Ask a Realtor anything

[davepratt]

Re: Ask a Realtor anything

Buyer dies, the estate remains responsible for the sale regardless.

If you read the clause it did state that if the Buyer fails to close. If the seller fails to close that is a different issue altogether. Our lawyer is still tweeking it as mentioned.

Lawyers can poke holes in anything but long and short it was used in this case to weed out the less qualified buyers and it did it's job. The three weakest overall offers would not sign it... worked for us.

The estate can drag it out for years. Doesn't help the seller. I did read the clause Marnie and it doesn't state who caused the buyer not to close. I just ran it by a very prominent real estate lawyer who said this clause doesn't have a chance to stand up in any court. It probably weeded out 3 otherwise qualified buyers because it's incredibly one sided and they had very good legal advise. It borders on bullying due to the multiple offer situation. You would never get away with it in a more balanced market.

[veryold]

Re: Ask a Realtor anything

in case anyone is interested: just chatted with my next door neighbor, who said that his sister in vancouver mentioned to him that the RE market, while still insane there, has cooled a bit in the recent months.
maybe it's just a pause before it continues it's bull run, or maybe a sign of a more substantial reversal, who knows ?
cheers !

[Frorose]

Re: Ask a Realtor anything

The estate can drag it out for years. Doesn't help the seller. I did read the clause Marnie and it doesn't state who caused the buyer not to close. I just ran it by a very prominent real estate lawyer who said this clause doesn't have a chance to stand up in any court. It probably weeded out 3 otherwise qualified buyers because it's incredibly one sided and they had very good legal advise. It borders on bullying due to the multiple offer situation. You would never get away with it in a more balanced market.

difference in legal opinions then. (and AGAIN...the office lawyer is tweeking it)

If you had presented, I'm sure as the professional you are, you would be well aware of your clients ability to pay and be able to explain to a listing agent why we should not have any concerns (as several agents did without issue..one was concerned about the clause and reworked it to our mutual satisfaction. That was fine with us).

Based on some of the agents presenting and the lack of any actual knowledge of what their clients even did for a living let alone if they were qualified for financing as said..it did it's job. Good legal advice? Hardly. If they had good legal advice as per your friend's opinion then they had nothing to lose by signing it. No harm or foul either way then.

You know full well people are getting stupid during offers and upping their numbers without any idea if they qualify at that number. I'm all for getting my client the best number but it better darn well be a qualified number.

If the bank doesn't appraise out the number? How will the buyer cover the difference? That is a perfectly acceptable question to ask. You have to have a huge amount of confidence in the buyer these days and the cooperating agent actually doing their job to qualify the buyer. You know full well there are alot of lazy agents out ther who happily will just rep someone without properly qualifying. Getting my seller a high number that doesn't have a chance of closing doesn't help anyone. We are sadly seeing more of it out here. If you aren't over at your end fantastic.. My eyes have been opened to an awful lot of shady back room deals and questionable financing practices so....

In a more balanced market we wouldn't be in crazy multiple offers and we would be back to good old fashioned negotiation and perhaps a little bit more professional behavior in the industry. I would be quite content with that truth be told on either side. We priced this home pretty much exactly where it should have been listed at. We did expect multiples but not that many. As I said earlier. No one was forced to sign the schedule C addition, but my job as a listing agent is to protect my sellers even if it means putting in a clause that may or may not be enforceable as a means test.

I have had my share of agents attempt to "bully" me on my listings, this falls quite short of some of the things some agents have said to me during offer presentations.....


Anyhow. I am off to show some homes tonight. Happy discussing. Don't really want to get into a tissy contest over semantics. Long story short if it works great...if not? The lawyers are going to go to battle over it anyway. Once the new clause has been tweeked I'll send it to you and see if you like it any better.

