Karen O'Brien

Karen is a well-known realtor in the PEI community and can call upon her connections to get your property SOLD! She specializes in 'property virgins' and can help you get into the PEI real estate market.
Direct: (902) 856-0032
Email:
Toll-Free: 1-888-701-0021

First Time Buyers - 'Property Virgins'

As a Realtor selling property in the PEI Real Estate market it gives me great satisfaction to help guide first time home owners or 'property virgins', as they are sometimes referred to on a popular Real Estate television show, through the process of realizing their dream of owning their own PEI home. There are many obstacles that can, and sometimes do, occur while going through the process of purchasing PEI real estate and it is my job, as a PEI Realtor, to assist my client and overcome the obstacles quickly and easily. First Time Buyers on PEI

There are also many emotions that a Realtor is confronted with during the real estate purchase process. One of the first things I like to do is get my clients pre-approved for a mortgage, then they know what price range they should be looking in for their first real estate purchase. The PEI Real Estate market is one of the few markets where you can still purchase a home for $15,000 on the low end and up to a $1,000,000.00 on the high end. I have come to realize that by showing homes to people which are out of their price range, the client gets frustrated and disappointed when shown what they can get within their price range.

Once the first time buyer knows what they can afford, I then compile a list of what they are looking for in a home and what area of PEI they want to live in. Armed with this information I begin my search of available PEI real estate listings in their area of choice, and surrounding communities, within their price range and matching their 'want list'. I encourage my clients to drive by the real estate listings they are interested in and get a feel for the community. I try and get the clients to narrow down their selection to 3 properties that they are interested in viewing, to show them any more than that at a time they sometimes get confused.

Once the client has narrow down their choices to three of the PEI real estate listings that I have provided, I set up the viewings and get any information that I can on the property so that my client can make an informed decision. This is the part of the process that I really enjoy. The PEI Real Estate Market has a wide variety of homes to choose from. Someone looking for a $250,000.00 home can choose between a newer modern home, a farm house, waterfront home, Victorian home or a condominium. That is why it is so important to know what your client is looking for.

After showing the properties, a good PEI Real Estate agent will ask the client if there is one property that they like more than the others and if they are ready to make an offer. Some first time buyers think they have to look at every available home in their price range. Asking the question makes the client go to that next level in fulfilling their dream.

There are still many steps in the process of buying real estate on PEI but this to me is the most important stage of the process. Selling PEI Real Estate is a challenging and rewarding career choice for me.

Contact Karen O'Brien today for more information!

Direct: (902) 856-0032
Email:
Toll-Free: 1-888-701-0021

Types of PEI Real Estate

It is very important to know what type of property that you are looking for. You should also be very aware of whether you wish to live in the city, close to the city with some rural feel, or in the country. PEI real estate offers all these possiblilities. Often first time buyers (property virgins) don't consider their needs in the most practical light. Many residents of PEI have both a rural cottage and a city home. This is ideal and gives you the best of both worlds. In the summer they live at the cottage usually a 20-30 minute commute from work and enjoy the country lifestyle. In the winter (or at least by the time the kids go back to school) they are back in their city homes again as these are much more practical for winter living and getting to work regardless of snow, etc.

Starter Home

Summerside offers a great selection of starter homes. I define starter homes as being any home under $100,000 but you will find homes in the west end of Summerside priced, even today, at just over $50,000. Imagine that you can purchase a small home in a city, a block from Credit Union Place, home to the Summerside Capitals hockey team, a competitive sized swimming pool and leisure pool, a bowling alley, a walking track, harness racing, concerts and more. These homes a generally small and they are older but they have tremendous potential to be your PEI real estate investment project. You can purchase one of these smaller homes, live in it and renovate it at little or no risk. You are not going to overextend yourself. Then you can either sell it in an upward market, which at these prices you can afford to wait for, or you can move on to a larger home and rent to a pool of eager, long-term tenants.

