BUYING A HOUSE
- Should I buy first or sell first?
- What's involved in buying a residential property?
- Should I buy new or re-sale?
- Why should I buy a home, instead of renting?
- How much can I afford to pay for a home?
- What is a home inspection and should I have one done?
- When you should start the mortgage process?
- What is a pre-approved mortgage?
- Can I use gift funds as a down payment?
- Should I wait for my mortgage to mature?
- How can you use your RRSP to help you buy your first home?
- What are the costs associated with buying a home?
SELLING YOUR HOUSE
- Should I buy first or sell first?
- Do I have to put a For Sale sign on my lawn?
- Can I restrict showings to meet my schedule?
- If my house doesn't sell within a specified time, can I take it off the market and put it back on later?
- Do you recommend staging my home before putting it on the market?
- Should I be present for showings to show prospective buyers all the special features of my home?
- If I price my home high, can't we always work our way down from there?
BUYING A CONDO
- What is a reserve fund?
- If something breaks in my condo, do I have to fix it or does the condo corporation take care of it?
- What do my maintenance fees cover, and will they increase?
- In addition to Maintenance fees and mortgage payments on a Condo, are there also property taxes? Condo's seem very expensive when you consider all three of these. Is it actually worth the extra cost?
BUYING A HOUSE
It isn’t necessary to have the proceeds of the sale of your home in hand to buy a new home. You can discuss bridge financing and other options that may work for you with your mortgage broker. In my experience, when your home sells, you will find the right one. And you will be one step ahead of the great majority of buyers out there. You will have been working with a Realtor to sell your home, so you’ll have gained a tremendous edge & knowledge of the market
Buying a home is an exciting time. But as one of the largest purchases you're likely to make, it's important that you get it right. Buying a home is one of your best long-term investments - so this means doing your homework and making sure that the property you will eventually buy is the right one for you in terms of price, location, value, size and lifestyle.
Personalized choices. You may be able to upgrade or choose certain items such as siding, flooring, cabinets, plumbing and electrical fixtures.
Up-to-date with the latest codes/standards. The latest building codes, electrical and energy-efficiency standards will be applied.
Maintenance costs. Lower maintenance costs because everything is new and many items are covered by a warranty.
Builder warranty. Most new homes come with a builder’s warranty. This can be important if a major system such as plumbing or heating breaks down. This warranty does not apply if you build the home yourself. Neighborhood amenities like schools, shopping malls and other services may not be complete for years.
Taxes. Such as the Goods and Services Tax (GST) will apply. However, you may qualify for a rebate of part of the GST or HST on homes that cost less than $450,000. For more information about the GST New Housing Rebate program, visit the Canada Revenue Agency website at, http://www.cra-arc.gc.ca.
Extra costs. You may have to pay extra if you want to add a fireplace, plant trees and sod, or pave your driveway. Make sure you know exactly what's included in the price of your home.
Easy access to services. Probably established in a neighborhood with schools, shopping malls and other services.
Extras included. Landscaping... Landscaping is usually done and fencing installed. Previously owned homes may have extras like fireplaces, finished basements or swimming pools.
No GST/HST. You don't have to pay the GST/HST unless the house has been renovated substantially, and then the taxes are applied as if it were a new house.
Possible redecorating and renovations. You may need to redecorate, renovate or do major repairs such as replacing the roof, windows and doors.
Number one: you will have a sense of personal satisfaction owning your own home. You will be able to create your own private space that is unique to you. When you own, you can do it all your way!
A second benefit of owning is that you can deduct the cost of your mortgage loan interest from your federal income taxes. In the beginning, interest will compose nearly all of your monthly payment, for over half the number of years you will be paying your mortgage. This can add up to BIG savings at the end of each year. You are also allowed to deduct the property taxes you pay as a homeowner.
Another financial plus in owning a home is the possibility of the home increasing in value over time. If you rent, you write your monthly check and it is gone forever. At the end of your lease, you have nothing and face the possibility of increasing rental rates.
