Whether you are a buyer or a seller, there are distinct advantages to using a Realtor.  A Realtor, is a licensed real estate professional who is a member of a local real estate board, as well as the Canadian Real Estate Association (CREA).

This individual has the experience and qualifications needed to successfully conduct a purchase or sale. In Ontario, you can expect strict adherence to provincial law and a  code of ethics. This ensures you receive the highest level of service, honesty and integrity.

If you are a buyer
In today’s busy, complex world, purchasing a home can be a lot more time-consuming and complicated than other business transactions. First-time buyers, especially, quickly discover that there’s a lot more to buying real estate, than deciding what vacation to take or what car or suit to buy.

Using a Realtor from the start can provide you with the sound , effective advice and professional services you need to get the best deal possible.  Once a Realtor has a clear understanding of what you want and what you can afford, their knowledge can save you a lot of time looking at homes that aren’t right for you.

A Realtor can pre-screen properties so that you should only have to visit a handful of homes to make an informed and wise selection.

Much of the early search with a Realtor can be done through the Multiple Listing Service (MLS) and preliminary discussions. As you visit and react to each home you see, the realtor will have an increasingly better idea of what you want and don’t want.

A Realtor will also be able to advise you on the various options available for financing a home and tell you when to bring in other experts such as a lender, home inspector, lawyer and insurance agent.

If you are a seller
Sometimes a seller will be tempted to sell their home on their own, believing it will save them the cost of the real estate commission. But, selling a home is a very complex procedures, involving large sums of money, stringent legal requirements and the real potential for very costly mistakes.

Just as most of us lack the knowledge to do a major repair on the family car, most sellers lack the depth of knowledge, experience and amount of time needed to sell a home on our own.  A Realtor not only has the qualifications and expertise, but is committed to spending the time it takes to get the best deal possible.

Selecting a Realtor
Before you make a Realtor part of your team, it pays to shop around and sharpen up those interviewing skills. The realtor you select should be someone who knows the neighborhood you live in or want to live in; who can provide you with sound, effective advice; and who has broad and current knowledge of today’s real estate market.

Begin by identifying several candidates and interviewing at least two or three before making a final decision. If you were pleased with the services provided by the Realtor who helped you make a previous sale or purchase, he or she may be your best choice.

Jot down the names and telephone numbers printed on “For Sale” signs you notice around the neighbourhood, in local real estate ads or publications.  Also, ask friends, family and business associates to recommend some names.

Interviewing Realtors
The realtor you select should be someone who shows genuine interest, knows the current real estate market and has a good track record in the sale and purchase of properties you’re interested in. This individual should make you feel comfortable and that they have your best interest in mind.

Be sure to get a resume and references and to ask questions such as:

• How long have you and the firm been in business? How many homes have you sold in the last six months? How close were the sale prices to the asking prices? What price range of homes do you generally handle?
   
• Do you provide multiple listing of your property through the Multiple Listing Service (MLS)?  (This service provides access to a much broader base of potential buyers.)
   
• If selling: How will you market my property? Will the marketing plan include an open house for other Realtors and regular open houses for prospective buyers, advertising and flyers? How did you establish the suggested selling price for this home?  Was my home compared to those sold recently in the neighborhood and to those currently on sale?  What tips and hints can you offer to make my home show better.
   
• What will using your service cost me?
   

If the Realtor looks enthusiastic about selling your home or helping you buy one, and appears confident in their ability, consider hiring them.  But first check their references or talk to people who have recently sold or purchased property through them.  Most people who have had a positive experience will be quick to express it.

Source: Ontario Real Estate Association
 

Buying a House

What Do You Want?

Begin by listing your needs:

- living requirements (i.e. how many bedrooms);
- family size;
- what you're bringing with you from your old house;
- how close to schools, shopping and other services;
- the size of down payment you can afford; and,
- price range.

It's important to be realistic when you're thinking about a down payment and setting a price range. You don't want to be saddled with something you can't afford. At this stage, it's a good idea to talk things over with a real estate sales professional.

What's Out There?

The marketplace offers both resale homes and new homes. However, since this document deals with resale homes, we will concentrate on them. (If you're interested in a new home, talk with your salesperson.)

Resale homes are more likely to be in established neighbourhoods, close to amenities and have mature trees and gardens.

Remember, however, a resale home has been lived in. It has been exposed to the elements for a number of years. The house may have experienced some degree of shrinkage and settling.


Quick Service with the MLS® System

Most boards have their MLS® systems on computer. By sitting down at a keyboard, the REALTOR can key in your needs, choice of neighbourhoods and price range and immediately come up with a list of suitable properties. Some computer systems are more extensive than others. Some even show a photograph of the house, complete with interior views. Also common are MLS® catalogues, which provide additional information about each property, along with its photograph. Both computer systems and catalogues are updated regularly.

As we said earlier, you can also view MLS® listing advertisements via the national Internet website, mls.ca (You can reach it at aboutmls.html). It features area maps, colour photographs of available properties and has e-mail links to the listing REALTORS, along with their profiles.

Touring a House

When you visit a house, consider these points:

What type of wiring does the house have? Does the electrical panel use fuses or circuit breakers?

What type of heating system does it use?

What about the roof and foundations?

What about the plumbing?

What about power outlets? Different appliances, and power tools use different types.

There are other things to look at, as well. If you don't have time or don't feel comfortable doing it, home inspection services are available for a reasonable fee.


Making an Offer

In the offer, you are:

- saying how much you're willing to pay;
- suggesting a closing date;
- proposing a set of conditions; and,
- stating when the offer expires.

