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Different Types of Closing Costs for Canadian Home Owners

Picture this. You just bought a fantastic Ottawa home, your family can’t be happier, it’s close to main amenities and stores and you can’t wait to start mingling with the neighbours. But wait, your home is still not paid for completely!

Have you considered the closing costs you still have to pay? These are the list of additional charges that your lawyer might be coming over right now to present to you. These are completely legit by the way. According to the Canada Mortgage and Housing Association (CMHC) and Genworth Canada in addition to the down payment, 1% (or 2 – 2.5%) of the purchasing charges are allotted to closing costs either land transfer taxes or legal fees. These can change from city to city, but the main particulars of these additional charges remain the same. The following are some of them in detail:
 

Appraisal Fee

The appraiser may have provided you with a professional view of the market value of your brand new home, but he/she needs to be paid too. The charges can vary location wise and depending on your lender, but you can expect a bill as low as $300 for a partial appraisal. A full appraisal can come to about $550 plus G.S.T, but it can go higher if your home is large, custom made or situated in a remote location.

Home Inspection Charges

A complete Ottawa home inspection is made to ensure buyers their money will not go to waste. Since that analysis was for your benefit, you can expect a bill amounting to $300 - $450. No need to baulk at the price though! These inspections are well worth the investment since those professionals can pinpoint problem areas your untrained eye might miss.

However, make sure you are getting your money’s worth by making sure the home inspector has liability insurance in case of accidents during the home evaluation.

Fire Insurance

Once you move into your new home, your mortgage lenders will ask you to acquire a fire insurance certificate for it. The charges can mirror the original mortgage amount or replacement cost of the home to an extent, but it typically falls between $250 - $600 for most homes or properties.

HST or Harmonized Sales

If the mortgage you owe is insured by Genworth Canada or CMHC, you can expect a 13% HST or Harmonized sales if you call Ontario your home. This is supposed to be paid at the time of closing along with the charges owed to the abovementioned entities. HST only applies to the services rendered for the transaction but will also apply to the purchase price of a brand new home (on builder forms).  Even if the insurance charges are included in the mortgage fee, you will still need to pay the P.S.T as one of the closing charges.

Besides these, there are a few other closing costs that need to be taken care of after you purchase your new Ottawa home. However, not all of them may be applicable to you since each varies by location, type and price of the home. Keep these points in mind when you are talking with your lawyer so that you are completely prepared to take care of those costs and you won’t have anything to worry about.

Visit www.bennettpros.com for all your real estate needs.

Things to Consider when Selling your Ottawa Condo

If you plan on selling a condo in Ottawa, chances are you are facing some difficulty locating prospective buyers. No, it’s not because of your home. Condos are hot in today’s market! If you would like to make a successful sale, there are a few things you have to keep in mind before you put on your salesman hat:

First Impressions Count

The owner of a home is ultimately responsible for its upkeep and maintenance. If you show potential buyers a condo that looks rundown and is in desperate need of a new coat of paint, no one is going to take you seriously. Even if your Ottawa condo looks presentable, those real estate agents and buyers will still go through each room with a fine toothed comb before they even think of buying it.

The simplest way to fix this problem is to actively participate in condo association meetings. This includes gathering (and implementing) as much information regarding your condo’s upkeep as you can. Once you put them in practice, you will have an easier time convincing potential buyers to give your home a chance.

 

See through your Buyer’s eyes

No matter how frustrated you get seeing those buyers walk out the door, your condo will remain owner-less until you know what they actually want. You see, buyers aren’t stupid. They know what they are looking for and even the slightest defects can make them back off.

Your job is to make them feel completely comfortable by ensuring that all taxes are clearly identified on the property and disclosure documents don’t leave them scratching their heads in confusion. The latter is of particular concern to real estate agents and buyers since it details the condition of the entire condo such as the state of the plumbing, overdue taxes (if any), additional charges etc. If they feel uncertain, they might hire a building inspector for a detailed inspection!

Give Your Condo a Personal Inspection

Even if you are a regular at those condo association meetings, make sure to run a critical eye over your home before inviting any interested buyers. Check for leaky plumbing, mould, water damage and any other defects that can put them off. Fix them yourself or hire a handyman to do general repairs for you before asking anyone to come over and analyze your home.

