When you hide something from your buyers, chances are you are going to have to pay for it after closing, as well as paying lawyers. And don’t expect your home insurance to cover your legal fees. Please see the attached case about a seller who tried to hide the fact that there was a prior fire on the property from a buyer. Insurance companies will not protect you if you deliberately mislead a buyer. This case underscores the importance about speaking to the neighbours whenever you are doing due diligence about any home. Neighbours will tell you things that the owner will not volunteer. Also, if it is important to your client, ask the seller or the seller’s agent point blank about it. If a seller is asked a question, they must respond truthfully. Remember that the next time you represent a seller as well.
Click here to read the article: http://www.thestar.com/business/personal_finance/2013/08/26/what_your_home_insurance_wont_cover.html
Now is the time for home closing protection insurance
Since writing my column on how to avoid a real estate train wreck, I have received many inquiries from buyers, sellers and realtors about home closing protection insurance, and how it can solve many of the problems associated with delayed closings.
Due to the growing possibility of buyers being declined their financing at the last minute, sellers need some protection in the event their closing is delayed or cancelled and they are forced to carry 2 homes for an extended period of time.
One company that I have dealt with that provides this coverage is Canadian Home Shield. Their President, James Vlachos, who is an insurance broker, advises me that for as little as $99, sellers can purchase a $25,000 insurance policy that will cover all mortgage payments, real estate taxes, utilities and insurance premiums up to a total of $25,000 in the event that the deal does not close through no fault of the seller. I personally have had 2 seller clients recover over $9,000 in costs after a buyer failed to close their purchase agreement.
Buyers can also purchase breakdown insurance protection for their home systems and appliances. Since most real estate contracts provide that sellers only warrant their systems and appliances to the date of closing, this provides buyers with the opportunity to purchase additional insurance protection for a year after closing.
For further information, please see the attached website: http://www.canadianhomeshield.com/ | http://www.thestar.com/business/personal_finance/2013/08/16/bridge_financing_can_ease_closing_day_stress.html
Seller financing can be a win-win for buyers and sellers
As a result of further restrictions announced by CMHC, it may be time for sellers to consider offering a seller take back mortgage as a means to entice more potential buyers to their property. It can also lead to tax savings for the seller if they are selling an investment property, However, as the attached article indicates, seller financing is not for everyone and the terms must be clearly specified in any agreement of purchase and sale.
Click here to read the article: http://www.thestar.com/business/personal_finance/2013/08/12/is_seller_financing_an_answer_to_cmhc_restrictions.html
Beware the pitfalls of rent to own
Rent to own can be a win-win situation for both landlords and tenants when it is structured correctly. But it is still a real estate deal, and both the landlord and tenant should have legal representation before signing any papers to make sure that everyone is properly protected. Read the attached article which demonstrates how things can go wrong when the parties have not done the proper due diligence.
Why the numbers 4, 8 and 13 matter in real estate deals
In many communities, house numbers can affect the price offered for a property. Buyers need to be aware of this whenever they buy a home. Read the attached article which explains why the house numbers 4 and 8 matter even more today when buying or selling a home.
If it matters to you, get it in writing
When there is any dispute in a real estate agreement, a judge will ask a simple question: “What does the agreement say?” Not surprisingly, most answers to common questions can be found in the fine print of the real estate agreement. See the attached article, which answers whether a TV bracket is a chattel or a fixture and what happens when items advertised on the listing turn out to be untrue after closing.
Do you need to disclose if a house is haunted?
See the attached US decision involving a haunted house that was not disclosed. Given that the GTA is now such a multi-cultural community, it is safer to just disclose anything with respect to a property that may bother someone, to avoid aggravation and lawsuits after closing.
My Law Practice
I have received many inquiries about my law practice, providing legal services to real estate buyers, sellers and investors. Working with Real Property Transaction Centres, I am now able to close real estate transactions throughout the GTA. If you require any assistance on a transaction that you are working on, please email me at mark@markweisleder.com
If you or your clients are looking for a written quote, please visit www.realproperty.ca and search under “How much does it cost” or contact Suzanne at 1-877- 219-9618, ext. 231.
About Mark Weisleder
Mark is a lawyer, author, instructor, Toronto Star columnist and keynote speaker for the real estate industry.
Mark Weisleder
www.markweisleder.com