B UYER’S GUI DE
TABLE OF CONTENTS WHY WORK WITH DANIEL? ....................................................... 1 FINANCING, BUDGE TING AND MORTGAGES . . ............... 3 FIND YOUR HOME ........................................................................ 5 MAKING AN OFFER ..................................................................... 7 HOW TO WIN .................................................................................. 9 THE ROLE OF A L AWYER ......................................................... 11 INSURANCE .. ................................................................................. 13 COMPLE TION OF THE TRANSACTION ............................... 15
WHY WORK WITH DANIEL? 13+ YEARS IN THE BUSINESS
50+ RESIDENTIAL AND COMMERCIAL CONSTRUCTION PROJECTS MANAGED
100+ RESIDENTIAL AND COMMERCIAL PROPERTIES SOLD OR LEASED
I am honest, loyal and hardworking. My knowledge of both construction and real estate, coupled with my excellent communication skills make me uniquely qualified to engage with clients and agents in a professional and approachable manner. MY COMMITMENT TO YOU: Always be honest, direct and truthful.
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Guide you through the process step by step.
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Listen and make notes.
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Help define the appropriate target market.
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With you, establish the best asking price for your home.
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Employ a broad range of marketing tools.
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Work to obtain an offer and negotiate it on your terms.
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Guide you through all the paperwork and the queries along the way.
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Support you continuously throughout the process and beyond.
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FINANCING, BUDGETING AND MORTGAGES REQUEST YOUR CREDIT REPORT Credit reports show your credit history. Request a free copy of your report from Equifax and/or Trans Union Canada to be sure they are accurate and challenge any errors. www.consumer.equifax.ca www.transunion.ca www.creditkarma.ca Pre-Qualification Pre-qualification is the lender’s estimate of your borrowing power determined by your application, credit history, income and debts. Pre-Approval Pre-approval formalizes the estimate and concludes with a letter or certificate of commitment from a lender that confirms approval for a specified amount at specified terms. Total Down Payment This is the amount of money you have to invest in a down payment and closing costs. If you already own a home, your equity can be added to this total. You can determine an estimation by talking with your lawyer or financial advisor.
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FIND YOUR HOME CREATING A WISH LIST Home purchases require some compromise, which is why you must prioritize your needs and wants before beginning your search. Share your wish list and your price range with your salesperson so they can find properties that fulfill your requirements. Keep your Sage Real Estate Sales Representative advised of any changes to your requirements. Collab is Toronto Real Estate Board’s home search tool. Search the MLS® in real time and find out about new listings through instant notifications. Communicate with your Sage agent by making comments on a listing that get conveyed automatically. The “Right” House The goal is to feel comfortable directing your Sage agent to proceed with the purchase of the right property when you see it since timing is critical. There are several offer strategies that can be used. Sage Advice for Home Buyers
1. Location, location, location! Buy into a location that you predict will be equally attractive in the future when you may need to sell. 2. Check out the schools. The school district is important even if you don’t have children. 3. Energy efficient houses save thousands of dollars. If the house isn’t energy efficient now, make certain it becomes so once it’s yours. 4. Trial-run your commute. Drive, walk or use “the better way” to get to work during peak periods to see if the commute is bearable. 5. Buy a fixer-upper to increase your equity. Your Sage Real Estate Sales Representative can tell you which renovations reap the greatest returns. 6. Pay off debts and don’t incur more! Lenders are more forgiving to borrowers who have recently been making regular on-time payments.
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MAKING AN OFFER Here are the most common elements of an offer: Price Price is determined based on comparable listings and sales, and current market conditions. Mortgage Condition This stipulates that you will buy the home subject to obtaining a mortgage in a specific time frame. Home Inspections Condition A thorough inspection of the property protects you against structural or material problems. The buyer is responsible for hiring and paying the inspector. Deposit The deposit secures the contract until the closing and will be applied to the down payment and/or closing costs. Closing Date Date when ownership changes hands. Flexibility can give a buyer a big advantage and can occasionally allow you to negotiate more favourable terms. Sign Back There is often a fair amount of negotiation before both parties are satisfied. Your agent’s experience and market knowledge will be invaluable during negotiations. Status Certificate (Condos) A status certificate tells you the overall health of the condo corporation. Your lawyer will typically need a day to review the certificate and will provide you with a written summary of his/her findings.
