Top 8 Winter Home Energy Solutions

Energy bills can get dramatically high, especially during Canada’s cold winter months. There are steps you can take to conserve energy and save some money at the same time. Below are our top eight Winter Home Energy Solutions.

8 – Turn Down the Temperature

When you’re away from your house for a few days, you don’t need to keep the heat cranked up. By reducing the temperature when you’re out of the house, you can save money on heating costs.

Another idea is to add an extra blanket on your bed and reduce the temperature by a couple of degrees at night.

7 – Seal Unwanted Leaks

Caulking and sealing leaks will insulate your home better, which will save you money in the long run.

You’ll want to make sure you’re buying the correct type of caulk, depending on what specifically needs to be sealed, and whether it is interior or exterior.

6 – Replace Furnace Filters

It’s a good idea to keep your furnace properly adjusted with annual maintenance.

This will include cleaning or replacing your filters every couple of months to improve efficiency.

5 – Save Money on Water

There are several ways you minimize water consumption. Low-flow shower heads and smaller toilets will minimize water output.

You’ll also want to make sure you fix any leaky taps that might be constantly wasting water.

4 – Update Old Appliances

Refrigerators, freezers, dishwashers and washing machines that are a couple of decades old may be using significantly more energy than newer models.

Sometimes the investment in a new major appliance will save you money in the long run.

3 – Use an Area Rug

We like to be barefoot in our own space, but when our feet are cold, so is the rest of our body.

Consider purchasing an area rug for rooms in your home that have cold floors.

2 – Unplug Electronics

Electronics that are plugged in still use energy, even when you’re not using them.

By unplugging electronics and small appliances when you’re not using them, you will ensure that there is not additional energy being used up.

1 – Switch Lights Off

One of the simplest ways to reduce your energy use is by flicking off lights when you leave a room.

It’s also a good idea to switch to energy-efficient lighting.

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Can I Be Denied a Mortgage After Pre-Approval?

If you are in the market for a new home and have already been pre-approved for a mortgage, you might think you’re in the clear. However, this is not always the case. There are several reasons a mortgage can be denied after pre-approval, and you must understand what causes it to happen to ensure your mortgage will be approved.

Reasons a Mortgage Can Be Denied After Pre-Approval

There are a number of reasons that a mortgage can be denied even after the prospective applicant has received pre-approval. Here are a few of the more common reasons:

Change of employment – One of the requirements for being approved for most mortgages is steady employment. If you have changed jobs and are still in the probationary period with your new employer, this can negatively impact your mortgage approval, although exceptions may be made in some cases, like if the job change is within the same field. The length of time you are required to be with an employer varies, but typically it is at least six months.

A poor credit report – You do not need perfect credit to be approved for a mortgage, but there is a minimum requirement for your credit score (and for most lenders it is a minimum score of 650). If you have been pre-approved but then acquire new debt or miss debt payments, this will hit your credit score and can potentially knock it down enough that you may not be approved.

Additional debts – Related to your credit score, taking on large debts when trying to get a mortgage is not a good idea. Hold off on buying that new car or applying for a line of credit until your mortgage deal officially closes and you have the keys in hand.

Changes in loan requirements – It is possible that after pre-approval, a lender or mortgage product may experience changes to their requirements and guidelines that result in you being denied the mortgage. These may include changes in debt-to-income policies, the savings required of the buyer, or a mortgage insurance premium increase.

Appraisal issues – In some cases, the mortgage pre-approval for an applicant is subject to a satisfactory bank appraisal. If there are issues with the appraisal, the mortgage application could be denied.

What To Do If Your Mortgage Has Been Denied

Luckily you don’t have to give up if your mortgage application has been denied. There are several things you can do to improve your financial situation and increase your chances of being approved:

Improve your credit score – Raising your credit score is the most reliable way to convince lenders to give you a mortgage, since it shows you can make payments on time.

Pay down debt – If your debt-to-income ratio is too high, pay down some of your debt to lower the ratio. A consolidation loan could help speed up the process if some of the debt comes from credit cards or other high-interest sources.

Add income – Like paying down debt, adding income will help improve your debt-to-income ratio.

Increase the down payment – By saving more money for a down payment, you will decrease the mortgage amount and the risk to the lender. As a result, they will be more likely to approve you for a mortgage.

Get a co-signer – If you have unreliable credit, you could try getting someone to co-sign your mortgage application. This person must have a good credit history and agree to pay your mortgage if you can’t. However, many people refuse because it is a high risk to them.

How to Ensure Your Mortgage is Approved

It is never a good feeling to be left wondering whether your mortgage application will be approved. There are a few things you can do to help ensure that you are not denied, including:

  • Don’t take on any additional debts like vehicles, student loans or lines of credit
  • Don’t make any large deposits into your bank accounts without having proof of their source, and don’t make any large withdrawals
  • Continue to save money and make loan payments on time

It can be devastating to learn that, despite being pre-approved for a mortgage, you can’t get financing to purchase the house you want. There are several reasons this can happen, so be sure to consult with your mortgage lender if this occurs so that you can take the necessary steps to remedy your situation and get your mortgage approved as soon as possible.

