Understanding the Financing Clause when Buying Muskoka Home

What is a Mortgage - Karen Acton Royal LePage Lakes of MuskokaOur market in Muskoka has been very active this last few years and sometimes the temptation to make offers unconditional can be very strong.

As a buyer, you may have been pre-approved and feel that it is safe to buy unconditionally only to be caught up by a lender’s requirement that you cannot meet.  At the last minute, you may even have to come up with a larger down payment.  If you are unable to do so, this could leave you not only losing your dream home but potentially subject to the consequences of a breach of contract.

As a seller, an unconditional offer is always very appealing but if that buyer cannot produce funds on closing the results cannot only be heart breaking, but you may be faced with losing the home you hoped to buy and possibly being in breach of your contract with the seller of your future home.

As a Realtor® I always strive to guide my clients with good advice and protect them from making a mistake. I know that when a buyer finds the perfect home or cottage they want it and don’t want to be outbid.  My job is to be the voice of reason. Unless you have the resources to buy with cash or a very large down payment that well exceeds most lenders’ requirements, a financing clause is simply the best option.

In a recent article Mark Weisleder a Partner, author and speaker at the law firm Real Estate Lawyers.ca LLP covered the following important points.

1. Pre-approvals are no guarantee you will obtain your financing

Too many buyers are cavalier about submitting offers without a financing condition, especially during the pressure of a bidding war. You must understand that even with a pre-approval, the lender must be satisfied with its own appraisal. The foundation for most appraisals is what would a willing buyer pay a willing seller, WITHOUT pressure? In a bidding war, there is almost always pressure on the buyer. This is why the appraisal will likely be lower than what the buyer offered and the lender will offer you less money than you hoped for. The answer is always to have an extra 5-10% of the down payment in reserve to protect you. In a condominium purchase, if it is conditional upon review of a status certificate, use that time to also make sure your financing is in order.

 2. Lenders can change their mind right up until the day of closing

Even if you are approved after you sign your agreement, the lender can still change their minds based on anything which they may learn before they advance funds. There are usually many conditions attached to any loan approval, such as verification of income, down payment, employment. Make sure you work with your mortgage broker to satisfy all of these conditions and requirements as soon as possible in the process. The worst words a lawyer can hear from a lender on the day of closing is “The file is in underwriting”. This typically means that someone else is reviewing the entire file because issues have arisen. In some cases this can result in the entire loan being cancelled, right on the day of closing. In our firm, since we receive and send funds via wire transfer, we are fortunately able to complete deals even when lenders are late transferring funds to our trust account.

 3. Always know the net amount you will receive from your lender

Every mortgage commitment is different. Some may contain up-front fees for arranging the loan, appraisals, CMHC fees and HST, interest to the interest adjustment date. All of these fees are deducted right off the top, before the balance is sent to your lawyer on the day of closing. The bottom line is you must know the exact amount that will be sent to your lawyer on closing, to make sure you have enough to make up the rest of the down payment, land transfer tax and legal fees. At our firm we remind clients to send us their mortgage instructions early in the process so that we can get them the net amount they will need to complete the transaction in a timely manner.

In Muskoka lenders sometimes have requirements for additional documentation. Things like water potability certificates, septic use permits, proof of properly installed water treatment (disinfection) systems, road access agreements to prove year round access, final occupancy permits and zoning even an inspector’s statement regarding the type of wiring and insulation. A mortgage can’t be advanced without insurance on the property, so a W.E.T.T. inspection may be necessary for wood burning devices. Ultimately the underwriter at the lending institution is responsible for making sure that the lender’s investment is protected.  Sadly, they are not concerned with how much a buyer loves a property or how much the seller needs the transaction to close.

I hope that after reading this you will be cautious when buying or selling a Muskoka home or cottage. A good Realtor® will always put the interests of the client ahead of their own and encourage you to use a financing clause if there is any possibility you may need one.

