Introduction 1
About This Book 1
Foolish Assumptions 2
Icons Used in This Book 3
Where to Go from Here 3
Part 1: Getting Started Buying and Selling a Home 5
Chapter 1: Buying and Selling a Home: Just the Basics 7
Knowing the Cast of Characters When Buying or Selling 8
Recognizing whos important when buying 8
Identifying whos essential when selling 9
Preparing to Buy a Home 10
Arranging financing 10
Finding a home 11
Making an offer 11
Doing the due diligence 11
Closing the deal 11
Considering Some Important Questions to Ask When Youre Ready to Buy 11
What is this going to cost me? 12
This is the right home, but is this the right neighbourhood? 12
What kind of changes can I make? 13
How much should I budget for maintenance? 13
Whats my exit strategy? 13
Knowing What Happens When YouSell 14
Deciding to sell 14
Preparing the home 14
Listing the home 14
Negotiating the sale contract 14
Closing the deal 15
Answering Some Questions You May Have When Selling 15
Does this home meet my needs? 15
Will moving be more trouble than its worth? 16
How much will this cost me? 16
Are last-minute renovations worth the cost? 16
What are the chances Ill be homeless if I sell? 17
Chapter 2: Introducing the Key Players 19
Understanding the Real Estate Agents Role 20
Identifying important agent qualities when buying or selling a house 20
Sorting out the basics to the broker-agent relationship 21
Understanding the agency relationship 22
Discovering the perfect agent 25
Sizing up the candidates 26
Making your agent work for you 30
Choosing to Go It Alone 32
Saving the commission 33
Working out the costs of selling it yourself 34
Getting some help 35
Valuing the Appraisal Process 36
Knowing what an appraiser looks for 37
Eyeing who needs an appraiser and why 38
Recognizing a good appraiser 39
Knowing how much you can expect to pay 40
Comprehending How a Lawyer Fits into the Picture 40
Taking care of business: What your real estate lawyer does for you 41
Finding a lawyer or notary 44
Knowing what to look for in a lawyer or notary 46
Costing out a lawyers fees 46
Part 2: Preparing to Buy a Home 49
Chapter 3: Sizing Up Home Ownership 51
Recapping the Joys of Ownership 52
Knowing Whats Right for You 54
Considering your foreseeable future 54
Saving space for change 55
Knowing What You Want 55
Focusing on your needs 55
Making the list 57
Knowing When the Time is Right 62
Knowing your finances 62
Comparing renting to buying 63
Considering homeowner concerns 65
Adding up the costs of homeownership 65
Understanding the market 66
Chapter 4: Understanding Your Finances 69
Increasing Your Down Payment 70
Dealing with debts 70
Sizing up your savings 71
Getting Up Close and Personal with Your Finances 74
Determining What Size Mortgage You Can Carry 77
Gross debt service (GDS) ratio 77
Total debt service (TDS) ratio 78
Generating your own figures 78
Getting a Head Start with a Preapproved Mortgage 79
Understanding the advantages of preapproval 79
Getting the lay of preapproval land 80
Anticipating the Closing Costs 81
Deposit and down payment 81
Identifying three key closing fees 82
Appraisals, surveys, inspections,
and condominium certificates 83
Taxes 84
Remembering Little Extras You May Not Have Considered 85
Chapter 5: Knowing Your Mortgage Options 87
Defining Your Financing Goals 88
Knowing the potential scenarios 88
Keeping interest payments in check 89
Mastering the Lingo: Mortgage Jargon 101 90
Mortgage principal 91
Interest 91
Amortization period 91
Mortgage term 92
Understanding the Types of Mortgages 92
Conventional mortgages 93
High-ratio mortgages 93
Fixed-rate mortgage 93
Variable-rate mortgage 94
Blended payments 95
Mortgage-a-rama: All the Nifty Options 96
Payment options: Open, closed, or in between? 97
Portable mortgage 98
Assumable mortgage 99
Vendor (seller) take-back mortgage 99
Builder/developer interest rate buy-down 100
Self-directed mortgage 101
Line of credit 101
Playing It Safe: High-Ratio Mortgage Insurance 102
Qualifying for high-ratio mortgage insurance 102
Determining the cost of high-ratio mortgage insurance 103
Covering Your Bases: Life and Illness 103
Going Mortgage Hunting: What You Need to Do to Get a Mortgage 104
Enlisting a mortgage brokers help 105
Searching on your own 107
Getting an online mortgage preapproval 107
Questioning Your Lender 108
Helping Your Lender Help You: Prepare Your Information 110
Sharing about yourself 110
Getting it in writing: The paperwork 111
Part 3: Discovering Your Perfect Home 113
Chapter 6: Finding a Home Thats Right for You 115
Looking Closer at Your Housing Options: Determining the Best Fit 116
Buying into a Fresh Start 118
Buying new 118
Building a home of your own 120
