Real Estate Frequently Asked Questions

Buyers and Sellers
  • I'm really new to this - where do I start?

    This is the time to prepare – like the old saying: Proper Preparation Prevents Poor Performance.  In this case, preparation will allow the process to run as smooth as possible, given the current market that is.

    If you’re buying, check out the Buyers Guide to start.  Sellers, check out the Sellers Guide.  They are the basics to be clear, but a good beginning.

    Let’s look at sellers first, in this process.  To begin, prepare by calling a Mortgage Broker, a lawyer, and your Realtor (I know a guy).  You will want to know clearly what your comfort level is in purchasing, and what you will be allowed to borrow.  You will also want to begin the legal process at this time, so no hurdles are needed to be cleared later.  As for the me, I’ll begin the comprehensive process of Selling your home, as we prepare to search for the new one.  This will include getting the inspection done quickly, and assessing any needs before listing so you have the time needed to address if things come to light.

    As for Buyers, much is the same to begin.  Mortgage Broker, lawyer, and Realtor (like I said, I know a guy) are your main contacts.  If there is no property to sell, its about time and readiness.  The ability to be prepared will be an asset, and this means full readiness financially for what you are comfortable with.  There are strategies and tactics that may win you an offer, but that comes later in our discussion.

  • How much should we put down for a deposit on the offer?

    Now we are getting to some strategy!

    This question is answered on a case by case basis, but there are some basics.  First and foremost – the deposit on the offer is different from the deposit you will need for a Mortgage (if needed).  However, the deposit you place on an offer will be taken off the principal of the home, if the offer is accepted.

    Confused?  Sorry about that, let’s take an example.

    The home in question is $500,000 – and you place an offer with a deposit of $5,000 upon acceptance.  That cash deposit is against the principal, but the balance due on completion is still $495,000.

    In regards to the deposit for the Mortgage itself, in this example the remaining balance of $495,000, there are many variables and this is best discussed with your Mortgage Broker.

    But back to the deposit on the offer.  This can be a strategic position which may award you an offer if a competing position is similar.  That portion, is best discussed when we are completing your proposal!

  • As a homebuyer, what can I expect when there are competing offers on a home?

    During a bidding war, the listing brokerage must disclose the number of active offers on a property, whether any of the buyers are represented by the listing brokerage, and whether any offers include an adjustment to the commission the seller would pay the buyer’s brokerage. These disclosures help ensure a level playing field for all buyers.

    The seller can accept or reject your offer, make a counter-offer, or even give one or more buyers an opportunity to “improve” their offers.

  • In this pandemic, how can I protect myself while viewing homes?

    Brokerages and salespeople must follow public health guidelines and safety protocols when showing a home. Many brokerages offer virtual showings to maximize the number of buyers seeing a property, while limiting in-person visits to those who are particularly interested.

    As a seller, you can request a limit to the number of visitors during all viewings, insist that no one displaying symptoms is allowed inside, and also provide specific instructions to reduce the touching of surfaces, among other protocols.

    As a prospective buyer, you should make sure to wear a mask and use hand sanitizer as you enter the home.

  • Difference between listing price and sale price, and why are they often so different?

    In years past, the asking or listing price was generally a close estimate of what the home was worth, and the selling price would end up being very close to the asking price.

    However, in today’s hot housing market, the list price is more often being used as a marketing tool to generate interest in a property. A seller has the legal right to set the asking price at whatever amount they believe is best for selling their home. RECO does not regulate the decisions of sellers or buyers.

  • What are conditions, and why does it seem nobody is using them anymore?

    Simply put:  Conditions on an offer protect you the buyer.  They should never be taken lightly and never removed unless you understand clearly what that means.

    With that said, volatility in a market may make having conditions on an offer  difficult to be accepted.  We see very few homes have conditions on the sale, this is true, at this time.  But that doesn’t mean that’s always the case, or is right for you.  There are ways to protect yourself and put an offer in as well.

    I’ll always provide advice to protect my clients, but as I’m not legal council, professional lawyer advice should be sought.

  • We are first-time buyers frustrated by the current real estate market. What advice or tips do you have for us?

    First, interview a few real estate agents and choose the one who best understands your needs.

    Second, manage your emotions: make sure you know what you want or need in a property and stick to what you are prepared to pay.

    Third, if you want to submit an offer without any conditions, be sure you’re comfortable with taking that risk as it can have significant repercussions.

    And fourth, real estate contracts are legal documents, so you read and understand everything before you sign, and get legal advice.

  • Competing bids on a home and the seller accepted a lower offer? Doesn’t the seller have to accept the highest offer?

    Sellers are not required to choose the highest-priced offer. Other factors can influence their decision, such as the size of the deposit, the closing date and other terms and conditions they prefer.

Some Q & A’s taken directly from the “Ask Joe” Column of the Toronto Star.  “Joe” is Joe Richer – the Real Estate Council of Ontario (RECO) Registrar.  Parts of the original piece can be read here.

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