What Happens if Your Home Closing is Delayed?
The majority of closings happen on time or within a few days if issues need to be addressed. If closing is not completed, and buyers can be left homeless. This is a terrifying thought, however, it does happen. Below are five reasons which can lead to a delayed or canceled possession date.
REASON ONE: UNREALISTIC CLOSING DATE
Don't expect to write an offer and be in your home the next day. It takes time for lawyers in Alberta to clear and transfer the title to you. The actual registration process can take a day or two or a few weeks depending on how busy the Land Title Office is and the transfer of land process takes about 3-7 days. An experienced real estate agent will know whether the contract dates are realistic or not.
REASON TWO: REAL ESTATE APPRAISAL ISSUES
When buying or selling real estate you need to understand that a large piece to a successful home sale is the bank appraisal. A bank appraisal is part of a real estate transaction anytime a buyer is obtaining a mortgage. It is normally completed prior to a buyer removing the finance condition. If the property does not appraise out, the bank will not forward the mortgage.
REASON THREE: TITLE PROBLEMS
Your Realtor should be doing their due diligence by pulling the title prior to you writing the offer. However, between the time you have satisfied and removed conditions, it has been known to have items placed on the title. These items can include a second or third mortgage, a lien from a collection agency, or a lis pendens. (A Lis pendens is the Latin term for a Notice of Pendency of Action. It means that a lawsuit is pending against the title of a property. The lis pendens is a public notice letting buyers know there is a dispute over the ownership of the property and is commonly used in divorce situations).
REASON THREE: REAL PROPERTY REPORTS
Another task that a real estate attorney will perform is a review of an instrument survey or real property report (RPR). An RPR can be defined simply as a drawing of the land a home is situated on. Real estate closings can be delayed in the event there is a discrepancy in line encroachments such as a neighbor's fence or there is an addition added to the property such as a deck or storage shed without compliance.
REASON FOUR: YOUR BANK DID A SECOND CHECK
When a buyer receives their mortgage commitment, it means the funds have been approved and the closing can occur, right? In most cases it does mean the funds have been approved, however, there are times when a lender will require additional documents at the last minute or a buyer has made a large purchase and their debt ratio qualifying has changed.
REASON FIVE: TERMS OF SALE
There are many reasons why home buyers have home inspections to ensure the property they are purchasing doesn’t have any major deficiencies that can cost a large amount of money in the future. After a home inspection is completed, the buyer can request repairs be completed at the seller's cost. If a seller agrees to make repairs, it’s important that these repairs are done prior to the buyer moving into the new home. These terms can range from the replacement of shingles to picking up dog feces.
THERE ARE STEPS YOU CAN TAKE TO MINIMIZE THIS RISK BEFORE REMOVING YOUR CONDITIONS
In the province of Alberta, the real estate contracts which Realtors use have several safeguard clauses for both the buyer and the seller. In lament terms - If a delay is caused due to the fault of a seller, the seller is responsible for compensating the buyer. This can include all costs accrued until the property has been transferred. Some of these costs can include, interest rates, storage, hotel rooms, and meals. The real estate contracts also work in favor of the seller and if for any reason, the buyer has delayed the closing, the buyer will be liable for compensating the seller.
- Ask for a copy of the real property report. The seller should have this in their possession within 10 days of putting the property on the market.
- Have your financial institution send you documentation that all financing requirements have been met
- Don't make any big purchases
- Ensure you have the dower signed if needed. This is a standard document Edmonton RE/MAX Agents use often.
- Complete a walk through prior to possession when required
- Ensure all paperwork including addendums are at your lawyer's office (With Remax Elite, we have a complete conveyancing department to ensure, there are no delays and help make the real estate sale process seem seamless.
- If you have questions about buying a home in Edmonton or the surrounding area, we are here to help. Contact us today!
What is a Housing Bubble and How Does it Affect You?
You have heard the term "housing bubble", but what does it actually mean, and is Edmonton experiencing one? Whether you already own a home and waiting for the right time to sell, or are considering buying another property in the near future, it is valuable to know whether to buy and sell in a housing bubble and how it may affect you.
