JustADude.ca/Real Estate

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Real Estate

Buying a Home

Professionals

  • Real Estate Agent
    • Do they charge a buyer's fee?
    • Do they have fees and service charges?
    • Typically you sign a contract to only buy through them for x months
    • CMHC Real Estate Agent Checklist
    • Interview Questions:
      • How many properties have they sold in the last 12 months?
      • What percentage of their listings have sold?
      • What is their sale to list price ratio? (the Real Estate Board's average in 2014 is 96.7%)
      • What is the average number of days that it takes to sell one of their listings? (Ottawa Real Estate Board average in 2014: 63 days on market; 106 cumulative days on market)
  • Mortgage Broker
  • Lawyer (real estate law)
  • Home Inspector
  • Property Insurance Provider
  • Life/Mortgage Insurance Provider (if req'd)
    • More than 20% down payment does not require CMHC Mortgage Insurance. Should still consider mortgage or life insurance to cover house if problems occur.
    • term.ca - Resource for comparing/finding lowest rates
  • Appraiser (usually provided by mortgage lender)
  • Land Surveyor - for Survey or Certificate of Location
    • Seller may cover cost; generally updated every 5 years

Buying without an agent

Considerations

  • Crime: Crime Reports - Always check the crime in the neighbourhood you are considering.
  • Zoning.
  • Closest Schools
  • Bus Accessibility
  • Airplane flight paths
  • Monthly Utilities (these can be requested)
  • Well Water? Septic System?
  • CMHC Home Hunting Comparison Worksheet

Purchase Agreement Conditions

DISCLAIMER: We are not lawyers. Any advice within these pages shall be taken at your own risk.

The most dynamic part of an offer to purchase is the list of conditions. There can be many. Some good examples are provided by:

Common conditions

  • Conditional Upon Inspection of Property by a Home Inspector - General Inspection
    • "This Offer is conditional upon the inspection of the subject property by a home inspector at the Buyer's own expense, and the obtaining of a report satisfactory to the Buyer in the Buyer's sole and absolute discretion. Unless the Buyer gives notice in writing delivered to the Seller not later than _____ p.m. on the ______day of ____________, 20____, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. The Seller agrees to co-operate in providing access to the property for the purpose of this inspection. This condition is included for the benefit of the Buyer and may be waived at the Buyer's sole option by notice in writing to the Seller within the time period stated herein."
  • Conditional upon Arranging a New Charge/Mortgage
    • "This Agreement in conditional upon the Buyer arranging, at the Buyer's own expense, a mortgage satisfactory to the Buyer in the Buyer's sole and absolute discretion. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement not later than ___ p.m. on the ___ day of ___, 20__, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer's sole option by notice in writing to the Seller within the time period stated herein."
    • This may include an appraisal, land survey, etc, as required by the mortgage agency.
  • Conditional Upon Solicitor Approval (Buyer)

"This Offer is conditional upon the approval of the terms hereof by the Buyer's Solicitor. Unless the Buyer gives notice in writing delivered to the Seller not later than __ p.m. on the ________ day of __________, 20___, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of Buyer and may be waived at the Buyer's sole option by notice in writing to the Seller within the time period stated herein."

    • Note: Do not sign anything until the lawyer has reviewed the paperwork.
    • "This is sometimes included when there isn't enough time for the buyer’s lawyer to review the offer prior it being made."
  • Conditional upon Sale of the Buyers Property
    • "This Offer is conditional upon the sale of the Buyer's property known as ______________. Unless the Buyer gives notice in writing delivered to the Seller not later than ____p.m. on the ______day of ____________,20, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer's sole option by notice in writing to the Seller within the time period stated herein."
    • Note: Typically the Seller will want you to complete all other conditions right away (e.g. inspections), so you run the risk of investing time and money to complete those conditions, and then the seller could find another buyer.
  • Escape Clause (Removal of All Conditions)
    • "Provided further that the Seller may continue to offer the property for sale and, in the event the Seller receives another Offer satisfactory to the Seller, the Seller may so notify the Buyer in writing by delivery to the Buyer or to the Buyer's address hereinafter indicated. The Buyer shall have ______ hours from the giving of such notice to waive all conditions by notice in writing delivered to the Seller, failing which this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction."
  • Seller Agrees to Provide Existing Survey with Declaration:
    • "The Seller agrees to provide, at the Seller's own expense, not later than __p.m. on the ____ day of ________, 20____, an existing survey of said property showing the current location of all structures, buildings, fences, improvements, easements, rights-of-way, and encroachments affecting said property. The Seller will further deliver, on completion, a declaration confirming that there have been no additions to the structures, buildings, fences, and improvements on the property since the date of this survey."
  • Change of Completion Date by Buyer
    • "Notwithstanding the completion date set out in this Offer, the Buyer may _______________ the completion date of the transaction by not more than ______ days, by giving written notice of the amended completion date to the Seller or the Seller's Solicitor at least ______ days in advance of the earlier of the completion date set out herein and the amended completion date."
  • Conditional for rural properties: septic, the well (incl pump), potability, etc.
  • There are many more!

