What are Closing Costs

It is widely known that venturing into home ownership is one of the largest investments you will ever make. You do your research to find out how much it will cost to buy a house, determine what you can afford, and set a monthly budget to help you stay on track. From your deposit, to property insurance, to title insurance to lawyer fees, you know what you need to prepare for, but do you know what they all mean? We don’t want to keep you reading all day so we won’t dive into them all just yet, but now is the perfect time to dig a little deeper, and find out exactly what are closing costs.

Once your home purchase is finalized, there will be some additional costs you should be prepared for called closing costs. Typically, closing costs can range from 1.5% to 4% of the selling price, and are often the legal and administrative fees you are required to pay at the time of closing. Some examples of closing costs are listed below:

What are Closing Costs

Everything You Need to Know

These are just a few of the costs you should be prepared to pay, but if you would like a list of exactly what you can expect, your RE/MAX agent will be able to help! There are some costs that will be dependent on the type of property you are purchasing, and some may be worked into your negotiations with the sellers.

Home Inspection Fee

We have shared the importance of a Home Inspection many times. Although it will cost you in the beginning, it can save you a lot of money should there be any serious problems with the home.

Mortgage Default Insurance

If you put less than 20% down on your new home, you will be required to buy mortgage default insurance to protect the lender.

Land Transfer Tax

Land Transfer Tax is the tax you pay when you buy land or interest Canada. This includes any buildings, buildings to be constructed, and fixtures and is calculated as a percentage of the purchase price of your home.

Legal Fees

When determining what your closing costs are, it is important to keep in mind the legal fees you will be required to pay.

Appraisal Fee

This cost covers the estimate on the value of your home and certifies the lender of the resale value.

Property Taxes

If the previous owner of the home has already paid the property taxes for the year, you may be required to reimburse them for the amount that has been paid.

These are just a few of the costs you should be prepared to pay, but if you would like a list of exactly what you can expect, your RE/MAX agent will be able to help! There are some costs that will be dependant on the type of property you are purchasing, and some may be worked into your negotiations with the sellers.

Thank you to my colleagues at RE/MAX for this article.

4 Tips for Selling a Tenant-Occupied Property

There is a lot to think about when you’re in the process of selling your property. There are moments of uncertainty as you hope to sell for the best possible price within a reasonable amount of time.

The process can also be stressful for your tenant, who may be concerned about where he/she will be living after the sale.

We reached out to our RE/MAX Influencers—a panel consisting of RE/MAX Sales Associates from throughout Canada—to find out the best advice they give to clients who are attempting to sell tenant-occupied homes.

Offer incentives

Several RE/MAX Influencers suggested that it’s a kind gesture to offer some sort of incentive to tenants during the time while the house is being listed.

A slight reduction in rent could mean a lot to your tenant if you’re in a financial position to offer the discount. Other options may include offering maid/cleaning services free of charge, giving your renter gift cards for restaurants, local shops or movie theatres, or even throwing in a nice bottle of wine. These gestures may be of minimal cost to you, but can go a long way to making the process smoother.

A happy tenant is far more likely to be cooperative and helpful during the listing process.

Respect their time

Until your property is sold, it is important to respect the fact that it is still the place your tenant calls “home.” It’s important to be open and honest with showing timelines and schedules.

One tip is to determine days and times of the week for showings that are most convenient for your tenant. Once those times are determined, advise your real estate agent to book during that schedule.

“When people feel heard, and are a part of the process, they are much more likely to work with you, rather than against you,” said a RE/MAX Influencer.

Work together and communicate

By working together, the situation may end up being a win-win for both yourself and your tenant.

Coach them through how to show potential buyers they are great tenants so that the new buyers may want to keep renting to them. The more cooperative, clean and tidy the tenant is, the more likely they won’t have to move if an investor is purchasing the home.

It’s a good idea to have your real estate agent introduce him/herself to your tenant early in the process so that they can explain what will be happening and how the renter may be impacted. In some cases, real estate agents may be able to act as an intermediary, to keep the flow of conversation going.

“Try to make your tenant feel part of the team. Have all documentation available regarding the legal positions of all involved. Manage expectations proactively,” said a RE/MAX Influencer.

Help them out

Do your best to find someone who will either continue to be a landlord for your tenant, or, be sure to give your tenant more than the minimum notice required by law. Some sellers take this a step further by waiving the rent payment for the final month of the renter’s occupancy if they are helpful during the selling process.

In situations where the tenant is forced to move out following the sale, you may want to offer assistance in helping them locate a new place to live.

By helping your tenant, he/she will feel more positively about the situation, and will likely return the favour by being more cooperative throughout the time your property is listed.

Thank you to my RE/MAX colleagues for posting this article.

What is Renovation Mortgage Financing

You’ve found your dream home, but the only problem is that it’s a dump! Fear not, homebuyer! There are many options available to help you finance the renovations, so you can stop dreaming and start living. One of the most popular options for new homebuyers is the renovation mortgage financing, where you assume the costs of the renovations into your mortgage.

You’re probably wondering – how does it work? Sometimes, you don’t even know everything that needs to be taken care of until you begin a large renovation project. According to the Canadian Mortgage and Housing Corporation:

CMHC Mortgage Loan Insurance can help you obtain financing for both the purchase of your home and the renovations — up to 95% of the value after renovations — with a minimum down payment of 5%.

Essentially, at the time you apply for your mortgage, you will also estimate all of the costs associated with your renovations and add those to the mortgage.  For first-time homebuyers this can be an extremely smart option as they may not have enough saved up to  purchase the house and then immediately take on a huge renovation project. However, whenever undertaking any renovation project, whether financed yourself or through a mortgage, you should always put aside some extra for the “unknown”. This might even just be upgraded appliances or furniture when the renovations are through, but having some money set aside is never a bad thing!