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10 Real Estate Terms You Need to Know

When buying or selling a home, you’re going to encounter all the terminology that goes along with it. Many of these words and phrases are not common knowledge, and having a basic understanding of the ones used most often can make the process less daunting. Let’s look at a few real estate terms to know:

Adjustable-rate mortgage – There are two main types of mortgages. An adjustable-rate mortgage has an interest rate and mortgage payment that vary according to market conditions. It is less predictable than a fixed-rate mortgage but can potentially have very low-interest rates at times.

 Fixed-rate mortgage – Fixed-rate mortgages are more predictable. They have an interest rate and mortgage payment that remain the same throughout the term and do not fluctuate according to market conditions.

Mortgage pre-approval – A mortgage pre-approval is a process that involves you as the homebuyer and a lender. Homebuyers will fill out an application detailing various aspects of their finances, including income, assets, and credit history. The lender will then review it to determine the debt-to-income ratio and the amount they are willing to lend to the homebuyer. This is not the same as a mortgage approval.

Appraisal – An appraisal is a process of determining the value of a particular property so that a lending institution can determine how much they are willing to loan. In Canada, an appraisal can only be done by a member of the Appraisal Institute of Canada or the Canadian National Association of Real Estate Appraisers. An appraisal is different than a market evaluation, which is what a real estate agent will give you as an idea of the property’s worth.

Offer/Counteroffer/Backup offer – Here’s where we get to the nitty-gritty. An offer to purchase sets out the terms with which you agree to buy the home and is a legally binding contract between the seller and the buyer. However, there are different kinds of offers.

A counteroffer occurs when the seller of the property does not accept the offer you extend and makes changes to it, such as the price or the date, making the original offer invalid. A counteroffer will have a time limit within which a buyer may accept or reject it.

A backup offer happens when a buyer is interested in purchasing a property that already has another offer in process with someone else. If the original offer falls through for any reason, the backup offer will be next in line to purchase the property. There can only be one backup offer on a property at any time.

Principal – The principal is the amount you borrow from a lending institution. It does not include the down payment that you would have contributed, and it does not include interest. Your mortgage payments will always be applied toward the interest first, so you need to consider that when budgeting for a mortgage payment. The interest is typically calculated on a daily basis, but you will pay it with your monthly mortgage payment.

Debt-to-income ratio – Also known as DTI, the debt-to-income ratio is a number that is determined by the buyer’s total debt, plus the monthly house payment, divided by the gross monthly income and multiplied by 100. The resulting number helps lenders determine the amount of risk they are taking with a particular buyer. Lenders typically look for less than 28 per cent of the total monthly income spent on housing, and less than 36 per cent contributed to debt payments.

Mortgage loan insurance – If your equity or down payment on the property is below 20 per cent, you will be required to purchase mortgage loan insurance. Offered by CMHC, Genworth, and Canada Guaranty, mortgage insurance protects the lender against losses if you fail to pay your mortgage.

Equity – Equity is the difference between the market value of your property and what you still owe on it. If you sell a property at a profit, then equity is the amount you will receive after paying off the mortgage.

Closing Costs – Closing costs are those associated with the actual purchase of the home and not with the value of the house itself. They can include legal fees, realtor commissions, lawyer fees, and land transfer fees. These are all due on the closing date once the purchase of the property is finalized.

Real estate lingo can be confusing sometimes, but if you look up some of the terms ahead of time, you will be well on your way to understanding what is going on when you purchase your home.

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How Much Will It Cost to Buy a House?

You’ve likely heard people lauding the benefits of home ownership. Canadian real estate has historically seen solid long-term gains, which bodes well for existing homeowners and those who plan to buy and keep the place for the long term. There are several other benefits of owning a home, including a roof over your head, a place to plant roots, pride of ownership, and a part of retirement planning. However, as with all investments, there is that initial cost of owning a house in Canada, and unlike other investment vehicles, a home also comes with ongoing expenses. So, down to the nitty-gritty: How much will it cost to buy a house?

Here’s How Much Will It Cost to Buy a House:

The price of the home and the services associated with the purchase are all relative to the type of property, its age/condition, and its location, so do your research to ensure it remains a good investment. A real estate agent can outline what you can expect to pay and maybe some unexpected expenses. In the meantime, here’s a list of hidden costs to factor into your budget.


Depending on the price of a home and the market conditions, you should factor an up-front deposit into the cost of buying a home. You’re expected to pay a deposit when you make an offer on a home.

The deposit is a security measure to ensure you don’t lose the home to another interested buyer. The deposit also assures the seller that you’re serious about the purchase. If you are required to pay a deposit, it will become part of your down payment once you have purchased the home—it comes off the home’s purchase price. There’s no standard deposit amount, as it varies between provinces. But your real estate agent can advise you based on the home’s asking price and the market conditions.

