The Saskatoon real estate market is hot right now. Buyers are searching for homes for sale quicker than they are coming on the market, and homes in certain price ranges are seeing an increase in value. This is making it even tougher to get onto the property ladder as a first time home buyer. These programs from the Government of Canada may be helpful to you if you are ready to start your house hunt:
The First Time Home Buyer Incentive
The First-Time Home Buyer Incentive is just like it sounds—an incentive for first time home buyers to buy their first house.
If you have the minimum down payment for an insured mortgage, you can apply to finance a portion of your home through a shared equity mortgage with the Government of Canada. For a purchase price of $500,000 or less, the minimum down payment is 5%. When the purchase price is above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion.
A shared equity mortgage is where you take a smaller mortgage, in exchange for your lender owning some equity in the home. You’ll essentially become a co-owner of the property alongside your bank lender. You’ll get to live in the house, but only borrow a fraction of the purchase price. When you sell the house, you’ll share the profits and losses from the sale with the lender, in line with your equity share.
The Home Buyer’s Amount
The Home Buyer’s Amount is a non-refundable credit for first-time home buyers and buyers with disabilities. It offers a $5,000 non-refundable income tax credit amount on a qualifying home acquired during the year. For an eligible buyer, the credit will provide up to $750 in federal tax relief.
The Home Buyer’s Plan
The Home Buyers’ Plan is a program through the Canada Revenue Agency that allows eligible first-time home buyers to withdraw up to $35,000 in a calendar year from their RRSP to buy or build a qualifying home. The program states the funds withdrawn must be paid back within 15 years.
GST/HST New Housing Rebate
The GST/HST New Housing Rebate allows an individual to recover some of the GST or the federal part of the HST paid for a new or substantially renovated home that will be used as a primary residence.
To begin buying a house, start by assembling a team of real estate professionals to guide you through the process. Your lender can help you understand exactly what you can afford, and the steps you can take to afford the home you want. They can also give you solid advice on whether the first-time homebuyer incentive is something you should participate in. Your lender can then provide you with a pre-approval which will help your REALTOR® assist you in not only finding a home, but also in making an offer and negotiating the real estate agreement on your behalf!
When you buy a home with a REALTOR®, you gain peace of mind knowing they’re trained professionals who work with property purchase contracts on a daily basis. Having said that, you are still the principal on this contract and you should never sign anything that you do not fully understand. Let’s dig a bit deeper into a typical real estate purchase agreement, specifically looking at conditions and clauses.
Real Estate Agreement 101
An Agreement of Purchase and Sale is a written contract between a seller and a buyer for the purchase and sale of a property. In the agreement, the buyer agrees to purchase the property for a certain price, provided that a number of terms and conditions are satisfied.
The process begins when the purchaser makes an offer, which is irrevocable for a certain time period. If there are no counteroffers and the agreement is signed by the seller within the time period the offer was left open, then the agreement becomes legally binding. At this point the agreement cannot be cancelled unless both parties agree. If the offer is not signed before the offer expires, it will become void.
Fixtures are improvements made to a property that are attached or cannot easily be removed without causing damage to the property. Examples include: hot water heaters, built-in cabinets, light fixtures, etc. These items are assumed to be included in the sale of the home, unless they are specifically excluded in the agreement.
Chattels are moveable items of personal property, and must specifically be listed in the Agreement if they are to be part of the sale of the home. Examples include: appliances, lawn and garden equipment, blinds or drapes, etc.
The requisition date is the time within which the homebuyer has to examine the title, and complete all other searches. It is within the buyer’s best interest to do a number of searches to ensure that there are no problems with the property. These include things such as searching the registered ownership of the property with the land registry, checking that the property complies with zoning regulations, and searching for any outstanding municipal work orders. Usually the buyer’s agent and lawyer will handle this.
The removal date is the date on which conditions must be fulfilled, waived, or removed for the agreement to be binding and for the transaction to proceed to closing.
Closing arrangements are when all relevant documents are exchanged by the lawyers on both sides of the agreement and the sale is finalized.
The completion date or possession date is the date that the seller must give vacant possession of the property to the buyer.
What is a Conditional Offer
The rest of the renovations that you may be considering will need to be decided on individually. This is where your REALTOR® will be a big help deciding whether or not these renovations will pay off, depending on the overall standard for the rest of the neighborhood and for homes in a similar price range, as well as how seriously out of date your home may be currently.
Common Conditions on an Offer to Purchase
There are numerous types of conditions that might be included in the Offer to Purchase, including:
Financing Condition - This offer is conditional upon the buyer obtaining approval of a mortgage on the property in the amount set forth in the agreement on or before a given date.
