In the News: 15% Property Transfer (bonus) Tax for Foreign Buyers in B.C.

Short Version

“Good intentions can often lead to unintended consequences” – Tim Walberg

As Canadians we no longer appear to be a people that keeps our word.

Review the official policy here.

Long Version

The BC government is increasing the PTT by a 15% tax for purchasers who are foreign entities.

This post is not about the tax itself: whether the tax is right, wrong, too much, too little, etc. that is all for another conversation. The majority want to implement a tax on foreign buyers. Fine, I get it. it makes sense on many levels.

But let’s do it with some class. As Canadians are we not known for being fair in our dealings?

The topic of this post is the patently unfair retroactive implementation of this tax. Such an approach is tactless, lacks foresight, and should be embarrassing to any self-respecting CDN that ever looked a person in the eye and while shaking their hand said ‘yes, we have a deal’.

Did the BC Gov’t not learn anything from the HST implementation?

The Back Story

Why is this happening at all? Partly due to growing anger about rapidly rising prices. Anger that needs to be directed somewhere, at somebody. Sadly it is being channelled toward a very specific group of people, largely due to inaccurate or flat-out misleading headlines like this one:

Foreigners buy 5% of B.C. homes in less than 3 weeks

Let’s do some math on this headline. ‘5% of BC homes’ (that’s 55,000 of 1.1 million total properties) were purchased by foreigner buyers? Leaving 95% to go?

The above headline was not written by somebody with a grasp of basic math. Nor was the opening sentence:

Citing freshly collected data, the B.C. government announced that overseas nationals bought approximately 5 per cent of homes in the province over just 19 days last month.

Extrapolating the math suggested in the headline indicates that ~55,000 of the 1.1 million privately owned properties in BC were bought by foreigners. In other words at this pace all 1.1 million will be owned by foreigners in just another 380 days.

Just over a year, and that is it.

Clearly this is bad math, bad writing, and an inaccurate headline. But it is this sort of error, combined with hyperbole and a twisting of numbers, that has so many of us twisted in knots.

So, the Government of BC to the rescue with their knee-jerk reaction tax.

(Hey gang, relax. The BC election is still a year away (May 2017), and you really could have taken an extra few days and considered the unintended consequences of your actions.)

The Core Story

The nuts & bolts of this new tax:

1. A foreign national is a person who is not a Canadian citizen or permanent resident.If it is company that is purchasing, a foreign company is one that is not incorporated in Canada, or incorporated in Canada but controlled in whole or in part by a foreign national or other foreign corporation.

International student?

Foreign (i.e. American) worker on a temporary visa, with your Permanent Resident status application pending approval?

You, my friends, are out of luck. Just like one student we know of whose parents were assisting her on the purchase of a $400,000 condo to live in during her remaining six years of studies. Contract entered into three months ago, completing in about four months. Boom! $60,000.00 extra please, in addition to the $140,000.00 minimum down payment required, or else forfeit your $80,000 deposit to the developer.

If she completes, the government wins. ($60,000 in new tax revenue)

If she cannot raise the extra $60K, the developer wins. ($80,000 deposit forfeited)

Either way, she and her family lose. And we as CDN’s have our reputation for fair dealing evaporate.

At the very least, this British national training to be a doctor is getting quite the slap in the face for having the audacity to try and put down any kind of roots while living here for the next six years.

She entered into a contract in good faith, and now one of the things we Canadian’s hold so dearly ‘stability of Government’ has been thrown out the window as we allow the rules of a firm and binding contract to be rewritten midstream. Negatively impacting this person, and hundreds of others.

2. The increased tax applies only to properties in the Greater Vancouver Regional District, and does not apply elsewhere in the province, or the Tsawwassen First Nations Lands.

Whistler, and other recreational destinations, just let out a long sigh of relief. Internal sales stats suggest that for many months in Whistler up to 1 in 4 buyers is a foreigner. Their market would have been hit hard by a restriction like this.

It may still be, in the opposite direction, once we see where foreign capital starts to flow to as alternatives to the GVRD.

3. The tax only applies only to residential properties, not commercial.

Commercial real estate investors need not worry. For the BC government this would, of course, have been a much more concerning group to annoy. Much easier to hammer on the individuals here learning, working, and trying to become a part of the community. Especially when the public perception has been as warped as it has to assume all foreign buyers are multi-billionaires from one specific country.

4. The increased tax is effective August 2, 2016, regardless of when the contract is signed. Even if the contract was signed weeks, months, or in the case of condo pre-sales years ago, if it completes after August 2, 2016 there is a higher tax. End of story.