At this time you'll present a deposit, along with your offer. An appropriate deposit will show your good faith to the seller. The seller's agent is bound by law to bring all offers to the seller's attention.

After your offer is accepted and all the conditions are met, the offer becomes binding on both sides. If you walk away from the deal at that point, you may lose your deposit. You may also be sued for damages. Therefore, make sure you understand and agree with all of the terms of the offer before signing.

Conditions

Most offers carry some kind of conditions, which have to be met before the sale is complete. Some common types of conditions are:

you getting a suitable mortgage (include the amount, interest rates and any other figures you feel important)

you selling your current home (the seller may continue to look for a buyer, but will give you the right of first refusal)

the seller providing a current survey, or a "real property report," showing the location of the house on the property owned by the seller and that there are no encroachments

the seller having title to the property (your lawyer will check this out when he or she conducts a title search to see if there are any liens on the property, easements, rights of way or height restrictions)

if there is a septic system, the seller should have a health inspection certificate, stating the system meets local standards

if you still have any doubts about the home's safety and construction, you may wish to make the purchase conditional on an inspection by a qualified engineer

any inclusions (we've talked about this earlier -- basically, what stays and what goes)

The seller may counter your offer, by changing the conditions, price or both. Look at the counter offer in terms of what you're looking for in a new home: how does it fit in? And you can, of course, always counter the counter offer.


The Mortgage

A quick way to see how much you can afford is to use the gross debt-service formula (GDS). Here, the Principal, Interest and Taxes (PIT) on your mortgage loan should not exceed 30 per cent of your gross income. Increasingly, financial institutions will factor energy costs into the PIT formula, moving the rule of thumb GDS from 30 to 32 per cent.

You can work it out in reverse: multiply the monthly payment on principal, interest and taxes (include any condominium maintenance fees) by 40. So if your monthly payment for these items is $1,000, you'll need a gross annual income of at least $40,000. Discuss your mortgage limit and different types of mortgages with your salesperson before you begin seriously looking for a new home.

There are several different types of mortgages:

Pre-approved Mortgages: Pre-approval means that you as a buyer, have qualified in advance for a mortgage of X dollars, contingent upon the lender approving the property. Many financial institutions offer pre-approved mortgages, with your interest rate guaranteed not to rise for a certain period.

Conventional Mortgages: Most banks and trust companies offer standard loans using the property as security and require you to make a monthly blended payment including principal and interest. Conventional mortgages require at least 25 per cent of the purchase price as a down payment.

High-ratio Mortgages: If your down payment is less than 25 per cent, you may still qualify for a mortgage, but you will need mortgage insurance. Canada Mortgage and Housing Corporation (CMHC), a federal crown corporation, and GE Capital Mortgage Insurance Company, a private company, provide insurance for high-ratio mortgages.

Vendor Take-Back Mortgages: The seller underwrites part of the purchase, as a loan to be repaid by the buyer. These are often used as second mortgages, to bridge any gaps or to make the property more attractive to the buyer. In some provinces, the seller may also transfer the mortgage to the buyer.

Open and Closed Mortgages: Open mortgages allow you to make extra payments on the principal, reducing your borrowing costs. Because of this flexibility, interest rates for open mortgages are a little higher. Closed mortgages have no flexibility; you must wait until the term is up to pay your mortgage. However, interest rates for these mortgages are generally lower. In the middle, are the partially open mortgages that have some of the characteristics of both open and closed mortgages.

Just as there is a range of mortgage types, there is also a range of repayment schedules. As well as the traditional monthly payment plan, there are now semi monthly, biweekly and even weekly payment schedules. Accelerated repayment options speed up the process even more, paying down the mortgage faster and spending less on interest charges. You may also opt for a shorter amortization period, or mortgage "life". It raises your monthly payments in the short-term, but saves you in the long-term, on the interest you pay.

Those Extra Expenses

You should plan on a few extra expenses. In some provinces, you may have to pay a land transfer tax (a sales tax on property). You may also have to pay:

- a mortgage broker's fee (as much as one per cent on the principal);

- an appraisal fee;

- surveying costs (if the seller couldn't come up with a current survey); and,

- a high-ratio mortgage insurance premium.

You also face a possible interest adjustment. Mortgages are normally calculated from the first of each month: if your closing date is the same as the beginning of your mortgage, there will be no adjustment. However, if your closing date is July and you move in on June 15, those last 15 days are the interest adjustment period. Your lender will expect you to cover the cost of the interest during that time.

You'll also have to reimburse the seller for the unused portion of any prepaid property taxes or utility bills. As well, you must also pay any legal fees, and, if applicable, any REALTOR fees. Be prepared to furnish proof to your lender that you have insured your new house... that will cost, as well.


Closing

Before the house can formally change hands, there are still a few things to do. Here's what to expect on or before closing day:

your lawyer and the seller's lawyer will arrange to transfer title of the property from the seller to you

the mortgage money will be transferred to your lawyer's trust account, and then to the seller

your lawyer will bill you all additional expenses -- land transfer taxes and any outstanding legal fees

At this time, be sure to:


check with your lawyer that everything is as stated in the offer-to-purchase

make a pre-possession walk-through with the agent. Is everything in good condition? Is everything you wanted there?

Once you're satisfied and the keys to the front door are in your hands, there's nothing else to say, except...

Welcome home.


In addition to what is written here, there are good sources of information on how to buy/sell a home from the provincial real estate associations and financial institutions.

The comments contained on this site are for information purposes only and do not constitute legal advice. Procedures and laws vary from region to region.

