Yes they are legal. As of July 1, 2015, we can electronically sign agreements of purchase and sale in Ontario. Pat and I use Docusign. We load the document onto the site and add the people who will sign and add the markers where signatures and initials are required.
We end up with a clear PDF file that has signature tracking. But then we forward this file to another party and that’s where we’re back to scanning or pictures with a phone and illegible agreements. I wish using something like Docusign was mandatory but I don’t think that will happen.
Sometimes we get offers back where each page is its own JPG file or each of the twelve pages has such a dark background that you can’t make out any of the pre-printed text. After all of the negotiation and finally coming to an agreement, we’ll end up not being able to see what we’ve agreed to. Wouldn’t it be better if the original offer was clear enough for everyone to read?
The other benefit to using electronic signature software is accessibility for those who have any type of challenge with signing their name. There is a hosted signature option where I can bring my tablet to a client who feels self conscious because it takes so long for her to sign her signature on each page and give her the option of tapping the screen where she needs to sign.
Electronic signatures save trees! People (young and old) don’t have printers and don’t want to print. Electronic signature software eliminates the need to print anything. There is a print button, but you don’t have to use it.
Some people are worried that electronic signatures mean that people won’t meet in person any more. I sincerely hope that nobody is buying a home without seeing it (in person) with their Real Estate Broker or Sales Representative!
I don’t know that we will stop global warming with this option, but it is a step in the right direction. We’ve got something that is accessible, convenient, environmentally friendly and it doesn’t cost our clients one cent! There is a cost to the software and there is a hardware requirement if I’m going to bring a tablet to a client for signature, but I think my clients are worth the extra cost.
Shadow flipping has been in the news recently with Agreements of Purchase and Sale being assigned to a new buyer two or even three times before closing.
This does happen in the GTA with some new home or condo purchases, but only if the builder’s original Agreement allows for it and several do not. There’s a potential incremental HST cost to each purchaser and the rebate may be forfeited because the original purchaser who signed the builder’s Agreement and agreed that the home would be a principal residence will not be moving into the home. It’s very confusing for buyers and sellers and their Realtors. Pat and I took a course about this topic that was taught by a local Real Estate lawyer and the consensus at the end of the course was that the tax calculations were too complicated and we should all stay away from assignments of new builds.
But, an assignment isn’t always bad. It can be used when something happens and the original buyer cannot close the transaction.
We had a case where the buyers had two dogs. The condo they purchased only allowed one dog. We all missed it. We asked about the pets policy at the concierge desk but not at the management office. The lawyer was the buyer’s lawyer who did their wills and did not have real estate experience so he missed this vital part of the status certificate. So when the buyers asked, after waiving the status certificate review condition and firming up the purchase, how they should register their dogs, they were told they could only move one dog in. They were heartbroken. We suggested that we help them get someone to take over their agreement of purchase and sale.
Rather than list the unit for sale on MLS, which would cost the buyers commission, we helped them write an ad on one of the free sites. We showed the condo during a revisit (with the Seller’s blessing because he knew what had happened), and helped the non-real estate lawyer with the assignment agreement. I actually sent the sample agreement that we used in class. The original purchase didn’t register on title, but the assignment did. This saved the original buyer from having to pay land transfer tax. The purchase price was the same so capital gains tax was not an issue.
The takeaway from this story is that assignments are sometimes necessary and more importantly, be wary of pet restrictions in condos. Disclaimer: The dog in the photo is Jase Belsito and is not the dog from the story.
If you’ve got a good job and some cash put away, you’re probably ready to buy your first home. If you’re renting, you’re paying someone else’s mortgage when you could be paying your own. If you’re living at home, you may be able to move out sooner than you thought.
The first step is to talk to a mortgage professional who can tell you pretty quickly whether or not you are ready to buy. And a good mortgage professional will be able to help you with a plan so that you are ready by helping you clear up any credit problems or suggesting a plan to save some money for a down payment.
