Randy Miller

Broker Of Record

Urban Avenue Realty Ltd., Brokerage

Whitby & Brooklin Real Estate

Office 905-430-1800

Direct 905-430-9444

Email: randy@randymiller.ca

Categories

Here is a great article from Mark Weisleder that might interest you. The Real Estate Council of Ontario did a survey of first time buyers in Ontario and found that one of the top issues that buyers had was they wished they understood the real estate contract and the process involved in buying a home a lot better, before they bought their home. Here are 5 things to know so that you will not be surprised either before or after closing.

1.    How much is the bank really lending me?

When you go to your lender to arrange financing, many buyers wrongly assume that if you are borrowing $300,000, then that is the amount you will receive on closing. Not true. In many cases, the lender may deduct a mortgage processing fee, which can be approximately $250. If the lender is paying your property taxes, they may deduct an amount right off the top in order to create a tax account for you, sometimes up to an additional $1,000. If your closing is for example on January 10, 2015, and your first payment is March 1, 2015, then the lender may deduct in advance interest from January 10, 2015 to February 1, 2015. Finally, if you are using CMHC or Genworth to obtain insurance for your mortgage, for example if you do not have 20% of the down payment, then not only will the premium be deducted from the principal amount of your mortgage, but an additional 8% PST will also be deducted on closing. Buyers often tell me that the PST charge was not explained to them by anyone. Ask your mortgage broker or lender in advance about all of these potential charges so you are prepared for what you will have to bring in on closing.

2.    What does "more or less" mean when they are discussing the frontage and depth of a property, or the square footage?

What this means is that if there is an error in the dimensions or square footage up to 5%, a buyer can typically not complain about it after closing. If the boundary lines matter to you, make the deal conditional on your receiving an up to date survey that demonstrates the actual boundary lines. If the square footage matters, arrange to hire a professional to measure it for you. Most offers contain a disclaimer that the seller does not warrant anything anyways so you need to protect yourself if this matters to you.

3.    The seller told me the counter tops were made of granite but I found out later they weren't; can I sue after closing?

The answer is usually no, since the fine print indicates that if it is not in the Agreement, it didn't matter to the buyer or the seller. Therefore, if anything about the property does matter to you, whether it is any feature or item contained in a listing, be sure to include it in your agreement of purchase and sale as well.

4.    I bought and sold my home on the same day. Even though I was packed up at 1 pm, I could not get into my new home until 6 pm, meaning that I had to pay the movers for an extra 5 hours. Can this be avoided?

This can be a real problem, especially at the end of the month. The safe way to avoid this is to close your purchase a few days early and obtain bridge financing so that you can move when it is convenient for you. The interest you will pay to do this is much less than what you will pay movers to wait around.

5.    I don't agree with the terms of the furnace rental contract. Can I just cancel it?

Unfortunately, the answer is usually no, unless you are prepared to pay a penalty. In the fine print, the buyer agrees to assume every rental contract that is disclosed. Before you sign, ask for the details of any rental contract in advance so that you are aware of what it will cost to either assume the contract and continue making the payments or the cost to cancel it after closing.

When you understand the fine print and the process before you sign any real estate agreement, you should not receive unwelcome surprises later.

By Mark Weisleder 

Purchasing or selling real estate is a complex process and every element of the transaction is best handled by an experienced professional. Don’t take chances, go with proven results and experience. With 25 years of full-time local service in Whitby, Brooklin, Ajax, Pickering, Oshawa, Courtice and Bowmanville, I can make your purchase or selling worry-free. Contact me today!

Randy Miller
Broker of Record
Royal Heritage Realty Ltd., Brokerage
905-430-1800

Post CommentComments: 0Read Full Story

Flooded Basement


The basement floods after closing. Can the buyer sue the seller? The agreement contained wrong information about the property dimensions but also included a disclaimer clause. Can the buyer sue if there is a problem after closing? Do you need to disclose a murder that occurred in a home? These are not simple questions, but if you remember the following principles, you should be able to understand the law.


Here are 5 key lessons to remember:


1.    When there is a flood after closing, the buyer will have to prove that the seller knew about this defect and that it was serious or else that the seller actively concealed the defect from the buyer. It will also depend on whether the buyer conducted a home inspection and in the case of basement water, whether the seller actually finished the basement themselves. A buyer will have to prove that the seller must have known about the problem during their ownership. Buyers will have to take pictures of the damage and bring in an experienced contractor who will be able to look at the damage and then give an expert opinion, in court if necessary, that the seller either must have known about the problem or did work behind the walls to conceal the problem. If the buyer cannot prove this, they will likely not be successful.


2.    The defect must make the property uninhabitable or dangerous. This means that the defect must be so serious that the buyer may not be able to continue living in the property. This would include a foundation problem. It is not clear if this would include a disclosure that the property was previously used as a grow op, as it would depend on the extent of the operation and whether it was actually remedied according to accepted industry standards. It would also depend on whether the buyer could obtain insurance for the property. Suffice to say that if the seller does not disclose a minor basement leak, the buyer will not be successful suing about it after closing.


3.    The law is not settled as to whether a seller needs to disclose a property stigma, whether it is a murder, suicide or neighbourhood condition, such as a pedophile who lives next door. Most appraisers will tell you that this will affect a property's value. However, it will still be hard to prove that this stigma would make the home uninhabitable and this is why many lawyers will tell you that you do not have to disclose property stigmas. 


4.    If you advertise the boundaries of a property in a listing, can the buyer get damages or get out of the deal if it turns out the boundaries are incorrect? Will it make a difference if there is a disclaimer clause in the offer itself, saying that the information, while believed to be correct, is not guaranteed and should not be relied upon without independent verification? In most cases, if the disclaimer is there, the buyer will not be able to sue the seller for any damages and will need to make sure that they do their own proper due diligence in advance. The lesson for any buyer is to make sure that if there is a disclaimer present, that you check a survey of the property or make the deal conditional on your own independent verification of all boundary lines.


5.    If you have any concerns about disclosure, ask the sellers point blank if they have had any water in the basement, murders or grow houses on the property in the past, or insert a clause to this effect in your offer. The sellers then have to respond truthfully. Speak to the neighbours and ask if any repairs were done at the property during the past year or whether there are any other issues with the property that you should know about. Also ask the neighbours about anything peculiar going on in the neighbourhood, including asking about the neighbours on either side of the property you are interested in buying. A major reason sellers sell a home is simply to get away from a neighbour.


When you understand the rules about disclosure and properly protect yourself, you should be able to minimize any problems that could arise after closing.


By Mark Weisleder, a Toronto lawyer, author, course developer and public speaker for the real estate industry


Randy Miller 
Broker of Record
Royal Heritage Realty Ltd., Brokerage  
905-430-1800


Post CommentComments: 0Read Full Story