Most people following the real estate market in Hamilton have heard that if you’re going to sell a house, fall or spring are the best times to do it. If that’s the case, then it could be easy for one to surmise that winter and summer must be the worst. 

However, 2021 proved that we can’t always rely on assumptions. Last winter, we saw an unprecedented housing boom where prices reached an all-time high in February. By the time the traditionally busy spring arrived, rising interest rates caused the market to falter. 

It just goes to show you that you can’t predict the market. Your decision to move should be based on when it suits your lifestyle and not on what the market is doing or trying to time it. 

In fact, there are often compelling reasons to sell a house during slow times. Yes, that even means right before the holidays. Let’s take a look at what is happening in Hamilton right now.

A Snapshot of the Hamilton Market

After months of critically low supply and soaring prices, Hamilton is now enjoying a much more stable market. As of the last report by the Canadian Real Estate Association (CREA), the housing supply in Hamilton has risen to 3.5 months’ worth of inventory, which is excellent news for buyers. As a seller, you may have to be more patient since buyers have more options now. 

Buyers tend to have less competition and are not rushing to make a decision like they were earlier in the year. However, as a seller, you can rest assured that plenty of people are still searching for housing. We are already seeing demand start to increase as the market adjusts to the new interest rates. For the second year in a row, the cold months may shape up to be busier than anticipated! Prices may have fallen  from their February peak, but the average cost of a house is still more than $200,000 above pre-pandemic values in 2019.

If you’ve owned your home longer than two years, you stand to make an excellent profit by selling now.

Do you want even more advice for a successful sale? Some of our other recent posts can help:

• Should You Wait Until the Timing is Better to Sell Your Home?
• How to Negotiate a Real Estate Contract
• Fact vs Fiction About Working with a Real Estate Agent

Sellers Face Less Competition in the Winter

In the past, more people have listed their homes for sale in the spring than any other time of year. It makes sense because that’s when most people are looking to buy. On the other hand, it’s also when you’ll face the most competition. Prospective buyers then have many listings to choose from, which gives them more negotiating power.

Depending on the market, you may actually get better results when conditions are slower, and there are fewer houses for sale.

Buyers Are More Motivated

The holiday season may be when the fewest people are looking to buy. That sounds like a disadvantage, but it could work in your favour. Why? 

Anyone buying a house now is doing so for a compelling reason. 

For example, they may be recently divorced or have accepted a new position and need to move quickly. In any case, they are highly motivated to act now. 

As a seller, you’ll have far fewer tire kickers who just want to browse through your home with no intention of buying.

While you still should do everything in your power to maximize your results, it’s nice to know that your position is stronger than you may have believed. 

The Unique Challenges of Selling Before the Holidays

Selling a house right before the holidays presents a unique list of challenges. People are busy, and potential buyers spend more time with their families than looking at houses. When you do book showings, you must make the most of them. Here are a few things to keep in mind to make your listing stand out even when buyers are preoccupied with holiday preparations.

Decorate tastefully but with restraint. Some holiday decor will make your home seem warm and exciting. However, be mindful that not everyone celebrates in the same way. A good rule of thumb is always to keep your personal preferences out of your decor when showing your home to potential buyers. During the holidays, this is more true than ever. Your real estate agent will help you stage your home in a way that feels festive and welcoming but never overbearing.

Inclement weather can be a challenge. You never know what the weather will be like when showing your home during the winter. It might be unseasonably warm and sunny, or there could be a blizzard. You’ll have to be prepared for anything. Consider investing in a durable mat for boots and shoes and post a sign politely asking visitors to remove their footwear. Keeping a Swiffer mop in the foyer closet will help you with last-minute cleanups to keep your home show-worthy during inclement weather.

Are you selling a house and then buying? The articles below will help you enjoy a streamlined purchase:

• The Hidden Gems of Burlington You Need to Know About
• Pre-Qualification vs Pre-Approval: Which is Better?
• Interest Rates Are on the Rise: Should You Get a Fixed Rate or Variable?

Best Practices for a Successful Sale Anytime

No matter when you decide to sell, there are always best practices to help you maximize your results. Preparing your home is an obvious first step. You want buyers to stand up and take notice the minute they walk in the door. As a result, your house should be spotless, and all minor upgrades have been completed. However, you can go even further:

Set your price strategically. Overpricing your home is the most common error sellers make, especially during the off-season. Of course, you don’t want to underprice either. An experienced real estate agent always performs extensive background research to determine the optimum price to attract the most buyers in the current market.

