Found the home of your dreams?

“Your home sold or I buy it”

Save money and be green with these

energy saving tips

FALL EDITION 2014

There is no shortage of information on the Internet about buying or selling a home, but finding local and objective advice that applies to you can be a real challenge.

The Real Estate Council of Ontario (RECO) is here to help. As Ontario’s real estate regulator, we protect consumers by ensuring that real estate professionals follow the rules and regulations that govern the sector. And, we provide consumers with objective information about the buying and selling process.

All sales professionals registered with RECO have met the standards needed to enter the profession. They are required to take continuing education courses to keep up with the latest developments and they participate in the consumer deposit protection insurance program. This means they are well equipped to help you with their knowledge and guidance during a real estate transaction.

RECO also provides consumers with information in a variety of places and formats about buying, selling and owning a home. For example, this newsletter, published twice a year, can help you learn how the real estate process works and what you can expect of your real estate professional.

Message from the ChairBy Glenda Brindle

It doesn’t matter if you are buying your first home or selling your fourth – being an informed consumer is critical to helping you ask the right questions and make the right decisions in what may be the largest transaction of your life.

There are other RECO resources available to consumers. I would encourage you to visit our website, www.reco.on.ca, which contains a section dedicated to educating consumers about the buying and selling process.

Our Facebook page (www.facebook.com/RECOhelps) and our Twitter account (www.twitter.com/RECOhelps) provide regular tips, and our videos on YouTube (www.youtube.com/RECOhelps) give more in-depth advice from objective experts.

And finally, check out RECO’s Ask Joe column that appears weekly in the Saturday Toronto Star’s homes section.

Remember, an informed consumer is an empowered consumer. Knowing what you need to ask and what your registered real estate professional can do for you should lead to a positive experience when buying or selling your home.

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Finding a home that has the qualities you want and is within your budget is no easy feat. But there’s lots more to do before you move in.

Before you make an offer These to-dos can be completed before or after you make an offer, but getting ahead of the game is a good idea.

● Obtain a mortgage pre-approval to give you a good idea of how much you will be able to finance for your home.

● Hire a real estate lawyer in case you have legal questions and so you’ll be ready when it’s time to close the deal.

After your offer is accepted These items should be added to your list once your offer has been accepted.

● Satisfy any conditions included with your offer, like conditional financing or a satisfactory home inspection.

● Confirm financing by providing your lender with the signed Agreement of Purchase and Sale. Your lender may conduct an appraisal on the home.

● Ask your real estate professional, family or friends to recommend a home inspector. There are also associations for home inspectors that can refer you. When selecting a home inspector, ask about their training, experience, certifications and approach to the home inspection process.

Here’s your to-do list.If there is an issue with any of your conditions, you will need to speak with your real estate representative and your lawyer about your options.

If all the conditions are satisfied, you will have to sign documents stating that each of the conditions are either waived or fulfilled. The offer will then become firm.

● Once the deal is firm, your lawyer will help you close the transaction.

● You might need to prove you have home insurance before your lender will release the mortgage funds.

Planning your move

● If you’re renting, you’ll need to provide notice to your landlord.

● If you already own a home, it’s a little more complicated. Ideally the move-in date for your new home will align with the date you move out of your existing home. If not, you may need to get a storage locker and stay with friends or family, or rent temporarily while you’re between homes. You might also need to talk to your lender about bridge financing if you will own both homes for a period of time.

Throughout this process, your registered real estate professional is a great resource. Make the most of their expertise as you work through these to-dos. Just remember, at each step of the way, you’re getting a little bit closer to your dream home.

Found the home of your dreams?

3Fall Edition 2014 · reconnect

factReal estate contracts are all standardized

– all you have to do is sign.

Every home is unique and so is the contract to buy it or sell it. Buying or

selling your home involves a lot of paperwork and the devil really is in the details. Signing your name on the dotted line is not something to be taken lightly – you’re dealing with binding contracts for significant values. Don’t sign something you haven’t read or don’t understand. You can always ask your broker or salesperson to explain – that’s why you’re hiring them. If it’s still not clear, consider speaking with a lawyer. Don’t sign until you’re comfortable with the whole agreement.

Also keep in mind, many of the terms and conditions in real estate contracts are negotiable, such as how long the contract will be in effect or whether the appliances stay when a home is sold. It never hurts to ask!

When you sign on the dotted line of a

representation agreement, your contract

is between you and your salesperson.

When you sign a representation agreement to buy or sell, it’s a contract between you

and the brokerage where your salesperson works, not with the individual salesperson.

It’s possible that you chose that brokerage because you want to tap into the expertise of a specific representative. After all, you have a lot at stake and you want to work with someone who has a great reputation.