Modern Home

The island offers a good selection of newly built homes. In the Charlottetown and Stratford areas of PEI building permits exceeded expectations this year. You can build a new home from approximately $150,000 or buy a home in a subdivision that is pre-constructed from $200,000. This represents a good buy as many other areas in Canada are considerably higher priced. While subdivisions and tract housing are less common in the PEI real estate market than in other places, the single home build projects common here are not subject to the "subdivision assembly line" method of construction and the cost is offset by the lower cost of land.

Farm

It does depend a lot on how you are defining the term farm, but althought here is much agriculture and 'real' farms operating in PEI including potato, dairy, hog, beef etc, I am assuming that you are looking for a small holding, something in the country that affords you a rural lifestyle, is close enough to a town for shopping, medical and other services as well as access to schools. There are lots of this type of PEI real estate listing. There isn't a great deal of Crown Lands in PEI and as a consequence most land is privately owned. Actually the population in PEI is denser than many places but you would never know it as it is evenly spread out. If you chose to buy at either end of PEI you could get a rural 'farmhouse' style property with considerable acreage for less than $100,000. If you chose the same property in the center of PEI, either the North or South Shores then you would have to budget at two to three times that amount.

Waterfront

There are a lots of choices to be had if you are looking in the PEI waterfront real estate market. PEI has many bays and inlets and as such we are blessed with a long, jagged coastline. This means more land and less pressure on the supply of land fronting on water, whether river, bay, inlet, or oceanfront. Buyers of waterfront PEI real estate divide between those looking for a family home by the water to live in year round and those looking for waterfront recreational real estate. All waterfront will eventually afford year round living but at present if you buy waterfront property in the extreme west or east of the island on a practical sense as outlined at the head of this article you will find that it is only good for summer living and recreation. If you want year round waterfront living there are some choices in the city as well as areas just outside such as Schurmann's Point near Summerside. Additionally you might consider some North or South Shore developments such as Sunset Dunes near Borden and Granville on the Water or Seawood Estates on the North Shore and near Kensington and a 20 minute drive to Summerside. These developmemts do offer the possibility of four-season residency.

Heritage

Heritage homes can be had in the major cities of PEI such as Charlottetown and Summerside. Summerside was home to the fox industry and as such brought wealth to the city in the early days. This spawned a mercantile trade and many of the fathers of Summerside and the scions of the city's industries built large, architecturally significant homes on its tree-lined streets. Some of these homes have been converted to apartments and still others are now bed and breakfast accomodations, however there are still heritage homes that come on the market that are intact single family homes. These can often be had in the two to three hundred thousand range and should you be looking for an inexpensive "mansion" these might just be the ticket.

Condominium

The condo market is not a big part of the PEI real estate market however it is a market that will expand in the coming years. Already in the Charlottetown area there is increased condo construction. However we have projects such as St. Stephens Place, The Lofts, and Harbour Terrace overlooking the Summerside waterfront. There are also new retirement condo opportunities such as Bishop's Landing.

Recreational

The recreational PEI real estate market is huge. Our population of under 140,000 swells to over a million in the summer. While many of these visitors stay in hotels and bed and breakfasts, many have purchased property here, vacation here when they wish, and rent the properties out to other holiday-makers when they aren't here to defray the cost. In this way they are building equity in an excellent PEI real estate investment, enjoying a first-rate holiday home and destination and bringing in money to subsidize the cost.

Contact Karen O'Brien today for more information!

Direct: (902) 856-0032
Email:
Toll-Free: 1-888-701-0021

Modern PEI Home
    Modern PEI Home
Summerside PEI Heritage Home
    Summerside Heritage Home
PEI Recreational Property
    PEI Recreational Property
Starter Home in Summerside, PEI
    Starter Home
PEI waterfront property
    Luxury Year-Round Home on Waterfront

Making an Offer


You have toured PEI, choosen the area that you want to live, determined the price bracket in the PEI real estate market you are searching in and finally after viewing a number of PEI properties you have fallen in love with one. You are ready to make an offer.

