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TO BUY OR SELL FIRST? 5 QUESTIONS TO ASK WHEN HIRING A REAL ESTATE PROFESSIONAL OPEN HOUSE SAFETY: 3 TIPS FOR PROTECTING YOURSELF AND YOUR HOME TOP 10 Buying and Selling Mistakes BABY EDITION

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Page 1: 3 TIPS FOR PROTECTING YOURSELF AND YOUR HOME TOP 10 · 2015-12-15 · 3 tips for protecting yourself and your home Before the open house, have a conversation with your real estate

TO BUY OR SELL FIRST?

5 QUESTIONS TO ASK WHEN HIRING

A REAL ESTATE PROFESSIONAL

OPEN HOUSE SAFETY:

3 TIPS FOR PROTECTING

YOURSELF AND YOUR HOME

TOP 10Buying and

SellingMistakes

BABY EDITION

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Do you have any comments or inquiries about the reconnect newsletter?Please send them to: [email protected]

Real Estate Council Of Ontario3300 Bloor Street WestSuite 1200, West TowerToronto, Ontario M8X 2X2

Tel: 416-207-4800Toll-Free: 1-800-245-6910Fax: 416-207-4820

@RECOhelps

/RECOhelps

Disclaimer: While RECO makes every effort to ensure that the information in this publication is current and accurate, RECO does not warrant or guarantee that it will be free of errors. The information contained in this publication is not intended to cover all situations. It is general information only and users/readers are encouraged to seek their own independent advice for particular fact situations.

Providing objective adviceRECO works to protect consumers and enforce the rules that real estate professionals in Ontario must follow. That means we can offer buyers and sellers impartial advice on how to protect themselves, and the right questions to ask during the real estate transaction.This newsletter is a great place to start. Inside, you’ll find key information about buying and selling pitfalls, whether to buy first or sell first, how to choose a representative, and more.

Three pillars of protectionAll brokers and salespersons in Ontario are registered with and regulated by RECO. That’s why working with a real estate professional provides buyers and sellers with three pillars of protection.

KnowledgeReal estate professionals must complete courses before they can enter the real estate sector. And once they are in the profession, they complete additional courses every two years to keep their knowledge up-to-date and their skills sharp.

Professional standardsBrokers and salespersons are required to uphold professional standards that emphasize treating anyone involved in a transaction with fairness, honesty and integrity, and following rules and regulations that are there to protect consumers. In the rare instance that something goes wrong and you want to complain about your representative or the brokerage, RECO will investigate the complaint and take steps to hold the real estate professional accountable for their actions.

InsuranceDeposit insurance provides you with peace of mind knowing that your hard-earned payment will be held in trust and insured against loss, insolvency or misappropriation by a brokerage.

Information is powerWhen it comes to real estate, informed consumers have more positive experiences. Understanding the process and asking the right questions can make a big difference throughout the buying and selling process. I encourage you to keep reading to learn more.You can also find more buying and selling tips on RECO’s website (www. reco. on. ca) and on our Facebook page (www.facebook.com/RECOHelps). RECO’s “Ask Joe” column in the Toronto Star is also a great resource. You can find it in the Saturday “Homes” section.

Looking for a larger home for your growing family? RECO is here to help.Congratulations on the new addition to your family! Welcoming a new child into the world is one of the great joys in life, but a growing family often requires a larger living space.

Whether you're buying your first home or you're looking to upgrade from your current home, there's no shortage of information out there. Much of it focuses on market trends and how to get the best price, but you also need information about your rights and responsibilities as a buyer or seller. How do you ensure you are protected?

Fortunately, the Real Estate Council of Ontario (RECO) is here to help.

Message from the CEOBy Kate Murray

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OPENHOUSESAFETY:

When it comes to open house security, you won’t find a more passionate advocate than Brenda Phelan. After losing thousands of dollars in valuables, she’s determined to prevent other people from going through what she went through.

“The thief took valuables and personal documents, but the worst part was the feeling of being victimized,” says Phelan. “I hope nobody else has to go through what we went through.”

RECO Registrar Joseph Richer says: “Holding an open house can be a great way to attract potential buyers, but it’s important to remember that you’re allowing strangers into your home. A lot of effort goes into making a property look good, but security is just as important.”

3 tips for protecting yourself and your home

Before the open house, have a conversation with your real estate representative about the potential risks. Here are some precautions to consider:Protect your valuables

• Portable electronics• Jewelry and other valuables• Passport and travel documents• Remove personal photos from walls• Receipts, bills

and personal information

Thieves know to look in closets and sock drawers, so the items should be placed somewhere secure, like a safe, or offsite at a friend’s home.

Keep track of who enters the property by having your real estate professional ask each visitor to show identification and complete a registration form.

Ask your representative to limit the number of visitors at one time, or to bring an assistant to ensure that all visitors are escorted as they tour the property.

Fortunately, a few simple steps can go a long way. Most importantly, communicate early and openly with your registered broker or salesperson about how the open house will work.

“It’s important to remember that it’s your home, and you set the rules for visitors,” says Richer.

Discuss these and other precautions you might want to take with your registered broker or salesperson, who may also have additional ideas on how to protect yourself.

