Archive for the 'Tips for Sellers' Category
How to Avoid a Law Suit After Selling Your House
Lawyer Bob Aaron wrote an interesting article recently about a home seller’s obligations to disclose house defects to buyers. According to Aaron, the main criterion the courts apply to decide if a seller is responsible for repairs/defects is whether the defects are patent (obvious) or latent (hidden).
Case in point: The buyers of a home in Leduc County, Alberta, inspected the house three times before signing on the dotted line. The only problems they found were minor wiring issues. Soon after they moved in, however, they discovered an infestation of carpenter ants in a bedroom ceiling and mould in the basement.
Because of the ant infestation, the entire roof had to be removed and replaced with a metal one.
But when the buyers took the matter to court, the judge ruled that they’d failed to take reasonable steps to determine the full extent of the defects before buying the home. The buyers would therefore have to bear the repair costs themselves.
“I believe,” wrote the judge, “that the [sellers] were neither subjectively aware as to the existence of the roof defect, nor did they act in a reckless manner in regards to the roof defect.”
However, on the issue of the mould in the basement, the judge ruled that the sellers’ active concealment of the mould together with a false statement about previous water in the basement amounted to fraudulent misrepresentation.
Despite what is commonly knows as “the doctrine of caveat emptor (buyer beware)”, the sellers were ordered to pay the buyers $12,186.45 for drywall repairs.
So - my advice to you as a seller is that you disclose all major defects that a buyer or home inspector may not be able to find on a simple visual inspection.
My experience is that by taking “the high road”, you avoid much higher future repair and legal costs.
Read Other Related Articles:
Are Home Sellers Obligated to Disclose If There Has Been a Death or Violence in Their Home?
What You Don’t Tell the Buyer May Come Back to Haunt You When Selling Your Home.
Tough Times Are No Time for Inexperienced Realtors
“There are far too many agents out there who don’t specialize, who do just two or three deals a year. Would you use a part-time lawyer or a part-time dentist? We need to raise the bar.” So says a high-profile executive of a prominent Toronto real estate firm, and I agree with him.
More than 1,000 real estate agents and brokers gathered Monday for a general meeting of the Toronto Real Estate Board (TREB).
They came to discuss the current market conditions and to brainstorm. The executive was one of several speakers, but his words hit home.
Last year in Canada, there were close to 100,000 realtors, up from 77,000 in 1987. This is simply way too many. And the majority of these newcomers are part-timers. Some time ago, TREB asked the province to restrict real estate licenses for part-timers. The move was struck down by those who believed the board’s request was unconstitutional and restricted labour rights.
I did not agree with those who opposed TREB’s suggestion then, and I do not agree now. This is because I believe the business of real estate is far too important to you to have it handled by a part-time agent.
Real estate agents today are responsible for a whole host of laws and regulations on your behalf. These include provincial and federal laws dealing with issues of privacy, disclosure of property conditions, agency representation, banking and money laundering, to name just a few.
Changes to these laws take place very quickly, and part-time agents simply do not have the training or the incentive to stay on top.
Would you willingly go under the knife with a part-time surgeon? Or hire a part-time lawyer to represent you if you were accused of murder? Of course not. Then you should be just as wary of hiring a part-time agent to handle your most valuable asset in today’s troubled market.
The time for part-time real estate is over. Your family and financial welfare are at stake.
Please tell us what you think.
Toronto Councillor Mihevc Opposes Scrapping Land Transfer Tax
The Toronto Real Estate Board (TREB) needs your help. With resale home sales declining, TREB members are asking you to contact City Hall about scrapping the recently added Toronto land transfer tax.
But Councillor Joe Mihevc (Ward 21, St. Paul’s) is calling TREB’s plea to drop the tax “opportunistic.” That’s because Councillor Mihevc seems to think home buyers can provide funding to the proverbial bottomless pit whenever City Hall comes up short in the cash department.