I'm out

[nearace]

Re: Ask a Realtor anything

in case anyone is interested: just chatted with my next door neighbor, who said that his sister in vancouver mentioned to him that the RE market, while still insane there, has cooled a bit in the recent months.
maybe it's just a pause before it continues it's bull run, or maybe a sign of a more substantial reversal, who knows ?
cheers !

More likely the new rules for off shore buyers.

[golfinseb]

Re: Ask a Realtor anything

Awe renovations worth the investment or are you better off leaving a house "dated" in this market?

[davepratt]

Re: Ask a Realtor anything

Awe renovations worth the investment or are you better off leaving a house "dated" in this market?

It totally varies by area and the types of renos you're considering.

[nomullies]

Re: Ask a Realtor anything

Awe renovations worth the investment or are you better off leaving a house "dated" in this market?

Great question. I too would like to hear some more takes on this. We'll be empty nestors soon in a 2600 sq ft house in Missingsauga. Kitchen done four years ago but most other renos 20 years ago. We are debating what to update and whether to update at all. And also whether to stay or leave. No grandkids in the near future.

Where to move to is another question. Have dog so condo out.

[dmcdam]

Re: Ask a Realtor anything

Great question. I too would like to hear some more takes on this. We'll be empty nestors soon in a 2600 sq ft house in Missingsauga. Kitchen done four years ago but most other renos 20 years ago. We are debating what to update and whether to update at all. And also whether to stay or leave. No grandkids in the near future.

Where to move to is another question. Have dog so condo out.

I'm no expert but in my limited experience, the timing of your listing seems to be more important than renovations. Take this place for example:

https://www.thestar.com/business/201...k-concert.html

The owner took advantage of the low inventory to garner lots of interest. When we sold our last home, two agents I interviewed said to wait until after Labour Day to list our place saying that they'd offered the same advice to several of their clients. Only one agent recommended listing it before Labour Day, pointing to the fact there was zero inventory in our area at that time. We took her advice and were the only home listed in the north end of Bolton. Our renovations were basically paint and lipstick, but we focussed on staging and decluttering. It went to multiple offers and sold for $110k over asking.

[Jeffc]

Re: Ask a Realtor anything

Great question. I too would like to hear some more takes on this. We'll be empty nestors soon in a 2600 sq ft house in Missingsauga. Kitchen done four years ago but most other renos 20 years ago. We are debating what to update and whether to update at all. And also whether to stay or leave. No grandkids in the near future.

Where to move to is another question. Have dog so condo out.

you've done the kitchen which is where you would get the biggest bang for your buck in terms of ROI. Bathrooms are next. Other than that if it were me I wouldn't do a ton provided the rest is in good shape and well taken care of.

[dmcdam]

Re: Ask a Realtor anything

you've done the kitchen which is where you would get the biggest bang for your buck in terms of ROI. Bathrooms are next. Other than that if it were me I wouldn't do a ton provided the rest is in good shape and well taken care of.

I've always heard/read the same things but many of the stats I've seen listed say only expect about 75-80% ROI on kitchens and bathrooms. That means if you're renovating strictly to sell, then you still might be throwing away 20-25% of your investment. If you're going to live in it for a few years before selling then any unreturned dollars were simply the cost of enjoying your renovated kitchen or bath for those few years before selling.We did do an inexpensive reno on our kitchen about 2 years before we sold - new quartz countertops/sink/taps/trim/lighting, painted existing cabinetry, new tile floors, and fresh paint.

IMO the more important thing is to ensure that potential buyers can picture themselves living in your home in its current state without feeling like something is a disaster and needs to be renovated immediately. That means no peeling paint, chipped or broken countertops, cupboards, and everything in clean, good working order. Most buyers can live with things being outdated as long as they're in good shape. Fresh paint is big.

[Benz]

Re: Ask a Realtor anything

Great question. I too would like to hear some more takes on this. We'll be empty nestors soon in a 2600 sq ft house in Missingsauga. Kitchen done four years ago but most other renos 20 years ago. We are debating what to update and whether to update at all. And also whether to stay or leave. No grandkids in the near future.

