Renovation Do’s and Don’ts for Your Muskoka Home Resale

Karen Acton - Renovating your Muskoka HomeWhen you decide it’s time to sell your home, you may consider making some changes before listing.  A wise investment of time and money can drastically improve your potential resale value; however, a good plan is vital.

You may believe you are the master of your own renovation, but that may not be the case. Reno’s can develop their own inertia. Things often grind to a halt as each decision can lead to new a dilemma, an unintended consequence or an unexpected outcome. This can result in delays getting listed and missing out on a great market.

Here are a few renovations that I believe make good financial sense, providing a nice return on your investment at the time of resale — and a few that don’t.

Good Resale Value Projects for Muskoka Homes

Kitchens.Updating a tired old kitchen is one of the wisest methods of increasing the value of your home. Keep in mind when planning a kitchen reno, making design decisions, or selecting plumbing fixtures, appliances, cabinets and countertop materials that your choices should appeal to the largest segment of the market and not personal preferences.

Remember, using the existing kitchen layout and affordable cosmetic materials is a sure way to keep the cost of your kitchen reno manageable. When you start tearing out walls, bumping out the exterior home footprint to gain a few feet, and moving plumbing fixtures and appliances, the cost of the job will jump and your return on investment dollars will diminished.

Bathrooms.Home buyers notice bathrooms, and although all the bathrooms are important, a priority should be placed on the master bath, followed by the guest bathroom/powder room and any other secondary bathrooms.

The same rules apply to a bathroom remodel as to the kitchen. Cosmetic changes are safer from an investment standpoint than modifications involving changing layouts. Again keep the permanent pieces neutral so they appeal to a wider audience.

Master suites.As home buying decisions are in the hands of adults, and adults care about the environment where they sleep, updating a master bedroom or remodeling and adding a new master ensuite can be money well spent. Buyers will picture themselves living in their private space especially if they have children living at home or plan to have a family.

Curb appeal.Very often this is the best project for a return on investment. You have heard not to judge a book by its cover, but smart money recognizes the cover’s value. Your front elevation (unless you are on the water) is more than just a first impression. It’s the only impression available to just about all your home’s potential buyers.

The good news is that there are numerous affordable projects that can improve curb appeal. One of the first things buyers look at is the roof.  If it’s in poor condition, it can be perceived as an indication of the overall maintenance of the home. It may cost less to have it done before listing than what you might lose in the negotiating process of an offer.

Repainting is another low-cost, high-impact improvement.  Even a professional cleaning of the exterior siding can make a considerable difference.

Cleaning out overgrown brush and making a few new planting additions to your landscape can go a long way toward improving curb appeal at a very low cost.

Costlier changes such as replacing old windows or an aged entry door are things that potential buyers will notice and value too.

Poor Resale Value

Garages. Adding a garage or insulating an existing one are great ideas, but only if you plan to stay put. Unless you are a great handyman and have access to inexpensive materials and labour, these changes won’t generally pay for themselves if you plan to sell soon.

Pools. Backyard pools are loved by many, and while this appreciation is well founded, they should be constructed for their many virtues that are NOT investment related. Here in Muskoka, it is unlikely to pay for itself in resale value. Many buyers perceive a pool as a negative maintenance expense.

Home theaters/kids’ spaces. No, I am not trying to be the Grinch but there is no assurance your home buyer will be ‘into’ movies or have children living at home. Adding that rock-climbing wall or screens, projectors & speakers might represent unwanted expense to buyers who see this space better used for something more suited to their family.

Removing features.Do not remove features for investment reasons unless they are truly an eyesore or a safety hazard. If you never use the fireplace in your basement, removing it might make perfect sense to you, but the next homeowner might wish it were still there, and the money you spent demolishing and reworking the space will not be reclaimed.

Wine rooms.These are definitely trendy and will almost be expected in large high-end homes however; in a typical Muskoka home they will not add value to the resale.

I am always happy to answer questions and help with recommendations. If you are thinking of reselling your Muakok home and would like some advice on the best ways to improve your resale value, just give me a call!