Source: The Canadian Real Estate Association
 

Buying Your Home With Less Stress

LESS STRESS AND MORE SUCCESS IN BUYING YOUR NEW HOME

How do you determine whether the purchase of a home makes sense? What's the easiest way to examine the whole picture from emotions to economics? In this report you will learn how to separate wants from needs. You'll learn how research effectively, choose wisely, finance properly and endure the whole way through.


DETERMINE HOW MUCH YOU CAN AFFORD

Set a realistic budget for yourself. Based first upon your income, decide how much you can really afford to invest for your monthly payment. Most financial institutions suggest that your payments be no more than 28 percent of your total monthly income. This is called your GDS, or Gross Debt Service ratio. A good Realtor will help you determine this if you are unsure.


ESTABLISH YOUR NEEDS AND WANTS

Begin your search for a home by making a careful appraisal of the kind of home you need and want. Write it down take the time to be specific about your particular requirements. You may want a hot tub, but you may only need a bath tub.


FIND A HOME THAT MEETS YOUR NEEDS

Some tips for successful house hunting:

Keep a record of all your research data. Write down comments about the homes that you see. Keep track of your likes and dislikes.

Make sure that your agent is aware of your time schedule and your expectations. Do you like to look at one or two homes in a session etc? Discuss all of this with your agent.

Tell your agent about any homes that perk your interest and those you'd like to know more about. Include the homes you notice as you travel around the area yourself or those you see advertised in the newspaper.

If you want to spend time driving around looking at homes for yourself, ask your agent for a list of drive-by homes, which you can consider first from the outside.
Your agent can than make appointments to show you those that appeal to you.

Express your likes and dislikes to your agent after you see a home. Honest communication is essential. Remember that the homes don't belong to the agent! You must be frank about your likes and dislikes to enable the agent to do the best job for you.


GET PRE-APPROVED

A lender will qualify you for the loan amount that you want. A lender can let you know what specific loan programs would be best for you. He can also help you understand terms like GDS and TDS (gross debt service and total debt service). By looking your current income and your credit history, your banker can help you understand your budgetary restrictions.

To be sure that you can afford that dream house make sure that you get pre-approved. In the approval process, all of your documentation is completed and submitted to an underwriter. The pre-approval that you receive is an actual loan commitment from a lender - your guarantee of loan approval. You will be armed and ready to negotiate for that dream home.

In summary, you can save yourself time and heartache by meeting with a lender before you start your search for a home.


REAL ESTATE PROFESSIONALS ARE HERE TO HELP

You can learn a lot about an agent by just letting him/her talk to you about how he/she helps her buyers. {Please read the section outlining the questions you should always ask before selecting an agent.} Within a few minutes, you will probably be able to determine if his/her style is in line with yours. You will also be able to determine his/her skill level. Ask as many questions as you can up front. Finding a good agent will save you time and effort.


MAKE AN OFFER

Your real estate agent can help you make an offer to buy that dream home. It is important to know beforehand whether your agent represents you or the seller. Some agents work only for the seller. You should in this case find a buyers agent to work with you. In this case the agent will be able to advise and support you in making a fair offer. You should be able to get a good idea of value by having your agent complete a current market evaluation for the local area of your search.


SAVE MONEY ON YOUR INITIAL INVESTMENT

There are only two major investments to consider when buying a home. These are the initial investment (including down payment and closing costs) and the monthly payment (including principle, interest, taxes, and insurance). Here are some ways to save on your initial investment:

Choose the down payment loan that is right for you. You do not automatically have to put 20 percent, or even 10 percent, down. You can put 5 percent, or even 3 percent, down on some loans.

As part of your offer, ask the seller to pay some of your closing costs. Sellers are usually allowed to contribute to a buyer's closing costs.

Shop around for your home insurance. A little shopping can save you a considerable amount of money.

You can deduct money paid for discount points from your gross income before computing your tax, which would effectively reduce the cost to you. Check with your accountant.


KEEP YOUR MONTHLY PAYMENTS LOW

Get a loan with no monthly mortgage insurance premiums. You may be able to reduce or eliminate them by paying a little more at closing. By putting 20 percent or more down, you can eliminate them entirely.

Consider an Adjustable Rate Mortgage. These mortgage types can be up to 3 percent lower than fixed rates.

Secrets To Getting the Most House for Your Money!

Get "Pre-Approved" Not "Pre-Qualified!"

Make sure you are in the strongest negotiating position possible. Price is only one element in the negotiations, and not necessarily the most important one. The strength of your offer and closing dates might be the most important things to the seller.

The way to make the strongest offer today is to get "pre-approved". Pre-approval occurs after all of your personal information has been verified. You are actually APPROVED for the loan and the only thing left to do is the appraisal on the property. This process takes anywhere from a few days to a few weeks depending on your situation. It's VERY POWERFUL and a weapon I recommend to anyone interested in serious negotiating.

Sell First, Then Buy

If you have a house to sell, sell it before selecting a house to buy! Contingency sales aren't nearly as strong as one that comes in with a ready, willing and able buyer. If you are asking a seller to accept your offer contingent upon the sale of your property, then you are now not in a strength position and, the seller is in the position of possibly by-passing an offer not contingent on the sale of property. You will not be in a strong negotiating position and the seller wont be as comfortable with the deal. Buying before selling might cost you thousands of dollars.

If you're concerned about the availability of homes for sale, then you may want to do some drive bys. You can identify homes and locations. This may make you confident enough to add your house to the market.

Don’t Rush into Anything

Your agent should show you everything available that meets your requirements. Make sure that you have found the right house before you make an offer.

In a hot market it is well advised to make a timely decision on your prospective home. However, in today’s market there isn't this pressure, unless a home is well under-priced, and your agent will know that it is.