Fall and Winter Safety Tips for Your Muskoka Home

Fall Maintenance in your Bacebridge Home - Karen ActonIt’s finally here, in spite of the glorious weather the leaves are turning and Fall has arrived. October usually brings us our first burst of cold and a time change that means it’s time to check our smoke and C02 alarms again. It is also a great time to check your furnace filters and clean out the dust that may have accumulated in your duct work.

Here are some other tips put together from the web site of the Ontario Fire Marshal to help keep you and your Muskoka home safe.

FIREPLACES

• Clean the ashes regularly. When you remove fireplace embers or ash, place them in a metal container with a lid and cover them with water. Do not place them in a plastic or paper bag or other container that is not fire-resistant. Do not dispose of them indoors or close to your home or another structure.
• Use care with “fire salts,” which produce coloured flames when thrown on wood fires. They contain heavy metals that can cause intense gastrointestinal irritation and vomiting if eaten. Keep them away from children.
• Never burn gift wrappings, boxes, cartons, or other types of packing in the fireplace. They burn too rapidly and generate far too much heat.
• Always use a screen in front of the fireplace to protect against flying sparks.
• Never use gasoline or any other flammable liquids to start a fire.
• Use only seasoned and dried wood.
• Never leave the fire unattended or let it smolder.

CANDLES

• Extinguish candles when leaving the room or going to sleep. Keep lit candles away from items that can catch fire
• Place candles in sturdy, burn-resistant containers that won’t tip over and are big enough to collect dripping wax.
• Don’t place lit candles near windows, where blinds or curtains may close or blow over them.
• Don’t use candles in high traffic areas where children or pets could knock them over.
• Never leave children or pets alone in a room with lit candles.
• Do not allow older children to light candles in their bedrooms. A forgotten candle or an accident is all it takes to start a fire.
• During power outages, exercise caution when using candles as a light source. Many destructive fires start when potential fire hazards go unnoticed in the dark.
• Never use a candle for light when fueling equipment such as a camp fuel heater or lantern.
• Keep candle wicks short at all times. Trim the wick to one-quarter inch (6.4 mm).
• Be wary of buying novelty candles. Avoid candles surrounded by flammable paint, paper, dried flowers, or containers that can melt or break.
• Never let candles burn out completely. Extinguish taper and pillar candles when they burn to within two inches of the holder, and container candles before the last half-inch of wax begins to melt.
• Use extreme caution when carrying a lit candle, holding it well away from your clothes and any combustibles that may be along your path.

HEATING SYSTEMS

• Keep anything that can burn at least three-feet away from heating equipment, like the furnace, fireplace, wood stove, or portable space heater.
• Have a three-foot “kid-free zone” around open fires and space heaters.
• Never use your oven to heat your home.
• Have a qualified professional install stationary space heating equipment, water heaters or central heating equipment according to the local codes and manufacturer’s instructions.
• Have heating equipment and chimneys cleaned and inspected every year by a qualified professional.
• Remember to turn portable heaters off when leaving the room or going to bed.
• Always use the right kind of fuel, specified by the manufacturer, for fuel burning space heaters.
• Be sure all furnace controls and emergency shutoffs are in proper working condition.
• Leave furnace repairs to qualified specialists. Do not attempt repairs yourself unless you are qualified.
• Inspect the walls and ceiling near the furnace and along the chimney line. If the wall is hot or discoloured, additional pipe insulation or clearance may be required.
• Check the flue pipe and pipe seams. Are they well supported, free of holes, and cracks? Soot along or around seams may be an indicator of a leak.
• Is the chimney solid, with no cracks or loose bricks? All unused flue openings should be sealed with solid masonry.

KITCHEN SAFETY

• If you are sleepy or have consumed alcohol don’t use the stove or stovetop.
• Stay in the kitchen while you are frying, grilling, or broiling food. If you leave the kitchen for even a short period of time, turn off the stove.
• If you are simmering, baking, roasting, or boiling food, check it regularly, remain in the home while food is cooking, and use a timer to remind you that you are cooking.
• Keep anything that can catch fire — oven mitts, wooden utensils, food packaging, towels or curtains — away from your stovetop.
• Again, have a “kid-free zone” of at least 3 feet around the stove and areas where hot food or drink is prepared or carried.

