Deposits are a common part, and have a significant impact, on almost every real estate transaction. The Supreme Court of Canada has described the deposit in a real estate transaction as, compensation to the seller for the lost opportunity to bargain with other buyers (for the property being taken off the market), and for any resulting loss of bargaining power, as the price at which the seller is willing to sell has been disclosed. In many cases, a deposit helps solidify the buyer’s commitment to the property.

 

In a typical real estate transaction, the buyer's Realtor will deliver the required deposit to his or her brokerage. The deposit clause in the purchase agreement will specify when the deposit must be paid, usually upon the removal of subject clauses.


Section 28 of the Real Estate Services Act requires that money held by a brokerage in respect of a real estate transaction be held by the brokerage as a stakeholder. The money is held for the real estate transaction and not on behalf of one of the parties. If a party does not remove a subject clause, the brokerage requires the written agreement of both parties in order to release the deposit. If both parties do not sign the agreement to release the deposit, then the parties will have to apply to court for a determination of the deposit issue. Therefore, if both parties to a contract for a trade in real estate do not consent, in writing, to the release of the deposit, the brokerage cannot release the deposit to either party. However, the brokerage may pay the deposit into court, or the brokerage may release the deposit as directed by a court order. 

 

A certain degree of written consent is generally included in the standard Contract of Purchase & Sale which both the Buyer & Seller sign at the time of an accepted offer. This generally includes the following paragraph:

 

"In the event the Buyer fails to pay the Deposit as required by this Contract, the Seller may, at the Seller’s option, terminate this Contract. The party who receives the Deposit is authorized to pay all or any portion of the Deposit to the Buyer’s or Seller’s conveyancer (the “Conveyancer”) without further written direction of the Buyer or Seller, provided that: (a) the Conveyancer is a Lawyer or Notary; (b) such money is to be held in trust by the Conveyancer as stakeholder pursuant to the provisions of the Real Estate Services Act pending the completion of the transaction and not on behalf of any of the principals to the transaction; and (c) if the sale does not complete, the money should be returned to such party as stakeholder or paid into Court."

 

 

 

 

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With every real estate transaction, a buyer is faced with a myriad of potential defects with any property. Some defects are patent or obvious, such as the property is located next to an airport, or the roof has no shingles. Generally, these defects do not need to be specifically disclosed, as they are readily identifiable on any reasonable inspection of the property. Other defects are not so easy to identify and these are considered latent or hidden defects.

 

A latent defect is one that cannot readily be discovered through a reasonable inspection of the property. Latent defects may include such things as: a leaking roof; improper wiring; or, the presence of a current or a former grow-op.

 

Latent defects in a property that are material and are known to the seller or licensee typically must be disclosed to the potential buyerThis is particularily true in situations where they may impact the use and value of the property, its fitness for habitation, or where the defect makes the property potentially dangerous.


As a common point of reference, the court has commented that:


"Every imperfection or deficiency which a reasonably careful inspection and inquiry will not reveal cannot amount to a latent defect of the kind capable of displacing the doctrine of caveat emptor. In order to qualify as such, the defect must carry with it a consequence of substance; that is, it must be of such a nature as to render the house uninhabitable or dangerous."

 

A licensee, representing the seller, generally has the same duty to disclose that a seller has at law. A licensee, representing a buyer, or as a limited dual agent, also typically has a duty to disclose such material latent defects that are known to them. Allegations are often made that such disclosure was not made. The buyer, in such cases, must prove that the seller or licensee actually knew or, reasonably ought to have known, of the defect and failed to disclose it.

 

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EXTERIOR MAINTENANCE

 

Concrete - Expect concrete to crack. While cracking cannot be prevented, sometimes it can be minimized by:

 

  • Applying a water repellent in the summer (product requires warmer temperatures to be applied properly)
  • Filling cracks with an appropriate concrete caulking
  • Filling in low spots or settled areas near/under walks, patios, porches or drives
  • Draining water away from the slab/foundation
  • Removing ice and snow as soon as possible, but never use de-ices or salts as some products will chemically attack and damage concrete. As alternate sources for traction, try using either cat litter or sand.

 

If you missed the timeframe to apply a water repellent (containing silane/siloxane) to exterior concrete (driveways, sidewalks, steps, and porches) during homeowner maintenance projects this summer, you will want to post a big reminder to do so in the spring. Application of a water repellent to exterior concrete helps reduce porosity and potential damage from the elements and street salts. Unfortunately, the city/county road maintenance, applies salt to the streets during the winter. Salt (concrete’s enemy) is then carried by vehicles on to the drive and garage floor. Then the salt water drips from vehicles causing permanent damage to the concrete.

 

Exterior Caulking and Paint Touch-Up - Repair, caulk, and touch-up paint on exterior trim, doors, and windows. Be sure to replace caulk, as needed, around windows at brick areas.

 

Exterior Doors - Adjust or replace weather stripping and sweeps as needed. Check the fit of exterior doors at the thresholds.  Adjust accordingly to keep out water, dust, insects and drafts.