A housing bubble happens when the price of homes rises quickly, at an unsustainable rate. Typically, a price-growth rate that’s in the high single-digits is considered to be healthy and sustainable. Under healthy conditions, homeowners continue to earn equity over time, sellers can make a profit on resale, and buyers can still afford to get into the market. This has been the trend in most Canadian provinces except for Alberta over the last decade where Alberta house prices have plateaued and in some places dropped dramatically.
What Usually Happens When a Housing Bubble Bursts?
During a housing bubble, homes become overvalued. When the bubble bursts, prices fall. Homeowners who have no intention of selling are unlikely to feel the direct impacts of the bursting bubble. However, these market conditions often indirectly impact other aspects of the economy, so to call homeowners who aren’t selling “free and clear” would be misleading. The Homebuyers who purchased a home during a housing bubble likely paid considerably more than it is worth.
Is Canada in a Housing Bubble?
The Canadian housing market took a surprising upward turn during the COVID-19 pandemic, after coming to a grinding halt in mid-March. The slow-down was short-lived, and what followed through the remainder of 2020 was a spike in demand for homes met by a shortage of supply. With 2021 well underway, there appears to be no end in sight. There are a number of factors that indicate we’re not experiencing a bubble caused by market speculators, contrary to some media reports.
A recent online survey of RE/MAX brokers and agents in Western Canada, Ontario, and Atlantic Canada found that speculators are not a factor in the Canadian real estate market at this time. In fact, more than 96% of RE/MAX brokers and agents supported this finding, confirming that the majority of homebuyers are end-users. Speculators tend to wait out hot markets, buying when prices are down and selling when they’re up again. The short-term investment opportunities they’re generally looking for are hard to find under current market conditions. Bully offers and bidding wars are commonplace, and we continue to see demand outpacing supply with the release of the monthly housing market data. These factors are generally inhospitable to speculators and investors.
For a housing bubble to burst, there needs to be a steep incline in inventory and new listings, and a decline in demand – neither of which is likely to happen any time soon.
The Canadian housing market is still feeling the impacts of the pent-up demand from 2017 when the government introduced the foreign buyer tax and the mortgage stress test as a means to cool the overheating market. These policies prompted many homebuyers to move to the sidelines, opting to wait and save, with plans to re-engage in the housing market in a few years.
Now fast-forward a few years to 2020. COVID-19 had a similar impact on the market, whereby many homebuyers delayed their purchase plans due to pandemic-related uncertainties. That pre-existing pent-up demand for homes continued to swell. With Canadians subject to stay-at-home orders with nowhere to go and spend their hard-earned money, they collectively saved historically high sums, which was injected back into the housing market once consumer confidence returned. The spending came in the form of record-high home sales and for those who were unwilling to face the competitive resale market conditions, renovations to existing dwellings. In fact, Canadian real estate was said to be the driving force behind the Canadian economy in 2020. Savings, low-interest rates and low inventory continue to put pressure on the housing market.
What is Happening to Edmonton's Real Estate Market?
A housing bubble can happen as a result of non-organic growth like it did in January 2006 to June 2007 and the average single-family detached house rose by $200,000. This happened due to our job surplus and supply and demand of real estate. Basically, people were moving to Edmonton and the surrounding area for work and there was a shortage of houses to buy.
Edmonton house prices hit the high point at the crash of economic stability in the summer of 2007 and the real estate market crashed fast when the bubble burst and the ripple effect of a bursting housing bubble flooded Alberta. Several homeowners were holding more than one property which resulted in lower asking prices and foreclosures. There were fewer buyers to due to the loss of jobs, economic instability, and uncertainty, a surplus of housing choices, and anticipation of a more housing prices drop.
Is Edmonton in a Housing Bubble?
The answer is "no". Edmonton is one of the few places in Canada, where house prices have not changed for the last decade, making it a great place to a home. Although in the last few months, Edmonton's real estate market has picked up a bit and there have been a few more multiple offers, we are not anywhere close to our last real estate bubble. Edmonton's increase in real estate activity has been due to the low-interest rates and not the economic factors. We currently have some of Canada's best-priced real estate making Edmonton a great choice for investment.
Is now a good time to buy in Edmonton?
The answer is yes. With low house prices, low-interest rates, and an inviting international real estate market, Edmonton is a fantastic place to buy a home.
Is now a good time to sell in Edmonton?
