Top Real Estate Lessons of 2012

                                                      By Mark Weisleder
Fri Dec 28 2012

Buyer Beware

Between signing a real estate deal and closing, there are plenty of things that can go wrong. By being prepared you can make sure that your deal is kept on the straight and narrow.

Here are some recurring themes I saw this year.

1. Appliance disappointments


Sellers will only guarantee that the appliances and home systems they leave behind will be working on closing. If something breaks down shortly thereafter, it is not the seller’s responsibility. Buyers should consider insurance against these types of breakdowns. Some companies that provide these policies are Canadian Home Shield, Resrx and Direct Energy. As with any insurance policy, check the deductibles and what is and what is not covered.

2. Closing day disappointments


Sellers have to move out as soon as title changes hands. This can be as early as 9 a.m., although most deals close between 1 p.m. and 4 pm. If the seller is still there after the title changes, they can be liable for any extra moving costs the buyer incurs.

Sellers must also be sure they give their lawyer the right keys so the buyer can get in. On more than one occasion in my experience, the seller left one key but there were two locks on the front door. The buyer had to pay a locksmith and sent the bill to the seller. The same goes for junk left behind. If you leave it, you may have to pay the costs to remove it.

3. Arrange bridge financing


Most buyers want to close their sale and purchase on the same day. Sometimes it doesn’t go smoothly. For example, if the person buying your home is late closing, your lawyer may not be able to get the money to the lawyer who is acting for the person selling their home to you in time. This can result in the seller cancelling the deal if you are late, or charging a penalty to extend it for another day. In addition, you will likely pay additional moving costs as your seller may not have left the home by the time your movers arrive.

Bridge financing gives you the ability to have the funds on hand if needed and merely pay interest on the money for one or two days.

4. Appraisal policy requirements


More and more lenders are requesting that an appraisal be done a few days prior to closing, after the buyer has waived their financing condition. If the appraisal says your home is not worth what you paid for it, they will not lend you what you expected, and you will have to come up with this additional down payment yourself. This can be disastrous at the last minute.

Ask about your lender’s policy regarding appraisals before you apply for any mortgage loan. Make sure they will provide all approvals before you have to waive any finance condition.

5. The new home HST rebate


People who buy a new home or condominium from a builder must understand that the HST rebate is built into the sale price. The builder will get this money, after closing, from the Canada Revenue Agency (CRA), so long as you move into the home. If you are not moving in, but intend to rent it out or resell it immediately, you will have to pay this HST, typically between $20,000 and $30,000, to the builder on closing. Otherwise CRA may chase you for the money later.


So this is just some of the things you need to be aware of when purchasing a home.  It is always best to consult your Realtor if you have any questions about any of these things. 
By being properly prepared in advance, you should enjoy a positive home closing experience in 2013.



Happy New Year

Happy New Year 2013

As 2012 comes to an end, I want to take a moment and thank each and everyone of you for friendships, your business and your support and laughter.   May 2013 bring you all great success, good health and magic moments to make memories that will carry you through the years to come.   

Remember, people may never remember what you said but they will always remember how you made them feel … xo

To your success,
Michelle Makos

First Time Buyers – Tread Carefully

Your government is increasingly worried about you getting into the housing market, if you haven’t figured it out by now.
Ottawa has made it harder for you to get credit and is trying to limit how much debt you can take on. Has the message sunk in yet? The real estate industry says yes, and points to a dramatic drop in sales over the past few months as proof new mortgage regulations have stifled the market.
The lesson for consumers is to tread slowly.
It’s a reality check for a lot of buyers in the market for what they could realistically afford.

To find out more about this … read more

Thinking of Selling? Get a free home evaluation

Selling My Home
If over the holidays, you should decide that you need to make a move…. let’s talk.  I can give you an idea of what you need to do to prepare your home for the upcoming Spring market and to get the most amount of money for your home.  Spring market starts soon……..let’s get together and look at your options.
Feel free to email me at michelle.makos@rogers.com or call me at 905-831-3300 or 416-300-3004.  

Most Common Selling Mistakes

Thinking of Selling Your Home in 2013?

What are the five most common mistakes people make when listing their home for sale?   Look and listen.
Have a question?  Call me or email me at michelle.makos@rogers.com.    If you would like a free home evaluation, let me know.   I am here if you need my help.

Real estate is my business.  I treat every client like they are my only client.  It is your biggest investment, choose someone who cares about YOU.   Have a super day and wonderful 2013.  Cheers, xo

How much extra do I need to close my deal?

Closing Costs

Closing costs are the additional charges you will need to have money for when your house closes.   Many people are often surprised at the additional costs over and above the price of the home. 
According to the CMHC and Genworth Financial you should have at least 1.5% of the purchase price for closing costs in addition to the down payment (have around 2.5% to be on the safe side). The costs vary among provinces and cities.
Home Inspection Fee Generally Required with Resale Homes
Certified Home Inspector
Below you will find a brief explanation of these costs. Please note these are some of the closing costs you may encounter depending on your specific situation. Use this as a guideline then talk with your lawyer who can provide a more realistic estimate for your situation.

Appraisal Fee Generally Required with New Homes

An appraisal provides the lender with a professional opinion of the market value of the property. This cost is normally the responsibility of the homeowner and it can cost between $100 – $300.

