How Can I Get Approved to Rent With No Rental History? Honest Answers Ahead

By Jeanne Sager | Sep 1, 2017

 

“How can I get approved to rent with no rental history?” This is a common chicken-and-egg conundrum for first-time renters, since landlords are often wary of opening their doors to tenants with no record of paying rent. So if you’re young and/or have never rented your own place before, how are you supposed to convince a landlord that you’re a solid bet?

Never fear—overcoming this hurdle is entirely within your grasp, provided you do a little prep work first.

“It can be challenging to find a place to rent with no rental history, but it’s not impossible,” says Denise Shur, a Realtor® with 1:1 Realty in San Jose, CA. Just follow the steps below on getting a rental with no rental history under your belt.

How to get approved to rent with no rental history

Basically, landlords want to see that you have money to pay your rent and will do so in a timely manner. So before you start cold-calling landlords or perusing rental listings, make sure to gather some evidence that makes a convincing case on your behalf.

The main thing you need? A stable income, which suggests you have the cash to funnel toward rent.

“Normally, if you go talk with a real estate agent or property manager, they will be able to look at your work history and finances and help you get approved to get into a rental,” says Lana Lavenbarg, a Realtor® with Re/Max Ideal Brokers in Grants Pass, OR.

In addition to proving you have money coming in to pay your monthly rent, there are other things that can strengthen your case.

Shur suggests putting together the following paperwork to bring along for your meeting with a potential landlord:

  1. A copy of your last three years of income tax returns, proving your income history.
  2. A copy of your three latest pay stubs, proving your current income.
  3. A letter from the company where you work, on official letterhead, showing the company’s name, address, and phone number, signed by someone in human resources or finance. The letter should verify how long you’ve worked at the company and your current salary. Ideally it should include a statement such as the following: “We do not anticipate any layoffs in the foreseeable future.”
  4. A recent copy of your credit reports (these can be obtained online from Annual Credit Report, the one site authorized by the government to provide one credit report a year to Americans free of charge).
  5. A recent copy of your bank statements, including savings and retirement accounts to show that you are financially stable.
  6. A letter explaining why you have no rental history and describing your plans for the next one to five years.
  7. A list of personal references that can vouch that you’re responsible and won’t become a headache for your landlord or the other tenants.

How to nail the deal with a landlord

Shur says personal details can swing a landlord your way. Here are a few tidbits landlords love hearing:

  • If you have a parent or other person who can co-sign a lease and guarantee rent, bring it up (or better yet, bring the individual along).
  • If you used to pay rent to a family member, even if it’s a small amount, that’s a good thing to share. Shur suggests asking the family member to write a letter that you can present to the landlord.
  • If you don’t have pets and don’t plan to have any during the time you’re renting, make that clear early on.
  • Finally, if you have the ability to swing three months’ rent in advance, make the offer. It will show a landlord you’re financially stable and able to take on a monthly rent.

Source: http://www.realtor.com/advice/rent/how-can-i-get-approved-to-rent-with-no-rental-history/ | Sept. 1, 2017

7 Secret Thoughts Landlords Have About Renters—Revealed

By  | Aug 17, 2017

Whenever you hand over your rent check late (again), do you wonder what your landlord is really thinking? Well, we’re here to help you find out! This is important intel for all sorts of reasons. For instance, landlords can choose to raise your rent once your lease is up, or hold it steady. They can jump on repairs right when you need them at 3 a.m., or wait until morning. So here’s a peek at some of landlords’ secret thoughts—along with some eye-opening lessons on how to stay on their good side.

‘Why did you sign your lease without reading it?’

“Renters are often so excited about getting the keys to their new rental that they rush to sign their lease agreement without carefully reading it,” says John Nuzzolese of the Landlord Protection Agency website. “I prefer to sit and explain each clause of the rental agreement to the tenants before they sign it. It’s crucial that tenants completely understand what their rights and responsibilities are before finalizing the agreement.”

Why is this so important? So you and your landlord are on the same page—about when rent is due, what penalties there are for violating the lease, and what you can and can’t change in your place. For instance, “I once had a tenant take it on himself to remove our new carpeting and replace it with carpet of an ugly color,” says Nuzzolese. “I was so annoyed—and it came out of that tenants’ security deposit to change it back.”