However, sometimes your representative may be reassigned or asked to help out a colleague. This can be distressing, especially if you like and trust your representative. But, it’s allowed so long as the other representative works at the same brokerage. To avoid disappointment, it’s important to have clear lines of communication and share your expectations. And if possible, before you sign your representation agreement, put in writing who your primary contact will be at the brokerage and their level of involvement during your buying or selling process.

A brokerage can’t represent both the

buyer and the seller without written

consent from both.

When a brokerage represents both the buyer and seller, this is called “multiple

representation.” By law, your representative must tell you if a multiple representation situation comes up and let you know how it will affect the services they provide to you. They can’t proceed with multiple representation unless all parties agree to it in writing. So, be sure to ask questions and make sure you are comfortable with the implications.

Real estate fact or fiction: eight things you need to know before buying or selling a home

You read RECO’s Ask Joe column in the Toronto Star each Saturday. You can finish the sentences of your favourite HGTV real estate show host. You consider yourself as savvy as can be when it comes to real estate knowledge. But when it comes time for you to buy or sell a home, can you decipher fact from fiction? Read on for the eight home buying and selling essentials that you need to know before you buy or sell a home.

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fictionIn a bidding war, sellers must go

with the highest priced offer.

Sellers do not have to choose the highest priced offer, even if it’s at or above the

asking price. Other factors could be more important to them, such as the size of the deposit, the closing date and other conditions attached to an offer. For example, a seller may accept a lower value offer with an earlier closing date because they already bought their new home and don’t want to carry both mortgages.

Having an open house can come

with risks if you’re not mindful.

Holding an open house can be a great way to show off your home to potential buyers.

But the possibility of theft or damage is there. Before the open house, be sure you talk to your representative about how the open house will work. If you have concerns, voice them! Agree on a game plan about what precautions will be in place. There are some basic safety measures you can take. Store all valuables, medications and financial information in a secure place. Have a sign-in sheet for all visitors. Ask your representative to have an assistant on hand to escort visitors at all times. It’s important to remember that it’s your home, and you set the rules for visitors.

A home inspection’s a waste of money –

if you give the place a good look around,

you’ll know if it’s been kept up or not.

A home inspection may find problems that could turn your ‘dream home’ into the

nightmare you avoided. Carefully consider the risk of future expensive repairs before you skip an inspection. Given the risk, you might want to ask yourself, “Can I afford not to have an inspection?” A qualified and experienced home inspector will examine the major systems in the home, including electrical, roofing, plumbing, heating/air conditioning, foundation and septic systems. The inspector will help you assess the overall condition of the

home and what repairs might be needed. There is no guarantee the inspection will catch everything, but it’s your best chance. Attending the inspection is also a good idea. You’ll have the chance to ask questions and gain additional insights from the home inspector.

If your conditional offer doesn’t firm up, you

will automatically get your deposit back.

If you do not waive or fulfill the conditions in your offer within the time allowed, the

deal will not proceed. This means your deposit – which is held in a brokerage’s trust account – can be released only if both the buyer and seller agree, or if you obtain a court order. You should seek the advice of your lawyer and real estate representative before you decide to neither waive nor fulfill a condition.

There are stringent rules and regulations

in place to protect consumers when

they buy or sell a home in Ontario using

a registered real estate professional.

Real estate professionals are regulated in Ontario. This means that anyone working

as a real estate salesperson or broker must be registered with RECO and must follow the rules and a Code of Ethics. RECO’s job – with authority from the provincial government – is to protect home buyers and sellers.

Working with a registered real estate professional has its advantages. For one, you can be confident they have met the standards needed to enter the profession and they take part in ongoing education to stay on top of emerging trends. They are also enrolled in an insurance program that protects consumer deposits. In short, you are able to draw on their professional knowledge and guidance as you engage in one of the biggest transactions of your life.

“While buying or selling a home can be complicated, there’s plenty you can do to increase the odds that you will have a positive experience,” says RECO’s Registrar Joseph Richer. “You can achieve that by asking questions, doing your research and taking advantage of the expertise provided by working with a registered real estate professional.”

For more information about these topics or to verify the registration of a real estate professional in Ontario, visit www.reco.on.ca.

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You’ve already bought a new home and now the clock is ticking to get your existing home sold. A local real estate representative has advertisements up around the neighbourhood promising “Your home sold or I buy it!” It seems like the perfect fall-back plan in case your home doesn’t sell as quickly as you would like.

But before you jump at this guarantee, make sure you understand all the details involved.

Consider your financesKeep in mind the price your representative offers for your home may not be the listing price or even the amount you are expecting from potential buyers. Will a lower sales price on this home impact your ability to close on the new home?

Do your researchAs with any home sale, you’ll want to interview the representative about their approach to the selling process. How will they market your home? Do they have experience working in your area? Have other sellers taken

them to be in your listing agreement. By law, they will need to provide a few additional details in writing: 1) disclosure of all facts that they know of that affect or will affect the value of your home, and 2) the full details of any negotiations they may have had to re-sell or lease the property by them to another person, including the prospective price.

