Targeted Questions

Note:

Most of the following questions and answers are describing the Purchase of a house, are to be read as either a house, condominium or property for investment or commercial use.

Who said Toronto is a slow market!! Recent activity is tough on buyers!!

Since the beginning of January, there has been a major upturn in the activity on TREB . I have personally been in at least 4 situations this year alone that have resulted in multiple offers being presented on properties. Two, three and even 10 offers being registered at one time on properties. This kind of activity is great for Sellers, but very hard on Buyers. Wait for it!!!  I am a firm believer that the best time of the year to buy a house is in December from about the 10th to about January 10th. This is traditionally the slowest time of the year and this is when people tend to get more of what they want and not have to deal with a large number of Buyers.

2007 through 2011 Tough Years for Buyers, Wonderful for Sellers.

Control of the Situation.

Always remember that when you are buying, you must analyze the situation from every bit of information that you can get your hands on. Buying the property is based on some of these following factors.

I will put it in a rhetorical form so that you can ask yourself the questions when the time arrives. If you have not thought of some of these ideas then I am glad that I have been able to help.
Taken as a whole these ideas should not be misconstrued as being any form of gospel.
Rather, they should be taken as a framework or a foundation upon which to build.
I think it would be advisable for you to analyze the list of questions and see whether or not you can see what areas I have missed, thus giving you a better perspective. I will keep revising this page until I get as much on it as I can.
Brainstorming is one thing, but after reviewing for a while, I know that there will be many categories that I will add, or improve on in the future.

Jot it down or print the page.

About the current Listing

How long has the property been on the market?

As a sales representative, I have all of this information available to me just by going to my computer.
Lots of times, I know these details before I will show the property. If it is a new listing, there is a reason for showing you and usually it is because it is good value or it fits the criteria of what you want and has just shown up on the computer.

How many times has it been listed for sale?

Sometimes if you are not familiar with the street you will not know that the property has been listed for ages and hasn't sold.

How many different agents have worked on the property?

History of a listing does not necessarily mean something bad. Interpretation of this information can be subject to a lot of speculation. Do not try to second guess the Seller too much - it doesn't help.

What was it originally listed for?

Very pertinent question. Sometimes this will tend to give you a strategy to approach buying.

How many reductions have there been?

Six months without a reduction can hurt a property's ability to be desirable to neighbourhood Buyers.

How many offers have been presented?

Very tough question to get a truthful answer. Some people tend to stretch the truth. That is why the question of presentation is important. Agents present verbal offers to their Sellers all the time. What you want to know is whether the offers were physically presented and also whether there were signbacks or open rejection. Remember, this is a tough one to verify.

How many showings have there been?

Another tough one. "Oh it gets shown 10 times every day!"

What is the activity like in the neighbourhood?

Are there a lot of sold signs or is everything for sale?

Don't ask if there is any flexibility in price until you see the house.
If you are not interested at all, "who cares how flexible they are or are not."
If there is interest at the right price, then we can discuss the flexibility of a Seller, but wait until you see the house.

About the street or building.

Are there any comparables on the street or in the building?

Gives you a fuller perspective on the activity on the street.

Are they fully comparable or partially?

One of a kind or common.

How long have they been listed for sale?

Realistically priced? Now is the time to compare listing prices with selling prices.

How many times have they been listed?

I can get all of this information as well.

What are the listed prices of these comparables?

Take the first group of questions and apply here as well.

What properties have sold on the street in the past six months?

Easy enough with computer access.

At what price?

What was the last listed price of the sales and the selling price?

This can give you a barometer of whether or not prices are rising or falling, but it is not foolproof.

What was the original listing price of the sales?

The difference between listing and selling price is a small measure of what is happening on the street.

What properties haven't sold? Listed and expired?

It just means that they were probably listed too high.

What properties have expired? The Listing that is and at what price?

What are the demographics of the street or building? If you do not know.

Again, if I have done my homework, I will know what is happening on the street. As I am quite computer literate, I can search a street or building in many ways thus getting a better profile of what is happening. to give you an idea, I can:
Search by Address, (I can go back as far as 1985 for information on some streets.)
Search by Assessment (I can get the proper legal description if available plus the tax assessment and the correct owners.)
Search the demographics of a neighbourhood to a limited degree
Search by TLA (See who has owned the property in the past 10 years and at what price)
Search by District (Comparative search of properties in a given district or soon to come, neighbourhood.)

Ownership of the Property

Who owns the property? (Type and age of person and profession could play a role here.)
How long have they owned it? (Can make a big difference if they bought prior to 1989 and before 1987.)
At what price did they buy it? (If a recent sale can you find out the circumstances of the deal?)
What have they done to the property since they bought it? (Improvements or neglect.)
Is the work they have done compatible with other work in the neighbourhood? (Some people haven't got a clue when it comes to upgrades and quality of workmanship. Others over improve.)
More upgrades, less upgrades?
Why are they selling? (Tends to lead to speculation. Better wait and see the house. Then if you are interested, these questions may become relevant.)