 

Storm Doors - Be sure the storm door is vented to minimize heat build-up between the storm door and the exterior door. Review the manufacturer’s recommendations for proper installation/venting. Always close the storm door so it latches tightly since the vacuum between the two doors could prevent it from doing so. If not, damage to the storm door and jam could result if the door is caught by winds.

 

Overhead Garage Door - It is a good idea to have a yearly maintenance check done by a professional. They can adjust, lubricate, and repair as needed.

 

Gutters and Downspouts - Keep gutters clean from leaves and debris to avoid overflowing. Downspouts should direct water away from the foundation. Be sure splash blocks are positioned at the base of the downspouts to drain water away from the house.

 

Hose Bibs - Disconnect garden hoses/attachments to hose bibs before freezing weather. Why risk water damage to the home from a frozen/burst pipe?

 

Ice Damming - During the winter, ice and snow build-up on roofs and gutters block the water from running off the roof. This is called ice damming. As the ice and snow mass begins to form at the lower portion of valleys and gutters, the mass increases in size, pushes up and penetrates under the shingles, valleys, and soft it areas of the home. When snow and ice begin to melt and refreeze—having no place to go—ice will back up under the roofing material. This causes water to leak into the house. Since homes are made to shed water downward, this upward pushing of the ice is not normal and is considered an Act of God. If ice damming happens to your home, resulting in damage, please contact your insurance company immediately.

 

Pests - If you have a problem with wildlife intrusion, contact a company who specializes in pest detection and removal.

 

Swales - Be sure to keep rear swales unobstructed and in good condition to allow excess water to make its way to the drainage beehive. Over-seed this area with lawn grass seed (never sod) to establish a good residential-standard grass cover.

 

INTERIOR MAINTENANCE

 

Frozen Pipes - When the temperature drops below 32 degrees, some water pipes could freeze.

 

  • Keep the home heated at a minimum of 65 degrees. Open cabinet doors in the kitchen so that warm air can reach pipes under the sink. This includes any rooms that have plumbing located on outside walls.
  • Know where the primary plumbing shut-off valve is located and how it operates.
  • Insulate pipes (heat tape or weatherproof insulation) that are exposed to cold air, especially in the garage, basement, or crawl space.
  • Let water flow at zero or below. Leave a thin stream of water dripping/running from all faucets in the home when the temperature remains below zero. Continuous water flow from at least one faucet can help keep either cold air or frozen ground from freezing pipes and plumbing fixtures.
  • Remember, after a long cold spell, the ground can still be frozen even when the outside temperature is above freezing.
  • When a pipe freezes, open a faucet at the end of the pipe to give the water some place to go after it thaws.
  • Do not leave garage doors open for extended periods of time.
  • If there is any damage to the home from a frozen pipe, contact your homeowner’s insurance agent as soon as possible.

 

Leaks - Moisture can cause costly damage to a home, so it needs to be addressed promptly. Leaky plumbing or sources of water penetration should be repaired immediately. Inspect and replace caulking around tubs, showers, sinks, and countertops as needed. Use the appropriate caulk and follow the manufacturer’s directions carefully. Prevent moisture intrusion of any sort.

 

Drains - Preventative maintenance helps you stay away from sewer cleaning bills. Fixing the drain is less disgusting than ignoring it. The first step in cleaning a drain is to make sure the clog is a local problem, not a systemic one. Plunger to the rescue! If two or more drains (toilets, sinks, washer, etc.) suddenly plug up, become sluggish or gurgle when used, call the plumber. Minimize use of toilets, showers, dishwashers, washing machines, etc. until an “all clear” is given.

 

Heating System - Have you had your furnace serviced yet? The manufacturer recommends having a professional, seasonal maintenance done to keep the system running at peak efficiency. A seasonal maintenance and trial run in the fall are more convenient to determine service needs before winter hits. Balance registers and make other minor adjustments for seasonal changes. Vacuum registers and grilles to keep free of dust, dirt, and grime. Filters should be replaced once a month. Clogged/dirty filters are one of the main causes of system failures.

 

Fireplaces - Before lighting, the damper must be in the full open position. Fireplaces with doors should always be operated with the doors fully open or fully closed. Refer to the fireplace manual for proper lighting and operating instructions. While fireplaces give a cozy atmosphere, they can be a source of drafts. To minimize drafts and loss of warm air, be sure the damper is closed when not in use.

 

F.Y.I.’s

 

Counter Tops - Towels and rubber drain mats left on counter tops can trap moisture underneath them. Water or other liquids left unattended can seep under sink rims and into joints/seams. Extended exposure of moisture to counter tops can cause the laminate to warp and blister.  Please be careful.

 

“Drop-in” bowl cleaners - Can cause deterioration of some internal parts in the toilet and void the manufacturer’s warranty.

 

Dryer Fire - Blocked lint screens or build-up in the venting system can start a fire. If the lint screen is clogged, or, if there is an obstruction in the vent, the drying time is longer, and eventually moisture build-up in the vent line can result causing damage to drywall and other surrounding areas. Clean the lint screen before each load.

 

Faucets/Aerators - Hard water prevails in this area. Minerals can enter the supply line and cause faucets to drip because the washers wear more rapidly when they come in contact with foreign matter. Periodically remove and clean the aerators on faucets and showerheads to allow the proper flow of water. Consider a water softener unit to reduce hard-water problems.

