Month: March 2023

Move-Up Buyers Want to Make Their Move. Here’s How.

Posted on by Trisha Wilson

According to a recent RE/MAX Canada survey, 16 per cent of Canadians said they want to enter the housing market, or sell in order to “move up.” The high cost of real estate has made entering the market a challenge for many first-time homebuyers, but thanks to well-timed purchases and considerable equity gains, move-up buyers are in a great position right now, making shopping for a “forever home” feel like less of a stretch.

When you bought your first place, chances are you were young, strapped for cash, and prepared (or at the very least, warned) to make some concessions. “You can’t have it all,” they said. “So where will you take the hit – price, location, home style?” Move-up buyers, on the other hand, typically have some savings and equity to work with, making their next move less of a compromise and more of a thoughtful selection.

But move-up buyers face their own set of challenges that call for a carefully considered strategy. Here are three options for the smart move-up buyer with a plan!

Sell First, Buy Later

This strategy is ideal for the move-up buyer who doesn’t want to get stuck paying two mortgages simultaneously. Selling the existing home eliminates the risk of having to carry two mortgages if you don’t sell your existing home in time. It also reduces the chances of having to reduce your asking price if the sale isn’t happening quite quickly enough for your liking. This is a good option for move-up buyers who are banking on the proceeds of their sale to fund their new (and likely more expensive) property. By selling first, you’ll know exactly how much money you have to purchase your next home. Click here to get some tips on determining the right asking price.

Buy First, Then Sell

If homes in your area of choice are selling faster than the “For Sale” signs can hit the front lawn, also known as a seller’s market, the “buy first” strategy might be the way to go. By buying your new home before selling your old one, you won’t feel rushed into settling for a sub-par property or having to seek alternative temporary accommodations while you shop the market. This move-up buyer still lives in their existing home, allowing them the flexibility to shop around and continue looking until they find that perfect place, without any added inconvenience or pressure. This move-up buyer typically requires a bridge mortgage. Click here to read more about different types of mortgages.

Time and Align Your Purchase and Sale

When all is said and done, this move-up approach is the most ideal, but getting there is another story. Aligning your purchase and sale closing dates can be tricky. Remember that there are three dancers in this tango – you, the person you’re buying from, and the person you’re selling to. You’ll also have to move out and move in on the same day. In this scenario, time is your best friend and flexibility your saviour. This means you’ve planned ahead – you’ve researched neighbourhoods, gotten pre-approved for a mortgage, and you’ve started the organizing and de-cluttering process well in advance.

Your move-up strategy will depend on a number of factors, such as your financial situation, current housing market conditions, and your personal comfort level. Plan ahead and get the right advice from a knowledgeable, experienced real estate team, to ensure a smooth transaction at both sides of the offer table – We’re here to help!

 

Courtesy of REMAX.ca

What is a Buyer Representation Agreement?

Posted on by Trisha Wilson

Whether you’re looking at a condo in the city or a detached home in the suburbs, the search for your dream home is an exciting time! For many prospective buyers, the period between the decision to buy and the day you get the keys to your new home takes a back seat to your dreams of the exciting times ahead. As a buyer, you need to be informed and educated through every step of the process. It can be challenging to set aside your search for the perfect window treatments when your agent is asking you to sign a document you don’t understand: the Buyer Representation Agreement (BRA). To help you tackle this, we are going to give you the short and sweet explanation of what a Buyer Representation Agreement is, so you can get back to the decisions you’re excited about making!

What is a Buyer Representation Agreement?

This document is a written contract that defines the relationship between you and the brokerage, and how the agent will represent your best interests. It outlines the services your real estate agent provides and what they expect from you, including:

  • The agent’s duties and obligations to the buyer
  • Agency relationships
  • The scope of the agent’s duties
  • Buyer obligations

Homebuyers will sign a BRA when they’re working with a real estate agent and are ready to make an offer on a home.

What are the benefits and drawbacks of a BRA?

By signing a BRA, you enter into an agreement in which your real estate agent will represent you in the home buying process. Advantages include:

  • Representation – A BRA ensures that your real estate agent works in your best interests and abides by the services listed in your contract. They can handle much of the home-buying process on your behalf, including negotiating, inspecting, and paperwork.
  • Clarification – A BRA formalizes your professional relationship by clearly laying out what your real estate agent expects from you and what you can expect from them.
  • Negotiable – Most of the terms in a BRA can be negotiated with your real estate agent.

Disadvantages of a BRA include:

  • Locked term – By designating a real estate agent as your representative, your real estate agent will always receive a commission if you purchase property during the contract term.
  • Exclusivity – With an exclusive BRA, you will not be able to use another real estate agent. If you are unhappy with your current agent, there are steps you can take to break your agreement and engage another agent.

How is a BRA presented?

While the agreement can be written, oral, or implied, it will ultimately be required by law to be reduced to writing with your signature in order to protect everyone involved.

When should you sign a BRA?

Like anything else you place your signature on, it’s important to fully discuss and understand the services provided, the cost related to the services, and that the written agreement is clear. Typically, a BRA is signed before you begin working with the real estate agent.

What will happen if you don’t sign?

According to the Code of Ethics, the broker and salesperson must protect and promote your best interest as their client on top of being fair, and honest. While you can choose to be a customer rather than a client, be aware that there could be some differences in how you are represented.

What is multiple representation?

Multiple representation means that a brokerage represents both the buyer and the seller of a property. There are no standard terms of service for multiple representation, so you need to consult the representation agreement before any offer is submitted. Multiple representation must be consented to in writing, so make sure you ask questions and are comfortable with how it may affect the services provided to you.

What is a holdover clause?