Better yet, hire a professional to thoroughly examine your walls, ceilings and floors. They know what to look for and can even give you relevant advice regarding your condo’s upkeep. If they can give you papers stating your condo is in top condition, even better! Present them to buyers to reassure them that proper measures were taken to ensure they received the best home their money could buy.

Condo or Ottawa homebuyers are not just looking to place a roof over their heads. They are on the lookout for homes that can enrich their life style and be a welcome port in a storm after a hard day outdoors. Even if your condo is considered to be the best, very few will consider buying it if it has defects. Respect their needs by maintaining your home. Chances are you’ll have a successful deal at the end of it.

Visit www.bennettpros.com for all your real estate needs.

First Time Sellers: Things you need to Know

Did you find the process of buying your first home daunting? Were you are overwhelmed by the end of the whole buying process? Now that you are getting ready to sell your first home, you might be skeptical and not that excited about the whole selling process because of your prior experience. Also, the Ottawa real estate market looks complex and the rules of the market have changed over the past few years. However, by hiring a good realtor and following the tips given below, you can easily sell your home.

Believe in Yourself

Many Ottawa home owners have been involved in the selling process. You might have even bought your home from a family who used to live there. Remember to have faith in yourself. If they can survive the process and live to tell the tale you surely can to.

Set a Goal

What are you looking for at the closing? A bigger check or a higher selling price? Remember they are not the same. Not only do you have to look at the selling price but you also have to look at the terms and have a good realtor on your side.

Changing Times

The real estate market in Ottawa has changed over the past few years. Purchases and Sales through the internet are now common. Along with this you also have to provide disclosure forms to the buyer, get a home inspection and deal with the line of brokers from many potential buyers. It is therefore important that you have decided on all aspects of your sale before you put the house up for sale.

Clean Your Home

Just imagine going to a grocery store and finding fruits and vegetables thrown together in a large box. Not a nice picture right? You like your fruits and vegetables neatly lined along the shelves. This is why you need to keep your home clean and everything should be placed in an organized manner. Buyers will not be happy to see a mess home with clothes falling out of the closets and doors creaking with every move.

Fix instead of Hiding

Home inspections are now very common. It is to help buyers from being duped. As a buyer you expect everything to be perfect therefore it is your duty as a seller to make sure that you have taken care of all the issues in the house that would put you off from buying it. Even if a buyer is not able to see any technical faults, a home inspector will see them easily.

Current Market Trends and Rivals

Contact your local Ottawa real estate agent when you decide to sell your home. Your agent will explain the current trends of the real estate market including what type of homes are in demand these days and how you should price your home according to those trends. The realtor will also help you understand that your property will face competition and how to make the best of the competition and come out on top.

If you are selling your house for the first time there are many things that you need to look at. There are 185 steps in the home selling process. Just putting up a sign and an ad in the real estate section of your local Ottawa newspaper is not enough. Talk you your real estate agent today and sell your home without fast, for top dollar and with the least amount of hassle.

Visit www.bennettpros.com for all your real estate needs

Things to Do After Buying a House

Finally! You have managed to buy your dream home. Of the many different types of homes available in the Ottawa real estate market, you have finally managed to find the perfect house. We can understand that the process was stressful and you had to keep meeting the realtor, lenders, lawyers and all the other people involved.

The diverse housing styles available in Ottawa probably did not make the choice any easier. With unique brick homes with Victorian design in Glebe and the more traditional homes in Kanata you may have had to rethink and put in a lot of effort before you bought your humble abode.

However, this does not mean that you can kick back and relax. Your financial responsibilities as a home owner are just beginning.

Timely Mortgage and Insurance Payments

It does not matter if you have to make payments weekly, monthly or biweekly; always make your mortgage payments on time. Late payments may affect your credit rating negatively and will also result in late charges. If you continue to fail to make mortgage payments you could even lose the house because of foreclosure.

To avoid such situations, have payments deducted automatically from your account and keep at least three months worth of payments as savings for hard times. If you still have trouble making your timely payments, talk to your lender and see what can be done. Insurance and property tax payments also follow same route. However, instead of foreclosure you might face legal and financial charges in case you are not able to make the payments on time.

Operating Costs

There are many on going costs that are related with everyday operations of your home. These include costs like security alarm service costs, gardening service, snow removal service and maintenance and repair costs. If you own a strata or a condo some of these costs will be a part of your monthly association fee.