It depends. If you are a condominium owner, expect to take a loss on your property if you have purchased it in the last ten years. If you are selling a luxury home, the demand is beginning to increase especially near Canmore and country residential. For those who are selling detached houses in Edmonton, prices are stable, and asking prices need to be at "fair market value" to receive an offer within a reasonable time period.
If you would like to know more about Edmonton's real estate market, feel free to contact our experienced, professional Edmonton Remax Realtors who can guide you through the buying and selling process.
How Do Edmonton Realtors Earn their Commissions?
In the life of a real estate agent, there is much more than showing homes, meeting with potential buyers and sellers and receiving a commission. There is plenty that happens behind the scenes. Being a REALTOR® is extremely time-consuming.
If you have ever tried to buy or sell a house on your own, you may have an idea of how hard real estate agents work. Imagine if you were selling more than one house at a time. A good Edmonton real estate agent will make the process of buying or selling a home flow smoothly, leaving the impression that their job is fairly simple. The fact is, this is not at all what really happens. If you have spent social time with a REALTOR®, you may understand how difficult their job actually is.
There are definitely REALTORS® out there who cut corners, do not take care of their clients well, and they should not define or be in our industry. The real estate industry is also loaded with competent professionals with whom I am proud to work with.
Below is a list of common activities REALTORS® perform on a daily basis:
Schedule Property Showings
Scheduling showings require contacting the listing agent who will inform their seller they have a showing in order for the seller to vacate the premises prior to the availability of the buyer and the buyers real estate agent. It also gives the showing agent an opportunity to find out any relevant information related to the property. All showings must be time blocked which most agents have down to an art form, so we are not early or running behind with our buyers.
Schedule and Prep For Listing Appointments
Once a listing appoint has been scheduled, REALTORS® work behind the scene gathering all pertinent information about the property including the property history, information about the community, current real estate statistics, establish the absorption rate, acquire the title of the property which will show applicable encumbrances such as easements, liens, or covenants, and confirm the registered owners, and comprise a comparative market analysis. The agent will pre-fill paperwork, double-checking everything is correct in order to save time while on the listing appointment. The agent will gather all necessary real estates tools such as yard signs, the CMA and key boxes.
A REALTOR® usually attends the property inspections with or in place of the agents' buyer, unless agreed upon by the seller. A property inspection normally takes a few hours. In the event there are any concerns with the inspection, it can take several hours to days to come to an agreement that both the buyer and the seller are comfortable with prior to removing and contingencies are conditions.
Delivery of Deposits
Once an offer has been agreed upon, time is crucial in the deliverance of the deposit. A late deposit can result in the agreement becoming voided and the buyer losing their dream home.
REALTORS® are held by a high code of conduct and ethics and no matter how much you may disagree with the opposing REALTORS®, negotiations must be dealt with in a professional manner while working in the best interest of the client. There is much more to offer and counter-offer negotiations than just the price of a property. Negotiations also include terms, possession, conditions and sometimes contingencies. Parties involved in the negotiations can also include lawyers, mom and dad, someone with power of attorney on behalf of a client or the "handyman special" uncle.
REALTORS® have trail and trails of paperwork. Each change on an agreement, amendment or addendum must be documented and kept for at least six years. Agents must ensure everyone involved in the transaction has a copy of each document change including the buyer, the seller, both real estate agents, the financial institution, both real estate offices, both lawyers representing the buyer and seller.
Follow-Ups & Inquiries
A good real estate agent will follow up on email, texts and missed calls in a timely manner. REALTORS® can easily receive dozens of emails every day and it is so important not to get sidetracked with the unnecessary emails which can gobble up an agents valuable time.
Closings require toe follow-ups with lawyers to ensure they have all the necessary documents including any recent amendments, walk-through with builders and buyers prior to the closing date and making arrangements for keys once the title has been transferred. And of course,e re-arranging the real estate agents schedule to accommodate the meeting time with the buyer.
Other Related Services
Meet up with other real estate affiliates which help listed properties sell such as a professional photographer, mandatory measuring company employees, home stagers, putting up signage, open houses, or helping a client get their property ready to be shown. Other meetings may including attending financial institutions with a client if needed, property inspections, verify completion of repairs, and other closing related meetings.
After scheduling showings, a real estate agent needs to accommodate the time set aside to show their buyer the homes without them feeling rushed. This may be one or two properties or may consist of a complete day or a few days such as a house hunting trip - HHT.