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Legal Cannabis and your Muskoka Home

October 17, 2018 is a big day for many Canadians who have wanted to see the use of recreational marijuana made legal. But what will the impact be on your Muskoka home and its future resale value? Will you choose to legally grow cannabis plants in your home? Will a home you wish to purchase in the future have been used as a “home grow” that may have caused hidden issues? Will being close to a legal commercial “grow op” impact value? Is being close to a retail outlet a pro or a con? These are important questions to think about.

What the New Law Says

  • 4 Cannabis plants may be grown in each residence-includes apartment/condominium units
  • No growth height restrictions
  • Could include outside garden, but may be determined by province but Ontario has made no specification at this time
  • No regulation on safe growing.

Risks to Consider

  • Mould and moisture damage
  • High-voltage lights pose a potential fire hazard

In a CBC interview the Canadian Real Estate Association (CREA) said the government’s plan to allow so-called “home grow” could lead to the spread of mould and other fungi in residences across the country — which could result in some costly surprises for home buyers.

“There’s absolutely no question it impacts the value of the home,” Michael Bourque, chief executive officer of CREA, told senators, adding the physical effects of a grow op can often go undetected during a home inspection.

The new law will limit home marijuana growers to four plants per household. The government initially intended to limit plants to 100 centimeters in height, but the House of Commons approved an amendment that removed such a restriction.

“On the surface [four plants] sounds moderate, but the legislation doesn’t limit the number of crops or the size of each plant. Four plants could yield over five kilograms a year, which has the potential to cause structural damage to dwellings and comes with associated health consequences,” Bourque said, noting the use of fertilizers and pesticides in the growing process could exacerbate environmental health risks in a home or a multi-unit dwelling that shares air circulation.

The question of buying a home that has been used to grow cannabis or trying to sell one that has, may be of less significance that the proximity of home to retail and commercial grow facilities. In a recent Zoocasa story this was the data they discovered.

In the journal “Real Estate Economics,” James Conklin and co-authors studied the conversion of medical marijuana stores to recreational marijuana, and the subsequent effect on housing prices in Denver, Colorado after legalization in 2014.

Their research showed that homes located near converted stores experienced appreciation at 8% higher than homes further away.

Realtor.com also reported on American cities having undergone a year of experience with recreational marijuana sales. Their data showed a significant increase in home prices — well above the national median price.

The same data shows that while proximity to a pot shop tends to increase home value, Colorado homes close to grow-ops have lost value. Evidently, the pungent odor of pot is a sticking point for many American buyers.

There is no Canadian data available yet, but it is something for us to watch.

Will it be a “big deal” in the “big picture”?  In a CBC interview Jonathan Page, a botanist who has studied cannabis extensively and serves as the CEO of Anandia Labs, said he doesn’t expect a new flood of grow ops to result from the bill and predicts most Canadians will simply opt to buy the product from a licensed provider.

“I think this is an exaggeration. Canadians can produce their own beer and wine at home, grow tobacco for personal use, and yet the vast majority buy these products from stores,” he said.

No matter what the future holds as a Muskoka home owner you need to be informed. Your choice to grow cannabis while legal may have more ramifications than you think. As a Muskoka Realtor you can rest assured I will be talking to my Sellers about stigmas, defects and disclosure; and ensuring my Buyers conduct independent research into properties they wish to purchase.

For more information about marijuana legalization in Ontario, please refer to the Ontario Governments web site.

 

 

 

Getting ready to sell your Muskoka Home This Spring

Curb Appeal - Karen ActonMy years as a Muskoka Realtor have taught me many things and one of the most important things I have learned is that buyers have choices even in a “Hot Market” and they make decisions about a property almost as soon as they see it. Here are some tips for getting your property sold and making sure that you are not being eliminated in the first 5 minutes of exposure to a buyer.

You only get ONE first Impression

Remember that buyers have choices and you want them to choose your home not the one down the road. They make decisions about a property within a blink of an eye. So you want your home or cottage to look spectacular from the moment they first see it whether that is on-line or in person.

Staging is about condition more than décor

Your home needs to look and feel good but remember buyers are savvy and most often are represented by a Realtor – they will deduct from the offer price their own “perceived value” for things that need repair or maintenance. Repair anything that needs it, replace any fixtures that look dated and clean like your life depends on it. Elbow grease is cheap and adds tons of value. Remember, buyers are buying their new house not your old one.

