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YOUR PERFEC T PROPERT Y
I LOVE IT. I WANT IT.
3 HOW RE ALTORS® WORK FOR THEIR CLIENT S
5 GE T TING S TARTED
7 BU YING A PROPERT Y IS A COLL ABOR ATIVE EFFORT
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25 HOW TO WIN
27 BULLY OFFERS
29 THE ROLE OF A L AW YER
RE ALTORS® - CHA MPIONS OF YOUR C AUSE
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PE ACE OF MIND
FINANCING , BUDGE TING & MORTG AGES
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AND IT ’ S YOURS
SAGE ADVICE FOR HOME BU YERS
15 TORONTO: A VARIE T Y OF PROPERT Y T YPES
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35 AF TER YOU PURCHA SE YOUR PROPERT Y
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FINDING YOUR VERSION OF PERFEC T
ABOUT SAGE
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PERSONAL PREPAR ATION TECHNIQUES
21 THE PROPERT Y SE ARCH P ORTAL YOU WISHED FOR
MEE T LEE COLUCCI
41 RE AL ES TATE GLOSSARY
YOU R PERFECT PROPERT Y One does not decide that now is the time to purchase a property and then find it that very afternoon. It just doesn’t tend to happen that way. Acquiring the perfect property is a process. This guide is about understanding that process and placing oneself in the most favourable position possible to attain your goal of being a property owner or home ownership. Every day, in neighbourhoods throughout Toronto, I help clients acquire the home of their dreams, or invest in property that best fits their portfolio. In essence — their perfect property. When working with me, my initial goal is to understand what your individual version of “perfect” looks like. With an understanding of every element that goes into your perfect property, I strive to find that for you and help you purchase it. Welcome, and let the process begin.
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HOW RE ALTORS® WORK FOR TH EI R CLI E NTS With a wealth of online resources, a moderate ‘for sale by owner’ market, and countless real estate online guides, it’s not surprising that some home buyers consider adopting a ‘do it yourself’ approach as their option of choice when deciding to purchase real estate. However, for most people, a real estate professional is an indispensable partner in the home-buying process. While buyers today are more educated about real estate than ever before, all the research in the world can’t match an experienced Realtor’s® understanding of today’s market. Without the pavement-pounding and advance scouting a Realtor® does on behalf of their clients, prospective buyers might overpay for a home or lose out on the home of their dreams simply because they do not find out about it. Buyers just do not have the same type of resources that a Realtor® does. A Realtor® is also completely objective and professional when discussing their opinion of the property being considered for purchase unlike a parent, spouse, partner or best friend. The buyer’s Realtor® is typically compensated through the seller, a common misconception, which means buyers have nothing to lose and everything to gain by tapping the expertise of a Realtor®. From the moment we begin working together, until the day you move in, me and my team will be working for you. Anyone can purchase a house — I pride myself on finding you a home. Similarly, anyone can purchase an investment condo. I make a point of finding you the best type of investment property possible. The right property not only fulfills your current needs, it continues to be right for you as time progresses. Buying the aforementioned
“perfect” piece of property has long term personal and investment benefits, where as the cost of the alternative can be immeasurable. The role I play for buyers is not as simple as sifting through MLS® properties online, showing them and then selling. Finding the perfect home is really about listening: having a client’s individual needs and wants understood, their priorities and concerns addressed, and their tastes and lifestyles considered. I’m trained and particularly adept at accomplishing these goals for my clients. Finally, it’s important to understand that my clients benefit from Realtor® networking: drawing on previously established relationships and resources, and exchanging information and support. It’s about overall professionalism: maintaining honesty and integrity, dedication, respect, and commitment. It’s also about plain hard work, and the employment of energy, hustle, passion and drive. The governing body of real estate in Ontario is the Real Estate Council of Ontario. RECO is responsible for ensuring REALTOR compliance of the relevant ‘Trust In Real Estate Services Act, 2020’ (TRESA). Under the umbrella of greater transparency and understanding, Buyers are now to have the required Information Guide provided and explained to them, together with other updated real estate documentation and processes. Trained Sage Realtors® welcome the opportunity to provide this information to buyers in a clear, concise manner. The RECO Information Guide is available now for review via this link: https://rb.gy/3pjx3t
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G E T TING STARTED To the uninitiated, the process of buying a property may appear to be relatively straightforward, however there are dozens of variables and pitfalls to avoid in any transaction that can make home buying quite complex. If you are organized and prepared, the process will not only be easier and less stressful, you will be well positioned to take advantage of an opportunity when it presents itself. Here are some steps reviewed in detail to follow throughout your search:
7. Find Your Version of Perfect
THE BUYING PROCESS
The home search portal you wished for.
1. Choose Your Real Estate Team Buying a home is a collaborative effort. Each member of your team plays an important role.
10. Make an Offer
2. Choose Your Realtor® Choosing the right advisor to guide you through a transaction is a critically important decision. It can absolutely make the difference between getting a home or not. 3. Understand Agency Relationships Buyer Agency ensures the buyers’ best interests are enshrined. RECO’s Information Guide will be provided and explained. It outlines agency relationships in detail and may be accessed for review now via the link on page 3. 4. Financing, Budgeting & Mortgages Mortgage pre-approvals are the way to go and incredibly easy to obtain.
Make a wish list, look at everything, keep track of what you see, and be sure to give your Realtor® honest feedback. 8. Complete Website SageRealEstate.ca + LeeColucci.com 9. Realm
When you find a property you absolutely love, it’s important that you are in a position to act quickly. 11. Multiple Offers Understand the nuances of bidding war negotiations. 12. Preemptive Bids (Bully Offers) Untangling the bully offer conundrum. 13. Understand the Role of Your Law yer Your lawyer will protect your rights and ensure you actually get what you’re paying for. 14. Get Insurance Seek quotations from relevant insurance experts for each type of insurance you require. 15. Complete the Transaction
5. Sage Advice for Home Buyers Points to consider.
I will make sure everything is in place for a smooth and efficient closing.
6. Know Your Property Types Every neighbourhood in the city offers a variety of housing styles. One needs to understand the advantages and limitations of each.
16. Move Ahead As you’re settling into your new home, or organizing the specifics of your investment property, I will still be there for you.
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BUYING A PROPERT Y IS A COLL ABORATIVE EFFORT You will need to acquire your own team of professionals to support you throughout the process. Your first string players are:
5. Inspectors There are many inspections that can be obtained on any property. The basic ones are:
4. Appraiser
Building inspection. This detailed mechanical and structural property inspection is used to assist in understanding the condition of the property being considered for purchase. Also helps with budgeting for required repairs.
5. Inspectors
Pest control.
6. Lawyer
Environmental (if applicable).
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6. Law yer
1. The listing brokerage/Realtor® 2. The selling or cooperating brokerage/Realtor® 3. Lender
Insurance Broker
Supporting Roles: 8. Home security specialist 9.
Moving company
Understanding the parts each one plays will allow you to work with them in a mutually beneficial way. 1. The Listing Brokerage/Realtor® Works with each property owner (seller) to market a home. The listing Realtor® works for the seller. 2. The Cooperating or Selling Brokerage/Realtor® This is the agency role a Realtor® plays for most buyers. The cooperating brokerage/Realtor® works with buyers to help them locate exactly the right property to meet their needs. The cooperating brokerage/Realtor® typically works for the buyer. 3. The Lender Unless you have all the necessary funds to purchase the property, you will require a mortgage from a lender. There are many different types of mortgage loans that can be reviewed in detail with your mortgage provider or broker. 4. The Appraiser The property must be appraised to make sure the lender feels it is worth the full amount being paid to secure the loan that the lender is planning to give.