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HOW TO WIN Since only one buyer gets the house, stack the cards in your favour by: 1. Meeting the sellers beforehand to make a good impression.
2. Knowing the market so that you are in a position to bid high without overpaying. 3. Bidding high during the first round. You may not get an opportunity to improve your offer. 4. Offering a large deposit. 5. Accommodating the seller’s requested possession date or offering a seller-flexible possession date. 6. Asking for few, if any, conditions. 7. Proving your ability to close the transaction. 8. Writing a note about why you want the house. 9. Keeping yourself available when offers are being presented for last-minute negotiations. 10. Having faith and trust in your agent so you can make the most aggressive choice based on their insight. Bully Offers (Pre-Emptive Offers) Bully Offers must be attractive to sellers in terms and price. Buyers making unattractive Bully Offers can easily offend sellers, disadvantaging their subsequent offer on offer night. A good agent can review the appropriateness of Bully Offer submissions in each situation to determine if it is a good idea.
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THE ROLE OF A LAWYER The buying process involves many legalities, so be sure to use a lawyer with real estate experience. Although most transactions close without any problems, an experienced real estate lawyer is invaluable if difficulties arise. Toronto lawyers typically charge a flat fee for home buyers. Disbursements will be in addition to the quoted fee. Your lawyer will be able to provide you with exact disbursement expenses on your transaction. WHAT DOES A LAWYER DO? Before the offer: •
Review offer clauses to help buyers understand the legal aspects of the offer.
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Detail exact closing costs. Search title, taxes, utilities, building and zoning or order title insurance. Execution search. Mortgage and other financing arrangements. Verify insurance policy documentation. Calculate land transfer tax. Request resolution of any problems found in searches.
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Address Provincial Sales Tax issues. Prepare mortgage documentation, statement of adjustments, and documentation for land registry. Accept closing funds. Review & have buyer sign necessary documentation.
Closing day: • • • • • • •
Exchange mortgage documentation for money. Meet with the seller’s lawyer. Complete final searches. Transfer funds. Register deed and mortgage in buyer’s name. Pay land transfer tax. Obtain keys from the seller’s lawyer.
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The lawyer will send you a reporting letter certifying your title together with the deed, survey, and all other related documentation.
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INSURANCE The insurance requirements associated with home ownership can be complex. This section provides a brief overview of the various types of home-related insurance. Homeowner’s Insurance Protects your home against hazards, as well as liability coverage against injury to visitors. Policies can also protect the home’s contents. Your lender requires homeowner’s insurance in an amount at least equal to your mortgage. Mortgage Life Insurance The amount of insurance is equal to the principal amount of the mortgage. In the event of the mortgagor’s death, the balance of the mortgage is paid off. Mortgage Insurance Canada Mortgage and Housing Corporation (CMHC) insurance protects lenders of high ratio mortgages against default. Title Insurance Eliminates the risks of defective property title. A title claim could be very serious. You would have to pay all defense costs, and a claim could result in complete loss of equity if defense were unsuccessful. We encourage purchasers to buy title insurance because of the cost savings when hiring a lawyer. With title insurance, your lawyer can skip come of the searches. As municipalities increase their search fees, title insurance becomes even more cost-effective.
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COMPLETION OF THE TRANSACTION Shortly before closing, your lender will forward all loan documentation to your lawyer. You will be responsible for bringing the balance of your down payment and closing costs in the form of a certified cheque.
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CLIENT LOVE “Right from the start, Daniel was dedicated to finding us a great home in the neighbourhood we wanted within our price range. He was aggressive in his search and proactive in teaching us about the process. Always honest and forthright, we strongly recommend working with Daniel and plan to do so again.” — Robert & Natalie S. “Daniel is a true professional. His knowledge blends building/renovations with real estate and delivers realistic market expectations for both selling and buying. Daniel sold my house over asking and produced a 35% price increase in less than a year of ownership. Though my house was not conventional and had many challenges, Daniel was able to help stage and market my house brilliantly. Thank you Daniel and I look forward to working with you again!” — Marc A.
SAGE REAL ESTATE LTD., BROKERAGE
YOUR REAL ESTATE EXPERIENCE SHOULDN’T BE GOOD. IT SHOULD BE GREAT.
DANIEL LIPTON Broker 416.464.3806 mail@DanielLipton.ca DanielLipton.ca
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