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.
Real 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.
In 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.”