Refer back to our student example in point #1. A pretty devastating announcement for several people. Including Mac Kerman – was he really the target that everyone had in mind?

Would it not have been possible to consider:

• An exemption for students?
• An exemption for gainfully employed temporary workers?
• An exemption for those with Permanent Resident status applications pending?
• An exemption for these groups purchasing below $475,000.00 or $750,000 – along the same lines as first-time buyer rules.
• A sliding scale? Starting at 5% and rising to 15% based on purchase price.

What happened to being reasonable?

Could we not possibly have differentiated between foreign buyer and foreign investor?

Could we not possibly have made an exception for existing contracts?

• The additional tax is payable even if there would normally be an exemption available.Transfers between related individuals, transmission to surviving joint tenant and other such items now attract the additional tax.

• This is notable. This is a form of a death tax. It is a tiny little foothold on the topic. And sure, the target this week is foreign buyers, and foreign inheritors, but it will not be long before talk of a Canadian death tax starts to gain traction.

Conclusion

We already have people who should know better getting the details of this new tax wrong when interviewed. New construction and pre-sale contracts dating back years are indeed 100% affected by this tax, and the many thousands of buyers who entered into a good-faith agreement as long as three years ago on a pre-sale completing as soon as next week are caught in this mess. How is that fair dealing on our part?

One family I spoke with due to complete late next week on a $1.6M home have been in Canada for more than two years, they are settling their family here, have professional jobs and are paying their income taxes, but now need to come up with an extra $240,000.00 cash. Simply due to their Permanent Resident status application taking its time winding through the process.

We are thumping these taxpaying resident en-route to becoming Canadians because… why?

Because this is how we allow our government to roll. This how we Canadians do business?

So, too damn bad.

What a slap in the face to these buyers and hundreds of others, as it is to you and I as well. This is not how you personally or I personally do business. Except that on the world stage, as Canadians it looks like it is.

Have you entered into a contract with a Canadian in good faith? Yeah, so what – we will just add a 15% premium at the last minute because our handshake means nothing and written contracts mean even less.

We should all find ourselves a touch embarrassed to be Canadian this week.

Courtesy of Dustan Woodhouse, AMP – Canadian Mortgage Experts 

Sometimes we forget what great tools we have from our Private Mortgage Lenders.

1. Construction mortgages for the smaller home builder, loans based on each property or blanket several and payout the mortgages as they sell.

2. Are you a builder already and have standing inventory that you’d like to take some money out of to continue your business. We have a Private lender will look at these with rates as low as 8%.

3. Are you a Flip Master are you interested in buying, renovating and selling properties. We have a private lender that may be able to help with as little as $10,000 down payment.

4. We also have a private lender that will assist with a legal suite conversion. Remember that CMHC now allows 100% offset for legal suites opening up a whole new option for buyers to qualify.

5. Private second mortgages up to 85%, banks can only refinance to 80% and will probably turn it down these days.

6. Private second mortgages behind your CHIP mortgage depending on a few factors up to 50%.

7. Farm land the bank and FCC said no we have a lender that will lend on farm land throughout Canada.

8. Rental purchases with 100% offset on the rents and 75% loan to value

9. Foreign ownership probably one of the biggest growth markets with our weak dollar. They can be done with 35% down even if the client is not a US citizen, lower than the banks 50%.

10. Commercial properties that the bank has said no to you will also be considered through our private lenders

11. Small town BC, Alberta and Saskatchewan loans up to 70% of the property in area’s most won’t go.

Lots of options for private lenders this year and lots of opportunities from BC to Ontario. Want to learn more? Contact your mortgage professional at Dominion Lending Centres – we can help!

Courtesy of Len Lane, AMP – DLC Brokers For Life 

Pre-approvals are certainly beneficial. However, they can also be very disappointing if you are not prepared to know what they actually mean.

They DON’T mean…

They don’t mean that you have a mortgage.Until there is a Purchase Agreement (a written up contract to purchase a property) actually submitted to a bank and a commitment from the bank offered to the client, there is no mortgage. Your bank will often say, “You are pre-approved on a mortgage based on a specific rate that is being offered during this time.” Factors such as the amount of income you bring in, the amount of debt you have and even the property itself will determine whether or not the bank will actually give you a mortgage.

They don’t mean that the rate you are pre-approved for will be the rate you pay. Rate holds are temporary and depending on whether or not you qualify for the rate, you may not get what you initially bargained for.

