Does the Buyer or the Seller Pay for Closing Costs?

When it comes to who pays for closing costs in a real estate transaction, there will be closing costs that are unique to both buyer and seller. The buyer can incur costs that are equal to 3% to 6% of the sales price of the property. Each party is responsible for paying their own costs at closing. However, if the market is in the buyer’s or seller’s favour, it may determine if either party negotiates paying some of the other’s fees and costs in order to make a deal.

Most of the buyer’s costs are associated with the loan. The biggest costs incurred for a loan will be the loan origination fee and any discount points paid to buy down the interest rate. Other costs may include those for an appraisal, HOA assessments, prorated insurance and taxes.

The seller’s biggest closing cost liability is paying the real estate commission. Other fees would include paying the title insurance, transfer taxes and prorated property taxes.

In a buyer’s market, it may have been negotiated that the seller pay for some of the buyer’s closing costs, called seller concessions. In a seller’s market, a buyer may offer to pay for some of the seller’s closing cost liability, such as the title insurance or the home warranty plan. If a buyer does this, it increases the seller’s net proceeds and gives the buyer an advantage in a seller’s market.

Whether you are a buyer or seller, I can help you use the anticipated closing costs to help complete a sale to your advantage. Call or email me today and we can go over your specific goals and circumstances. I am always here for you to provide guidance and help you navigate all aspects of the sale.

Ask These Questions when You’re House Hunting

When you are house hunting, there are important questions you should ask so you can determine if the spaces you are viewing will truly fit your needs, without you having to make costly changes after you move in. Everything is not always as it seems. First impressions may be cosmetic and not be indicative of the true condition of a home.

When touring the main living area, ask what the flooring is like. Consider its age, appearance and maintenance requirements. Is new flooring going to be needed in the near future and do you have the budget for it?

Pay close attention to the number, size and placement of the windows. Is there enough light and airflow for the activities of you or your family? Check for any condensation between the window panes and how well they operate.

Since the kitchen gets a lot of use, it is important to ask how old and what condition the appliances are in. You need to know what appliances are included with the house sale. Answers to these inquiries will determine what appliances you may have to replace now and in the future.

The bathrooms serve many functions. It is important to find out if the toilet, sink and shower work properly. Is there any evidence of an excessive moisture condition that will be a problem later? Are the bathrooms well-vented?

When looking at the bedrooms, be sure and ask about closet and storage space. Will you have ample space to store your family’s stuff without having to add storage components to the house?

These questions address just a few areas of concern. Call or email me and we can discuss in more depth what other important questions you should be asking when you are house hunting. I am always here to help.

Plan for These Unexpected Costs when Buying a Home

Coming up with a down payment to buy a home is the primary cost that buyers account for. Closing on a home purchase doesn’t end with the down payment, so you want to be prepared and save for these additional costs that you may not have anticipated.

There will be closing costs that are associated with your loan. Plan on paying 2%-3% of your loan amount for loan application fees, attorney fees, appraisal fees, homeowners’ insurance and other assorted costs.

The $375 to $500 cost of a home inspection should also be factored in. Without a professional home inspection, you will not know what defects the home may have nor be able to negotiate with the seller on repairs.

If the house you are considering is in need of new landscaping, check with a landscaper for the cost to bring it up to your standards. Ask for an estimate for monthly yard maintenance if you don’t plan to do it yourself. Budget for at least $100 per month.

Exterior and interior cosmetic updates will likely be on your to-do list. Decide if you need a plan for working on one renovation at a time. Painting the entire exterior or interior of a home all at once can put a big dent in your finances.

Adding small décor items to your new home can quickly absorb funds from your budget. Bigger-ticket items like appliance repair or having to buy new replacement appliances is your responsibility and can also increase your cost of home ownership.

You can never have too much cash on hand to comfortably close on your new house to make it the home you want it to be. Give me a call so I can guide you through the home-buying process without any surprises.

Closing on a Home? Avoid These 5 Common Mistakes

If you can properly prepare yourself ahead of time for closing on your home, you won’t be so overwhelmed with the process. Watch out for these typical missteps in your preparation.

