Friday, October 10, 2014

Home’s closing date can change in estate sale

A home inspection may provide missing details about an estate-sale property.
TORONTO STAR FILE PHOTO
A home inspection may provide missing details about an estate-sale property.
I’ve found a great home that I want to buy but it’s being sold as part of an estate. How will that impact the purchase?
Typically, when you see a home listed for sale, the seller is the homeowner. But if the homeowner is deceased, the seller is the estate and is represented by the person in charge of administering the estate — the estate trusteea.
The basics of buying a home that is part of an estate sale are generally similar to buying any other resale home. But there are a couple of considerations you should be aware of.
First, your closing date might be a moving target. Since the home’s title is in the name of the deceased homeowner, the trustee may need to get permission from the courts to sell the home on behalf of the estate. This process is called probate. Sometimes this will already have been done before the property is listed.
Since the home may be listed for sale before probate is granted, the seller may ask for a closing date that is several months away, or may have a clause that allows the closing date to be delayed if probate isn’t granted in time.
As a buyer, you need to be aware of your own timelines and needs:
  • Have you already sold your existing home or given notice to your landlord?
  • If so, do you have a back-up plan if the closing date gets postponed?
  • How much flexibility do you have?
  • One potential solution is to add a clause to your offer stating that, if probate hasn’t been received in time for the sale to close on the selected date, you will be able to take occupancy of the home until the sale can close. Essentially, this means you will be renting the home from the seller at a particular price, until probate is granted and the sale is able to close. While this may not be appropriate in all circumstances, it’s something to discuss with your lawyer if you are considering it.
    In addition to working with your registered real estate professional, you should seek the advice of a real estate lawyer when you draft your offer to ensure the appropriate terms and conditions are added.
    The second consideration you should be aware of is that less information may be available about the state of the home than with a typical resale home. Since the homeowner is no longer around to offer insights about the age or condition of the home’s systems, such as the furnace, roof or plumbing, or the home’s history in terms of renovations, damage, fires, etc., a home inspection is a smart move.
    Be sure to seek out a qualified home inspector to help you assess the condition of the home and its systems, and identify potential problems. Consider referring back to my two-part series on home inspections for more information. The articles, available on the Star’s website, were published July 18 and July 25.
    Aside from these considerations, you’ll want to take the same steps as you would with any other property. Think about whether the home meets your needs and whether it fits within your budget.
    As always, be sure to ask questions if something is unclear and get any details you discuss in writing.
    Joseph Richer is registrar of the Real Estate Council of Ontario (RECO). He oversees and enforces all rules governing real estate professionals in Ontario. Email questions to askjoe@reco.on.ca .

    Saturday, September 13, 2014

    The worst home renovation traps to avoid

    Which reno projects reap the richest rewards (and what does your neighbor's home have to do with it)?

     You've just finished renovating your home from top to bottom. That means attic, basement, and every square inch of living space in between.
    Okay, so your place now looks like the Palace of Versailles - but you also had about as much work done to it as the Queen did Buckingham Palace (and that little project just about bankrupt her!).
    Sure, some of those expenses may well pay for themselves come resale time, but not all. You knew that - and that’s why you shied away from the skylight installation, the pool, and the new asphalt driveway. 
    But there’s more to it than that.

    Fixer-upper fixations

    The Appraisal Institute of Canada compiles a report each year based on findings from a survey of its members to determine which reno projects offer the highest return on investment
    Perhaps the most significant findings from the survey are: 
    • The expense you put forth for the project must be relative to the price of your home (for instance, a $30,000 improvement doesn’t belong in a $100,000 property).
       
    • The projects you undertake mustn't separate the home from other homes in the neighborhood too drastically.
       
    • You’ll recover a higher return from renovations if the value of your home is below the neighborhood average; those same renovations will yield significantly less if the value of your home exceeds the average.
       
    • The smartest improvements reside in a kitchen update worthy of the Duchess of Cambridge, a remodeled bathroom, and an interior paint job. These upgrades are the only ones that could potentially pay entirely for themselves. That roof replacement and new furnace or heating system might encourage up to 80 percent in recovered funds. Doors, windows, and a new deck may fetch back 75 percent.
       
    • But your wood fence, interlocking paving stones (cute - but not all that investment-smart), and unnecessary landscaping costs (a bush shaped like a deer - really?), could end up setting you back 75 percent in unrecovered costs. 
    These findings might be of particular note if you’re planning to spend an average of $21,000 or more on your home in the year following the purchase of your house - and many Canadians do, according to data by Canada Mortgage and Housing Corporation.
    Why so much? One possible reason: Home renovations are in vogue. Of course, all you’d have to do is take one glance at television programming these days to arrive at that conclusion.