Don't forget to check into the SCHOOL DISTRICTS of the area you're considering. Information is available on every school; such as class sizes, % of students that go on to college, etc. You can get this information from my web site.


Get an Agent in Your Corner

  A professional agent works with his clients, not only telling them tips like these but providing useful expertise towards helping meet the goal of owning a new home. So whether you decide to work with me or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer agent. Then you become a client and you're no longer just a shopper. When your agent hears of a great buy, he will be bound to call you, his client, because you are working together, and you are no longer just another phone call from someone that is tire kicking. I always recommend that you hire your own agent to get the most out of your home buying position.

The Importance of a home inspection

A home inspection prior to purchasing a home or condominium can bring peace of mind when you sign the sales contract. Knowing what to expect both inside and out will help you make an informed decision about the value of the home and the future upkeep.

A home inspection accomplishes two important goals. First, it gives you a chance to determine the condition of the house, its structural soundness, and the condition of its mechanical systems. Second, it brings any problems to the seller's attention at a time when they can be resolved before closing a sale.

If you sign a contract before inspection, consider including a clause that the sale is contingent upon a satisfactory structural inspection, and specify when the inspection is to be carried out. That way, you are protected.

A comprehensive inspection includes a visual examination of the structure from top to bottom, including the heating, air conditioning systems, the interior plumbing and electrical systems, the roof and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement and visible structure.

Following the examination, the inspector will provide a report that not only points out possible defects or areas of concerns, but also the positive aspects of the structure as well as the type of maintenance that will be necessary to keep the home in good shape.

Even the most experienced homeowners lack the knowledge and expertise of a professional inspection firm. For example, watermarks in the basement may indicate a chronic seepage problem, or simply may be a result of a single incident.

A professional assessment will provide complete information about the condition of the property you are considering and will help avoid any unpleasant surprises after the sale. In addition, a home inspector can remain totally objective, while you as a prospective homebuyer may be emotionally involved.

The inspection fee for a typical single-family house can vary depending upon the geographic area. The particular features of the home such as size, age and special structures will be taken into consideration. A decision to have a home inspected is a good investment. You might save many times the cost of inspection by being aware of defects, maintenance requirements, and upgrading requirements.

Good decorating should not sell you on a house. Remember, you're also buying structural and mechanical systems. Walk through a house twice before you hire an inspector. The first time, look at the rooms, the floor plan, and envision your own decorating ideas for the house. The second time, go back and look at the condition of the walls, doors, appliance, and plumbing. If the home still looks good after two visits and you're getting serious about the purchase, hire an inspector.

Inspectors should be licensed in building-related fields; architects, contractors, and structural engineers are good examples. When interviewing a potential home inspection firm, carefully inquire about the specifics of their work and company. Ask how long they have been in business, ask for references from previous customers. Find out what type of insurance they carry and do they guarantee inspections?

A home inspection usually lasts about three hours. Professional inspection companies will be happy to answer all your questions. Avoid firms that issue only a verbal report. The report should be in narrative form, not just a checklist of items inspected. The home inspector should also issue a written report with accurate cost estimates for any major defects discovered during the inspection. You may find it valuable to accompany the inspector as he goes through the house.

Property inspections are not limited to residential properties. Many inspectors help homeowners with analysis and solutions to specific problems such as energy conservation, wet basements or cracked foundations. Inspectors also inspect work upon completion to ensure that a contract has been properly fulfilled.

If you are considering purchasing a home, the Ontario Real Estate Association advises that you invest in an inspection by a reputable and qualified inspection firm. Buying a home is one of the biggest decisions you will make. Know what you are buying and what your future upkeep obligations will be.

For more information regarding home inspections contact the Ontario Association of Home Inspectors.

Source: Ontario Real Estate Association

Why do I Need A Certified Home Inspector

Building Problems:

Problems of structural integrity are usually found in older homes, and can be as small as cracked plaster to large foundation cracks. These problems may not cause the house to fall down, but they may cost anywhere from 500.00 to 50,000.00 dollars to repair. Inspection of homes older than 25 years is a must. These types of problems need to be addressed immediately, and should be cause for concern if you are thinking of purchasing a property of this age.


Outmoded Electrical System:

Homes older than 25 years can have less than 125 amp services which are old and insufficient for today’s electrical needs. Modern homes are now being built with 200 amp services and newer wiring types. Avoid homes with aluminium wiring, or older style fuse box systems. The home should be upgraded to a breaker box system immediately. This will save you time, money, and provide enough electricity to keep the home running well.


Drainage Issues:

This problem can be found in any age home and is usually the most common problem found. This type of problem can lead to wet basements and can be a serious issue if the basement is already finished. Corrections to this issue can range from installing new eaves trough and downspouts to installing new weeping tiles or re-grading the entire yard which can be very costly.


Older Plumbing:

Plumbing systems in homes older than 25 years may need to be repaired and or replaced. Repairs can range from a small quick joint fixes to a complete piping replacement. You would be well advised to seek the help of a professional home inspector to have a full understanding of the problems.


Leaking Roof:

A roof lasts 15 to 25 years depending on the original material used and the typical area weather. Inspectors typically need to perform a thorough examination of the roof and the underlying materials to ascertain the correct age and life remaining. Repairs to an older roof can range from 1,500.00 to 10,000.00 dollars or more.


Poor Ventilation:

Mould and fungus, rotting wood and cracked plaster and drywall are a few of the problems associated with a poorly ventilated room/house. Bathrooms without proper vents and kitchens lacking the proper range hood fans can be a major problem and a determent to health. These problems can be expensive to repair but need to be addressed.