To get a pre-approval that is solid it is important to know exactly what the terms of the pre-approval mortgage are. Pre-approvals should show exactly what you qualify for in terms of how much money you will be able to borrow for a mortgage based on your financial profile.

A good pre-approval…

A good pre-approval will reflect that you properly income qualify. As mentioned previously, many banks will give you a pre-approval based on a rate guarantee, NOT ON YOUR INCOME. This means that you may be in a lurch because the bank has not pre-approved you properly. A good pre-approval will be based on asking for documents to prove your income. The last thing you want is to be “pre-approved” only to be told after you’ve made an offer on a property that you actually don’t qualify.

A good pre-approval will let you know how much money you will need to provide for a down payment along with closing costs. There are more costs involved in purchasing a property than just the down payment. Costs such as legal costs, title transfer costs, property transfer tax costs (if applicable), appraisal costs (if applicable), etc. are often not talked about when initially going to your bank to ask for a mortgage loan.

A good pre-approval will secure a rate for 90 to 120 days. If rates are trending down, even when you have a negotiated pre-approval rate, you should be able to take advantage of the lower rate. Pre-approvals are excellent when rates are trending up. They secure the lowest rate, even when the bank has raised their rates. But be careful! Every bank has their own guidelines as to guaranteed rates and whether or not they will commit to the lower rate they initially negotiated with you.

A good pre-approval will be aware of lender guidelines concerning properties. Appraisals are not done for a pre-approval. But when contracting for a mortgage, depending on amount of down payment, contract details, etc. you may have to have one. The lender and the insurer ultimately look at the property to see if they deem it marketable and low risk for resale.

A good pre-approval gives the Realtor sure negotiating power. In today’s market there are properties selling so fast that financing has to be secured before going in to make an offer. A good pre-approval ensures that your chances of getting an accepted offer on a popular property are sure. Taking part of a multi-offer negotiation increases your opportunities for success, which can only be the result of a firm pre-approval.

A good pre-approval will prepare you for what you should expect your monthly mortgage spending budget to look like. With your pre-approval in place you know what kind of payments to expect, including the amount of taxes, strata fees (if applicable), etc. you will likely be paying. Your pre-approval explores the costs involved in purchasing a property and carrying a mortgage.

Courtesy of Geoff Lee, AMP – DLC GLM Mortgage Group 

So you’ve graduated from high school and off to university or college. Before you start, take the time to set down some goals and a budget for your financial future as a post secondary student.

Your parents have probably been telling you to put aside some money from your part time job into savings. However, sometimes we don’t take the advice of our parents  So if you aren’t sure you are on track with your budget and savings, consider a few pointers that I have always found helpful and some from the experts provided in the links below.

To help with your financial future as a post secondary student here are a few easy steps you can set up a budget to live by including a savings plan:

1. Track your spending for 2-4 weeks. It depends on how disciplined you are but if you can track for the full month –all the better. Some expenses like gas for your car will be easy. It is the little trips for coffee that we sometimes forget and those can add up.

2. Make a chart or list of your expenses (all spending) and income. If you are spending more than you are earning you need to make some adjustments. You should not be dipping into savings to cover your monthly expenses. If you are earning more than you are spending — excellent!

3. Based on your budget, set an amount each month that goes into your savings account. I recommend 10% of your income. If you are living at home while going to school you may be able to set aside more in savings. Take advantage of that low or no rent situation!

4. Talk to friends and family to see who they use for investing their savings. You may be conservative or more aggressive — that is up to you to decide or to discuss with a financial planner. Set aside some money for short term needs and for a long term savings. You may have a goal to save $1,000 for new tires for your car and then accumulate a larger savings goal that you build on over the next 4 years of school to use towards moving out of the family home, buying a new car or a down payment on starting a business.

For more tips visit—

http://www.mymoneycoach.ca/impulse_spending/education.html

To learn more about common challenges for post secondary students, visit –

Five financial pitfalls that post-secondary students should avoid

Courtesy of Pauline Tonkin, AMP – DLC #Innovative Mortgage Solutions

In today’s market, variable and fixed rates are not too far apart. This makes most people think that the fixed rate is the way to go as it’s often viewed as the safest option.

Many believe that variable rate mortgages are for the daring and at any time your rate could double leaving you high and dry in the cash flow department. Many don’t realize that isn’t the truth at all.

The great thing about a variable rate is you have the option to lock into a fixed rate at any time you start feeling panicky, but I can assure you your interest rate will not be doubling over night. Even if your rate did go up by .25% the savings you would have already earned would put you on level playing ground, or you’d possibly still be in the lead.

