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What’s next? From Offer Acceptance to Closing Day

The time between acceptance of your offer and the closing date is sometimes a confusing time period. This article will remove some of the mystery. Hopefully, any questions you might have, have been anticipated; however if there is anything that hasn’t been covered, please do not hesitate to contact us at any time.

We will be in touch at regular intervals until closing date ( and after) to ensure that everything is proceeding in order.

The Agreement of Purchase & Sale

The Agreement of Purchase and Sale, (and any amendments or waivers) will be sent to your Lawyer or Paralegal as discussed.

The Deposit

The Deposit will be placed in an Interest Bearing Account until closing and credited against the purchase price on the Statement of Adjustments. If there was a clause that the interest on the deposit cheque is to be paid to the purchaser, then this cheque will be mailed after closing.

Title Search & Requisition Date

If there are no conditions in the Agreement, your lawyer will open a file and begin the procedure to ensure that you will have good title to the property. If there are conditions the process will be delayed until the conditions have been waived.

This procedure may include other things, but here are the basics:

  • The Title Search
  • Obtaining a Tax certificate (showing current realty tax information)
  • Assurances from Municipal and Utility Departments that there are no liens or issues affecting the property (i.e. work orders or outstanding payments etc.)
  • A search to ascertain if there are any judgments outstanding against the current owners and if there is a mortgage on your purchase, they will also search regarding your name(s).

All of the searches will be conducted prior to the Requisition Date noted in your Agreement. If there are any questionable issues, they will be addressed in the form of a “Requisition Letter” to the Vendor’s Lawyer; to be satisfied prior to closing. Your lawyer will address any of those concerns (if any) around that time.

Survey And/Or Title Insurance 

If an existing survey for the property is not available (or does not show the current location of the fences, buildings, and structures), the mortgagee will require either a new survey or title insurance.

Title insurance is less expensive and acceptable for the mortgagee, in most situations (insuring the property against possible encroachments etc. that an up to date survey might reveal). First Canadian Title Company is one of such companies offering this survey, but your lawyer may recommend others.

If you choose to have a new survey prepared, we can provide you with a few names of those we have used in the past, or your lawyer may have someone they prefer. We would be happy to assist you in making any arrangements.

Financing

Your lawyer will in all probability also represent your financial institution with respect to your first mortgage. In that regard, they will send any documentation directly to your lawyer, and make the funds available for the closing date. If you have a closing date that extends beyond your rate commitment watch the rates and get in touch if you see rates increasing. (Get your commitment extended.)

Executing Documents & Balance of Down Payment

During the week prior to closing your lawyer will request an appointment for you to execute closing documents, (i.e. mortgage documentation, land transfer tax affidavit etc.) and review the Statement of Adjustments. You will also be required to bring a certified cheque at that time for the balance of your down payment and legal fees. This appointment usually occurs the day prior to closing.

Closing Date

On the closing date, your lawyer will exchange documentation and balance of closing funds with the vendor’s lawyer’s firm and complete the transaction.

Possession

Your lawyer may have many transactions closing on your closing date, and it is often difficult to close early in the day. If you are selling as well, then that transaction has to close first in order to have the money to close your purchase. You are not legally entitled to possession of the keys and your new home until the closing has occurred. Keys will be given to your lawyer on closing.

Keep this in mind when making your moving arrangements. You don’t want to pay for a moving van all day if the closing doesn’t occur until later in the day.

Access Visits Prior to Closing

Visits prior to closing will be arranged through Lakeview Realty Inc. (with the listing agent and the vendor.) If you require any assistance with respect to contractors etc., We have names that we could recommend.

Please visit our Concierge section for more details. We would be happy to help.

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 Planning Your Move

An organized approach and checklist can make “The Moving Process” a lot easier!

Movers: 

Book the movers. It’s a good idea to obtain estimates from several different companies. (Note: There are different rates for different times of the month). You can choose to have the movers pack everything, some of your more precious or breakable items, or pack everything yourself.

If packing yourself, make arrangements for special boxes on moving day for mirrors/pictures etc. and make special arrangements for moving your pets and perishables, such as food and plants.