 

Smoke Detectors - Dust or vacuum to keep dust and debris from interfering with sensors.  Test by pushing the test button on the smoke alarm cover until the alarm sounds, then release. The alarm sounds if the electronic circuitry, horn, and battery are working. If no alarm sounds, the unit may have a defective battery or other failure. Refer to the operating manual for detailed instructions.

 

Electrical Outlets - Save time and service calls.  Check GFI’s before calling the electrician. It might just take a simple reset to resolve the problem. 

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By Gail Vaz-Oxlade | MoneySense

 

Houses have grown to outrageous sizes. Termed "McMansions," these homes would function as hotels in Europe or Asia, but here in Canada one family needs 3,500-6,000 square feet to not get under each other's feet. Don't even get me started on the rabid renovation cycle that sees perfectly good kitchens, bathrooms and floors being ripped out and replaced for the sake of fashion. "Oh dah-ling, cherry wood is so passé!" All this while we're banking next to nothing for the future. Heaven help us.

 

Big ol' TV star that I am, I live in a modest home. (Rumour has it the mansion being built down by the lake is either mine or Elton John's.) I call my home, "My Little House" and I love it for a whole bunch of reasons.

 

Smaller means fewer carrying costs. My Little House costs about $94 a month to heat and just a little more than that to cool. And if you downsize your mortgage along with your living space, you can get to mortgage-free even faster! Hey, I'm there. It's wonderful.

 

Smaller means more to save. Because my carrying costs are lower, I can stash away more for retirement. The thought of being old and sick is bad enough. Being poor too would really suck!

 

Smaller means less work. From vacuuming to yard maintenance and roof replacement, a smaller home means you have to pay out less to keep your home from falling into ruins.

 

Smaller means more time. If you swap a big house for something smaller that's more convenient to work, your commute will shorten and your personal will grow.

 

Smaller means less stuff. There's nothing to put a damper on spending like not having anywhere to put the stuff you would buy.

 

Smaller means more family. One of the biggest downsides to a big home (from a mommy's perspective) is how easy it is to spread out and not see each other. If your dining room doubles as the homework space, you can help with homework while you make dinner. There's a lot to be said for cozy.

 

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September 2013

 
 

 

Welcome to September!

 

All corners of the province have experienced unbelievably good weather through the summer, but it looks like we can't escape the wet stuff forever.

 

For the real estate market, last year's relatively sluggish summer has rebounded strongly this year. It looks like we've entered a period of relative stability, with many areas in balanced - rather than buyer or seller - market conditions. Remember though, real estate is local. It's hard to take regional stats and make inferences about a neighbourhood.

Moving forward, it looks to be a relatively busy Fall market, as interest rates have begun climbing and buyers with pre-approved mortgages look to take advantage of more favourable rates. We anticipate a solid next few months as this wave of buyers ripples through the market. Expect to see things taper off closer to Christmas.

 

Given this, for those of you thinking about selling, it is important to realize how vital the Art of Pricing is to the sale of your home.

 

All sellers want the highest price possible for their homes, but the strategies to get there are not always intuitive. In certain circumstances, pricing low can be more effective than pricing high, while in others, pricing above market value can be a winning strategy. In most cases, however, the optimum pricing strategy is to price within 10% of market value and let the market decide. After all, the 'list price' comes with a caveat: Or Best Offer.

 

Top Reasons for NOT Pricing High:

  1. You lose out on potential buyers who put a price cap on their property searches.
  2. Serious buyers question the motivation of a seller with an overpriced listing.
  3. You provide a strong comparable for your neighbours who are properly priced. You are effectively selling other people's well-priced homes.
  4. Buyers assume that properties which remain on the market for long periods of time have something inherently wrong with them.
  5. Other agents will be more hesitant to show your home.

In a quickly rising market, pricing strategies tend to matter less, as underpriced listings are bid up to market value and overpriced listings simply wait until the market catches up to them. However, in flat or falling markets, pricing plays a pivotal role in how much you may ultimately sell your house for.

 

In a flat market, buyers have more time to analyze the market and therefore become more educated about value. Houses that are overpriced will simply sit on the market, as well-priced new listings come on to replace well-priced recently sold listings.

 

In a falling market, the optimal pricing strategy is actually to price BELOW market value. A simple exercise that pricing experts like to use in this situation is to visualize catching a fly ball. The ball represents the market and your glove represents your pricing strategy. If you price too high, the glove will simply swing across where the ball was. If you price at market, there's a good chance you will miss it. But if you price just below market value, there's a greater likelihood of catching the ball. After all, it's better to take a little bit less than to risk having the ball drop in for a double.

Many factors come into play when it comes to pricing your home and a professional can help you through that process. To find out more, please feel free to contact me at the information above.

 

 
   
  (Click chart to see larger image)  
 
 
*This communication is not intended to cause or induce breach of an existing agency agreement.

*Although this information has been received from sources deemed reliable, we assume no responsibility for its accuracy, and without offering advice, make this submission to prior sale or lease, change in price or terms, and withdrawal without notice.
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