Country living in a new home 122
Following a Lead: Resale Houses 125
Eyeing the pros and cons with resale houses 125
Choosing the right resale home 126
Rising Ambitions: Investigating Condos 128
Weighing the ups and downs of condo living 128
Understanding condo ownership 130
Closing the deal 133
Converting condos 136
Living Co-operatively 138
Considering the co-ops pros 139
Weighing the co-ops cons 139
Home Owning as an Investment 140
Doing your due diligence 140
Helping your mortgage 141
Chapter 7: Shopping for a Home: The Nitty-Gritty 143
Finding the Right Home for You 144
Making the list 144
Checking whats on your doorstep 148
Staying connected 149
Checking Out the Hood 150
Defining neighbourhood character 150
Improving the prospects 151
Your neighbourhood priorities 152
Drilling into Opportunities 154
Working with your agent 154
Working online 155
Working the neighbourhood 156
Working your network 156
Attending open houses 157
Getting Up Close with Foreclosures 157
Taking a Closer Look at Properties 159
Stacking up the properties 159
Scrutinizing more than one house 160
Coming to Grips with Coming up Empty 161
Getting Fired Up: Recognizing What Powers the House 162
Heating systems 162
Fuelling up 164
Considering electricity 167
UFFI 169
Asbestos time, the worst of times 169
Septic tanks 170
Well water 171
Stacking Them Up How the Homes Compare 171
Chapter 8: This Home is Great! (Except for . . . ) 177
Putting Your Emotions Aside 178
Reality Check: Can You Fix the Homes Problems? 179
Household cosmetics 179
Things you cant change 180
When its not worth it 181
Catching a Flipped Home 182
Check It Out: Investigating Your Prospective New Home 183
Moving beyond appearances 184
Dont be afraid to snoop 186
Ask questions 187
Determine whether the home has been maintained 187
Part 4: Getting the House You Want 189
Chapter 9: Making a Deal on Your New Home 191
Preparing to Make an Offer 191
Get your mortgage preapproved 192
Get to know the local market 192
Get to know the sellers motivation 193
Get to know your limits 193
Ready to Purchase: Making an Offer 194
Figuring out whos who and whats what in your contract 194
Comprehending the terms and conditions (subject to clauses) 197
Competing with multiple offers 199
Chapter 10: Signing On to a New Life 203
Taking Care of the Paperwork 203
Removing conditions 204
Paying your lawyer a visit 204
Getting that mortgage 206
The Ins and Outs of Inspections 207
Getting an inspection, no matter what 208
Understanding what your inspector does 208
Choosing a good inspector 209
Knowing what to expect when youre inspecting 210
Inspecting a Newly Built Home 212
Sizing Up an Inspection Report 213
Home exterior 213
Home interior 214
Checking Out Condo Inspections 216
Outside the building 216
Inside the building 218
You Are the Owner of All You Survey 219
Considering title insurance 219
Figuring out why you need a survey 220
Finding a professional surveyor 220
Chapter 11: Protecting Your Interests: Insurance and Warranties223
Insuring Your Home 223
Knowing what to protect 224
Understanding how youre protected 226
Extending your coverage 228
Getting the best deal 229
Finding Out Whether the Property Comes with a Warranty 229
Understanding the new home warranty 230
Knowing whats covered 231
With a warranty, youre in the drivers seat 231
Preparing for the Preclosing Walk-Through 232
Chapter 12: Closing Time: Closing Events and Moving Day 235
Identifying What You Sign 236
Recognizing What You Pay 237
Taking Possession on the Possession Date 238
Making Your Moving Experience One to Remember 239
Moving day versus the day of possession 239
Timing is everything 240
Moving your life 241
Moving your stuff 241
Packing it all in 243
Moving it yourself versus hiring professional movers 244
Being Organized: The Moving Timeline 247
Two months and counting 247
One month to moving day 247
One week before 248
The day before 249
The big day 249
After the move 250
Part 5: Preparing to Sell Your Home 253
Chapter 13: Deciding To Sell (or Stay) 255
Making the Big Decision 255
Identifying the reasons why people sell 256
Recognizing reasons to stay put 256
Taking stock of wants and needs 257
Looking At Your Budget: Your Finances 259
Doing the math 259
Contemplating refinancing 260
Considering Your Mortgage When Moving 261
Paying off your mortgage early 262
Letting your buyer take over your mortgage 262
Taking your mortgage with you to your new home 264
Scouting incentives 264
Knowing the Ups And Downs Of Financing 265
Trading up: Your options 266
Trading down: Your options 266
Timing Your Move 268
Sell first and then buy, or vice versa? 268
Buying before you sell 271