 Update the kitchen

This is usually the most important room in the house to a buyer. If they fall in love in the kitchen they will often compromise in other areas on their “must have” list.  Remember fresh clean and bright are always in style. Even if the budget will not allow for big changes clean and clear countertops, add new door knobs on the cabinets and drawers and if possible consider new flooring and countertops.

 Bathrooms are the second most important room in the house

If you have the budget for it, upgrade what you can, at least in the main bath. The same principle of fresh clean and bright applies here too. Consider changing the old cabinet-style sink for a pedestal or furniture sink and remember storage is vital. Make sure linen storage is organized and accessible.

Make bedrooms neutral

Do not assume that a buyer will be able to envision their belongings in your rooms.  Very often they can’t especially when they are faced with strong colours and lots of clutter. You have a five-minute opportunity to get this house sold so if doing some simple fixes in paint colour and or décor will help, it is wise to make the effort.

 It’s NOT Personal

Your plan is to move so pack up the personal stuff before you list. Go through each room and take a moment to remember and then pack the sentimentality away.  What stirs your heart can cloud the judgement of a potential buyer. Remove and store as many personal items as possible including family photos, certificates awards and diplomas.

 Pack it NOW

Get a head start on your move. Start deciding what you want to keep/donate/discard. Pack it up and get it out into a storage space. Your closets and cupboards will look bigger and more organized. Storage space is one of the most frequently requested interior features.

The nose knows!

More and more people are suffering from allergies. Worldwide, sensitization rates to one or more common allergens are approaching 50 per cent.  So it is quite possible that a future buyer will be a sufferer.  Remember when you live in your house you will not be able to smell what others do.  The best option is no smells at all rather than the cloying smell of a chemical air freshener.  Open windows when the season allows, if you have pets, remove them from the property for the duration of the sales process if possible and definitely for showings. Hopefully you have family who will help out with this. A good vacuum cleaner will help remove pollens and dander and you will need to do it often and always prior to a showing.

 Let there be light

Make sure every light bulb is energy efficient and at the highest wattage the fixture will take. Clean all the fixtures for maximum sparkle. Turn on lights before you leave for the showing so every room is bright for the buyers to see.

 Curb appeal

Before a potential buyer will even think about viewing your property they will often drive by it and half of them will do it at night. That means you need to put considerable thought into creating great curb appeal. Never underestimate its power. Curb appeal done well is like gift wrapping on a present. The National Association of Realtors says, “Great curb appeal sells more than half of all houses that go on the market.” Outdoor lighting is important. Light up the porch or entrance way making sure that the address numbers of the house are illuminated and visible. Consider lighting pathways and perhaps a spot light feature of the property like a beautiful tree or the front façade.   Curb appeal includes the outdoor living features on the property too.  This is one of the most undervalued aspects of market preparedness that will add dollars to your bottom line. Ninety five per cent of people surveyed said outdoor living amenities are vital. Outdoor allure also includes balconies, decks and patios.

As a Muskoka Realtor I see many beautiful locations and I know that savvy home and cottage owners  take advantage of these fantastic settings as well. Remember – Give your potential buyer what they don’t know they want, but when they see it they can’t resist. It’s  a great way to help generate offers faster.

How to Choose a Great Muskoka Handy Man

Karen Acton - Muskoka Handy Man

We all know how busy the skilled handy man in Muskoka is and how hard it is to find one when you need one. The temptation is always there to go the route of letting the friend of a friend fix or renovate for you. But when things go wrong you are left in a difficult position. Whether it’s a big project such as a bathroom remodel, something small like putting up shelves, or just simple repairs and routine maintenance, many busy home and cottage owners need to turn to a capable handy man to get the job done. Finding a qualified, professional, and reliable handy man can be a real challenge.

Here are some tips for you to help ensure that you find the right person for the job:

ARE THEY QUALIFIED FOR THE WORK

Unfortunately, all handy men are not created equally! If your project requires specific skills make sure that the handy man you hire has the qualifications and experience to do the job. Don’t forget that in Ontario some jobs require that a person, other than the home owner, performing certain work must be licensed; electrical and plumbing often fall into this category.