Down Payment

In Canada, the minimum down payment on a home depends on the purchase price. If the house is below $500,000, the minimum down payment will be five per cent. If the price is from $500,000-$999,999, the down payment is five per cent on the first $500,000 and 10 per cent on the remaining amount.

While five per cent is the minimum down payment, anything below 20 per cent is considered a high-ratio mortgage and requires mortgage loan insurance. To avoid this, you’ll need a down payment of 20 per cent or more. This insurance is paid in a lump sum or added to your mortgage and included in your payments.

Land Transfer Tax

When you buy a home, you are required to pay a land transfer tax on closing to the territory or province where you are buying. This tax is based on the amount paid for the property, as well as the remaining amount on any mortgage or debt assumed as part of the arrangement to buy it.

The cost will vary depending on your municipality, the size of the land, and other factors. Alberta, Saskatchewan, and parts of Nova Scotia do not have Land Transfer Tax at all, while other provinces use a tiered system—meaning, the higher the purchase price, the higher the percentage you pay. Homebuyers in Toronto are hit with a double whammy, having to pay a municipal land transfer tax on top of the provincial land transfer tax.

Appraisal Fee

An appraisal is essential for the buyer. It lets the lender know they are providing a mortgage for a legitimate price and that you are paying fair market value for the home.

A property appraisal will typically cost in the ballpark of $300, but can vary depending on the appraiser and your location. However, this is an essential step, saving you from borrowing more than you need to, and preventing lenders from giving you too much.

Home Inspection

Though it is not required, a home inspection is recommended in the home-buying process, helping you avoid many potential pitfalls. In hot real estate markets, many homebuyers will waive a home inspection from their conditions. It is a wise investment, helping you avoid costly repairs and renovation. A failed home inspection could be a negotiating factor or a deal-breaker.

A home inspection will generally cost an average of $500 depending on the size, age, and condition of the home, but it’s well worth the spend for the peace of mind you’ll have.

Property/Home Insurance

Most lenders will require you to have enough home insurance to cover the total cost of the property. Lenders will ask for proof of insurance before providing the funds to purchase the home.

While property insurance is likely already something you have factored into your budget, it’s important to do your research and find a reasonable quote that will ensure you are covered should anything unexpected happen. The more coverage you add to your home insurance, the higher the annual premiums.

Mortgage Insurance

Your lender will most likely offer you mortgage life insurance. If you pass away while the policy is valid, the insurance company will pay out what you owe the lender, ensuring that your family can remain in your home without making any payments.

An alternative to mortgage insurance is factoring your mortgage into the payout of your life insurance policy. This way, your beneficiaries get the money directly and can pay your mortgage lender, unlike mortgage insurance, where the payout goes to the lender first. Talk to your financial advisor about which option works better for you and your family.

Mortgage insurance is not to be confused with mortgage loan insurance, which protects the lender against mortgage default. Mortgage loan insurance is required if your down payment is less than 20 per cent of the purchase price. Premiums for this type of insurance range from 0.6 per cent to about 4.5 per cent.

Lawyer Fees

A real estate lawyer or notary is required to complete the purchase of a home. They prepare and review all legal documents, with the agreement of purchase and mortgage as the primary documents. Additionally, they ensure there are no previous claims on the property to help provide you with a clean title to the property.

The fee you will be charged by your lawyer will vary depending on the person representing you and must be paid upon closing. Ask your real estate agent for advice, as they likely have a preferred trusted lawyer they can refer you to.

Title Insurance

Title insurance is a one-time fee that protects from losses related to the property title or ownership. Though not required, it protects you from unknown title defects, existing liens on the property, structural encroachment issues, title fraud, and errors in surveys and public records. Talk to your lawyer about title insurance and if it benefits you.

Property Taxes

Property tax is billed annually and it is expressed as a dollar rate for every $1,000 estimated to be the market value of your property. The tax is paid on property owned by an individual or an entity and is one of three taxes a household pays in Canada, the others being sales tax and income tax.

When you’re looking at homes to purchase, your real estate agent will be able to tell you what the property tax was for previous years. This information will allow you to plan for this ongoing expense.

Maintenance and Energy Costs

Potentially your largest ongoing homeowner expense, these costs include lawn care/ yard work, professional services, additions/upgrades, and the cost of keeping the house running year-round. Ensure that you factor these costs on top of your mortgage and property taxes when determining if you can afford a home.

Moving Expenses

It’s easy to forget about the small things when moving, but it’s important to remember they can add up quickly! Consider the cost of cable, Internet, electricity, natural gas, and other utility installations. Don’t forget about movers, a moving truck, and feeding your friends who are helping out!

Land Survey

A land survey is a legal document that evaluates your home’s boundaries. Though it is not a requirement to sell your house in most jurisdictions, it will establish trust, outlining the size of the property and defining future possibilities of expansion. The cost of the survey depends on how much work is involved and the time of year, but you can expect to pay at least $1000.