    Where there’s smoke...

    A recent Maclean's article that highlights the "dark side" of home renovations certainly supports the observation that home renovations are sweeping the nation in ever-growing numbers. 
    Shows like Property BrothersLove it or List it, and Holmes on Homes are just a few that provide evidence of the growing trend: Home renovations have climbed 7 percent every single year since 2003. Roughly half that growth might be due to a “white-hot housing market,” according to Maclean’s. Economists have even given it its own name: the Wealth Effect.
    For every $1 increase in wealth a homeowner makes due to real estate appreciation, notes TD, the homeowner doles out a nickel on home improvements. A Houzz survey further found that where just 14 percent of Canadians said they would take out a line of credit to finance their home renovation costs in 2013, a whopping 34 percent said the same a year later.
    Okay, we get it - home remodeling is the new black. Still, don't get sucked into a black hole of debt over it.

    One final tip

    Keep your eyes on the prize and don’t get too consumed with the idea of transforming your home from top to bottom. Take it one project at a time and always keep the cost-to-value ratio in mind. Follow that advice and you’ll have both your palace and your bankbook looking tip-top in no time.
    brampton homes for sale, toronto homes for sale, bolton homes for sale. www.bramptonTorontoHomes.com 

    Friday, September 12, 2014

    Do your research and avoid painful surprises

    There’s little hope of changing your offer once it’s accepted.

    When buying or selling a home, the importance of doing your research before making decisions is critical. Understanding what you want, and what you can expect during the purchase or sale process, means fewer headaches when you go to close the deal — and no unfortunate surprises after you have signed on the dotted line.
    Spend time doing your homework to know what you want, and what to expect from the market and also from your real estate representative, when buying or selling a home.
    Here are two situations that highlight the need to be informed:
    I forgot to include a condition in my offer to buy a home. Can I add it after my offer has been accepted?
    Any offer that has been accepted is considered a binding contract. Therefore, you cannot add or alter the terms or conditions after an offer has been accepted — unless the other party consents to these changes. This would typically be done through the use of an amendment form.
    However, you should know that the seller may not consent to new conditions, especially if they conflict with their plans or are in any way detrimental to them.
    That’s why it’s important to do your due diligence in advance. Talk to your registered real estate professional and make sure you include all of the conditions that are important to you in the offer you submit.
    Client vs customer: What is the difference and why does it matter when you’re buying or selling a home?
    Buyers and sellers may enter into one of two types of agreements with a brokerage: a representation agreement for clients, or a customer service agreement. Both are considered legally binding.
    There are two big differences between the brokerage’s obligations to a client versus a customer.
    If you are a client, the brokerage has an important obligation to you called fiduciary duty, and must promote and protect your best interests in the real estate transaction. If you are a customer, the brokerage does not have that obligation, but must treat you with fairness, honesty and integrity, and provide you with conscientious and competent service.
    If you are a client looking to purchase a property, under a legislated code of ethics, the salesperson must take reasonable steps to determine, and then disclose to you, all material facts about the property.
    If you are a customer, however, the salesperson only has to disclose to you the material facts that he or she already knows or ought to know, and they are not required to take any further steps.
    There are a couple of other points to consider when deciding whether to become a client or a customer of a brokerage, especially if you are a seller.
    A real estate agent must convey all written offers to a seller who is their client — unless otherwise specified in writing. A salesperson working with you as a customer, however, is not obliged to convey offers to you — unless your agreement provides for the brokerage to receive written offers on your behalf. In that situation, the buyer’s representative would have to contact you directly.
    With all of these points in mind, your decision boils down to a basic question when considering the client versus customer relationship: What are my needs and which relationship best meets them?
    If you have knowledge and a comfort level with buying and selling real estate, then perhaps the customer relationship is sufficient for your needs. If your knowledge and experience is limited, then the client relationship is likely your better option.
    But one important factor remains the same for both clients and customers: No matter what you decide, remember to do your homework in advance.
    Before you sign your agreement with the brokerage, make sure you know what you want, the services you expect to receive. For sellers, this could include staging, open houses, advertising and a marketing plan. For buyers, this could include must-have features, potential deal breakers, amenities and geographic considerations.
    In both cases, make sure that it’s clear who will be paying for these additional services.
    Be informed. Determine what you want and what you need. Understand your rights and obligations under your relationship with the sales representative.
    If you prepare well in advance, this will help ensure there are no surprises during the buying or selling process.