Your lawyer handles much of the paperwork involved and facilitates the transfer of the home’s ownership. They also ensure that you receive good title to the property you purchase. 7. Insurance Broker Property insurance will be required. In securing insurance for your property, you might opt for other insurance coverage as many insurance brokers offer complete packages for a reasonable amount. Please review the insurance section in this guide. 8. Home Security Specialist Although burglar alarms are not essential, homeowners value the peace of mind having a home security system provides. With advanced technology now incorporated into many systems, some home alarm systems contain freezing temperature alerts in case of furnace malfunctions and flood alerts in case of back-ups. Many security systems now have the capability to be turned on or off remotely and some even have visual online monitoring capacity. 9. Moving Company Good movers are worth their weight in gold. Negotiating for replacement of articles carelessly broken is not fun, so ensure the moving company you employ is fully bonded and has provided you with references.
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RE ALTORS® - CHAM PIONS OF YOU R CAUSE Choosing the right advisor to guide you through a transaction is important because their counsel and direction illuminate the pathway to property ownership. Buyers should give just as much consideration to hiring a buyer’s representative as sellers give to hiring a listing Realtor®. That means conducting interviews, seeking referrals and researching the brokerage as well as the Realtor®. It is important to ask potential Realtors® a number of questions relating to their experience, comfort levels and routines. It is also important to listen for the questions they ask you to see if they are intent on understanding your needs and if they are committed to fulfilling your wants.
BUYER AGENCY If you sign a Buyer Brokerage Agreement then your Realtor® is called the Selling Realtor® or the Cooperating Realtor® in the transaction. They work exclusively to represent and protect their buyer’s best interests. Selling or Co-op Realtors® do not owe their allegiance to the seller so they can fight on their buyer’s behalf to get the property on the best terms for the buyer. The seller’s interests are protected by the listing Realtor® of the property.
Experience in your preferred neighbourhood and the style of property you’re after is also important. The comfort level that is established between you and your Realtor® is equally important because buying a property is a highly personal experience. Ultimately, you only work with one Realtor® so it should be someone you like and respect and who feels the same way about you. You must have complete trust in your Realtor® of choice. If you feel Realtor® trustworthiness is not there, keep on looking.
WHO PAYS THE RE ALTOR®? In the case of Buyer Brokerage, the Cooperating Realtor® can either be compensated directly by the purchaser or be compensated through the Listing Brokerage from the proceeds of the sale. Buyers are usually only responsible to directly compensate the Selling Realtor® if they purchase a property which has not been listed for sale. Buyer Brokerage Agreements clearly detail any responsibility for payment of commissions. Buyers should discuss the type of agency relationship they desire to have as well as Realtor® compensation with their Realtor®. Please read, review, and ask questions of your Realtor® until you completely understand.
‘THE RE ALTOR® WORKS FOR ME , RIGHT!?’ Your Realtor® will work on your behalf to find you a property and will negotiate for it on the best terms possible for you if you retain the Realtor® by signing a Buyer Brokerage Agreement. Please review and read the RECO Information Guide and ask questions of your Realtor® until you completely understand its contents.
WHERE DO I GO FROM HERE? After reviewing and understanding the forms, it will be necessary for you to choose and authorize the appropriate representation. This should be done before you look at any potential properties. Representation Agreements are now required by law in Ontario if you purchase a property through a registered Realtor®.
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FIN ANCING , BU DG E TING & MORTG AG ES GET TING A MORTGAGE PRE-APPROVAL In today’s property purchasing environment, a mortgage pre-approval is not only essential, it is also incredibly easy to obtain and can be done over the phone or in person. A mortgage pre-approval lets you know the maximum mortgage amount the lender is prepared to lend you. It also demonstrates to a seller that you are a serious, willing and capable buyer. It goes a long way to provide you with the lender’s formal loan commitment once you have found the property you’d like to purchase. DO I GO TO MY BANK OR TO A MORTGAGE BROKER FOR MY PRE-APPROVAL? You should see both. See what your bank can do for you. Interview a mortgage broker as well because they have access to many lenders and can obtain quotes from the various lenders who are best positioned to meet your requirements. Mortgage brokers understand what qualifications each lender is looking for and can structure your application accordingly. They also know where the bargains are. Mortgage brokers are usually compensated by the lenders they represent. HOW MUCH CAN YOU AFFORD? You can afford a property that costs as much as the mortgage amount for which you qualify added to your total down payment. CHECK OUT YOUR OWN CREDIT REPORT Lenders will ask for your permission to obtain and examine a credit report detailing your credit history. Information contained in your report formulates their decision whether or not to lend you money. It also is used in consideration of what interest rate the lender is prepared to offer prospective borrowers. Credit reports precisely describe existing credit card limits, timeliness of payments, types of accounts, loans, balances, judgments, and bankruptcies and easily identifies any exaggerations or misrepresentations made on mortgage applications. Credit reports are not infallible however and you should request a copy of your own report so that you can confirm its accuracy before you formally apply for mortgage prequalification. You may challenge any errors and attempt to rectify wrong information before it works to your mortgage approval disadvantage. HOW TO OBTAIN YOU OWN CREDIT HISTORY REPORT There are two main credit bureaus in Canada; Equifax, and Trans Union of Canada, both of which will provide you with a free copy of your own report. Contact them directly for details on how to go about it. www.consumer.equifax.ca or www.transunion.ca PRE-QUALIFICATION This is the first step in obtaining a mortgage. Prequalification is the lender’s estimate of your borrowing power. Your ability to buy depends on your approved capacity to borrow. In the pre-qualification process the lender will review your mortgage application and usually request a credit report. After analyzing your credit history, income and debts, the maximum loan amount for which you would qualify will be confirmed.
PRE-APPROVAL The line between pre-qualification and pre-approval often gets blurred. Occurring quickly on the heels of prequalification, pre-approval formalizes the estimate of a buyer’s borrowing power and leads to provision of some type of commitment or offer to place a mortgage from a lender or mortgage broker. It would involve a credit application and usually requires income verification as well. The lender carefully analyzes your financial situation by applying their established standards for underwriting. HOW MUCH SHOULD I TRY TO GET PRE-APPROVED FOR? Secure a pre-approval for the highest amount for which you would qualify. Only spend into your comfort zone but it is important to establish your maximum approval parameters. LOAN COMMITMENT AND FINAL LOAN APPROVAL The pre-approval process concludes with you obtaining a letter or certificate of commitment from a lender to place a mortgage with you and their final approval of that loan. The commitment certificate or letter is confirmation that you have been approved as a borrower by the lender for a specified amount at specified terms. Please carefully review the letter as it usually places caveats on their final loan approval. Lenders usually reserve the right to have their own appraisers confirm market value of the property you want to finance. They may want to ensure that the property complies with their underwriting standards, verify information, or re-check your credit before granting final loan approval. Carefully review approval documentation with your lender or mortgage broker and discuss any implications of buying a property without a financing condition. GET YOUR PENCILS OUT! While your bank or mortgage broker will be able to tell you the exact range for which you can be approved, it is a good idea to also calculate what you feel comfortable spending. You must recognize and accept the extent of the financial commitment you are about to undertake as you will likely be making mortgage payments for many years. You may not want to commit to monthly mortgage payments as high as the amount for which you qualify. Only you know how much you are comfortable spending on monthly mortgage payments. TOTAL DOWN PAYMENT You must determine exactly how much money you now have available to invest in your down payment and closing costs. This is the total amount of cash available. If you already own a property, you will need to estimate the amount of equity you have acquired in your property so that you can add this calculation to your available savings for a down payment. This is your total down payment. CLOSING COSTS ESTIM ATION Part of your available cash will have to be kept aside for expenses incurred to complete the sale. Even though you will not be able to establish the exact expense total at this time, you should be able to arrive at a very close approximation of your total costs through discussion with your lawyer. B U Y ER ' S G U ID E | 11
SAG E ADVICE FOR HOM E BUYERS LOCATION, LOCATION, LOCATION! You’ve heard it before and it’s true! Buy into a location that you predict will be equally attractive in the future and you most likely will have made a good investment. Remember, you can change a house but you can’t change its location. CHECK OUT THE SCHOOLS The school district is important even if you don’t have children because at some point, you might decide to resell your home. It is not uncommon in Toronto for some people to move into an area just because of its close proximity to a particular school. Re-visit point one, above. ENERGY EFFICIENT HOUSES SAVE THOUSANDS OF DOLL ARS IN UTILIT Y BILLS OVER TIME If the house you’re considering purchasing isn’t energy efficient now, make certain it becomes so once it’s yours.