Over the last 40 years variable rate mortgages have proven themselves to be the better choice for saving money and flexibility. I would also say that you’ll be given ample warning in the news and media that the Bank of Canada is planning a move on rates. When the rate does increase, I’m certain it will be slowly creeping up with just a quarterly rate increase at a time.

Where you’ll save the most money choosing a variable rate compared to a fixed rate is with the penalty.

With a variable rate, you’ll only ever be charged 3 months interest at any given time you choose to break your mortgage during the term. With a fixed rate it’s always the greater of Interest Rate Differential (IRD) or 3 months interest, and believe me those IRD penalties can be insanely large!

Statistics show that the majority of Canadians break their mortgage before the 5 year term is up, so save yourself some dough and consider going variable. There’s more to it than just the lower rate…and we here at Dominion Lending Centres can show you many mortgage options to fit your specific needs.

Courtesy of Danielle Spitters, AMP – DLC Valley Financial Specialists 

When I meet with my clients, I explain that I believe my role is to get them the mortgage that fits their goals and plans, while saving them the most amount of money over the lifetime of their mortgage. This takes into consideration what you might be offered at renewal time by the lender or should you terminate the mortgage during the term or what will you pay for an early payout penalty.

In the last few weeks the feds have increased the posted rates (aka, contract rate) at the big 5 banks, was 4.54% and now at 4.74%. Why does this matter to you??…qualifying and early payout penalties!

Qualifying……. If you want a variable rate mortgage or a term shorter than 5 years, we have to use the “posted or contract rate” (4.74%) to qualify you for the mortgage. This recent bank rate increase means fewer clients will have the option of choosing a variable rate or shorter term mortgage. The 5 year fixed rate becomes their only option.

Early payout penalty……With the 5 year fixed rate seriously low at 2.44% for an insured mortgage, that might not seem like a bad deal. Unless you have to break or terminate that big bank mortgage before the end of the term. The big banks calculate the early payout penalty by adding back the discount you got when you selected the mortgage term with them. It is as if you are paying them the posted rate, when it comes time to calculate the early pay out penalty. (e.g. Posted rate 4.74% – your rate 2.59% = your discount of 2.15%). With this new increase in the posted rate, it means your penalty will be higher should you break or terminate your mortgage before the maturity date.

In an economy where interest rates are decreasing, by increasing the posted rate the big banks have found another way to make money off of you, the borrower, that is not in your best interest!

When you are mortgage shopping for a purchase, refinance or a renewal, please talk to an experienced and knowledgeable Dominion Lending Centres mortgage professional. When life happens and the penalty is $3,500 vs. $16,000 you will be happy you followed our advice.

Courtesy of Karen Boies, AMP – DLC Citywide Mortgage Services 

Knowledge is power! With education comes limitless possibilities.

Are our kids learning the essentials in life? Are they being empowered to make life-changing decisions when they enter into the real world of economics?

The education that most kids in senior secondary school receive these days focuses on biology, math, physics, chemistry, English, physical education, social studies, mechanics, wood-working and home economics, not real life!

What about personal finance? We need to teach our kids about everyday economics.

Most people remember when they got their first credit card. What a disaster that was (for some people). If we aren’t taught about how to use credit, it can quickly get out of hand. Most people think that if they have a $1,000 limit all is good as long as they don’t exceed the limit —FALSE! Credit scores strengthen and increase if balances are at or less than 30% of the limit. There you go, you may have just learned something. What are most teenagers more concerned with, the growth of one’s mutual fund or the latest and greatest Apple product.

Why not educate our kids about credit, day-to-day banking, mortgage financing, stocks, mutual funds etc… before leaving the protective confines of the International Bank of Mom and Dad. 

My entire mortgage practice is based solely on information and education — just look at the title of this blog. ALL of my clients are provided options in order for them to make an informed choice. I encourage all my clients to ask as many questions as possible, if there are unanswered questions then I am not doing my job correctly.

It’s never too late to learn. The brain is a muscle that constantly needs exercise and craves new data. Keep feeding it. Ask questions, even if the answer seems obvious. Maybe the person answering will put a slightly different twist on the topic and reveal something new to you. This business I’m involved in yield new information on a daily basis, I thrive on it and it’s a necessity of survival.

Education is a priority for me, it should be for you too!