Environmental Problems:

Older home pose an especially large risk of having these specific problems. These can include asbestos, UREA formaldehyde insulation, polluted drinking water, remnants of lead paint and radon gas in the basement. It is important to discuss these potential hazards with a inspector.


Poorly Maintained Home:

Maintenance is of paramount consideration when looking at a property. Inspectors can often find a large range of problems that can and will probably cost the new homeowner a lot of time and money. Some of these may require immediate consideration. These can include everything from, furnace repairs, roof repairs, peeling paint to decaying fences.


Furnace and Air Conditioning:

Furnaces and Air conditioners need to be maintained to provide healthy air and efficient safe temperature control. If the system is more than 15 years old you may wish to replace it altogether as a new system will certainly provide you with a more efficient and cleaner environment. The newer system will also consume less fuel and pay for itself in the long run.


Poor Weather Stripping:

These are common problems in even a newer home. The problems can range from, poorly sealed windows and doors to deteriorated caulking. These problems lead to a non-efficient and sometimes damp house. Repairing problems of this type can be addressed easily with the right materials and done relatively inexpensively.
 

First-time buyers: finding the home that's right for you

This year, consumers are can count themselves lucky in one important aspect: they are living in time that offers unequalled opportunities to realize the dream of home ownership.

Interest rates are among the lowest in decades and the availability of housing of all varieties is at the highest level in years.

In fact, in many situations, renting a family dwelling can actually be more expensive than buying. If you consider a $150,000 mortgage at 8 per cent for a 5-year term, the monthly payments would be less than $1,200 per month. Compare this to renting a suitable three bedroom apartment or townhouse in many urban centres, and it's easy to see that buying a home has become an attractive alternative.

If you take a $100,000 mortgage at the same rate and term, the payments shrink to less than $800 per month. Even better, if you're willing to accept a one-year term, the interest rate drops at least two percentage points. This would peg a $100,000 mortgage at only $650 per month and a $150,000 mortgage at around $975.

There is another important benefit to home ownership that often gets overlooked. Over the course of 25 years (the usual amortization period for mortgages), the total amount of money paid by many renters can actually exceed the amount paid by a home owner. This is due not only to the fact that mortgage payments can be cheaper than rent, but because rental fees generally increase over the long term. Of course, interest rates may also rise, but so probably will the value of the property. Therefore, additional equity will be gained.

Add to this the reality that after a mortgage is paid off, homeowners will no longer make monthly payments while renters will continue to bear the burden for the rest of their lives. This savings can greatly impact your quality of life upon retirement.

These figures are only intended as broad examples. The fact remains that money spent on rent is still money down the drain.

Regardless of the number crunching, the bottom line is that owning a house is the best way to assure the happiness and well-being of you and your family. A home gives a family room to grow, and room to prosper.

The best childhood memories many of us hold include Sunday dinners in the family dining room, retreating to the rec room when friends visit, or skating on the backyard rink throughout the cold winter months.

If you've made the decision to buy, the first person you should talk to is a Realtor. These real estate professionals will help you with virtually every aspect of your home ownership needs. From putting together a 'buying blueprint' that details your specific housing requirements, to giving advice on what you can afford, a Realtor can cut through the complexities.

Constructing a 'buying blueprint' is a critical step for first time buyers. In it, you will list items such as: how many bedrooms do you really need; is a finished basement a necessity or can you afford to wait; how big a yard do you need; and most importantly, where do you want to live? All these considerations will affect your ability to buy.

For example, many first-time buyers will forego a property close to the downtown core in favour of a suburban or even a rural home. This can lead to huge savings which can be used to either lower the mortgage and monthly payments, or to acquire a bigger home for the same cost.

Opting for a townhouse or resale home are other alternatives that can help first-time buyers escape the 'rent trap' and channel their funds into a solid investment.

When you've narrowed your requirements, a Realtor will scout properties for you and make recommendations on homes that suit your needs. Once you begin viewing, your Realtor will accompany you, offering advice on matters such as the amenities of the neighbourhood, repairs or upgrades that could be necessary, building inspections, carrying costs and so forth.

So, if you're one of the thousands of Ontario families caught in the cycle of paying rent and seeing nothing in return, now is the time to make a move. Buying a home can pay off in so many ways--you simply can't afford to pass up the opportunity.

Source: Ontario Real Estate Association

Getting Your House Ready For Sale


Sidewalk Appeal

Make sure that you have everything up to spec when prospective purchasers take their first look, remember you only get one chance and about 20 minutes to make a great first impression. Therefore, in order to create that love at first sight in their minds you must, Plant flowers, weed and edge the gardens. Mow the lawn, trim the hedges and shrubs, as well as clean the driveway and sidewalks of dirt, leaves or snow and water the lawn, well in advance of selling. Clean and repair rain gutters and siding, and finally touch up the paint and clean out the garage.

Next to Godliness

There is an old saying that I have referenced in the heading, and while we cant be perfect we should always try to get a few things exactly right for the purpose of showing our home. Make sure that the mirrors are clean and make appliances sparkle. Wash or polish all floors clean and freshen bathrooms. Clean/shampoo all the carpets and clean the windows, walls, doors and trim.

Is There a Counter Under That?

Remember the last time you looked at your kids room and wondered what colour the carpet was. Well lets not keep our prospective buyers guessing. Clear all of your countertops and de-clutter all heavy traffic areas. If it is possible, store your surplus furniture to reduce feeling crowded. Put seasonal clothing into storage and clear the halls and stairs of clutter. Make all closets neat & tidy and only half-full, even if this means moving items to another storage area. Touch up interior paint and paper, repair cracked plaster, tighten door knobs and cupboard latches. Oil any squeaky doors, repair leaky plumbing (taps, shower heads and toilets). Repair seals/caulking around bathtub and sinks and replace burnt-out light bulbs or install brighter bulbs. Remember the brighter your house the more inviting it will be. And finally, clean the furnace and humidifier.