To determine 'affordability' you will first need to know your taxable income along with the amount of any debt outstanding and the monthly payments. Assuming it is a principal residence you are purchasing, calculate 32% of your income for use toward a mortgage payment, property taxes, and heating costs. If applicable, half of the estimated monthly condominium maintenance fees will also be included in this calculation. Second, calculate 40% of your taxable income and deduct all of your monthly debt payments, including car loans, credit cards and lines of credit. The lesser of the first or second calculation will be used to help determine how much of your income may be used towards housing related payments, including your mortgage payment. These calculations are based on lenders' usual guidelines. In addition to considering what the ratios say you can afford, make sure you calculate how much you think you can afford. If the payment amount you are comfortable with is less than 32% of your income you may want to settle for the lower amount rather than stretch yourself financially. Make sure you don't leave yourself house poor. Structure your payments so that you can still afford simple luxuries.
A home inspection is a visual examination of the property to determine the overall condition of the home. In the process, the inspector should be checking all major components (roofs, ceilings, walls, floors, foundations, crawl spaces, attics, retaining walls, etc.) and systems (electrical, heating, plumbing, drainage, exterior weather proofing, etc.). The results of the inspection should be provided to the purchaser in written form, in detail, generally within 24 hours of the inspection.
A pre-purchase home inspection can add peace of mind and make a difficult decision much easier. It may indicate that the home needs major structural repairs which can be factored into your buying decision. A home inspection helps remove a number of unknowns and increases the likelihood of a successful purchase.
The best time to look for a mortgage is before you look for a house. This enables you to determine the amount of money you can borrow and how much house you can afford.
A pre-approved mortgage provides an interest rate guarantee from a lender for a specified period of time (usually 60 to 90 days) and for a set amount of money. The pre-approval is calculated based on information provided by you and is generally subject to certain conditions being met before the mortgage is finalized. Conditions would usually be things like 'written employment and income confirmation,' and 'down payment from your own resources,' for example.
Most successful real estate professionals will want to ensure you have a pre-approved mortgage in place before they take you out looking for a home. This is to ensure that they are showing you property within your affordable price range. In summary, a pre-approved mortgage is one of the first steps a home buyer should take before beginning the buying process.
Most lenders will accept down payment funds that are a gift from family as an acceptable down payment. A gift letter signed by the donor is usually required to confirm that the funds are a true gift and not a loan. Where the mortgage requires mortgage loan insurance, Canada mortgage and housing corporation requires the gift money to be in the purchaser's possession before the application is sent in to them for approval. Where mortgage loan insurance is provided by GE Capital this is not a requirement.
Lenders will often guarantee an interest rate to you as much as 90 days before your mortgage matures. And, as long as you are not increasing your mortgage, they will cover the costs of transferring your mortgage too. This means a rate promised well in advance of your maturity date, thus eliminating any worries of higher rates. And if rates drop before the actual maturity rate, the new lender will usually adjust your interest rate lower as well.
Most lenders send out their mortgage renewal notices offering existing clients their posted interest rates. The rate you are being offered is usually not the best one. Always investigate the possibility of a lower interest rate with the lender or another lender. If you don't you may end up paying a much higher interest rate on renewing mortgage than you need to.
Today, about 50% of first-time home buyers use their RRSP savings to help finance a down payment. With the federal government's Home Buyers' Plan, you can use up to $20,000 in RRSP savings ($40,000 for a couple) to help pay for your down payment on your first home. You then have 15 years to repay your RRSP. To qualify, the RRSP funds you're using must be on deposit for at least 90 days. You'll also need a signed agreement to buy a qualifying home.
Even if you have already saved for your down payment, it may make good financial sense to access your savings through the Home Buyers' Plan. For example, if you had already saved $20,000 for a down payment - and assuming you still had enough "contribution room" in your RRSP for a contribution of that amount you could move your savings into a registered investment at least 90 days before your closing date. Then, simply withdraw the money through the Home Buyers' Plan.
The advantage? Your $20,000 RRSP contribution will count as a tax deduction this year. Use any tax refund you receive to repay the RRSP or other expenses related to buying your home.
While using your RRSP for a down payment may help you buy a home sooner, it can also mean missing out on some tax-sheltered growth. So be sure to ask your financial planner whether this strategy makes sense for you, given your personal financial situation.
First and foremost, you have to make sure you have enough money for a down payment - the portion of the purchase price that you pay yourself. To qualify for a conventional mortgage you will need a down payment of 25% or more. However, you can qualify for a low down payment insured mortgage with a down payment as low as 5%.