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AMAZING STATS ABOUT LEARNING

• 25% of children starting kindergarten in Canada lack the skills needed to learn how to read.
• Every time 350,000 Canadians learn to read, our GDP goes up by $32 billion (i.e., a 1% increase in the nation’s literacy rate translates into a 2.5% GDP increase).
• On average, Google processes over 40,000 search queries every second, over 3.5 billion searches per day and 1.2 trillion searches per year worldwide… whatever it may be, we are always learning.

The level of documentation required for the average mortgage these days can be very frustrating. It can seem endless, very nitpicky and annoying because we are able to purchase a vehicle with just a paystub. There are a few reasons for the increased documentation requirements.

The first is that the banks are mandated by the Anti-terrorism Act to make sure all funds are legally sourced. Criminal organizations do exist even  in say, Central Alberta, and they are clever and will launder their funds however they can.

I had the opportunity to attend an anti-fraud session led by the Edmonton police and he told a story of how a routine bylaw infraction led to the discovery of a criminal enterprise which involved more than 32 million dollars in mortgage fraud. Police resources, insurance proceeds, court time and on and on mean there was a genuine cost to the greater community. Increased due diligence prior to funding can help catch such things ahead of time.

The second is that your banks and mortgage lenders are accountable to the mortgage default insurers and their company’s investors and shareholders and to OSFI which oversees them all. If you default on your mortgage they have to be able to prove that they took every step possible to ensure you were in fact a solid borrower qualified for the mortgage.

Honestly it boils down to this. If you were lending someone $350,000 wouldn’t you want to make sure they could afford to repay you?

So back to down payment sources. When you are providing documentation for your mortgage it is going to have to be pretty clear. It will have to show your name, financial institution holding said asset, account number and all transactions into the account for the past 90 days. Any deposits over $500 will have to be properly accounted for as per the above rationale. A quick reminder that you will have to have at least 5% to put down and an additional 1.5% for the closing costs so 6.5% all together though these days the banks and the mortgage insurers really like to see additional savings just in case you experience a job loss or illness.

Here are the most common and acceptable down payment sources and how each is to be verified. Keep in mind that you can use a combination of them but you will have to provide verification of each.

1. Savings – All accounts will need to be verified via a 90 day history

2. TFSA – Must be verified via a 90 day history

3. RSP- Will require a 90 day history and in most cases verification that the funds have been redeemed via the forms to the RSP provider and have been deposited into your account

4. Gift – from an immediate family member. Need to see a signed gift letter stating it is in fact a gift which is not expected to be repaid and proof it has been deposited to your account. In some cases they will want to see the source of the gift which means a statement from the person giving you the funds.

5. Loan – You can use borrowed funds for your down payment through certain lenders. They will need to verify the terms of the loan if it is new to make sure you can afford both it and your mortgage.

6. Credit Card/Line of Credit – This is similar to the loan as above but in this case you usually only have to prove you can afford the payments for both.

7. Sale of Asset – You can sell anything you own but make sure you document it properly. Bill of sale, copy of the cheque and proof it has been deposited to your account.

8. Gifted Equity – If you are purchasing the home of a family member and they wish to, they can gift you the equity in the home and this can be used as the down payment.

9. Inheritance – This is usually verified via the documents form the lawyer with corresponding deposit to your account

Sometimes I (and my colleagues at Dominion Lending Centres) get questions about rare occurrences such as a lotto win. Even in this case, which I have actually seen, there is a paper trail.

So called mattress money is no longer acceptable unless you can show you have held it in a traditional account for the 90 days.

Banks and mortgage lenders are stuck abiding by the rules which mean that so are we all.

Courtesy of Pam Pikkert, AMP – DLC Regional Group 

1. Cash back at closing, while not illegal they lender will usually reduce the mortgage by that amount.

2. Furniture included in the contract, lenders consider this to have a value and if it is zero then it needs to state that in writing. Better yet have the seller and buyer write it in a separate agreement.

3. Changes after the inspection will need to be addressed after the fact and any rebate will adjust the mortgage down usually.

4. Handy Man Special, this one sets off all kinds of alarms and usually means a full appraisal to see what shape the house is actually in at that time.

5. Anything that sounds like illegal activity has taken place on the property, grow op, meth den and lately we had one that had been the scene of a murder. All of these are considered to have an effect on the potential value.

6. Size of a property can affect the sale, houses under 700 sq ft have only a few lenders who will consider them.

7. The appraisal itself can set off a lot of red flags, signs of water damage or the house in disarray can lead lenders to back away. Especially in times when there are down turns in the market.

8. Change in employment during the process is never a good thing to have happen. This can actually cause the deal to stop.