GET REFERENCES

Request at least two local references from previous customers. Any good handy man should be willing to do this without hesitation as his reputation is his stock in trade. Don’t just ask for them, check them! Inquire about the quality of the work, timeliness, professionalism, and how the handy man handled any changes that may have occurred during the project.  I find it good to ask if they would hire him or her again.

PUT IT IN WRITING WITH A PROPER ESTIMATE AND A CONTRACT

If you can find 2 or 3 handy men with good references then you should ask them for written estimates for the work you have in mind. Be sure that each estimate contains enough detail that you can make a comparison between them, after all it is not fair to compare apples with cabbages. For example, are the specified materials of the same quality? Does the cost include cleanup and hauling away any debris or old/broken items? Read all contracts carefully and be sure to ask about anything that you are unsure of.

DON’T FORGET ABOUT INSURANCE COVERAGE

Liability insurance is always important. If the handy man or maybe an employee of his/hers is injured while working on your property, you may be held liable for their medical costs and other expenses. Ask for evidence of their WSIB coverage before agreeing to any work. If they only work directly for home owners they do not have to have WSIB and may be depending on your policy for protection. They should also have insurance against their errors and omissions so you are protected if they do damage to your home or cottage accidently when working on the project. Uninsured handy men often charge less for their services because they lack the overhead expense of insurance, but using them could cost you in the long run.

BE CLEAR ABOUT THE PAYMENT SCHEDULE BEFORE YOU SIGN

Be cautious if you are asked to pay for the entire job up front – this is not an accepted business practice and could leave you open to fraud. Handy men will often ask for 50% up front to allow for the purchase of materials. You may have agreed to a “Time and Materials” contract with a weekly invoice being submitted or you may have even set up an account at the supply store so the materials can be billed directly to you and only need pay the handy man his weekly labour cost. Whatever the details are, be sure you are all clear on them and request receipts for all payments.

Whatever your project once you have found that great Muskoka Handy Man you will keep him or her close to your heart! A capable honest and dependable handy person is golden – someone you will recommend to friends being confident they will not let you down.

 

 

The Upside to Downsizing Your Muskoka Home

DownsizeYour children are grown and finally gone and settled into their own adult lives. You have gone through the woes of “empty nest” syndrome and you are now in the position to think about what is next for you!

Do you keep the big home and hope that you get to host the family holidays? Do you even want to do that?  Most of us eventually decide that a smaller home with less maintenance and overhead is the wiser thing to do, so here are some pros and cons to help you decide if there is an upside to downsizing for you.

Most often when I see clients downsize, they tend to move into into a smaller home or condo. Smaller homes very often are on smaller lots and both of these options can mean being closer to neighbours.

On the downside you can see and hear your neighbours.  This may be a negative but you can help moderate the effect by upgrading the window treatments in your home for privacy and strategically place screening plants in your garden or on your patio or balcony to make you new location more private.

The upside is you can get to know your neighbours. In most cases when you downsize you will find you have more time on your hands.  Less work to do around the home so having new friends in the neighbourhood is a great way to spend some of that time. Be social, old friends are great, but making friends next door will enhance the everyday enjoyment you have in your new home.

One of the things a larger home often has is storage space that smaller homes and condos usually lack.

On the downside storage becomes a premium. The double vanity in the old bathroom, the large hall closet, the full basement with a large utility room: these places may be gone in the new home. To counter-act this you may want to consider closet organizers and perhaps a bathroom makeover.

The upside is you can purge and then indulge: You may need to be a little brutal with yourself at first but pare down your “stuff” to only the things you need and love. Then give yourself permission to acquire only products you love as time goes on.  They may cost a little more but your new and efficient life style means you can afford to spend a little more on your favourite perfume and toiletries and use them every day rather than having 2 or 3 kinds and keeping the favorite one only for special occasions!

Most large family homes have formal sitting areas and family rooms. Often there is a craft room and a work shop. Lots of “hidey holes” for family members to have “me time” that may not exist in a smaller home.

