The NUMBER 1 QUESTION IN REAL ESTATE:
Q. If I am going through an open house, or calling an agent off a sign, should I tell them I have been working with another agent?
A. Yes, but first and foremost, real estate representatives are required by the Real Estate and Business Brokers Act to introduce themselves, and inquire at the first possible opportunity, "if you are currently under contract with any other brokerage". There are two main reasons for this, i) if you are under contract, that contract puts you under obligation to work with and pay the contracted brokerage for services as written on the contract. ii) the Act prohibits a registrant from dealing with another registrants client without written consent from the contracted registrant. [O. Reg. 580/05 s. 7(1) ]
What is the difference between a real estate salesperson and a real estate broker?
Why should I use a real estate brokerage?
What is the responsibility of the real estate brokerage to me?
What do I need to decide when I’ve decided to buy a home?
How will a real estate broker help me find my dream home?
How do I decide my price range when buying a home?
Once I find a house I like, what would be the next step?
What will I need to bring with my offer?
What is a listing agreement?
What is the main idea about this agreement?
Why should I list with a REALTOR®?
How much should I ask for when selling a property?
What different tools does a REALTOR® have to help me sell my home?
What is a public open house?
What do I need to do to prepare my house for an open house?
What if my house isn’t selling?
If I get an offer, should I accept it?
Once the offer is signed, if I change my mind, can I get out of it?
What if I’m asked to give the buyer a current survey? Do I need to?
Do I need a lawyer? If I do, what is their role?
Glossary of Terms
Real Estate: Glossary of Terms
Buying your House
The person you normally deal with is a real estate salesperson or Broker. The salesperson is licensed but must work for a Brokerage. A broker can operate their own brokerage and has undergone further education. All listings are placed in the brokerage name, with the salesperson or Broker representing you.
A broker can deal directly with home buyers and sellers, or can have a staff of salespersons or brokers that can either be independant or employed by the brokerage
A real estate salesperson or broker is more than just a "sales person." They act on your behalf as your representative, providing you with advice and guidance and doing a job - helping you buy or sell a home. While it is true they get paid for what they do(once they find you a property and the transaction closes) , so do other professions that provide advice, guidance, and have a service to sell --such as Certified Public Accountants and Attorneys.
The Internet has opened up a world of information that wasn't previously available to homebuyers and seller. The data on listings available for sale is almost current - but not quite. There are times when you need the most current information about what has sold or is for sale, and one of the only ways to get that is with a professional real estate member.
If you're selling a home, you gain access to the most buyers by being listed in the Multiple Listing Service®. Only a licensed real estate agent who is a member of orgainzed real estate can get you listed there - which then gets you automatically listed on some of the major real estate web sites. If you're buying or selling a home, the MLS® is your agent's best tool.
However, the role of a professional real estate member like Jason Steele has changed in the last couple of years. In the past, real estate professionals were the only way home buyers and sellers could access information. Now brokers and sales people are evolving. Because today's home buyers and sellers are so much better informed than in the past, expertise and ability are becoming more important which is why you need to talk to Jason Steele first. Staying on the cutting edge of technology and real estate education, Jason can offer the guidance and assistance you need.
The real estate professional is becoming more of a "guide" than a "salesperson" -- your personal representative in buying or selling a home.
A REALTOR® must disclose to you in writing, who exactly they represent in any real estate deal. A REALTOR® may represent you as a buyer or a seller; he or she may also represent both buyer and seller in the same transaction. Because all REALTORS® are guided by a stringent Code of Ethics and Standards of Business Practice, a REALTOR® should always treat you fairly. In Ontario, if you feel you have been treated unfairly, you can either contact the local board and file a complaint or visit http://www.reco.on.ca which is the Real Estate Council of Ontario. The enforce the Real Estate Bussiness Brokers Act in Ontario.
As your representative, the REALTOR® owes you the duties of utmost care, integrity, confidentiality and loyalty. Make sure you discuss agency with your REALTOR® . If a REALTOR® is showing you homes, they are automatically deemed to legally be your representative , and owe you all of the associated obligations. Likewise though if you are allowing a representative to show you properties, you may be under obligation based on what is called "implied" agency. You are acting as if they are your representative, therefore they see you as a client.