Next, you need a real estate Broker who you trust and who puts your needs ahead of their own. Interview a few. Ask about their experience and knowledge. Ask how many transactions they had last year. You’re looking for a balance between “way too busy for you” and “I need you to buy this house today so I can make my next car payment”. Will your Real Estate Broker be happy to answer your home maintenance questions years after you’ve moved in?
Call or message me at 905-466-7992 to get some answers!
If you’ve got some money that you want to invest, real estate may be a great option for you. Someone else pays your mortgage and once the mortgage is paid off, you have extra income.
Get help with this early on. What type of property is the best investment? Where should you buy? Who will screen tenants for you? How much should you put down? You need a real estate Broker with rental property experience and knowledge. Pat and I own some rental property. We also manage several properties and we help our clients buy and then rent their investment properties. You need a mortgage professional who understands investment property. You’ll need an accountant when it’s time to sell to help you understand any Capital Gains or HST implications. And you need a real estate lawyer.
I’ve found that a 35% down payment will result in positive cash flow in most cases and lots of lenders prefer a 35% down payment when it’s not your principal residence.
If you’d like to chat with us about this possibility, give me a call or text message at 905-466-7992 and we’ll show you how you can become a Landlord!
A little bit of elbow grease will go a long way to getting the best possible price for your home.
Get rid of clutter. Throw out or file stacks of newspapers and magazines. Pack away most of your small decorative items. Store out-of-season clothing to make closets seem roomier. Clean out the garage.
Wash your windows and screens to let more light into the interior.
Keep everything extra clean. Wash fingerprints from light switch plates. Mop and wax floors. Clean the stove and refrigerator. A clean house makes a better first impression and convinces buyers that the home has been well cared for.
Get rid of smells. Clean carpeting and drapes to eliminate cooking odours, smoke, and pet smells. Open the windows.
Put higher wattage bulbs in light sockets to make rooms seem brighter, especially basements and other dark rooms. Replace any burnt-out bulbs.
Make minor repairs that can create a bad impression. Small problems such as sticky doors, torn screens, cracked caulking, or a dripping faucet may seem trivial, but they’ll give buyers the impression that the house isn’t well maintained.
Tidy your yard. Cut the grass, rake the leaves, trim the bushes, and edge the walks. Put a pot or two of bright flowers near the entryway. In winter, clear the snow, showing how easy it is to keep the snow cleared at this house.
Patch holes in your driveway and reapply sealant, if applicable.
In Ontario, every new home builder must be registered with Tarion. In order to be registered with Tarion, a builder must complete a net worth statement and demonstrate adequate construction knowledge. He may even have to write a test and be able to show Tarion officials a building plan and an agreement of purchase and sale. The cost to enrol in Tarion is $300 a year, but the approval process can take a little time. And if the builder is new, he’ll have to put a deposit down for each build so that Tarion has some recourse if something goes wrong. And then every year, the builder has to renew with Tarion which means filling out another net worth statement and paying another $300 and waiting for approval. Becoming a registered builder is not expensive and is a simple enough process as long as you know what you’re doing. Why then are so many new homes not under Tarion warranty?
One reason may be that the builder could not possibly become registered because he does not understand the process. You should definitely stay away from any home offered by that builder.
But what if the builder is just trying to avoid the HST? If you’re buying a new home with no Tarion warranty, you can assume that the builder/seller will NOT be paying HST. The seller may have built the home for himself or a family member and may be under the impression that HST is not applicable. This may be true, but if not, it’s a costly mistake and as a buyer, it is vitally important that you protect yourself from any future HST liability. The best way to protect yourself is to surround yourself with knowledgeable professionals. Start with a real estate professional who understands that this is a complex issue and add a real estate lawyer with tax knowledge or a lawyer who knows when to call in a tax lawyer. Sellers of new homes may also want to consider consulting an accounting professional with a tax speciality because both Capital gains and HST may be applicable.
Here’s a link to a Toronto Star article from 2012 which outlines how a buyer became a builder and liable for the tax when she sold the home she purchased.