A holdover clause is an optional clause in your BRA. It means that once your BRA expires if you purchase a home after a certain number of days (usually 30 to 90 days) that came to your attention during the BRA, you must still go through the agent to purchase the home, and they will still receive a commission on the home purchase or lease.

Learn more about the many other important home buying steps so you can spend time where it really matters! Are you ready to take the next step? Contact us!

 

Courtesy of REMAX.ca

How to Save for a Down Payment While Renting

Posted on by Trisha Wilson

Renters across Canada have been struggling with rising rent costs and wondering how they will be able to save for a down payment while renting. With some money management tricks and adjustments to your daily living, you can save for a down payment. It might go slowly, but every little bit helps. Here are some tips to save for a down payment while renting.

1. Make a Budget and Stick to It

Making a budget is the easiest way to make your financial goals happen. When you have a plan for where your money is going, it puts the power back in your hands and gives you an idea of how long it will take to save for a down payment.

To make a budget, write down your monthly income. Then, list your monthly expenses, including your savings goal. Your expenses should always be less than your income; otherwise, you are going into debt. Track your spending to ensure your budget is accurate. But the trick is that if you want to save enough for your down payment, you must ensure you stay within budget as much as possible.

2. Get Rid of Your Existing Debt

Qualifying for a mortgage does not end with saving enough for a down payment. Mortgage lenders will also look at your debt-to-income ratio (DTI), the percentage of gross income used to pay minimum monthly debt payments. If you have a high DTI, you are a risk to the lender, who will be less likely to approve you for a mortgage. However, if you work to cut down your existing debt while saving for your down payment, you can get approved for the house you want.

3. Cut Unnecessary Spending

Another way to boost your down payment savings is to cut back on a few luxuries. For example, consider buying groceries and making meals instead of ordering in, working out at home for free instead of paying for a gym membership, or taking public transit. Then, take the money you would have used on those splurges and put it into your savings account for the down payment.

Some people might be willing to sacrifice just about everything to have their house sooner, but most of us would rather not sacrifice our quality of life. Make a line in your budget for fun things like a night out with friends, and ensure you don’t go over budget. Saving for a down payment is not worth sacrificing your mental health.

4. Lower or Eliminate Rent Costs

Your most considerable monthly expense is likely your rent, so an effective way to save for a down payment is to cut your rent costs. Although moving is not fun, it can save you thousands of dollars annually. Renters who work from home can choose a location with a lower cost of living, while those who work in an office can find a cheaper apartment closer to their work, saving them expenses for both housing and transportation. Then, take the difference in your expenses and put it in your savings account for your down payment.

5. Add Extra Income

While cutting expenses is an effective way to create room in your budget to save for a down payment, another way to save is to take on a side hustle. There are many opportunities for part-time work, such as driving for Uber or Skip the Dishes or becoming a tutor. You could also start your own home business cleaning houses, pet sitting and dog walking, or doing yard work. It doesn’t have to be fancy if it earns you extra money for your down payment.

6. Immediately Save Any Bonuses or Gifts

If you receive regular bonuses at work or a tax return each year, these can easily be contributed toward your down payment savings without sacrificing your quality of life. To take it up another notch, ask for down payment contributions in place of gifts for your birthday or Christmas. If you feel you are missing out on fun for yourself, set aside a predetermined percentage or amount to use as you want, and put the rest in savings.

With these tricks, you can save up for a down payment while renting. Set up a savings account dedicated solely to your down payment and watch as your efforts pay off – literally!

 

Courtesy of REMAX.ca

Address Change Checklist

Posted on by Trisha Wilson

There is nothing like receiving a handwritten note from a loved one, delivered the old-fashioned way directly to your mailbox. Sure, bills, letters, cards, and more can easily and more efficiently be accessed online, but where is the fun in that?

You have nearly reached the end of your home-buying journey, and although the road has been long and winding, you have reached the final stage! Your fingers are itching to dive into unpacking and settling into your new home, but first, you need to let your family, friends, companies, and government agencies know where they can reach you.

For family and friends, you can easily send a change of address card via mail or email, but there are a few more steps when it comes to informing government agencies. Nowadays, most services enable you to easily change your address online, which can be completed in a matter of hours. However, a few, like your registry, will require you to visit in person to complete the paperwork. Here are the main services for which you need to change your address:

Canada Revenue Agency – It is very easy to update your address online. Click here to change your address with the CRA and ensure your tax information is accurate.

Canada Post – Use Mail Forwarding to forward any personal or business mail from your old address to your new one so that you don’t miss any important information. This should be completed a few weeks before your moving date to ensure nothing gets missed.

Local Registry – Known as Service Ontario in Ontario and by other names in other provinces, this is where you can update your driver’s license and health care cards. If you are moving to a new province, you will also need to get a new license plate.

Bank and credit card company – Any information that proceeds through your bank, such as accounts, loans, or lines of credit, will need to be updated with your new address. If you have bought a new home, then your mortgage will already have the address.

Insurance broker – All home or rental insurance will need to be updated to reflect your new address. You will also need to update your auto insurance so that your new address is printed on your card. You should know that insurance rates often change based on address.

Employer – If applicable, it is important to change your address for the purpose of tax information and your Employment Insurance.

Medical Personnel – Your doctor, dentist, and any other medical practitioners that you see will need to be updated with your new address. This also includes the veterinarian.

Memberships and subscriptions – If you are a member of a place such as a gym, it will be necessary to change your address information.

Utilities – Assuming that you have not done so already, all utilities, including internet and TV, will need to be switched over to your new address.

Education institutions – If you have children that will be attending the same school as before the move, you will need to notify their school that you have moved and provide your new address.

This may seem like a daunting task, but fortunately, once everyone has been informed, you can go back to unpacking and organizing and can rest easy knowing that your friends and family will be able to easily find you to wish you well in your new home.

 

Courtesy of REMAX.ca

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