    Joseph Richer is registrar of the Real Estate Council of Ontario (RECO). He oversees and enforces all rules governing real estate professionals in Ontario.  on YouTube at http://www.youtube.com/RECOhelps .

    Thursday, September 11, 2014

    Why 20% of Households Are Throwing Away $11,500

    About 20 percent of households who would benefit from refinancing are not doing it — and they could be losing out on lessening their mortgage payments by thousands of dollars over the life of the loan, according to a new report from the National Bureau of Economic Research.

    "Despite the large stakes, anecdotal evidence suggests that many households may fail to refinance when they otherwise should," according to the report. "Failing to refinance is puzzling due to the large financial incentives involved."In analyzing a large random sample of outstanding mortgages from December 2010, researchers found that the median household could save $160 per month over the remaining life of the loan, amounting to a total savings of about $11,500.
    The report found that borrowers may fail to refinance because they are unable to calculate the full financial benefit to them, they fail to see the benefits over time, or the high amount of upfront costs may deter them.
    "Our results suggest the presence of information barriers regarding the potential benefits and costs of refinancing," according to the NBER report. "Expanding and developing partnerships with certified housing counseling agencies to offer more targeted and in-depth workshops and counseling surrounding the refinancing decision is a potential direction for policy to alleviate these barriers for the population most in need of financial education."

    Tuesday, August 26, 2014

    Landscaping & Tree Trimming

    Planting new trees and shrubsExisting trees

    It’s important for homeowners to ensure trees and other plants don’t grow too close to powerlines and other electrical equipment. Here’s why:
    • Tree limbs that come down during a storm or high winds can bring powerlines with them causing a power outage and leave live powerlines on the ground which is a severe safety hazard.
    • Tree branches that touch powerlines can also cause a fire and create an electric shock hazard if someone touches the tree.
    If you have trees that are growing too close to powerlines, contact a trained arborist or your local electric utility to have the tree safely trimmed.

    If you’re planting new trees on your property, make sure to plant them far enough away from the powerlines so even when your sapling is a mature tree, it doesn’t come too close. Follow ESA’s tree planting guide for suggestions on species that are appropriate to plant near powerlines.
    Thinking about planting shrubs around that green box on your property? Remember, this box – called a padmount transformer -- contains electrical equipment that runs underground. Never dig near one, and don’t plant shrubs or plants within 1 metre of the box. This will make it difficult for utility personnel to find and access the box if there’s a power outage.

    Monday, August 25, 2014

    10 Tips for New Home Buyers

    #1. Choose the type of home that meets your lifestyle needs aerial view of subdivision

    Do you like being close to downtown, or would you prefer living outside the city? Do you like the prospect of maintaining a garden? Where do you want your children to attend school? These are lifestyle decisions that play a large role in the new home buying process.

    You also have more design choices than ever before. Would you like a 'smart' home that's pre-wired
    for your media and entertainment needs, or a gourmet kitchen for entertaining? Or both?

    There are two major types of new homes available to you - freehold and condominium - and each has different construction timelines and warranty coverage.

    To find out more about new developments that may suit your needs, read the home sections in major newspapers as well as real estate websites such as www.homesmag.com and www.condolifemag.com. Check out Twitter for the latest builder and industry news.

    #2. Determine what you can afford

    Once you've chosen the location and type of new home that fits your needs, meet with a financial representative to determine a mortgage amount that you can comfortably afford. This will help you understand the types of homes that fit into your price range. You should also consider getting a pre-approved mortgage, in order to shop with added confidence.

    For more information on new home financing, visit the Canadian Bankers Association at www.cba.ca or call them (toll-free)
    at 1-800-263-0231.

    man using laptop#3. Research your builder

    Talk to homeowners in the neighbourhood(s) you're interested in. Find out if they were satisfied with their builder.

    Look up any builder you're considering in the Ontario Builder Directory section to ensure they are registered with Tarion. You'll learn how many homes they have built in the last 10 years, and whether they have had any claims with us over this period.

    #4. Talk with a real estate lawyer.

    Before you sign your Agreement of Purchase and Sale, or Contract for a Custom Home, have it reviewed by a qualified real estate lawyer. There are other issues for you to consider, which are explained in the Making the Deal section of our website.

    #5. Prepare for your Pre-Delivery Inspection (PDI)

    The Pre-Delivery Inspection is probably the first time you'll visit your new home in its completed state - and it's your primary opportunity to learn how to operate and maintain your new home as well as to ensure that everything has been built according to your purchase agreement.
     
    To help you prepare for this important stage of the home buying process, you may want to read Getting Ready for the Pre-Delivery Inspection or print a copy of our comprehensive PDI Checklist.