The downside is that it is harder to have your own space. As a retired empty nester, you may have developed separate interests and activities from your partner so you will need to be intentional about giving each other the time and space needed to continue to do these activities.
The upside is that by being more exposed to your partner’s hobbies you may find you both enjoy them.  In addition, you will have a smaller home and fewer rooms that need cleaning so more time to spend together.

One of the biggest factors to consider when downsizing is what to keep and what to let go of.

The downside is your furniture may no longer work. Even if you’ve made careful decisions about what items you will keep and take to the new home there could be issues. A light-filled room can highlight stains you hadn’t noticed, the color or style may be all wrong for the space, and the way you find yourself using a room may mean that your furniture feels like a mismatch.

The upside is you are liquidating capital in the process and so can afford some new items: You have the perfect excuse to go shopping for new furniture and that is always fun!

The garden is usually a big adjustment whether you love to garden or not. Moving from a large home that likely has a larger garden to a smaller one with just a little one or even a condo with none can mean a big change.

The downside is your backyard shrinks, and your lifestyle changes along with it. For many this is a relief not a problem but if gardening is a passion for you, the solution is not as hard as you may think. There are often neighbours who can no longer manage their gardens who would love to allow you to help. Put a message on the community Facebook page and see how many replies you get. If you’re used to lazing by a back-yard pool and know you’ll miss it, consider a hot tub or a swim spa instead.

The upside is you have more time for you. Mowing the lawn will no longer be a time-consuming chore and the cost of the spring and fall turn around will be cut down considerably.  Remember, with some creative furnishings and plantings, a compact backyard can still meet your needs for a restful outdoor escape and a place to entertain family and friends.

By the time, you are ready to down size you have very likely been used to a large kitchen and cooking for a family. A smaller home or condo will usually mean a much smaller kitchen.

The downside is a compact kitchen changes the way you cook. When you have had oodles of counter tops and lots of storage perhaps even a pantry, cooking a family meal is relatively easy. A smaller kitchen will require you to clean as you go, plan your meals and shop for ingredients more often. It also means you need to reduce the quantities of serving dishes, glassware and kitchen gadgets that you keep.

The upside is that you can have fun learning new recipes. Embrace your downsized lifestyle and eat out more often. Meet friends out for dinner instead of having them over and when it comes to family events go to their home or make it pot luck and paper plates!

Another adjustment you will likely have to face is that your rooms need to serve more than one purpose. If you had a sewing room in your old home, you will most likely have to set up in a spare bedroom and pack things up for company.

The downside is rooms must serve more than one purpose. As an empty nester, you will have had the luxury of turning rooms the children once occupied into craft rooms, man caves, home offices and the like. When you downsize you will need to adjust to multipurpose rooms and make do, particularly when hosting guests.

The upside is less space less junk. You will be less tempted to accumulate stuff and buy only what you need or genuinely love.

Laundry rooms are often sacrificed in a downsizing move. Laundry rooms become laundry areas and in a condo may even be a community facility.

The downside is you need to plan your laundry day. If your kitchen and laundry become one or you need to leave your home to do laundry, figuring out what to do with baskets of washing can be a challenge. The typical laundry room is a prime dumping ground for all manner of items, such as shoes that need cleaning and stained items that are soaking in the sink, ironing board and so much more. You must find a way to eliminate this or “hide” it until laundry day.
The upside is small loads of laundry done frequently: Piles of laundry will become a thing of the past. Staying on top of washing, folding and ironing will become the norm.

Perhaps the biggest change and even the most difficult one to adjust to is how to handle house guests.

The downside is you have to plan well for company. Larger homes often come with guest rooms for visiting family but downsizing means you need to get creative to squeeze in more than one guest at a time. Bunk beds, wall beds, sofa beds and air mattresses are all options. It’s up to you how many guests you want to accommodate at once —and sometimes it will take a visit or two to see what will work.

The upside is smaller groups of visitors means more one-on-one time with them: If only a couple of family members can visit comfortably at once, quality time together is assured.

The decision to go from a large family home to a smaller one is not easy to make, but in my experience it is usually a good move with no regrets. I would be happy to help you with any questions you may have about the process and, of course, with the search for that new smaller abode.