Whenever you renovate, you take the risk that your choices (appliances, fixtures, lighting, flooring) will not be what a potential buyer wants. If so, they will not associate the same value to those choices as someone other potential buyer. Conversely, if a potential buyer has no concerns about the choices, then you're probably going to get a better return on your renovation investment.

Unless a kitchen/bathroom is a complete mess, you may want to limit changes to minor upgrades, paint and window coverings. If you absolutely must renovate, don't get fancy because you risk putting people right off and that may be the difference in their decision to make an offer.

While I agree that the greatest return is realized on kitchens and bathrooms, that only goes so far.

[veryold]

Re: Ask a Realtor anything

just my 2c:
our basic, clean, but NO UPGRADES, small (1200 sq ft), but huge back yard semi, sold in 4 days, for an unbelievable almost $100k over asking, and we thought that asking price was too high to start with Mind you, our location is absolutely prime !!!
Re. renovations or not, it matters more in a normal market, but in this mad RE bubble, it doesn't matter much, imho. And if offshore investors are buying your house, they don't want to pay higher price for your renos, but want to do renos with their own people for cheap and rent/flip in a month or two after taking possession. On our tiny street, there were no rented houses in the past, but now in the last 6 months there are three and ours will be forth.

[Weirfan]

Re: Ask a Realtor anything

Legally they can't but they've got you between a rock and a hard place and you're usually best to move on with life.

I would think that any reputable real estate agent representing the buyers would not support an offer being made if their clients were not pre-approved to cover the offer being made.

As for any clause indicating forfeiture of the down payment, I agree with Dave that it is a form of bullying. No chance I would ever agree to that,
nor can I see anyone that is being properly advised. Unforeseen things happen.

curious if the sellers agent getting commission on the forfeited down payment ?

[davepratt]

Re: Ask a Realtor anything

I would think that any reputable real estate agent representing the buyers would not support an offer being made if their clients were not pre-approved to cover the offer being made.

As for any clause indicating forfeiture of the down payment, I agree with Dave that it is a form of bullying. No chance I would ever agree to that,
nor can I see anyone that is being properly advised. Unforeseen things happen.

curious if the sellers agent getting commission on the forfeited down payment ?

You make some very good points. The problem with pre-approval is that the banks take the information you give them as gospel. They won't actually spend the time or money until they have a firm deal.
I had another lawyer tell me there was no way I should ever let a client accept that clause as it's extremely messy and vague. He also doubted any broker would release trust funds without a mutual release signed by a both parties due to the Real Estate and Business Brokers Act. He also said said when they get to court a seller must prove damages and if the deposit exceeded actual damages, the seller can't keep it all.
Finally, that's an interesting question re the commission because if push came to shove an agent could demand his full commission because he fulfilled the terms of the listing agreement. Either way it can be a major you know what show.

[veryold]

Re: Ask a Realtor anything

You make some very good points. The problem with pre-approval is that the banks take the information you give them as gospel. They won't actually spend the time or money until they have a firm deal.
I had another lawyer tell me there was no way I should ever let a client accept that clause as it's extremely messy and vague. He also doubted any broker would release trust funds without a mutual release signed by a both parties due to the Real Estate and Business Brokers Act. He also said said when they get to court a seller must prove damages and if the deposit exceeded actual damages, the seller can't keep it all.
Finally, that's an interesting question re the commission because if push came to shove an agent could demand his full commission because he fulfilled the terms of the listing agreement. Either way it can be a major you know what show.

We discussed this subject (deposit loss) with our agent, and he would not charge us anything if that happened, but would hope that we try to sell again with him, which we would be more than happy to do !

A quick question: if we sign a one lease on an apartment for a year, and we get stuck with the house if buyer doesn't close, could the one year worth of rent be claimed as our losses, and claimed against the deposit ?

thanks so much for all you hard and generous work in this thread