1. All contracts and agreements are legal documents, so take the time to carefully review them prior to signing. Any email or document that you receive from your agent, lender or title officer demands your attention prior to moving forward. Don’t fall prey to just scanning materials that require electronic signatures.

2. Pay full attention to what the sellers have stated on their property disclosures. Look for ambiguities and vague responses and investigate any concerns prior to closing. The same care should be part of your thought process when reviewing the title report.

3. A simple but costly mistake is having your name appear in conflicting versions on different documents. Many signatures require notarization, so be sure your driver’s license matches your name on your paperwork. The lender and title officer must be in sync on your legal name, or delays will result from having to have documents redrawn.

4. It is important to have your closing funds ready to wire to the title company upon request. If you don’t allow enough time for the transfer to take place, you won’t be closing on time. If you are planning on handing over your funds drawn on a cashier’s check, it is a good idea to see if the closing agent will accept a cashier’s check. Many do not.

5. Constant communication with your agent, lender and title rep about any financial or life changes will help avoid last-minute modifications in your loan documents and any needed adjustments on other closing paperwork.

Call me anytime with questions regarding your closing so we can avoid any possible delays.

Buying a Home? Make Sure You Ask These Questions

It’s always good to be ahead of things, especially when buying a home. If you are, there will be fewer surprises during the first few months after you take possession. Start asking some of these maintenance-related questions so your budget will be better prepared for remedies later.

1. How old is the roof? The age and type of the roof will help determine when you can expect replacement. Asphalt shingles are the most common type of roofing and have an average life of 15 to 20 years. Shake roofs have life expectancies of 20 to 40 years. Metal and concrete tile roofs can last 30 to 50 years.

2. Has there ever been a major plumbing break? It is not uncommon to have a pipe burst or for an old house to have a leak. Water damage can be a costly thing to remedy. If there has been a leak, a mould inspection is recommended.

3. How much is being spent on utilities? Knowing the energy sources and the average monthly utility costs will help you determine if you will need to upgrade to more energy-efficient appliances.

4. What is the capacity of the water heater? You need to know how big the water heater is so your family will have enough hot water at peak times. Water heater sizing guides will help you determine if you have to budget for a larger water heater.

Give me a call, and I will help you communicate with the seller and the neighbours, who will be your best allies in getting the right answers.

House-Hunting Etiquette: Questions You’re Afraid to Ask

Permission to view someone’s home for sale comes with some rules of etiquette.

Even if you are visiting an open house, you need to be aware of things that you may normally take for granted.

Preparing ahead will help alleviate confrontation or the need to ask these questions when you are in someone else’s home.

1. Is it okay to consume snacks or drinks? Unless you are prepared to clean up or pay for a spillage accident, have your refreshments before you enter a home. If a seller has left cookies out for the showing, feel free to take one and eat it in the kitchen.

2. Can I use the bathroom? If it’s urgent, ask for permission. You never know if the water has been shut off. Schedule stops to take care of your personal needs before visiting.

3. Is looking into closets acceptable? Look all you want, but don’t disturb what you see.

4. What about taking photos? Before you click the camera, first ask if it’s okay. This is especially important if you intend to post your photos publicly and the seller has personal effects that they don’t want promoted.

5. Can I sit on the furniture? This is not a good idea unless you have a physical need to do so. Ask for permission if you need to sit for health reasons.

Call or email us with any of your burning house-hunting questions. We are always here to help and make sure you have a pleasant experience.

Moving? Here’s a Checklist of What to Do Before You Move

When the big moving day arrives, you will want to be as organized and pre-prepared as possible. Many tasks are best managed when your new home is vacant. Here is a moving checklist to help you navigate your move.

1. Since it is likely that the seller will turn off the utilities upon closing, contact the utility companies and have the utilities turned on in your name ahead of closing. Be sure to include setting up your Internet and cable services at the same time.

2. Make sure the vacant house has been cleaned to your standards. If not, hire a cleaning service if you don’t want to do it yourself. At an average cost of $150, you may want to leave it to a professional.

3. For closing day, arrange for a locksmith to come and change the locks. Often, the locksmith will only have to rekey the existing locksets at a reduced expense.