Save for Emergency Repairs

There are some repairs that you can do on your own and you may also be able to identify most of the repair and maintenance work beforehand. However at times there are some repairs that are unexpected. These can be costly and you be corned into a tricky situation if you do not have an emergency fund set aside.

Live Within a Budget

Though you should have prepared a monthly budget before you bought the house, it is a good idea to start one now. You should monitor your monthly spending and evaluate the change every month. This will help you determine how close you are to reaching your financial goal.

If you have the habit of buying things on credit and spending more than what you earn, it is time to cut back. If you cannot manage your money on your own talk to a professional and save your home and money while you still can.

The real estate market in Ottawa is blooming and flourishing at the moment. Talk to an agent at Bennett Property Shop today and find what else you can do to save costs and the dream house you just bought.

Seize the Day

Seize the day:
Buying sooner pays off as mortgage rates begin their slow but inevitable climb

I can remember when mortgage rates sat at 21%. That was back in 1981. (Of course, I was only an infant at the time. ) Compared with those difficult days, recent news of a mere 0.60% increase in the big banks’ posted rate seems almost cute.

But, while the overall outlook is good for 2013 and 2014, too much complacency can cost you hard-earned dollars.

You don’t have to be a veteran market-watcher to know that Canada has been enjoying historically low mortgage rates: discounted rates have been hovering around 3%. (That’s for a five-year fixed rate mortgage.) Thousands of first-time homebuyers have jumped at the chance to lock into rates like these.

But, from the Governor of the Bank of Canada to the heads of the big banks, financial experts agree that interest rates cannot remain so extraordinarily low. BMO Capital Markets Senior Economist Sal Guatieri has suggested that a “normalized” mortgage would be closer to 4.99%.

Now, over the past few weeks, it seems the big banks have begun the slow but inevitable mortgage rate hike. How might it affect you? Let’s do some simple math:

Let’s say you’re looking at purchasing a $250,000 condominium. As of press time, the posted rate of several of the big banks is 3.69%. Lock in now, and  (assuming 25-year amortization ), you’ll pay $1,273 monthly.

If you wait till rates normalize at 4.99%? You’re looking at $1,452 monthly – that’s  a difference of $179 a month. Over a five year term, you’re losing $10,740. I don’t have to tell you what you could do with that money.

But perhaps more significantly, an higher rate will decrease the amount you’re approved for – by tens of thousands of dollars. Play around with an online mortgage approval calculator: you’ll be amazed. With an income of $64,000 and a down payment of $20,000, today’s mortgage rate will get you approved for $252,000. At 4.99%, that approval suddenly drops to $228,000. That may mean the difference between buying the home you love and settling for one you can afford. 

I’m all for buying the home you love.

 Visit www.bennettpros.com for all your real estate needs.

Mortgage Basics

If you have already had a look at our blog, you surely have seen a couple of posts that explain a few of the most basic mortgage related questions that buyers have. When you look for Ottawa real estate properties, the first and foremost thing you need to do is understand the basics that are involved with buying a mortgage and how the monthly payments are calculated. After this, you get yourself pre-approved for a mortgage. There are few benefits of a pre-approved mortgage that can help you in buying your dream home.

We define mortgage as a loan that is specific for real estate. The loan is provided with one basic condition that if for any reason the borrower is not able to keep up with the timely payments the lender has the right to sell the property so that they can get their money back.

The monthly payments are based on the amortization rate and the time period for which the mortgage loan is issued. These payments are inversely proportional to the amortization time period; the larger the amortization period, the smaller the monthly payment. The time period is usually between 10 to 25 years.

Your mortgage calculations will depend on the amount of the mortgage you qualify for. The pre-approval process can give you a fair idea of the amount that you can avail and the amount you have to pay for down payment. The pre-approval process begins after you provide all the necessary financial documentation to your lending institution. The lender will then check for your credit score with the credit bureaus. It is against this information that the lender will provide you a complete mortgage plan that will include the amortization period, interest rate and the monthly payments that you will have to make.

While many people do not believe in getting pre-approved for a mortgage, we cannot stress its importance enough. Pre-approval will save you many complications that can come once you set your eyes on a particular home. Also, many realtors will not work with you if you are not pre-approved.

