1. Get you financial house in order
The first step to getting your financial house in order is to determine if you are in a position to get a mortgage. Start by ordering your credit report. It will show if you have any financial problems including liens, unresolved payment disputes etc. You will need to resolve any outstanding issues and have these removed from your credit report. In addition your credit report will show your credit score which is a proprietary system of assigning a number between 300 and 900 to indicate your credit worthiness. Obviously the higher the number the better risk you are. You should know that better credit risks are usually allowed to carry a higher debt load, earn a better interest rate and of course will find it easier to be approved for a mortgage.

Secondly you have to determine how much PEI real estate you can afford. You should approach several lenders and seek a pre-approved mortgage. In this way you will know that you have a mortgage available for the next 90 days and what price range you should be looking. You should try both banks and mortgage brokers to see who will give you the best rate.

2. Determine what you are looking for
Once you have a budget you can begin the search - right? Well not exactly! You should take the time to write a list of those features your next house must have and another of those features you would like the house to have if you can get them in your price range. You need to know the area that you want to look in and on PEI this means deciding between rural and city living. Many locating to PEI may not understand the implications of rural living as they often have not spent a winter here so this should be considered too. However once you have made your lists and put your finances in place it is now time to see a realtor and start the search in earnest

3. Working with a Realtor
Your first decision when choosing how to work with realtors is to determine if you are looking to contract a buyer's agent. A buyer's agent will work for you whereas some people feel more comfortable not to have their own agent and to work with the listing agent. While there are rules of conduct and the listing agent has to treat you honestly and fairly, it should be understood that their first duty is to their client, the vendor, and not to you. For this reason I believe that having your own PEI real estate agent is beneficial and most importantly it isn't going to cost you - his/her commission will be paid by the vendor as a split between listing and selling agents. In practical terms this means that the listing agent shares half the commission with your agent.If you are working with your own realtor then you need to meet with him/her and discuss your needs and wants based on your lists. If you are working alone then you will need to hit the local real estate guide and the internet and begin to search yourself using the lists you have made as search parameters.


4. Negotiation & Offer
Once you have found the "ideal home" it is time to make an offer. Choosing just the right amount and best terms to offer is a skill. Often home purchases are won or lost on the opening bid and it isn't always about money but rather terms, such as closing dates, and some people get hung-up on the inclusion of certain items such as appliances or drapes. If you have your own realtor he/she will help you determine fair market value and write your offer. The way fair market value is usually determined is based on comparable sales to be found in that neighbourhood over the last 6 months for homes and properties that are similar enough to compare. Generally an offer around or just slightly below the average of comparables will be seriously considered as well as closing date, inclusions, and subjects. Subject might include "subject to selling your present home", "subject to IRAC approval" (necessary if you are a non-resident) and can include "subject to suitable financing" but shouldn't in your case as you already have your mortgage financing in place and that makes your offer stronger already. The vendor can accept your offer, counter offer or ignore your offer.

5. Closing
Closing and conveyancing is the process of legal work including land title transfer, working out pro-rated items such as property taxes, oil left in the tank etc. It is the process of making your offer reality and the transfer of title and funds. You will need a PEI lawyer to carry out this very important function. At this stage the final work on your mortgage will be completed too. Shortly thereafter, everything signed and sealed, you will be the proud owner of your new home and ready to move it.

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Nice tips. Thanks for sharing these useful tips.
Buying home is a very crucial task one should be very careful while investing in real estate.
First of all contact with any real estate agent they will better guide you.
Before initiating for buying a home get your loan approved in advance.
Then third the most important thing is location.
After selecting a home do inspection of that house.
Do all the legal work under the guidance of any legal adviser.

Wow.. wonderfully explained about 5 Steps to a Successful Real Estate Purchase.. It really helps as planning to purchase a property..

Thanks for sharing

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I agreee. Thanks for the post!

What about becoming your own agent and save on the transaction fees? I hear a lot of people are doing that now.

great tips!! how did you arrive to this strategy?

You missed a step - doing due diligence about the area that you want to purchase. Real estate is always about location, location, location.

Thank you for the descriptive tips. Your points clearly illustrate the steps that should follow from the initial step of choosing a real estate to until finish buying it. So they would be really helpful for any person who intended to do such purchases.
Nowadays people tend to buy and invest on real estates more as it is a great investment for the future. Furthermore it can be used as a source of extra income by renting or leasing the property.
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Buying a home is an emotional investment as well as a solid financial investment. Make sure to ask your agents any questions you feel you need to ask, like how many clients is he working on right now, will he be representing both buyer & seller, etc. Keep your self informed through out the whole process, make sure your agent communicates with you regularly specially when complications arise, missed deadlines, etc.

Huh? What are you talking about?
Emotional investment maybe, solid financial investment maybe too.
Agents can handle multiple clients and who are you to dictate as long as you're handled adequately?
If you're a savvy investor and using an agent the agent may not be doing more that providing you with REO's lists to look at and opening the doors for you. You should be doing your due diligence. And know your market, costs, and realistic objectives.
The agent won't miss any deadlines typically and usually has the buyer or seller to blame for any delays or whatever. Most agents are fairly responsible and proactive unless they get wanna be investor experts who can't afford to buy anything anyhow and just waste time for all involved.

Hello Friends........

Great Tips. Thanks for sharing such wonderful tips with all of us.

Keep sharing more tips in the future.

[quote=MangoLoans]What about becoming your own agent and save on the transaction fees? I hear a lot of people are doing that now. [/quote]
You are kidding right? The time, effort, and expenses of getting a license are definitely not worth doing for one deal. Not to mention the money you might loose on that deal for not knowing what you are doing. Plus, most states require new licenses to hang with a Broker for the first two years and the Brokers who take on rookies typically keep a large share of their early earnings.

Thanks for the info. In addition, you can't make money in real estate without making real offers, and you'll never acquire the knowledge you need to become a successful real estate investor until you get the real-life experience that only comes from making offers.

My broker takes 45% of my earnings until I net him 20,000 in office income, then I get to keep an additional 10% until I net an additional 20% in income. And yes, I am a rookie as well for now.

i agree these were some great tips. thanks for sharing this information.