4. Any planned remodelling or renovations are best accomplished when the house is vacant. It is much easier than you having to live around construction debris.

5. If repairs need to be done, line up a handyman to get the work done right after you close.

6. Be aware of what safety items need to be in place prior to taking occupancy. Have a fire extinguisher for each level of the home. Ensure that the smoke and carbon monoxide detectors are in working order.

7. Prior to closing, have a walk-through with the seller or your home inspector so you can be familiar with the electrical service and water shutoff valves in an emergency. Get instructions on any other working systems of the home.

8. Have your mail forwarded and change your address profiles where needed.

Contact us for an even more extensive checklist to help with your move.

Is There a Best Time to Buy or Sell a House?

There is no defined time that is best to buy or sell a home because there are a few influencing factors that will determine when it is right for you. Our goal is to keep you informed on these factors so you can make the decision that’s best for you.

If you know what the market activity is at any given time, it should dictate when you move forward with your planned real estate venture. The supply and demand of homes will determine the availability and price. The statistics that we provide you will help you select the right time to buy or sell your home.

As a seller, you want to list your home when available inventory is low so you can entertain more buyers and be more aggressive with pricing. As a buyer, you want to shop for a home when there is plenty of inventory to pick from. More homes on the market means more ability to negotiate the price.

Interest rates will influence your timing and also determine which home you can afford. Low rates allow sellers to be more assertive on pricing because more buyers can qualify to buy their homes.

Buying or selling a home in the late spring or early fall is generally a good choice but not always the most advantageous. There is more competition, so consider listing your home during less market activity. As a buyer, you will have fewer buyers to compete with while you can still see a reasonable inventory of homes.

If you are wondering when the best time is for you to buy or sell a home, call or email us, and we’ll update you on the present market activity and how it may affect your timing. We are always here to help.

In the Market to Buy a House? Here’s a Home Viewing Checklist

When you begin your house-hunting adventure, what should you be looking out for? Here’s a checklist to take along with you when you view prospective homes.

Grade. Check the grade of the property that surrounds the house. Walk up to the house and take note if the grade slopes away from the structure. Any puddling or sloping toward the house could mean poor drainage.

Roof. While outside, stand back and check the roof for any shingle damage and poorly maintained gutters.

Plumbing. A quick and easy check for plumbing issues is to run the faucets to see if there is good water pressure. While running the faucets, take a look under the sinks and check for drips or past water damage. To avoid other possible expensive leak repairs, check walls and ceilings for discolouration that could likely be from water leaks.

Pest control. Hidden areas such as basements and attics can be home to unwanted pests and insects, so include a visual inspection of these areas.

Structural. Needed structural repairs can be noted by checking for floor and wall cracks and out-of-square door frames.

Electrical. A quick check of a home’s electrical wiring can be done by running some of the appliances with the lights on. Any flickering could indicate wiring or electrical service issues.

Please give us a call or email us prior to starting out. Our experience will help guide you through this checklist to help you avoid unanticipated and costly issues in the future.

Look out for These Home Inspection Red Flags

A home purchase is likely the biggest investment you will ever make. To protect your investment and your personal health and safety, you want to be aware of red flags that could signal significant problems with the home that you wish to buy.

Structural red flags are the most serious because they threaten the integrity of the home. Look for large basement floor cracks and bumps. Doors and windows that are out of alignment, along with steps that have separated from the foundation, are all indications of settling of the home.

Mold-related issues are often detected in older homes with deferred maintenance and may not have easy fixes. Keep an eye out for patches of black mold in the house as well as any mold-related odor, unventilated bathrooms or bubbled paint.

Even an untrained eye can uncover red flags associated with destructive pests. Powdery residue around wood elements, grinding sounds, and hollow areas in floors and walls are indicators of wood-destroying pests. Droppings and bug body parts are also signs of insect infestation.

Defective roofing can present you with several threats to a home’s integrity. Beware of a roof that is over 20 years old and displays cracked and missing shingles or has evidence of previous repairs. Once inside the home, keep an eye on the ceiling, where there may be staining or patchy paint.