Selling before you buy 272
Cutting through the stress 273
Buying time with the closing dates 275
Timing it right: The ideal selling and buying scenario 276
Changing Your Mind about Selling 276
Home equity loans and homeowner lines of credit 276
Refinancing your mortgage 277
Reversing your mortgage 277
Considering Estate Sales to Sell Your House 279
Knowing what to do as the estates executor 280
Being aware of taxes 280
Chapter 14: Setting a Price and Knowing the Cost 283
Pricing Your House to Sell 283
Determining your homes worth 284
Recognising the three most common pricing mistakes 285
Comprehending the Basics of Appraisals for Sellers 287
Knowing if your home requires an appraisal 288
Exploring how an appraisal is performed 288
Appraising condominiums 290
Preparing for an appraisal 291
Sum Fun: The Math of Selling Your Home 292
Estimating the costs of selling 292
Tallying it up 296
Some Good News about Taxes 297
Principal residence exemption 297
Moving tax credits 298
Chapter 15: Making Your House Shine 299
Taking a Closer Look at Inspections for Sellers 300
Having your home inspected: The why 300
Having your home inspected: The why not 301
Knowing what your inspector looks at 301
Preparing for the inspector 302
Undertaking Home Improvements 303
Keeping future returns in mind 303
Creating curb appeal 305
Alluring interiors 306
Going to Market 309
Your basic For Sale sign 310
Advertise, advertise, advertise 310
Showing (Off) Your Home 313
Fielding the calls 314
Staying secure 316
Holding an open house 317
Part 6: Sealing the Deal 319
Chapter 16: Examining Listings and Disclosures 321
Getting the Lowdown on Listing Contracts 321
Understanding the listing contract 322
Selecting your listing type 323
Grasping the Importance of Disclosure Statements 325
Knowing who sees your disclosure statement 326
Identifying what you need to disclose 327
Chapter 17: Understanding the Legal Stuff 329
Cooking Up a Recipe for a Successful Contract 329
Reading the Recipe: Basic Contract Know-How 330
A pound of offer 331
An ounce of buyer 332
A pinch of deposit 332
A dash of address details 333
Pricing to taste 333
A handful of covenants and a sprinkle of conditions 334
Time frame of the offer 339
If you have rental units 340
Top with acceptance 341
Keeping Condo Owners Covered 341
Examining Deeds and Titles 342
Conveyance 343
Land registries 344
Chapter 18: Being Cognisant of Negotiating Tricks and Bargaining Chips 347
Keeping Your Eye on the Prize: Whats Really Important 348
Getting an Overview of the Negotiating Process 349
Knowing how low you will go 350
Negotiating the subject to clauses 350
Including appliances and household decor: I never liked those drapes anyway 353
Deciding on the closing date 354
Racing against the clock: Open for acceptance until 355
Signing on the dotted lines 356
Contending with Multiple Offers 356
Dealing with Backup Offers 357
Part 7: The Part of Tens 359
Chapter 19: Ten Regional Concerns When Buying a Home 361
Check Transportation Routes in Cities 361
Be Cautious about Industrial Sites 362
Stay Away from Major Roads If Youre Noise-Sensitive (Or Nose-Sensitive) 362
Be Certain Your Streets on the Level 363
Make Sure Youre in a Good School District 364
Be Sensitive to How Local Climates Can Affect Your Lifestyle 364
Watch Out for Waterways 365
Only You Can Avoid Wildfires 365
Research Services in Rural Areas 366
Think Twice about Leased Land 366
Chapter 20: Ten Tips for Condo Buyers 367
Insist on Seeing and Reading Documentation 368
Have the Condo Inspected 368
Use Your Measuring Tape If You Buy New 369
Get to Know the Board of Directors 369
Stay Away from High-Rental Developments 370
Watch Out for Maintenance Fees That Are Too Good to Be True 370
Ask about the Buildings Commercial Property 371
Share as Few Walls as Possible, Especially If You Crave Quiet 371
Own Your Locker and Parking Space 372
Check for Signs of Aging 372
Chapter 21: Ten Tips for Home Sellers 373
Sell When Your Home is at Its Peak 373
Prepare Your Home for Sale 374
Fix the Little Things 374
Light It Up 375
Let Your Neighbours Know 375
Know Where to Advertise 376
Get Your Documents in Order 376
Prequalify Buyers 377
Tighten Security 377
Send Notifications: My Dear Tenants 378
Chapter 22: Ten Ways to Protect Your Investment 379
Inspect the Exterior 379
Know Your Surroundings: Landscaping, Yard, and Deck 380
Maintain Heating and Cooling Systems 381
Stay Warm: Insulation 381
Breathe Easy: Ventilation 382
Sleep Soundly: Home Safety 382
Keep an Eye on Your Doors and Windows 383
Cook Up a Storm in a Safe Kitchen 383
Get Away in a Leak-Free Bathroom 384
Into the Dark: The Basement and Attic 384
Glossary 385
Index 397