But, what if you already own a home and want to renovate? 

Mortgage refinancing is an option that many look into if they do not want to obtain funds in other ways (lines of credit, loans, etc.). Mortgage refinancing takes into consideration how much left you owe on the house, and allows you to borrow up to 80% of the appraised value.

Refinancing your mortgage allows you to undertake the renovations, but spread the payment out over a longer period of time with generally less interest than a credit card or personal loan rates.

To find out what the eligibility criteria looks like, Genworth has created an information sheet highlighting many of the applicable scenarios. It is important to recognize that in order to qualify for renovation mortgage financing, the renovation cost must make sense based on the properties value or potential value.

Whether your undertaking renovation costs in your mortgage, or simply just looking to increase the ROI, it’s important to know what areas of your house are worth investing in. Understanding the best renovations for the greatest ROI will help you prioritize your to-do list. It’s also good to do some research and understand what types of remodelling mistakes can actually lower your homes value as well.

So the next time you walk into a home that needs work, don’t get scared off right away if you don’t have the funds readily available to renovate. Whether you use renovation mortgage financing or borrow against an existing mortgage, your dream home may be more achievable than you think.

Looking to enter the market, or understand the current value of your home? Contact a local RE/MAX Agent to help get you started.

Find the Perfect Neighbourhood

It can be tough to find the perfect neighbourhood to live in.

Each neighbourhood has its pros and cons, and the definition of an ideal neighbourhood can change depending on your stage of life. Young families may want to live walking distance away from the school their child attends. Millennial singles may be more interested in an area that is close to downtown.

We reached out to our RE/MAX Influencers—a panel consisting of RE/MAX Sales Associates from throughout Canada—to find out the best advice they give their clients who are seeking out the perfect neighbourhood.

What’s important to you?

When looking for a home, it’s important that you consider your top priorities in terms of location.

One RE/MAX Influencer put it best, “I always advise to consider distance to work, desired schools and kids’ activities. You can change anything about a home, except its location.”

If a large yard is important, you may want to consider looking in an older neighbourhood. If a newer house is important, you may have to live with the fact that the yard will likely be smaller with less privacy, due to the lack of mature trees.

Driving times to work, proximity to golf courses, shopping and services will also likely be factors that you consider before choosing a neighbourhood to live in.

Your budget will have an impact on your decision as well. Several RE/MAX Influencers noted that they often remind their clients to consider re-sale value.

You may also want to consider air and water quality, busyness of the street, and even how much snow accumulates on average during the winter.

Work with an agent who understands your needs

It’s important that you are working with a real estate agent who understands what’s important to you. Your REALTOR® should be asking you questions to understand your needs as a buyer so they can help guide you through the process.

“I need to know exactly what is important to my clients so I can help with the particular neighbourhood choices. The perfect neighbourhood is different for each client,” said a RE/MAX Influencer.

Think long-term

Although it’s important to think about your immediate needs, it’s also vital that you think about what your needs may be five or 10 years down the road.

If your child has one more year of elementary school before he/she graduates to junior high, the proximity of the middle school to your house is equally, if not more important, than the distance to the elementary school.

“I tell my clients to keep in mind that they will likely be in their new home and neighbourhood for at least 5 years. They should consider what their needs may be within those 5 years.”

Thank you to my RE/MAX colleagues for this post.

What to Expect as a Fall Buyer

What to Expect as a Buyer This Fall 5 Things You Need To Know

Despite the fact that one of the hottest times of year for real estate appears when the spring flowers start blooming, that doesn’t mean the market is completely cool for the rest of the year. In fact, we are heading into a very popular time of year for prospective buyers and sellers across Canada. As some prepare for summer to come to an end, and others are preparing for the busy back to school season, some Canadians are doing their research to find out what to expect as a buyer this fall.

With the shorter days and cooler weather beginning to make an appearance, it is very clear that fall is on the way, and if you are one of the many entering the real estate market, you may be wondering what to expect. Fortunately, we have compiled the top things you need to consider as you begin your search for the perfect place to call home.

Location, Location, Location & Weather: We all know it is all about location when it comes to finding your dream home, but before you find the right location, you need to consider the weather. Planning your search too late into the season may mean you are battling Mother Nature so the earlier you begin your search, the better.

Timing is Key: Although your busy summer is winding down, you certainly aren’t working with a clear schedule. Between back to school and the holiday season, finding the perfect time to begin your search is imperative to your overall success and is something you should expect as a buyer this fall.

Decision Time: Although there isn’t as much inventory as you would typically find in the spring, there are still many home to choose one which is why narrowing down your options can be challenging. Using these tips and our House Hunting Comparison Checklist will help when it comes time to make your decision.

The Price is Right: As we get closer and closer to the holidays, you may begin to worry you are running out of time. With the added pressure, you may be tempted to make a decision by increasing your budget, but that will come back and haunt you in the long run. Make sure you plan your budget early in the buying process with help from our Monthly Home Budget Planner.

Make the Move: If you got a head start on the fall selling season and are ready to make your move, we have just the thing you need. Getting home and organized before the holidays is your main goal, and this moving checklist will help you do just that as quickly and efficiently as possible.

As we begin to see the leaves fall off the trees and the familiar sights and sounds of this beautiful season, these tips will be exactly what you need to find a new house to call home this fall.

Thank you to my RE/MAX colleagues for this article.

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