Home Inspection Fee Generally Required with Resale Homes

A qualified home inspection, top to bottom, is for the benefit of the buyer. A home inspection can cost anywhere from $300 – $400 and is well worth the investment. When hiring a home inspector make sure the inspector has liability insurance just in case they overlook something.

Fire Insurance

Mortgage lenders require a certificate of fire insurance to be in place from the time you take possession of the home. The amount required is generally the amount of the mortgage or the replacement cost of the home. This cost can vary on the property size, amount of coverage, the insurance company and the municipality. The cost can vary anywhere from $250-$600 annually for most properties.

Provincial Sales Tax on Mortgage Insurance

If your mortgage is insured, (CMHC or Genworth Financial), you will be required to pay the applicable taxes on the insurance premium on closing. While the insurance premium can be added to the mortgage amount, the tax must be paid at closing.

Land Survey Fee or Title Insurance Fee

A recent survey of the property is usually required by lenders. If one is not available the cost can range between $600 – $900 for a new survey. In lieu of the survey most lenders today will accept title insurance which can cost considerably less.

Legal Costs and Disbursements

Lawyers and notaries charge fees for their services involved in drafting the title deed, preparing the mortgage, and conducting the various searches.
Disbursements are out-of-pocket expenses incurred during the process such as registrations, searches, and supplies. Shop around or ask your Realtor, some are cheaper than others.

Land Transfer Tax

Most provinces charge a land transfer tax payable by the purchaser. The amount varies depending on the province. Land transfer tax is based on the purchase price. First time home buyers purchasing a new or re-sale home may be entitled to a refund.

New Home Warranty

Land Transfer Tax
Added expenses
In most provinces new homes are covered by a new home warranty program. The cost to the purchaser for this warranty is approximately $600 and should the builder default or fail to build to an agreed-upon standard the fund will finish or repair the deficiencies to a maximum amount. For more information on Ontario new home warranty visit http://www.tarion.com.

HST

HST is payable on the purchase of a newly constructed homes only. If you are purchasing a new home make sure you know who pays this, you or the builder. On the offer the purchase price will say “Plus HST” or “HST Included” and who gets any HST rebates. Many builders have included this cost into the purchase price so the buyer does not have to come up with it at closing.

Closing Adjustments

An estimate should be made for closing adjustments for bills the seller has prepaid such as property taxes, utility bills, and other charges. Any bills after the closing date are the responsibility of the purchaser. A lawyer will let you know what they are once the various searches have been completed.

3 Deadly Mistakes Every Homebuyer Should Avoid

3 Deadly mistakes every homebuyer should avoid.

Deadly Mistake #1: Thinking you can’t afford it.
Today, buying the home of your dreams is easier than ever before.  Many people who thought that buying the home they wanted was simply out of their reach are now enjoying a new lifestyle in their very own new home. 

Buying a home is the smartest financial decision you will ever make.  In fact, most Canadian home owners would be financially broke at retirement if it wasn’t for one saving grace – the equity in their home.  Furthermore, mortgage rates are more flexible today than ever and tax allowances favor home ownership.

Real estate values have always risen steadily.  Of course there are peaks and valleys, but the long term the trend is a consistent increase.  This means that every month when you make a mortgage payment the amount that you owe on the home goes down and the value typically increases.  This owe less-worth more situation is called equity build-up and is the reason you can’t afford not to buy.

Even if you have little money for a down payment or credit problems, chances are that you can still buy that new home.  It just comes down to knowing the right strategies, and working with the right people.  See below.

Deadly Mistake #2: Not hiring a buyer’s agent to represent you.
Buying property is a complex and stressful task.  In fact, it is often the biggest single investment you will make in your lifetime.  At the same time, real estate transactions have become increasingly complicated.  New technology, laws, procedures and competition from other buyers require buyer agents to perform at an ever-increasing level of professionalism.  For many homebuyers, the process turns into a terrible, stressful ordeal.  In addition, making the wrong decisions can end up costing you thousands of dollars.  It does not have to be this way!

Work with a buyer’s agent who has a keen understanding of the real estate business and who is on your side.  Buyer’s agents have a fiduciary duty to you.  That means they are loyal to only you and are obligated to look out for your best interests.  Buyer’s agents can help you find the best home, the best lender and the best inspector.  Best of all, in most cases, the buyer’s agent is paid out of the seller’s commission, even though he/she works for you.

Trying to buy a home without an agent at all is, well… unthinkable.

Deadly Mistake #3: Getting a cheap inspection.

Buying a home is probably the most expensive purchase you will ever make.  This is no time to shop for a cheap inspection.  The cost of a home inspection is very small relative to the home being inspected.  The additional cost of hiring a certified inspector is almost insignificant.  As a homebuyer, you have recently been crunching the numbers, negotiating offers, adding up closing costs, shopping for mortgages and trying to get the best deals.  Do not stop now.  Do not let your real estate agent, a patty-cake inspector or anyone else talk you into skimping here.  

NACHI front-ends its membership requirements.  NACHI turns down more than 1/2 the inspectors who want to join because they can’t fulfill the membership requirements. 

NACHI certified inspectors perform the best inspections by far.  NACHI certified inspectors earn their fees many times over.  They do more, they deserve more, and yes they generally charge a little more.  Do yourself a favor…and pay a little more for the quality inspection you deserve.