Ever wonder how a realtor gets paid when they help you with the home buying process?
Real Estate Commissions
Payment to a realtor is made in the form of a commission and is based on the final purchase price. The real estate agent commission fee in Ontario, Canada ranges but is normally paid to the realtor representing the seller and the buyer.
In most cases the buyer does not pay real estate commissions as the seller distributes commissions to the agents. Please note that the seller is also responsible for paying HST, which is added on top of the commission.
To discuss the scenario when a buyer may be responsible for paying some of the commission feel free to reach out or if you have any questions regarding commissions as a home buyer, please feel free to give me a call.
Real Estate titles is an important discussion to have when purchasing a home or condominium with another person, a friend or a spouse. There are a variety of ways you can hold title and it is best to know meaning of the two most common options.
Tenants in Common
Now we are not talking about having common interests with someone else. ?? Tenants in Common means when two or more people own real estate together. In this arrangement, owners can have equal ownership or they could each own different percentage. This option allows more flexibility, where ownership can come in at different times.
Tenants in common are able to individually sell their ownership in the property. That means that owner A could sell his 50-percent interest while owner B retains their half. The same holds true for inheritances. If owner A deceases, their ownership rights are inherited by their heirs, while owner B would continue to own their portion of the property. This can lead to some sticky situations where co-owners of a property don't know each other well or at all.
Joint Tenants
Joint tenants are also co-owners of the property, but there are some distinctions. For example, joint tenants must all take title simultaneously from the same deed, while tenants in common can come into ownership at different times. Another difference is that joint tenants all own equal shares of the property.
Joint tenancy also differs from tenancy in common as when one joint tenant passes, the other remaining joint tenants inherit the deceased tenant's interest in the property. However, a joint tenancy does allow owners to sell their interests. If one owner sells, the tenancy is converted to a tenancy in common.
Those are the two most common forms of titles in real estate. It is always highly recommended to discuss these options with your lawyer to make sure you set it up best to suit your scenario.
If you have any questions regarding titles please feel free to give me a call and we can discuss it further. Don’t forget to like, share and comment below.
When working with clients, negotiations is critical in getting them the best possible deal in their real estate transaction. However, many people forget what can be negotiated in a real estate contract.
It is important to know what can be negotiated when you are sitting at the table with your trusted realtor.
Here are the five primary negotiations points that you need to consider in a real estate contract.
1. Price
Price is always a given and many people are solely fixated on this point which shouldn’t be in the case. There are many other points to consider when negotiating.
Buyers don’t want to overpay or price themselves out of a resale in the future, while sellers want to make sure the deal makes sense for their financial plan.
2. Terms and Contingencies
You can negotiate the terms and contingencies of your real estate contract. This means you can add clauses and conditions to the contract such as home inspection and financing.
3. Closing Date
The closing date is a huge negotiation as this can be a factor if you get the home or not. If your closing date coincide with the sellers, you have a better chance in securing the property.
4. Inclusions and Exclusions
In most cases, appliances are included in the purchase price; however, it isn’t always included. Other items such as curtains, blinds and shelves may not be included as well. Therefore, it is important to discuss this while negotiating as it is overlooked.
5. Deposit
The trusty deposit that many people wonder if it is necessary in a real estate contract. Even though it isn’t mandatory to have a deposit in a real estate contract. However, we do recommend to put down a 5% deposit to show good faith in the negotiations.
There you have it! The top five primary points to keep in mind while you are negotiating for your first or next real estate property.
If you have any questions regarding the negotiation process please feel free to give me a call and we can discuss it further. Don’t forget to like, share and comment below.
Our goal this year is to do 20 episodes in 2020. Let’s get started because we are already a little behind. Our first episode we will discuss our favourite neighbourhoods to buy this year.
Last year our top choices where Rockcliffe Smythe and Wallace-Emerson, though Rockcliffe surpassed the average growth of 4% in the GTA (according to TREB) with a huge 2019 and an almost 11% increase, Wallace-Emerson on the other hand had a very steady growth hovering around the average.
That being said I am going to slip Wallace-Emerson right back into the mix for 2020. I feel like this neighbourhood was slow and steady throughout the race but is ready to take the lead.