How To Put The Spotlight On Your Home

This is your homes debut for every prospective buyer that comes through the door or drives up the driveway. So in order to best show your home I suggest, turning on all lights, opening all the drapes in the daytime and play quiet background music. Turn on air-conditioning or light the fireplace. If you have them keep your pets outside during showings or, better yet, at a friend's. No one loves your pets more than you and no one knows them like you. Remember some people are allergic and or fear dogs and cats. Have as few people in the house as possible. If you can, be absent during any showings. Potential buyers often feel awkward and rushed if they think they are inconveniencing the owner.

Summary

As unfair as it might be to your home, after only fifteen seconds most buyers have already developed a perception of your property that will colour their feelings for the rest of the showing and perhaps dramatically affect their perceived value of the property. "You Never Get a Second Chance to Make a First Impression." The decision to buy a house is an emotional choice and not solely based upon rational factors such as price, location and accessibility to services. It is a search for a place in which one will find comfort, security and happiness. Emotions are set early, so it is important that minor, even typical, nuisances such as an un-mowed lawn or a pile of boots by the door are looked after.

Selling Mistakes Commonly Made

Limiting the Marketing and Advertising of the Property

Your realtor should be dedicated to selling your property using a wide variety of marketing techniques; he or she should also be available during business hours because most calls come during those hours.

Choosing the wrong Realtor

It is critical that you have full faith in your realtor’s experience and abilities. You want a realtor who has a good feel for the market, has good marketing talents and offers sound advice on how to improve your chances of selling. In order to achieve the best sale price within a reasonable period of time you need an accurate indication of what the true market value of your property is. Your realtor should be able to give you a valid indication of market value.

Forgetting to "Show Your Home"

When attempting to sell your home to prospective buyers, do not forget to make your home look as pleasant as possible. Make necessary repairs. Clean. Make sure everything functions and looks fit to be seen. An inadequately clean home in need of repairs will sell for less and will distract buyers. A little work can improve the first impression of your home a thousand-fold. First impressions are lasting impressions and can dramatically affect a property's perceived value.

Pricing Your Property Too High

Every seller obviously wants to get the most money for his or her home. The best way to do this is NOT to list your home at an excessively high price! A high listing price will cause some prospective buyers to lose interest. Also, it may lead to high expectations as to upgrades and extras included in your property. As a result, overpriced properties tend to take longer to sell, if they sell, and sometimes may be sold at a lower price. Make sure you determine the market value of your home correctly. Be sure to make valid estimations of current market conditions, current and historical re-sale data and upgrades to the property. The overall future development of the surrounding area may have an impact as well. Estimating current market value correctly requires detailed background knowledge of all recent neighbourhood sales as well as homes currently for sale in order to estimate value accurately. Ask your Realtor for a detailed market evaluation. Is it a Buyer's market, a Seller's market, a Balanced market? What do future trends look like? Ask your realtor for a full analysis.

Mistaking Appraisals for Market Value

Unfortunately, a recent or current appraisal may have been given at an overly high price. Lenders can appraise property higher than market value to promote re-financing. The market value of your home could actually be lower. Your best bet is to ask your realtor to perform a current market evaluation. This will give an accurate estimate of your property value.

Trying too Hard To Sell

As with all highly personal purchases, buying a home is difficult enough. Try not to pressure or oversell the property to potential buyers. People will place their own values on features without being pushed. Moreover, if pushed these value points inherent in the property may lose lustre as the prospect will not have had a chance to create the value for him/herself. A good idea would be to point out any subtle conveniences and be open to enquiries, while giving your prospect the room he/she needs to build their own value.

Not Knowing Your Rights & Responsibilities

You must be well-informed of the details in your real estate contract. Real estate contracts are legally binding documents, and they can often be complex and confusing. Not being aware of the terms in your contract could cost you thousands. Know what you are responsible for before signing the contract. Are their any liens, restrictions to use, etc.? Not knowing the answers to these kinds of questions could end up causing you a few headaches and costing you a substantial amount of money.

Trying to Sell to “Lookers”

Often buyers who do not come through a realtor are more interested in seeing what is available than in actually making a purchase and could be a long way from buying. They may have an existing property there are trying to sell, and may use your house as a pricing point, or may not be able to afford a house yet.

Your realtor should be able to differentiate buyers from lookers. Realtors have to find out a prospective buyer's savings, credit rating, and purchasing power. If your realtor fails to find out this pertinent information, do some scrutinizing on your own. Avoid wasting time selling to tire kickers. If you find yourself doing this yourself, consider finding a new realtor.

Not taking advantage of market fluctuations

Moving up in a market downturn? If your $150,000 home has dropped 10% in value, so has your $300,000 dream home. Yes, you lose $15,000 on your current home, but you save $30,000 on your next purchase! Always keep in mind the big picture.

Summary:

Although there is no substitute for doing your homework (start by asking your family and friends who have recently moved for their experiences) the previous list of common pitfalls may be helpful. The selling and buying of a house can be a stressful and confusing process. Not only is it very expensive to 'learn from your mistakes' but very few people move often enough to gain the needed experience.

The 'Whys' and 'Whens' of Selling your home

Homeowners face a double quandary when faced with the prospect of selling their homes: how does one make sure the decision to sell is the right one; and once the choice is made, when is the right time to sell?

Traditionally, there have been four major reasons why and when people sell their homes: financial and market conditions, employment changes, family matters and lifestyle changes. In today's economy, one additional issue has emerged which has great bearing: low interest rates.