Promote your listing thoroughly. Even during busy times, an effective marketing strategy can result in a more successful sale. When selling before the holiday season, it becomes even more imperative. Your listing should be featured on the MLS® and all major real estate and brokerage websites. Offline feature sheets and just-listed flyers can help reach an older demographic with the means to buy your home. However, keep in mind that you don’t have to attract a ton of buyers–just the right one at the right time!

Set realistic expectations. Patience is the ultimate key to successfully selling your home in the off-market. You can still obtain maximum results, but it may take longer than you realize. During that time, be sure to keep your home ready to show. You never know when a motivated buyer will come through the door!

Always Work With an Experienced Real Estate Team

A local real estate team will help you position your home to attract buyers and sell as quickly as possible. Knowing the market and the nuances of the individual neighbourhoods can mean the difference between undervaluing your home and achieving top dollar- even during the busy holiday season.

Are you ready for a successful sale regardless of what the market is doing? There’s no better way to hit the ground running than with a complimentary home evaluation. You can schedule yours today with no obligation right here. 

When buying an investment property, it’s normal to focus on the business details. You scour the market before finding an ideal property at the right price. From there, you turn your attention to finding and vetting tenants and hopefully establishing a mutually beneficial relationship with someone who stays for the long term.

All of these are critical to your success as a real estate investor, but knowing the legal side is also essential. Understanding your rights and responsibilities will help you avoid many of the traps that even experienced landlords can fall into. This insight is just as much a part of a successful business plan as finding the right property and tenant in the first place.

While this guide is not intended as legal advice, it is a detailed walkthrough of the main points of the Residential Tenancies Act that every landlord should know.

What is the Residential Tenancies Act?

The Residential Tenancies Act (RTA) is a set of laws that outline both the tenant’s and landlord’s responsibilities in Ontario. It covers most residential units, including detached houses, semis, townhouses and apartments. The act generally does not apply to non-profit or subsidized housing, secondary school residences or short-term accommodation rentals.

The RTA governs everything from how much a landlord is allowed to increase the rent year over year to what recourse you have when a tenant damages the property.

Housing prices will always fluctuate, and yet real estate remains one of the safest long-term investments you can ever make. See some of our previous posts for more:

• The Market is Changing. Is Real Estate Still a Good Investment?
• What to Know Before Becoming a Landlord
• How to Sell an Investment Property

Landlord and Tenant Board

The Landlord and Tenant Board (LTB) is a tribunal that interprets the RTA and works to resolve any disputes that arise during the rental agreement.

The LTB also works to ensure that there are no unfair evictions. A landlord must apply for approval before they can legally remove a tenant from their unit.

Most inquiries, concerns and applications can be processed online, by email or by courier.

Ontario Standard Lease

The Ontario Standard Lease is the official contract between a landlord and tenant, containing all details in the agreement, including contact information, the rental amount and due date and whether subletting is allowed. The contract is designed to protect both parties and is required by law in most cases. When completed, both landlord and tenant have a clear understanding of their rights and responsibilities.

It’s important to note that you cannot use a written lease to impose rules that violate a tenant’s legal rights in any way. Some terms are unenforceable even when the tenant signs them, including not allowing pets, forbidding guests or roommates or requiring unauthorized deposits or fees.

Deposits and Payments

Your tenant may agree to pay the monthly rent using a credit card or postdated cheques, but you are not allowed to require it. Once you decide on a method, you can only change it if both parties agree in writing.

You can request that the tenant pay a deposit against their last month’s rent. However, you can’t demand more than the cost of a single month. You cannot request prepayment in advance for multiple months. Another thing that many landlords don’t realize is that you are required to pay interest each year on the deposit.

Many landlords also believe they are entitled to collect various deposits from their tenants, but only two are permitted under Ontario law:

1) A last month’s rent deposit

2) A key deposit.

Contrary to popular belief, deposits for damages, smoking, cleaning or pets are illegal.

Once you’ve decided to invest, the next big question is where? Here are some posts that can help you decide:

• Where to Invest in Real Estate in Ontario
• Hamilton vs Toronto: Which City Should You Choose?
• The Hidden Gems of Burlington You Need to Know About

Recourse for Damages

Since you can’t legally require a damage deposit, what recourse do you have? All disputes are handled by the LTB, which will decide who is responsible to cover the cost of repairs. 