Ask the movers if they provide or sell boxes. Some of them will give you used boxes to start the process. If none are provided, there are stores that cater to moving. Check the yellow pages or speak to us. We can point you in the right direction. It is a good idea to devise a colour code system with stickers for boxes going to different rooms on moving day.

Be aware that you do not own the new home, (and are not entitled to possession) until after the transaction closes. If you are closing and moving on the same day, you may not have possession until later in the afternoon.

If you rent your present home:

Give the necessary written notice to your landlord, and make arrangements of any monies you may have on deposit.

If you own your present home:

Call the gas and electric companies and let them know you are moving. Arrange to have the meters read on the appropriate date.

If your water heater is rented, arrange for the transfer of the rental agreement to the new owners.

Instruct your heating oil supplier to fill the tank on the appropriate date. You will be credited with the cost at closing. If the new owners are converting to gas, make special arrangements with them.

Advise the telephone and cable companies of your move and have them discontinue their services on the appropriate date.

Advise all of your present service companies of your new address and closing date, so final billings may be directed to you.

At your new home:

Make arrangements with the gas and electric utilities, telephone, cable and other services to be connected or begin on the day of closing.

General: 

Obtain “Change of Address cards” from the post office and send out well in advance.

Have the post office forward your mail to your new address.

Inform gardening, dry-cleaning, newspapers, magazines, diaper and other home services of your new address.

Obtain a letter of introduction from your current bank to help establish new accounts. Transfer trust or bank accounts and securities.

Inform all creditors (Visa, Master Card etc.) of your new address and the date it becomes effective. (Don’t forget pre-authorized payments)

Cancel or transfer social, athletic, civic, religious or business affiliations and memberships.

Arrange for the transfer of medical and dental prescriptions and optical records.

Consider having a “Garage Sale” to dispose of unwanted clothes and furnishings.

Change your address on your driver’s licenses, effective the date of your move.

Collect all items out of cleaning and storage.

Safely dispose of all flammable liquids, as it is illegal for movers to carry them.

Arrange with your lawyer for access and keys on the closing date.

Leave a note in the house with your address for the new owners or occupants in the event that someone wasn’t notified.

Take advantage of the Lakeview Realty Inc. “Concierge Service” to make your move an effortless one and to help you on your way! 

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Steps in Making a Purchase Offer

Making An Offer? Keep these items in mind.

Agency

Prior to making an offer, we will have discussed agency with you, and you will have chosen in which capacity you wish Lakeview Realty Inc., to represent you. (Either as a customer, or a client).

Deciding & Preparing

When it comes time to make an offer, (and assuming you have chosen to work with us as our client.. a buyer broker relationship), we can provide information and advise as to the current market information to assist you in making your decisions.

Major elements of a real estate offer:

 

Price:

This depends on the current market conditions, but generally, in a normal or buyer’s market, the price offered by the buyer is different from the asking price. In a seller’s market, however, (and if there is more than one offer), the offering price is often over the list price.

Deposit:

The deposit shows the buyer’s good faith and will be applied against the purchase price of the home when the sale closes. Between 5% and 6% is a bit of a benchmark in the City of Toronto. A Lakeview Realty Inc., Professional can advise you as to an appropriate amount.

Terms:

Includes the total price and deposit which the purchaser is offering as well as the financing details. The buyer may be arranging their own financing or may ask to assume your existing mortgage if you have an attractive rate and term. (Usually in a market when rates are higher)

Conditions:

These might include “subject to home inspection”, “subject to the sale of the purchaser’s property”, “subject to obtaining satisfactory financing” etc. In a seller’s market, try not to have any conditions. Work out all the details ahead of time.

Inclusions and Exclusions:

These might include appliances, certain fixtures such as light fixtures, heating systems, air conditioning, window treatments etc. If there is something you are not sure about, spell it out. Don’t get caught up on the little things. You are purchasing a home, not chattels.

Closing Or Possession Date:

Generally the day the title of the property is legally transferred to the buyer, and funds are received by the seller. (unless otherwise specified).

You may have made the offer conditional on certain events occurring (i.e. financing/inspection/ sale of purchaser’s property etc.). This is not recommended however if it is a seller’s market and you are in competition. The offer will be prepared, after discussing the details with you.