Despite all evidence to the contrary, Councillor Mihevc believes the hated tax has had no negative impact on home sales whatsoever. Because of his skewed thinking, he wants the milking of tax payers to continue, even if it means leaving potential home buyers unable to buy.
In response, TREB has stepped up to the plate, statistics in hand, ready to do battle.
“The land transfer tax is not balanced and not fair,” said board spokesman Von Palmer, citing a 21-per-cent drop in the number of sales for the first half of October, compared with 2007.
Last week, Mayor David Miller moved that as a stimulus, development charges on new home construction be frozen. “If you are concerned about the real estate industry [new developments] and what the economy is doing to that industry now, then you have to be equally concerned about the land transfer tax”, said Palmer.
Palmer suggested resale housing should receive the same treatment as new home construction. Others are also jumping into the fray. William Strange, professor of real estate and urban economics at the University of Toronto commented “It does not seem like the first place you would look,” in reference to City Hall’s milking of home buyers for extra funding.
The latest data from TREB revealed that the average sale price of homes in Toronto plunged 15 per cent - from $441,878 to $375,804 - compared to this time last year.
Let Councillor Mihevc know how you feel about the land transfer tax grab!
Contact him through his web site at:
www.toronto.ca/councillors/mihevc1.htm
Home Buyers Looking to Sellers for Mortgage Help
By now, the financial crisis has touched most players in the real estate market.
Even some high-end buyers in Toronto who were scheduled to close home sales have run into an unforeseen glitch.
The banks’ lending policies are currently tightening up so that some buyers are having trouble getting the full amount of financing they require.
As a result, some buyers have started borrowing from the sellers themselves in the form of a “Vendor Take Back” (VTB) mortgage.
Here’s an example of how a VTB works:
Sale price: $1,500,000
Buyer’s down-payment: $500,000
Mortgage required: $1,000.000
If the bank is willing to advance the buyer only $800,000 of the required $1,000,000, the buyer still needs $200,000 to close the sale. Solution? Ask the seller to hold a second mortgage for $200,000, and the sale goes ahead.
What are the risks of holding a seller-take-back? Provided the seller does not need the entire $1,500,000 in cash, then everything can work out fine for both parties. Typically, VTB mortgages are held by the seller for one to five years. At the end of the term, the buyer must pay the full balance owing in cash or ask to renew the mortgage with the seller for an additional one to five years.
What happens if the buyer fails to keep the monthly payments on this second mortgage? This is not a likely scenario, since the buyer is able to keep payments on the $800,000 mortgage and the $200,000 mortgage payments are a relatively small amount. But if the buyer does default, the seller’s only solution is to exercise a “Power of Sale” outlined in the mortgage agreement (unless both parties can work it out beforehand).
Nevertheless, with financial institutions making it increasingly harder to borrow, VTB’s are proving to be a clean, viable and generally safe way of “bridging the money gap”.
Have a question?
Let me give you an unbiased, no-strings-attached answer. Simply send me an email, or call me: Rosalin Smith-Carr, at my direct line (416) 482-8330 ext. 3519
Do You Know What Your Listing Agent is Saying About Your Home?
The statements below in bold text are actual written comments made by listing agents on the published listings on the Toronto MLS.
While most are innocent enough, other comments may influence buyers and other agents to take advantage of you, or dismiss your listing altogether.
- Must Be Sold! Motivated Seller.
Aren’t all sellers supposed to be motivated?
- Bring an Offer, Seller Is Very Motivated.
Well, at least this seller is a bit more motivated that the previous one.
- Super Motivated Vendor!
Wow! Now we’re really making some serious motivational headway!
- Motivated Seller Would Like To See All Offers. Limited Showings Between 10am and 4pm Mon-Fri. No Sign on Property.
The seller will look at your offer, but only as a favour. And don’t come a-knockin’ after four (if you can even find the place!). - Motivated Seller! Will Entertain Reasonable Offers!