get the benefit of living with your own design choice but your home instantaneously becomes worth much more. I can advise which renovations reap the greatest returns. DO A CREDIT CHECK ON YOURSELF Make certain there are no errors on your credit report. If there are, take steps to rectify them before they adversely affect your mortgage pre-qualification. Transunion.ca or Equifax.ca both detail how to obtain your own credit report. CLE AN UP YOUR CREDIT – PAY OFF DEBTS AND DON’T INCUR MORE! Make all your payments on time. Even if your credit history has been through a bad patch or two, lenders are more forgiving to borrowers who have seen the error of their ways and have recently been making regular on-time payments. This is a time in your life to be financially prudent and responsible.
TRIAL RUN YOUR COMMUTE DURING RUSH HOUR Drive, walk, or use “The Better Way” to get yourself to work during peak periods from the home you are considering buying. If the commute is unbearable, it’s best to find out now.
INTEREST RATES LOW? Should you go for a longer term, fixed-rate mortgage or a variable-rate mortgage that will allow you to lock in to a fixed term if you see interest rates on the increase? A Mortgage Broker can help you delineate the pros and cons for your consideration.
WANT YOUR EQUIT Y TO INCRE ASE EXPONENTIALLY? Buy a fixer-upper. Buyers will pay top dollar for a good home in an in-demand area that is in really good condition. Give your equity position a terrific boost by purchasing the classic “fixer-upper”. If you pay to have the kitchen and bathroom remodeled yourself you not only
BUY SO YOU CAN EXPAND Buy a home that can expand along with your family’s changing needs. There are times when trading up is appropriate and there are also times when the need to purchase another home could have been avoided had you bought a home that would have accommodated minimal expansion.
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TORONTO: A VARI E T Y OF PROPERT Y T YPES From towering condominium skyscrapers to sturdy bungalows, Toronto’s housing stock is amongst the most diverse in the world, giving buyers virtually limitless options when looking for a home to call their own, or an investment property to add an additional revenue stream. Almost every neighbourhood in the city offers a variety of housing styles and a choice between existing, new construction or renovated homes. Here is a brief rundown of the various types of residences you’re most likely to encounter during a home search in Toronto: SINGLE-FA MILY HOMES Officially defined as a residential structure that includes only one dwelling, single-family homes are readily available in most of Toronto’s neighbourhoods. Buyers should be prepared to pay a premium for the extra land, privacy, square footage, and outdoor space a single-family home affords. The variety of single-family homes in Toronto is vast and includes bungalows, detached, semidetached, row homes, modern homes, townhomes, and multi-million dollar mansions. However, while vast, there are a finite number of these single-family freehold homes throughout the city; making them a top-tier investment. CONDOMINIUMS Purchasing a condominium in a multi-unit building means that the buyer owns an individual unit as well as a share of the building’s common areas, such as the lobby, corridors and amenity areas. Many buyers choose condominiums because they require little maintenance, frequently offer amenities such as a swimming pool or fitness centre, and in most cases are relatively affordable compared to townhomes or single-family homes. Because of the shared ownership, a condominium association is responsible for decisions regarding the operations of the building and owners must abide by the rules and regulations set forth by the association. Condominium owners also pay monthly assessments which cover maintenance and repairs of common areas as well as costs associated with shared amenities. In Toronto, condominiums run the gamut from new construction high-rises with striking views and luxury amenities to vintage walk-up buildings with charming elements such as original hardwood floors and built-ins.
GREEN TORONTO Thinking of living Green? Here are some considerations: • A location near public transit.
• Building materials containing recycled content. • Renewable energy sources suchas solar power. • Energy-efficient windows, appliances, and heating and cooling systems.
• Plumbing fixtures that reduce overall water usage. • Rapidly renewing or recycled materials for interior
finishes, such as bamboo flooring, wool carpeting, and countertops made from recycled metal or glass.
• Low-VOC (volatile organic compound) paints, carpet
adhesives and sealants which limit emission of volatile organic compounds and thereby promote a healthier indoor environment.
• Native vegetation in landscaped areas or on a green roof.
• A landscape irrigation system that recycles rainwater. • Facilities for storage and collection of recyclables. If green features are important to you, talk to me about finding a housing option that fits your needs. MULTI-FA MILY HOMES (INCOME PROPERTIES) These unique properties can be great investment vehicles for their owners. Ranging in everything from size to style to general make-up, multi-family homes, or income properties as they're often called, create a wide range of housing possibilities. Occupy one unit and rent out the others to help pay the mortgage, move a family member into the same house but allow them the privacy of their own separate, independent suite, or simply make all apartments available for lease and treat the property as a single income-producing entity. Understanding the opportunities that income properties provide means making sense of things like cap rates, landlord-tenant rights and relationships, property management techniques, appropriate improvements that derive a good return, and finally, careful and calculated portfolio construction. These types of properties can be found all over Toronto. Some are purpose-built multiplexes, while others are converted single-family homes. Careful consideration of legal, financial, insurance, and above all else, safety issues, should happen prior to considering this type of purchase.
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FIN DING YOU R VERSION OF PERFECT CRE ATING A WISH LIST Almost every property purchase involves some degree of compromise which is why you must prioritize your needs and wants before beginning your search. When deciding to purchase a property, think about the following:
• Three features it absolutely must have in order for it to be in the running.
• Additional features that are essential for you. • What else would really make you happy? LOOKING FOR PROPERTIES You are ready to begin your search once you have obtained a mortgage pre-approval, decided on a Realtor®, selected your buyer representation, and completed your wish list. THE BUYER’S RESPONSIBILITIES Share your wish list and your price range comfort zone with me. That information will assist me with researching the market for properties that seem to fulfill your requirements. GET EDUCATED IN THE M ARKET Ask all the questions you want — there are no stupid questions (unless you already know the answer). One of my most important mandates is to educate buyers, share my knowledge and build their perspective on the market. This helps to ensure good decisions are made and a high level of satisfaction with a purchase prevails. LOOK AT E VERY THING The first series of showings should give you an overall understanding of what is available in the marketplace. There is no property listed on the market by any Realtor® that cannot be viewed through me.