“People focus so much on staging their home, but safety and security is much more important,” says Phelan. “It’s a lesson I had to learn the hard way.”

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With that in mind, here are the most common buying and selling pitfalls, and tips on how to avoid them:

HIRING THE FIRST SALESPERSON YOU MEETWhile you may decide to work with the first real estate professional you meet, it's a good idea to meet with a few different representatives before settling on one. Make sure you feel comfortable with them and their approach to the process. Also, be sure to get references and contact them to learn about their experience with the salesperson. Before signing a representation agreement, it’s a good idea to use the 'Real Estate Professional Search' tool on RECO's website (www.reco.on.ca) to check the status of their registration and see whether they have been subject to disciplinary action.

NOT MAKING YOUR EXPECTATIONS CLEAR WITH YOUR REAL ESTATE PROFESSIONALWorking with a real estate professional is a partnership, so communication is the key to success. It’s important to have a mutual understanding about what you’re looking for in a home, what elements you would consider to be ‘deal-breakers’, and what services the brokerage will be responsible for. Make sure you discuss what services you expect them to provide, and get it in writing.

FAILING TO READ AND UNDERSTAND FORMS AND CONTRACTSIt can be tempting to speed the process along by signing forms that you haven’t read. After all, nobody really likes reading the fine print. But taking the time to understand what you’re signing can avoid a lot of problems later on. For example, you don’t want to find out that you’re on the hook for a six month listing agreement to sell your home if you only want your house on the market for three months. Make sure all the blanks on the form are filled in before you sign it, and make sure you get a copy of whatever you sign.

ALLOWING EMOTIONS TO OVERTAKE COMMON SENSEWhen you fall in love with a property, it can be hard to walk away. Stick to your budget and be aware of the risks of foregoing a home inspection for a chance to win a bidding war. Making your offer conditional on a home inspection is a smart decision because a qualified home inspector, engineer or contractor can identify underlying problems with a home’s major systems, like heating and electrical. Skipping an inspection is a gamble because you’ll leave yourself vulnerable to a much more costly problem later on.

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It’s worth the effort to learn about the home buying and selling process; doing so could save you time, stress and money. One way to protect yourself is to learn from the mistakes of others.

“RECO is responsible for protecting home buyers and sellers, and we’ve seen too many Ontarians fall victim to easily avoidable buy-ing and selling hazards,” says RECO’s Regis-trar Joseph Richer. “Being mindful of these issues can help the process go a lot smoother.”

MOST COMMONBUYING AND SELLINGMISTAKES

WATCH OUT

FOR THE

TOP 10

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ASSUMING EVERYTHING IS INCLUDEDDon’t assume that the stove, washing machine and dryer or other items are included with the sale. The seller may want to take the dishwasher with them, and the hot water tank might be under a rental contract that you’ll be required to take over. The best way to protect against any surprises is to detail all the items (known as chattels) you expect to be included in your written offer. In the offer, you can also include a clause requiring the seller to pay out any outstanding leases on the home’s major systems.

FORGETTING ABOUT WHAT’S WITHIN THE WALLSThe hardwood floors, stained glass windows and walk-in closet are appealing features, but the insulation, wiring and plumbing are just as important when you’re evaluating a property. Ask your real estate professional to look into the age of the home’s systems and if there have been any upgrades. If extensive renovations have been done, your real estate professional can also help determine if the appropriate permits were issued.

FORGETTING ABOUT WHAT’S OUTSIDE THE WALLSWhen you buy a home, you’re also buying a place in a community. Visit the neighbourhood at different times of the day to see if the surroundings fit your lifestyle. Is it too noisy, or not vibrant enough? The only way to find out is to spend some time exploring the area, talking to neighbours and researching the locations of amenities like grocery stores and banks.

NOT DOING YOUR RESEARCHIf you’re concerned about buying a home with a troubled past, a simple Internet search for the address can go a long way. This is also something you can ask the neighbours about.

MAKING VERBAL AGREEMENTSVerbal agreements aren’t a problem, until they’re a problem. Putting everything in writing forces both parties to be clear about their expectations and provides a record that can prevent disputes later on.

UNDERESTIMATING CLOSING COSTSThe price paid for a home is just one of many costs associated with the purchase. Related costs, such as land transfer taxes, title insurance and a home inspection, can really add up and take an unexpected chunk out of your budget. There are also the final touches – like a fresh coat of paint, some window coverings or a new appliance – that you may want to do to make the place feel like your home.

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10While these tips will certainly help, the most important advice is to work with a registered real estate professional.

“Registered brokers and salespersons provide a great deal of knowledge and expertise about the buying and selling process, along with specific knowledge about neighbourhoods and local issues,” says Richer. “They can also provide crucial help in avoiding these hazards.”

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What is your experience? Experience is about more than how many years someone has been in business. Take the time to learn about the types of properties they typically work with, which cities or areas they work in, and how many homes of the type you are looking for that they have helped buy or sell.

What is your approach to the buying or selling process? For the buying side of things, how will the representative search for suitable properties and what is their approach to negotiations? When selling, how will your home be marketed to help attract the right prospective buyers? By understanding their approach, you’ll know what to expect and will be able to determine which representative is aligned with your preferences.