    #6. Read the Tarion Homeowner Information Package

    The Homeowner Information Package should be given to you by your builder before or during your Pre-Delivery Inspection. It outlines your new home's statutory warranty, the responsibilities of both you and your builder, and how Tarion will handle a warranty claim.
     
    Whether you purchase a freehold home or a condominium, we encourage you to read this document in its entirety - and we recommend that you file it with your other new home documents so that you can refer to it in the future.

    #7. Visit our Online Video Library

    Our Online Video Library has a wide range of educational videos designed to help new home buyers learn about statutory warranty coverage and how to make a claim.

    #8. Complete and submit any required Statutory Warranty Forms on time

    Even though most builders will do everything they can to ensure your home is ready when you move in, sometimes items are missing or not working properly.

    To help you better understand what is and isn't covered under the statutory warranty, we encourage you to review the Construction Performance Guidelines prior to submitting a Statutory Warranty Form. Additionally, if you believe that there are items missing from your home, we recommend that you refer to your PDI Form or your Agreement of Purchase and Sale to confirm this before you submit a Statutory Warranty Form. To get an item resolved, you should contact your builder and follow our statutory warranty process.

    #9. Maintain your home

    You've made a big investment in your home, so you should take care of it all year round. It's important to remember that the ongoing maintenance of your new home helps to ensure that your statutory warranty rights are protected.
     
    We've created a maintenance guide that addresses common questions and provides tips on how to look after your new home through all four seasons.

    family outside of their home#10. Enjoy all your new home has to offer!

    You've done a lot of research, decision making and waiting by the time you reach this point.
     
    Now it's time to enjoy your new home!
    - See more at: http://www.tarion.com/New-Home-Buyers/Pages/Top-Ten-Tips-For-New-Home-Buyers.aspx#sthash.dupou3ZP.dpuf

    Sunday, August 24, 2014

    70% in their 20s don’t consider a mortgage a debt: Survey

    While most Canadians want to be debt free, those carrying mortgages feel more comfortable owing money than previous generations.

    Most Canadians say they want to be debt free, but those carrying mortgages feel more comfortable owing money than previous generations.
    DREAMSTIME
    Most Canadians say they want to be debt free, but those carrying mortgages feel more comfortable owing money than previous generations.
    While most Canadians want to be debt free, those carrying mortgages feel more comfortable owing money than previous generations, according to a survey.
    But that may have something to do with how they define being debt-free, which varies by age, the survey by Manulife Bank of Canada found.
    Nearly 70 per cent of respondents in their 20s said they could have an outstanding mortgage and still be debt free, compared to just 29 per cent of respondents in their 50s.
    The survey also found that nearly 40 per cent of home owners feel more comfortable with debt than their parents with the views differing by generation. Those in their 50s were five times as likely as those in their 20s to feel more comfortable with debt than their parents.
    Even so, the results are encouraging says Jason Daly, vice president of products and marketing for Manulife Bank.
    “It seems that Canadians are feeling fairly good about where they’re at, relative to their parents,” he said.
    The average Canadian owes about $1.63 for every dollar they earn in disposable income, according to Statistics Canada. But 51 per cent of home owners in the Manulife survey said they were in good or great shape in terms of becoming debt-free.
    Low interest rates have lowered the sense of urgency about borrowing, Daly said.
    “A low interest rate environment makes debt a little less intimidating, a little bit more manageable,” he said, noting that the results may have been different if interest rates were higher.
    Having open conversations about debt also helps increase comfort levels, Daly said. Only 28 per cent of respondents in the survey said they were more likely to talk about debt with their spouse or partner than their parents were. That number fell to just 15 per cent among respondents in their 20s.
    Conversations about debt seem to have a positive impact. Home owners who said their parents taught them a lot about debt management were twice as likely to say their debt was in good or great shape.
    Schools, too, are beginning to recognize the importance of financial literacy, Daly said.
    “These are all good things that are going to help the consumer over time,” he said.
    Still, having a debt management plan is key, Daly said.
    “It’s really critical, managing your cash flow, trying to get a debt management plan in place. And a financial manager is a great asset to getting your financial goals in place and looking at your financial plan holistically,” he said.
    Debt freedom
    A survey of 2,400 people asked them to describe their progress toward debt freedom.
  • 35% said they're doing okay
  • 29% said they're in good shape
  • 22% said they're in great shape
  • 11% said they're in poor shape
  • 3% said they're in very poor shape
  • 1% said becoming debt free is not on their radar
  • Source: Manulife Bank