1. Do the research before you buy

When buying any home, it’s important to know the real estate market in your preferred neighbourhood, as well as any future developments in the works, by-laws, community news, and so on. Is the neighbourhood school or shopping mall closing? Is a condo being built down the road? With a fixer-upper, it’s even more important to look to the future because you’ll want to get a return on your investment after spending so much time and money on renovations.

• Pay attention to the home inspection

A thorough home inspection is never more important than when buying a fixer-upper! If there are serious structural or other costly renovations that you didn’t bargain for (such as electrical or plumbing overhauls), you can back out of the deal before it’s too late.

An inspection report will not only reveal big-ticket repairs needed, but you’ll also gain great insights into all the issues with the property so you can prioritize accordingly.

• Learn the local laws

You could come across unexpected surprises if you aren’t aware of local by-laws. For example, your home could have a ‘historical’ designation that limits certain renovations, or it could be zoned so that you can’t rent out the basement, expand the driveway, have an inground pool, and so on. You also need to know the legalities around construction permits and other municipal by-laws that could impact your investment. To get started, work with an experienced, local realtor and real estate lawyer who knows the area, as well as talk to the appropriate municipal staff.  

• Understand the finances

The odds of any home renovation coming in under budget or even on budget are pretty slim! The more that’s needed, the more that can go wrong and throw even the most financially prepared off course. You don’t want to be drowning in debt or dealing with high-interest credit cards for years after your purchase; your goal is to come out ahead, not behind. Have a financial plan in place that allows for at least 10% more wiggle room for emergencies. Further, shop around for contractors, materials and supplies, and keep track of all estimates, purchases, transactions and contracts. Think of your project as a small business and leave no stone unturned.

• Choose your projects wisely

When prioritizing your fixer-upper jobs, keep in mind that you want to choose jobs that will see a solid return on your investment when it comes time to sell, such as updated kitchens, bathrooms, flooring, windows and roofs. These cosmetic changes are less costly than big structural changes such as foundation repairs or adding another storey. Additionally, extravagant or elaborate renovations may not increase the home’s value if they aren’t appealing to potential buyers or aren’t in line with what’s going on in your neighbourhood.

It’s also important to remember that real estate markets can be volatile, and what you thought you could get for your fixer-upper after renovating might not be the case in months or years from now. This is where your careful planning and research comes in when deciding what type of repairs and renovations you want to take on. If the fixer-upper needs too much fixing for your budget and time-frame, you can continue your search until you find the best match.

When choosing a fixer-upper, make sure you’re clear on your short term and long term goals, and plan for the unexpected – financial, legal, and structural! The best way to protect yourself and your investment is to work with a real estate lawyer who knows the ropes. At Ares Law, it’s our job to guide you through the entire process, from the initial offer and purchase agreement to surveys, closing details and even drafting contracts with your contracting team. Connect with us today at 705-645-8743 and let’s get started on turning your fixer-upper into a dream home!

The post Before You Buy a Fixer-Upper – 5 Things You Need to Know appeared first on Ares Law.

Here are 5 reasons why an inspection is an essential part of your home-buying process:

1. Safety & protection

Your home inspector will look for safety issues such as mold, mildew, carbon monoxide, asbestos, electrical problems, leaks, foundation issues and so on. If any worrisome issues are detected, you can then decide if you want to proceed with the purchase and begin repairs or renovations, or you can back out of the offer and continue with your search.

• Peace of mind

A home inspector looks at things that the average home-owner doesn’t know much about. For example, they will inspect the foundation, plumbing, electrical, insulation, furnace/AC units, ducts, eavestroughs, flooring and so on. In every area of the house both inside and out, they are trained to look at not just the general conditions, but also search for potential problems. They can also ascertain if something has been recently covered up or repaired, which can send off alarm bells for an undisclosed issue that can then be further investigated.

While a home inspector may not find every single issue with the home, particularly if it’s an advanced electrical issue, for example, their analysis is a great starting point for you to decide if the home is worth buying or not. If you don’t have the time or finances for big repairs, you can simply walk away from the deal! Alternately, if you get a glowing home inspection report, you’ll have the peace of mind knowing your home is in great shape.

• Negotiation leverage

If your home inspection reveals that repairs are needed, you can work with your Realtor to decide if you want to negotiate a lower price, or that the seller will conduct (and pay for) the repairs within a specified time.

• Education

Many new homeowners aren’t familiar with the basics of home construction or the various types of maintenance needed. The suggestions in your report will help educate you on ongoing and future issues, such as your attic insulation that may need raking and a top-up, window sill covers to protect against basement leaks, or knowing which kinds of tree roots can damage your foundation. Keeping your home in tip-top shape is the best way to protect your big investment, get top dollar when it comes time to sell, and most importantly, to keep you and your family safe.