Here are my other picks for 2020.
This next neighbourhood my wife and I call home, Runnymede and the Junction. I expect these neighbourhoods to have a strong year because of their amazing schools, transit and an awesome community vibe.
Finally, my last pick is going to be Weston-Pellam neighbourhoods. With Corso-Italia and St.Clair West, home prices are on the rise and hovering around the $1 million average, expect for the surrounding neighbourhoods; Earlscourt, Pellam Park and Carleton Village to see a large spike.
Outside of Toronto I really like Guelph, Cambridge and Innisfil. With Metrolinx committing future services to these communities it will be a great opportunity for young buyers. Also I really like Aldershot in Burlington, with Burlington looking to gentrify all neighbourhoods surrounding their three (3) Go station stops, expect a ton of changes coming now and in the future.
If you have any questions regarding these neighbourhoods or any other feel free to give me a call and we can discuss your options. Don’t forget to like, share and comment below.
A downpayment is an initial payment made when something is bought on credit. It is also a topic that many people inquire about when buying real estate.
The minimum downpayment in Canada depends on the purchase price. This was recently changed in the last few years.
Let’s break it down to make it less confusing.
Under $500,000 Purchase Price
If the purchase price is $500,000 or below, then the minimum down payment is 5%.
$500,000 to $1,000,000 Purchase Price
If the purchase price is between $500,000 to a million, then the first $500,000 has to be 5% and the remaining balance would require 10% down payment.
$1,000,000+ Purchase Price
For properties with a purchase price of over a million dollars, the downpayment must be 20%.
To better understand it all, let us paint a picture with an example of a purchase price of $800,000.
Purchase Price: $800,000
First $500,000 subject to 5% = $25,000
The remaining amount ($800,000 - $500,000 = $300,000) subject to 10% = $30,000
Total Minimum Down Payment = $55,000
**Note this mortgage would be subject to Mortgage Insurance**
This is just one example and I always recommend to speak with a mortgage lender to see all your financial options and see what works best for you.
Remember to like, share and comment below any questions that you may have around real estate.
A lease is a contract outlining the terms under which one party agrees to rent property owner by another party. When a lease has expired, many people are unsure of what to do and if they need to move out.
The simple answer is no. You do not need to move out when the lease has expired. Let me explain it a bit further.
In Ontario, the residential tenancy automatically renews on the expiry date. Unless, the landlord or tenant has given notice of termination. The automatic renewal goes from month to month and uses the original terms from the lease.
What can change is the rent amount. Usually the landlord cannot increase your rent more than the “guideline” percentage which is set by the government each year. This upcoming year of 2020, the increase percentage is 2.2.
As for ending the tenancy, there are a few “for cause” reasons that the landlord can terminate the tenancy and they are:
Not paying the rent in full,
Causing damage to the rental property,
Illegal activity in the rental unit or residential complex, and
The landlord requires the rental unit because the landlord, a member of the landlord’s immediate family or their caregiver wish to move into the unit.
It is always wise to read your tenancy agreement carefully and ensure that you know all your rights as a landlord and tenant.
If you have any questions on renting, buying or selling, feel free to reach out to me as I would be happy to help.
Shopping for homes in a hot market is no easy task. Many times, people will buy prior to selling. With this comes a very common question - what happens if the purchase and selling closing dates don’t match?
This is when Bridge Financing comes into play.
What is Bridge Financing?
Simply put, it is a bridge loan that is used as a financing tool that allows you to bridge the gap between your old and new mortgage.
Bridge loans are temporary loans. In other words, you’re effectively borrowing your down payment on the new home.
How Does It Work?
To calculate how much your bridge loan could be, you could use this formula. Take the purchase price and minus it from your mortgage amount and minus that from your deposit. This will give you the bridge loan amount.
Please keep in mind that rates with bridge loans are slightly higher and there are administration fees attached to them too.
If you would like to learn more about bridge financing, feel free to reach out to me as I would be happy to help.
When buying a new development there are some hidden costs associated with the purchase. Many times these costs are not shown upfront.
Here are the five hidden costs that you should know before purchasing a new development.