This condition is typically included to protect the buyer in the case that they are unable to secure the required financing, causing them to lose their deposit and potentially being sued by the seller for non-completion of the transaction.
Subject to Home Inspection - This means that the offer is conditional upon the inspection of the subject property by a professional home inspector, and the obtaining of a report satisfactory to the buyer in their sole discretion on or before a given date.
The home inspection clause is standard and appears in almost every residential real estate transaction. This condition gives the buyer the right to have the home professionally inspected by a certified home inspector to evaluate the house that is being sold. This condition is the buyer’s way of being protected from the unknown deficiencies in the home. The house must pass the inspection for the purchase to proceed or the buyer and seller may further negotiate their agreement to account for the findings in the home inspection.
Subject to Encroachment Check - This means that the offer is conditional upon the buyer obtaining and approving a satisfactory encroachment check on or before a given date.
An encroachment check will help the buyer determine if the building(s) on the land comply with zoning bylaws or if there are any encroachments by building(s) onto adjacent lands. The survey will also determine whether any building(s) from neighbouring lands encroach upon the subject’s property. A recent survey can disclose the location of fences to the property boundary and if there have been recent additions to the property. Lastly, the survey helps to determine whether anyone else may have a claim against the subject property or if any rights of way or easements exist.
Subject to Gas Line Encroachment - This means that the offer is conditional upon the buyer obtaining and approving a satisfactory gas line encroachment check on or before a given date.
This condition is usually standard, and is simply a request submitted to SaskEnergy to facilitate an inspection of the natural gas facilities at the property. Encroachments are classified in the following ways:
- A pipeline encroachment is any building or structure located over, or in some cases near, the natural gas pipeline or facility, including facilities that are not situated in an easement. A natural gas facility may include, but is not limited to, the pipeline itself, regulators, shut-off valves, meters or gas mains.
- An easement encroachment generally consists of any tree, shrub, pit, well, foundation, pavement, building, or structure located on a pipeline easement. Urban pipeline easements are identified on the property title.
Subject to Property Information Disclosure - This means the offer is conditional upon the buyer obtaining and approving a satisfactory property information disclosure report on or before a given date.
A property information disclosure statement is provided by the City of Saskatoon or the necessary municipality at the request of the buyer. The information provided reflects the results of a search of existing building records, including building code, plumbing code, and deficiencies of the property at the time of the last inspection.
The report will also outline all building permits that have been issued for the property and whether there were any deficiencies at inspection. This report will help the buyer determine whether there has been any unpermitted work done on the property and if any deficiencies may exist.
Subject to Property Condition Disclosure Statement (PCDS) - This means that the offer is conditional upon the buyer viewing and approving the PCDS on or before a given date.
A Property Condition Disclosure Statement is a document completed by the homeowner at the time of listing the home for sale. In this report, the seller is required to disclose defects that they are personally aware of. The seller is responsible for the accuracy of the answers in the Disclosure and can be held accountable by law for any inaccuracies they knowingly provide.
Common Conditions on an Offer to Purchase
Of course, you can also add any additional conditions that you feel are important for the seller to consider your offer. These include the sale of your own property, removal of garbage from the back yard, leaving window treatments, appliances, special lighting, etc. While the conditions are meant to protect you and you should take advantage of them, beware of including too many in the offer because you may lose the deal if the seller should reject your offer. Your experienced local REALTOR® will be able to help you best define which conditions to include in your offer, and guide you through the process!
Completing an Agreement of Purchase and Sale can be complicated and technical. Before the Agreement becomes final, it may get modified as the result of negotiations between the buyer and the seller, and counteroffers presented to the buyer by the seller. Be certain that you understand all the terms of the Agreement and review them with a real estate professional before finalizing the agreement.
Most homes sold in Saskatchewan have a home inspection condition in the contract of purchase because it is highly recommended that all buyers request one before they close on a property. Since there are often a lot of questions surrounding a home inspection, let’s take the time to review some of the more common ones:
What is a Home Inspection?
A home inspection is a professional consulting service that determines the present condition of the home’s major systems, based on a visual inspection of accessible features.
A Home Inspection is:
- An in-field evaluation and professional opinion of the performance of the readily accessible installed systems in a home.
- Primarily a visual inspection.
- Intended to identify components that are significantly deficient, unsafe or near the end of their life.
- Documented in a written report.
A Home Inspection is NOT:
- An insurance policy, guarantee or warranty on the home.
- Invasive or destructive.
- Intended to identify concealed defects.
- A code or design review.
- Intended to predict future performance or life expectancy.
- An environmental review or energy audit.
Is a Home Inspection Necessary?