Presentation & Negotiation

We will then present and negotiate the offer to and with the Vendor on your behalf, along with the listing broker. As mentioned, in a seller’s market, there will often be more than one offer and you will be guided and directed through this process.

The vendor will then have the choice of accepting, rejecting or countering your offer. The counter offer could be for any number of reasons (i.e. the price, conditions, closing date or any other items).

The offer can be countered back and forth until an agreement is reached or the negotiations cease.

Acceptance & Closing

After an agreement is reached, the parties acknowledge receipt of a copy of the agreement. You will continue to be assisted with satisfying the conditions, delivering copies to the lawyers and following through with you until after the transaction closes… and beyond.

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Residential Real Estate Sale Costs

Important Note: This outline and costs are for Residential Re-Sale/Single Family only. Different rates may apply to New Homes & ICI properties. Please check with your professional advisors for specific amounts as this is only a guideline.


Don’t Be Surprised!

Buyers and Sellers are sometimes surprised on closing day with extra costs they had not anticipated, or been advised about. The following is an outline of normal costs. We hope you find it helpful.

Vendor’s Closing Costs

Discharge of Mortgage/Charge

Check with your mortgage, but a standard procedure with some financial institutions (unless an open mortgage, or specifically written in the mortgage document) is to charge a 3 month interest penalty, or the interest differential (whichever is greater). Check this out.

Real Estate Commission + GST on the Commission.

Moving Costs

Moving costs vary. Rates are usually from about $65.00 to $95.00 per hour, depending on the company and the number of people. It will also depend on the size of the vehicle and the time of the month you are moving. (The days around the middle and end of the month are busier and more costly) If they participate in the packing, the cost increases.

Legal Fees

This varies according to the lawyer. Most lawyers charge a flat fee, plus disbursements.   It is a good idea to get a couple of quotes. Make sure you ask what the fee includes (i.e. title insurance/disbursements etc.)

There is usually an extra fee if the lawyer is also acting for the mortgagee. Fees probably will range from about $600.00 and up depending on the Sale Price. Some Title Insurance companies are now doing a closing package.

Note: Some purchasers like to involve their lawyer prior to signing an offer.

 

Purchaser’s Closing Costs

Deposit

At the time of presenting an Agreement of Purchase and Sale, you will have an option to submit a deposit cheque payable to the listing broker, or deliver on acceptance. This will be held in trust until closing. The cheque is usually certified and deposited on the day after acceptance. (If you are in a competition situation, it is a good idea to have a certified cheque on presentation.).

The amount of the cheque is usually from about 5% – 6% of the offering price, or more depending on the circumstances and closing date. If you have a home to sell or your money is tied up in a term deposit etc., you can often make arrangements with your financial institution for a short term loan or line of credit.

Survey

If there is not a survey showing the current location of fences, buildings, and structures, (and the agreement of purchase and sale does not state that the vendor will provide one) then it may be necessary to arrange for one. The mortgagee will either require a new survey or title insurance. This will vary with financial institutions.

Even if the mortgagee doesn’t require one, you may wish one. (especially if you are planning to do any extensions etc. in the future).

Costs vary from about $700 to $1000.

Title Insurance

This is becoming more popular, especially when there is no up-to-date survey. (As mentioned) or where there may be potential problems, such as encroachments etc. It is often used with mortgage refinancing or assurance for a minor title problem. The fee is in the area of $200 to $300 but could vary with more expensive homes.

The fee is in the area of $200 to $300 but could vary with more expensive homes.

Legal Fees

This varies according to the lawyer. Most lawyers charge a flat fee, plus disbursements. It is a good idea to get a couple of quotes. Make sure you ask what the fee includes (i.e. title insurance/disbursements etc.).

There is usually an extra fee if the lawyer is also acting for the mortgagee. Fees probably will range from about $600.00 and up depending on the Sale Price. Some Title Insurance companies are now doing a closing package. Note: Some purchasers like to involve their lawyer prior to signing an offer.

Disbursements

These are costs that your lawyer will have to pay on your behalf. They include things like the following: Photocopies, Tax Certificates, Zoning clearances and Work Orders, Couriers, Registration of Deeds/Mortgages, Postage, Long Distance Calls, Mortgage Schedules, Sheriff’s Certificate, Condominium Estoppel Certificate, etc. These will vary on different properties, but probably in the area of $600.00 and up.