Time to Create a Budget

Now that you have a better idea of the cost to buy a home, it’s time to hit the books to find out how much these services will cost in your area. Make a list, create a budget, and get started!

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What Happens When a Buyer Backs Out of a Real Estate Deal?

When housing markets begin to cool after record highs, some homebuyers get cold feet. Imagine you buy a home for $1.2 million. When it comes time to close after you have signed your purchase agreement, you notice a comparable home down the street sells for $855,000. What happens when a buyer backs out of a real estate deal?

Some homebuyers choose to walk away when it comes to closing day, despite agreeing to purchase the property. Another common scenario occurs when a homebuyer backs out after overbidding in a hot market and going over budget. Once it comes time to close, the bank completes an appraisal and refuses the entire mortgage amount. The homebuyers need to come up with hundreds of thousands of dollars to close. They walk away because they don’t have the money, despite signing an agreement to purchase.

No matter the scenario, walking away at closing after you sign a purchase agreement can have significant legal and financial consequences.

When you back out of the deal, it will cost you. You instantly forfeit the deposit you submitted with your offer. You are also at risk of being sued by the seller for money they have lost on the sale of their home. Understanding the purchase agreement and adding conditions to protect you from unforeseen circumstances is essential.

Understanding your Agreement of Purchase and Sale

An Agreement of Purchase and Sale is a firm and binding deal that allows the buyer and seller to proceed with the sale. It outlines the terms and conditions of your home purchase. As a legal agreement, backing out comes with serious consequences.

Once the buyer and seller sign a purchase agreement, it becomes legally binding. Typically, the buyer provides a deposit of around five per cent of the purchase price to show the seller that they will honour their agreement and complete the purchase. Backing out of the deal after signing the contract and paying the deposit means you do not get that money back.

Are there legal ways to back out of a real estate deal?

There are a few legal ways to back out of a deal. The first is if the sale was conditional and the conditions were not met. It could result from a significant issue in the home inspection, a low appraisal, or the inability of the buyer to sell their current home. Regardless of the reason, the deal dies automatically if the conditions are not fulfilled.

Additionally, an agreement could become null and void for reasons outside the contract’s conditions. Common issues that can end a deal are a lien on the home, substantial damage to the property before closing, or if the buyer can prove that the seller knowingly misrepresented the property in a significant way (however, misrepresentation can be hard to prove in court).

The risks of backing out of a deal at closing

Buyer’s remorse is not part of real estate. Once the buyer and seller have signed the purchase agreement and the conditions have been satisfied, both parties must abide by the contract. There is typically not much leeway to cancel a real estate purchase.

Buyers may feel that they overpaid, or their financial circumstances have changed, but those reasons may not justify the potential consequences of walking away.

If the buyer walks away, they may forfeit their deposit and could be sued by the seller for loss in the value of their property on resale.

If the seller eventually sells their home for a lower price, they may sue for the difference in price. Let’s say there was an agreement to purchase the house for $850,000. The closing day comes, and the buyers back out. The home then goes back on the market. The best offer is $700,000. The home buyers that backed out on closing day now must make up the money the sellers lost. In this case, that is $150,000.

This nightmare scenario has played out. In Gamoff v. Hu, the buyers lost their $30,000 deposit, and they were ordered by the Ontario Superior Court of Justice to pay $470,000 in the lost value after they backed out.

You may also be responsible for the seller’s legal fees, mortgage carrying costs, and any other losses the seller suffered.

How to avoid the risks of backing out at closing?

With the help of legal representation, there are a few things that you can do to protect yourself from these circumstances. Consult with your lawyer before signing an Agreement of Purchase and Sale to determine if there are terms to add that will protect you, as the buyer.

Setting the right contingencies within the contract is the best way to protect yourself from some of the most common issues home buyers encounter.

With a low inventory and rising competition for homes across Canada, it may be tempting to waive any conditions, especially when competing against multiple offers. Discuss the situation with your lawyer, consult a financial advisor and consider getting a mortgage pre-approval, to help ensure that you add the right conditions to your Agreement of Purchase and Sale before signing on the dotted line.

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5 Savvy Ways to Save Money on Your Next Renovation

Renovating your home is a big decision and often an expensive one. After weeks or months of planning, saving money or acquiring financing, your dream home is finally within sight! Be warned, however, completing these renovations requires thorough research if you hope to stay on budget. Renovating is exciting and friends, family, and neighbours will all offer advice and tips aplenty. You need to verify and evaluate all the ways you can save money on your next renovation. Read on for ways to save on your renovation and save yourself a bundle!

5 Savvy Ways to Save Money on Your Renovation

1. Make A Budget and Draw Up a Roadmap

Going over budget when renovating is easier than you might think, making it the most significant threat to your well-made plans. Make a budget and do your best to stick to it. Choose the areas that need renovating and develop a roadmap for everything required. Differentiate between needs and wants, which will go a long way toward keeping your budget on track.