Attend Listing Appointments
A professional REALTORS® attends all listing appointments as though it is a job interview because that is exactly what it is. The seller is interviewing the real estate agent and the agent is interviewing the seller. Prior to the listing appointment, an agent should be prepared for any questions or concerns a seller may have as well as have all necessary tools needed, should a seller be in a position to list the property. Each listing appointments should take an hour or two - sometimes more depending on how much information is presented to the seller or how many concerns they may have.
Keeping Clients Updated
This can include and newly listed homes which may be a hot commodity and must be shown immediately to sitting down at the computer for a few hours to perform a new market analysis and research back office syndication sites to forward to clients.
More phone calls
On any given day, a good real estate agent will be on the phone to other agents looking for property specific feedback on their listings, updating clients, addressing any on-going concerns, dealing with offers, mortgage brokers, real property report companies, condominium management companies, dispute low property appraisals and other real estate activities.
Maintain Required Continuing Education
Yes. Edmonton real estate agents are still required to maintain and continue education which is mandated by the real estate council of Alberta. The cost of maintaining a real estate licence and updating an agents education criteria is the responsibility of each REALTOR® and not the real estate brokerage.
Marketing and Property Syndication
If you are lucky enough to find a real estate agent in Edmonton who is an e-pro and is familiar with search engine optimization, they will spend several hours syndicating your home through various search engines and websites to ensure your property reaches the first page of google.
Attend Real Estate Conferences
There are dozens of real estate conferences annually and attending these help your REALTOR® stay up to date on the latest technology, real estate systems, and tools to help them with time management and gaining an advantage over their peers.
Maintain Active Social Media Profiles
Although social media and blogging play a key factor in the life of a real estate agent, if the only thing you see on an agents site is personal posts - you might wonder if they are actively doing any real estate. Many agents will hire this out to maintain an internet presence.
Networking with Edmonton Home Builders
There are several different home builders in Edmonton and this is a great way for real estate agents to keep up-to-date with home demand trends, especially in our current real estate market. Recently many Edmonton home builders have implemented garden suites that offer new home buyers a great way to pay off their mortgage quicker.
Stay in Touch with Past Clients
If your REALTOR® stays in touch with you on a regular basis, you have a great real estate agent. With so many things to do, it is hard to find time to stay in touch with all of our clients!
Several people take education and start a career in real estate under the assumption that it is easy money. In reality, real estate agents are in a brutal time consuming, competitive business. The net commissions are not enough to keep people in the business, in fact, most people get out of real estate because they cannot afford to be in it. REALTORS® who survive to do so because they have a passion for the real estate business, and enjoy helping people make their real estate dreams a reality. It’s a great business to be in, but it’s NOT EASY!
What is the difference between a garage suite and a garden suite?
The official city description a garage suite is "a self-contained accessory dwelling above or attached to a rear detached garage, on a single detached lot which usually comes in the form of apartment-sized living space, with its own kitchen, bathroom, and living space, on the second floor of your garage".
The city description of a garden suite is "an at-grade self-contained, accessory dwelling located in a building that is physically separate from the principal dwelling." Typically, garden suites are single-story structures built in the backyards of single detached homes and must have their own kitchen, bathroom, and living space.
There are several benefits of purchasing a house with a garage or garden suite or building on an existing house in Edmonton including ...
- Garage and garden suites are great ways to add some rental income to your property to help pay down your mortgage. It eliminates the shared interior space the way you would with a basement suite. These smaller living spaces are also a great way to add some diversity to your community because they allow different demographic access to housing options on your street.
- Garage and garden suites can keep family members nearby, yet allows for more personal space. It can be a great option for keeping your parents or your children close, while still maintaining some privacy by ensuring everyone has their own space. Alternatively, some ageing empty nesters have decided to downsize into their own garden or garage suite, and allow their children’s family to live nearby, in the main house.
- As with any good infill project, it is all about creating more flexible living options so every Edmontonian can choose the community that suits them best. For more information on Garage and Garden suites, visit the city of Edmonton's Infill website.
How to Fire Your Realtors®
There are a few reasons to fire your Realtor. If you feel you made a mistake by signing a selling agreement with the wrong Realtor, the best thing to do is to correct it and move on. If your Lawyer or Doctor was not working in your best interest, would you fire them too?