Some buyers like “testing the waters” before they make their best final offer. If we dismiss them as unreasonable, we may lose them. - Listing Agent Must Be Present. Property Has Been Gutted. A Gem! - Ready to Build!
Why is your agent making it so difficult to show your home by insisting he must be present? Is he afraid someone might walk away with an old piece of 2-by-4? - Previous Deal Fell Through.
How is this going to persuade a buyer to make an offer? They may conclude there’s something wrong with the home or the seller is difficult to deal with. - Reduced $30K! Motivated Vendor! Price Reduced For Immediate Sale — Act Quickly! Translation: Since the seller has reduced the price, put in a really low offer and see what happens!
The moral of this story is — the market has changed, and as a seller in today’s market you now need to be more involved in the selling process. Make sure you approve the text BEFORE your home gets listed.
This is no time to place one of your most valuable assets in the hands of an inexperienced agent.
More to come on this subject shortly.
Uncertain as to what to do in this market? I will be glad to give you a no-strings-attached answer. Simply send me an email, or call me Rosalin Smith-Carr, at my direct line (416) 482-8330 ext. 3519
Reflections on an Ever Changing Toronto Housing Market
The Toronto housing market has experienced an amazing change over the past few months. It goes without saying, it’s no longer “business as usual”.
But the change isn’t merely a shift from a sellers’ to a buyers’ market.
It’s a pervasive change, and all those involved in real estate - sellers, buyers, agents, mortgage brokers, builders, home-stagers - will have to adapt to the new real estate climate, or drown.
Bear in mind that 2007 was a banner year for home Toronto home sales. Fast-forward to September 2008, we see home sales dropped by 11 percent compared to September ‘07. The average price also declined six percent over the same period, from $420,182 down to $393,647.
Buyers are now definitely in the driver’s seat. But it’s taking some sellers far too long to figure this out.
In the “old days”, when buyers were plentiful and bidding wars were the norm, offers conditional on home inspections or on financing were simply not considered. Home prices were based solely on how badly a buyer wanted the home, and how much they were prepared to pay for it.
As a sobering sign of the times, bidding wars have virtually disappeared, along with the free-spending buyers.
So what does the future hold for the Toronto real estate market?
Is it all gloom and doom? I don’t think so. Back in 1910, Florida real estate lost 90 percent of its value. It was widely believed at the time that Florida real estate prices would never recover. Well, they did. And I believe that the Toronto market will recover, too.
Slowdowns and recessions come and go. And recovery will come, though probably not tomorrow.
In the meantime, we all must adapt to the changing economic times if we are not only to survive this new real estate climate, but thrive in it.
Old Attitudes May Prevent The Sale of Your Home in Today’s Market
Last week, I had a client in from the States. She’s moving back to Toronto, and looking for a home in the million-dollar range. Since she could only be here for the week-end, I phoned six real estate offices to set up Saturday-morning showings.
But all of my calls hit brick walls.
One agent required appointments be within a half-hour period, a challenge when showing several houses. Another said the home could only be shown during certain hours. Yet another request I made to show a home, advertised as “land value only” was refused because the property could only be viewed while the seller’s agent was present!
So, if you are selling your home now, why would your agent make the buyer’s agent jump through hoops to show your home?
When I finally succeeded in making a single appointment, both my client and I had to rearrange our entire schedules to accomodate the sellers.
Hello! Hello! — am I the only one who knows the real estate market has changed, and that sellers no longer have the luxury of dictating when their home can be shown? In order to get your home sold today, it must be made available all day, every day (including weekends), at short notice, and with or without your agent present.
You should be aware that a home for sale in today’s market has a lot more competition than it did even a few months ago. In some Toronto neighborhoods, listings have increased 50%!
Buyers - not sellers - are now in the driver’s seat, and if you want to sell your home, buyers must be accommodated as much as humanly possible.