The most important reason why you need to be pre-approved for mortgage is that it will give you a clear picture of the type of real estate you can afford. Another reason is that a seller would be more interested in your offer if you have the means to quickly provide the cash.

Therefore before you get yourself pre-approved make sure that you have not provided any false information to the lender. Another reason you might not get pre-approved is if the mortgage inspector values the property to be worth less than the asking price. Thus, when you decide to look for a real estate property in Ottawa make sure that you are pre-approved so that you have a better chance at ownership.

Visit www.bennettpros.com for all your real estate needs.

 

How to Invest in U.S Real Estate

The US investment market is still suffering from the consequences of the recession that hit its financial market in 2007. Although the market has picked up quite a bit areas like Nevada, Florida, Arizona, and California, areas that were hit the hardest are still below the replacement value. The Ottawa real estate market is quite different, but as an investor you should try to have a look for an investment opportunity in our neighbouring country.

The Canadian dollar still holds strongly against the U.S dollar. This in turn means that if you invest in US assets, you are likely to get a decent return over time. Taking a close look at these facts suggests that Canadians have an opportunity to invest in the best US real estate. In addition, you will be able to enjoy the summers with your family in the sun and the value of the property is likely to appreciate in the coming years.

It may sound like a dream come true but there are few things that need consideration before you dive into the opportunity. If you are planning to buy property for purely business purposes then you have to consider the following:

Passive Real Estate Investment does not Exist

You will require local knowledge of the area in which the property is located. You want the house to be located in the perfect neighbourhood and you might even let it out on rent while you wait for the value to increase. A local professional will help you manage the property and keep it occupied without any problem.

Mortgage Issues

If you are planning to find leverage or a loan from an American lender then you are in for a surprise. Even with mortgages cheaper than before, it is very difficult for Canadians to qualify for a mortgage therefore you might have to pay for the home in full. Your Ottawa Real Estate agent can look into alternative solutions

Taxes!

Unless you have prior experience and property in the US, you might want to expose yourself to the various US taxes that are involved in the buying and renting of an investment property. Not to mention you will have to file for yearly tax returns. We would highly recommend talking to an account familiar with investing in US properties.

Lack of a Diversified Investment Portfolio can be Disastrous

If you have just one rental estate in the US, you should be ready for all consequences. Deadbeat tenants, uninsured damages and property in the wrong area are all ingredients to a recipe for disaster. It is therefore important that you have more than one type of housing property in the US.

Your Ottawa real estate agent will help you in making the right decision for your real estate investment in the US. They can help you rent, sell and buy homes in the US along with all the help and information you require for mortgage.

Visit www.bennettpros.com for all your real estate needs.

Avoid Homebuyer Traps

It does not matter what type of house you buy, real estate is a major investment and requires a lot of cash. For some buyers the process can be even more costly because they fall prey to costly mistakes and end up paying extra for the home they want or losing it to another buyer, or worst of all buying the wrong house. Your Ottawa real estate agent can help you avoid the different buyer traps that are set so that you can get the house of your dreams.

Blind Bidding

It is important that you study the market before you place a bid. It will help you figure out if the seller is asking the right price or not. Without proper market research you could easily bid a lot for a house or you could bid too low.

Buying the Right Home

As a buyer, it is very easy to be swept away by all the excitement and emotions of buying a new house. You might make a hasty decision and end up with a house that is either too big or small or too far from work. And by the time you realize that you made the wrong decision, it might be too late. Before you go to a real estate agent in Ottawa make a list of the things that you really need in your new home. Follow all the steps that are necessary when you buy a house before you sign on the dotted line.

Clear Ownership

Before you sign the ownership papers make sure that you are the sole owner. You do not want to deal with any tax liens, leases, easements, or undisclosed owners. Have a complete title search before you sign the papers.

Accurate Survey

Make sure that you have a copy of the updated property survey that clearly marks the boundary of your property. If the survey is not updated, you will see that there are structural changes that are not shown. Make sure that you carry out a thorough inspection of the house. By hiring a home inspector you can find the different faults that are present. Remember that the seller is also there to maximize his profit so you need to take all the necessary precautions.

Pre-Approval on Mortgage

Many buyers make the mistake of not getting a preapproved mortgage. A pre-approval on your mortgage helps you shop for a home without worrying if you can afford it or not. It is not only free, but also convenient for you and your real estate agent.