To ensure a fair process, both landlord and tenant should walk through the home together to conduct a move-in checklist. When the tenant leaves, the home should be in the same condition. 

Rent Increase Guidelines

Once the rental agreement is signed, you cannot increase your tenant’s rent for at least 12 months from the time they moved in or from the last increase.

After 12 months, you can raise the rent by the amount specified by the Ontario government standards.

What if your own expenses have increased or you’ve taken on extensive upgrades? You can apply to the LTB to approve your request. Random increases will likely be denied, but the LTB may approve a larger amount if you can prove that your own expenses justify it.

Your Obligations as a Landlord

A few simple guidelines will help your relationship with your tenant run smoothly. Your tenant will be happy, increasing the chances that they will stay for the long term. Your primary responsibility as a landlord is to provide and maintain a unit that complies with all health, safety and maintenance standards.

Remember that they have the right to reasonable enjoyment of their home, and of course, you can’t bully, harass or threaten your tenant under any circumstances.

Your Right to Enter the Premises

Your tenant has the right to privacy, and you can’t simply barge in whenever you want even though you are the property owner. You have the right to enter your tenant’s home whenever you have reasonable grounds and provide 24 hours’ notice. These reasons will be primarily to conduct maintenance and repairs or to perform an inspection of the property.

As with any rule, there are exceptions. You can enter the unit without notice in case of an emergency or whenever a tenant consents.

What Happens if a Tenant Doesn’t Pay?

Having to chase rent payments can be exasperating. As an investor, you have your own expenses, and you rely on those funds to hold and maintain your property. What recourses do you have if your tenant cannot or will not pay?

You are entitled to receive your payment as outlined in your contract. However, there are limits to what you can and cannot do.

• You can’t turn off any essential services like heat, hydro, hot water or gas.
• You can’t confiscate your tenant’s personal belongings in lieu of rent.
• You can’t lock them out of the unit unless you have an eviction order from the LTB.

If your tenant doesn’t pay, you can give them notice of termination of the rental agreement after 14 days. Often, this is enough to get results. Finding a new place to live is no easy task, and your tenant likely doesn’t want the headache.

However, you may have to escalate if there is still no resolution. After giving your tenant notice, the next step is to apply to the LTB to terminate the agreement and begin the eviction process.

Ending Your Rental Agreement

If either party wishes to end the agreement before the lease expires, there may be some financial penalty. However, neither of you is locked in, and you can void the tenancy at any time by providing written notice. When the landlord asks the tenant to vacate, it could fall under two categories:

1. For cause: Where the tenant failed to pay rent, damaged the property, disturbed others in the area or engaged in illegal activity on the premises.
2. No fault: When the landlord wants the property for their own use, either for a family member to move in or to sell it.

Keep in mind, if you ask your tenant to leave so you or a family member can move in, you are generally required to cover the last month’s rent on your tenant’s behalf.

Staying on the right side of the LTA won’t just help you stay out of legal trouble. It will cement your reputation as an ethical landlord and help you achieve longer tenancies and enjoy a more profitable long-term investment.

Are you searching for your next successful investment opportunity? We can help you spot exactly what you’re looking for. Reach out to us today for a free, no-obligation consultation or call 905-332-9223 to connect with us immediately.

One of the most common questions homeowners ask is when is it the right time to list your home for sale? There is no easy answer just by looking at the market itself. Seasonality used to be something we could count on. Fall and Spring were the busiest months in real estate. Things would always slow down for the Winter and Summer, but nobody worried about what would happen next. 

Over the last few years, everything has changed. This year, the Spring market was busy, as expected but the Fall Market fell short. The only thing we can count on now is that the real estate market will fluctuate.

Why Timing the Market is a Recipe for Failure

It’s almost impossible to time the market anymore, because even the most well-informed experts don’t know what will happen next. There are just too many factors at play affecting the market. Rising interest rates and high inflation have stopped many buyers dead in their tracks. Some people think we will see further softening before real estate values rebound. On the other hand, the growing population and increased immigration combined with a housing shortage mean a lot of pent-up demand for real estate. In that case, prices will inevitably go up. It’s only a question of when.

There’s nothing more valuable than industry knowledge to help you successfully sell your home. Here are some articles to bring you up to speed:

• How to Negotiate a Real Estate Contract
• Fact vs Fiction About Working With a Real Estate Agent
• 5 Seller’s Mistakes to Avoid

If You’re Ready, the Time is Right

Since you can’t time the market, what should you base your decision on? The best reason to sell now is that it fits your lifestyle. Up or down, there are ways to make the most out of every situation. 

