Below are answers to some of the most frequently asked questions (FAQs) that Rayanne receives from clients who are considering buying or selling a home.
There are 2 types of offers:
- Firm Offer: This is an offer to purchase a property with no conditions. This type of offer is very attractive to a seller.
- Conditional Offer: This is an offer to purchase a property with at least one condition. A condition can be subject to financial approval; subject to a satisfactory inspection on the property; subject to selling the buyers’ home, etc.
When a seller receives an Offer to Purchase, they have three options:
- Accept the offer
- Reject the offer outright
- Submit a counter-offer
Offers can go back and forth until both parties agree, or one party rejects the offer. Either side has the power to end a negotiation.
Be prepared to spend anywhere between 1.5% and 2.5% of the purchase price on closing costs. Your lawyer will provide a detailed listing of costs at the time of closing. Here are some estimates for buyers in Ontario.
- Appraisal Fee (New Homes). Estimated cost: $100-$300. Provides the mortgage company (lender) with a professional opinion about market value of the property.
- Home Inspection Fee (Resale Homes). Estimated Cost: $300-$500. Benefits the buyer.
- Fire Insurance is required (certificate of fire insurance) by mortgage lenders.
Estimated cost: $250-$600 annually for most properties. Fire insurance must be in place from the time a buyer takes possession. Many variables contribute to the cost of Fire Insurance, including
- property size
- amount of coverage (amount of mortgage or replacement value of the home)
- the amount of coverage
- the municipality.
- Provincial Sales Tax on Mortgage Insurance. If your mortgage is insured (CMHC or Genworth Financial), the taxes on the premium are paid at closing.
- Land Survey Fee or Title Insurance Fee. Expected cost: $600-$900 for a new survey
Surveys are usually required by lenders. Most lenders today will accept title insurance (which costs less) in lieu of a land survey.
- Title Insurance
Title Insurance is growing in popularity in Canada. But what does it cover? The following risks are usually covered under a title insurance policy:
- Survey irregularities
- Forced removal of existing structures
- Claims due to fraud, forgery or duress
- Unregistered easements and rights of-way
- Lack of pedestrian or vehicular access to the property
- Work orders
- Zoning and set back non-compliance or deficiencies
Talk to your lawyer for more detailed information about what risks are covered and what are excluded, and whether title insurance is right for you.
- Legal Costs and Disbursement
Lawyer and notary services costs including drafting the title deed, mortgage preparation, property searches, registrations and supplies.
- Land Transfer Tax
Most provinces charge a land transfer tax which is payable by the buyer. This amount varies by province. First time home buyers purchasing a new or resale home may be entitled to a refund.
- New Home Warranty
In most provinces, new homes are covered by the New Home Warranty Program. The purchaser pays for this warranty. It provides that should a builder default or fail to build to an agreed-upon standard the fund will finish or repair the deficiencies to a maximum amount. Full details at Tarion.com.
HST is payable on the purchase of a newly constructed home. Make sure you know who pays it: you or the builder. It will be indicated on the offer. Many builders include the HST in the purchase price. HST also applies to professional fees including: lawyers, REALTORS®, home inspectors, surveyors etc.
- Closing Adjustment
There will be some items the seller has prepaid such as property taxes, utility bills and other charges. Any bills after the closing date will be the responsibility of the purchaser. Your lawyer will provide actual charges once searches have been completed.
These taxes, levied on properties that are changing hands, are the responsibility of the purchaser. Depending upon where you live, taxes can range from a half percent to two percent of the total value of the property. In the province of Ontario, the following formula is used to calculate the amount of land transfer tax.
Ontario Land Transfer Tax:
- Up to $55,000 X .5 % of total property value
- From $55,000 to $250,000 X 1 % of total property value
- From $250,000 to $400,000 X 1.5 % of total property value
- From $400,000 up X 2 % of total property value
The choice to rent or own is typically based upon an individual’s current situation.
Here are some of the reasons people choose to rent:
- It is a lifestyle choice. They do not want the responsibility or upkeep that comes with property ownership.
- They may want to own, and are saving for a down payment and they rent in the meantime.
- They may have downsized from a larger home and wish to use their equity from that home in other forms of investments.