Statement of Adjustments

The balance due on closing is the difference between the sale price and the amount of your deposit which was presented with the offer. However, there are a few things that get adjusted at the time of closing. The vendor is responsible for everything up to closing date and the purchaser is responsible from then on.

This would include things like Realty Taxes and fuel oil (if heated by oil).

The normal procedure is for the vendor to fill the fuel oil tank (200 gallons is standard) on closing and charge for a full tank. (Unless the purchaser is converting to gas, at which time other arrangements will be made.)

Utilities and Gas (which is metered) will be read on closing.

There may be other adjustments if the purchaser is assuming a mortgage. (Or if purchasing a new home)

Home Inspection

Usually done within 2-3 days from acceptance, although if thought to be in competition, some purchasers will do a pre-inspection. Usually between $300 to $400, plus GST. There may be additional charges if inspecting something specific, such as termites.

Home Insurance

From about $400 and up. Call for quotes. All mortgages must be noted on the policy. There is also an 8% insurance tax.

Note: If purchasing an older home with the old “knob and tube” wiring, you may have to shop around, as some companies will not insure the home unless it is replaced.

GST

Most residential resales are exempt from GST, however, most of the services involved with the transaction will be subject to GST (e.g.- real estate commissions, lawyer’s fees, appraisals, processing fees, homes inspections, insurance, moving costs, etc.) Financial services are exempt (mortgage, brokerage, etc.)

Substantially renovated houses – are subject to GST if purchased from the Builder/Renovator.

Note: GST is a Tax and will not be added to the value of the home for finance purposes.

Land Transfer Tax

This tax is payable at the time of closing and these rates apply to residential resale only. See our post on Land Transfer Tax for rate estimates.

Arranging the First Mortgage

For a conventional mortgage, (75% of the Sale price) there could be a processing fee (from $200 to $300), and/or an appraisal fee (about $200) for arranging the first mortgage. If you choose to pay realty taxes with your mortgage payment, there could be a tax hold back from about 1/3 to 1/2 of the annual taxes or more. This would be for the purpose of building up a reserve to pay taxes in the following year.

Note: If arranging a mortgage over 75% of the Sale price (i.e. high ratio) the processing fees could be about $275 or more (an insurance premium on the principal amount of the mortgage would also apply, but this is usually added to the mortgage and not a closing cost.. from 0.5% to 3.75% depending on the down payment. There is also an 8% insurance tax)

Second Mortgage costs 

If arranging a second mortgage rather than a high ratio mortgage, there would be additional legal fees and Appraisal and brokerage fees. Approximately $500.00 and up PLUS Brokerage of about $475.00 and up.

Closing Date

Just a reminder at this point as to the procedure on the closing date. It will be necessary for your lawyer to obtain the money from you and the mortgagee, either the day prior to/ or the morning of the closing. They then have to arrange a time to close the transaction with the lawyer on the other side of the transaction. It is advisable not to order the moving truck too early in the day, as you are not entitled to the key/ and possession until the deal is closed. You then have to obtain the keys from your lawyer. Don’t pay for a mover to sit outside your new home.

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Understanding Real Estate Market Conditions

The real estate market is always changing. Sometimes quickly, sometimes more slowly.
Lakeview Realty Inc. knows the market and how it will affect your home sale and/or buying decisions.

It is important for you to understand the three basic types of conditions.

Market Type Characteristics Implications
for Buyers
Buyer’s market

(The supply of homes on the market
exceeds the demand, or number of buyers)

  • High Inventory of Listings
  • Few buyers compared to availability
  • Homes on Market longer
  • Prices more stable or dropping
  • You have more time to make a decision
  • More negotiation power
  • More product to choose from
  • Conditional offers considered
Seller’s Market

(The number of buyers wanting homes
exceeds the supply or number of homes on the market)

  • Minimal Inventory of Homes
  • Many buyers
  • Homes Sell Quickly
  • Prices on Increase
  • You may have to pay more than
    anticipated
  • You may have to make decisions quickly
  • Conditional Offers may be rejected
Balanced Market

(The number of homes on the market is
equal to the demand or number of buyers)

  • Demand Equals the supply
  • Sellers accept reasonable offers
  • Houses sell within reasonable time
    period
  • Prices generally stable
  • More relaxed atmosphere
  • Reasonable Number of homes to choose
    from
  • Normal negotiation process
  • Conditional offers probably considered

 

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Land Transfer Tax

Land Transfer Tax is one of the largest costs in buying a home, other than the deposit and the mortgage. It is payable at the time of closing.