Source: http://www.realtor.com/advice/rent/secret-thoughts-landlords-have-about-tenants/

6 Neighborhood Red Flags to Look for When Renting

By Cathie Ericson | Aug 10, 2017

Finding the ideal home or apartment to rent can be tricky. Even though there’s less financial commitment than with buying, you’re still selecting a place that will be home, sweet home, for what could be years. That’s why you want to make sure that the property, as well as the neighborhood, suits your needs. Keep an eye out for these neighborhood red flags; they’ll help you figure out what it’s really like to live there.

If you need help with property management, tenant management services, or looking into a property investment – contact CMG Toronto today. The best property management company in Toronto.

1. The overall rental market

Do you see a plethora of properties sitting vacant? That can be a worrying sign, says real estate investor Brian Davis, who teaches courses in rental investing at SnapLandlord.com.

“Healthy neighborhoods should have only a handful of vacant properties at any given moment, even if they are being marketed for rent or sale,” he says.

When you’re browsing listings, pay attention to how many apartments are actually up for rent. If the number seems suspiciously high, the neighborhood could be a real dud.

2. The condition of other properties in the area

If you see too many homes in obvious disrepair that aren’t being renovated, it means the properties in the neighborhood aren’t worth fixing up, Davis says.

Also, watch for the general level of upkeep among homes in the areas. Eyesores worth paying attention to are trash on the lawn or sidewalk; blinds or curtains hanging outside of the window; cars parked in the yard; and holiday decorations up year-round, says Roslyn Lash, an agent with Realty Select in Rural Hall, NC.

3. The commercial property scene

You want to see most of the commercial spaces occupied with healthy-looking businesses, says Davis. This not only reflects well on the vibrancy of the market, it can also make your life easier when you have grocery stores, restaurants, and other amenities close by.

On the other hand, you also want to make sure there’s not too much of a good thing, notes renter Shane Lee, who lives on the Lower East Side of New York City.

“While it’s convenient to live in a neighborhood full of restaurants and bars, don’t forget you will also have to deal with the trash and noise,” he points out, adding that his apartment often smells just like the restaurant downstairs.

4. The area’s crime rates

Before you sign on the dotted line, make sure you check out how prevalent crime is in the neighborhoods you are considering. A few resources that will give you the 411 are AreaVibes, SpotCrime, and NeighborhoodScout.

5. 24/7 activity on the streets

In addition to touring the property on a Saturday afternoon, it’s smart to take a look at the neighborhood at different times of the day.

Check for daytime loiterers, Davis advises.

“It’s a good sign to see neighbors shooting the breeze in the evening, but think twice if you see a pack of unemployed-looking people just hanging out on the street in the middle of the day,” he says.

Visiting the neighborhood at night can give you a sense of how safe you’ll feel—and, of course, what the noise levels are.

Lee has one other practical tip: look down. He was annoyed by all the dog waste near one apartment he was considering: “It made me feel that the neighborhood was dirty and residents there didn’t really care about hygiene or how other people feel.”

6. The scoop from neighbors

Finally, seek out neighbors to really get the scoop beyond what you read on the property listing. If you don’t run into any people, quiz the landlord or ask for some references.

“Talking to people who live there is a sure way to gain inside knowledge about the neighborhood,” notes Lash. “You’ll also get a good idea of whether people are short-timers, which could be a red flag in itself.”

Source: Cathie Ericson | August 12, 2017 | http://www.realtor.com/advice/rent/neighborhood-red-flags-when-renting/

Protect Yourself When Rejecting Applicants

One of the hardest parts of landlord management is having to reject prospective tenants who don’t meet your requirements. Accepting a tenancy is the easy part, assuming of course you’ve done your due diligence throughout the ever-important screening process. By the time you’re ready to accept a tenancy, you should be happy and confident in your choice. You’ve met with everyone, reviewed applications, and followed up with references. You’re confident in your choice. But assuming again that you’ve gone through a thorough screening process, that means you now have applicants to reject as well. Nobody likes to be rejected, and nobody likes to do the rejecting either. It can harbor ill feelings and negative scenarios. Understanding of course that this is a touchy process, there are ways that you can both respectfully and legally reject an applicant. In doing so, you’ll be protecting yourself, your investment and you’ll have the peace of mind of knowing that you did everything you could to make the rejection process as painless as possible for all parties involved. Displaying that level of respect for the process and for the applicants will go a long way in protecting your rear end.