Allocate funds to each part of the renovation and consider DIY projects that you can realistically handle yourself, which can be cost-effective. Plan for more straightforward upgrades that can be good alternatives to expensive renovations. For example, perhaps you can give your kitchen cupboards new life by refinishing them instead of costly replacement.

Always track your spending meticulously. Your thoughtfully planned budget may not be adequate if you do not follow it closely and keep track of all your expenses.

2. Renovate During the Fall

Once you’ve decided which spaces could use a pick-me-up, make a plan to get yourself organized and think ahead.

Contractors are sometimes cheaper in the off-season.

Many contractors like to finish well before the holiday season. If you’re paying by the hour, you might also see appreciable savings on labour costs if the work gets done faster. In addition, during the off-season, your contractor might not be distracted by other jobs on their roster, giving your home their complete attention.

Retailers may also offer generous end-of-season discounts on new appliances, fixtures, and other building materials, time to make space for next year’s new models.

Finally, think about the other ramifications of the timing of your renos. For example, if your renovation requires insulation, you’ll also save on the coming winter’s heating bills by having the work completed before the cold sets in.

3. Determine Where To Cut Corners

A chunk of your renovation cost is often hidden in aesthetics. By factoring in functionality and efficiencies, your renovations can help reduce your home’s operating costs, savings that will continue year after year.

Fun Fact: Demolition tasks can be cost-effective and oddly therapeutic when you undertake to do them yourself. Just be sure to do so safely and dispose of waste materials properly.

Look for pre-painted trims, fittings, and fixtures that may seem expensive, but can save you money once you factor in the cost of materials and painters.

Try to avoid moving sinks, toilets, and especially tubs to significantly reduce renovation costs. Moving pipelines can be an expensive affair. Change the fixtures but not the layout to save money.

A cost-effective option is to look for pre-owned building materials that are cheaper but just as effective in the renovation. Your contractor may have some leads on the procurement or check out your local Habitat for Humanity’s ReStore.

Substitute expensive building materials with cheaper substitutes. For example, you can install a slate or laminated countertop instead of granite in your kitchen. They look beautiful but are far more affordable than granite.

Look for cheaper options in a different pattern or colour. Some laminates, flooring, fixtures, or furnishings may be more affordable in a different colour. Simply tweaking the colour palette can save you a significant amount of money.

4. Stay Involved & Engaged with Your Contractors

Knowledge is key. Some shady contractors have been known to take shortcuts or add extra fees to your renovation. It is always a good idea to oversee the work-in-progress closely. Gather a basic idea of the job and monitor the proceedings. Of course, working with a reputable contractor helps too.

Consider purchasing the materials yourself to avoid mark-ups by the contractor. If you have the time and knowledge, you may consider managing the labourers yourself and save a bundle; however, this is not always feasible.

Getting multiple quotes and selecting a contractor with the lowest cost and good references is crucial. A reliable contractor will do the job efficiently and help you save unnecessary expenses.

5. Recycle and Declutter

Sell any leftover construction material. You can also recycle used furniture and other odds and ends you do not need to reduce your outflow. Not only will you make some money towards the renovation costs, but you will also do the environment a world of good by keeping the landfills junk-free.

If you’re simply in a hurry to get rid of it, speak with your contractor. Many will help you dispose of extra stuff left over after the renovation is complete, saving you the trouble of finding buyers.

You will thank yourself for a clutter-free home and garage later!

Government Rebates for Renovations

You’ll find a variety of government rebates for energy-saving renovations. If your plans meet the criteria, these could save you up to 25 per cent. Look for programs related to energy efficiency or ones that help seniors age in place.

Bottom Line

Renovating a home can be expensive. However, a little research and prudence may help reduce the costs and create a cozy home that looks and feels like new.



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What Is a Clean Offer?

What is a clean offer? This term actually has nothing to do with housework. Below, we answer some important questions about what a clean offer is, how to go about presenting a clean offer, and the risks and benefits of making one.

What is a clean offer?

A clean offer is an offer to purchase a home without any conditions attached to it. Also called a contingency-free offer, a clean offer aims to entice the seller with the promise to buy a home without any caveat that might cause the deal to fall through, which can happen based on the conditions specified in the offer. Conditions, and reasons to renege, may relate to the buyer or seller, and may include conditions like an unsatisfactory home inspection, the buyer’s inability to secure financing, the buyer not being able to sell their current home first, the seller being unable to accommodate a specific closing date, among other things. From a seller’s perspective, the more conditions there are, the greater the chances of the buyer legitimately backing out of the deal.

How do you write a clean offer on a house?

If you’re working with a professional real estate agent, then they will do all the heavy lifting in this regard. As always, the contract is key, so both the buyer and seller should do their due diligence and have the contract reviewed by a lawyer, to ensure they are protected in the transaction. Remember: if it’s not in writing, it never happened.

When would someone make a clean offer?

