Frequently Asked Questions
In most provinces, traditionally the seller agrees to the commission that will be paid to the agent that is working for them. From there, once the listing is posted publicly on the Multiple Listing System, the commission that agent will pay to a cooperating broker is posted there. Essentially, this means that both buyer and seller agents are working for free until the deal is closed! The buyer will almost never write a cheque to pay a broker, and the agent working for the seller is paid out of the proceeds of the sale. For rentals, the way the market is right now, the tenant is usually charged a fee of one month’s rent that is often split between two cooperating brokers.
Inspection – Inspection costs vary based on the area, size of the home, and the services the inspector is providing. For a standard home inspection, a buyer should budget $400-600. Of course, other inspections require additional fees, so if you’re thinking about a lead inspection or an additional pest inspection there will be an additional cost, and so on. Lender Costs/Fees (Appraisal, Credit Report, etc) – These fees are often lumped into your closing costs that are paid at the end of the transaction, but sometimes are charged up front. Expect to pay about $390 for an appraisal. Lawyer/Legal Fees – Real estate lawyers and notaries traditionally charge a flat fee and do not charge by the hour. A real estate lawyer that is able to work on behalf of your lender will often waive the personal representation fees on your behalf, as they will be compensated by the lender. Expect to pay about $1000-1200 for lawyer/notary fees. You will be required to pay a deposit once you have performed your due diligence (inspection, financing approval, etc) which is usually around 5% of the purchase price.
If you can put down 20% or more, this is called a conventional or low ratio mortgage and usually does not require mortgage protection insurance. if you are putting down less than 20%, this is a high ratio mortgage and will require that you pay extra for mortgage default insurance through Canada mortgage and housing corporation (CMHC), Genworth financial, or Canada guarantee. We recommend speaking with your financial institution or mortgage broker for further details.
Assessment/Appraisal Difference We get asked all the time about the different values assigned to a property, and why they often seem to be so substantially far apart! Here’s a quick rundown: Market Value: Simply put, this is what a buyer is willing to pay for a property. A real estate professional will use their knowledge of the market as well as a comparable market analysis to give a range of value for a specific property; however, there is both an art and a science to this process so each real estate professional may have a different opinion of value. Appraised Value: An appraisal takes place if there is financing being obtained on a home (or some other situation arises, such as for estate/probate purposes). Basically, a lender wants to be sure that the home is worth what the buyer is paying (and what they are lending), as they will be holding a mortgage on the home as collateral for their loan. Appraisers traditionally will create a radius around a property and select 5-6 comparable properties that have sold, and add or subtract value based on the finishes, overall condition, and basic specs of a property. If financing, it is important that the property appraises. If it does not, the lender may deny the loan. Assessed Value: An assessment is done for tax purposes. The city/town assessors’ office places a value on each property in the municipality each year in order to ascertain what the tax on each property should be.
Our current market conditions are simply a function of supply and demand, because of this, there are often multiple buyers bidding on the same one property, which creates “the auction effect” – or a bidding war. At one of our recent listings, the scarcity of similar properties becoming available in the neighborhood lead to over a dozen offers being submitted, the majority over ask and a handful presenting as either all cash or boasting no contingencies. It’s not always the highest price that seals the deal, sometimes, other aspects of the offer add significant value to the seller. Limiting contingencies can lessen risk for sellers who are worried about their ability to buy their next place, and adding a use & occupancy for a seller after leaseback might help with the timeline on their purchase or significantly increase their buying power. Oftentimes, when there are a number of offers on a property, the agent working for the seller will work with their client to narrow the field to 3-5 of the strongest offers and circle back to those buyers for a second round or “best and final”. This represents an opportunity for the seller to communicate their most desired terms and for the top offers to improve their position before the seller makes a final decision. In our market, there is often an emotional desire to “win” that overpowers the need to make a sound investment decision. It’s very important to discuss goals with your agent after signing a Buyer Agency Agreement in order that they make be able to effectively advise you while keeping your investment goals in mind to avoid making a decision that could negatively impact your financial future.
Usually – wrong. A listing agent is better defined as “the agent working for the seller”. When the listing contract is signed the commission being paid by the seller to the listing firm is legally bound; therefore, generally speaking, the only entity that would benefit from working with the listing agent directly would be the agent working for the seller’s pocket. In addition, when the listing contract is signed it also creates a fiduciary responsibility between the agent working for the seller and the seller. What this means is that anything the agent working for the seller learns about you, they are required to disclose to the seller (unless you and the seller sign a dual agency agreement which basically makes the listing agent a messenger between the two parties). Simply put, if you work with the listing agent directly, you have no representation or advocate in your corner.
This is a common question given the market that we work in. With rising prices all over the area, it can be daunting to think about making such a large investment. There are a couple of variables to consider here: 1. Interest Rates: As interest rates continue to rise, buying power decreases. The negative correlation of rising rates outweighs the impact of a market slowdown. When you look at the overall cost of interest rates rising, for every .5 rate increase, it represents an additional 5.5% that you'll be paying each month. To put this into perspective - for a 30-year loan on a $500,000 purchase with 20% down, you're looking at an additional $43,000 in mortgage payments over the term of the loan for each .5 rise. 2. Do you have something to sell?: If you are planning to leverage equity from a current home, or need to sell before you will buy, keep in mind that should the market cool down, so does your investment. Talk to a mortgage professional sooner rather than later to discuss various scenarios for your next purchase.
