Mark R. Baril, B. Mgt., LL.B.
The current economic downturn has led to lost jobs, lower income, and decreased real estate prices. This results in financial challenges for some, and opportunities for others.
Whether to buy, sell or hold real estate in today’s market is determined by our financial circumstances. Job loss or job restructuring may be the catalyst that leads us to believe that we have no choice but to sell our home. Before you make any decision, consider the following options first:
- Amend your payment schedule: Contact your mortgage company to determine whether you can change your payment amount and frequency.
- Refinance at a lower interest rate: Interest rates are still extremely low, and you may be in a position to take advantage of the opportunity to refinance, possibly saving yourself hundreds of dollars each month in interest. Your lender would rather you pay your mortgage than foreclose on the property.
- Minimize unnecessary expenses: Utility and other household costs can often be decreased, saving hundreds of dollars annually.
If you are forced to sell your home in this difficult time, consider ways to maximize your net gain. For example, a partial pre-payment of your mortgage may lower payout penalties payable to your lender.
Buyers find themselves in a market with many homes to choose from, and lower prices as a result. When buying, ensure that you protect yourself by seeking legal advice first.
In the age of “For Sale By Owner” both buyers and sellers are trying to save a buck. Too often, buyers commit to a contract that they cannot complete, but it is too late! Many considerations should be made before offering to purchase a home such as the following:
- Does the home comply with municipal bylaws and other requirements?
- Can I obtain the necessary financing?
- Do I need a home inspection or appraisal?
- Is there any warranty?
- Do I need to consider any other conditions in my offer?
Taking these and other considerations into account, remember to seek legal advise first! After all, buying or selling a home is likely one of the largest and most important financial decisions in your life.