June 1st, 2017
When current homeowners make the decision to move and purchase a new home, there are usually two ways to go about the process:
1) Sell your current home before looking for your next home and submitting any offers to purchase a new home.
2) Search for a new home with the possibility of submitting an offer while your current home is for sale on the market.
There are different reasons for taking one approach over another. Market conditions, timing constraints, financial situation, career demands, children's schooling needs, etc will all factor into the decision making process. This article will focus on option 2 and how to go about submitting an offer on a new home before your current home has sold.
"Sale of Buyer's Property"
If a buyer submits an offer to purchase a home but must first sell their current home, it is necessary to include a clause that makes the offer conditional on the sale of the buyer's property. The typical clause might be worded as follows:
This Offer is conditional upon the sale of the Buyer's property known as ________. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than ______ p.m. on __________, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer's sole option by notice in writing to the Seller as aforesaid within the time period stated herein.
The above clause means that the sale of the home does not become final and binding until this condition and any other conditions have become fulfilled or waived.
Typically, the seller will also require the inclusion of an "escape clause" in the agreement of purchase and sale. The escape clause requires the seller to notify the first buyer if they accept another offer from a second buyer, and gives the first buyer a set time period (usually 24 or 48 hours) to meet the conditions of their own offer or walk away from the deal. If the first buyer is unable to sell their existing home and it is confirmed in writing, the first deal becomes null and void and the seller can continue with the sale to the second buyer.
If the first buyer does fulfill the conditions included in the offer, the seller must sell the home to the buyer according to the original terms of the offer. This is known as giving the buyer the "right of first refusal."
These conditions can effect the the negotiations between the seller and first buyer, and if these conditions are accepted by the seller, can also effect negotiations with the second buyer. It is important to discuss the advantages and disadvantages of these details with your sales representative.
April 20th, 2017
February 22nd, 2017
Warming temperatures signal the need to assess winter damage and undertake any necessary repairs. These home maintenance tips will help save you time and money by protecting your investment and making it a more enjoyable place to call home:
January 31, 2017
If you are self-employed it can be difficult to obtain financing for purchasing a home. I myself have been self-employed for the past 20 years and can recall the challenge of obtaining my first mortgage as a self-employed individual. Recently, I had a self-employed client whom was looking to complete his "pre-approval" before making an offer on home. He was dealing with one of the "Big 5" banks and the process ended up being frustrating and needlessly time consuming for him. The bank (who he already carried two other mortgages with) initially gave him the impression that he would easily be pre-approved for the desired amount and that the process would be fairly simple. They asked him for specific documents at the beginning of the process and then he heard nothing from them over the following weeks. When he initiated the next contact with the lender wondering where they were in the process, they then asked him for more documentation and had no input on the status. More than a week later, he still had no word as to the status of his pre-approval and decided to ask where they were in the process. They then asked him for more documentation.
Of course any lender needs to perform their due diligence, and assess and manage the amount of risk involved with a particular client. They do this to protect themselves and to protect the borrower. Lenders have a set of calculations, ratios, and formulas that help them reach a final decision of whether a client can be approved for a mortgage and if so, for how much. Regardless of the applicant's financial situation, lenders should be able to clearly state what documentation they need from you at the outset of the process based on the information you provide them about your employment or business situation. Following that, a good lender should be able to educate you on the process and provide a rough timeline for the entire process. In the case of my client, it was only when he approached them wondering what the delay was, that they asked him for more documentation. To me this was poor customer service and it appeared that the lender lacked experience dealing with self-employed individuals. From my own personal experience and hearing from other self-employed individuals, this is a common experience.
My suggestion for self-employed individuals is to use a mortgage broker. Brokers have access to a variety of lenders, some of which specialize in dealing with self-employed individuals. Brokers also have access to many more options and tools to help you with the process of obtaining a mortgage. When working with any lender or broker as a self-employed individual, I suggest the following:
1) Ask for an overview of the process and educate yourself on the process before committing to anything.
2) Ask about the differences between different options. For example, rates, term, pre-payment options, variable vs fixed rate, early termination penalties etc. Different mortgage products and tools are available and some may suit your needs or situation better than others.
3) Ask exactly what documentation is needed from the outset.
4) Ask for an estimate of time needed to complete your application.
5) Ask to be provided with more than one option for your mortgage from more than one lending company.
I hope you find this article helpful. If you have any questions about the process or would like a list of some local Mortgage Brokerages in the Kingston area, feel free to contact me at firstname.lastname@example.org and I would be happy to help.
January 17th, 2017
Thinking of selling your home this spring? Make sure you focus on the best strategies to attract buyers while keeping your costs low. Here are some suggestions on how to ready your home to for sale.
1) Home Improvements
In an effort to make the home more attractive for selling, many sellers will spend a lot of time and money renovating or upgrading various features of the home. Sellers often assume that these improvements will pay them back or earn them more money upon the sale of the home. On average, most sellers will only get back just over 60% of the cost of the improvements. Some “improvements” can actually work against you if they are unappealing or too unusual for the market you are in. Also, make sure you have the correct permits when undertaking any renovations that require them. Improvements done without the proper permits could leave buyers skeptical about the quality and safety of the work that was done.