There are certain circumstances where a non-contingent, clean offer is more commonplace. A seller’s market is one of them. In a seller’s market, demand outweighs supply and buyers are in greater competition with each other, giving sellers the upper hand. This is when you might see multiple offers, bidding wars, bully offers, and unconditional, clean offers. The idea here is that, by presenting an offer with no caveats attached, the seller will feel more comfortable and confident in accepting this particular offer. Despite the obvious reward of making a clean offer, it also comes with some risks, so homebuyers are encouraged to discuss this strategy and be aware of the pros and cons.

Can you back out of a no-conditions offer?

In short, no. (Well… sometimes. More on that below.) Generally speaking, the Agreement of Purchase and Sale is a legally binding agreement, and all parties to it are required to follow through. Should the buyer back out of the deal, they may forfeit their deposit and risk being sued by the seller for loss in the value of their property on resale.

For example, if the seller eventually sells their home for a lower price than what the original buyer had promised to pay, they may sue for the difference in price. Let’s say there was an agreement to purchase the house for $850,000. Closing day comes, and the buyers back out. The seller re-lists the home, and the best offer is $700,000. The seller can now go after the original buyers, seeking to recoup that $150,000 loss. The buyer who backed out of the deal may also be responsible for paying the seller’s legal fees, mortgage carrying costs, and any other losses they suffered as a result of the deal-gone-bad.

Backing out of a non-contingent offer

While uncommon, the contract can become null and void for a variety of reasons beyond the contract’s conditions, such as an existing lien on the home, new or substantial property damage incurred before closing, or if the seller has misrepresented the property – however, misrepresentation can be difficult to prove in court.

Homebuyer’s due diligence

Ultimately, the homebuyer is responsible for proceeding in a way that they’re comfortable with. For many, this means making an offer that’s conditional on a home inspection, repairs, financing, specifics around existing tenants, a preferred closing date, or in the case of a condo purchase, a status certificate. Work with a team of trusted professionals, including a real estate agent, lawyer, financial advisor, and a qualified home inspector – if this is indeed one of your offer conditions.


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Are Higher Fixed Mortgage Rates Here To Stay?

One question many Canadians are asking is are higher fixed mortgage rates here to stay? At the September policy meeting, the Bank of Canada (BoC) raised interest rates by 75 basis points, bringing the benchmark rate to 3.25 per cent, maintaining its hawkish approach to monetary policy. The central bank signalled that it would be prepared to keep pulling the trigger on rate hikes until there is sufficient evidence the consumer price index (CPI) is showing signs of coming down.

Although the Canadian annual inflation rate has eased from its 30-year high of 8.1 per cent in August, officials conceded that this was driven mainly by gasoline prices. The national economy endured “a further broadening of price pressures, particularly in services.” As a result, “the policy interest rate will need to rise further,” and additional tightening was on the horizon to ensure price stability.

Given the outlook for inflation, the Governing Council still judges that the policy interest rate will need to rise further,” the BoC said in a statement. “Quantitative tightening is complementing increases in the policy rate. As the effects of tighter monetary policy work through the economy, we will be assessing how much higher interest rates need to go to return inflation to target. The Governing Council remains resolute in its commitment to price stability and will continue to take action as required to achieve the two-per-cent inflation target.”

Now that rates are normalizing from their pandemic-era lows, borrowing costs are increasing for credit products and services. Of course, this also means higher returns on bank deposits.

But many buyers and homeowners have a major question: What about mortgage rates?

Are Higher Fixed Mortgage Rates Here To Stay?

In response to the central bank’s policy decision, most Canadian financial institutions, including the Bank of Montreal, Scotiabank, and Toronto-Dominion Bank, raised their prime lending rates by three-quarters to 5.45 per cent. This is up from the previous prime lending rate of 4.70 per cent.

This matters because it is the starting point for lenders’ loan calculations. In other words, it will trigger a significant boost in borrowing costs for many Canadian consumers.

Many economists, market analysts, and homeowners are concerned that this will add pressure to the Canadian real estate market. While this is true, the effects of higher mortgage rates on the nation’s housing industry are not as cut and dry as experts would purport.

Variable-rate mortgages will be immediately impacted by higher mortgage rates. Homeowners who are due for renewal on their fixed-rate mortgages within the next couple of years will also feel the financial squeeze of higher mortgage rates. Homebuyers will now need to contend with higher mortgage rates compared to what others received a year ago.

A rising-rate environment in Canada’s housing sector is expected to create a ripple effect throughout the economy. Because homeowners will contend with greater debt-servicing payments, many will inevitably slim down their budgets and cut back spending on other areas, be it trips to restaurants or buying apparel.

But is this the new normal for the Canadian real estate market? Yes.

Governor Tiff Macklem has been clear that he intends to tighten policy a lot more until the central bank successfully tames inflation. While the institution noted that it could not contain the supply component of rampant inflation, it does possess the tools to douse red-hot demand. So, as rates go up, it will trim demand, whether it is for labour or real estate.

