Real Estate Quotes

Some mortgage documents state very clearly that the whole premises cannot be rented out. This is fairly common with CMHC residential mortgages, as they are generally granted for the benefit of the owner/occupier and not for investment or rental purposes. [2006] - Douglas Gray

Occasionally a lender may require mortgages be insured. For example, if the property is older or is smaller than is normally required by the policy of the lender, or if it is located in a rural or a run-down area, then the mortgage may be required to be insured with the Canada Mortgage and Housing Corporation (CMHC) or Genworth Financial Canada. CMHC is a federal Crown corporation, whereas Genworth is a private corporation. [2006] - Douglas Gray

If you are unable to raise the necessary 25% funding to complete the purchase of the home, then a high-ratio mortgage may be available to you. This is a conventional mortgage which exceeds the 75% limit. By law, these mortgages must be insured, and they are available only through approved lenders that are accepted by CMHC or Genworth Financial. [2006] - Douglas Gray

Some lenders charge a processing fee or set-up fee for their administrative expenses in the processing of your mortgage application. Avoid paying this type of fee if at all possible. [2006] - Douglas Gray

The lender will obtain its own appraiser to determine the value of the security for mortgage purposes. The necessary fee is either paid by the borrower to the lender in advance at the time of application, or is taken from the mortgage proceeds by the lender. In a competitive marketplace, you can negotiate directly with the lender, or through the mortgage broker, to have the fee waived and absorbed by the lender. [2006] - Douglas Gray

The Home Buyers Plan (HBP) allows you to withdraw up to $20,000 from your RRSP to buy or build a qualifying home. This is permitted under CRA policy. Generally, you can participate in the HBP only once in your lifetime, as it is designed for first-time home buyer. You do not have to include the withdrawn amounts in your income, and the RRSP issuer will not withhold tax on these amounts.Under the HBP, you have to repay the withdrawal to your RRSP within a period of not more than 15 years. Generally, you will have to repay a minimum amount to your RRSP each year, e.g. 1/15 of the withdrawn amount, until you have repaid the full amount you withdrew. If in any year you do not repay the amount you have to repay for that year, the amount you do not repay will be included in your taxable income for that year. [2006] - Douglas Gray

Highly desirable locations will generally go up in price more quickly and consistently. Property that offers a stunning view tends to escalate the most, for obvious reasons. Waterfront property is desirable due to its limited supply and high demand. [2006] - Douglas Gray

Certain times of year are traditionally slow months for residential real estate sales (November through February and sometimes March, depending on the weather), hence prices decline. [2006] - Douglas Gray

If you don't have a buyer broker relationship in writing, the listing broker has the primary duty to the vendor, and the broker whom you otherwise use is technically a sub-agent of the listing broker. In both these scenarios, the agents legally represent the interests of the vendor. [2006] - Douglas Gray

Make sure that you put a condition in your offer that says "subject to purchaser obtaining a home inspection satisfactory to the purchaser within X days of acceptance of the offer. In addition to the need for a home inspection, you might also be able to obtain a "vendor's disclosure statement." [2006] - Douglas Gray

It is important to obtain a qualified and independent inspector. Avoid someone who has a contractor business on the side and may hope to get the repair business from you. Their advice could be self-serving and biased. Check with your local Better Business Bureau to see if there have been any complaints against the company that you are considering. Home inspection fees range from approximately $200 to $400 or more, depending on the expertise required and the nature of the inspection, the size of the home, its age and condition, your geographic area, the nature of inspection service requested, and other variables. It normally takes a minimum of three hours to do a thorough inspection. [2006] - Douglas Gray

Ideally, you should check out the condominium unit or property that you are interested in at three different times before you decide to purchase: during the day, in the evening, and on a weekend. That should give you a better profile of noise factors, children, or parties, and the effectiveness of the management control. [2006] - Douglas Gray

Many real estate companies and CMHC have free surveys on a quarterly or monthly basis, giving average rental prices in specific areas for specific types of properties. You don't want too high a number of rental houses or condos, as that will increase competition and possibly reduce the overall desirability of the neighborhood. [2006] - Douglas Gray

If you are buying a condo as an investment, it is prudent to purchase within a four-hour-drive radius of your principal residence. This is just a general guideline. The point is that you want to be able to conveniently monitor and/or maintain your property. [2006] - Douglas Gray

There are several professional designations for property appraisers in Canada. The most common national designations are AACI (Accredited Appraiser Canadian Institute) and CRA (Canadian Residential Appraiser), both awarded by the Appraisal Institute of Canada. [2006] - Douglas Gray

Title insurance will cover you for your legal fees to defend your right of ownership, which could cost tens of thousands of dollars, as well as your actual financial losses. The insurance covers you from the time you take title until you sell your home. [2006] - Douglas Gray

If you buy a used residential property as a principal residence, there is no GST payable on the purchase price. In other words, it is exempt. When purchasing a resale home, you can request that the vendor provide you with a certificate stating that the property qualifies as "used" for GST purposes. [2006] - Douglas Gray

In practical terms, many municipalities do not enforce the bylaw regulations relating to "illegal suites" if there is a shortage of rental accommodation in the community, or unless a neighbour complains. In most cases you have a right to appeal a decision of your municipality requesting that the tenant vacate your premises. [2006] - Douglas Gray

The deposit is generally 5% to 10% of the purchase price. If there were conditions in the offer, and these conditions were not met, then the purchaser would be entitled to receive the full amount of the deposit back. If you are purchasing through a private sale and no realtor is involved, never pay the funds directly to the vendor; pay them to your own lawyer in trust. If a realtor is involved, the funds can be paid to the realtors' trust account or your own lawyer's trust account as the situation dictates. [2006] - Douglas Gray

Contact the lawyer referral service in your community. Under this service, sponsored by the provincial law society or a provincial division of the Canadian Bar Association, you can consult with a lawyer for about half an hour for either a nominal fee (usually $10-$25) or no fee at all. Make sure you emphasize that you want a lawyer who specializes in real estate--ideally, condominium real estate. If you did not obtain the referral through the lawyer referral service, ask the lawyer over the phone what a half-hour initial consultation would cost. In many cases, it is free as a marketing goodwill gesture. [2006] - Douglas Gray