• Insurance & legal issues

The condition of your home or cottage can impact your home insurance premiums, or whether or not you’ll be insured at all. If your property has features such as an oil tank, wood stove, or outdated wiring and plumbing, it’s a bigger risk to insure. Your home inspector can alert you to any concerns, and likely recommend upgrades or suggestions.

When it comes to buying a home, it’s important to do everything you can to learn all about it. While a home inspection takes a little more time and money during an already busy period, it’s worth it, in the end, to be fully informed and know the big picture. Be sure to select a reputable, certified and insured home inspector, and review your report carefully. At Ares Law, it’s our job to protect our clients by ensuring you are armed with all the facts and legalities regarding your property purchase. If you’re looking to purchase in Bracebridge, Huntsville, Gravenhurst and the greater Muskoka region, call us today at (705) 645-8743; you’re in good hands.

The post 5 Reasons Why You Shouldn’t Skip the Home Inspection appeared first on Ares Law.

We’ve outlined the key real estate closing costs you should know about beyond your down-payment, so you can avoid any last-minute surprises and enjoy your new home purchase:

• Taxes – Land Transfer Tax & GST/HST

All property purchases involve land transfer taxes, even if it’s a condo, cottage, cabin, or vacant lot. This tax goes to the provincial government (covering health care costs, education, highways, emergency services and so on). The amount you pay is based on the fair market value of the land, not necessarily what you paid for the property. For example, a home or cottage worth $700,000 in Huntsville will have an additional cost of $10,475 in land transfer taxes. The good news is that first-time home buyers may be eligible for a refund for all or part of the land transfer tax they must pay, up to a maximum of $4000. Your Realtor or your real estate lawyer should walk you through those costs at the time of purchase so that you can plan accordingly.

If you have purchased a newly constructed home, condo or cottage, you may be subject to paying GST or HST. Be sure to ask your Realtor or real estate law team if you qualify for any rebates.

• Inspection Fees

A home inspection is always recommended, unless you are buying a new build that has a full warranty. A home inspection is valuable in determining the overall condition of the home and what work, if any, is needed. While the costs of a home inspection may vary, you can count on paying $300 – $500 on average.

• Insurance

There are a few different types of insurance required for any home purchase. For example, if you have less than 20% saved towards your down payment, it’s mandatory in Canada to pay for mortgage insurance (typically through CMCH), which protects you and your lender in case of a default on a mortgage.  

Title insurance, although optional, is a recommended expense you may wish to consider, as it provides the purchaser with protection against property liens or any other issues that may be related to any previous owners and outstanding debts related to your new purchase.

Finally, your home will need property/content insurance to cover any theft, fire, floods, accidents, injuries and so on.

• Reimbursements on pre-paid bills

It’s not uncommon for homeowners to pay in advance for their municipal property taxes, condo fees, or utility bills such as hydro or natural gas. As a result, the amounts that have been pre-paid that happen to cover the time period after the closing date will have to be reimbursed by the new owners. It’s not fair that the previous owners should have to pay for taxes and services on a home they no longer own.

• Legal fees

If you’ve worked with a real estate lawyer in the past, you know the value of their expert services. A good real estate law team helps safeguard you and your investment and will have your best interests in mind. Not only do they do their research, inspect every document, and give sound advice, they help protect you from costly, unexpected surprises.

Here at Ares Law, we specialize in real estate law and we understand all the ins and outs of real estate transactions, including the added expenses that can potentially trip you up. Our legal team has the experience and dedication you need! If you are buying or selling a home or cottage the Bracebridge or greater Muskoka region, call the Ares Law team today at (705) 645–8743 to set up an appointment and let’s get started.

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One important part of the home-buying process is to retain the services of a real estate lawyer who understands the “nuts and bolts” of your purchase and will be able to handle all the legalities. As an experienced legal team, we’ve outlined some of the common questions we get regarding visiting your newly-bought home before you move in:

1.How many times can I go to see the house before moving day?

The majority of buyers ask for two visits to the property before they move in. It’s recommended you give ample notice and be respectful of the seller’s time and schedules as well as the realtor’s. In order to set up your walk-through, you would simply need to ask your realtor to book the appointment for you with the seller’s agent. The buyer should never contact the seller directly.

2. During my visit to the house, if I find any issues what should I do?

Going back to walk through your new home is the perfect opportunity to look for any problems or potential issues. If you do see anything that concerns you, write out a list and give it to your realtor. They will pass the information along to the current home owner and will work with the seller’s agent to get these problems or issues resolved before you take possession.

3. Is a home inspection considered one of my allowed visits?

A home inspection is separate from your individual visits to your new home. Getting an inspection done by a reputable company before you move in and take possession is due diligence and worth every penny; an inspector is trained to see things you wouldn’t typically notice. For example, does the house need a new roof? Is there a crack in the foundation? Is there asbestos in the insulation? The final report you receive will give you a clearer perspective on the home as a structure (and not just your dream home) as a result of anything uncovered in the report.