• If your current house is too small and you’re ready to upgrade, there’s no reason to wait until the market changes.
• If you’re relocating for work, you may not have the luxury of time to wait.
• Thinking of downsizing? Your timing might actually be perfect, especially if you have equity in your current home.

Why Your Position May be Stronger Than You Realize

It’s easy to compare today’s prices with those at the beginning of 2022 and feel a little dismayed. It’s painful for anyone to hear that their most valuable asset has depreciated significantly. However, there is another way to look at it. 

At the start of the year, the average home price in Burlington peaked at $1,156,477 in April. By September, that value fell to $877,125. Those numbers are disheartening for any seller, but this is only part of the picture.

Imagine you bought your home in 2017, just five years ago. Back then, the average price was approximately $630,000 in April. Today that house would sell for nearly $900,000, a hefty return on investment after only five years. In other words, what you could have earned doesn’t matter. What matters now is that you’re still making a significant profit on your sale, and it leaves you in an excellent position to buy your new home.

How to be Successful in Spite of the Market

The best, and sometimes the only way, to win in any market is simple. Just buy in the same market that you sell in. Think of it this way: If the average cost of a house rises by $100,000, you’ll be overjoyed when you sell, but you’ll also pay more when you buy. If the market drops, you will still be okay because your new house will also be less. As a current homeowner, you are always the least affected by market fluctuations because you already have equity behind you.

Preparing Your House for Any Market

Regardless of the outside factors, there are many things you can do to influence the success of your sale. Your real estate agent can help by performing extensive research on your neighbourhood to determine the best way to price and position your home. 

Even in down markets, certain areas are more valuable than others, and certain features appeal more to buyers. The inside knowledge your local agent provides will help you develop a successful strategy.

The best thing you can do is to perform all of the little tasks that make your home stand out.

Clean and declutter until your house showings from top to bottom.

It’s a great time to get around to those minor repairs you’ve been thinking about. A fresh coat of paint throughout, brand new faucets in the kitchen and an attractive backsplash can help make an immediate impact on buyers.

When making your home beautiful, remember the outside. Create a powerful first impression by keeping the lawn manicured and the walkway clear and free of debris. Some well-placed seasonal decor can add a nice finishing touch!

Want more tips to make the most out of your sale? Here are some ideas to help you out:

• How to Stand Out in a Changing Market
• Our Selling Advantage

The Importance of Accurate Pricing

The real estate market is always changing, which can make it challenging to determine the ideal selling price for your home. There is no formula to calculate the listing price. Instead, your real estate agent will perform a detailed analysis of how your property compares with others recently sold in the neighbourhood.

The right price is one that gets the attention of potential buyers while allowing you to maximize the value of your house.

Setting an attractive price is often the most critical component of a successful sale. Did you know that we offer free home evaluations with no obligations? Book yours today right here.

When you think of what’s involved in a real estate transaction, you likely think of everything before the sale. For the seller, there’s the home preparation, photographs and marketing to find the most qualified buyers. For the house hunter, going to showings and choosing your home are what stands out. Few people think about what happens after the fact, once the paperwork is signed but before the closing date. 

However, the closing process is critical to ensure a seamless transfer of ownership. When something is off legally, the transaction can fall through. Even worse, there can be lawsuits. Real estate contracts are legally binding, with potentially severe consequences when breached. Unfortunately, legal jargon is nearly impossible for a layperson to understand, never mind follow to the letter. But what exactly does a real estate lawyer do, and do you really need one?

A Real Estate Lawyer is Always Required–to Some Degree

While not recommended, you could negotiate the terms of the purchase agreement if the contract is simple enough. However, The Land Registration Reform Act of Ontario requires a lawyer to examine the title before any ownership transfer can occur. The lawyer steps in to make sure all the i’s are dotted and t’s are crossed to eliminate any issues before they arise. 

Your lawyer will pour over the purchase agreement to see that every clause is valid and can advise you whether any conditions will impact the house closing. They also inspect the property title to find out if there are any liens or outstanding taxes.

If the property is a condo, the lawyer will thoroughly review the status certificate, ensuring that the management company has the required reserves to maintain the building. This gives you peace of mind that you won’t get dinged with a hefty and unexpected assessment fee after your purchase.