KEEP A RECORD OF E ACH HOUSE YOU SEE This is an essential part of your market education process and will assist in evaluating the home you ultimately decide to buy. Speak to me about how your showings are saved and how each listing, complete with notes and research, is stored on my website for future access. SHOULD YOU GO INTO OTHER RE ALTORS ® OPEN HOUSES? You may attend open houses if you identify yourself to the Realtor® holding the open house and tell them that you have a buyer’s agency contract with another Realtor®. Hand them one of my business cards. This will allow the Realtor® hosting the open house to concentrate on other prospective buyers. It is inappropriate for another Realtor® to pry into the confidential details of your search. OUTSIDE OF OPEN HOUSES, SHOULD I SEE PROPERTIES WITH ANY OTHER RE ALTOR ®? No. Once you have signed a buyer’s agency contract with me, it becomes my responsibility to show you homes. It is unethical for other Realtors® to show buyers properties if they know the buyer is under contract to another brokerage. INFORM ME OF CHANGING SEARCH PARAMETERS This is part of the process, don’t worry. Keep me advised of any changes to your requirements along the way. Decide to spend more money? Decide to spend less? Decide to consider other locations? Decide to only consider one location? Tell me so your revised parameters can be responded to immediately.
NOW IS THE TIME TO EXPLORE ALTERNATIVES Keep an open mind. As you inspect various possibilities within your price range, you will be more comfortable narrowing your search to specific parameters and you will be able to assess various alternative property types, configurations and conditions.
HOW TO USE THE INTERNET TO YOUR BEST ADVANTAGE The internet provides a comprehensive database of current listings and almost every listed property works its way onto several websites. Write down the listing identification number(s) of listings which appear interesting and record the site domain name. Send this information to me so I can investigate and identify.
TELL ME YOUR TRUE FEELINGS ABOUT THE HOUSES YOU’RE SEEING Honest feedback efficiently steers me towards your goal. It is important to discuss your impressions and reactions to properties confidentially with me in a frank and direct manner.
WHEN YOU FIND “THE RIGHT ” HOUSE My goal is to educate you so that you will feel comfortable directing me to proceed with the purchase of the right property when you see it. Timing is critical when purchasing and there are several strategies that you can use in order to be successful with any offers that you make.
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PERSON AL PREPARATION TECHN IQU ES It’s important to be prepared but it’s even more important to have the facts. There’s a tremendous amount of confusion these days in terms of how properties are priced... Are they underpriced and looking for a bidding war, or are they overpriced with room to negotiate?? It can be tough to tell. There’s nothing worse for a buyer than seeing a property they love, but leaving that house or condo with absolutely no idea what it will realistically sell for. In an attempt to mitigate that uncertainty, prior to every single showing, whether it’s a freehold home, a condo or a piece of commercial property, I invest a great deal of time into conducting what’s called a Comparative Market Analysis (CMA). These CMA’s involve carefully curating and comparing past sales, and have helped my clients make sense of what a property’s value might actually be, regardless of what it’s priced at. This is extremely important, especially in today’s highly competitive housing market, where the asking price is rarely in line with the selling price.
My personal preparation involves the following:
• A full CMA of the property itself • Research on the property’s listing history on MLS • The last time the property was sold and for how much • The year it was constructed • Research on the building, developer, and number of units (condo specific)
• Calculating an average sale price based on comparable sales
• Calculating a range of sale prices based on comparable sales (slightly more informative as the top end of the range reflects the highest price paid for a similar property)
I do this preparation personally to allow my clients to have the facts they need to make good, sound decisions, and to afford them the opportunity to leave the property with a realistic expectation of what it will sell for. A hidden built-in benefit of this type of preparation is helping my buyers avoid future problems with appraisals.
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SAG ERE ALESTATE.CA 100%* of buyers use the internet in their search. If you’re searching for a home in Toronto, there’s only one web address you need to know: SageRealEstate.ca, Toronto’s ultimate home search. Our website includes tools, tips and access to all of the Toronto properties listed on MLS® and best of all, you’re in control. TRACK THE VALUE OF YOUR HOME USING CASTL . Castl. (yourcastl.com) is a proprietary platform for SAGE agents and clients. It allows clients to: Track the Value of your Home Track the valuation of your home through regular updates from Castl. and let this work as a stock ticker for your most valuable asset.
Learn Sold Price of your Neighbour’s Home Find out the price at which homes are selling in your neighbourhood and throughout th Greater Toronto Area. Follow the Market Access our monthly sold reports to stay on top of the real estate market, in your neighbourhood and 600 others in the Greater Toronto Area. Find your Next Home Search for your next property through Castl. To get started with Castl. simply ask your SAGE agent to add you to this proprietary platform. VIRTUAL TOUR AND PHOTO GALLERY Sage Real Estate listings are featured with virtual tours, photo galleries, and individual listing websites.
TH E PROPERT Y SE ARCH PORTAL YOU WISH ED FOR REALM is Toronto Real Estate Board’s latest home search tool that offers infinite control and possibilities for home buyers. Users can search the MLS® system in real time, across any device. Buyers can find out about a new listing the very moment it gets uploaded onto MLS® by requesting instant notifications. They won’t miss finding out about any hot new listing. Buyers can
*National Association of Realtors®. Profile of Home Buyers and Sellers 2023.
also easily communicate with me through REALM by making comments on a listing that get conveyed automatically, request showings, etc. Users simply define the information they would like to receive. It is the best buyer portal we have seen. Simply ask me to invite you to join in on the fun.
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I LOVE IT. I WANT IT. When you find a property that fits you perfectly, someone else may want it too. It’s important to act quickly and make a solid offer based on a rational approach to pricing and negotiating that you and I have discussed. To start the process rolling, we will draw up an agreement that includes your offering price and other terms and contingencies. Buyers often focus on the price but there are other important terms included in a real estate agreement. You can include any terms you like but remember that the more you add, the more likely the seller is to object. Here are the most common elements of an Agreement of Purchase and Sale: PRICE The market, the buyer and the seller will determine the final price. I will help you formulate an offer based on comparable listings and sales and current market conditions. MORTGAGE CONDITION A mortgage condition stipulates that you will buy the property subject to obtaining a mortgage. If you cannot obtain a mortgage then the contract will be void. You will need to establish a time frame for securing financing. HOME INSPEC TION CONDITION A thorough inspection of the property by a licensed home inspector protects you against structural or material problems that are not detectable in a casual walkthrough. Home inspections are just as important in new construction as they are in resale. Buyers can’t inspect a home that isn’t built yet; however, they can request an inspection prior to closing. In new construction an inspector will make sure that all mechanical systems are working properly and may also spot repairs that need to be added to the builder’s punch list (a list of items that need to be completed). The buyer, not the seller, is responsible for hiring and paying the inspector.