4. Is the home appraisal the same as an inspection?

No, the appraisal is requested from your bank or lender and is separate from a home inspection. This appraisal is conducted to make sure the value of the property is consistent with the amount you are asking to borrow. It’s worth saying that this step ultimately protects you from potentially overpaying on the property, while also protecting the bank from supporting a poor investment.

5.What if my new house has a well and septic tank?

A lot of properties in rural areas may be on a septic system and have a drilled or dug well instead of being tied into the municipal services. If your new home has either of these systems, you must request a water test for the well. You’ll also want to make sure you are given proof it was checked and have a report telling you that the water is clear of containments. The same applies if your house has a septic system; ensure the sellers get it inspected and pumped out (if necessary) before you move in. In most cases, unless it’s stated in the purchase agreement, the seller is responsible for cleaning up the contamination. That’s an important “little thing” your real estate lawyer will have an eagle eye for in the details of your contracts.

6.What should I expect on my final visit?

You want to make sure the condition of the house is good. Take your initial list of repairs with you and check that everything has been done. Remember to take measurements of windows and doorways so that when you move in, you know your belongings will fit through the front door and up the stairs.

Whether this is your first home or your tenth, it’s always important to have all the information you can so you can feel confident moving forward with your big purchase. At Ares Law, we specialize in helping clients just like you with all their real estate needs and it’s our job to answer any questions you might have. Simply call Bernie Keating and the experienced team in Bracebridge at (705) 645–8743.

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Does a realtor have a responsibility to tell me everything about a house?

If a realtor has knowledge of an event or stigma associated with the house, such as a death or illegal substances grown in the home, for example, they must disclose the information. All real estate sales agents/realtors are governed under the Real Estate Council of Ontario (RECO) and are regulated by the Ontario Real Estate Association (OREA). With that governance, all realtors in Ontario have an ethical obligation to disclose the existence of stigmas concerning the home such as a murder, suicide, drug lab, brothel, death by natural causes or even paranormal activity. They are obligated to tell you the buyer before you put in your offer. However, in many instances, a realtor may not know the home’s history.

Is the seller required by law to share information?

Simply put, if a seller and their agent are asked a question about the property, they cannot give a false answer…it’s unethical. In fact, when listing their home, sellers complete a Seller Property Information Statement (SPIS) which details defects and concerns about the home, including any renovations, big repairs, and so on. They are trusted to complete this ‘to the best of their knowledge’. However, as of yet, there is no formal law in Ontario that states a seller must disclose information like a violent crime that has occurred on their property. Without an actual law in place, the responsibility rests on the buyer and realtor to ask as many questions as possible. The saying, ‘buyer beware’ really rings true and you’ll want to do as much research as you can on the property so you have peace of mind as the new owner.

What about grow-ops?

The police maintain a list of marijuana grow operations they have discovered in Ontario, but of course not all operations get discovered and documented. It is completely up to the seller to disclose if they knew their property was a grow op previously and report any existing defects that might have resulted from this past use. If it is shared with you that such activity has occurred on the property, you may ask for proof that the defect was fixed or will be fixed from the local health or building authorities. Again, if the buyer asks the question, the seller is obligated to answer truthfully.

Can the seller record my comments when I’m at an open house?

In more recent years, sellers have been known to set up hidden cameras and recording devices in various parts of their home. They want to hear what potential buyers are saying to be able to use that information to their benefit, by leveraging it when it comes to negotiations. The dark side to this is that if people touring the home talk about personal financial details, like how much they are willing to offer, that can allow sellers to use that to their advantage.

Canadian laws are fairly clear when it comes to privacy boundaries, but it has created a bit of a grey area in the real estate business. The legislation states that a person cannot intentionally record or listen to a private conversation using a range of devices. If a seller does use the conversations to their advantage and they are found out, the law says it can result in jail time.  

On the flip side, if a seller has disclosed they are recording the home visit or open house, it is completely legal. This is something that all potential buyers should be made aware of and be very cautious about in their conversations while touring homes. As a buyer, it’s best to save your impressions about the home for the privacy of your own vehicle or away from the property.

These are just a few factors to consider regarding disclosure issues when working with your realtor. Buying a home is a complicated process; there’s a lot to know and understand. For that reason, it’s advisable to work with an experienced real estate lawyer to make sure everything is valid, thoroughly researched and above board. At Ares Law, we specialize in helping clients in Bracebridge, Huntsville, Gravenhurst and the greater Muskoka region to ensure their property purchase runs smoothly and all legal bases are covered. Connect with us today at (705) 645–8743 and see how we can help.

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