All these will not only affect your fundamental decision to sell, but will greatly impact your options regarding when to sell.

Financial and market conditions

Almost every aspect of real estate involves market conditions and financial issues--for the seller they are of the utmost importance. After all, it's the seller who is putting property, equity and sometimes, years of hard work on the line.

With so much at stake, it's imperative that sellers contact a real estate professional. Only Realtors have the hands-on experience and intimate knowledge of the real estate industry needed to get the best possible price for your property.

We've all heard of "buyer's" and "seller's" markets. These terms refer to the proportion of people wanting to buy versus the number of homes on the market. If the number of homes for sale outstrips potential buyers, then it's a buyer's market. If there are not enough homes to satisfy demand, then it's a seller's market.

If you're selling for financial gain, you'll obviously want to do so in a seller's market. But, if you plan to purchase another home after sale, there isn't as big a difference as you would first think.

In a seller's market, you may sell your home more quickly and for a better price, but you'll be facing the opposite challenges when purchasing. In a buyer's market, you may have to wait longer to get a fair price, but you'll have more selection and pricing options when looking for your new property.

Right now, interest rates are near their lowest in decades. This has lead to unprecedented opportunities for those wishing to buy. Often, mortgage payments will be less than rent on an apartment or townhome. Therefore, a large number of consumers are considering ownership, many for the first time. For sellers, this holds the potential for a huge boom.

"Seasonality" is a term that Realtors use to gauge when home sales are expected to climb. Although this is only one factor to be considered when selling, in Ontario, springtime tends to be a time of higher activity. Buyers with children especially prefer to look in the spring in order to settle in a new home before school begins in the fall.

Employment changes

Employment changes can affect a decision to sell. There's the obvious matter of relocation if a new job or promotion takes you to a different city. In this case, selling most often becomes a necessity unless the homeowner wishes to retain a property for investment or other purposes.

Moving to a smaller urban centre may also allow you to purchase either a similar home for less money or a bigger one for the same outlay. Even if a new job does not require you to move a great distance, you should use the opportunity to assess your home ownership needs and move up if you can.

The reality is that with interest rates as attractive as they are, it's more possible than ever to make a major move without lowering your family's standard of living.

Family issues

The family issue homeowners cite more than any other when deciding to sell is children. Most often, people want a bigger home to accommodate a newborn, or may find their family has simply outgrown the home.

If this is the case, you're in a perfect position relative to today's marketplace. First and foremost, you can afford to put in enough time to sell at the right price and then find a home that suits your requirements. Contacting your Realtor well in advance of the date you wish to move will virtually guarantee you'll find a good home at a good price.

Lifestyle changes

The two most common lifestyle changes that motivate sellers are retirement. For those planning to retire, truly enjoying your latter years may involve a "cashing in" of assets. Again, it's a wise to look far enough ahead in order to use the market to your advantage and sell at a good price.

Changes in lifestyle can include things such as buying a condominium to ease the workload involved with maintenance and upkeep; city dwellers who want to live in a more rural environment, or even those who want to set up a home business.

Source: Ontario Real Estate Association

Use the MLS to help sell your home

When selling your home you want to make sure as many potential buyers as possible are aware of your property. The best way to ensure that "maximum exposure" is through the services of a Realtor and the Multiple Listing Service (MLS).

Realtors are experts, trained and licensed in the field of real estate, who service the needs of the public in the buying and selling of homes. All are members of local real estate boards and have access to the MLS -- an extensive network of listings across the country.

What is MLS?

The MLS is a central registry of properties used by Realtors to match buyers with homes on the market. MLS is described as a "cooperative marketing system" to ensure maximum exposure of properties for sale.

The MLS is very effective. Last year, sales across Canada from MLS listings totalled an amazing $58 billion.

In addition to being distributed in printed catalogues, MLS is also a sophisticated computer database of properties indexed by price, location, type of home, number of bedrooms, amenities and so forth. Photos of homes may also be available on-line and, over the past year, many real estate boards have added their MLS listings to the Internet through www.mls.ca.

The advantages for the consumer

The major benefit of MLS to consumers is that it allows the Realtor to use his or her skills to full advantage. Realtors are experts at determining what it is a potential buyer wants in a home--and a large part of the Realtor's job lies in finding properties that suit these criteria.

With MLS, a Realtor can search the database for homes that suit budgets, location preferences and family requirements, and quickly put together a short list of suitable homes.

Many consumers will find themselves first viewing MLS material at their Realtor's office to preview potential properties and narrow the list further. When it comes time to view in earnest, they know exactly what homes they want to see, what their options are and what types of properties the market has to offer.

Through the MLS, Realtors can literally view details of thousands of homes. In fact, in 1997, over 300,000 properties new to the market were listed in Ontario alone.

This gives the home buyer an extraordinary amount of choice and flexibility. The search for homes doesn't have to involve driving around neighborhoods looking for "for sale" signs. Nor will it mean relying on homes listed only in newspapers or real estate magazines. With the MLS, an entire spectrum of available properties is at your Realtor's fingertips.

Even if you're moving across country or to a distant part of the province, the MLS can be used to scout homes in advance, greatly reducing the worry that often comes with relocation.

The bottom line is that what's good for the buyer is good for the seller. This is because the main obstacle for any seller is to find qualified, motivated buyers. The only way to overcome this is to match your home to the requirements of as many potential buyers as possible. Using the MLS cuts through the complexities, exposes your property to those most likely to purchase it, and makes sure you won't waste time showing your home to those who aren't truly interested.