Window Coverings & Appliances
Unlike resale homes, new developments may not include window coverings and appliances. Take into account these extra costs when calculating your closing costs.
It is always best to specifically ask the developer which appliances are and aren’t included can clear up any confusion and help you plan your extra spending for those items.
Development Levies
In many major cities, development levies have increased drastically. This can include parks, infrastructure, transit and so much more.
If these aren’t capped, they can theoretically end up costing you in the tens of thousands on top of traditional closing costs. Most lawyers recommend on having a “Cap” in place on levies. It would be best to consider this during the purchase.
Utility Hook Ups
Since this is a new development, the utilities will need to be set up for the first time. This means that the builder will charge a small fee to hook up water, gas and hydro.
You can also request a cap on utility hook ups and it would be best to discuss this with your lawyer to ensure that one is in place.
Tarion Warranty
With most new homes, a Tarion Warranty is a cost that is added onto the purchase of a new development.
A Tarion Warranty is a warranty that is provided to cover your home for a certain period. Warranties can vary in years, depending on the builder. For example, a one year warranty would offer homeowners the following:
Requires a home is constructed in a workman-like manner and free from defects in material;
Protects against unauthorized substitutions;
Requires the home to be fit for habitation;
Protects against Ontario Building Code violations; and
Applies for one year, begging on the home’s dates of possession even if the home is sold.
Even though they say the price includes HST, it does not mean you qualify for this rebate. Depending on the sale, the vendor would be claiming the HST and this means the purchaser can not.
Above all, keeping these five hidden costs in mind can help better prepare you financially.
If you are looking to learn more about buying new developments, don’t hesitate to contact me as I would be happy to help.
Property tax is a real estate ad-valorem tax, calculated by a local government, which is paid by the owner of the property. We may not love them but it is one of the carrying costs that come with homeownership.
Property taxes are charged by the municipality you live in, and are used to pay for many city services such as garbage and recycling collection, sewer protection, road maintenance, snow removal, policing, fire protection and more.
How is the Amount Determined?
Once a year, municipalities across the province asses and determine their property tax rate, which is usually somewhere in the range of 0.5 to 2.5%. Your municipality’s property tax rate is multiplied by the market value of your home (not the purchase price), which can vary year-to-year based on the value of surrounding properties.
For example, if the market value of your home is $325,000 and your property tax rate is 1.5%, your property taxes would be $4,875.
Payment Options
Most lenders provide the option to tack on your property taxes onto your monthly mortgage payment. With this option, your lender then takes on the responsibility of paying your municipality.
Alternatively, you can also pay the municipality directly, by phone, mail, online or by setting up a pre-authorized payment plan.
That is a wrap on property taxes and the basics on what you need to know about them.
If you have any more questions on property taxes, feel free to reach out to me as I would be more than happy to answer them for you.
For those new to buying and selling real estate, the language can often add layers of confusion.
Here are six terms that you should know before starting the process.
Buyer’s Realtor/Selling Realtor
There are usually two realtors involved in a transaction. Buyer’s agent who represents you and the listing agent who represents the seller.
Multiple Listing Service (MLS)
A database that is used to access property information.
Mortgage Pre-Approval
A pre-approved mortgage is also referred to as a pre-approval. This would be a written approval from a lender that it will loan you a certain amount of money for the purchase of real estate, for a certain term and at a certain interest rate.
Offer
An offer is a conditional proposal made by a buyer or seller to buy or sell an asset, which becomes legally enforceable if accepted.
Conditions
A condition is a term in a contract that has an expiration attached to it. Without the condition being removed before the expiration, the contract falls apart.
It is common in real estate to put conditions such as the buyer needs to obtain adequate financing, or the buyer doing a home inspection before they buy. However, a condition could be anything.
Closing/Closing Dates
A closing is the final step in the real estate transaction. The closing date is set during the negotiation phase, and is usually several weeks after the offer is formally accepted. On the closing date, the ownership of the property is transferred to the buyer.
These are terms that are important to know as it helps make the real estate language easier to understand.
If you have any real estate inquiries or if there is a term that you want to know exactly what it means, please reach out as I would love to help.