Every house needs a home inspection. Buying a house that reflects your lifestyle and meets your individual needs may be the largest and most rewarding investment of your life, but can also be very stressful. To ensure your hard-earned dollars are soundly invested, it is recommended that you have a Canadian Home Inspection performed. Plus, it will also provide you with a general maintenance report that can save you money in the future!
What Does a Home Inspection Include?
A home inspection will usually include an examination of the foundation, basement, roof, attic, heating and water systems, electrical and plumbing systems, as well as the general condition of the structure itself. For a condo, it will include electrical, plumbing, heating, deck, and other interior components of the unit, plus garage and roof, if access is allowed.
An inspector will look for poor construction practices and make note of any repairs that might be required or any general maintenance issues. Importantly, a home inspector will also make note of any fire and safety issues that need to be addressed.
What is the Difference Between a Home Inspection & Home Appraisal?
A home inspection is requested by either the home owner or the home buyer and is an unbiased and non-invasive visual examination of the physical condition of the property. An appraisal is a process required for almost all mortgage loans that’s used to determine the estimated market value of a home. To determine the value, a third-party appraiser factors in the home’s location, its condition, and the value of similar recently sold houses in the area, also known as comparables.
The appraisal process includes walking through the home, researching comparables, and creating a final appraisal report. This report will provide the final determination of the home’s market value and will be used in the lender’s final decision to approve the loan amount. The lender typically cannot lend more than 97% of the appraised value of the home.
While they have different processes and serve a different purpose, appraisals and inspections do have a few things in common. For one, they both benefit the homeowner and the lender because they ensure the home is worth what you’re paying for it and that it’s safe to live in. Both also help to uncover any issues that may affect the sale, as well as make you feel more secure in your decision to either purchase the home or walk away from the deal. Furthermore, since these services are completed by a third-party professional who has nothing to gain or lose from the results, you can feel confident in their findings.
Does a New Home Need to be Inspected?
Definitely. Just because a home is new does not mean you should assume that everything is perfect. Inspections, however, can greatly reduce your risk. Inspecting a new home helps to identify deficiencies during the warranty period. Plus, the construction can be evaluated to ensure it conforms to building standards.
Who Should Attend a Home Inspection?
Although it is not required for a buyer to be present for the inspection, it is highly recommended. This is a great chance to learn more about your new home and ask questions to the professional about the condition of the home and how to maintain it. Also, having your real estate agent present will help prevent any miscommunication or any misinterpretation of information or questions on house deficiencies.
There are some situations where a home inspection isn’t necessary; for example, if the buyer intends to demolish the building. For the most part, though, a home inspection is necessary for the buyers to identify any concerns that may need to be addressed or that may even prevent the sale from finalizing.
As your REALTOR®, I have the experience of being involved in many home inspections and I can help you determine whether the inspection findings require further investigation or whether they affect the overall value of the home. It is my job to assist you through the entire home purchase process, from the initial hunt through to possession, and I will help guide you the entire way through!
Are you thinking of selling your home in the near future but when you look around you see so many things that may overshadow your homes shine? You know that kitchens and bathrooms sell homes, and home buyers usually want to see these items completed before they move in, unless they are buying a house for a great price expecting to need to renovate it. And the trick to deciding whether or not to renovate is to figure out which category your home will fall under.
Renovations That Always Pay When Selling a House
There are renovations that pay, those that will add some value, and those to avoid. The key lies in the difference between what buyers like and what they’ll actually pay for. Here is a list of renovations that always pay:
General Repairs
Leaving your home in disrepair will not look good when a potential buyer comes to view it. Buyers will think that if you can’t be bothered to repair a broken hinge, what else could you be leaving undone, giving them the overall feeling of a neglected home. Fix anything that is broken no matter how minor it may seem.
Fresh Paint in Neutral Colors
Most buyers want to walk through and imagine their furniture in your home. A bold color on the walls could make it difficult for them to see past it and imagine themselves living there.
Decluttering & Professional Cleaning
This is not technically a renovation, but it is a very important first step in selling your home and should not be underestimated. This will help your property feel fresh and as new as possible, and will help buyers imagine themselves living in it.
Other Renovations To Consider When Selling a House
The rest of the renovations that you may be considering will need to be decided on individually. This is where your REALTOR® will be a big help deciding whether or not these renovations will pay off, depending on the overall standard for the rest of the neighborhood and for homes in a similar price range, as well as how seriously out of date your home may be currently.
Kitchen Overhauls
Almost everyone wants a great kitchen and would prefer not to have to either live through a kitchen renovation or wait to move in while the renovation is taking place. Be very careful, though, if you do decide to take on this renovation as styles are always changing and people's tastes are different. If you do decide that a kitchen renovation is in order, it’s better to keep it minimal. You may be able to recoup the costs of a new faucet and updated backsplash, but you won’t necessarily see the return for a complete rebuild with new counters and cabinets.