DEPOSIT The deposit is given by the buyer typically to be held in the listing brokerage’s trust account and secures the contract until the closing. An initial deposit usually in the form of a cheque or money order must be given to the seller or seller’s Realtor® along with the offer. Upon completion of the agreement the deposit will be applied to the down payment and/or closing costs to the benefit of the buyer. If the sale does not go through due to contingencies covered within the contract, then the deposit money typically will be returned to the buyer. CLOSING DATE One of the most important terms of a real estate contract is the closing date – the date when ownership changes hands. This is usually the date that the seller must vacate and the buyer may occupy the property. Flexibility on the closing date can give a buyer a big advantage over other potential buyers and can occasionally allow you to negotiate a lower price or other, more favourable terms. COUNTER OFFERS In some transactions, there is a fair amount of negotiation – offers and counter offers – before both parties are satisfied. This is one aspect of a real estate transaction in which a Realtor® is invaluable. Not only can I draw upon previous experience and market knowledge to offer sound advice during a negotiation, I can also serve as a buffer between the buyer and the seller/seller’s Realtor®. Negotiating for a property can be a highly charged and emotional process, and even the most emotional buyer will look like one cool customer behind the right Realtor®.
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HOW TO WIN Securing the property when in a bidding war takes knowledge, commitment, preparedness, and guts. Sometimes the differences between the top offers that have been presented to a seller are very slight. Frequently there is no clear-cut winner and the seller is forced to make a judgment call. Only one buyer gets the place, stack the cards in your favour to have that buyer be you. Here are the keys to success:
broker, your bank manager or existing mortgagee before you get to the offer submission stage on a property so you know exactly what you can rely upon them to provide. 8. Prove your ability to close the transaction. Perhaps impress the seller with your career or have a letter from your bank stating you are in a position to close the transaction. Don’t ask for things in the offer that the seller has not already included in the sale.
1. Know the market so that you are in a position to bid high but not overpay.
9.
2. Bid as high as you can. Sellers almost always sell to the highest offer.
10. Maybe write a note to include with the offer about why you want the house.
3. Offer your top price on the first round. You are not guaranteed to get an opportunity to improve your offer.
11. Keep yourself available when offers are being presented. Totally, 100% available for last minute discussions, negotiations or clarifications.
4. Huge deposit. Certified cheque or bank draft. Huge deposits greatly impress sellers.
12. Have faith and trust in me. If you don’t trust me by the time you are into a multiple offer scenario, you are dealing with the wrong Realtor®. The experience and counsel a trusted Realtor® can and should provide when in multiple offers can absolutely win you the property. I will always provide you with insight and informed options. Consider them and make the most aggressive choice you can.
5. Consider inserting a clause in the offer that states should you (the buyer) default on the purchase and not close the transaction, the deposit will be immediately released to the seller. Your lawyer might not like this but sellers love it. 6. Possession. Accommodate the seller’s requested possession date. Even better, offer a seller-flexible possession date within specific dates. This gives the seller the opportunity to set his/her exact preferred date. 7.
Few, if any, conditions. Building Inspection: Prudent buyers want to have a property inspected before submitting an offer. This is understandable. However, you have to balance your need to have a building inspection with the fact that winners in multiple offers usually have firm unconditional offers. Maybe have it inspected before you submit your offer? Financing: Get your financing in place before you submit an offer. Talk to your mortgage
13. The new TRESA regulations allow for Sellers to share with all Bidders in multiple offer scenarios, particulars of offers. This may or may not disadvantage your offer. We can review the need to include a clause in your offer stating that if the seller chooses to share any aspects of your offer then you reserve the right to withdraw your offer. One comforting reality is that bidding wars usually take place only on good properties. Paying top dollar today may prove to be a bargain in hindsight tomorrow. Today’s multiple offer winner buyer may also well be putting themselves in a seller’s multiple offer scenario when selling in the future. Nothing is more gratifying.
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BU LLY OFFERS What are they? When sellers list a good property in a hot market they are often hoping that their property will generate a bidding war. Bidding wars have a track record of generating the highest prices for sellers. That happens frequently in Toronto’s current real estate market. When that strategy is employed by the seller and listing brokerage then a date, typically five to seven days down the road, is set for interested buyers to submit their offers to the seller for consideration. If more than one buyer comes to the table at the time then a multiple offer scenario ensues. Don’t forget that the seller is a client of the listing Brokerage and as such the listing Realtors’® allegiance is directed exclusively towards the seller. The buyer, on the other hand, typically is a client of the cooperating brokerage and as such, I have an allegiance to do the very best for my buyer. So even though a seller may have set a particular date to review all offers, a buyer is legally entitled to ignore that request and submit an offer earlier than the requested ‘offer date’. Should the buyer go ahead and submit an offer earlier than the seller-requested timeframe, we have a bully offer. Sellers are not legally required to consider a bully offer, however, if a bully offer is duly registered with the listing brokerage then the seller must be advised of the existence of that offer. They must then decide whether or not to actually entertain that offer. Part of the seller’s decision making process, whether or not to consider a registered bully offer, often revolves around the price of the offer. While not formally presenting the offer, the buyer’s Realtor® (with the buyer’s permission) might verbally disclose to the listing Realtor® the price of the offer in an effort to get a formal presentation of the offer to the seller. Sellers go through several considerations before deciding whether or not to look at the offer. Such as: How many people are viewing the property?; How many other hot prospects exist in the wings?; Might they lose this buyer if they refuse to consider that offer now?; How much more might they possibly hope to get on offer presentation
night above what is being offered now in the bully offer? There are a host of other considerations that all give rise to deciding whether or not the Seller will entertain the bully offer. If the seller decides to go ahead, the listing Realtor® has a set procedure to follow regarding advising other buyers and those who have expressed an interest in the property about the advancement of the offer presentation time. The seller is then at liberty to view, accept or reject the bully offer. From a buyer’s perspective, bully offers have pros and cons too. A bully offer may well be accepted by the seller with little or no competition from other buyers. Sellers have to face the ‘bird in the hand’ conflict. It puts the buyer more in the driver’s seat. ie. here is my terrific offer, take it or leave it. On the down side, sellers may resent having their requested offer presentation schedule being ignored and feel like the buyer is exerting excess pressure on them, particularly if the bully offer has a short irrevocable period. Should a buyer submit a bully offer on a property they see that they really want to buy? Perhaps they should, you never know, it just might fly. However, for bully offers to be considered they must be particularly attractive to a seller. Something they’re unlikely to see at an offer presentation. Usually, attractiveness here is defined as price. The seller must come to the conclusion that it is not worth the risk of waiting until the official offer date time because it is unlikely that a higher offer will be forthcoming. Bully offers must be very, very good, attractive and compelling. Buyers making unattractive bully offers can easily offend sellers, disadvantaging their subsequent offer on offer night. I can always review the appropriateness of bully offer submissions with buyers in detail in each specific situation and come to the conclusion whether or not to go ahead with one.
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TH E ROLE OF A L AW YER The buying process involves a number of legalities and sound legal representation is not merely a suggestion, it is a requirement. Your lawyer will protect your rights and ensure you actually get what you’re paying for. WHAT IS IMPORTANT IN A L AW YER? Ideally you will want to use a lawyer with substantial real estate experience, as lawyers who may be excellent in one field of law might not be as strong in real estate law. Most transactions close without any problems; however, if there were to be some difficulties an experienced and effective real estate lawyer is invaluable. Go with the lawyer that you feel has the right experience for your situation. HOW DO THEIR FEES WORK? Toronto lawyers typically charge a flat fee for their real estate purchasing clients. It is usually beneath the law society mandated maximum tariff rates. Talk to a lawyer and get a quote. The best lawyer for you may well not be the cheapest but save money elsewhere. You need a good lawyer! WHAT ABOUT THE EX TRAS? Disbursements will be in addition to the quoted fee. Common disbursements and adjustments are land transfer tax(es), realty taxes, prepaid utilities, clearance certificates, etc. Your lawyer will be able to provide you with exact disbursement expenses on your transaction. WHAT SPECIFIC FUNC TIONS DOES A L AW YER PERFORM? Before the offer is signed If requested, lawyers will consult with buyers to review the offer clauses. They will not recommend negotiation strategies but will ensure that the buyer understands the legal aspects of the offer.