Whenever complications or disputes arise, you’ll always want a good lawyer in your corner.

Looking for more facts that can help you succeed in real estate? These resources may be helpful:

• How to Negotiate a Real Estate Contract
• Pre-Qualification Vs Pre-Approval: What’s Better?
• How to Stand Out in a Changing Market

Buying a Home? Add in a Clause for Your Lawyer to Review

Making an offer to purchase can get complicated on large transactions like real estate. You have to put a lot of thought into the market to know how much to offer and what, if any, conditions you should place to protect yourself. 

Your real estate agent is there to help you get the best possible price and terms. But did you know that a real estate lawyer can help create a bulletproof offer? For example, you’re probably already familiar with certain conditions buyers often place when bidding on a home. Conditions of home inspection and condition of financing are two of the most common clauses you’ll see.

However, many people don’t realize that you can even include a condition of legal review. This allows you to have your lawyer inspect the offer before it becomes binding and can save you a lot of headaches during the close.

Woolcott Real Estate is one of the top teams in Burlington and Hamilton for a reason. Find out more about our selling process here.

Selling? How a Lawyer Protects Your Financial Interests

When selling a home, your real estate lawyer works to ensure the buyer follows through with all of their commitments, including submitting the deposit and down payment on time. Your lawyer will also uncover any problems with the property title and resolve them before they affect your closing.

Working with a highly qualified real estate lawyer brings peace of mind to what might otherwise be a stressful transition!

Can the Buyer and Seller Use the Same Lawyer?

Ontario law generally prohibits the buyer and seller from using the same lawyer. As you can imagine, this could become a significant conflict of interest and detrimental to both parties. However, there are some exceptions to this rule:

• When the buyer and seller are considered related under the Income Tax Act
• When the transferor and transferee are the same person, and the transfer takes place to sever land
• A transfer between an estate trustee and the beneficiary
• In a remote area where finding separate lawyers represents an undue inconvenience

Most Common Legal Pitfalls in Real Estate

Now that you know the importance of working with an experienced real estate lawyer, let’s look at some of the most common legal pitfalls and how to avoid them.

• Errors in drafting the purchase agreement. Big or small, errors in the contract can cause the property not to close or result in a lawsuit after the fact.
• One party wants to back out after the market changes. Legally, it’s not allowed, but breaches do happen, especially when a property dramatically changes in value after the papers are signed. Having a lawyer review the contract reduces the chances of last-minute problems.
• Misunderstanding zoning laws. A buyer might purchase a property with the intention of performing significant renovations. Checking the zoning laws before agreeing to purchase is critical.
• Disputes over chattels and fixtures. What is included in the offer and what is not? Both parties must be on the same page.
• Seller representations and warranties. The seller is obligated to disclose certain facts about the property, and must honour all stated warranties.

A successful sale begins with knowing how much your house is worth in today’s market. Book your free home evaluation here.

Finding a Good Lawyer

It’s not every day that you’re buying or selling a home. As a result, you may not have a lawyer in mind or a plan to find one. You can try searching through Google reviews to see a lawyer’s track record from previous clients. 

However, the best way to find the right professional for you is often through your network. Your real estate agent will have connections with trusted experts in every field you can imagine. Finding a qualified real estate lawyer is often as simple as asking for a recommendation.

Do you have questions about what it’s like to buy or sell in the current market? Our local experts are standing by and ready to answer your questions, big or small. Reach out to us today.

If you’ve followed real estate news at all in the last six months, you know the market has undergone a massive change recently. 2022 started out with one of the busiest housing booms in recent history. The average price of a home spiked to record highs, but buyers were not dissuaded. Nearly everything that hit the market got scooped up, often to the tune of multiple-offer scenarios and fierce bidding wars. However, it all came to a fast halt when the Bank of Canada began raising the interest rate. Sales slowed down, and prices began to fall.

At the beginning of the year, high prices put the dream of ownership out of reach for millions of Canadians. Now that prices are coming down, first-time buyers are facing a new challenge… Interest rates.

Higher interest rates increase the cost of borrowing while reducing the amount you can qualify for. As a first-time buyer, it can sometimes feel like you can’t win. However, help is available. Here are some tips to help you get into your first house sooner rather than later.

A Quick Glance at Government Programs

Your first purchase is always the most difficult. And yet, homeownership helps to provide financial stability for the country. That’s why the government has an interest in helping first-time buyers. There are programs available as long as you:

• Are a Canadian citizen
• Are over the age of majority
• Are making a qualified purchase on a primary residence. (Government programs do not apply to investment properties.)