- They may not know exactly which area they wish to live in. By renting, they can try living in a neighbourhood without the commitment of ownership to decide whether or not it meets their needs.
- They may be in transit. Their career may require them to travel. Renting provides the required flexibility.
Pricing a home properly is a key element in a timely and successful sale. Many variables go into a thorough review of pricing a home properly. Rayanne performs detailed research to provide the seller with a clear and complete overview of the current value of their property. She presents this research to the seller along with the reasons behind them.
Small Improvements = Big Returns
It’s always a good idea to spruce up the exterior and interior of your home before listing it for sale. But that doesn’t mean you have to undertake major and/or expensive projects. Here are some simple steps you can take to increase the perceived value of your home and make a great first impression.
- Keep lawns cut
- Trim hedges and shrubs
- Weed and edge gardens
- Clear driveway and clean up oil spills
- Clean out garage – Power wash
- Touch up paint
- Plant colourful, inexpensive flowers (in pots if necessary)
At the Front Door
- Clean porch and foyer
- Ensure doorbell works
- Repair any broken screens
- Apply fresh paint or varnish front door
- Repair door locks and key access
- Clear halls and stairs of clutter
- Store surplus furniture
- Clear kitchen counter and stove top
- Clear closets of unnecessary clothing and stuff
- Remove empty boxes and containers
- Put away personal photos so buyers can envision the house as theirs
- Clean and freshen bathrooms
- Clean fridge and stove (inside and out)
- Clean around heating vents
- Clean washer and dryer
- Clean carpets, drapes and window blinds
- Eliminate pet odors and stains
- Repair leaking taps and toilets
- Clean furnace and filters
- Tighten door knobs and latches
- Repair cracked plaster
- Apply fresh coat of paint or touch up where necessary
- Clean and repair windows
- Repair seals around tubs and basins
- Replace defective light bulbs
- Oil squeaking doors
- Repair squeaking floor boards
Create a Buying Mood
- Make sure your home smells fresh and clean
- Turn on lights
- Turn on air conditioner/heater
- Open the drapes
- Light the fireplace
Typically, renovated and/or updated kitchens and bathrooms have the highest return on investment.
It depends. If your home has been regularly maintained and some of the major items have been recently replaced (furnace, roof, air conditioner etc.) then it may not be required. However, if some of these items have not been done, and/or there have been renovations or additions made over the years it may be wise to get an inspection to ensure that all is appropriate prior to sale. In these cases, being able to substantiate repairs/renovations through a pre-sale inspection will become a strong selling feature.
Expect to do it yourself. You will need to:
- Determine the right price
- Complete pre-sale repairs
- Stage the home if required
- Take appointments
- Show your property
- Arrange for open houses
- Develop marketing materials
- Negotiate the price
- Negotiate the terms
- Provide the details for the offer for presentation to lawyers for searches and formal completion
- Stay on top of details of the offer and follow-up accordingly.
The above assumes you have traffic to your home and you receive an offer. Other tasks will be advanced marketing, digital marketing, selling strategies, networking and much more.
- A clear and complete explanation of the buying and selling process.
- A complete understanding of your goals and objectives through a thorough assessment of your needs.
- A preliminary plan to sell your home. This will be fine-tuned based upon the outcome of the needs assessment.
- For the Buyer – Access to properties currently on the market.
- For the Seller – Proper marketing to ensure maximum coverage and exposure to all potential buyers.
- Knowledgeable of financing options.
- Proven selling skills including negotiation and mediation.
- Ability to prepare legally binding agreements.
- Professional Ethics – First and foremost, honesty and integrity. When you work with a REALTOR®, you can expect not only strict adherence to provincial laws, but also adherence to a Code of Ethics. The Code of Ethics assures you will receive the highest level of service, honesty and integrity.
- Highest Professional Standards – Before receiving a real estate license, candidates must successfully complete an extensive course of study developed by OREA on behalf of the Real Estate Council Ontario. Additionally, in the first two years of practice, licensees are required to successfully complete three additional courses as part of their articling with an experienced broker. All licensees must continue to attend courses throughout their careers in order to maintain their license.
Have a question about home sales in Ottawa not answered mentioned here? Contact Rayanne.