|PREPARING FOR THE REAL ESTATE ROLLER COASTER RIDE|
|Never wear your emotions on your sleeve during the real estate ride.
Selling your home is a huge financial transaction that can trigger a roller coaster of emotions. When you’re being tossed around at every turn, you need to hang on and stay on track.
Although you’ll likely have a strong connection to your home, try not to get offended if a potential buyer wants to rip up your kitchen or paint over the wood trim.
Also, never take comments personally. It’s natural for people to complain when they’re interested in something so while criticisms may seem negative, they’re actually a sign that the buyer’s interested in your home.
If you receive a “low ball” offer, remember that it’s often just a starting point but be aware of tactics such as “low balling” where an attractive price is initially offered only to be adjusted at a later point on the basis that circumstances have changed. Recognizing these strategies will help you keep a balanced perspective.
If you’re able to generate multiple offers, make sure you consider more than just the price. There’s nothing worse than accepting a conditional offer just because it’s over the asking price only to have it fall apart a month later when you could have accepted a firm cash offer that was almost as good.
It’s completely natural for both buyers and sellers to experience a wide range of intense emotions as they navigate through the complex real estate process. However, if you hop on the real estate roller coaster with a competent agent by your side, you’ll not only enjoy the ride but you’ll look forward to doing it again!
The Biggest Bang For Your Buck!
Whether renovating for yourself… for long term use, or in contemplation of selling, it is important to know where you should start and which items will offer a real payback.
Bathrooms and kitchens are always at the top of any list, and they are often the rooms that make the decision when buyers are comparing homes. However, never underestimate the value of a simple paint job to improve the appearance of a house.
When doing renovations, it is wise not to overspend (or under spend either) and be aware of current trends. The best advice is to hire a contractor or a specialist and do some comparison shopping first. For further information concerning contractors, we would be pleased to offer you our Concierge Service.
Below is the “Top 10 List” according to the Appraisal Institute of Canada (as of the date of their most recent online report).
Painting & Décor (interior)
The most important thing to do when getting your home ready for sale is to ensure that it is clean, uncluttered and has a bright coat of paint. These will appeal to the most number of purchasers and are then in a position to visual their own belongings in the home without being distracted by strong colors or clutter etc.
Each house is unique and we would be happy to discuss and advise you on your specific situation.
The “Spruce-Up” for resale purposes
This option may only cost a few hundred dollars and a few hours of your time. Use this as a check list in getting your home ready.
Perhaps your home would take on a new look with some of the following items;
It is very important to carefully consider your pricing options when you bring your property on the market.
The biggest detriment to selling real estate is the all too common problem of overpricing. Anxious sellers often want to know why their property is not selling. The answer is usually one of three things: Location; Lack of Marketing and Exposure; or Price. There may be extenuating circumstances or factors that come in to play, but these are the most common things, with the most common being Price.
Why do we all sometimes make the common mistake of asking too much? There are several reasons. Obviously, we want the highest price possible for our home. Following are a few other thoughts:
Market value is defined at the price a property will bring if exposed for sale on the open market allowing a reasonable time to find a willing purchaser who buys with the knowledge of all the uses to which it is adapted and for which it is capable of being used.
If a property is properly priced it will do the following:
You may think that interested buyers “can always make an offer”, but if the home is overpriced, potential buyers looking in a lower price range will never see it to make that offer.Those who can afford the home at your asking price may recognize that they can get more for their money somewhere else. You may
Those who can afford the home at your asking price may recognize that they can get more for their money somewhere else. You may hear things like “It was too small for them” or “they want a main floor family room.. or an extra bedroom etc.”
What they are really saying is “They expected more for the Price”.
The Realtor does not determine what your home is worth. Market Conditions, Solds, Competitions, and Trends Determine Value, and then together we determine the price.
Don’t pick the Realtor who promises you the highest price to get you to list with them. Pick the one who knows the market and substantiates the price with facts and experience, like Lakeview Realty Inc. We are here for you! Just Contact Us.
As the saying goes…
This is especially true when marketing your home. Try to view it through the purchaser’s eyes, and review this check list to see if it measures up.
Driveway, Walk and Front Entrance:
Decks and Porches
Now all the major items are repaired or checked, following is an outline of last minute items to show to the best advantage.
Final check list for showings:
A few last minute tips:
These are the basic things that you should review and do where able or appropriate. There may be some other things that we can assist you with in terms of furniture arrangement and décor, that would make it easier for a purchaser to view your home.
If you need any assistance regarding names of dependable trades people or suppliers to help you get the job done, please don’t hesitate to ask. We are constantly adding to the list from satisfied clients. Visit our Concierge Services for more information
Spending the time and effort to prepare your home for sale can provide you with benefits you hadn’t imagined in both the length of time your home is on the market and the price you will realize for your home.
Most people ask us when we evaluate their home what things they need to do to prepare. The most important things are obvious. Do minor repairs, paint where necessary (neutral of course) and remove all clutter. There are a number of inexpensive storage boxes on the market that are attractive and useful, which you can use in your future home as well. It’s a good time to start sorting out and packing in moving boxes …or doing that garage sale that you have been planning for a while.
In the alternative, it is probably a good time to start sorting out and packing in moving boxes …or doing that garage sale that you have been planning for a while. “The Moving Store” has everything you need to begin the packing process, (such as different size cardboard boxes, tape guns, and labels etc.) It is also a good idea to have different colour labels for different rooms. (It makes it easier on moving day.)
If doing renovations.. the most important major renovations (as always) are kitchens, bathrooms and main floor family rooms.
We also have names of contractors, workmen, painters and flooring people that we have used and found reliable. Please click here to visit our Concierge Section.
Even if you are not planning on moving in the near future, but are some planning some improvements, make sure they are the right things.
We would be happy to visit and give our opinion on what to do and the current value of your home. Just Contact Us!
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 and Sale, (and any amendments or waivers) will be sent to your Lawyer or Paralegal as discussed.
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.
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:
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.
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.
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.)
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.
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.
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.
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.
An organized approach and checklist can make “The Moving Process” a lot easier!
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.
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!
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.
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.
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.
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)
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.
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.
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.
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 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.
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.
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.
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.
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.
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.
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)
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.
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.
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.
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.
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.
(The supply of homes on the market
(The number of buyers wanting homes
(The number of homes on the market is