Archive | August, 2011

How to take title

August 31, 2011

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When you buy a home with someone else, among all of the other decisions, you will need to decide how you want to own the property: jointly, or in common.

Buying as joint tenants means that you both own the entire property. You are each responsible for everything, and each have the rights that go along with owning the whole property. It also means that, if one of you dies, the survivor becomes the sole owner of the entire property. Joint tenancy is usually the best way to take title if you are married or in a common law relationship, and buying a house together to live in together.

Buying as tenants in common means that you each own shares, so that if one owner dies, his or her share goes through his or her estate. Tenancy in common is usually the best way to take title if you are buying with a business partner, friend or sibling. It is also usually the best means if your parent has to go on title for financing purposes, but you will be putting in the majority of the down payment and making the regular expenses; you can own 99% of the property, with your parent owning 1%, to reflect who has the majority interest in the property.

The type of ownership you choose will depend on your personal situation and should be discussed with your lawyer before you sign your paperwork.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she’s not online, she can usually be found in her garden.

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Preparing for cooler weather

August 31, 2011

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Luckily we’ve had a glorious summer here in Barrie! Great heat, nice breezes, and a bit of rain to keep everything alive. Although the summer’s not over yet – believe me, I’m trying to delay the inevitable, too – it’s time to start thinking about getting your home ready for winter. There are a few things you can do around the house to make your home more efficient, even starting now!

If there are some major renovations you’ve been thinking about to better your home’s energy efficiency it’s far more pleasant to make those changes now than while it’s snowing.

Replacing windows and doors are a major cost, however if you’ve noticed over the last year or so that you have a draft in some parts of your home, or if you have cold spots in winter, now might be the time. You’ll really notice a difference on your heating bills. Weatherstripping around doors and windows can be a cheap alternative if you’re putting off replacing them for another season!

Replacing or adding insulation in your attic will also make a noticeable discount on your heating bill this winter, but you’ll also have the added bonus of keeping cool when next summer rolls around. You can replace the insulation in your attic for about $1/sqft if you DIY.

There are also some very inexpensive – or free! – things you can do to save energy any time of year. For example, if you have a fridge or freezer that’s 15 years or older, the Ontario Power Authority will pick it up from your home for free! Even something as simple as choosing Energy Star light bulbs will make a considerable change in your bills, and for the environment too.

There are so many resources for you to make your home function better that will save you money in the long run! Certainly you can spend lots of money improving your home’s energy efficiency, but even the smallest things can help, and they also make great selling features when you’re ready to move on.

Laura

Laura Keller of Century 21 B.J. Roth Realty is a real estate agent with a business philosophy of nurturing relationships with her clients. She will walk you through the process of buying, selling, or investing step-by-step so there are no surprises at the end of your transaction.

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Mortgage Monday Myths: You Need a Down Payment

August 29, 2011

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If you know me well, you know that I get a kick out of alliterations (especially when it comes to titles and categories like “Mortgage Monday“) – how could I resist a triple-alliteration with “Mortgage Monday Myths” right?   The world of mortgage is filled with mis-information, mis-conceptions and myths (more alliteration – woohoo! ;)), so every once in a while I’m going to address some of those myths here on the BarrieRealEstateTalk blog.

This week we’ll take a look at what most first-time home buyers probably consider the biggest road block to buying their first home: saving up for a down payment.

Mortgage Monday Myth #1: You need to have a down payment.

While a down payment of at least 5% will help you get the best rates and options for your mortgage, there are still some lenders that will provide “cash back” mortgages that essentially allow you to buy your first home with very little money saved.  I don’t recommend a cash back mortgage to many first-time home buyers, but for those that want to get into the house market while rates are so low, sometimes a cash back mortgage is a great way for responsible people to get their foot in the door of home ownership.

That all being said, there are some caveats to keep in mind.  Some cash back mortgages require you to actually have a 5% down payment saved, but the cash back can be used for closing costs and other initial expenses (new furniture, lawyer fees, taxes, etc), whereas others will permit you to use the cash back to actually cover the down payment.  The cash back is “given” at the time of closing (when you actually move into the house, not when you sign the paperwork).

In addition (and this is the big one in my opinion), if you need to terminate the mortgage loan before the (usually 5-year) term has matured, the lender will “grab back” a percentage of the cash back you received up front.  For example, if you took out a $250,000 mortgage and received a 5% cash back for your down payment ($12,500), but broke the mortgage 2 years early, you’d owe $5,000 back to the lender (on top of a bunch of other fees) for 40% (the 2 years you didn’t complete of the 5-year term) – yuck!  It’s a little confusing, I know.  But basically, if you do a cash back mortgage, you’ve got to be pretty sure you’re not going to break that mortgage before the term is up.

Of course, the most obvious downside to the cash back mortgage is that you’ll end up paying higher interest rates than you could get if you came up with the down payment on your own (you’re not just going to get the cash back for free, you know!). 😉  Usually the lender will charge “posted rates” (the rates openly advertised by the banks) for a cash back mortgage, versus the “best rate” you could get through a mortgage broker.  Over the term of your mortgage, this could end up costing you thousands of dollars (but that has to be compared to the money/equity lost of renting instead of buying, of course).