If you've decided to buy a home, start by determining what type of community, or specific neighbourhood, you're interested in. List your space needs, including:
•living space requirements (i.e. how many bedrooms);
•what you're bringing with you from your old house;
•how close to schools, shopping and other services;
•the size of down payment you can afford; and,
Once you've identified the features you want in a home, the search begins. A REALTOR® will use various tools to try and find properties that meet your specifications. One of the important search tools will be the local MLS® system. By sitting down at a computer the REALTOR® can key in your needs, choice of neighbourhoods and price range and immediately come up with a list of suitable properties available through the MLS® system. Because this is a member-to-member system, your representative will have access to information usually before it is uploaded to the public system.
It's important to be realistic when you're thinking about a down payment and setting a price range. You don't want to be saddled with something you can't afford. At this stage, it's a good idea to talk things over with a real estate sales professional and a mortgage professional as well.
Once you find the house you want to make your home, you can work with a REALTOR® to strategically develop an offer. In the offer, you should specify how much you're willing to pay. State when the offer expires, and suggest a closing date for the transaction. You can also propose some conditions on the offer. Some common types of conditions are:
•getting a suitable mortgage (include the amount, interest rates and any other figures you feel important);
•selling your current home (the seller may continue to look for a buyer, but will give you the right of first refusal);
•the seller providing a current survey, or a "real property report," showing the location of the house on the property owned by the seller and that there are no encroachments;
•the seller having title to the property (your lawyer will check this out when he or she conducts a title search to see if there are any liens on the property, easements, rights of way or height restrictions);
•if there is a septic system, the seller should have a health inspection certificate, stating the system meets local standards;
•if you still have any doubts about the home's safety and construction, you may wish to make the purchase conditional on an inspection by a qualified home inspector;
•any inclusions - basically, what stays and what goes.
You will need to present a deposit along with your offer. An appropriate deposit will show your good faith to the seller. The seller's agent is bound by law to bring all offers to the seller's attention.
After your offer is accepted and all the conditions are met, the offer becomes binding on both sides. If you walk away from the deal at that point, you may lose your deposit. You may also be sued for damages. Therefore make sure you understand and agree with all of the terms of the offer before signing.
Selling your House
The process of selling a home with a REALTOR® starts with the Listing Agreement. It's a contract between you and the brokerage company that the listing sales person or Broker represents. It is a framework for subsequent forms and negotiations. It's important the agreement accurately reflects your property details and clearly spells out the rights and obligations of all parties. Both you and the listing representative sign the listing agreement and each receive a copy. The agreement binds both parties to its terms and conditions.
Generally, in the agreement you appoint the brokerage company as your agent and give its representatives the authority to find a purchaser. The duration of the agreement is indicated, and the compensation is specified. The agreement also sets out the listing price, and accurately describes the property you are selling. That will include the lot size, building size, building style and materials, floor areas, heating/cooling systems, room sizes and descriptions.
This is when you must also decide what you are taking with you and what you are leaving with the house. Generally, unless stated otherwise, fixtures remain with the property, while chattels -- things which are movable -- aren't included in the sale. If necessary, what stays and what goes are listed under "inclusions" or "exclusions." BE VERY SUIRE! For example, a bookshelf fastened to the wall could be construed as a fixture and may have to stay unless otherwise stated in the listing/offer.
Finally, the Listing Agreement may also detail the financial conditions of the property, including the mortgage balance, mortgage monthly payments and the mortgage due date. It should also provide information about annual property taxes; and references for any easements, rights of way, liens or charges against the property.
One advantage of listing with a REALTOR® is that only a REALTOR® is able to place your listing on the MLS® which is the co-operative listing system operated by local real estate boards. This is a member-to-member service developed by REALTORS®, AND MAINTAINED BY REALTORS®.
When your listing is placed on the Multiple Listing Service®, the information about your property is shared with all other REALTORS® accessing MLS®, and all REALTORS® have the opportunity to sell your property. This type of cooperative effort will result in the listing agent offering compensation to the selling agent. Your property gains more exposure, because it reaches the majority of the real estate professionals in your community and nationwide. Members have access to more information about the property than the general public. This is because members must disclose pertinant information about the property to their buyers.
One major issue for anyone selling a property is how much to ask for. Although you may have an idea of how much your house is worth, it's important to have your home valued by a professional on its own merits. Be careful not to price yourself too high or too low. If it's too high, there's no sale; too low and you lose on your investment.
A REALTOR® has the research and expertise to provide a market assessment of what similar properties in your area have sold for. They can also provide information on market history, such as the number of properties sold in your community the previous month or year. Jason Steele of Coldwell Banker in Port Elgin and Southampton areas, does not charge for a market evaluation providing you list with him within 45 days of the evaluation.