If you need help with property management, tenant management services, or looking into a property investment – contact CMG Toronto today. The best property management company in Toronto.

So, What Can You Do and What Can’t You Do?

First and foremost, you need to know how you are legally entitled to act, and you need to understand what would put you into a legal grey area. According to Canada’s Human Rights Act of 1984, a landlord cannot reject a tenant based on a variety of recognized and prohibited grounds of discrimination. We’re talking race, nationality, gender, sexual orientation, origin, skin colour, religion, marital or family status, pardoned offences, and disability. If you reject a tenant based on these grounds, you will be in direct violation of the Human Rights Act. Now, it’s important to understand that this doesn’t mean that you can’t reject an applicant of a certain colour, race, religion, sex etc. What it means, is that if you plan to reject an applicant, you’d better have a good reason that doesn’t apply to any of the described characteristics.

With that said, Ontario landlords can accept or reject an applicant based on a multitude of criteria, including credit checks, income information, personal or professional references and rental history. Which brings us back to a reoccurring theme on these blogs: have a proper screening process!

As a landlord, you are required to treat every candidate equally. With that said, it’s part of your job to make judgements against the applicant’s’ character. How else are you supposed to decide on who to accept? Making this decision can be the scariest part of landlord management, as being stuck with a bad tenant can be a massive source of stress. You are entitled to accept or reject an applicant based on your own judgement calls, but you must ensure that your judgement does not break Canada’s Human Rights Code. Just understand that when making your selection, your reasoning should be based on who is the best fit, and nothing else. The best way to ensure that there is no grey area in which an applicant can claim discrimination, is to require the same process from each applicant across the board. You should require the same rental application from all prospects, and you should do the same credit checks, background checks and reference checks for all. Once you’ve made your decision, applicants should be contacted within an appropriate window of time whether you are accepting or rejecting. This will give the applicants time to make other living arrangements, and will ensure transparency. It’s typically recommended to follow this process in writing, as to create a legally sound record of the process.

Make the Phone Call

In addition to sending a written rejection, you should give the prospects a call. Speaking directly shows respect and character. It also gives you a chance to properly thank the applicant for their time and interest. This will greatly limit any ill feelings a rejected applicant may feel.

The big take home here, is that the power to choose is in your hands. With that said, there are right and wrong ways to do anything, and the rejection process requires a touch of tact. Don’t be afraid to reject, just make sure you’re doing it for the right reasons, and in a respectful manner.

Are You a New Landlord? Don’t Make These Costly Mistakes

Owning a rental property is a very smart move. It can be a reliable source of additional monthly income, not to mention the potentially large payoff when it comes time to sell the property and cash in on it’s equity. But it’s not all fun and games. Failing to properly manage your rental property can be a massive source of headache, and extremely costly both from a time and financial perspective. If you’re new to the game, be aware that this is a business, and as such, remain business minded. Recognize areas where other landlords have failed, and use them as learning experiences. On that note, avoid making these costly mistakes:

If you need help with property management, tenant management services, or looking into a property investment – contact CMG Toronto today. The best property management company in Toronto.


Failing to Properly Screen Tenants

The most important aspect of landlord management, is properly screening your prospective tenants. Failing to do so is like playing Russian roulette. You may get lucky…or you may bite the bullet. Think of your tenant as the arms and legs of your business. They are living in the space, and therefore have direct impact on the properties maintenance and liveability. The last thing you want is for your tenant to run a muck on your property, as this will leave you with the headache of fixing the space up, and the bill that comes along with it. More importantly, you are relying on the tenant to pay their rent for your investment to be worthwhile. If a tenant fails to pay their rent, it can take months for you to evict them, and there is no promise that you’ll ever be paid out on the months of back rent – so be smart and screen your tenants thoroughly.