Our team will help point out red flags like these so your home-buying process will result in fewer risks to your health, safety and bank account.

Don’t Make These 6 Mistakes as a First-Time Home Buyer

Experience will be your best ally when it comes to avoiding pitfalls when buying your first home. We are here to help you avoid these most common mistakes.

1. A real estate agent who doesn’t have your best interests at the forefront or the right tools and resources to assist in getting the job done effectively won’t likely produce good results. Be selective in choosing who will represent you.

2. Relying on a lender just because of a past banking relationship may not yield the best rate and terms for your loan. Explore the competition.

3. In a hot seller’s market, hesitating to put in an offer on a suitable home could mean losing a rare buying opportunity and creating uncertainty when it comes to future prospective properties.

4. Not staying within your budget and moving forward with a higher-priced home can cause you to pinch pennies to make ends meet and trigger unnecessary anxiety.

5. If you are in the midst of a seller’s market and you have not been preapproved for a loan, your offer is in a very weak position. You risk losing every buying opportunity until you do get preapproved.

6. You will miss valuable buying opportunities if you make your home search parameters too broad. Don’t spend too much time looking at properties that really aren’t for you. Narrowing down what features of a home are on your bucket list will allow you to home in on those properties from the start.

We are here to ensure you have a smooth home-buying experience. Call or email us and let us help you avoid these mistakes and other potential pitfalls.

Purchasing a Home vs. Renting: 5 Tax Advantages

While renting a home gives you the freedom of picking up stakes and moving whenever you want, realizing the dream of home ownership can give you far more benefits, the most obvious being the growth of your nest egg coming from normal market appreciation and the additional equity increase that you gain from making home improvements over time.

Home ownership can also enhance your financial status with some of the following tax advantages.

1. Making monthly principal and interest payments on your loan may qualify you for a mortgage interest deduction, which reduces your income tax liability proportionately.

2. Owning your own home means paying property taxes and, with some limitations, may give you an additional tax deduction on your income taxes.

3. If your loan includes a mortgage insurance premium and your income qualifies, that premium is deductible and also lowers your tax liability.

4. A percentage of some home improvements can increase your tax deductions, especially if they are eco-friendly. Solar panels and wind turbines are examples.

5. Having a home-based business and the improvements that are associated with that business may also contribute to decreasing your tax liability. The square footage percentage of the portion of your home where you conduct business may give you additional tax deductions.

If you feel that owning your own home will benefit your financial future, then we are here to take you down that path.

4 Reasons to Consider Buying a Home in the Off-Season

As a home buyer, you can optimize your home buying if you move forward with your search during the off-season of where you wish to live. In very hot climates, the off-season will be during the summer, while in most other parts of the country, it would be during the winter months. Here are a few reasons you may want to consider buying your home out of season.

1. A seller who lists his or her house during the off-season is more likely to be very motivated to get the home sold. Therefore, you can benefit because the seller will be more willing to negotiate on price and terms, especially if you present a fair offer.

2. There are usually fewer buyers when you decide to shop when it’s not peak market time. Fewer buyers mean less competition and no price wars. Buyers tend to be more focused on the holidays during the winter, while communities in hotter climates draw virtually no competing home-buying snowbirds during the summer.

3. Since the off-season can mask the usually attractive curb appeal of a home, it can also provide a more realistic viewing of a home without the gingerbread. You can better see the “bones” of a home with minimal landscaping and possible deferred maintenance.

4. The durability of a prospective property can be better tested when you shop off-season since the mechanics of the home are being put to use on a daily basis. The furnace output is being tested to its maximum capability in cooler winter zones, while the air conditioning is being constantly challenged in the desert climates during the summer. The insulation and soundness of doors and windows are also best evaluated during these times.

Even though the market traditionally slows down during the off-season, we are here 365 days a year to improve the results of your home-buying experience.

Determining Home Appraisal Value: 7 Contributing Factors

The valuation of your home will consider a variety of contributing factors. The appraised value will weigh everything from location and demographics to the physical attributes of your home. These are key influences.

