Tag Archives: real estate contracts

Mortgage Fraud Warning

May 4, 2012

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Courtesy of RECO’s “For the RECOrd” magazine

 

RECO investigators are all too familiar with mortgage fraud and the turmoil it causes for the victims who are left fighting to get their homes back. Unfortunately, in most cases, RECO only becomes aware of the mortgage fraud after the fact when a homeowner realizes they have been victimized. But on one recent afternoon, a tip from a brokerage helped RECO stop a fraudster in his tracks and save a senior from heartache.

“It had many signs of a mortgage fraud including someone misrepresenting themselves as a registrant in order to create the illusion of a legitimate transaction,” says RECO’s Deputy Registrar, Bruce Matthews. “But in this instance, we realized that we had an opportunity to act quickly and prevent a fraud from happening.”

It all started when a legal assistant at the Toronto law firm representing the supposed seller noticed irregularities in the real estate transaction. She inquired with Sutton Group All Po Realty, the brokerage that supposedly represented the seller. But Gail Fulton and Doug Lytle, staff members of the brokerage, were shocked to find that they had no record of such a deal. The pair quickly recognized the seriousness of the matter and immediately contacted RECO.

Within a few hours, the urgency of the investigation became clear as RECO’s Manager of Inspections & Investigations, Brian Prendergast, determined that the transaction was fraudulent and put a face to the fraud’s victim: an elderly minister who had no idea that a fraudster was trying to sell his house without his knowledge.

“Naturally he was shocked and alarmed,” says Prendergast. “We realized that this kind man could have his life turned upside down if he was forced to go through the exhaustive process of rectifying the title to the home he had lived in for over 30 years. Knowing what was at stake left us even more determined to do everything we could.”

Fortunately, it was not too late. Prendergast worked with representatives from Service Ontario’s Policy and Regulatory Services Branch to determine that the Land Transfer Office had indeed received and processed an application to transfer the title of the house and to register a $600,000 mortgage against the property. But, crucially, they had not yet certified the transfer. Once RECO informed them of the fraud they halted the transfer process immediately.

With RECO’s help, the homeowner returned the title to his name. He can now rest easy knowing his home is safe.

“I was surprised and shocked, but even in that first call Brian said everything would be okay,” says the homeowner, who has asked to keep his identity private. “Just an hour and a half later he phoned again to say everything was straightened out.”

While RECO’s quick work played a key role in preventing the fraud, numerous individuals from the brokerage, law firm and Service Ontario also deserve kudos for the roles they played.

“We owe a great deal of thanks to these individuals,” says Matthews. “They paid attention to their instincts and reacted quickly, allowing us to protect this gentleman from fraud.”

This potential fraud has a happy ending, exemplifying one of the ways RECO fulfills its mission to uphold the integrity of real estate transactions.

While RECO’s efforts prevented the fraudsters from making off with over half a million dollars, they remain at large. York Regional Police continue to investigate.

Tips to Avoid Mortgage Fraud:

Avoid being an unwitting participant in mortgage fraud. Be suspicious of situations where you are:

  • Asked to inflate (overstate) your income on a mortgage application, indicate you plan to live in a property being purchased as a rental property or provide other false statements.
  • Asked to sign documents that contain blanks or asked not to complete certain sections of a form or document.
  • Offered a fee for the use of your name and credit information.
  • Discouraged from visiting the property, having the property appraised or inspecting the property you are purchasing.

IF IT SOUNDS TOO GOOD TO BE TRUE, IT PROBABLY IS!

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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5 Tips to Sell Your Home

April 27, 2012

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It’s a big decision to sell your house. Here are some easy tips to make the process go as smoothly as possible!

  1. Interview a few different agents before making a decision. Despite what you may think, we’re not all the same! We offer different services for different commission rates. Make sure you’re comfortable with the person you hire and know exactly what you’re getting for what you pay.
  2. Know your rights and obligations. There are so many contracts you have to sign from the listing agreement to the offer you accept. Have your REALTOR explain everything in detail before you sign anything, or have your lawyer go over it with you.
  3. Price it right. Base the price of your home on current market information instead of what you think it’s worth. Even if you put $20,000 into a renovation doesn’t necessarily mean you will get it back when you sell.
  4. Take your agent’s advice. If he or she suggests your home needs some TLC or de-cluttering, do it! It’s not an insult, we’re only trying to help. The better your home looks, the more money you’ll get in the end.
  5. Take the first offer seriously. It’s true what they say; it’s often the best one that comes across the table. Also consider that after your home has been on the market for 45 days (or whatever it has been) the market conditions may have changed from when you originally picked the price. Make sure your agent brings current comparables when you look at the offers.

These are just a few things you can do during the process of selling your home. Ask advice from your agent and other real estate professionals; they know what they’re doing!

Good luck!

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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Student Housing in Barrie

January 17, 2012

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There is definitely a stigma attached to student housing. Some investors shy away from that market due to the high turnover rate and the idea that students will damage the property. There’s a new reality, and investors should take note.

In Barrie, there has been a lot of discussion surrounding the rentals around Georgian College. One year ago in January, I attended the Ward 1 Town Hall meeting hosted by Mayor Jeff Lehman and Ward 1 Councillor Bonnie Ainsworth. One of the primary concerns was the student housing situation in our neighbourhood. Many people who own homes near the College reported that many of the student houses were basically slums with disenfranchised and often seemingly non-existent landlords. This image can be changed, but we need some local investors!

The need for good student housing in Barrie is great. According to a Barrie Examiner article on rental housing, Georgian supplies 525 on-campus beds for students – less than 10% of the full-time student population! If you ever drive down Duckworth St, you will have noticed that, last year, two new student apartment buildings were built which visibly helps the lack of student housing.

