FAQ's

Our most common questions, all in one place

How can the current market conditions affect my position as a buyer?

Pay attention to market conditions – they will have a definite impact on your position as a buyer. The table below lists the influences that different conditions may have on you. Impact and expenses may vary, depending on your area.

BUYER’S MARKET

  • The supply of homes on the market exceeds the demand.
  • High inventory of homes. Few buyers compared to availability. Homes are on the market longer. Prices tend to drop. More time to look for a home. More negotiating leverage.

SELLER’S MARKET

  • There are more buyers looking to buy a home than there are homes on the market.
  • Smaller inventory of homes. Many buyers. Homes sell quickly. Prices usually increase. May have to pay more and make decisions quickly. Conditional offers may be rejected.

BALANCED MARKET

  • The number of homes on the market is equal to the number of buyers.
  • Sellers accept reasonable offers. Homes sell within an acceptable time period. Prices are generally stable. More relaxed atmosphere. Reasonable number of homes to choose from.

How much down payment will I need to provide?

Like many things in life, planning ahead is the key to success. So, you should know the price range you can afford before you start shopping. Here are a few things to keep in mind:

Down payment – this is usually the percentage of the total cost of a home that you’ll need to pay. The more money you put down, the more money you’ll save on monthly payments and, in the long run, interest paid. The minimum down payment required is as follows;

  • For homes with a purchase price less than or equal to $500,000 the minimum down payment is 5%
  • For homes with a purchase price greater than $500,000 and less than $1 million, the minimum down payment is 5% of the first $500,000 plus 10% of the remaining balance
  • For homes with a purchase price of $1 million or more, the minimum down payment is 20%

Note: High ratio mortgages must be insured by a mortgage insurer such as the Canada Mortgage and Housing Corporation (CMHC), Genworth Financial Canada or Canada Guaranty. You will be required to pay the premium for this insurance.

  • Knowing what you can afford – how much house you can afford comes down to 3 factors: your monthly mortgage payment, your down payment and the amortization period or length of time it will take to pay off the loan.

Note: Check out our mortgage payment calculator here

  • Getting pre-approved – this will really help you figure out what you can spend on a home because you’ll know before you start shopping. And you’ll be protected against rising interest rates as well.

What is involved with closing the sale and what are the associated costs?

On or before closing day, lawyers for the seller and the buyer will set up a trust account for the money coming from the sale. This money will be used to pay off any mortgages you owe on the property, after which you receive the balance. 

Your lawyer should also ensure that you receive compensation for pre-paid expenses, such as property taxes, electrical or gas bills, or, if applicable, heating oil left in your tank.

You will give the property deed or transfer documents, mortgage details, and keys to your lawyer. Your lawyer will register the mortgage discharge and transfer the deed at closing.

You will also pay the listing brokerage company their compensation (your lawyer typically arranges the payment from the proceeds of the sale).

While your down payment and mortgage will cover the purchase price of your home, it’s wise to consider the other expenses involved in buying a home. You’ll pay some costs at the beginning of the home-buying process and others, known as closing costs or disbursements, when your home purchase is finalized. A list of additional costs that could add up when you buy your first home can be accessed here https://www.cibc.com/en/personal-banking/mortgages/resource-centre/add-costs-when-buying-home.html

How can I add value to my home before putting it on the market?

Everyone has their own reason for selling their home. One thing, however, is universally true: the desire to get as much as you can for your home. There are a lot of ways you can add value that you might want to consider, such as:

  • Renovating – this can be something as simple as freshening up the walls with a coat of paint or updating your door knobs and lighting with more contemporary styles all the way to major renovations like installing a new kitchen, bathroom or hardwood floors. Before you do anything though, it’s probably wise to know how much value a renovation or remodel will actually add to your sale price and how much other comparable homes in your neighbourhood are selling for. A Royal LePage agent is a great source of information. They can give you an assessment on your home so you don’t embark on expensive renovations before knowing.
  • Enhancing curb appeal – first impressions mean a lot. Which is why you want your home looking its very best when a potential buyer is standing at the bottom of your driveway or simply passing through the neighbourhood. So, make sure the lawn is cut and raked. If there are some dead patches of grass, overseed or sod. Trim bushes and trees, even add a few brightly coloured flowers. Touch up any peeling paint around exterior windows and doors, stain the fence or deck, clean up your garage or shed and ensure that your home looks just as enticing at night by making sure it’s well lit.
  • Getting a home inspection – the last thing you want is for the deal to fall through due to an unpleasant surprise. It’s also highly likely that the buyer will ask for a home inspection anyway. So you may want to consider taking the initiative yourself. That way, if there are any major repairs that need doing now, it won’t jeopardize the sale of your home or force you to lower the price later on.

How is the market value of my property determined?

The market sets the price. Your REALTOR® will help you set a realistic price to match market conditions. 

Your REALTOR® can give you a comparative market analysis based on similar homes in your area. It will show current listings, recent sales, and expired listings (a good thing to check because these houses are usually either overpriced or poorly marketed).

Your REALTOR® will help you develop a competitive price based on:

  • Location 
  • Size 
  • Style 
  • Condition 
  • Community amenities 
  • Financing options 
  • Market conditions (Is it a buyer’s or a seller’s market?) 

Remember: The market determines price. Avoid the urge to price your home based on considerations that do not affect its market value. For example, the following do not affect the market value for your property:

  • How much you need to purchase your next home 
  • How much you paid 
  • How much you spent on improvements 
  • The value of a similar home in a different community 
  • The cost to build the same home today 
  • Your personal attachment to your home (Yes, it’s your house and you’re proud of it, but this makes no difference to potential buyers.)

What is involved with the signing of a listing agreement?

The listing agreement is a contract between you and your REALTOR®’s brokerage company. It will: 

  • Provide a framework for subsequent forms and negotiations 
  • Clearly spell out the rights and obligations of all parties, the length of the agreement, and the compensation 
  • Set the listing price, and accurately describe the property (including lot size, building size, style and materials, floor areas, heating/cooling systems, room sizes, and descriptions) 
  • Detail what is, and what is not, included in the sale (As a general rule, fixtures are included; chattels, things which are movable, are not. If necessary, list what stays and what goes under inclusions or exclusions.) 
  • Provide information about annual property taxes, and note any easements, rights of way, liens, or charges against the property 

The agreement binds both parties to its terms and conditions. You and the listing REALTOR® sign the listing agreement and each of you receives a copy.

Your REALTOR® may also ask for:

  • Plan of survey or location certificate – A survey of your property showing the lot size, location of buildings, and any encroachments from neighbouring properties. Some jurisdictions need this to complete the sale of your home. Your lawyer may recommend a survey, especially if significant changes have been made to your property. 
  • Property tax receipts – Most listing agreements include information about current annual property tax assessments. 
  • Mortgage verification – Details about your mortgage provided by a mortgage lender upon your authorization. 
  • Deed or title search – A legal description of your property, and proof that you own it. 
  • Other documentation – Annual heating bills, water and sewage costs, electricity bills, and recent expenditures on home improvements. Many provinces also require a signed property condition disclosure statement.

FEEL FREE TO ASK US ANYTHING

Get In Touch

Maria Makrygiannis

Right At Home Realty Inc.

5111 New Street Suite 103 Burlington  Ontario,  L7L1V2  Canada 

Phone: (416) 666-6307

maria@askmarianow.com