Your individual land transfer tax calculation should be calculated and verified by your legal advisor/lawyer.

Please note the Ontario Provincial Government does amend the LTT from time to time. Visit Ontario’s Land Transfer Tax Website for the latest rates and information.

>>> Land Transfer Tax Calculator

Note to users: Although we try to ensure the accuracy of our information, it is not guaranteed, and we advise you to confirm all information with your solicitor/lawyer.

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Do You Need A Real Estate Sales Representative?

Working with a sales repWith the easy accessibility of information on the internet today, many purchasers ask themselves the question, “Do I need a real estate sales representative?” Many people start their search on “the net”, by checking out the industry sites for listings of homes in neighbourhoods of interest, information on financing, costs related to buying, etc.

This is actually a good idea at the beginning, especially if you are not sure where you want to live.

With all of that information so available, would you want to work with someone exclusively?

Following are just a few of the reasons why you should:

Sales Representatives and Brokers are aware of homes a number of days in advance of their appearance on the Internet. We also have more details about the specific homes then may be displayed on websites.

Once you have decided on the type of home and preferred locations, sales reps can notify you quickly once new listings appear on the “hot sheets.” Most new listings are published right away, but, some are not! You could miss the one you are waiting for. We check a couple of times a day for new listings and have automated systems checking more often than that.

Sales reps can be pre-inspected for you, so you don’t waste valuable time looking at those that would be of no interest. We all know the following… some ads or pictures may make it actually sound better than it is.

You may also require assistance with neighbourhood information, sale prices and home values, schools, etc. Sales reps also understand the condition of homes; costs of buying; agency and how it affects you; explanation of the offer and closing procedures; trends, negotiation and much more. Often they can point you to better financing options.

Contact us at Lakeview Realty Inc. to explain the full benefits of working with one of our sales representives.

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What do all those abbreviations mean?

What does it all mean … all of the short forms in listings, ads or feature sheets?    

The following are just a few of the common abbreviations you might see.

A/C Air
conditioning
Apt. Apartment
Appls. Appliance
Bach. Bachelor
Balc. Balcony
B/I Built-in
Bkr. Breakfast
Bsmt. Basement
Bth.,
Bthrm.
Bathroom
Br,
Bed., Bdrm.
Bedroom
Brdlm.
w/l
Broadloom
where laid
Bldg. Building
Bung. Bungalow
Cath.
Ceil
Cathedral
ceiling
C/A or
C.a.c.
Central
air, central air conditioning
C vac,
C/vac., Central vac.
Central
vacuum
Condo. Condominium
Det. Detached
Db. Double
Elf. Electric
light fixtures
Ex. Exercise
Exp. Exposure
Ext. Exterior
Fam.
Rm.
Family
room
Foy. Foyer
Fncd. Fenced
Fn.
Bsmt.
Finished
basement
Frpl.,
Fpl., Fp.
Fireplace
Fl. Floor
Fur. Furnace
Gam. Games
Gb&
e.
Gas
burner & equipment (furnace)
Gar. Garage
Hdwd
Flr., Hrdwd Flr.
Hardwood
floor
Incl. Included
Kit.
Kitch.
Kitchen
Lau. Laundry
Lib. Library
Lof. Loft
Lrg.,
Lge.
Large
LR. Living
room
Lux. Luxury
Nur. Nursery
Obf. Open
brick fireplace
Off. Office
O/L’s Over
looks
Pan. Pantry
Pla. Play
Pkg.,
Prkg.
Parking
Ph. Penthouse
Pc. Piece
Priv.,
Pr.
Private
Rec. Recreation
Reno.,
Reno’d.
Renovated
Rm. Room
Sep
Entr.
Separate
entrance
Sit. Sitting
S/L Storage/locker
Sol. Solarium
Spac. Spacious
Stry. Storey
S&S Storms
& screens
Sub
Div.
Subdivision
Tan. Tandem
Twnhse. Townhouse
Utl. Utility
W/O Walk
out
W/W Wall to
wall
W/D Washer/dryer
Wkshp. Workshop
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Agency Overview – Working With a Brokerage

Realtors work within the Law of Agency

As of January 1st, 1995, the Ontario Real Estate Association required agents to disclose to everyone involved, who it is they represent.