Allowing Tenant Renovations

Some landlords think to themselves: “my tenant wants to renovate? Fantastic, free service for me!” That’s a potentially dangerous thought process. For starters, you should be heavily involved in any renovations or fixes being done to the space. Once the tenant leaves, you’ll need to find a new tenant; what if the renovations or fixes from the old tenant were performed poorly? Then you’re going to be stuck cleaning up the mess. Moreover, tenant renovations can potentially cause damage to your property, or even tenant injuries that may lead to legal trouble. If your tenant is offering to pay for certain renovations, that’s fantastic, but make sure you pick the professionals to do the work, and make sure you know exactly what work is being done.


Lazily Written Leases

Take your time when writing up the lease. The lease is your failsafe in case of disputes. The lease should thoroughly outline what is expected of the tenant, and what steps can be taken if the tenant fails to live up to the lease requirements. If the lease is missing vital details, or lacking specific required information, it may be deemed null and void in the case of a legal dispute. Do not skimp on the lease.

Verbal Lease Agreements

Some landlords settle with a verbal lease agreement. A verbal agreement will not hold up legally, and causes a ton of grey area. Without proper documentation, you have no leg to stand on if need be. A written, and signed lease agreement, is the only way to protect your rear end.

Not Having Insurance

Like any business, you need to be covered legally as legal disputes can arise with your tenants; rent can go unpaid, damages can arise, liability issues can come up; understand that a landlord can be held liable in the case of injury to your tenant or one of their guests. A good insurance plan will protect you and your investment.

Not Requesting Tenant Insurance

On the same note, you’d do well to ensure that your tenants have tenant insurance. It’s not uncommon for tenants to cause damage to a landlord’s property. Fires, floods, broken structures etc. are all possible, and if your tenant doesn’t have insurance, you will likely get stuck with the bill.

Accepting Alternative Methods of Payment

Why did you purchase a rental property to begin with? To make money, right? So why on earth are their landlords who accept alternative methods of payment? In some cases, tenants will offer to pay for certain renovations or repairs. In this case, how do you know the job will be done well, or at all? Accepting anything other than money for rent, negates the very purpose of renting out the space to begin with.

These are just a handful of big errors that many landlords make. If you’re new to the game, be smart and avoid these common mistakes.

Tenant Customer Service is Paramount

The most successful landlords treat their venture as a business. Like any good business, customer satisfaction must be a priority. Failing to view it as such is a guaranteed way to fail. Customers drive business, period. Like any business, however, you will encounter bad customers. Accept this now, and accept that your job is to manage them. With that said, I’m not encouraging you to allow yourself to be taken advantage of. “Professional tenants” do exist, and their aim is to suck the landlord dry. This is not OK, and I would encourage any landlord to take the necessary steps to evict in these given scenarios. But all too often landlords will treat minor discrepancies as if they represent the end of the world. This leaves them stressed, leaves their tenants unhappy, and breeds a negative environment for both parties.

Making the effort to view your tenants as customers, and understanding the importance of customer satisfaction, will ultimately lead to a more satisfactory tenancy for both parties; tenant satisfaction leads to wilful cooperation on their part. This will make your life as the landlord infinitely easier. The long-term effect is equally beneficial as it is essentially indirect marketing: a satisfied tenant will be more likely to give you less headache, and want to stay on board once their lease is up. If not, they are more likely to bring you future business throughout positive word of mouth. The ultimate effect for you as a landlord, is less vacancy, and better tenant cooperation. This should be the ultimate goal for any successful property manager.

So, what sorts of actions should a landlord/property manager take to ensure customer satisfaction? Glad you asked:

First and foremost, a thorough lease agreement fully outlining your expectations as a landlord must be put in place. I would also recommend spending time to go over the vital details with your tenant either in person or over the phone. Many landlords send over the lease agreement without discussing the terms with the tenant. In turn, many tenants fail to actively read the agreement. This creates grey area, which is a recipe for disaster. Clear communication, on the other hand, will ensure that both parties are on the same page. This will give both parties confidence entering into the agreement, as they understand what will be expected on a daily, weekly or monthly basis. No surprises mean less headache.