1. First is the location. The neighbourhood’s location value will be relative to its proximity to area schools, amenities and accessibility to those amenities. A home’s location within the neighbourhood can add positive value if it is in a cul-de-sac or on a large lot and does not back up to any main roads. Location value is reinforced if surrounding homes are clean, neat and owner-occupied.

2. Value will be influenced by what upgrades and updates are contributing to making a home more current in quality, energy efficiency and safety.

3. Appraised value is enhanced when a home has been built in the last 20 years because it presents a lower risk for needed repairs and has newer amenities.

4. Buyers will pay higher prices when the design of a home is timeless and has good appeal for the majority of buyers.

5. As important as the value of the interior of a home is in the appraisal process, so is the exterior landscaping and overall curb appeal. Landscaping that is easy to care for and complements the home’s exterior will yield more value.

6. The value of the number of bedrooms and baths will be of prime importance when comparing to competing sold and listed homes. As the bedroom and bath count goes up, so does the value of the property.

7. The square footage and the efficiency of the floor plan contribute to the value. Finished livable basements add value, but not to the same extent as those living spaces that are above grade.

If you have any questions about home appraisals, call or email us. We are always here to help guide you so you can make the decisions that are best for your goals.

Wire Fraud in Real Estate: How to Protect Yourself

In a world of scamming via Internet connections and communications, we want to warn you of the wire fraud that could be a product of sending or receiving emails that takes root during the closing process in a real estate transaction where large sums of money are being transferred to consummate home sales.

Once scammers gain access to a real estate agent’s or title company’s email account, they can deceive home buyers by “forging” emails to falsely convey closing money wiring instructions. If successful in convincing a buyer to send closing funds to an account other than that of the title company’s financial institution, the scam won’t likely be discovered until the funds cannot be recovered.

It is important to protect yourself from this potentially huge loss of your life savings. Whenever you receive an email from a title company or your agent with wiring instructions for closing, you always need to call the source to confirm the content of the instructions that you have received. Typically, real estate agents should not be in receipt of wiring instructions because it provides another avenue for potential fraud.

Most title companies protect themselves and their clients by communicating wiring instructions via encrypted email once the buyer calls to ask for those instructions. While nothing is foolproof, email encryption helps assure the secure transfer of closing funds.

We are aware of the perils associated with this part of the closing process and are here to assist you in the verification process. We can direct you to title companies with encryption capabilities.

Ready to Buy a Home? Here’s How to Prepare

To help avoid being a victim of homebuyer anxiety, we would like to give you some pointers to better prepare yourself for what lies ahead when you set out to buy a home.

A good starting point is to go to your lender of choice and get preapproved for a loan. In doing so, two major things will be accomplished. You will know what kind and price of home that you can afford to buy, and you will be able to accompany any offer to purchase with a loan preapproval letter, which adds strength to your offer.

Before you set out on your search, if you list the characteristics of a home that will suit your family, your time will be rewarded more quickly because we can help you target amenity-specific homes. In today’s market of limited inventory, you want to be mentally prepared to pull the trigger when you view a home that fits your needs. Hesitation can result in missing out on the property that really works for you.

To assist in the decision-making, evaluate your funds on hand so you can afford to do fix-its or be able to enhance a new build home if that’s what you would choose to purchase.

Have your yellow pad filled out with these items when you call upon us to partner with you in the homebuying process. By understanding your needs and what you qualify for, we can then move forward efficiently, meet your needs and not miss your best opportunities. We can help you determine what is right for you, given your individual financial circumstances and goals. Call or email us today.

Here’s How to Get the Most out of Your Virtual House Hunt

What better way to kick off your house hunt than to log on to your computer to “virtually” check out the availability of homes that will complement your lifestyle? We have tuned into the online needs of buyers, putting comprehensive property information at their fingertips. Search filters, property data, and media production quality are better and easier to access than ever before.

Your virtual house hunt enables you to insert yourself into a prospective home without physically being there, all through virtual tours, 3D images, a multitude of still photos, floor plans, and written descriptions that accurately depict the property you are viewing. Not only can a comprehensive online presentation leave you feeling like you just physically toured the home, it will also give you a great picture of the exterior spaces and the neighbourhood and how the house is located by incorporating satellite imaging links.