After the Agreement is accepted • Detail exact closing costs.
• Search title. • Search taxes, utilities, building and zoning, or order title insurance.
• Execution search. • Mortgages and other financing arrangements. • Verify insurance policy documentation. • Calculate land transfer tax. • Requisition letter to seller (requesting resolution of any problems found in searches).
A few days before closing • Address any provincial sales tax issues.
• Prepare mortgage documentation. • Prepare statement of adjustments. • Prepare documentation for land registry. • Accept closing funds from buyer. • Review and have buyer sign necessary documentation. On closing day • With mortgagee, will exchange mortgage documentation for money.
• Meet with seller’s lawyer at registry office. • Complete final searches. • Transfer funds. • Register deed and mortgage in buyer’s name. • Pay land transfer tax. • Obtain keys from seller’s lawyer. After completion • Send you a reporting letter certifying your title together with the deed, survey, and all other related documentation.
• Invoice you for services rendered.
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PE ACE OF M IN D The insurance requirements associated with property ownership can be complex as there is no one-stop insurance shop to fill every insurance need. Some insurance is placed by your lender or mortgage broker, some by an insurance broker, and some by your lawyer.
insurance). They describe the mortgage insurance through CMHC which protects lenders of high ratio mortgages against mortgagor default. They are not one of the insurance policies that purchasers consider buying for their own benefit.
This section provides a brief overview of the various types of home-related insurance. Please seek quotations from the relevant insurance expert for each type of insurance. Carefully review coverage, limits, restrictions, rates, and overall policy suitability to ensure that your insurance needs are being appropriately met. You do not need every type of insurance; however, if something goes wrong the appropriate insurance becomes the bargain of a lifetime.
TITLE INSURANCE
HOMEOWNER’S INSURANCE W hat is it? Just as one would not drive a car without insurance, one does not own a home without this basic insurance. Homeowner’s insurance protects your home against hazards such as fire, smoke, wind, hail, and acts of vandalism. It would also provide liability coverage against injury to any of your visitors. Is it required? Your lender will require Homeowner’s insurance coverage in an amount at least equal to your mortgage. This is required because the lender could be left without security for its loan in the event of property damage or loss. Options. Most homeowners opt for a homeowner’s policy that also protects the contents of the home. Contents protection coverage can also be for full replacement value. Hint: Non-smokers often get rate discounts as do property with monitored burglar alarms. W here do I get it? Contact your general insurance broker or Realtor® for advice and coverage. MORTGAGE LIFE INSURANCE W hat is it? This is a life insurance policy with the amount of insurance being equal to the principal amount of the mortgage. In the event of the mortgagor’s death, the balance of the mortgage is paid off. Is it required? Lenders do not usually make their commitment to place a residential mortgage with a buyer contingent upon the buyer taking out mortgage life insurance. An exception to this would be mortgages for very high amounts. W here do I get it? Through the lender or mortgage broker at the time you take out your mortgage. MORTGAGE INSURANCE W hat is it? Mortgage insurance, mortgage loan insurance, and mortgage default insurance are all the same (not to be confused with mortgage life
W hat is it? ‘Title’ legally describes the ownership of land. Purchasers want assurance that the property they are buying will legally be theirs and they will receive good and marketable title to it. Those with any claim to your property should be restricted only to any mortgagee(s) and the government if taxes are not paid. Title insurance eliminates the risks of a defective property title by providing the compensation necessary to rectify covered title defects. Most policies also pay the cost of defending against any covered claim. Unlike homeowner’s insurance which protects you from an unforeseen event in the future, title insurance protects you from an undetected defect or fault in the past. W hat is a title defect? The following are some examples of hidden title defects that a title insurance policy could typically cover: unsatisfied mortgage, lien or judgment; fraudulently discharged mortgage(s); missing heirs, etc.; improperly executed deeds; irregularities or errors in existing surveys; required removal of existing improvements; unregistered easements or rights-of-way; …the list could go on and on. IF I DON’T HAVE TITLE INSURANCE , HOW SERIOUS COULD A CL AIM BE? It could be very serious. You would have to pay all defense costs and a claim could result in complete loss of equity if defense were unsuccessful. Title insurance means that you do not have to worry about any mistakes in titles. How much does it cost? Should we get it? The cost of title insurance is a few hundred dollars. We encourage purchasers to consider buying title insurance not because of the fairly small likelihood of an undiscovered title defect but because of the cost savings provided. Some savings are even significant enough to almost completely pay the cost of some title insurance policies. W hat cost savings are there if I get title insurance? In usual transactions, lawyers not only search title but also obtain certificates of clearance from the zoning department, work orders, liens, hydro, etc. If the property is title insured then the lawyer can skip some of the searches as the need for them is redundant. If there were to be a problem discovered on any search then the insurance would pay to resolve it. As municipalities increase their search fees title insurance becomes more cost effective. On some properties the savings amount to several hundred dollars.
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AN D IT ' S YOU RS I will work closely with you and your lawyer to make sure everything is in place for a smooth and efficient closing. Typically, a day or two prior to the closing, your lender will forward all loan documentation to your lawyer and let you know the amount required to complete the purchase. You will be responsible for bringing the balance of your down payment and closing costs to your lawyer in the form of a certified cheque. At the closing, your lawyer will guide you through the many documents you need to sign. During this same time period, it’s important that we plan to use one of our previously negotiated buyer visits to do a final walk-through of the property, ensuring everything is in order. My goal is to provide you with the information you need to feel confident throughout this process. In addition, if you have an existing property to sell, I will customize a comprehensive marketing program to help you achieve the highest possible sales price in the shortest amount of time. For more information, just ask.
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AF TER YOU PU RCHASE YOU R PROPERT Y REBUILDING YOUR SAVINGS AND M AINTAINING FINANCIAL DISCIPLINE Buyers should take time to review and evaluate their finances after a home purchase. One important step to consider is setting up an automatic electronic payment with your mortgage lender which lets you avoid costly penalties associated with late payments. Make a plan for gradually rebuilding your savings account which many buyers deplete in order to make their down payment and pay for moving costs. As a property owner, it’s important to have a cash reserve set aside for unanticipated maintenance that your property may require. In fact, a general rule of thumb is that owners should expect to spend about 1-3% of the cost of their property per year on maintenance and repairs. While your transaction is complete, our work is not. In fact, I maintain relationships with my clients long after closing. I am always glad to help you find a variety of service providers and tradesmen to perform work on your property. As you’re getting settled in, here are a few situations you may encounter in the coming months and years that are important to think about. REFINANCING Keep an eye on interest rates even after you purchase your property. If rates go down, you may be able to save money
by refinancing which simply means you take out a new mortgage at a lower interest rate that will replace your original loan. Another common situation that calls for refinancing is the expiration of the initial fixedrate period on an adjustable-rate mortgage (ARM). If prevailing fixed-rates are substantially lower than the rate, your ARM will carry once it adjusts, then it might make sense to refinance into a fixed-rate loan. Many lenders offer no-cost refinancing which means they take the costs and fees associated with refinancing and roll them into the interest rate. It’s a way for owners to lower their monthly payment. While refinancing a mortgage has become much easier in recent years, it is still a major financial transaction with important implications which requires just as much diligence as securing the original mortgage. I will happily refer you to a mortgage professional to help you determine the right time to refinance. HOME IMPROVEMENT Whether it’s a fresh coat of paint, new hardwood floors or a major kitchen remodel, most new owners have at least a few projects they want to undertake once they move in. Please ask me to help you determine the market value of improvements you are considering making to your property.