Hand in hand with this is ongoing communication. Don’t just fall off the map once your tenant has moved in. This can lead to many unwanted scenarios including tenants slowly easing off lease agreement details because they feel they aren’t being monitored. More importantly, your tenants may need you from time to time. In these instances, it’s important that they can easily reach you. If they feel that you don’t prioritize customer service, they’ll be less inclined to treat your property with respect. Make sure you are easily reachable, and timely to respond to inquiries.

Always remember that you are a professional, and conduct yourself as such. When your tenants see that you are a serious landlord who takes on full accountability, they are more likely to respect you. When meeting with your tenants, be well dressed and well groomed. Be friendly and courteous, but be sure to keep a clear distinction between friendship and professional relationship; most of us have taken advantage of a friend at one point or another in our lives. But how many of us have taken advantage of a superior? Small talk is a nice middle ground that will put your relationship in it’s place.

Lastly, stay organized. This will show your tenant that you are a professional who commands respect. Maintaining a sense of order and organization will give your tenant confidence in dealing with you and living in your space. They will feel that they are in good hands, and will be more likely to adhere to rules and clear communication throughout their tenancy with you. An organized landlord is inadvertently encouraging and promoting easy cooperation from their tenants.

These are just a few key details to keep at the forefront of your mind. By maintaining clear communication, professionalism, organization and clear agreement details, you’re setting up a successful tenancy in both the immediate and long-term future.

Selling Your Rental Property? Work with Your Tenants!

There comes a point in every Landlord’s career where they decide to cash in on their investment property. Typically, a landlord will rent the property for years, allowing a tenant to pay down the mortgage. Once a good chunk of the mortgage has been paid off, it makes sense to sell, cash in on the equity, and either upgrade to another property or use the earnings for another purpose. If this describes you, then you should be mindful of leveraging your tenant relationship to reach a profitable sale of your home. Believe it or not, your tenant may be the deciding factor that makes or breaks the entire process.

Ideally, you should be open and communicate clearly to your tenant throughout this process. Your tenant is living in the space, which means they have a lot of control over how presentable the space is throughout the showing process. If you have a strained relationship with the tenant, they may take petty measures to make the home unpresentable prior to a showing. This is the last thing you want, as it will devalue your home in the eyes of the potential buyer.

In preventing any ill feelings on your tenant’s part, let them know that you plan to sell, and that you’ve appreciated their tenancy. Give them a rough timeline estimate so that they have adequate time to search for a new living space, should it be required. You may also consider some sort of incentive in asking for their help with keeping the space presentable. The incentive can be up to you; gift cards and cash incentives, for example, can go a long way.

Typically, you’ll need to provide your tenant with a written notice of entry 24 hours prior to the date and time of the showing. In addition to this, it’s recommended to simply give your tenant a call with specific details; a personal touch can go a long way in maintaining a healthy landlord/tenant relationship.

In addition, you’ll want to be respectful and sensitive towards your tenant’s privacy. For example, some tenants may have concerns about personal belongings and hanging pictures to be included in any marketing material (i.e. Realtor.ca listings). If this is the case, you should coordinate a photo shoot with your tenant so that they can remove pictures from the walls and hide any personal belongings that they’d like to remain hidden from the public eye.

You’ll also need to consider admittance; the Residential Tenancy Act only permits admittance between the hours of 8am and 8pm if it’s not an emergency (and no, a showing is not an emergency). So, don’t go planning any showings for 6am or 10pm etc. Your tenant will not thank you, and you may end up in some hot water.

Here’s another big one: Pets. Does your tenant have one? Two? More? Some potential buyers may not take kindly to pets living in the space they are considering purchasing. This is another big reason why healthy tenant relationships are key. You may need to request that the pets are hidden from site during showings. This may require your tenant to find a babysitter, take the pets out during the showing time, or arrange some sort of hidden space that will not be shown to the prospective buyer.