Be aware of possible “red flags” that result from omissions in the virtual viewing. Missing views of exteriors or some living spaces may be a sign that a property has some deficiencies. This will be an opportunity to have us investigate what is not in view so you can decide if the property is worth pursuing.

After you have completed your virtual house hunt, we can help you coordinate safe viewing appointments of the properties that you feel will fulfill your needs. We’re here to help you through every step of the process.

What Every Buyer Needs to Know Before House Hunting

Before you begin your hunt for a new home, even if it’s online, we suggest that you do some important information gathering ahead of time so that the fruits of your labour will be more immediate and more satisfying.

The place that you will call “home” will be the result of understanding what your needs are now and into the future. Condo or loft living may be your chosen lifestyle if you don’t want to deal with much maintenance and have no outdoor living requirements.

If so, be sure and note that there will be added monthly housing costs via homeowners association fees. To give yourself or your family room to grow, a detached single-family home with ample outdoor spaces may head your list of criteria.

“What location is best?” Probably the most important part of your information gathering will be how you answer this question. The value of your new home will be influenced by its location, so you will need to analyze your needs regarding how and where you work and play.

The type and locale of a home will determine your overall cost of ownership. Will it be city life, country living, or nesting in the suburbs? Additionally, you will want to include the cost of home maintenance and commuting costs as part of your cost of living fact-finding.

Once you decide whether you are a candidate for a remodeling project or if a newer home better suits your way of life and patience, you will want to get prequalified for a loan that is tailored for the type and location of the home that works for you.

Please remember that we are here to make your information gathering easier so that the end result is a home that is a perfect fit for you and your family.

6 Things EVERY First-Time Home Buyer Should Do

It’s time to prepare for the closing on the purchase of your first home. Before you are handed the keys, there will be several tasks to do so you can set the stage for being a homeowner.

Speaking of keys, you should change the locks, which can be a DIY project for you, or contact a locksmith.

Notifying all of your contacts of your new address should also be on your task list. An email blast will accomplish this very efficiently.

On top of emailing your contacts, make sure to contact the post office and let them know that you have moved. This can all be done online so make sure to visit www.canadapost.ca to make sure your mail follows you to your new home.

Having all of the utilities on and in your name the moment you flick on the switch will assure power, hot water, heat, and AC to make your first night comfortable.

Prior to closing, familiarize yourself with the amenities that are near your neighbourhood so you know where the nearest hardware store and grocery stores are located to get you through the moving-in process.

Create a repair fund as soon as you are under contract to take care of the maintenance your home will eventually require.

Our resources are here to guide you through your task list, and we are just a phone call away.

5 Financial Benefits of Owning a Home

You want to make smart financial choices for your future. Do those include buying a home? Here are five financial benefits that point to yes.

1. Tax breaks: As a homeowner, you may qualify for certain tax breaks or refunds, such as the Home Buyers Tax Credit or the GST/HST New Housing Rebate. Check out the taxes section of canada.ca  to learn more about the qualifications for these programs.

2. Stability: If you take out a fixed-rate mortgage, you’ll know what payments to expect for the life of the loan. Rent, on the other hand, often increases annually. When you own a home, you also typically have more control over expenses such as utilities, so you can make choices that encourage efficiency and save money each month.

3. Forced savings: Each month, as you pay down your mortgage, you are adding equity. This can be an excellent way to build wealth. In the future, you can sell the home for a profit or borrow against the equity to obtain needed funds. Medical emergencies, college tuition, and home repairs or renovations are common uses for these funds.

4. Good credit: A mortgage is considered “good debt,” meaning that it looks good on a credit report and can help you establish a healthy credit score. As you faithfully pay off the loan, your score can increase. This can prove helpful in obtaining lower insurance rates and qualifying for lower rates on future purchases.

5. Final payment: When you buy a home, there will come a day when you no longer have to make your mortgage payment. It will eventually be your property, free and clear. (Time to celebrate!) This scenario is much different than paying rent, which will continue for a lifetime.

Are you wondering if a home purchase makes sense for your financial future? I’d be happy to discuss these and other benefits and help you determine if now is a good time for you to pursue homeownership.