If you’re not flexible in making your home available, it will be dropped from the list of homes to be shown.
More Homes for Sale and Fewer Buyers - The New Challenge for Home Sellers
True, you may be kicking yourself for not selling your home last year when the market was hot and sellers had the advantage. But selling in a buyers’ market need not be a traumatic experience.
Just keep in mind that with more homes on the market and fewer buyers, impulse buying is virtually non-existent, so home buyers again need to be “wowed”.
Once again though, this dramatic shift in the real estate market shouldn’t worry you. The key is to anticipate what to expect, and prepare accordingly.
First and foremost — you need to “Stand Out From the Crowd.”
Your home MUST appear impeccable. When buyers set out to look at homes, they take all their dreams and images of the perfect home with them. The closer your home matches those images, the more likely the buyers will reward you with a great offer to purchase.
Secondly — you’ll need powerful marketing that emphasizes online advertising.
Recent surveys show that women - responsible for 80 percent of all household purchasing decisions - are abandoning newspapers and embracing the internet for their home search, and are “using newspapers to line the canary cage.”
Read the rest of this article »
Top Seven Most Offensive Home Buyer Turn Offs and How to Avoid Them
Toronto’s housing market has made a 180-degree turn from a sellers’ to a buyers’ market. That means that buyers are now in the driver’s seat.
What worked in the buying frenzy pre-2008, won’t work now. This is especially true for you as a home seller. In order to attract buyers, you not only need to make your home stand out from the competition, but you also have to avoid turning off buyers.
The seven biggest buyer turn-offs:
Overstuffing. Having too much furniture, trinkets and mementos on display. Put most of them in storage. Buyers want to see your house, not your stuff!
Pet distractions. Some people are terrified of dogs (or even cats). So don’t turn off potential buyers by keeping Fido and Fluffy around during showings. Dog and cat odours are likewise a major turn-off, not to mention serious allergies that some buyers may have to them.
The jungle front or back gardens. The message you send to buyers is that the rest of your house is probably neglected too. No curb appeal means lower offers from buyers.
Bad paint or wallpaper choices. If your wall colours are anything but neutral, consider having them redone before starting your showings. Nothing turns a buyer off faster than seeing a colour or pattern which they consider to be “hideous”, splashed all over the walls.
The dirty bathroom. Anything less than a spic ‘n’ span washroom is unacceptable. Even a water stain in the sink can bring out the “ewww” response in buyers.
The mildewy basement. The first stop for many buyers is the basement - will yours pass the sniff test? What buyers DON’T want to smell is mold or mildew. If your basement has even a borderline odour, invest in a de-humidifier.
The overly ambitious asking price. In a buyers’ market, this alone will be enough to stop people from even looking at your home. Statistics show that the percentage of potential buyers will increase as much as seventy-five percent for every $20,000 to $40,000 you adjust your asking price, depending on the price range of homes in your neighbourhood.
Read Other Related Articles:
Single Biggest Mistake Home Sellers Make in a Buyers Market
How to Get the Most for Your Home in a Slowing Toronto Real Estate Market - Part One
How to Get the Most for Your Home in a Slowing Toronto Real Estate Market - Part Two
How to Get the Most for Your Home in a Slowing Toronto Real Estate Market - Part Three
Unsure as to what to do in this market? Simply send me an email, or call me Rosalin Smith-Carr, at my direct line (416) 482-8330 ext. 3519
Buyer Sues Real Estate Agent Because She Overpaid for Her Home
I overheard the following conversation between two agents at my office a few days ago: “Did you hear about the buyer in the States who is suing her agent because she claims she paid too much for her house?” To which the other colleague replied: “If this ever reaches Toronto, half the real estate agents will be in court!”
It was only a matter of time before something like this would happen. Fortunately for all concerned, home prices in Toronto are holding their own, so we are not likely to see a train wreck here like we are seeing with our neighbours to the south.
Read the rest of this article »