In reality, you can still purchase a home with very little down payment, but you’ll end up paying more for not having one, and it could end up costing you even more down the road if you need to break the mortgage.  Not everyone will qualify for a cash back mortgage, but don’t let not having a down payment stop you from trying to purchase your first home.  The cash back mortgage may just be the solution you’re looking for.

 

Myth Busted: You don’t need a down payment.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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The Importance of a “Showing Ready” Home

August 25, 2011

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There is an extensive list of things to do and prepare for when one has elected to list a property for sale such as cleaning, touch up work, etc., but one factor worth noting above and beyond all others is accessibility for showings. A good REALTOR® will explain to his/her clients that once the sign goes on the lawn, the home, although often still occupied, is now a commodity that prospective buyers are going to be interested in seeing.

Due to a number of their own circumstances including but not limited to shift work, currently residing “out of town”, etc., it is not uncommon for prospective buyers to want to see a home on relatively short notice. Although it’s not always the most convenient to delay dinner, pack up the kids and head out on short notice, you don’t know who you’d be refusing if you deny the showing. If you don’t believe me, ask anyone who has bought and sold 3-5 homes over their lifetime and you’ll quickly discover that most of them have a “they only gave us 20 minutes notice but they bought our house!” or “we saw the house, called the agent and bought the house that Saturday” kind of story.

I can attest first hand to the frustration that goes with refused showings when working with qualified buyer clients who request to see a home at a certain time and date (often with 24 hours notice or more) and are refused with reasons as lofty as “there’s nobody home to let the cat out”, -or- “it’s my mother in laws birthday party so we are at home preparing for the dinner this evening” (you get the idea, but both of those are real reasons that I’ve experienced, and both times my client elected to purchase one of the other 4-6 homes we saw that day!).

In light of the fact that being unprepared can cost you the sale of one of your biggest investments, here are a few pointers to help your home maintain a “showing ready” status to account for extenuating circumstances:

  •  Clean your home on a daily basis, this one is twofold: 1) you won’t have to emergency clean in the event of a showing 2) routine maintenance is much easier in the long run than an extensive clean up job. This includes vacuuming, dusting, putting dishes in the dishwasher (or washed and put away), taking out the trash, etc.
  •  If you have pets that are not friendly, or don’t like strangers, make sure they are contained well you are out of the home, or have a contingency plan with a friend/neighbour who can remove them from the home in the event of a short notice showing.
  • Provide the real estate brokerage representing you with every method of personal contact you have including home number, work number, cell number, e-mail so that you can be reached at all times. Most agents are courteous enough to give as much notice as possible but 8 hours can go by for most people while at work if they are unable to be reached, a showing with ample notice might seem “rushed” by the time you get home from work.
  • Understand that most agents will try and arrive at your home during the scheduled showing but leave some flexibility as they are often viewing other homes in addition to yours and as a result, may arrive earlier or later than expected. A good rule of thumb is to allow an extra half an hour before the scheduled showing, and an extra half an hour after the scheduled showing. (Ex – if they requested 3-4pm, count on 2:30pm-4:30pm just to be safe.
  •  Inform your agent of any times that the home cannot be shown due to individual circumstances, i.e. – “I’m a shift worker so no showings before 11am please” or “We have company here during the weekend of July 15th”

Although the process of vacating your home for showings (often at inconvenient times) is not enjoyable, just remember: the sooner the home can be shown, and the more convenient it is for prospective buyers to view the home, the faster it is likely to sell!

 

Brendan

Brendan Clemmens of Royal LePage First Contact Realty is a residential real estate agent in Barrie that provides value added service to all of his clients. Brendan can help you with all of your real estate needs but has a specific focus on helpin g young families and investors.

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Paper, paper and more paper

August 24, 2011

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In my first post, I gave an overview about what real estate lawyers do. Today, I wanted to expand on another point: preparation of documents.

In order to properly do the transfer, you will have to sign numerous documents authorizing your lawyer to register the transfer, your bank to advance the money or a certification of ownership if you are selling, among many other things. On a purchase, you will sign an acknowledgement regarding title, a title direction, an acknowledgement regarding title restrictions (if there are any) and a title insurance application (if you are getting title insurance – more on that in a later post), and you will review a statement of adjustments and a closing funds summary. On a mortgage, you will sign a funds direction, an affidavit regarding use of the property, an acknowledgement of the standard charge terms of the mortgage, a conflict acknowledgement, a closing funds summary and any other document your lender sends over. On a sale, you will review a statement of adjustments and a closing funds summary, and you will sign a vendor’s declaration. On all three, you will sign an acknowledgement regarding the draft transfer or mortgage.

Once you have signed everything, copies will get sent to the other parties (vendor, purchaser or lender). You will receive your copies when you receive your real estate report after closing.

Whoever talked about the paperless office clearly did not have real estate lawyers in mind!

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she’s not online, she can usually be found in her garden.

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