Fees at Buying Time

  • Deposit (typically 5% upon offer to purchase)
  • Legal Fees (minimum $500)
  • Home Inspection Fee (up to $500)
  • Land Registration Fee (% of Purchase Price, based on region, check with lawyer)
  • Mortgage Loan Insurance Premium (usually only if down payment less than 20%)
  • Appraisal Fee ($250-350, usually paid by mortgage lender)
  • Estoppel Certificate Fee (up to $100 for condos only)
  • Prepaid Property Taxes & Utility Bills
  • Property Insurance
  • Survey or Certificate of Location Cost ($1000-2000)
    • May be requested by Mortgage Lender
    • May be paid by Seller, should be updated every 5 years
  • Water Quality Inspection (if has a well)
  • Title Insurance - may be suggested by lawyer or lender
  • more...

Mortgages

Mortgage Rates

Posted rates can help with negotiations with your current lender or other lenders. Never accept a bank's posted rate, you should always be able to negotiate lower. A good mortgage broker will work with you for free to secure a better rate.

Mortgage: Fixed vs Variable

Avoid the 5-Year Fixed Mortgage Trap (Million Dollar Journey & Ed Rempel) 2010 Conclusions:

    1. "Stick to 1-year fixed or variable mortgages. Usually, you should take whichever is lower, but only take variable at a good discount, such as prime -.8-.9%."
    2. "Avoid 5-year fixed. Sometimes, they are tempting, but always assume they will end up costing much more, plus you will have lost your flexibility and negotiating power for 5 years. Remember that even when rates leaped 9% in 2 years from 1980-82, short term rates still saved money."
    3. Never take a mortgage term longer than you expect to stay in your current home.

Mortgage Pre-Approval & Final Approval Checklist

This list provides several items, not all of which may be required by your lender.

  • Driver's License
  • Letter of Employment
  • Confirmation of Salary from Employer (T4 & Current Pay Stub)
  • Sources of Income
  • Info & Details for all bank accounts (90-day history)
  • Proof of financial Assets (e.g. RRSPs)
  • Source & Amount of down payment
  • Proof of source of funds for closing costs (1.5% to 4% of house cost)
  • Credit Check. You can obtain your Credit Reports from Equifax or TransUnion

Final Approval may require:

  • Signed Offer to Purchase, and Letter of Fullfillment or Waivers.
  • MLS Listing (if available)
  • Appraisal (usually covered in part by lender)
  • Void Cheque

Selling a Home

Selling a Home DIY (without an agent)

Services

Tips / Recommendations

  • It makes more sense to sell on your own in a seller's market (i.e. there are more buyers than sellers).
  • Pay extra to have the house listed on MLS.
  • It's recommended to offer a 2-3% commission to the buying agent. Otherwise you won't get nearly as many showings to potential buyers.
  • Email local agents with info on the morning before listing on MLS.
  • List on MLS in evening. They refresh their listing at midnight.
  • List on MLS on a Wednesday evening. Every Thursday MLS sends out hot picks to agents.
  • Staging: Keep closets 1/2 to 2/3 full.
  • You may choose to not re-paint or repair minor cracks. Chances are that the buyers will re-paint anyway.
  • Open House:
    • Standard open house time is Sunday, 2-4 pm, but not recommended on long weekends.
    • Reportedly only 1% of sales come from open houses.
    • Beware of random people who may enter your home looking to steal items.
    • Ask them to sign welcome sheet. Use their contact info to ask what they liked/disliked.

Interview Questions for selling agent

  • How many properties have they sold in the last 12 months?
  • What percentage of their listings have sold?
  • What is their sale to list price ratio?
  • What is the average number of days that it takes to sell one of their listings?
  • Will you be the one showing the house?

Property Value

Ottawa professionals

DISCLAIMER: We have no experience with most of these professionals. Use at your own risk.

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