Something that can make or break a deal after its done is a condos status certificate. It is a document that is paid for by the condo owner at the buyers request, that will give the buyer a snapshot of what the financials and condition of the condo is in. This is a document that has a lot of information and even some lawyers do not know exactly how to dissect it. I have a lot of stories where the buyers lawyers are mistaken and read the information wrong. Here are a few things that buyers are looking for that are the most important.
1. Reserve Fund: There is not a right and wrong answer as to how much there should be. This number all depends on how old the property is. It does take some time to build this fund, but you want to make sure there is a hefty amount and no deficit. This is the fund that is used if there is an emergency in the building.
2. Lawsuits: There are a lot of liability and people that live in a building including tenants. There are also a lot of contracts that go in and out. This is a perfect brew for a lawsuit. This is where you will find out if there are any. If there are this is where you determine if you want to be a part of it.
3. Condo Fees: Never mind what is stated on the listing on mls. This will tell you how much the fees are and how much they are going up and the end of the year. If they go up, you could negotiate for a part of this to be covered by the owner for a year or two.
4. Special Assessment: Sometimes, special projects or renovation must be done, and there is an assessment that will ad to the condo fees for a year to five. Make sure that there is nothing major on the horizon. If there is, no worries, ask the seller to cover some of the cost going forward. Another thing to keep in mind, sometimes a condo owner pays this in full for a year. Make sure that there is no charges pending after the end of the year. If you don’t you could see fees go up at the end of the year.
5. Parking Spots & Lockers: Make sure that what was in the listing corresponds to the status certificate. Sometimes, you may find that there is only one spot or no locker and they are just renting. Make sure you are the owner. This could change the deal.
There are a lot more things involved here that is why you must get an experienced condo Real Estate lawyer to look over this carefully.
When Your buying a house the first thing you need to do is assemble your team. Whether that be from a referral from your agent or people that you already deal with, you must do this task.
The problem is when one of those team members are a weak link. Whether it be your Real Estate Agent, your mortgage broker (bank) or Lawyer, or inspections.
The reason in many deals your bank or broker will kill a deal is that typically when you have a 5 day clause to get your mortgage approved by an underwriter, they want more time. If the other party will not give you that time, the deal is dead. This year I’ve had two deals killed by banks. They needed more time and the seller was not willing to do this, and neither would I.
A good mortgage broker or banks will first do a pre-approval to determine how much you can afford. Now this doesn’t mean that you are approved. Its just to get an idea. The next thing that needs to happen is that they need to collect all of your NOA, pay stubs, job letters and etc. The underwriter will ask for this. You also want to make sure they have this so you know exactly what you make and they can know what you can afford. You wouldn’t believe how many surprises comes up after. You might only make a certain amount in a bonus etc etc.
Once they have all of that, and your offer gets accepted, your deal should be looked at on the second day. Give them a day for leniency. By the third day you should know if you are approved or not. Anymore time than that, and it is too long. If they are too busy go to somebody else. They will kill your deal. Banks are notorious for this, but I’ve seen it happen with brokers as well.
Get a good broker who can do one credit check, and if one lender is taking too long, they can call the other one and they already have the credit check and do not have to do it again. If you go to a bank and do this, you are stuck there. If you move they have to do another check and this could lower your credit score further.
Its seems as though everyday & every year around this time of year, there is a report that the prices of Real Estate in Canada will go down significantly. Last week there were reports from the money sector of the government that they think that Real Estate is over inflated by 30%.
Government: It’s funny that they thinks that because inevitably it is the government that controls the prices of Real Estate in Canada. They are the ones that have CMHC, and control their lending policies. They are the ones that control the interest rates and hold them low for so many years. They are the ones that control the policies regarding foreign investment in our country. Finally they are the ones that control the big banks.
Something has Changed: The oil prices have plummeted this final quarter of the year. The Canadian dollar has plummeted as well. The two factors which one is being championed by the average consumer, will inevitably drive the economy down, hence the dollar going down. The last time we saw the oil and dollar amount go down this much was in 2008, when the financial crisis exploded.
What Goes Up, Must come Down: While most of the country has slowed down, the major drivers of the economy have stayed relatively high. The last to dip a bit is Vancouver & Toronto. Alberta has slowed, and this is inevitable because the area is so reliant on the oil industry now.
Early Predictions for 2015: The interest rate will jump to 1% higher by the end of 2015, going up a .25 each quarter. The government will introduce tougher approvals for CMHC. The government will introduce new policies to slow the growth of Real Estate and bring the prices down. The prices will eventually slow down but not in Toronto & Vancouver, there is too much demand in those areas, but the suburbs will go down significantly in all of those areas.
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Real Estate negotiations are a lot like playing poker. The more chips you have the more power you have in the game. You can bluff and you can go all in whenever you want.
The Same thing applies to negotiating in anything, but in particular in Real Estate. When you are selling property you want to be a bully. The reason is that you need to make as much money as possible. Once you stop becoming the bully, you become the victim of someone bullying you!
Its sounds very cut throat and it is. Agents are trained killers and the media fuels the fire to sellers to get the most for their house and how to. Agents are trained to use anything to get the most for their clients and not care about what they are leaving behind. Since the moment I joined the real estate profession, I have been bombarded with courses and knowledge on how to win at negotiations, how to get the most for my client (legally) and how essentially kill the other people coming in the door with a smile!
When selling a house there are a few techniques to use to be a bully that should be used in all negotiations.
1. Pricing: Make sure you are not over priced. If you are overpriced you cannot bully anything. Your house is just over priced stale wood. If you price it under the market a bit you can actually spur a bidding war and that gets into whole new series of bullying that I will cover another time.
2. Once you have the correct price, you have to stick to your guns. So in order to do this you have to be willing to say to a buyer “NO”. If you have the correct price and the agent is doing his job you will be able to say no because you can just take the next offer coming in. If pricing is off and no marketing has been done and it has no movement, you will have to succumb to what the buyer is trying to do to you in negotiations.
3. Do not commit. If you are selling a house, do not go buy another house. If you have and your need is to sell the house ASAP you will need to get the best offer you can and will have to lower your price.
4. Do Not FALL IN LOVE with the house: If you are buying a house, do no fall in love with it. Look at it as a piece of Real Estate, wood and brick. Chances are that there are a number of houses that are very similar on the market. A builder usually builds the same model in a sub division. Truthfully there are a lot of stages that need to pass before a deal becomes official and deals can always not close at closing. Also take pictures and if it doesn’t work out, you can renovate a house to look similar.
5. Walking Away: On both ends of the transaction, you don’t want to not negotiate a little bit but be able to walk away at a moments notice you don’t like something that is going in a sour direction. Be reasonable, transactions do not typically go smoothly but watch out if the other party is over stepping their boundary.