(As a Sales Rep I try to tell my people not to waste their time speculating or second guessing the Vendor. Look at the house and then decide whether or not it is worth pursuing this line of questions. -Even then these questions may not give you the results that you want. Sometimes, these ideas can confuse and frustrate you rather than produce any leverage for your negotiations when buying.)

Let us assume that you have now had a chance to see the house.

Questions about the Owners

Why are they selling?

Upgrading, Downgrading, Leaving Town, Desperation? It will make somewhat of a difference to the way you approach an offer.

If this is a divorce, who has control?

This can be a tough one to deal with. There are a small number of cases that must go to court, but overall they are no more difficult than a difficult Vendor selling his or her castle.

If this is a Power of Sale, Who is the institution?

I have had extensive experience with "Power of Sale" properties. Both as the listing agent and the Selling agent. I will deal with these in the future as it should be approached from a whole different angle.

Where are they moving to?

May help determine how motivated they are to see an offer.

How soon do they want to move?

Now, one month or six months. It is important to know this before you make an offer. The closing may not coincide with anything that you would be comfortable with.

Buying Conditional

This is the most obvious way of buying a property. The conditions usually included are Conditional upon financing and Conditional upon inspection by a home inspector.
The wording is usually as follows:

THIS OFFER IS CONDITIONAL for a period of FIVE (5) BUSINESS DAYS FROM DATE OF ACCEPTANCE, upon the BUYER being able to arrange FINANCING THAT IS SATISFACTORY TO THE BUYER, failing which this offer shall become null and void and the deposit will be returned to the BUYER in a timely manner without interest or deduction. This condition is inserted for the benefit of the BUYER and may be waived at his sole option.

THIS OFFER IS (ALSO) CONDITIONAL until 11:59PM on (Specific date) upon the BUYER having the property inspected by a qualified home inspector. Should the BUYER find problems or deficiencies that he is unwilling to accept, then this offer shall become null and void and the deposit will be returned to the BUYER in a timely manner without interest or deduction. This condition is inserted for the benefit of the BUYER and may be waived at his sole option.

These conditions have one obvious purpose and several not so obvious purposes.
The first and foremost is for the very reason that you put them in the offer.

Conditional Upon Financing

The clause for financing allows you enough time to have your bank, financial institution or family member with the money, the time to give you a written commitment that they will give you the necessary funds or mortgage money to close the deal.
It must be in writing before you waive this condition. There have been instances where the bank did not give a written confirmation and then when it came time to close the deal, backed out leaving the BUYER scrambling to find another institution to finance the closing.
If they don't give you confirmation, you don't waive the condition, therefore, you start all over. Most people know approximately what they can afford and if the institution does not give them a go ahead, they should not waive the condition.
(I might add that if they don't, take your business elsewhere!)

Conditional Upon Inspection

Most people look at a property, they do not inspect it. The fact that most people have some knowledge of mechanics and the dynamics of construction, doesn't mean that they have the ability to detect major flaws in the condition of a property.
Paying someone $200 to $500 dollars to inspect a property thoroughly is good sense and makes for a more realistic assessment of the condition of a property.
Resale homes or apartments are not always in rough shape. Sometimes you can get one property on a street that is 60 years old, but has everything upgraded. This is great if the upgrades were done professionally or properly. If they were done cheaply or if there were things that were done wrong then it is best to know before you firm up the deal whether or not you have a lot of work (and money!) ahead of you.

Namely to protect your interests in obtaining the property without having to worry about someone else coming along and buying it out from under you before you have had enough time to verify whether or not you can afford the property or whether there are any major deficiencies that will cost you too much money if you close the deal.

The other not so obvious reasons for putting in these conditions are as follows:
Putting these conditions in, can be  a smoke screen.  The legality of how you make an offer is something I will not comment on, but there are many times when one uses Conditions for purposes other than what they were designed for.
Sometimes I have been asked to put a condition in that I know is not necessary.  Financing is one of those conditions.  In some cases, some people could afford to pay full price or even more than asking price, but they still put the condition in to:
1) Get a property for a little less than asking (Sometimes a lot less)
2) To have some time to decide whether or not they want the property.
1) The BUYER does not want the SELLER to know that they can pay cash for the property.  Sometimes SELLERS who know that the BUYER can afford more, will tend to push for more money.  Situations do vary .
2) Just to make sure that there is nothing else that would be more desirable that they should consider buying and having control of one property gives time to examine others

Categories that I will try and add

  • The Offer
  • The Tactics of Offers
  • What to include in the Offer
  • What to Avoid
  • Negotiations and Signing Back
  • Analyzing the deal before signing as firm

Remember I am in real estate and time is usually at a premium. Check back and look at the revised date at the top of the page for additions.