Covered Costs

You need to identify all covered costs. You will be surprised at the number of costs that will come up when you close the transaction. Talk to your real estate agent and ask them about all the hidden costs. Make sure that you see all the paper work before you close the deal.

Your Ottawa real estate agent will help you avoid all these mistakes and many more that you might make unknowingly. Contact Bennett Property Shop today and talk to the best real estate agents in the city.

Visit www.bennettpros.com for all your real estate needs

Mistakes Made By Real Estate Investors

You must have heard a lot of people telling what to do when you are investing in real estate. However, people fail to mention what not to do. It is this part that is of utmost importance for Ottawa real estate investors. If you are an investor, you might not be very happy with your current portfolio with the falling market prices. If you want to continue to succeed you have to avoid the mistakes you have already made in the past and also avoid any other mistakes that you can make in the future.

The most common mistake that many investors make is that they are not focused on their investment plan. Either investors do not have a plan or they are easily distracted from the plan when they see new lucrative deals. If you stick to a thought out investment plan that is based on fundamental real estate principles, you will make more money and you will also minimize any risks your investment can face.

Ideally every investor would like to buy property that will grow in value over time; the rental income of the property will exceed the expenses and the equity will continue to grow with tenants paying for your mortgage. If you are buying property just because its value will increase over time, you are taking a huge risk which will most probably result in losses. Your focus should be properties that will generate enough income that you can take care of all expenses related to it and you are able save some profit.

Do not forget to measure all risks and rewards. People are always worried about return on investment. They should also consider the return on risk or return on time. Time is the most precious resource for an investor. The money lost can be regained in some way or the other, but the time lost on a particular investment can never be regained. You should always weigh the risks against the return that an investment is offering. Most investment opportunities that offer big returns come with big risks. If you are not able to manage the risks, you might end up draining your funds.

Another mistake that many real estate investors make is that they try to make the investments on their own. It might seem that you have all the information available on the internet and you can work out the deal on your own, but in reality this is not true. If you think that you are getting good return on your investments and you have managed to take care of them well without involving a real estate agent you are wrong. A real estate agent will help you manage your portfolio and will let you know of all the risks that are involved with your investment.

As a real estate investor it is very important to ensure that you avoid these mistakes. Contact your local Ottawa real estate agent today and save your investments while you still can!

Visit www.bennettpros.com for all your real estate needs.

 

Mistakes to Avoid When Selling a House

Do you have a house in Ottawa that you’re trying to sell? Are you trying to do it on your own or have you hired your relative for the job? In either case, it would be a good idea that you hire a proper real estate agent to sell your house. At Bennett Property Shop we help you avoid the common mistakes that can decrease your profits from the transaction.

It is important that you keep a close eye on the market at all times. You might get good money when you sell the property when the market is strong, but your profits will be used up in buying the new house. If you sell your house when the real estate market is not that strong, you will see that you can get a better price on your house when you add in some renovations and make it appear better in comparison to what the market has to offer. However, it is better to wait for the market to improve.

Your house should be priced according to current market trends, not according to what you think it is worth. If you have over-priced your house even slightly, people will reject it in favour of bigger houses that are available in the same price. At the same time, people who could afford your house at market rate would not even look at it because you have it priced out of their range.

You do not want to be one of those sellers whose house is on the market for a long time. By charging a bit more than the market, you could be delaying sale and in turn ruining your chances of getting full price. If your house is up for sale for more than a month do something! Talk to your real estate agent and review the price, make repairs or add improvements and incentives for buyers. Do not forget to hold an Open House to announce the changes.

Never ask a relative to sell your home under any circumstances. It is possible that you might end up selling it for less and after a prolonged duration. When you hire a real estate agent, do not forget to sign a contract with them with a guarantee of performance.

You should avoid telling exaggerations that would attract buyers but would disappoint them when they see the house. Try to keep a well maintained yard so that buyers are attracted. Keeping the inside of the house clean is a no brainer and something that should be done at all times. Make sure you are done with all the necessary repairs and that everything is squeaky clean.

You should avoid these costly mistakes and hire a good real estate agent in Ottawa to help you sell your house as soon as possible.

Visit www.bennettpros.com for all your real estate needs.