So, when you've made the decision to sell, make sure you ask your Realtor about an MLS listing. It could be that your Realtor will already know of a number of potential buyers, but in most cases, an MLS listing will open up a broader range of interested parties.

Source: Ontario Real Estate Association

Buying/Selling Homes: Glossary of Terms

Amortization: Paying off a debt, such as a mortgage, by installments. The conventional amortization period for a mortgage is anywhere between 15 and 25 years. The shorter the amortization period, the less interest you have to pay.

Appraisal: An estimate of a property's value.

Asking (list) price: The price placed on the property for sale by the seller.

Blended payments: Payments consisting of principal and interest components, paid during the amortization period of a mortgage.

Broker: A person licensed by the provincial or territorial government to trade in real estate. Real estate brokers may form companies or offices, which appoint sales representatives to provide services to the seller or buyer, or they may provide the same services themselves. In parts of Canada, brokers are referred to as agents.

Buyer's Agent (also known as "Buyer's Broker" or "Purchaser's Agent"): A person or firm representing the buyer. A Buyer's Agent's primary allegiance is to the buyer. The buyer is the Buyer Agent's client.

Buyer Brokerage Agreement: A written agreement between the buyer and the buyer's agent, outlining the agency relationship between the two parties and the manner in which the buyer's agent will be compensated. In some provinces, a buyer agency relationship arises automatically, without a written agreement establishing the relationship.

Client: The person being represented by an agent. The agent owes the client the duties of utmost care, integrity, confidentiality and loyalty.

Closing: The day the legal title to the property changes hands.

CMHC: Canada Mortgage and Housing Corporation. A Crown corporation providing information services and mortgage loan insurance.

Commission: An amount agreed to by the seller and the real estate broker/agent and stated in the listing agreement. It is payable to the broker/agent on closing and shared, if applicable, among those salespeople involved in the sale.

CREA: The Canadian Real Estate Association. A national association representing the real estate industry on federal public policy matters, providing member services and education. CREA promotes adherence to a strict Code of Ethics and Standards of Business Practice.

Customer: A person who receives valuable information and assistance from a real estate broker or salesperson, but is not represented by that individual.

Debt-Service Ratio: The measurement of debt payments to gross household income which may include, in addition to the main wage earner's salary, salaries of other wage earners, commissions, bonuses, overtime, etc.

Dual Agent: A real estate broker or salesperson who acts as agent for both the seller and the buyer in the same transaction. Both buyer and seller are the agent's clients.

Equity: The difference between the value of the property and the amount owing (if any) on the mortgage.

Financial Institutions: Banks, credit unions, insurance or trust companies.

GE Capital Mortgage Insurance Company: GE Capital Mortgage Insurance Company is the only private sector source of mortgage insurance to lenders in Canada.

Gross Debt Service: The amount of money needed to pay principal, interest, taxes and sometimes, energy costs. If the dwelling unit is a condominium, all or a portion of common fees are included, depending on what expenses are covered.

Gross Debt Service Ratio: Gross debt service divided by household income. A rule of thumb is that GDS should not exceed 30%. It is also referred to as PIT (Principal, Interest and Taxes) over income. Sometimes energy costs are added to the formula, producing PITE, which moves the rule of thumb GDS to 32%.

Listing Agreement: The legal agreement between the listing broker and the seller, setting out the services to be rendered, describing the property for sale and stating the terms of payment. A commission is generally payable to the broker upon closing.

MLS®, Multiple Listing Service®: Trademarks owned by The Canadian Real Estate Association. They are used in conjunction with a real estate database service, operated by local real estate boards, under which properties may be listed, purchased or sold.

MLS®Online™: Carries MLS® property advertisements and consumer-related information supplied by individual real estate boards and associations across Canada.

Mortgage: A contract providing security for the repayment of a loan, registered against the property, with stated rights and remedies in the event of default. Lenders consider both the property (security) and the financial worth of the borrower (covenant) in deciding on a mortgage loan.

Mortgage Broker: A person or company having contacts with financial institutions or individuals wishing to invest in mortgages. The mortgagor pays the broker a fee for arranging the mortgage. Appraisal and legal services may or may not be included in the fee.

Mortgage Insurer: In Canada, high-ratio mortgages (those representing greater than 75% of the property value) must be insured against default by either CMHC or private insurers. The borrower must arrange and pay for the insurance, which protects the lender against default.

Mortgagee: The person or financial institution lending the money, secured by a mortgage.

Mortgagor: The property owner borrowing the money, secured by a mortgage.

Offer of Purchase and Sale: The document through which the prospective buyer sets out the price and conditions under which he or she will buy the property.

Real Estate Board: A non-profit organization representing local real estate brokers/agents, salespeople, which provides services to its members and maintains and operates a MLS® system in the community.

REALTOR: Trademark identifying real estate professionals in Canada who are members of The Canadian Real Estate Association, and as such, subscribe to a high standard of professional service and to a strict Code of Ethics.

Term: The actual life of a mortgage contract-- from six months to ten years -- at the end of which the mortgage becomes due and payable unless the lender renews the mortgage for another term (See Amortization).

Seller's Agent: The Seller's Agent represents the seller -- either as a Listing Agent under the listing agreement with the seller or by cooperating as a Sub-Agent, typically through the MLS® system. In dealing with prospective buyers -- customers-- the Seller's Agent can provide a variety of information and services to assist the buyer in his/her decision-making. The Seller's Agent does not represent the buyer.

Variable-rate Mortgage: A mortgage in which payments are fixed, but the interest rate moves in response to trends. If interest rates go up, a larger portion of your payment goes to the interest; if rates go down, more goes to cover the principal.

Source: The Canadian Real Estate Association