The Way It Was

In the past, many buyers thought that agents helping them were working in their best interests. The law, however, states that their duty lies with their client. Until now, that was always the Vendor. A buyer could always expect competent service, but in most cases, both agents were “working for the Vendor”

Now.. The buyer has a choice as to how he/she is represented.

  • The Agent is the Real Estate Company (the Broker) and all it’s salespeople
  • The Client is the party who contracts for an Agent to act on behalf of that party and assist with their real estate transaction
  • A customer is a person who receives services from another person’s agent, but they are not the Client of that person

Clear as mud?

Client.. Buyer Broker Situation.

This has become probably the most common situation now because a purchaser can hire an agent to work on their behalf to negotiate the best price and terms for them.

The buyer then becomes “their Client” and the agent must disclose any information that may affect their decisions.

The Sales Rep owes a fiduciary duty to that buyer.. confidentiality, disclosure, accountability etc. and will be able to give direct advice as to market activity, strategy etc.

The agent would work with the buyer to the fullest, making sure their interests are protected. This would include providing regular information on new listings, sales, and other pertinent information.

The best part is … There are no additional costs to hire an agent to represent you. (unless otherwise arranged). The buyer’s agent can be paid by the listing broker, as agreed upon in the listing agreement and MLS arrangements.

If the buyer chooses to be a client, then he/she must sign a Purchaser Agency Agreement with the agent, whereby the buyer agrees to work with that agent exclusively for a designated period of time.

If a buyer doesn’t choose this, then the agent is working for the Vendor, as before.

This can be a fairly lengthy topic, and this is just meant to be a very brief overview. Here are a few facts that may help you understand the relationships a little better:

REALTORS are governed by the legal concept of “ Agency.”

An agent is legally obligated to look after the best interests of the person he or she is working for. The agent must be loyal to that person.

A real estate company may be your agent – if you have clearly established an agency relationship with that REALTOR. But often, you may assume such an obligation exists when it does not.
REALTORS believe it is important that the people they work with understand when an agency relationship exists and when it does not – and understand what it means.

In real estate, there are different possible forms of agency relationship:

1 . Seller’s Agent

When a real estate company is a “seller’s agent,” it must do what is best for the seller of a property.

A written contract, called a listing agreement, establishes seller agency. It also explains services the company will provide, establishes a fee arrangement for the REALTOR’s services and specifies what obligations a seller may have.

A seller’s agent must tell the seller anything known about a buyer. For instance, if a seller’s agent knows a buyer is willing to offer more for a property, that information must be shared with the seller.

Confidences a seller shares with a seller’s agent must be kept confidential from potential buyers and others.

Although confidential information about the seller cannot be discussed, a buyer working with a seller’s agent can expect fair and honest service from the seller’s agent and disclosure of pertinent information about the property.

2. Buyer’s Agent

A real estate company acting as a “buyer’s agent” must do what is best for the buyer.

A written contract, called a buyer agency agreement, establishes buyer agency. It also explains services the company will provide, establishes a fee arrangement for the REALTOR’s services and specifies what obligations a buyer may have.

Typically, buyers will be obliged to work exclusively with that company for a period of time.

Confidences a buyer shares with the buyer’s agent must be kept confidential.

Although confidential information about the buyer cannot be disclosed, a seller working with a buyer’s agent can expect to be treated fairly and honestly.

3. Dual Agent

Occasionally a real estate company will be the agent of both the buyer and the seller. The buyer and seller must consent to this arrangement in their listing and buyer agency agreements. Under this “dual agency” arrangement, the company must do what is best for both the buyer and the seller.
Since the company’s loyalty is divided between the buyer and the seller who have conflicting interests, it is absolutely essential that a dual agency relationship is established in a written agency agreement. This agreement specifically describes the rights and duties of everyone involved and any limitations to those rights and duties.