9. Change in debt, better to not have any new debt show up as lender can check your credit again right up until the day of possession.

10. And last but not least the down payment needs to be in place at least ten days before possession and proven to the lender by ways of proof of savings.

At Dominion Lending Centres, we give you the advice you need to secure the right mortgage for your unique needs.

Courtesy of Len Lane, AMP – DLC Brokers For Life 

Chances are, you’ve seen real estate listings that end with terms like, “as-is, where-is” or “court ordered sale” or even “offers subject to court approval” and wondered if the listing prices were real. Or even wondered if you should be looking at foreclosed properties in order to make or save a buck.

My advice to you is to run the other direction as fast as you can.

Let’s begin with the foreclosed property sales process to see why:

In B.C., the process of taking possession of a property in default and then reselling it takes about a year, then another six months for the sale. During this time, the Mortgagor (the owners) can live in the property subject to only to allowing reasonable access to the realtor. They can live in the property without paying a penny against the mortgage, potentially to the final closing date.

Some, like the Smith family, who have fallen on hard times, treat this as an opportunity to get back on their feet and continue to take pride in their home and ensure that it stays in good shape.

Others, like the Jones family, have rented the property out since they bought it, haven’t maintained it, and now that they are in default, abandon any pretence of caring for the property.

After a year’s worth of legal action, the mortgagee (the bank or whatever financial institution the mortgage is with) meets with a judge and agrees on a price to list the property at. The Judge, who acts for the benefit of the mortgagee (the Smiths or the Joneses), insists that it be at the fair market value.

The property is then listed. It sits on the market for three to six months, the listing price drops regularly.

At some point, someone approaches the listing realtor with an offer. Because the place is listed “As-is, where-is”, all of the normal subjects and conditions have to be removed before the offer is represented. There is no allowance for financing, inspection and remedying existing problems. Even the normal disclosure statement will not be provided.

It’s entirely up to you to have all your ducks in a row (and theirs as well) prior to submitting an offer.

Once the offer is agreed upon by the bank, the listing realtor takes the offer to court for approval. If your realtor is smart and experienced, you tag along. Once in court, the offer is presented to the master for review. If anyone else has been interested in the property, they now take the opportunity to come in with a competing, sealed bid on the property. You will be given an opportunity to counter, but its basically guesswork as to how much to bid.

The successful bidder is now instructed to close within a very short period of time.

Because the bank are selling the property under a legal order rather than as an owner and because you are buying “as-is, where-is”, they cannot be held accountable for any damage incurred between your last inspection and the possession date. They will make every effort to prevent it, but what if the Jones family, angry at what’s happened, entered the property and trash the place, or remove all the appliances and fixtures for their next rental property?

Remember there are no subjects on your offer – you can’t cancel it no matter what. Then there are the clean up and fix up costs which you and you alone are on the hook for.

In the end, buying a foreclosed property may end up costing you more than buying the property for sale next door to it that’s move in ready.

Still not convinced? Still want to give it a try?

Here’s some advice on going ahead:

-Find the most experienced realtor you can and stick to him or her like glue. This is not a task for your Uncle Manny, no matter what a great guy he is. There are about a dozen or so realtors (B.C. again) who specialize in selling foreclosed properties. Someone like that who has handled dozens or even hundreds of foreclosure sales can provide valuable service in ensuring the transactions flow smoothly.

-Find your financing before you start looking. In terms of financing, the best (and possibly only) terms you will get will be subject to less than 65% loan to value. Make sure you have easy access to the 35% cash commitment ready.

-Have lots of experience in the building trades or have experienced family or a friend who can come with you on the walk through. Nothing says buyer’s remorse quite like the crack in the foundation you failed to notice on first look or underestimating the clean up costs by $100,000.

-Find a qualified inspector with a good reputation and when you’ve found a property, pay him well to tell you what’s good and bad.

-If you’re looking at a condo with a special assessment due and the bank says they’ll pay the special assessment, remember they’ll only pay that one. I guarantee you there will be a second one, which you will need to factor into your costs.

-If you are wanting to buy a foreclosed grow op, make sure the damage has been remediated and a clearance certificate has been issued. No one will finance an unremediated one! Note, there are only about three lenders who will finance one with a clearance certificate.

-Don’t think you can shortcut the process by contacting lenders directly. Remember, the decision maker is the Court’s Master, not the bank or credit union.

Still Interested? Really? Call or email a mortgage professional at Dominion Lending Centres!

Courtesy of Jonathan Barlow, AMP – DLC A Better Way