Some examples of improvements with the best “Return on Investment” (ROI) are:
- Refinishing hardwood floors or installing new hardwood flooring
- Adding or improving insulation, especially in the attic
- Replacing old shingles on the roof
- Converting an unfinished basement to a living space
- Replacing old windows
- Installing new vinyl siding
- Installing a new garage door
- Installing new hardware on doors, cabinets, and drawers
- De-clutter and remove grunge
- Add a fresh coat of paint
- Add or rearrange lighting
- Update your kitchen faucet
Ask your real estate agent for more suggestions on which home improvements give you the best bang for your buck and optimize your home’s appeal for successful sale.
2) Curb Appeal
The first thing buyers will see is the outside of your home. What kind of first impression will they get when they view your home from the outside? Remember that buyers will pull up and view your home from their car first before making their way to the front door and then inside the home. Some simple and inexpensive improvements to the exterior of your home can make a great first impression:
- Add a fresh coat of paint to any railings, steps, porches, exterior doors etc to help give a fresh and clean appearance
- Keep your lawn freshly mowed and free of any debris
- Adjust or repair any downspouts that are damaged or displaced
- Keep your windows and window frames clean
- Remove any weeds or unwanted plants from your garden and prune existing plants
- Replace, repair, or freshen up your mailbox
- Repair any damaged doors, steps, or porch areas
3) Showing the home
Sometimes sellers will limit showing of the home to specific times. Buyers often have the challenge of juggling family and work life while searching for a new home. Sellers should remain flexible and make their home available for showings at all times of the day and evening. Limiting your showing times can cause you to miss a potential sale. Staying flexible and co-operate with buyer’s agents even when it is inconvenient.
4) Use your agent’s experience
Although you are likely to know more about your own home, your agent likely knows more about how to sell your home. Your agent has a wealth of experience and has bought, sold, and viewed hundreds of homes. Your agent likely has many great suggestions on how to best sell your home, even if you may not want to hear them. Your agent may suggest a new paint job, removal of personal items, or have a differing opinion on the listing price, which can sound offensive at the time. Agents know what makes a listing grow stale and they know what helps a listing sell quickly. You don’t have to follow all of their advice, but listen and analyze what your agent has to say. Most people will buy and sell 2 or 3 homes in a lifetime, whereas an agent will buy, sell, and view hundreds and that experience can be very beneficial to the seller when it comes time to list the home for sale.
If you would like more information or advice on how to prepare your home for sale feel free to contact me at email@example.com
January 2nd, 2017
Selling your home is rarely something that happens overnight. Even in so called "seller's markets" listing and selling a home takes time. One of the challenges for sellers, is having a clear understanding of the steps involved and the amount of time needed to complete each step during a transaction. We all know that buying or selling a home can be both exciting and stressful at the same time. It can feel like an emotional roller coaster at times but having a clear understanding of the steps involved can help eliminate some of the uncertainty, stress and emotional ups and downs. Below we will look at the process of listing and selling a home and the time it takes to complete each step of the process.
Step 1- Listing your home (3-5 days)
When preparing your home for listing, your listing salesperson will usually need a couple of days to gather information about your home. This includes taking measurements, taking note of the home's features, and taking photographs. From this information your listing salesperson and you, the sellers, will come up with a listing price. After gathering information and determining a listing price, the listing agent will then be able to prepare the listing for upload onto the Multiple Listing Service where it can be accessed by other salespersons. It will also be uploaded to other sites such as Realtor.ca.
Step 2- Awaiting an offer on your home (*55 days)
The average DOM (days on market) for a single family home in the Kingston Area from October 2016 - December 2016 was 55 days.
*To be clear, the days on market can vary greatly based on a number of factors including listing price, location, time of year etc.
Step 3 - Accepting an offer on your home
Once you've accepted an offer on your home, you then have a specified period of time before the "closing date". The closing date is negotiated between the buyer and seller and is the date the transaction "closes" and the property changes hands. In many cases, sellers will have accepted a "conditional offer" from the buyers. At minimum, most buyers will submit their offer with the following conditions:
- Obtaining satisfactory financing for the property
- Obtaining a satisfactory home inspection report
- Obtaining satisfactory insurance for the property
Assuming the sellers accept the offer with the buyer's conditions, the buyer then has a specified and agreed upon time in which they must fulfill the conditions of the offer. Generally, a timeframe of 2-3 weeks is sufficient to meet the most common conditions.
Step 4- Receiving payment (0 days)
On the day of closing, the seller's lawyer will receive funds from the purchaser's lawyer. This money goes into the seller's lawyer's trust account to pay out any old mortgages, real estate commissions, and outstanding taxes. The remaining funds from the sale of your home go to you. Once the transaction is complete, your lawyer will then contact you to pick up your cheque.
I hope you found this article helpful and informative. If you have any questions please contact me at firstname.lastname@example.org