The consensus among many central banks is that they will lift their respective benchmark policy rates and leave them there for an extended period. When many Canadians acquired a home during a historical bubble, the debt factor could be troubling for new homeowners.

In addition, with higher interest rates on the way, it will add to the minimum mortgage stress test. But while it is unlikely federal regulators will reform the stress test in this environment, other industry experts think it might be time to take another look at it. The thought is that it might be placing too many buyers at a disadvantage amid rising rates.

Will Higher Rates be Real Estate’s Death Knell?

RE/MAX expects average residential prices to moderate downward by 2.2 per cent through the end of 2022. However, it appears that some market experts have thrown in the towel for the Canadian real estate market, with downturn forecasts as high as 20 per cent. And climbing mortgage rates will not do the industry any favours moving forward.

We see the downturn intensifying and spreading as buyers take a wait-and-see approach while ascertaining the impact of higher lending rates,” wrote Robert Hogue, assistant chief economist with the Royal Bank of Canada, in a research note.

That being said, there is some hope that perhaps the five-year fixed rate mortgage could have already peaked, as long as the Bank of Canada does not approve any supersized rate hikes for the rest of the year or heading into 2023.

Ultimately, the effects of rising interest rates are already being seen in the Canadian real estate market. In July, national home sales tumbled by 5.3 per cent month-over-month, while the MLS® Home Price Index (HPI) tumbled by 1.7 per cent month-over-month, according to the Canadian Real Estate Association (CREA). The next few months of data should give the industry a clear picture of what to expect in 2023.

When you’re ready to buy, ensure you work with an experienced, professional real estate agent who can help you navigate the market. Contact us today!



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What Are the Steps to Buying a Home?

What are the steps to buying a home? You’re starting to think about becoming a homeowner, or maybe you’ve even started to look at listings. Either way, you likely have lots of questions, from the general “how to’s” to specific queries around financing, different home types and locations, to how to make an offer. To help simplify what can be a complicated process, we’ve outlined the steps to buying a house in Canada.

What Are the Steps to Buying a Home?

There’s a lot to do, but we’ve narrowed it down. Here’s our 10-step home buying process checklist to get you started!

1. Choose a real estate agent that’s right for you.

A home is a huge investment, so work with a realtor that’s knowledgeable, professional, and responsive. Treat your search for the right agent like a job interview. Meet with a few different agents, ask lots of questions and check references.

2. Know your budget.

As you already know, buying a home is going to be expensive. Knowing exactly how much it will cost and how much you can spend is a crucial step in making a wise investment. Consider your lifestyle, your income, and any current debts you’re carrying. Are you secure in your employment? Are you planning any major life changes in the near future, such as a job change or growing your family? Be mindful of the financial impacts this could have.

3. Explore mortgage options and get pre-approved.

A mortgage pre-approval informs you of how much your lender is willing to lend you based on a number of factors, such as your credit rating, income, and debts. The lender also guarantees the current interest rate for up to 120 days (time may vary depending on the lender), giving you the freedom to house hunt, knowing that you’re safe from interest rate increases. If rates drop, so too should your guaranteed rate. In addition to the interest rate, be sure to also take into account the terms of the mortgage.

4. Start home hunting.

Admittedly, this step has many sub-steps, but let’s narrow it down a bit. While the old adage of “location, location, location” still stands when it comes to good real estate investments, the recent trend of remote workplaces has given people greater flexibility when it comes to answering that all-important question of “where?” Then comes the what: what type of home do you need to accommodate how you and your family live? Condominiums, townhomes, and freehold homes each offer distinct benefits, so ensure you’re choosing something that will work for you for the next five years. 

5. Schedule showings.

Did you know your agent can show homes in person or virtually? Virtual showings have been around for some time, often used for purchases by buyers from overseas, however, it has picked-up speed with local buyers too, due to the pandemic. Regardless of how you choose to view the listings, keep your eyes on the prize. Remember your budget and the must-haves outlined in step #4 above.

6. Make an offer.

You’ve found the home you want, in a location you like. Now, to make an offer to purchase for a price and terms that are agreeable to both you and the seller. Here’s where working with an experienced realtor can give you the upper hand. Different market conditions require a different approach – a seller’s market might mean lots of competition, requiring you to come in at or over the asking price with few to no conditions, while a buyer’s market means you have a choice and time is on your side. Lean on your agent on how to best handle the situation.

7. Get a home inspection.

Regardless of the market, this is one condition that we recommend you keep as part of your offer. The home inspection is intended to identify any existing or potential underlying problems in a home, alerting the buyer of risks and giving them leverage in negotiating a reduced selling price. Your home inspector will examine systems that are visible without opening walls or floors, including heating, plumbing, electrical, roofing, and foundation. The inspection should take approximately three hours and will cost a few hundred dollars, depending on the size of the home.