Bathroom Renovations
Bathroom renovations face the same challenges as the kitchen remodel—you will never really see the money you put into them, unless it’s absolutely in dire need of it. You’re better off doing a deep clean of what you have, adding a fresh coat of paint to the walls, and calling it a day.
Landscaping
Do not put a lot of time, effort and money into any landscaping project if you are planning on selling in the near future. For the most part, people are interested in a good, safe outdoor space. They may like to look at a beautifully landscaped year with flower beds and shrubs, but most people do not have the time, gardening skills, or desire to maintain it. Having a low-maintenance and easy-to-care-for space will be far more desirable than one that looks great but will require a lot of upkeep.
Home Fundamentals
A home's fundamentals are important—roofing, plumbing, electrical, heating, and cooling. Buyers want not only functioning equipment but also will appreciate knowing these items won’t have to be replaced in the near future. If they need to be fixed, you should definitely replace them but don’t expect to recoup the cost.
When it comes to any renovation questions you may have, the best advice I can give you is to talk to a REALTOR®. Since there are so many variables regarding whether or not a specific renovation will be worth it, there really is no way of knowing other than to have a good understanding of the market and what current buyers are looking for. We know which renovations will increase the value of your home and will be happy to provide some insight into your local real estate market that could influence your decision—whether or not you get your investment back, when you are selling, etc. Ask me for a free comparative market analysis and let’s about your renovation to-do list today!
Too often, people rush into buying a house when they’re not ready. Just because you’re sick of renting does not mean you should automatically buy a home thinking it’s the only alternative. Being sick of renting is most definitely a better alternative to buying and ending up with your finances in a mess or with a home that doesn’t fit your needs.
Owning a home is a big commitment, it’s not a guaranteed investment, and it’s a truckload of work. It can be a smart long-term move, but you want to know what you’re getting into. The following tips for buying a home are here to help you get started:
1) Know Your Credit Score
Your credit score is one of the biggest factors in what your loan terms will be. Know your score before you ever try to get a loan, and take the time to repair it if it's too low.
2) Get Pre-Approved for a Mortgage
A mortgage pre-approval means you should be able to get the loan, so long as nothing changes about your financial situation or your credit score. A pre-approval letter also helps when you want to compete with another buyer for a home you love. One of the first things most sellers will ask their agent when receiving offers is how qualified the home buyers are to purchase.
3) Research the Costs of Buying a House
There are a lot of fees that come with a home purchase, above and beyond the mortgage. Insurance, repairs, association fees, property taxes—you should have the income and the budget to handle all of these things if they are relevant to your purchase.
4) Work With an Experienced REALTOR®
Real estate agents are licensed professionals who work on your behalf and advocate for your interests. In most cases, sellers have a real estate agent working for them, so you’ll want someone on your side—a buyer’s agent—who also has your back in negotiations and can help you understand how to make an offer on a home. But that’s not all! Your agent will also help you find homes that match your budget and needs, provide facts on a neighborhood, negotiate an offer, navigate the home inspection, decipher paperwork, and request and review seller disclosures.
5) Understand the Value of the Property You are Offering On
Working with a real estate agent that understands market values in your local area is critical if you want to avoid overpaying for your house.
6) Verify All Information on the Listing
Another crucial thing to do before buying a house is to make sure the house listing is accurate. It would be best if you verified that all the information given about the home is right. Sometimes real estate agents put things in the listing that they may not have verified or may just not be aware of the facts.
7) Use an Experienced Home Inspector
The home inspection is one of the most vital aspects of buying a home. You will want to have someone performing it who is thorough and complete.
8) Check Previous Permits
If a renovation was done without a permit, it might not have been done right. No permit means that the work was not reviewed by an inspector, something you do not want in your new home.
9) Don’t Sacrifice on Location
Remember: you can change the flooring and even the layout of a home, but you can never change its location.
10) Don’t Do Anything to Affect Your Financial Situation
Your mortgage pre-approval is based on the information given at the time of your application. Any changes, like getting a different job or taking out a car loan, can result in denial of the loan request when purchasing a house.
Then the last piece is making sure that the house is in great shape when it gets on the market. I have all sorts of connections for that—painters and stagers and people that can help with decluttering or anything that needs to be done. And I can give my piece of advice, too, as we walk through the home and help that seller decide what needs to be done before we get that on the market.
These tips should help put you on the path to filling in your home-buying knowledge. Remember: that the more you educate yourself about the process beforehand, the less stressful it will be, and the more likely you will be to get the house you want for a price you can afford. But that doesn’t mean you have to go it alone! With my help and guidance, you can always feel sure that you are informed and guided along the way!
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