You’ll also need to discuss with the tenant whether they plan to stay in the living space or not. Contrary to popular belief, you cannot force a tenant to move out on a whim if you have an offer on the table. You will be left to negotiate with your tenant and the buyer. If you have a lease term signed off, the tenant is within their rights to stay, and the buyer will need to be made aware if they plan to. If you do not have an active lease term, then the buyer is able to provide the tenant with an N12 form, which will give the tenant 60 days to move out. With that said, if the tenant doesn’t move out, the eviction process can typically take quite some time. What’s more, is the standard Agreement of Purchase and Sale guarantees vacant possession. You will need to discuss with your Realtor if this stipulation is included. If so, you will be wise to consider leaving enough time to evict if need be. Otherwise, you may end up in direct breach of your purchase agreement.

With these factors to consider, failing to leverage your tenant relationship can be costly in more ways than one. The wise move, is to maintain healthy relationships with your tenants from the start, and to play the right cards when it comes time to sell. A tenant on your side, will make the process a breeze.

 

Condo Management: Condo Corporations’ Board of Directors

Landlords in the GTA often choose condominiums as their investment of choice; Condos come at a lower cost comparatively speaking, and generally hold their value/equity quite well. But with the ownership of a Condo comes rules, responsibilities and relationships to maintain. Condominium Corporations are not run by any one, single entity. A Condo Corporation has 3 governing heads that a landlord must be familiar with: the owners (you as a landlord are included in this group), board of directors and the property managers. Each governing head has their own roles and responsibilities, but the Board of Directors plays a crucial role; they essentially run the Condo Corp on behalf of the owners. They represent the owners, and are responsible for virtually all the major decisions related to the buildings finances, maintenance, upholding and enforcing the Condominium Act, the declaration, as well as rules and by-laws. Naturally, allocating the right board members is crucial.

A key factor for landlords to consider, is that there are no special skill sets, knowledge or certificates required to serve on the board. The Condominium Act simply states that the condominium corporation must be governed by a board of directors consisting of at least three directors who are a.) At least 18 years of age b.) Mentally competent c.) Cannot be bankrupt, and d.) Do not have a lien registered against them that has not been discharged in 90 days prior to the elections. In reality, these are very minimal requirements. In fact, someone with a criminal record can become a director. For anybody considering ownership of a condo unit, the competence level of the board may be concerning to you. For this reason, it’s important to understand that you will have your say in determining qualified candidates.

Owners are responsible to “vote in” or “vote out” directors, or an entire board in rare scenarios. They would do so at the AGM (Annual General Meeting) or a requisitioned meeting (a special meeting usually called or requisitioned by owners, by a single board member, or multiple members).  When a vacancy occurs on the board, the remaining members may appoint a “temporary member” to take their place until the next AGM. At that point, the appointed member will become a candidate to the elections should he or she wish to remain on the board. But the owners have final say. As a landlord/condo owner, it’s crucial not to take this process lightly.

According to the Condominium Act, the directors of a condominium corporation are held to the standard of “the care and diligence and skill of a reasonable prudent person.” They are expected to act in the best interest of the owners and the building, and to ensure that rules and declaration are applied uniformly and consistently. Boards are not allowed to refuse to enforce rules, so keep this in mind when dealing with your tenants. Failing to enforce rules generally leads to a wealth of problems down the road, with financial issues being just one of the many potential outcomes. These problems can ultimately lead to diminished resale value of the owners’ units.

Evidently, the requirements put forth by the Condominium Act are minimal and vague. Sometimes, owners find themselves working with a board who don’t have the owner’s best interests in mind. In these scenarios, a condo may wish to pass a by-law which would indicate specifics in terms of who can be elected to the board, provided that this by-law is within the scope of the Act. For example, it can be specified that “all directors must be owners”, as owners have an invested interest in the condos wellbeing. This would be a topic to discuss with the other owners in the building.

The Board of Directors is also responsible for hiring a management company, making their role even more important. Property Managers carry out most of the tasks required to maintain an orderly building, including but not limited to: collecting all fees from owners in a timely fashion, ensuring that invoices are paid, keeping proper records, maintaining adequate insurance, providing recommendations related to policies and procedures, carrying out enforcement based on policies and procedures, handling tasks associated with maintenance, and much, much more.