8. Close the deal.

The closing period for your transaction is typically 90 days, however, it can range depending on the agreed-upon terms in the Agreement of Purchase and Sale. The homebuyer has some important obligations during this waiting period. Once the offer has been accepted, there’s a window during which you must take all the necessary steps with regard to your offer conditions, such as financing, home inspection, and anything else that needs to happen before you officially seal the deal. Your mortgage lender will need a copy of the offer to ensure it’s in line with your pre-approved level of financing. After any adjustments or repairs have been done to your satisfaction, your Realtor will finalize the deal and your lawyer will process the paperwork, including the mortgage documents with your lender. All of this will point to a final date of actual legal possession: the real closing day.

9. Update utilities, transfer services, and change of address.

During your closing period, keep track of utility and credit card bills, magazine subscriptions, and any other regular mail or standing orders that you receive at your current address. Alert them of the address change in advance of your closing date. Also, be sure to contact your doctor and dentist. 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.

  • Click here to change your address with the Canada Revenue Agency
  • Contact your local Ministry of Health and Ministry of Transportation to find out how to change your address on your health card and driver’s license.
  • Forward mail to your new address by visiting the Canada Post website or at your local post office.
  • If applicable, it is important to change your address for the Employment Insurance program that you can easily do here.

10. Move into your new home!

If you’re moving during the busy season (typically summer) ensure you’ve booked a moving company well in advance. If you’re doing it yourself, book the truck, enlist some help and ensure you have ample packing materials. Here are some packing tips:

  • Pack the items you will need first in a clear plastic bin
  • Pack your plates vertically so they are less likely to break
  • Take a photo of how your electronics are connected so you can know where the wires go
  • Wrap your breakables in clothing to save on bubble wrap
  • Keep your glassware safe by packing it with clean socks

We hope this home buying checklist helps. If you still have questions about how to buy a home, or you’re ready to start the process, tap into the knowledge and experience of The Property Team; we will guide you through the process every step of the way!


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6 Tips for Selling your Home this Fall

Deciding to place your home on the market this fall? That’s great! Getting your home ready for sale is just as important in the fall and maintaining curb appeal requires different attention than in the spring and summer. Follow these six tips for selling your home this fall, and you might just get it sold before the last leaf falls.

Tips for Selling Your Home this Fall & Easy Fixes to Help Buyers Fall in Love

1. Don’t ‘Leave’ a Mess

While fall leaves are gorgeous to look at on trees, once they hit the ground they no longer add to the beauty of your property. Make a good first impression and get rid of leaves with a leaf blower or rake so the first thing buyers see is your home, not the amount of raking they will have to do each year! Clear walkways, your driveway, and your lawn, and be sure to pick up any stray branches as well.

2. Fall for Flowers

Gardens and landscaping can add to curb appeal when selling your home. Decaying plants, especially at the front of your home, don’t exactly say, welcome. If your summer flowers have died, it’s best to replace them or remove them.  Consider planting mums or fall flowers in flower beds and adding fresh mulch. (Mums can withstand cooler weather and come in beautiful fall colours). If you don’t have a garden or prefer not to plant flowers in them, try using urns or large pots instead.

3. Don’t be a Bore, Paint your Door

A freshly painted front door in a complimentary colour can give your home an upgraded look and help set it apart from other homes in the neighbourhood. Early fall, before wet and cold weather hits, is perfect for painting as the summer humidity and bright sun can cause a paint job to peel or crack. Another way to dress up your door is to change the hardware. Having new locks or handles without scratches or dents in an updated finish can make your door seem like new. This attention to detail can make the right first impression as buyers enter your home.

Hint: Choose a colour that will brighten up your façade and compliment your brick. While it’s best to keep exterior paint colours neutral on windows, garage doors, and siding, the front door is a chance to use colour. Have grey brick? Consider a deep red or blue. 

4. Lighten Up

Let’s face it without the summer sun, on darker days the inside of homes can look dreary. Here are some tips to minimize the impact of duller days.

  • Clean your windows and screens on both sides before listing
  • Make sure all blinds, and window coverings are open as wide as they can go
  • Show your home earlier in the day if possible
  • Consider outdoor landscape lighting, patio lighting, or solar pathway lighting

5. Give Sweater Weather Vibes

Keep your home feeling cozy from the outside in. Incorporate fall décor around your home’s exterior – it can be as simple as a wreath on the front door to a fully staged fall patio session, complete with chunky knit blankets and all! Inside, consider highlighting your fireplace if you have one, minimize clutter, and placing a throw on the couch. Make your home feel welcoming and buyers may just want to stay.

6. Festive Frights Not Always a Delight

If you’re selling your home during Halloween season, unless you’re selling to the Addams Family, you might want to nix the spooky décor. If you want to decorate, use pumpkins or décor that can be easily stored away during showings. Just be sure the festive spirit doesn’t dampen the buying spirit of those viewing your home.

Fall is the time for new beginnings. Follow these tips to help get your home sold and hopefully before you know it, you will be starting yours.



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