Even when both parties are acting in good faith, misunderstandings regarding an oral agreement can occur. A written agreement is the best way to ensure that you and your real estate representative are on the same page. For additional peace of mind, you can have your lawyer review the agreement before signing.

Asking questions and understanding all the details of your contract before signing will help you make the best decision possible for your situation.

advantage of the guarantee and how has it worked out for them? Be sure to ask for references and contact those individuals, particularly any sellers that signed or used the guarantee.

For additional perspective, you should interview several representatives to gain further insights about the value of your home and ensure the representative you choose is a good fit for your needs and expectations.

Get it in writingIf you decide that the representative offering the guarantee is the best choice for you, satisfy yourself that all of the details of this arrangement are captured in writing the way you want

Ask the right questionsYou’ll want to get a list of all of the terms and conditions involved. Key issues include:

• Are there exceptions to the offer? Does your home qualify?

• At what price will they buy your home? How is that price established?• After how many days of listing will they buy your home? How many days after that will the transaction close?• Your listing agreement is with the brokerage. Is the brokerage offering to buy your home or is it the sales representative personally?• Can you still try to sell the home while waiting for the representative’s or brokerage’s purchase to close?

• What happens if you change your mind about selling to them? Is the “guarantee” optional or do you have to sell to them if no other buyers submit an acceptable offer?• What is the commission arrangement if the guarantee is acted on?• Can the representative or brokerage confirm that they have the financial capability to honour the guarantee?

Your home sold or I buy it

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The right questions to ask before signing on the dotted line

HELLO

AgentHELLO

Broker

HELLO

Salesperson

People talk about working with an agent, a broker or a salesperson. What’s the difference?

It might seem like these terms refer to the same role, but there are actually some important distinctions.

“Agent” is often incorrectly used to refer to the individual real estate professional who helps you buy or sell your home, but that’s not technically accurate. Agent is actually the term for the brokerage (the company) that represents you. When

you sign a representation agreement, you are forming an agency agreement with the brokerage, not the individual salesperson.

Brokers and salespersons are individuals employed by the brokerage. They’re both real estate professionals who are subject to regulation and must be registered with RECO to trade in real estate in Ontario. The level of education distinguishes a broker from a salesperson. A salesperson can become a broker by taking additional courses and exams.

Hiring a real estate professional?In Ontario, every real estate salesperson, broker and brokerage must be registered with RECO under the Real Estate and Business Brokers Act, 2002.

Before you start working with a real estate professional, confirm that they are registered with RECO. You can do that in one of two ways:

1 Use the registrant search feature available on RECO’s website (www.reco.on.ca). 2 If the professional has the “MyRECO Certificate”

mobile app installed, they can display a special QR code. Download the app on your iPhone, Android or BlackBerry Z10 device and scan the code to confirm their registration.

A broker designation also allows someone to manage a brokerage. If they do take on that role, they are known as the Broker of Record. Brokers of Record generally don’t deal with buyers and sellers directly, but they will be in the background managing the business, reviewing transaction details and serving as a resource to your real estate professional. In the unlikely event that you have questions or concerns that your salesperson or broker can’t address, you can speak with the Broker of Record.

Consumer Q&A

Did you know?

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Do you have any comments or inquiries about the reconnect newsletter?Please send them to: communications@reco.on.ca

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.

Install a programmable thermostat to reduce your heating costs by up to 10 per cent. Adjust the temperature based on when you're home, sleeping or away.

Save money and be green with these energy saving tipsFall is here, and that means it’s time to think about how to save energy as the thermometer drops. Here are some simple tips that will save you money and reduce your carbon footprint.Information courtesy of Ontario’s Ministry of Energy.

Seal up those drafts by installing weather stripping around doors, attic hatches and air conditioners.

Change your furnace filter monthly. Also consider having your furnace serviced to ensure it’s running at maximum efficiency.

Use your appliances off-peak to take advantage of lower energy prices. In Ontario, off-peak rates apply from 7 p.m. to 7 a.m. if your home has a smart meter.

Unplug electronics when they’re not in use. TVs, computers,

cable boxes and other electronics use small amounts of electricity unless they’re unplugged.

Close off unused parts of your home like storage rooms and crawlspaces. It doesn’t make sense to heat rooms that you rarely enter.

And remember safety! Test your smoke and CO detectors to ensure they’re working properly. If the detectors take batteries, fall is a good time to replace them.

Use energy-efficient lighting by replacing burned-out bulbs with energy efficient compact fluorescent or LED lights.

Let natural light shine by opening your curtains to sunlight during the day. It’ll also heat up your home.

Don’t let faucets drip. Repair leaky faucets quickly. Even a small drip can waste litres of water per month, adding to your water heating and usage costs.

Clean your fridge coils regularly with a brush or vacuum to ensure they’re operating efficiently.

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