As you can see, allocating good board members is crucial to the success of the owners. A good board will communicate clearly and openly with the owner’s, address resident complaints, follow and enforce rules, maintain an orderly building, and ensure condominium corporation’s’ fiscal health, all of which have a direct impact on owners return on investment.

Bidding Wars: Dealing with Multiple Offers

If you’re a Realtor in the GTA, you’ve probably noticed an excess of bidding wars over the last few years. It seems like buyers are popping up in the dozens, but sellers are few and far between.

This is a simple case of supply and demand. The demand is stronger than ever, but supply levels are at an all-time low. The result? Sellers are receiving multiple offers for their properties. Now, if you’re a seller, this may sound great; multiple offers can give you leverage in the negotiation. But it’s important to understand that multiple offers can also be detrimental. For properties that sell with a single offer, the fallout rate floats around 10 percent. On the flip side, properties receiving two or more offers have a fallout rate closer to around 50 percent. Reason being that buyers often feel unduly pressured by a multi-offer situation. This can result in buyers backing out all together. Here are some tricks for sellers to minimize the risk of fallout:

Manners go a Long Way

Be polite and thankful. Manners often get ignored these days; it’s an absolute travesty for a sales person to neglect common courtesy. Thank your potential buyers and their buyer agents for their offers. Let them know that you’ll do everything you can to keep them informed along the way, and that you appreciate their interest. Be up front about needing to accept the best offer, but make it clear that you want to give everyone equal opportunity. Remember, a client buys a sales person before they buy a product. If the candidates like you and is serious about the purchase, they are more likely to follow through.

Don’t String People Along

If you have 10 offers on the home, and 4 of the offers fall short of the others, let the buyers know. Stringing them along will do nothing but create frustrations and complexities. People aren’t stupid; if you tell the buyers who’s offers you are considering that you have “x amount” of other offers on the table, they will assume you are playing hard ball. This will leave a bad taste in their mouths. If some offers aren’t up to par, cut them loose and let everyone know. This will show everyone that the aim isn’t to play games.

Don’t Shop Your Offers

It can be viewed as unethical to reveal other offers to your potential buyers. By attempting to create tension in a bidding war that already exists, you are using a pressure tactic that will all too often result in a dead deal. This type of scenario can result in you settling on an offer, rejecting the other offers, and then having your buyer back out because they felt pressured into over paying for the property. At that point, you’ll have to start fresh. Your best bet is to simply ask the buyers for their best offer so that you can avoid a drawn-out negotiation. Remember, the longer a negotiation ensues, the more likely the buyer is to cool off and reconsider.

Don’t Over Value Your Home

Only counter one offer at a time, and don’t be too aggressive. Be realistic about your home’s value as to avoid buyers walking away all together.

Don’t Be Pushy; Be Patient

If you want to get top dollar for your home with the least amount of headache, be patient. Make sure all parties agree on when to reconvene, and don’t turn the multiple offer scenario into a race. Pressuring buyers with deadlines will greatly increase the likelihood of the buyer walking away.

Make Sure Everything is Put in Writing

Never rely on verbal agreements, as this will not hold up in court. Every detail needs to be presented in a written agreement. This will cover your rear end if things get nasty.

Don’t Get Greedy

If you have a good offer on the table, accept it. Playing offers against each other will result in potential buyers growing frustrated with the negotiation process, and retracting their offer. I say this lightly, as you always want to get the very most that you can for your home. Understand that situations are circumstantial, and listen to your gut.

In a hot market like the GTA’s, handling multiple offers can be tricky. Keep a level head, and always consider the other parties involved. Transparency throughout the sales process is not only refreshing, but will typically result in the best outcome for all parties. Sleazy sales tactics are dated and ineffective.