Who’s working for you?

It is important that you understand who the REALTOR is working for. For example, both the seller and the buyer may have their own agent which means they each have a REALTOR who is working for them.

Or, some buyers choose to contact the seller’s agent directly. Under this arrangement, the REALTOR is working for the seller, and must do what is best for the seller, but may provide many valuable services to the buyer.

A REALTOR working with a buyer may even be a “sub-agent” of the seller. Under sub-agency, both the listing agent and the co-operating agent must do what is best for the seller even though the sub-agent may provide many valuable services to the buyer.

If the seller and the buyer have the same agent, this is dual agency and the REALTOR is working for both the seller and the buyer.

Code of Ethics

REALTORS believe it is important that the people they work with understand their agency relationship. That’s why agency disclosure is included in a self-­imposed Code of Ethics, which is administered by the Real Estate Council of Ontario.

The Code requires REALTORS to disclose in writing the nature of the services they are providing and encourages REALTORS to obtain written acknowledgement of that disclosure. The Code also requires REALTORS to enter into a written agency agreement with any sellers or buyers they are representing.

For more detailed information, please contact us.

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Can You Afford a Home?

MortgagesYour “Dream Home” becomes a nightmare when you end up “house poor,” with most of your income going to pay for the mortgage and unexpected costs, with only a little left over for enjoyment.

When buying a home you need to be practical, realistic and informed. Lakeview Realty Inc. real estate specialists can assist you in finding the “right home.” We can also assist you in evaluating mortgage options, obtain financing and review the anticipated costs involved.

Are you considering applying for a Mortgage?

Why not make your first stop with our “In House Mortgage Specialist.”

Within this website, you will find an outline of the normal costs involved in buying a residential “resale” home and a guide for calculating mortgage payments (at different rates and amortization periods — Note the amortization period has nothing to do with the term of the mortgage. The term is the length of time before maturity and refinancing whereas the amortization period is the period that is used to calculate monthly payments.. this is a very basic definition).

If you require any assistance applying for a Mortgage, please contact us to set up a call or appointment.

What You Can Afford.

There are a few things to consider:

Down Payment & Closing Costs:

This is the amount that you have available on-hand to initially invest in a home, bearing in mind that you have to keep a “reserve” for closing costs and moving. The land transfer tax is the biggest closing cost. See the chart in the following pages, plus the other costs involved.

You will be required to make “a Deposit” in the downpayment when you make an Offer, and the balance of the down payment will be paid on closing. The difference between the purchase price and your down payment will be covered by the mortgage loan.

The Mortgage:

How much can you afford to borrow?

A conventional mortgage is a mortgage that does not exceed 75% of the sale price of the home, with a down payment of 25%. There are other options available. A first mortgage can be obtained for up to 95% of the value of the home with as little as 5% down. There are qualifications and conditions which we would be happy to discuss with you and provide the details.

The first step is to calculate the amount which you can afford to repay the financial institution for principal and interest on a monthly basis. Click here to try our Mortgage Calculator

Financial institutions do this by calculating your debt/service ratio.

They calculate this on two different levels.

The GDS. (gross debt service) is the maximum amount which they feel you should pay for Principal & Interest (P & I). Typically, 32% of your gross combined monthly income is the amount most commonly used.

The TDS (total debt service) is the other consideration. This amount factors in all other monthly expenses for items such as car loan or lease, personal loan(s), etc. Typically, 40% of your gross combined monthly expenses along with your mortgage payment is the factor used for TDS. This means that your monthly payments for P & I, plus your other monthly fixed costs would not exceed 40% of your gross, combined monthly income.

 Interest Rates & Other Variables:

The amount of the mortgage you can arrange, based on payments you can afford, depends on the interest rate and the amortization period you use. The lower the rate, (and the longer the amortization period) the larger the mortgage amount you can afford will be.

Terms of the mortgage and other things to consider might be:
-How open is the mortgage? (When can you pay it off without penalty/ or portions of it?)
-Is the mortgage portable? (Can you move it to another house if you buy another in the future?)

The details on this page are for general informational use only.

Please contact us today to discuss your specific financial and mortgage options.