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ABOUT SAG E If there’s one word that sums up Sage, it’s uncompromising. Uncompromising is our way of making sure that every real estate experience isn’t just good, it’s great. We set a high bar for ourselves, and our Realtors®. Our clients deserve the very best of us, from the services and counsel we provide to the quality of our marketing materials, and we’re relentless in making sure they get it. As a family-run company, we have an unusual combination of deep industry expertise – literally decades of experience - and a fresh, progressive approach. We never stop thinking about how we can improve what we do so that we can deliver more value to our clients and Realtors®. THE M ARKET DOESN’T STAY STILL . NEITHER DO WE . We monitor, respond and adapt quickly but strategically, keeping an eye out for ideas that will help everyone stay ahead of the market.
ON THE GROUND AND HANDS ON. Our Realtors® are our partners. We work side by side with them, providing industry-leading knowledge, training and expertise. They’re supported by one of the most advanced, comprehensive marketing systems in the industry, an in-house creative team that’s second to none and a management team that’s one of the most respected in the business. SM ARTER. FASTER. This uncompromising level of support ensures that sellers’ homes are positioned in the most favourable light and receive maximum exposure in the marketplace locally, nationally and internationally. Buyers gain valuable knowledge about neighbourhoods and market trends that they can put into action to make informed buying decisions. WE STAND BY OUR WORD. We insist on the highest standards of integrity in everything we do, hand-selecting Realtors® who believe, as we do, in doing what’s right and fair for our clients. When it comes to making sure that they consistently get the best of us, we never compromise.
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M EE T LEE COLUCCI Well, how far back should we go here… After graduating high school (CDS 2001), I accepted an athletic scholarship to attend Long Island University, fulfilling a lifelong dream of playing NCAA basketball. During my freshman year, our team won the NIT Championship — a surreal experience, even now, so many years removed. Soon after that though, my focus returned to academics, facilitating a transfer to McGill University. There I earned a B.Ed. in Kinesiology, which believe it or not, still serves me well to this day. Since 2005, I’ve been a full-time Realtor. I’ve pursued a handful of distinguished titles over the years, the first of which was my Certified Luxury Home Marketing Specialist (CLHMS) designation. More recently, I attained my Broker’s License, giving me greater perspective on the industry overall. Like many of my clients, I call Toronto home. I’ve lived in some phenomenal neighbourhoods (St Lawrence Market, Roncesvalles, Dundas West), but have settled into Little Italy and am enjoying life here. I live in Toronto, I invest in Toronto, and I believe in the world class caliber of Toronto as a whole. I’m excited about the growth and expansion of this remarkable city. I feel especially honoured to play my part in bringing people into it and moving others around to different communities. It truly is a wonderful place to call home.
PERSPEC TIVE Real Estate has been my career, my focus, since 2005. It's complex and rewarding, but something I take very seriously. Partly because I’m a consummate professional, but also because I care immensely about my clients. Their satisfaction is what I strive for. When I begin working with any client, buyer or seller, the first step is to listen. It's paramount to understand what they need and want, it's important to know their priorities and motivations too. Each client is unique — recognizing their individual tastes, styles and personalities is the key to delivering the results that they're after. Not all Realtors are the same. One of my mandates is to invest my time in educating my clients. I want them all to have the same knowledge, understanding and perspective on the market that I do. This invariably equips people with the confidence they need to make good, sound decisions. It’s also led to many long-lasting, trusting relationships. At the end of the day, it's about doing good business. Maintaining honesty, integrity and respect, at their highest levels, are absolutely crucial. Being prepared, diligent and reliable, are of the utmost importance as well. At the centre of it all though is the passion I have for people and my unrivalled drive and work ethic. There’s great joy and fulfillment that I get from being a Real Estate Broker — if you haven’t experienced either in your real estate endeavours, it’s time for us to talk.
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RE AL ESTATE G LOSSARY Adjustable Rate Mortgage (A.R.M) Mortgage with a rate that is variable. It is usually tied to the prime rate. Agency Relationship a buyer or seller has with a real estate brokerage company. Agreement Of Purchase and Sale (AKA Offer) Legal document that outlines the terms of a Toronto real estate deal that will be signed by both the buyer and the seller. Amortization Mortgage payment that includes both principal and interest. Amortization Period How long it will take to repay the mortgage. Appraised Value Amount that a professional appraiser thinks what a Toronto property is worth. This is usually done to get the value of the house for mortgage purposes. Assessed Value Amount at which a property is valued for taxation purposes. Assumable Mortgage Mortgage that can be passed on from the seller to the buyer, should the buyer want the mortgage and qualify. Blended Mortgage Combination of two separate mortgages. Balloon Payment One-time payment against the principal paid at the end of certain mortgages. Bridge Financing Loan that covers a borrower in-between the purchase of their new Toronto home and the sale of their existing Toronto home. Canada Mortgage and Housing Corporation (CMHC) Institution whose primary purpose is to administer the National Housing Act and provide lenders with insurance against high ratio mortgages. Cap Maximum amount an interest rate can change.
Chattels Contents of the home belonging to the owner which are not included in the sale of a home unless specifically outlined in the offer. Clear Title A Toronto property that has no claims against it. Closed Mortgages Mortgage that cannot be paid out until the end of the mortgage period. Sometimes exceptions are made, but usually there will be a penalty charged. Closing Date Date that the house actually exchanges hands from the seller to the buyer. The Toronto buyer gets the keys and the Toronto seller gets their money. Cloud on Title When a claim has been made against the title of a Toronto property. Typically, it impacts the value of the property. Collateral Tangible asset that is used as a guarantee of payment in a loan. A house acts as the collateral in the mortgage. Commitment Written agreement that a lender will provide a specified amount of funds under certain conditions. Common Elements Parts of a condo building that are owned by all owners of the building, ie. walkways, elevators, halls, recreation facilities, etc. Condition Clause written into the offer which outlines something that has to happen before the agreement becomes binding. Should the condition not be met, the negatively affected party has the option to terminate the transaction. Conditional Offer Offer that has one or more contingencies that must be fulfilled in order for the agreement to become firm and binding upon both parties. Condominium Form of ownership where the owner has the title to a specific unit and a portion of the common elements of a building.
Conventional Mortgage Mortgage from a traditional lender such as a bank where the value of the mortgage does not exceed 75% of the value of the Toronto property. Any mortgage greater than 75% is considered high ratio and must be insured by CMHC. Cooperative Type of ownership wherein the building is owned by a company. In order to be entitled to live in the building you must buy shares. It is typically difficult to get a mortgage for a co-op without a large down payment and you must also be approved by the Co-op Board of Directors. Deed Document that officially transfers ownership of a Toronto property. Default When a borrower is not able to make a debt payment. Deposit Money that is put down after an offer has been accepted and is held in trust, usually, by the listing real estate brokerage. Disbursements Various expenses and costs that a lawyer will pay on behalf of a Buyer to close the sale. Discharge When a mortgage has been paid in full and the title has been changed to reflect that. Discount Points Fee that is charged when a mortgage interest rate is reduced from the current rate. One point equals one percent of the mortgage value. Down Payment Amount that the buyer puts down on the property in cash: this is the difference between the purchase price and the mortgage amount. Dual Agency (See Multiple Representation) Easement Legal right to use someone else’s land for a specified purpose. This right is tied to the land, not the individual, so it passes from the seller to the buyer.