Grease and fat fires are a leading cause of home fires in Canada, so be extra careful when doing this kind of cooking. Here’s what to do if grease in a pot or pan catches fire:

• Smother the flames by covering the pan with a lid. Do not remove the lid until the pan is completely cooled.
• Turn off the heat immediately.
• Use baking soda (flour can be explosive) on shallow grease fires.
• Never turn on the overhead fan, as this could spread the fire.
• Never throw water on a grease fire.

It may seem that I am stating the obvious but it is amazing how easily we can become complacent and after such a long and lovely summer at your Muskoka Home or Cottage it is a good thing to take a moment to think about the things we all need to do as we shift from summer mode to winter mode. Remember, as we “fall back” change your clock and take time to make your Muskoka home or cottage safe for Fall and Winter.

Avoiding Buyer’s Remorse When You Buy a Muskoka Home

the-thinkerDid you ever buy something special and later realize you didn’t really need it or like it after all? It could have been something as small as a new shirt or pair of shoes or as big as an appliance, but no matter what it was, returning it was likely, as easy as packing it back up, locating the receipt, and taking it back to the store for a full refund or exchange.

Most things you buy you get to try first, however, unlike store merchandise or a car you can test drive, you can’t “try before you buy” your new Muskoka home.

This makes your decision to buy or not buy extremely important and potentially stressful. Not only is a home a huge investment, it’s also where your family will be spending the next several years of your lives.
Your home is not just a shelter; it is where your memories are made.

Here are some suggestions so you can avoid feeling remorseful after your offer has been accepted, or worse, living in a house you don’t love.

Make a checklist.                                                                                                                                    Make a list of the things that are really important to you in a home. Ensure you include the ‘can’t have’ as well as the ‘want to have’. Some things will be ‘must have’ – deal breakers; others may be more negotiable. Separate the needs from the wants. It can be helpful to choose the top three.

When viewing homes, it’s hard to remember details after you have seen several houses, so take the list with you and check off items that each property has and make notes regarding missing ones. Can you be happy without them? Can they be improved or added later? It’s important to share this information with your REALTOR® and provide lots of feedback at each showing to help narrow down your search.
Have you seen the home more than once?
No matter how much you think you love a property, if you’ve only seen it once, you could be heading for buyer’s remorse. If possible, go back at a different time of day to get another perspective. You may see things differently the second time around. You may have missed something during your first visit that will stand out the second time. Or, you may like the home even better.

Explore every aspect the property.
Your first viewing of the property will have provided a basic understanding of the floor plan, condition and size. But, to really know if it is the right one for you, take time to experience the property. Your REALTOR® will want you to be sure it right for you too. Drive around the neighbourhood. Walk the boundaries of the lot, and look at the back of the home. Open every closet and go in the all the rooms, the basement, and garage. An offer can include a Home Inspection condition. This will provide an additional opportunity for you, along with your Home Inspector, to carefully review all aspects of the home.

Is this home what you set out to buy in the first place?
Frequently buyers modify their wants and needs throughout the search process. Did you lose focus on what you were looking for? Is this home going to meet your needs now and for the foreseeable future? Have you made a compromise that you will regret? Choosing a different neighbourhood to get a better price could end up being a mistake. Be sure you do not lose sight of the “needs” part of you search criteria by getting caught up in the “wants”.

Do you “want” this house or do you want to “win” this house?
Often, in a competitive situation, a buyer just wants to “win.” If you’re competing in a multiple offer situation, step back and ask yourself: Is this the home I really want or do I just want to beat out the other buyers? Also, has the potential purchase price exceeded your comfort zone? Putting an offer on a home at a price reflective of its market value is one thing. But after a few rounds of counter offers you may be looking at an amount that exceeds the list price. This may still be the home’s value but if it is more than you can comfortably afford it may be time to step away rather than “win”.
So, if you think you’ve found the perfect Muskoka home, ask yourself these questions. Ultimately, I want a client to sign an agreement only when they are completely convinced they have found the right home for them. If the home is not a “good fit” it cannot be put it back in the box and returned for a refund!