The First-Time Home Buyer Incentive

This Federal program provides up to 5% for your down payment on a resale home. For a newly constructed home, the government will put up as much as 10%. This shared equity loan must be repaid when you sell the property or within 25 years. Find out more about the First-Time Home Buyer’s Incentive here.

Home Buyer’s Plan

You can pull a maximum of $35,000 from any registered investment plan to put towards your down payment. You don’t have to pay tax on this amount as long as you repay it within 15 years. Find out more about the Home Buyer’s Plan here. Bonus: If there are two first time buyers on title, both buyers can use the HBP, allowing for a total of $70,000.

Land Transfer Rebate

The Land Transfer Rebate is a massive financial boost for first-time home buyers and can save you up to $4,000 on your closing costs. Find out more here.

First-Time Home Buyer Tax Credit

Currently, you can claim up to $5,000 on your tax return when you buy your first house, which will result in a savings of $750. The budget for 2022 proposes to double this amount to $10,000. If this passes, the tax credit will save you $1,500. Find out more about the First-Time Home Buyer Tax Credit here.

There is no shortage of things you have to know about when buying a house. Here are some other articles that can help you:

• Interest Rates are on the Rise: Should You Get a Fixed Rate or Variable?
• Conditions & Clauses on a Real Estate Purchase
• 7 Amazing Benefits of Working with a Real Estate Agent

Get Pre-Approved

Now that you know what programs you might qualify for, it’s time to get the ball rolling. If you want a quick idea of how much you might be able to borrow, you can get a pre-qualification. It’s easy, takes only a few minutes and you can get your results back right away. However, these results are a very rough estimate and not entirely accurate.

Serious home buyers should always start with a pre-approval. This process is much more in-depth. You’ll need to fill out a mortgage application and enter your income, debts, assets, and other personal information. Once completed, you’ll know how much you can borrow and can begin your home search!

Want to know more about the differences between a pre-qualification and a pre-approval? Read our complete breakdown right here.

Save as Much as Possible for your Down Payment 

The down payment is often the biggest obstacle between you and a new house. The good news is you may be further ahead than you realize. You’ve likely heard that you need 20% before you can even think about buying your first home. However, in Ontario, this is only true for homes over $1,000,000. 

For anything less, you’ll need 5% on the first $500,000 and 10% on the remaining amount.

Here’s how that breaks down on a $700,000 purchase:

If you wanted to put down 20%, you would need $140,000. If you can make it happen, you have the added benefit of not having to sign up for mortgage insurance.

However, you don’t need that much to make your purchase.

• 5% of $500,000 equals $25,000
• 10% of the remaining $200,000 equals $20,000.
• In total, you would need $45,000 as your down payment 

These funds should be readily available. If the seller accepts your offer, you’ll have to put down around 5% immediately as your deposit. The rest of your down payment is paid once the house closes.

Have you decided where you want to buy your first house? Here are some ideas to consider:

• The Hidden Gems of Burlington You Need to Know About
• Hamilton Vs Toronto: Which City Should You Choose?
• What to Expect When Buying a Home in Waterdown

Be Prepared For Your Closing Costs

Your closing costs include lawyer fees, land transfer taxes, utility hookups, and appraisal fees. You can expect your closing costs to amount to 3 to 5 percent of the total sale price. You’ll have to pay some of these costs upfront, and you can roll the rest into your mortgage payments. 

Work With A Real Estate Agent

Buying your first home can seem overwhelming in any market. This year has been particularly challenging, and many people have been caught off guard by the rapidly changing conditions. 

However, at the moment, things are looking up for buyers as prices are down and there is less competition. A real estate agent can help you through the entire process, from finding the right home in the right area to helping you negotiate the best possible price and terms.

Buying your first home is an exciting milestone, and our local experts are standing by to guide you all the way. Call 905-332-9223 or email today, and we will be happy to answer any questions – with no obligations.

“Negotiation” is a word that can put many people on edge. It implies that there is a lot at stake. Say and do all the right things, and you come out ahead. However, make one little mistake, and you stand to lose a lot. Nowhere is this connotation more true than in real estate. Buying or selling a home involves significant amounts of money, and it’s enough to make anyone feel tense. But, a successful negotiation isn’t at all like what you see in movies or on T.V. 

