Tag: Ottawa real estate

Buying without a Realtor

Posted on by teamrealty

Buying a house is a big investment, so it is natural to look for ways to save money wherever possible. Some buyers and sellers may assume that they can stretch their budget further if they handle the entire purchase themselves. Doing this may seem like a good way save you money, but can also lead to problems and higher costs in the long run.  As a buyer, hiring a Realtor typically does not cost you a cent; your Real estate agent will be paid from the commission on the sale of the home. Hiring a professional who is on your side to ensure that all your bases are covered only makes sense.

Can you believe that there was a time when real estate brokerages represented only the seller?  It’s true! Buyers had to make one of the most important financial decisions of their lives without a representative truly on their side.

Thankfully, today this is no longer the case. Most buyers choose to be represented by a buyer’s agent who, acts as an advocate, and is responsible for protecting your best interests.  As a home buyer, your real estate representative can provide you with essential information to help you make an informed decision.

As a home buyer, here are a just a few things your real estate representative will do to help you find your dream home:

  • Leverage their familiarity with the neighbourhood and provide you with information about local real estate values, taxes, utility costs, services and amenities.
  • Pinpoint homes that fit your needs and dismiss those that do not, thereby saving you time.
  • Identify the potential problem areas in a home and guide you away from “lemons”.
  • Arrange property showings and accompany you, or preview the properties on your behalf.  Previews have become even easier by using the latest technology your realtor can give you a “live” tour even if you are miles away!
  • Research properties to identify any problems or issues to help you make an informed decision prior to making an offer to purchase.
  • Advise you how to structure your offer.  This is particularly important in a Seller’s market, which we are currently trending towards in Ottawa real estate.  If you end up competing in offers, you’ll be glad you’ve hired a real estate representative, thereby giving you the best chance of your offer being accepted.
  • Present the offer to the Seller’s Agent and the Seller, and negotiate on your behalf.
  • Assist you in securing financing and advise you of your legal options.
  • Recommend appraisal, home inspection and contracting services, as appropriate.

When buying a home, you are entering into a legal arrangement, and having no realtor involved at all means that you are only working off of your own experience and knowledge, and that of the seller. In a purchase as large and complex as a home, there are many things that can be missed or glossed over, especially when the people handling the transaction do not have much experience. It can be easy to forget things like arranging a home inspection or a final walk through to ensure a smooth closing.  If mistakes are made, it can lead to hefty costs down the road.

When you hire a Buyer’s agent, they will fully represent you throughout the real estate transaction.  We hope we’ve convinced you to choose a realtor you like and trust for your next real estate transaction!

 

 

What Canadian home buyers need to know NOW about the upcoming changes to Mortgage rules

Posted on by teamrealty

What home buyers need to know before 2018

As of January 1, 2018, Canadian homebuyers will have to meet stiffer requirements in order to qualify for a mortgage with a federally regulated mortgage lender.

Why are the Mortgage Rules changing?

  • As Canada’s financial “watchdog” OSFI believes these new rules will decrease the risks for Canadian households with significant debt if and when the interest rates rise.

Are you a Confused by the upcoming changes to the mortgage rules? Don’t panic.

Our very own Kent Browne, Owner and Broker at Royal LePage Team Realty, sat down with Mortgage Broker York Polk  of Mortgage Alliance to discuss all these changes in order to help you, our clients, understand how they may affect you.

Here are the highlights:

Changes that came into effect November 30, 2016 and still apply:

  • All buyers having a down payment of less than 20% are required to pass a “Stress Test”* to obtain a mortgage.
  • To pass the stress test, buyers with a payment of less than 20% need to qualify at a higher rate (4.64% at the time) even though the contract rate is much lower (2.3% at the time).

Changes starting January 1, 2018

  • When OSFI’s new rules take effect – even those who have down payments of 20% or higher and do not require mortgage insurance – will also have to undergo a “Stress Test”.   Home buyers will need to qualify for mortgages that are two percentage points higher than the rates at which they are applying.
  • The qualifying rate for the “Stress Test” would be the greater of either 2% higher than the contract rate or the Bank of Canada rate (currently at 4.99%).

The contract rate remains unaffected.

If you’re a prospective home buyer concerned about how the new mortgage rules will impact your buying power, here are a few tips:

  • If you are thinking about buying a home, seriously consider buying now. Any firm agreement of purchase and sale on a specific property that has been completed and signed off on will follow the old rules, regardless of the closing date.  Note, if you need to make any changes to the agreement after January 1st, you will need to qualify within the new rules.
  • Conventional mortgages can be stretched over up to 30 years and by doing so, it will be easier to qualify at this time.
  • While home buyers should always get pre-approved, this will not protect you from needing to qualify under the new rules if you are unable to purchase a property before 2018.

Contact your Realtor  and a professional mortgage broker now to ensure that there are no surprises when it comes time to buy a home.  Questions? We’d love to help! Contact us info@teamrealty.ca.

* Stress testing is a best practice risk management tool. Stress tests are not predictions or forecasts­, they involve searching out extreme “what if” scenarios that have a very remote chance of happening, and planning for them.

Diligent stress testing is an essential part of CMHC’s risk management program and allows CMHC to evaluate its capital levels against multiple scenarios. Effectively, they confirm if CMHC’s capital holdings are sufficient for even the most extreme scenarios.

Stress tests are used by financial institutions to gauge how their business would fare under extremely difficult conditions. They provide a formalized mechanism for companies to look at risks and to assess the impact of the different extreme events. This information is from the CMCH article found here.