As your REALTOR® it is my mission to help you find a Muskoka home that will not only meet your needs but will bring you a sense of joy and contentment for years to come.

Building a Muskoka Cottage

renovatingSometimes when a client is looking for a perfect Muskoka Cottage they can be disappointed since many of the best and most appealing lot/cottage combinations can be quite expensive. In some cases clients then start to think about finding a lot and creating the perfect cottage from scratch.

Here are some important considerations to ponder before you decide to change track and start looking for a vacant waterfront lot:

  • Is the lot “ready to go?” In Muskoka realtors usually use the language “partially serviced” or “fully serviced” in the listing details to indicate if all or some of the required services —electricity, water, sewage, cell, internet—is directly available to the site.
  • If a road access is not developed and utilities are not already available to the site the lot value will be significantly lower than a serviced lot, but before you snap up a bargain you NEED to first find out whether it is even possible to connect to these services and determine how much it will cost to hook up. When additional utility poles are required to bridge the distance from an existing service to the building envelope, the costs can be prohibitive.
  • If utilities are not available or are excessively expensive, you may want to look into what, if any services you can generate yourself. Electricity is most likely the largest obstacle and if road access is seasonal, private or non-existent, you may need to consider solar or wind as a source as well as traditional electrical generators. Most cottages have septic systems and draw water from the lake/river or a well. Consider these expenses as well.
  • Do not forget your design costs. To get a building permit you must have certified plans so even if you do not have custom drawings you will need to make sure any plan you buy is stamped. If you are planning to use older plans that have been given to you, you will have to pay to get them stamped and maybe modified to meet current code requirements.
  • Throughout the Muskoka region there can be lot levies to pay at the time of obtaining your building permit. Depending on the municipality and the level of services at the site they can range from $6000 -$15000 and must be paid in full before a permit can be issued.
  • If you are not building your own cottage and intend to use a local contractor you would be well advised to have several contractors bid on your project. Get references and have a contract drawn up. Make sure your builder has WSIB coverage for himself and any of his sub trades. You will be expected to pay a significant portion of the cost up front to offset the cost of material and labour. You may want to consider acting as your own General contractor and work on a time and materials basis with your builder by setting up accounts with the suppliers and paying for the material directly. You should also budget many hours of your time to oversee the project. Whatever you decide, get more than a hand shake! There are many excellent builders in this area but there also some who will take on a project beyond their capabilities and cause you no end of additional expense.
  • It is possible to manage costs by building in stages. Put up a basic cottage initially but have it designed to put an add-on wing in a few years.. If this appeals to you, the only thing you need to do at the start is make sure your final plan can be accommodated under the applicable zoning regulations.

In conclusion building your perfect Muskoka Cottage may be what you end up deciding to do, however it is unlikely you will actually save a large amount of money. The process can be challenging and at times very frustrating.

Ultimately, clients who build, do seem to have a great sense of pride in their cottage. There is no doubt building to your exact needs will make your Muskoka Cottage the place you love to spend endless hours with family and friends!

Remember I am always happy to help and can put my years of experience and contacts to good use on your behalf.

Buying Your First Muskoka Cottage

zeleznik 003So you think you are ready to buy your first cottage! As a Muskoka Realtor I am here to help you navigate through the process smoothly, so you can begin to enjoy cottage life.

The starting point for this adventure is to sit with your family and determine what it is you are really looking for. The considerations are many, from the size of the building and the lake, to the type of access you will want.

You have probably spent time in a cottage, either rented, or with friends or family. Think about the very best of those experiences. You may be surprised to find that the favorite memories of your cottage experiences centre on things you had not thought you wanted or needed.