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Encroachment Occurs when the boundaries of some part of one property impede over the boundaries of its neighbouring property. Equity Value of the property minus any outstanding debt. Fiduciary Duty Legal relationship between a buyer or seller and their Realtor®. First Mortgage First mortgage on a property. It has the first claim on the property should there be a default. Fixed Rate Mortgage Mortgage that has a fixed amount of interest paid over a specific amount of time. Foreclose When the lender takes legal ownership over a property due to the borrower defaulting on the loan.
Interest Adjustment Portion of interest that is paid if the closing date of the transaction does not coincide with the mortgage payment date. For example: if mortgage payments are made on the 15th of the month but the sale closes on the 10th, there will be an interest adjustment for 5 days. Interest-Only Mortgage The interest is paid on a regular basis and the principal is paid at the end of the term. Irrevocable Period The period at the end of which an offer expires. Joint Tenancy Situation where two people share an equal ownership share of a property. If one dies, their share is transferred to the remaining person instead of to the beneficiaries of the estate of the deceased. Land Transfer Tax Tax paid to transfer a property.
Maintenance Fee Amount of money a condo owner pays each month towards upkeep on the common areas of the building. Maturity Date End date of a mortgage. Mortgage An agreement between a lender and borrower where the borrower puts up a piece of real estate as collateral for a loan to purchase that property. Mortgage Broker A professional who brings together borrowers and lenders. Usually their fee is paid by the lending institution. Mortgage Insurance Also referred to as mortgage loan insurance or mortgage default insurance, this is offered through CMHC and covers the lender when a borrower has less than 20% down payment. Currently in Canada there are three major such insurers: CMHC, Canada Guaranty, and Genworth.
Gross Debt Service Ratio (G.D.S) G.D.S is typically used as the indicator that tells you if you can afford a certain mortgage payment. All costs associated with housing (mortgage, taxes, heating, and 50% of condominium fees, if applicable) should not exceed 32% of your gross annual income (income before tax).
Leasehold Mortgage Home mortgage when the house is on leased land.
Liabilities Debts.
Mortgagor Borrower.
High Ratio Mortgages Mortgage that exceeds 75%. These mortgages must be insured by the CMHC.
Lien Legal claim against real estate to guarantee payment of a debt.
Hold Back When money is held back by the lender until a condition is satisfied.
Listing Agreement Formal agreement between the seller of a property and a real estate brokerage company authorizing the brokerage to offer a particular piece of real estate for sale.
Multiple Representation Occurs when a brokerage represents more than one client in a single transaction. For example, the buying client of one Sage Real Estate Realtor® buys a property that has also been listed with Sage Real Estate.
Homeowner’s Insurance Protects homeowners against damage to their home caused by fire, smoke, wind, hail, vandalism and slips/falls. Home Inspection Objective evaluation of a house by a home inspector. At the end of the evaluation a detailed document is provided outlining the condition of the house. Home Warranty Plan Insures against the failure of the operating systems of the home. It may cover things such as the heating system, central air, electrical, plumbing, and large appliances.
Legal Fees Amount charged by lawyer to execute the purchase or sale of a property.
Listing Broker The real estate brokerage company that represents the seller. Loan Commitment Document that demonstrates a lender is willing to lend a certain amount of money with certain conditions to a borrower. Lock-In Occurs when a buyer tells the lender that they accept a certain interest rate for a certain amount of time.
Mortgage Life Insurance Mortgage life insurance covers the mortgage value in the event of the death of the mortgage holder. Mortgagee Lender.
Open Mortgage Type of mortgage where the borrower can pay the debt at any time. Origination Fee Fee the lender receives for processing a loan application. Penalty Amount of money paid to the lender so that the borrower can prepay a portion of the mortgage. PIT Principle, interest and taxes. PITH Principal, interest, taxes, and heating.
Possession Control (ownership) of a property. Power of Attorney A legal agreement wherein one individual grants another the legal authorization to represent them and make decisions on their behalf. Pre-Approval for a Mortgage A written commitment from a lending institution to lend a potential buyer a certain amount of money at specific terms for the purchase of a property. Pre-Payment Privilege The right of a borrower to prepay some of the principal without having to pay a penalty. Principal The base amount of money borrowed. Real Estate Agent (Broker) The brokerage company that represents either a buyer or seller in the process of buying or selling real estate. Realtor® A registered real estate sales representative or broker. Refinance When a new mortgage is obtained and used to pay off the old mortgage. Renewal Agreement An agreement to extend the mortgage for another term once the initial term is reached. Reserve Fund Bank account established by a condo corporation to cover major repairs to the common elements. The fund is paid into from a portion of the monthly maintenance fee. Seller Take-Back Mortgage where the seller personally provides some of the financing for the buyer.
Setback The distance back from the property line beyond which you must get approval for any improvements.
Title Search The process of checking records to ensure the seller has the legal right to sell the property.
Statement of Adjustments Amount of money owed at the time of closing. The amount will be calculated by a lawyer and the adjustment will typically be the difference between the deposit and down payment subject to various credits and debits.
Total Debt Service Ratio (T.D.S) T.D.S. is typically used as the indicator that tells you if you can afford to take on more debt. Your TDS should not exceed 40% of your gross annual income (income before tax). This includes any mortgage debt, car loans, etc.
Selling Broker/Cooperating Broker The Realtor® who represents the Buyer in an Agreement of Purchase and Sale.
Trust In Real Estate Services Act, 2020 (TRESA). A replacement of the Real Estate and Business Brokers Act (REEBA). It is legislation that governs how Real Estate Professionals are to transact business in Ontario with increased consumer education, protection and transparency.
Special Assessment Special charge a condo owner has to pay for a capital improvement or unforeseen expense. Status Certificate Document that outlines the financial and legal status of a condo corporation. Sub-agent An agent who finds the buyer for a property but has a fiduciary responsibility to the seller. Survey Document that outlines the property line on a piece of real estate as well as the location of any fences and buildings on the property. Tenancy in Common When a property is jointly owned by a group of individuals, not necessarily in equal shares, and each owner has the right to sell their portion. Term Amount of time a lender lends funds to a borrower. Title Legal certificate outlining who owns a property. Title Insurance Insurance that covers a piece of land. This provides assurance that the real property remains the property of the buyer if a claim against the property is processed.
Trust Account Bank account used by brokers to keep deposit funds separate from other funds. Underwriting Calculation of risk involved for a lender. Variable Rate Mortgage Mortgage that has fixed payments but where the interest rate is adjusted to market levels. If rates go up, a larger portion of that month payment goes to interest but the actual amount of the payment does not change. Waiver Document normally signed by the buyer which relieves the seller from obligation to a particular condition in an offer. Warranty Legally binding commitment that the seller provides to the buyer to guarantee that the house is in good condition. Zoning Regulations Criteria that regulates how a property may be used, typically established by the municipality. A property could be zoned for many different uses including residential or commercial.
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