Your listing agreement is usually for a period of three to six months (sometimes longer) and you are entitled to cancel at any time. This can be done with a standard Alberta real estate form. A Realtor (depending on the agency designation) also has the option of terminating your agreement at any time without your consent, but this rarely happens.
If you have hired the wrong real estate company or agent to represent you, fire them. Do it professionally and do it in writing. There are a few things to consider prior to firing your Edmonton Realtor. All of these contingencies will be set out in your original listing agreement.
Who owns the listing?
A: The listing is owned by the brokerage, not the Realtor. If you have a problem with the agent, call the broker. If you have a problem with the broker, call consumer affairs and the Edmonton Real Estate Association.
Is there a fee to cancel your listing agreement?
A: There may be a cancellation fee in the standard agreement. This fee is usually the cost to cover expenses already paid by your Realtor prior to your cancellation. The service fee amount will be set out in the agreement you signed. However, if you paid a fee upfront, there usually is no cancellation fee.
Will I still have to pay a commission after I fire my agent?
A: If a buyer was introduced to your home during the term of your listing agreement and you sell it privately (during a specified time in the agreement) to that same buyer, commissions will be payable.
Can I hire another agent immediately?
A: Yes. Once your home is off of the market, you are free to list your home with any licenced real estate agent.
When you are ready to fire your Realtor, simply inform your agent that you would like to cancel the listing and ask him to provide you with the cancellation listing form. There will be two choices on this form. Make sure you have a property termination end date, the broker (not the Realtor) has signed and you have received a copy.
- 1. Unconditional termination
- Which allows no further obligations for either the seller or Realtor
- 2. Conditional Termination
- Your agreement will end on the termination date but your obligations will continue under the terms of Section 10 of the Exclusive Seller Representation Agreement. There may also be an additional term.
If your Realtor fails to provide this form within a timely matter, contact the brokerage and tell them about your grievances with the agent.
Can you fire a Buyers Agency or Buyer Realtor?
Yes. It is a different form, but you are free to fire your Realtor when buying. There may or may not be a small fee to get out of the agreement. This fee would have been set out in the original buyers' agreement which states: If you change your mind about looking for a property, you must tell us in writing. You must reimburse us for our reasonable expenses up to the time you tell us. Reasonable expenses will include: (If this section is blank - no penalty will be payable). However, this does not allow you to approach a seller that has been introduced to you while working with your realtor. If you do this, you will have to pay a full commission as set out in the original buyer brokerage agreement.
If you have any questions, both RECA (the Real Estate Council of Alberta) and EREB (the Edmonton Real Estate Board) have plenty of great information to help you make the best decision for you!
Have a Question? Feel free to reach out.
What Happens if your Real Property Report does not Comply?
If you are selling a home and have been told that there is no compliance or you have a non-conforming property, don't panic if you have not yet accepted an offer to purchase. Your Edmonton real estate agent can walk you through how to write or amend the purchase agreement to ensure you will not be penalized. However, if you have sold your home and are just finding out, you have no compliance or non-confirmation, talk to your lawyer.
Residential AREA real estate purchase agreements contain a clause that clearly outlines the factors of the real property report.
"The current use of the Land and Buildings complies with the existing municipal land use... buildings and other improvements on the Land are not placed partly or wholly on any easement ... do not encroach on neighbouring lands ... directly on the real property report ...location of Buildings and other improvements on the land complies with all relevant municipal bylaws, regulations or relaxations ... prior to the Completion Day, or the Buildings and other improvements on the Land are non-conforming buildings as that term is defined in the Municipal Government Act (Alberta) ...current use of the Land and Buildings and the location of the Buildings and other improvements on the Land comply with any restrictive covenant..."
Drawbacks of Non-Compliance or Non-Confirmation:
Knowing in advance that there may be an issue with compliance or non-confirmation on your real property report will save time, money and stress, by dealing with the issues in advance. Depending on the nature of the deficiency. A request to the municipality for a certificate may lead to a requirement for substantial alterations, relocation or destruction of certain structures.