It’s not necessarily a matter of “more” liability, it’s a matter of how it’s shared. With a single-family home, your homeowner’s insurance will be more expensive than a condo policy, and general maintenance and repairs are solely the owner's responsibility, so there could be more work/additional cost associated with a single family home. A condominium spreads the liability and burden of maintenance and repair costs across all of the owners, and your condo insurance policy is generally less expensive as the strata's master insurance covers a lot of the larger ticket items (roof, etc). It’s important to work with your agent and lender to understand the implications of each when deciding which is a better fit both financially and from a maintenance standpoint longterm.
A solid pre-approval can certainly give you the leg up on competing offers, so it’s important to be ready when it comes to working with a lender. In short, your pre-approval is the lender saying you can afford “x” after taking a quick glance at your financial situation. The majority of lenders will have very similar rates; however, a local lender on the ground in the area you’re looking in will likely be more competitive and better-known amongst agents, which surprisingly can have an impact on the pre-approvals credibility. You’ll also want to consider access to your mortgage banker throughout the process – a big question to ask is whether they are available on weekends (and whether you will be able to access them via cell phone!). In order to be best prepared for getting pre-approved, begin compiling the following items: 1) Tax returns for the past two years 2) Pay stubs for at least three months. If you are changing jobs or relocating, a copy of your offer letter. You’ll want to talk to your lender about your career change prior to a preapproval, as it may impact your ability to obtain a loan 3) Bank statements for the past three months 4) Other asset/income statements, such as retirement accounts, or real estate leases if you own investment property 5) If obtaining money from a third-party (friend or family member), a gift letter, which your lender can help you with 6) An idea of your credit score and monthly debts – student loans, car loans, etc will be used to calculate your debt-to-income, an important factor in mortgage lending 7) If you have a mortgage already, a couple of months statements may be needed by your lender 8) If you are divorced, a copy of your divorce decree and documentation of any child support or alimony may be necessary Getting all of these items together in advance will help you and your lender be prepared. Many lenders, if given all of this information up front and authorized to pull your credit, will actually be able to pre-underwrite your loan, meaning that you will be approved as a buyer and they will simply need to “approve the home” via appraisal and if needed, a condo document review and verification of facts through a condo questionnaire. This can be a huge bonus and help you shine amongst multiple offers.
There are quite a few things that you can do to prepare your home for the market. At the minimum start by patching holes in the walls, fixing leaky faucets and replacing anything visibly broken. It’s also a nice touch to clean carpets, removing any wear or stains, and to repaint any bold colors a warm, neutral tone helping the overall value of your home.
Looking to increase the value of your home before putting your home on the market? We recently wrote a blog about the 5 renovations that bring in the highest return on investment, click here to see what you can do to increase your home’s value.
The answer here takes into account the neighborhood, condition of the home, market fluctuations, and so much more. We’re happy to put together a custom report for you on your home’s value! Get started by filling out the form on this page.
Great question! This process varies from month to month, but we want to sell your home as quickly as possible. We consider ourselves a very tech savvy Real Estate team and we have an in-depth Marketing process that we want your home to be a part of!
Staging is a vital part of the home selling process. They say that first impressions are everything, and this couldn’t be truer when it comes to potential buyers walking into your home for the first time.
We often find that homes that have been staged sell faster and for more money than comparable non-staged homes.
Staging your home can take many different directions, but our goal is to let the potential buyer see themselves in your home. That task is much more attainable without your personal photos and mementos.
The short answer? No.
If a seller is present while a potential buyer comes to see the home this can create a sense of awkwardness for both parties. The buyer tends to feel uncomfortable speaking candidly about the listing, and the seller’s involvement may potentially disclose unnecessary information that could further affect the sale of the home.
While usually commission is negotiable and depends on a few different factors, rates vary from 7% on the first $100,000 and between 2.5-3.5% on the balance of the sale price depending on the agent and services provided.
We’re happy to talk more about our commission process as well as all of the services that we offer to our sellers. Let’s set up a time to chat here.
Yes and no! Properties will continue to sell year round but there are periods of higher demand. Depending on when you decide to sell could directly affect the amount of time on market and the final sale price of your home.
Weather conditions, according to area, play a role in popular times for buying/selling. Generally speaking, spring is a season in which the market picks up. Towards the latter of summer, the market demand can get substantially slower as buyers and realtors take their summer vacations.
Same goes for the fall. A second demand occurs up until about November, prior to the approaching holidays. The upside to keeping your home on the market during the holidays could be directly related to supply and demand, as there are constantly buyers in need of homes. Seller competition is substantially lower.
In general, you have the obligation to disclose anything that may be a potential problem or affect the value of the home.
In most provinces, it’s illegal to directly conceal or lie about any major issues going on in the house such as asbestos, roof damage, or lead paint. Things like strata fees and rules, neighborhood meetings, and zoning requirements should also be noted. You may want to disclose anything of the paranormal variety or if someone has passed away in the home.
Once again, the short answer is NO! If you have purchased a home, sold a home, or just hunted for homes, you have most likely used third party real estate search engines to search for homes. These sites provide estimated values of homes for nearly every home in Canada. However, these are not always accurate home values for your local market. All estimates are based on calculations and formulas that do not necessarily provide accurate information. These online guesstimates can be deceiving and lead to both upset buyers and sellers. You can receive a more accurate value of your home by speaking with a top Realtor in your local area, not a third party real estate website. If you are looking to see an accurate and up-to-date evaluation of your home's current value contact us today.