Remember that college and university students are generally good citizens. I remember when I started living in off-campus housing at university about 10 years ago. It’s an exciting time, and living on my own was a big step toward my independence. Although we didn’t own the house, us four girls felt like we owned a small part of it; we had pride of renter-ship!

So many students are like us. They’re growing up, and they want to prove to themselves, their friends, and their parents (when they visit!) that they can take care of themselves.

If you’re considering buying an investment property, consider this: most students rent by the room. If you’re renting a small 4-bedroom house in Barrie, you may pay around $1500 a month. According to an employee from Georgian College’s Housing and Student Life, students generally pay about $450 per room on average. If you multiply that by four rooms, that’s $1800! Granted, it may cost you a bit more for upkeep than renting to a family, but that’s still a larger profit margin for you.

Here are some tips from Georgian College’s Housing and Student Life Department if you’re considering ANY rental property as an investment:

  • Pick up a copy of the Residential Tenancies Act (RTA) and take some time to read it and understand the rights and responsibilities of both a landlord and a tenant
  • Join a landlord association and understand what being a landlord means. It is important to understand the pros and cons of being a landlord
  • Pick up a copy of the City of Barrie’s Rooming, Lodging and Boarding House By-Law.
  • If after doing all of the above, the potential investor is still interested in becoming a landlord, then s/he should speak with City staff to make sure the property s/he is interested in can be licensed under the City By-Law

Certainly there are varying points of view on this potential investment. As with anything, make sure you do your research. There are even some financial incentives for you to become a student landlord in Barrie! There is no denying that Barrie has a rental shortage in general, but you can make the conscious decision to rent to students. Good luck!

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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Signing a Listing Agreement

November 1, 2011

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Congratulations, you’ve decided to sell your home! Perhaps you’re moving up, or maybe you’re downsizing or moving to another city. Now comes the time to pick a REALTOR to start the process along. If you don’t already have an agent you’ve worked with before, it’s always recommended to interview two or three people to find the best fit for you. Once you’ve chosen someone, you’ll start seeing a lot of paperwork.

One of the pieces you’ll sign is an agency form called “Working With a REALTOR”. This basically outlines the relationship you’ll have with your REALTOR in very simple terms.

The listing agreement is the main document you’ll sign in order to put your home on the market. If this is the first time you’re selling a home, this can be the scariest contract before the offer comes in! Before you sign anything, go over the entire contract with your REALTOR. This way, you can ask any questions you have before the pen is in your hand. Most of the clauses (ie the numbered paragraphs) are very wordy, and have what may seem to be run-on sentences. Ask your REALTOR to explain each of them in layman’s terms.

 

 

 

The clauses that will probably be of most interest to you – and are the questions we most often get – are the commission clause and the length of the listing term. Remember that both of these are negotiable with your REALTOR. The commission should be based on the level of service you’ll get, so make sure you’re getting everything you want. This may mean you pay a bit more, but this is probably the biggest deal of your life. Do you always buy the cheapest winter tires, or the low-efficiency furnace? You know that paying a bit more for a better quality product, so don’t skimp here.

 

 

 

The length of your listing is dependent on many different factors. Pricing your home properly should ensure your house sells in a reasonable amount of time. Ask your REALTOR what that length of time is with respect to the current market conditions, what has recently happened in your neighbourhood, and the condition of your house. 90 days is reasonable for a listing period under normal conditions, but make sure you and your REALTOR discuss all the options.

A listing agreement is a very serious contract. Do not take it lightly, but there is no reason to be scared of it. It’s all part of the process on this home-selling and -buying journey! Good luck!

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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Signing the Buyer Representation Agreement

October 4, 2011

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Contracts in general tend to be difficult for people to sign. There is a finality to it. Obligation. If you’ve bought a home in Ontario,  you’ve likely seen this form.

There are reasons that this form is used that protect both you as the buyer, and us as the REALTOR. When you sell your home, for example, you sign a contract (the Listing Agreement) before your house goes on the market. For some reason, buyers are hesitant to sign the same type of contract.

 

Here are some reasons that should help you make the decision to sign the Buyer Representation Agreement (BRA) before you start working with your REALTOR:

  • you know what duties the real estate brokerage (ie the company with which your REALTOR is affiliated) owe you throughout the process, including negotiating the best deal for you
  • you have peace of mind knowing that your REALTOR is obligated to give you full disclosure about any properties listed on MLS, along with other professional advice as you continue to work together
  • you know that your REALTOR is protecting your best interests from the beginning of the relationship, through the offer process, and up to and including the closing day
  • your REALTOR will give you expert advice on knowledge of properties, neighbourhoods, and the market

You may be nervous signing a buyer’s contract. Here are some misconceptions that buyers have about signing this contract before the offer process begins:

  •  you have to buy a property within the time frame listed in the contract. Wrong! You and your REALTOR decide on a reasonable length of time to find your home in this contract. If you don’t find anything you like, you can hold off on your search, sign an amendment to this contract to extend the time frame, or choose another REALTOR if you’re not happy with the service you got the first time around.
  • you have to pay your buyer’s agent a commission. This statement isn’t necessarily wrong, however the vast majority of buyer’s agents are paid by the seller of the home you buy. When you’re interviewing REALTORs to act as your buyer’s agent, make sure they explain this clause to you so you understand exactly what it means.
  • the BRA only protects the REALTOR ensuring they have a commitment and security from you. In fact, signing the BRA early will ensure that you get the best service that actually works in your favour.

By law, a buyer’s agent should present you with this document before the home-buying process begins. If they don’t, ask to see it! Buying a home is a complicated process, and the more you learn early on the better prepared you’ll be when it comes time to make an offer on your dream home.

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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