They don’t necessarily involve talking smoothly or driving a hard bargain. Instead, the key to winning is education and research. Below, you’ll find a review of how a real estate contract works and what you can and can’t negotiate.

Components of a Real Estate Contract

Simply put, a real estate contract is legally binding. You should never sign it unless you understand every clause and condition. Your best bet is to talk to an experienced real estate professional who will help protect your interests. There are three types of real estate contracts you might come across: 

• Purchase agreement
• Assignment contract
• Lease agreement

The contract you’re most likely to see is a purchase agreement containing the offer to purchase a property and the terms. The elements of this contract include:

• Mutual agreement – all parties are willingly entering into the contract
• Consideration – the object of value being traded, in this case, the house
• Capacity – each party must be of legal age and sound mind
• Lawful purpose – the contract cannot contain any illegal clauses

Real estate contracts are often subject to intense negotiation. The buyer, of course, wants to purchase the property at the lowest possible price. In contrast, the seller wants to earn the highest amount possible. Once the paperwork is signed, the deal is done. There’s no backing out without consequence after all conditions have been met. 

Want to see what other clauses and contingencies you might see on your contract? Read our article right here.

Elements of Negotiation

What aspects of a real estate sale can be negotiated? The price is the most obvious. However, you can also negotiate certain conditions into the agreement that must be met before it becomes legally binding. While you can include any contingency you want to purchase a home, these are the ones you’ll see most often:

• Condition of home inspection
• Condition of sale of current property
• Condition of financing

Before signing off on your offer, you want to ensure that it includes everything you want. For example, buyers often believe that the house comes with the drapes and appliances. However, if you want to be sure, get it in writing.

That old saying “hope for the best, prepare for the worst” was never more true than when it comes to negotiating real estate. But here are some informative articles to help you get the best results:

• The Deal Fell Through. What Happens Now?
• Interest Rates Are On The Rise. Should You Get A Fixed Rate or Variable?
• How To Stand Out In A Changing Market

How the Current Market Affects Your Negotiating Power

In fierce sellers’ markets, the buyer cannot always get the price or conditions they want. Sometimes, you have to place a firm offer to stand out against other potential buyers who love the property. Whenever the market allows it, we recommend at least adding the condition of a home inspection. This protects you from ending up with something beautiful on the outside but riddled with non-stop problems after you take possession. 

Conditions may cost you the house if another buyer comes along with a firm offer. However, sometimes it’s worth it to keep looking because you may avoid a costly and stressful mistake.

During buyer’s or balanced markets, a buyer has more negotiating power. You may be able to get a break on the price or add in additional conditions to protect yourself and ensure you’re getting the right house.

As a seller, the ability to negotiate depends primarily on market conditions and the value of similar homes in your neighbourhood. It may be tempting to overprice your home in the hopes someone will pay, but this strategy often backfires, and you may not find a buyer at all. 

The Offer Process

When a buyer finds a home they like that’s in their price range, they’ll work with their Realtor to craft an offer. The offer to purchase includes the price they’re willing to pay, any conditions they may have, and expiry date when the offer becomes null and void.

The seller can now contemplate the offer and decide whether to accept or reject it. If the conditions are almost, but not quite, agreeable, they can also come back with a counteroffer.

Sometimes, they’ll ask the buyer to increase the dollar amount. Other times, they’ll ask for the removal of conditions or more flexible closing date. 

The process of offering and countering can go back and forth several times. At some point, an agreement will be made, or one party will decide to end the negotiations and move on. That’s why it’s so important to understand the market and the strength of your position. Otherwise, you may lose a contract for the sake of a few thousand dollars or over a fridge or stove.

Should you work with a real estate agent, and how do you pick the right one? Here are some ideas to help you make the best choice:

• 7 Benefits Of Working With A Real Estate Agent
• Can A Local Agent Sell Your House For More Money?

The Importance of Working With A Realtor

Real estate contracts can be complex, but they are legally binding. A professional, local real estate can protect you from overpaying or selling your house for less than it’s worth. But how do you choose the right agent? For the best results, you should look for someone who is:

• Knowledgable about the area
• Has experience with different types of markets (not just the boom that we came out of)
• Is part of a team of experts that can handle every detail for you
• Has experience in negotiating with both sellers and buyers
• Will be available to support you and answer all of your questions

Do you have questions about negotiating the best possible terms for your real estate transaction? Reach out to us here, and we’ll get back to you with the answers you need and more.