making an offer on PEI real estate How much to Offer

Once you have decided on the home that is for you then the process of real estate negotiation beings. This is the time when having a PEI real estate professional on your side can make a substantial difference to your chances of getting the home that you want at a price you can afford. The first step is to do a CMA (Comparative Market Analysis). This is not an appraisal but rather a look at the what has sold in the neighbourhood your new home is located in. We are looking for similar properties and this will give us a good indication were the market stands on the value. We may tweak our offer from there up or down to accomodate differences in the properties as well as the degree of desire you are experiencing to own this particular home. If there are good second choices (that don't feel like second choices) then you may want to try a lower offer. Once the offer is written it is communicated to the selling agent and will be presented to the selling party. Remember that the other party has a PEI real estate professional working for them too and this realtor has also done CMA's that (s)he feels supports the asking price. There can be outright acceptance of the offer, outright rejection or their may be a counter offer. Counter offers can go back and forth between the parties and their realtors until either sufficient common ground is found to create a deal or an impasse is reached and your real estate deal falls apart.

Other Considerations

When making an offer there are other considerations in addition to the price. These include the number of subject clauses that you have to insert into your offer. An example of a subject is "subject to financing", "subject to selling my own home", "subject to successful home inspection", you get the idea. If you are offering but it is subject to selling your home then this is something that the vendor will seriously consider a negative as your home may or may not sell. In addition there are considerations around closing date and possession date. Sometimes a vendor will look more favourably on a distant close, sometimes they want to close quickly. This will influence their decision about an offer. If an offer meets some of their needs in terms of timing, reliability or other factors they may overlook a lower price. Additionally a larger deposit will sometimes alleviate a vendors concerns as will a pre-approved mortgage.

Home Inspection

Home inspections are carried out after an offer has been accepted, however it is something that has to be written into the offer to ensure that should the home inspection show flaws in the home that you were unaware of that you can either back-out of the purchase or re-negotiate. If there are only small issues found during a home inspection (and there always will be some things) then the deal should most likely proceed on-track. However if the problems are structural for example you may not wish to proceed. On the otherhand, it is always at this stage worth finding out how much it would cost to repair the problems. Get a contractor to give you a quote (as opposed to taking the home inspectors estimate) and if you still feel that the home is one that you wish consider, ammend your offer to either reduce the price of the home sufficeintly to pay for the repairs or in some cases people specify that the vendor will do the repairs and the price remains the same. Either way the vendor can agree or not and you can choose to proceed with the purchase or not. As your PEI real estate professional I will help you with all the details

IRAC

IRAC or the Island Regulatory And Appeals Commission controls the amount of land and waterfront real estate as well as the useage of land in PEI. Some people from off-island are misinformed of the intentions of the Commission and believe that non-residents can not own land here. This is furthest from the truth. Only if you are buying a large amount of land or waterfront real estate exceeding 65 ft (130ft for a married couple) do you need to apply to the Commission. It should be further noted that permission is usually granted and IRAC should not be a factor in preventing you from owning PEI real estate. Contact me for more information.

Closing and Legal

Meeting with your PEI Lawyer Steps to Closing your PEI Real Estate Deal

In addition to the these steps you should be aware of what out-of-pocket expenses you will be need funds for prior to closing*

  • Lawyer's Fees - from $700 to $1500
  • Deed Transfer Tax and/or IRAC fees - $500 up to 1 to 1.5% of purchase price
  • Mortgage Application Fees - usually applies to privately arranged mortgages with a mortgage broker - may be several thousand dollars depending on the amount of the mortgage
  • Mortgage Insurance - if you are borrowing a high percentage of the purchase price
  • Home Inspection Fees
  • Utilities Hookups - Electrical, Telephone. TV, internet etc
  • Tax Adjustment - the amount of any property tax that the vendor pre-paid
  • Fuel Adjustment - the value of the fuel that the vendor bought and left in the tank
  • Home Owner's Insurance - on PEI from $500 per year and up
*This may not be an all inclusive list for every purchase, contact myself or a legal professional for more information