Some of the most important considerations are:

  • Distance from your home – A long drive after work on Friday afternoon may not seem like a big deal now but it needs to be factored into the decision making process. It will affect the amount of time you spend at your cottage. Will you continue to love and enjoy your property if the drive to Muskoka becomes a trial with jobs and children?
  •  Size of cottage – is the size of your family established or will there be children in your future? Do you want to be able to rent it and if so, what is the best number of bedrooms for a rental?
  • Size of the lake or river – often buyers want to be on a large lake and are willing to pay a premium for it. However, in reality they do not have a large boat and never utilize all of the lake. A smaller lake or substantial river is often quieter and for most families will be more than sufficient. And they usually come with smaller price tags!
  • Accessibility – Do you plan to use the cottage in the winter? Are you prepared to pay private road fees, if any? Would water access work for you?
  • Stunning view or level to the water? – Remember that Muskoka is famous for its rugged beauty so there are far more lots with some elevation than there are level ones.
  • Privacy – Everyone wants privacy so it is a feature that will increase the cost. How private do you need it to be? Great memories at the cottage often include activities with other cottagers!
  • Services – To some, the cottage experience is a rustic, 1 bathroom, lake water no dishwasher cabin. To others, the cottage is a place of relaxed luxury, with en suite bathrooms, 5 appliances, a drilled well and high speed internet? Muskoka has it all; you just need to know what you want.

In general, you can expect properties on larger lakes to be more expensive than those on smaller ones. Properties that have level to moderately sloped lots tend to have a higher asking price than those on steeper lots. A western or southern exposure will have a higher price tag also!

It is worth remembering that the building itself, is of secondary importance. Buildings can be repaired, renovated, and rebuilt over time. In many cases, the building represents only a small part of the property's value. So choosing the right lot and waterfront is of primary importance.

Finding the perfect cottage is a highly personal adventure, everyone has their own dream. I can help you to determine your wants and needs, and select appropriate properties for you to view. Rest assured you will know the right cottage when you see it. I would love to help you make your cottage dream come true! Call now to get started.

Here Comes Summer – Is Your Muskoka Home Ready?

towelsMonday June 20th is the official start of summer this year, but why wait until then to get into the summer spirit? You know I often advise getting a jump-start on things so here are a few tips for preparing your home and garden for a wonderful Muskoka summer.

1. Repair screen doors. If you use them, now is the time to take down the storm doors and put up screen doors to let the summer breezes pour in. Be sure to inspect screens carefully, patching holes as needed — even a tiny hole can be enough to let in a mosquito.

2. Schedule some outdoor projects. Are you dreaming of a new patio or need to replace a deck? Don’t delay booking a pro for your projects because in our short construction season the best professionals get booked up early.

3. Check your cooling systems. Take the time before hot weather sets in to dust ceiling fans, install window air-conditioning units, and schedule maintenance for a whole-house cooling system.

4. Eaves toughs and downspouts. If you did not get your eaves troughs cleaned this spring, be sure to get this important job checked off your list as soon as possible. Leaves and pine needles in gutters can lead to leaks and siding damage with summer storms.

5. Catch up on some maintenance. None of us are perfect, and chances are there are a few home-maintenance projects you have been meaning tackle.Why not make June the month to get caught up?

6. Create a drying station for towels and bathing suits. If you re blessed to own a Muskoka Cottage or home with a pool, then soggy towels getting dragged through your home is a mess waiting to happen. Choose a dedicated spot, either just outside the door (a covered porch works well) or in the mudroom, and hang a row of sturdy hooks for wet towels and bathing suits. Once dry, sand can be easily shaken off outdoors, so it doesn’t end up in your washing machine!

7. Reorganize your kitchen. Yes, you do have seasons in your kitchen too! If there are small appliances you use more in the warmer months like a crock pot now is the time to put it away and get out the ice cream maker. Stations devoted to a certain purpose can also do wonders. If you have children on summer vacation, create a self-help station stocked with healthy snacks.

8. Refresh first-aid kits and emergency supplies. Be prepared for everything from minor scrapes to natural disasters with well-stocked first-aid kits in the house and car, plus emergency supplies for your family and pets. Not sure what to include? The Canadian Red Cross has a helpful checklist.