Your REALTOR® may also recommend an Open House as a marketing strategy. There are two types: first is an agent's open house, where if you have signed an MLS® agreement, other REALTORS® may also be invited. Remember, each of these REALTORS® may have a prospective buyer.
The second type of open house is a public open house, where members of the public are invited to walk through your home and have a look. It's an efficient way to show your home to many potential buyers at once. The listing representative will act as host, answering any questions.
You and your listing agent will pick the time and date for an open house. In order to give the representative access to your home, you may wish to keep a key at his or her office, or in a lockbox. It's also a good idea to ensure that any valuables are put away in a safe location, then leave while the open house is underway. If you do stay, be sure to keep out of the way, and turn off any TVs or radios to let the representative and the buyer talk in peace.
Needless to say, clean counts with open houses. A general rule is that clean, uncluttered and well-lit spaces look larger and more attractive. People will naturally want to buy a house that is clean and well cared for.
Sometimes a home doesn't sell right away. Avoid the urge to pull your home off the market... be persistent! Generally, there are three reasons why a home may not sell as fast as others. First is location; second is condition; third is the asking price.
Naturally, you can't change your home's location, but you can fix the condition of your home and you can, of course, adjust your price. Throughout the listing process, you need to be constantly comparing your asking price against those of similar properties in your area. It may be time to adjust the price of your home.
Review your selling strategy regularly with your listing agent: Is your house being shown regularly? Are you receiving the feedback from prospective buyers? Are you in touch with the marketplace? Is your property competing well? If not, what else can you do? Is your home being marketed enough. One complaint I always hear from buyers is "this looked much bigger" or "this looked different on-line". Be sure your representative is using property photography equipment. Try to avoid the use of "fish-eye" photos as these really to offer a false impression of the property. Video presentations used as virtual tours are very consistant and offer the prospective buyer a "REAL" view of your home. Visit http://www.youtube.com/trumpyourfired to see some of Jason Steele's real video on homes for sale in Port Elgin and Southampton areas. This is a free service for all of his listings.
Once a buyer is found, you'll be receiving an offer that will detail how much, specify any conditions that may apply or be attached by the buyer, say when the buyer would like to take possession, and when the offer expires. As an act of good faith, the buyer will make a deposit with the offer.
You don't have to accept the offer as is. You may wish to make a counter offer that comes part-way to meeting the offer's conditions. The counter offer is one more step along the way to negotiating the final terms and conditions of the sale.
The offer, once signed by everyone, is a binding contract. Make sure you understand and agree to all of the terms in the document. You may want to have it reviewed by your lawyer before signing.
Before closing, especially if the buyer makes it a condition of sale, you may be asked to provide a current survey, or a "seller property information statement," showing the location of the house is on the property owned by you and that there are no encroachments. You may also have to prove that you have title to the property (the buyer's lawyer will check this out when he or she conducts a title search to see if there are any liens on the property, easements, rights of way or height restrictions). Especially in rural areas, you may also be asked to provide a certificate for a well or septic system, stating the system meets local standards. If asked for a "current survey" showing location of all buildings, be sure it is current. This is very important and may cost you a new survey because an old survey likely doesn't show the location of all buildings such as if you added a new shed. Be sure to strike out the word "Current" from survey and list and buildings that are not located on the survey.
The buyer may also make the purchase conditional on an inspection by a qualified engineer or inspector.
Then on or before closing day, lawyers representing you and the buyer will set up a trust account for the money coming from the sale and will pay off any mortgages you owe on the property. After these are paid, you will receive any money you have coming from the sale. You must deliver 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.
If you're buying a home for the very first time, the process may seem a little daunting. After all, buying a home is probably one of the biggest investments you'll ever make. It helps to have a REALTOR® like Jason Steele on your team -- someone who speaks the language of real estate very well.
A REALTOR® has the experience and the knowledge to guide you through the process of buying your first home and can help take the mystery out of the many terms, phrases and clauses you will encounter. The following glossary, an excerpt from the Ontario Real Estate Association's "How to Buy Your Home" book, provides definitions of some of the most common real estate terms you are likely to come across. The book also fully explains the process of buying a home and is available free-of-charge by calling 1-800-563-HOME or talk to your local REALTOR®, Jason Steele.
TRADEMARKS OWNED OR CONTROLLED BY THE CANADIAN REAL ESTATE ASSOCIATION. USED UNDER LICENCE.