 

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Renting vs Buying

In 2017, the age-old dilemma of renting vs buying couldn’t hold any more weight. If you’d asked this question 20 years ago, most would have resoundingly agreed that buying is a far better option; why pay down someone else’s mortgage when you can pay down your own, all the while building equity and securing your retirement? It’s not that simple anymore as home pricing in the GTA is growing further and further out of reach for the middle class, and even much of the upper class. The reality is this: one is not necessarily better than the other; it’s relative to circumstance. So, what are the factors? How do you decide which option is best? There are no easy answers to these questions. The fact remains that buying a home should be a very sound investment in theory. With that said, you’ll need to pound out the numbers to determine what you can and cannot afford, and you’ll need to be prepared to do some market analysis. It’s all about circumstance.

What’s the Market Doing?

This is perhaps the most relevant question provided you have money to buy. The GTA has seen some alarming jumps in home pricing. In fact, it’s been increasing at a rate greater than inflation, which is extremely abnormal. Canada has implemented new legislations and initiatives meant to tame the market, and it is expected that inflation will catch up to home pricing. With that said, it’s important to look at real estate trends when deciding to make the leap from renting to buying. The last thing you want is to buy at the height of the market, as this poses the risk of depreciation. Losing money on a home just isn’t the goal.

How Long Do You Plan to Live in the Space?

Buying should be looked at as a long-term investment, unless you are a seasoned investor. Even if buying at the height of the market, if you are in it for the long term, things should work out for the better. The market might take a dip, but that’s OK; just wait it out as you’re in no rush to sell in any case. Renting, on the other hand, allows you freedom to be nomadic. Are you single? Is your employment status unsecure? Then you’d better rent. Do you have a family? Is your career secured? Do you want a steady living arrangement for your family? Then buying is a great move.

How Much Can You Afford Monthly?

In 99% of the cases, a mortgage will be costlier than renting. If getting a mortgage will stretch your finances too thin, you’d better wait it out until you’re more financially secured. If you can easily afford the cost of the mortgage, great! But you also must factor in maintenance costs and upkeep. When renting, your landlord assumes responsibility for 99% of the maintenance and repairs. When you’re a homeowner, maintenance and repairs land on you; expect to pay 2-4% annually of your homes worth on repairs.

Do You Want to Rent out a Room?

Hypothetically, you could and probably would have a roommate when renting. The roommate will help cover your rental costs, which is great. But when you own your home, you can rent out a portion of the home and have that tenant help to pay down your mortgage. That’s a very different scenario that kicks your home investment up a notch. Moreover, you can create income by borrowing against your home. The big question here is if you’re prepared and willing to be a landlord.

Equity vs Inflation

Here’s a big issue: despite the current trends we’ve seen, equity typically increases directly in line with inflation. This means that the big take home you’ll get when you sell won’t be nearly as large as you thought. The prospect of buying a home at $500, 000 and selling it a few years later at $600, 000 is a great thought, but remember that the $100, 000 in equity won’t mean the same thing years from now that it currently means. You’ll have closing costs, land transfer tax, moving expenses etc.

Do You Plan to Invest Anywhere Else?

This is arguably one of the biggest factors. For most home owners, their home is their biggest investment. However, there are many other avenues of investment, stocks being a major player. With some research and guidance, renting a space and investing elsewhere can yield just as strong a return, if not stronger. But with that comes the need for research and resources. If this isn’t your forte, then investing in your home may be the best investment for you.

Freedom from Responsibility vs Pride in Ownership

Perhaps the biggest thing to think about is your lifestyle choice. When renting, you are free from responsibilities. You pay a set monthly fee and that’s it. If a pipe bursts, call the landlord. If a window breaks, call the landlord etc. It’s very low in terms of responsibility. Home ownership on the other hand, is a massive responsibility. This is your property, and without proper maintenance, you can forget about any profit on resale. You need to maintain the property and take pride in it. But isn’t that half the fun? If you feel this way, then home ownership can be an incredible experience. You want to paint the living room red? Go for it! You want to tear a wall down and free up space? Get it done! Home ownership can be fun, albeit a great responsibility.

So, the truth is there are no easy answers. Financially speaking, both options can make sense. It depends on a variety of factors; your best bet is to keep an eye on the market to determine the best times to buy and sell, and to thoroughly analyze your current financial status, goals and strengths.