Securing a Mortgage to Purchase your PEI Real Estate Dream

What do you Need to get a Mortgage?
Financing PEI real estate

The first step in every prospective PEI real estate purchase is to get a pre-approved mortgage. There is little point in beginning a real estate search not knowing how much money you have to spend. When applying for a mortgage there are a number of points that a lender takes into consideration. All these points are related to one thing however, can you pay, and will you be able to continue paying. Remember paying off a mortgage is a 25 year or more process and a lot can happen in that time. The first item on any lenders agenda is how much income you have coming in and how much debt it is already servicing. If you have a lot of consumer debt this will serverely cripple your mortgage attempts. Lenders generally require that you be spending no more than 32% of you income on housing and that your combined debt, consumer and mortgage, not exceed 40% of your income. The first hurdle is quite simple - the second, consumer debt, less so. If you do the math you will see that your consumer debt will impact your ability to borrow significantly. The answer is to ensure that you don't add to your debt load before attempting to secure a mortgage such as buying a car. Buy the car after the home. Secondly you should be trying to pay down your debt prior to looking for a mortgage.

The second greatest consideration lenders use when determining your credit worthiness is "your credit worthiness" and this is expressed in your credit score, a number between 300 and 900. You really must have a score of 600 or better to be successful applying for a mortgage and you may be better to wait until you reach a higher score as your interest rate will be based on this number.

How Much Should you Spend?

Now let's assume that you have pre-approval to spend $300,000. Do you have to, and should you be, looking in that price range? First of all obviously this is a maximum and you do not have to spend the amount you are pre-approved for. The lender thinks that you can pay this amount of principal and interest back given your current situation however you have the greatest insite into how much you feel you want to pay every month now, and what you think you will be able to pay in the future. The important thing to keep in mind is that there can be additional expenses both in home ownership and in life and having a little breathing space, not being mortgaged to the max, can certainly help ensure that you maintain an agreeable lifestyle, that you can still save for those unexpected certainties that life can throw including losing a job, and needing savings to continue the mortgage payments. You should always have a "Plan B". That's how you are going to continue meeting your commitments including mortgage for at least 6 months should the worst happen. This could be a spouses income, savings, investments that can be liquidated, etc.

How to Come Back from Bankrupcy (or Credit Problems)

  • Ensure that you have sufficient provable income as lenders may enforce this requirement more strictly after bankruptcy or credit issues
  • Begin to make all payments on time. This includes everything from loan payments on amounts that weren't discharged through bankruptcy, debt repayment plans setup with your creditors, and the regular day-to-day bills, such as utilities
  • Be careful! It isn't long after credit problems when the credit cards may start being offered again. Yes, you need a credit card often for everyday business but ensure that you pay off your card monthly - do not run a balnce.
  • Check your Credit Score and your credit report regularly and have any error corrected.
Consider a Mortgage Broker!

When searching out a mortgage don't forget to look beyond the bank. Have you considered a mortgage broker. Mortgage brokers work with a number of lenders (including banks) and will shop for the best possible terms given your situation. They can often finance people who fall through the cracks of conventional financing. Century21 Northumberland Realty has an in-house mortgage brokerage firm. They provide some useful calculators you may wish to try.

Centum Mortgage Calculators

Mortgage AnalyzerCalculate your mortgage payment. Create an amortization schedule. Discover what you will owe in 5 years. [try]
Mortgage IsolatorCalculate the rate, payment, principal or amortization by inputting any three known variables. [try]
Prepayment AnalyzerCalculate the interest savings of making extra payments to your mortgage. [try]
Maximum Mortgage AnalyzerCalculate the maximum mortgage amount you qualify for based on your income. A great tool for buyers! [try]
Payment AnalyzerCalculate the monthly, semi-monthly, bi-weekly and weekly payment option on your mortgage. [try]

Karen's Best Buys in PEI Real Estate

What ever price range you are looking in you are sure to find a PEI real estate Best Buy right here. We have analysed our all our PEI real estate listings to highlight those that represent particular good value for money in the PEI real estate market and represent a good PEI investment.
View all PEI Real Estate Best Buys

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