Second, you will require money for closing costs (approximately 2.5% of the basic purchase price).
Third, if you want to have the home inspected by a professional building inspector, you will need to pay an inspection fee. The inspection may bring to light areas where repairs or maintenance are required and will assure you that the house is structurally sound. Usually the inspector will provide you with a written report. If they don't, then ask for one.
Fourth, you will be responsible for paying the fees and disbursements for the lawyer or notary acting for you in the purchase of your home. I suggest you shop around before making your decision on who to use, because fees for these services may vary significantly. Additionally, there are closing and adjustment costs, interest adjustment costs between buyer and seller.
Finally, you will be required to have property insurance in place by the closing date. And you will be responsible for the cost of moving. Remember, there will be all kinds of things you'll have to purchase early on - appliances, garden tools, cleaning materials etc. So factor these expenses into your initial costs.
SELLING YOUR HOUSE
It isn’t necessary to have the proceeds of the sale of your home in hand to buy a new one - your mortgage broker can explain bridge financing and other options to you. In our experience, when your home sells, you will find the right one. And you’ll be one step ahead of the great majority of buyers out there. You will have been working with a Realtor to sell your home, so you’ll have gained a tremendous edge & knowledge of the market.
I recommend it! You'd be surprised how many people contact me for more information after just driving by the house. It also gives the locals a chance to put the word out about your selling.
Of course - with one caveat: your home will typically be on the market for less than one week prior to considering offers, so you don't want to make it too difficult for prospective buyers to make an appointment to see your home. A common restriction is 'no showings after 9 pm'. You can also request a certain amount of notice prior to showings so you can adjust your schedule accordingly.
Yes! While all our efforts are geared to a quick, smooth sale, that doesn't always happen. If your desired price is not achieved or you change your mind for any reason, let me know and we can suspend or cancel our listing agreement and re-list the house at a strategic time.
As part of my thorough consultation with you, I'll recommend certain repairs, fixes and renovations that would make your home more saleable, as well as common-sense prep such as de-cluttering and cleaning. However, I rarely recommend professional staging - it just doesn't seem necessary in most cases, with the possible exception of some estate or income property sales.
I have found that buyers prefer the privacy of being able to see your home and discuss it openly amongst themselves & with their agent, without the pressure of a seller being present. Your home's amazing features will speak for themselves, along with the various advertising and marketing strategies I will have in place for your home. Any questions the buyers have will go through their agent to us and we will have the added benefit of following up on their interest.
This is a very common question - unfortunately, the market isn't based on what you want to net for your home, it's based on what buyers will pay for it! Pricing high puts you at a definite disadvantage. Those who can't afford to go that high won't even see your home on the MLS; overpriced homes attract significantly less interest, and the longer they stay on the market, the worse the stigma. After reducing your price to fair market value, prospective buyers may now think you are desperate to sell and low-ball an offer significantly lower than what you want to net! All things considered, correct pricing is key to the sale of your home.
BUYING A CONDO
The condo's reserve fund is the pool of money they have set aside (required by law) for repairs and replacements to the common elements of the building. It is built up through the payment of monthly maintenance fees and can be depleted when major repairs are needed.
Your unit is considered to be your property - one of the benefits of ownership! Any repairs within the unit are your responsibility. Repairs outside the unit and regular maintenance like cleaning of hallways etc. are covered in your monthly maintenance fees.
Each condo building is different in terms of what your maintenance fees cover. This information can be obtained on the MLS listing for a condo or by obtaining a list of covered items through the property management company or condo corporation. In most condo buildings, common elements and building insurance are covered; some condos with higher fees cover parking, locker, and/or many utilities like heat, water and central air.
Yes there are also property taxes on condominiums. Considering whether condos are a good investment depends on your lifestyle and a lot of it comes down to personal taste. In terms of fees, in a freehold home you would not be paying maintenance fees of course, but when large repairs become necessary (i.e. roof, basement, exterior landscaping etc.) the cost is your responsibility, so depending on how renovated your home is, you might be looking at the equivalent of monthly maintenance fees in your own 'repairs fund' for your home!
In the Windsor Crossing Development condominium communities the maintenance fees are low because rather than paying for upkeep of expensive amenities like pools, gyms & the like, your fees typically cover basic landscaping & snow removal. It's one way to keep those monthly costs low!