9. Brighten up decor. Put away the heavy rugs, put crisp percale or cooling linen sheets on the beds, and bring in accents in lighter shades for the warmer months ahead.

10. Refresh your bathroom. Shower curtain liner looking a little dingy? Bath towels seen better days? Give your bathroom a mini spa makeover, and swap out your tired bath linens for fresh new ones.

11. Get the summer fun gear ready. From camping to beach trips, summertime activities come with a lot of gear. Get it cleaned up and ready now so that you’re not surprised by a leaky tent or blown-out beach umbrella when it’s too late to replace them.

Remember we live in one of the world most beautiful places. Muskoka is full of great things to do, so being prepared allows you lots of time to enjoy being in your Muskoka home or cottage.

It’s Spring Time in Muskoka and It’s a Great Time To Clean The Garage

messy-abandoned-garage-full-stuff-10168084Ah…. Spring in Muskoka. After the snow is gone we seem to get the urge to bring out our summer toys and perhaps access our lawn mowers. This means we need to get into our garages. That’s where all the tools, toys, bikes, sporting and camping equipment are, right? Too bad all those things you need are spread out all over the garage with no rhyme or reason. Well here are 7 steps to help guide you through the mess to create a garage that’s orderly and easy to access.

1. Analyze and prioritize. One of the biggest problems with garages is that generally there is no plan for the space. Many of us fail to take time to analyze and visualize the space to figure out how we want it to look. What is your priority for your garage? Do you want to park your car or have your own work space? Do you need to store seasonal items and sporting equipment? Maybe you need all of the above. Pick your priorities and plan with that in mind.

2. Clear the space. You’ll need to start with a clean slate. Get a couple of tarps and blankets to place your items on and lay them in an open area like the driveway or lawn. This is a great time of year in Muskoka when the weather is still a bit cooler than it will be in the summer.

3. Start purging! Try to commit to getting rid of half the stuff in your garage. Even if you don’t get rid of that much, making the effort will go a long way. To purge, start by making four piles: keep, donate, discard and recycle. As you purge, place each item into its respective category. Get rid of anything that is broken or things you haven’t used in over a year. Return items that don’t belong to you or belong somewhere else other than the garage. Get rid of duplicates.

4. Sort by putting like items that you are going to keep with like items. As you pull things out of the garage, group together all your sporting equipment in one spot, then your tools, lawn gear, camping gear, decorations and so on. You can even get down to the itty bitty nails and screws…sort these out as well.

5. Now that you’ve cut down, take inventory of what you have. That way you’ll have a better of idea of what organizational items you can work with or what you’ll need to purchase. Don’t purchase organizational products before you’ve purged…it will save you time, money and frustration. Next, map out the space. Draw it out on paper or use masking tape in the garage to outline the different spaces/work zones. You can mark off the spot for your car, heavy duty shelving, paint and hazardous materials cabinet, lawn care supplies, tools or workbench, and sports/recreational equipment.

6. Determine your organizational supplies. Now that you’ve mapped out your zones, gather your supplies. Use large trash cans to store rakes, shovels and brooms upright. You can also use a large trash can to store sporting equipment like, skateboards, balls, bats and gloves. Use pegboards to hang tools. Use large hooks mounted to studs in the wall or ceiling to hang bicycles and extension cords. And get a label maker!

7. Put everything away in its proper zone and label everything you can! This is the fun part because the finish line is in sight! Start putting things away in their designated zone and start labeling. It just makes it easier to find and put things away. Label makers are great for labeling cords, containers, drawers, boxes and shelves. If you don’t have a label maker, use masking tape or duct tape and a permanent marker. Be sure to label the front and sides of storage bins so you’ll be able to read them no matter which way you face them.

By getting the chore done sooner rather than later you will find you can enjoy your summer much more. And if you are planning to sell your Muskoka home, a well organized garage is a great feature and will make packing to move much easier!