Appraisal: An estimate of a property's market value, used by lenders in determining the amount of the mortgage.
Appreciation: The increase of a property's value over time.
Assessment: The value of a property set by the local municipality, for the purposes of calculating property tax.
Assumable Mortgage: A mortgage held on a property by the seller that can be taken over by the buyer, who then accepts responsibility for making the mortgage payments.
Blended Mortgage: A combination of two mortgages, one with a higher interest rate than the other, to create a new mortgage with an interest rate somewhere between the two original rates.
Blended Mortgage Payments: Equal or regular mortgage payments, consisting of both a principal and an interest component. With each successive payment, the amount applied to interest decreases and the amount applied to the principal increases, although the total payment doesn't change. (Exception - see variable rate mortgages.)
Bridge Financing: Money borrowed against a homeowner's equity in a property, usually for a short term, to help finance the purchase of another property or make improvements to a property being sold.
Buy-down: When the seller reduces the interest rate on a mortgage by paying the difference between the reduced rate and market rate directly to the lender or to the purchaser, in one lump sum or monthly installments.
Closing: The real estate transaction's completion, when the parties involved agree that all legal and financial obligations have been met, and the deed to the property is transferred from the seller to the buyer.
Conventional Mortgage: A first mortgage issued for up to 75 per cent of the property's appraised value or purchase price, whichever is lower.
Counteroffer: One party's written response to the other party's offer during purchase negotiations between buyer and seller.
Debt Service Ratio: The percentage of a borrower's gross income that can be used for housing costs, including mortgage payment and taxes (and condominium fees, when applicable).
Deed: A legal document that conveys (transfers) ownership of a property to the buyer.
Easement: A legal right to use or cross (right-of-way) another person's land for limited purposes. A common example is a utility company's right to run wires or lay pipe across a property.
Encroachment: An intrusion onto an adjoining property -- such as a neighbor's fence, storage shed or overhanging roof line that partially (or even fully) intrudes onto your property.
Equity: The difference between the price for which a property can be sold and the mortgage(s) on the property. Equity is the owner's "stake" in a property.
Foreclosure: A legal process by which the lender takes possession and ownership of a property when the borrower defaults on the mortgage obligations.
High-Ratio Mortgage: A mortgage for more than 75 per cent of a property's appraised value or purchase price.
Land Transfer Tax: Payment to the provincial government for transferring property from the seller to the buyer.
Lien: Any legal claim against a property, filed to ensure payment of a debt.
Mortgagee: The lender.
Mortgage Insurance: Government-backed or private-backed insurance protecting the lender against the borrower's default on high-ratio (and other types) of mortgages.
Mortgagor: The borrower.
Multiple Listing Service® (MLS®): A system for relaying information to REALTORS® about properties for sale.
Prepayment Privilege: A mortgage feature that allows the borrower to prepay a portion or all of the principal balance with or without penalty. This privilege is frequently restricted to specific amounts and times.
Principal: The mortgage amount initially borrowed, or the portion still owing on the mortgage. Interest is calculated on the principal amount.
Status Certificate: A written statement of a condominium unit's current financial and legal status.
Variable-Rate Mortgage: A mortgage for which payments are fixed, but whose interest rate changes in relationship to fluctuating market interest rates. If market rates go up, a larger portion of the payment goes to interest. If rates go down, a larger portion of the payment is applied to the principal.
Vendor-Take-Back Mortgage: When sellers use their equity in a property to provide some or all of the mortgage financing in order to sell the property.
Zoning Regulations: Strict guidelines set by municipal governments regulating how a property may or may not be used.
Material provided by the Ontario Real Estate Association
Amortization: The number of years it takes to repay the entire amount of a mortgage.
Thank you so much,
Jason Steele - Broker
Would you feel comfortable introducing the people you care about to me, who need my help?
The next time you are in a conversation with a friend, family member or neighbor and they
mention that they are looking for their first home, would you feel comfortable introducing, them to me?
When you do notice a friend, family member or neighbor would you do three things?
1. Take out your cell phone
2. Look up my number
3. Call me immediately and we can talk about how you can introduce them to me.
Follow my BLOG for real estate information.
Jason Steele - Broker
Wilfred McIntee & Company LTD., Real Estate Brokerage
On the Sunny Shores of Lake Huron, Port Elgin, On.
Not intended to solicit persons/properties currently under contract with any other representative or brokerage.
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