Another REALTOR® Says They’ll Buy My House. Should I Be Wary?

Wary might not be the best word, but you do need to make sure you understand the details of the offer. This type of offer is a guaranteed sales agreement, and while there is nothing illegal or wrong with a real estate company offering this kind of arrangement, it is rarely the best option for consumers.

In a guaranteed sales agreement, a real estate brokerage agrees to buy a piece of real estate from a seller at a previously agreed upon price, if it hasn’t sold to someone else before a certain date. Only real estate brokerages can offer these agreements, not individual real estate professionals.

What sellers need to keep in mind in these arrangements is that the real estate brokerage wants to minimize its risk.

For example, it’s rare that a guaranteed purchase price will be based on the property’s listing price or the property’s market value. In most cases, the brokerage calculates the guaranteed purchase price using a formula where legal fees, carrying cost, and commission on the resale are subtracted from the purchase price. This minimizes the brokerage’s risk, but it can also greatly reduce how much that seller receives for their home.

Brokerages that offer guaranteed sales programs are required to have policies for those programs. Those policies should include how the brokerage sets the guaranteed sales price and who is in control of the property’s listing price during the listing period; it may not be the seller. It’s not unusual for a guaranteed sales agreement to include a clause that requires a seller to lower their listing price during the term of the listing. Remember, your real estate brokerage wants to minimize its risk. It prefers to sell your property to a buyer rather than to use the guaranteed sales agreement, and lowering the listing price can sometimes help that happen.

First-time Home Buyer Incentive Program to Boost Affordability of Home Ownership

Starting September 2nd, first-time buyers (and previous homeowners impacted by marital breakdowns) can apply for a new government incentive. The aim of the program is to help make home ownership more affordable by reducing monthly mortgage costs.

Here are a few highlights of the incentive program:

Down payment:

•Buyers must have a minimum of 5% down (from their own resources, including borrowing from their RRSPs)
•Government will top up down payment another 5% (for resale homes) or 10% (for new construction) as shared equity mortgage (can be paid back at any time as a lump sum or must be paid back within 25 years). Although no interest is charged, the amount to be repaid will appreciate (or depreciate) with the total value of your home. An appraisal may be required at time of payout to establish value.

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Red Flags for Buying a House

If every transaction and home was squeaky clean, then we really wouldn’t need lawyers, home inspectors, REALTOR®’s and other professionals to assist and protect us throughout the process. There are hundreds of things that can be problems in a house or with the deal itself. Below are a few red flags that should pique your attention when buying a home..

PLEASE NOTE: These items are only red flags. They are not necessarily problems in their own right, but should trigger a little more research.

Current Owner Assumed Their Mortgage – Assumable mortgages have been an easy way for unscrupulous people to purchase homes without using a bank.

Low Down Assumable Offered – The terms of the mortgage may be horrible, or the house may be over priced. • Stained Basement Items – Water stains on any item in the basement should be questioned.

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How to Maximize Your Home’s Curb Appeal

Now that summer is finally here and we spend more time outdoors, our attention turns more toward keeping up our home exterior and improving our landscaping. Here are some ways you can add to the perceived value of your house without breaking the bank on a completely new landscape:

  • Wash the windows and siding on the front of the house.
  • Paint window and door frames on the front of the house if they’re outdated.
  • Clean and straighten your porch light.
  • Clean your eave troughs, and make sure the downspouts are straight.
  • Clean up tree and shrub wells by removing debris and edging a clean line around them.
  • Add fresh mulch around the bases of trees and shrubs.
  • Add fresh black soil and light mulch to the top of gardens.
  • Prune and trim trees, shrubs and perennials for a clean kept look.
  • Edge out the front of your lawn to create a clean line.
  • Perform regular lawn maintenance – mowing, weeds and fertilizing.
  • Level and clean all of your walkway stones.
  • Add some solar lights for night time visitors.
  • Make sure your address is clearly visible from the street!