The buyer may choose not to go ahead with the purchase until deficiencies are resolved. Under the AREA contract, the warranties provided by the seller only relate to development issues and not building code issues; and while there is some debate among lawyers on this issue, most take the view that any building code deficiencies including the lack of building code permits are the responsibility of the buyer.
Knowing in advanced provides certainty for both buyer and seller at the time of closing regarding compliance with development issues and provides the opportunity for a buyer to have the seller remedy any deficiencies in this regard prior to or in conjunction with the closing.
It can be used to address the validity of permits that may or may not have been pulled to add, replace or alter a deck, garden shed, gazebo or greenhouse. Any concerns or questions regarding issues with your real property report, please contact your real estate lawyer. Note* The town of Morinville no longer requires compliance.
Edmonton Realtor Fiduciary Duties
Real Estate Agents in Edmonton and the province of Alberta who is in an agency capacity for buyer or seller clients have duties mandated by the legal system called fiduciary duties. The position of the REALTOR® is a fiduciary capacity, acting in the best interests of the client.
- Obedience: Your real estate agent must obey your instructions as long as it is legal and in accordance with your brokerage agreement.
- Loyalty: Your real estate agent must be loyal and keep your best interests ahead of those of any other party, including themselves.
- Disclosure: In the province of Alberta, the law requires real estate agents, whether in an "agency" capacity or not, to disclose material facts to their client. Material facts are those that, if known by the buyer or seller, might have caused them to change their purchase or sale actions. In a signed agency agreement, your real estate agent must disclose more than the material facts. They must disclose all known or suspected information regarding the purchase of the property.
- Confidentiality: A real estate agents fiduciary duty of confidentiality means that nothing learned about you can be disclosed including your business, financial, personal affairs or motivations. This confidentiality fiduciary duty must be maintained for eternity.
- Accounting: Your real estate agent is accountable for all documents and funds in the transaction. Accurate reporting of the whereabouts of all monies pertaining to the transaction and the ultimate disposition. All documents are to be kept for at least six years.
- Reasonable Care: The words "reasonable care" are only finally fully defined in many cases by a judge or jury when it's too late to change your actions. Most Edmonton Real Estate Agents, as a rule of thumb, go by the ethics code "What we know, you know" when acting in an agency relationship.
Whether you work with a real estate agent in Edmonton under a "customer status" or a "client status", before signing any other paperwork, in Edmonton and the surrounding areas have a regulatory requirement to present and discuss our Consumer Relationship Guide with you which includes the real estate agency relationship you have chosen to work under. A copy of this form can be found at the Real Estate Council of Alberta.
Have a question about Edmonton Realtor fiduciary duties? Contact us.
What is a Real Property Report?
A Real Property Report (also known as the RPR) is a legal document that clearly illustrates the location of significant visible improvements relative to property boundaries. It is a plan or illustration of the various physical features of the property, including a written statement detailing the surveyor’s opinions or concerns.
Who needs a Real Property Report?
Part of the standard real estate contracts in Alberta will have a term in the document states the seller will provide a current real property report with the compliance report to the purchaser upon closing. Prior to putting your home on the MLS System and/or Realtor.ca, Sellers should order a new RPR to protect themselves from potential future legal liabilities resulting from problems related to property boundaries and improvements. Your REALTOR® can assist you with this process to ensure your property complies with municipal requirements.
Do I need a Real Property Report for a Condominium?
Bareland Condominiums require Real Property Reports. Conventional Condominiums do not require an RPR.
How does a Real Property Report protect you?
Purchasing a property may be the largest financial investment you ever make. With a Real Property Report, owners are aware of any boundary problems. They know whether their new home is too close to the property line, or part of their garage is on their neighbour’s land or vice versa. Since legal complications may occur if a sold property fails to meet requirements, a Real Property Report protects the seller.
What is on a Real Property Report?
The legal location description of the property and municipal address, dimensions and directions of all property boundaries, any improvements on the property, right-of-way or easements, any visible encroachments, a duly signed certification and opinion by an Alberta Land Surveyor and a permit Stamp where applicable.
How much does a Real Property Report cost?
The amount of work to prepare a Real Property Report varies between properties. Lot size and shape, number of buildings, natural features, age and availability of the property boundary information all affect the cost. However, if you are planning on selling your home in the near future, the sooner you order your Real Property Report, the more economical it will be plus any problems can be identified and resolved before a sale is finalized.