What services will be included? Discuss your particular needs and expectations to ensure they are able to provide the services you want. For example, when selling, will the representative have professional photos taken of your home or prepare multimedia promotional materials? Will they host open houses? What about advertising? Understanding exactly what services will be provided, and later documenting them in your written contract, will help avoid misunderstandings later on.

to ask when hiring a real estate professional

With nearly 70,000 real estate professionals in Ontario, how do you pick the one that is right for you?

“It’s always a good idea to meet with at least a few different real estate professionals before selecting who you will work with,” says RECO Registrar Joseph Richer. “Consider asking friends or family to recommend a broker or salesperson.”

When you have your shortlist of representatives ready, consider asking these questions to find out which representative is right for you.

What are the commissions or fees that I will need to pay? Commissions and fees can vary between brokerages and for the services provided, so be sure to understand what will be provided, and what it will cost. Keep in mind that, as with most things, the cheapest deal is not necessarily the best one.

Do you have references? As with most job interviews, getting in touch with references is an important step before hiring someone. Were past clients pleased with their experience? Was the representative responsive and easy to get in touch with? Would they recommend them to others?

Buying and selling a home is a major decision, so it’s important to take the time to find the right representative for you.

As the final step before committing to a representative, use the ‘real estate professional search’ feature at www.reco.on.ca to confirm they are registered with RECO.

questions

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to ask when hiring a real estate professional

Buying first can make the house hunting experience more enjoyable. Without a closing date looming on your existing home, you’ll have time to wait until the right home comes up for sale. It can also be less stressful knowing that if your offer is unsuccessful, you can wait for the next opportunity to come up.

The downside to buying first is if you are unable to sell your home fast enough, you will find yourself owning two homes at once. The result could mean paying two mortgages at the same time, not to mention all the other costs of home ownership. Additionally, you may have trouble securing a mortgage for the new home.

As a buyer with an existing home to sell, you can protect yourself by making your offer conditional on the sale of your current home. That means if you’re unable to sell within a specified period of time, you’re able to back out of the transaction. However, it’s worth pointing out that this condition will likely make your offer less attractive to the seller, especially if you’re buying in an area with a hot market.

The biggest benefit of selling first, aside from removing the risk of owning two homes at once, is you’ll know how much money the sale brought in, which will help determine how much you can afford to pay for the next place.

As helpful as that is to know, the challenge is that you’ll find yourself in a race against the clock, with your closing date looming and potentially no home to move into when you move out of your current one. If you’re not careful, you may end up rushing the buying process and settling for a home that isn’t ideal for you, or paying more than you planned because you feel pressured.

HAVE A CONTINGENCY PLAN

Regardless of which route you choose, it’s a smart idea to have a back-up plan in place in case you are left with two homes, or no home, for a period of time.

If the sale of your home closes first, you might consider a short-term rental or moving in with family or friends. This could be better than settling for a less-than-ideal home because you are rushed.

If the purchase of your new home closes first, you might need something called “bridge financing” to cover the down payment and other closing costs until the sale of your current home closes.

“No matter which option you choose, it’s important to remember that a registered real estate professional is knowledgeable about market conditions and will offer advice and solutions to guide you through the process,” says Richer. “They will be able to discuss various scenarios to make sure you have realistic expectations about what may happen and help you come up with a plan that works for you and your growing family.”

Your family is growing and you need a home that can grow with you. So, as you start thinking about your impending move, you’re left with the lingering question; “should I buy first or sell first?”

“While there is no ‘right’ answer, it’s important to know the potential pros and cons of both options,” says RECO Registrar Joseph Richer. “Regardless of whether you buy first or sell first, it’s a good idea to have a contingency plan in case your closing dates don’t align, leaving you with two homes, or no home, for a period of time.”

Speaking with your registered real estate professional before starting the buying or selling process can help you decide which route is better suited to your family’s needs.

TO BUY OR SELL FIRST?

BUY FIRST SELL FIRST

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The tips below have been provided by Consumer Protection Ontario, a consumer awareness program from the government of Ontario and partners like RECO.

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In Ontario, any agreement with a contractor worth more than $50 must be in writing. If the contract is signed in your home, you are also entitled to a 10 calendar-day cooling off period. Within these 10 days, you may cancel your contract without having to provide a reason or pay a cancellation fee.

Make sure your contract includes:• The contractor’s name, address and contact information.

• A thorough description of the project, including the materials to be used.

• A copy of the written estimate.

• A clear description of any warranties.

• The total cost and payment schedule, including the deposit amount. We recommend keeping down payments at not more than 10 per cent of the total cost of the contract.

• A work schedule, including start and completion dates.

Take the time to fully read and understand your contract.Learn more about your rights at Ontario.ca/HomeRenos.

Looking forward to the pitter-patter of little feet?

A growing family often means making upgrades to your house.

Whether you’re considering a major renovation, like building a new playroom, or smaller projects like childproofing stairs and doorways, signing a written contract can help protect your family and ensure a worry-free project at a busy time in your life.

What to expect when you’re expecting home repairs