8 Tips for a Successful Muskoka Home Renovation

Karen Acton - Renovating your Muskoka HomeIn my role as a Muskoka REALTOR® I am frequently invited into homes and cottages to give an opinion of value. These properties are in various states of maintenance and repair and often have been renovated by the home owner. These renovations span the whole gamut, from elegant and value-enhancing to lamentable and wasteful. So here are some tips that I believe will be helpful if you plan to renovate your Muskoka Home.

Set a Realistic Budget

If you plan to do a home renovation you really should have a clear idea of what you can afford before you start looking in magazines and picking fixtures and countertops etc. Talk to a contractor about realistic costs. Even if you plan to do the work yourself be sure to have a contingency fund built into the budget to allow for the unexpected. In my experience, there is nearly always a “surprise” element to every project.

Things to make sure you budget for include:

  • cost of preparing the space before you start the actual work (disposal of old materials)
  • relocating plumbing and electrical
  • light fixtures
  • paint and PRIMER – often skipped but will save time and money if done right!
  • flooring – will the existing floor be damaged in the process and need replacing or refinishing?
  • Permits – most renos WILL need permits and skipping them means that you could have issues when reselling and in some cases, void your insurance.
  • HELP – can you do it all yourself or will you hire out some parts?

Will Your Reno Suit Your Neighbourhood?

While most renos are interior and you may think immaterial to the neighbourhood you do need to consider the investment you are about to make. If your dream is to install an ensuite bath with a steam room that is wonderful but none of the homes in your area have this kind of luxury feature, you should understand that it is purely for your enjoyment while you own your home. You will not likely get any return on the investment. In fact, in some cases over improvements can devalue a home.

Remember not to ignore your home’s style when renovating especially if the renovation includes an addition. If you have a traditional Muskoka waterfront property, then a modern addition with walls of glass may not look esthetically appealing and will not generally improve value. While it may be your dream to own, it may not be the dream of many protentional future buyers. Work with your builder and architect to come up with a design that gives you the features you want but still fits the rest of the home or cottage.

Avoid Going Too Trendy

People sometimes make the mistake of wanting to be too hip and trendy in their new home by picking the latest, hottest, coolest things. I would encourage you to consider that trendy often means short term. While some of the hottest and latest trends will turn out to be timeless many will burn out fast and not only will you stop loving them quickly but the next buyer of your home or cottage will see them as “dated”.

To keep any room “trendy” pick accent items you can add rather than physical and structural ones. That way when the trend is over you can replace them with something new.  A good example of this is shag carpeting.  Rather than doing wall to wall, do a more standard floor finish and add a shag area carpet  and perhaps some shag accent pillows.  When shag goes out of style, and it will, replace these accents with whatever is the next trend.

Buy the Right Materials

One of the biggest mistakes that you can make when it comes to home renovation is to try to be frugal when choosing materials. The bottom line is, you’re going to get what you pay for.  Inexpensive and cheap are definitely not the same thing. Price check and be wise but being cheap will often lead to having to spend more in the long run. Cheap fixtures and products end up looking that way and invariably you will be disappointed and probably choose to replace then with the product you wanted in the first place.

Remember that if you’re going to do it, do it right. If you can’t afford to do it right, wait and do it later!

Do the Prep Work

Do it the right way the first time. Whatever the job get yourself ready before you start. Gather the right tools and prepare the space before you dip a brush in the paint or hammer in the first nail. You will be so glad you did.  I know it is the tedious part of any project big or small but if you fail to be prepared you will end up taking longer than needed and perhaps compromising on the quality of the finished job simply because you were too eager to get started.

One of the most important prep steps is the measuring. The old adage “measure twice, cut once” is the mantra of the great contractor and you should make it yours.  You can burn through a budget quickly by making cutting mistakes in your lumber or trim work and if ordering flooring, buying too much or too little will lead to total frustration. If you are not sure how to measure properly ask someone who knows. A quick lesson will save you time money and frustration.

Paint and Light

People often make the mistake of picking the wrong paint for whatever particular project they may be working on. It is important to use the correct type of paint for the surface. The best advice will come from the professional at the paint store but choose better quality paints with the right finish for the job.

Remember that your lighting needs to complement the colour palate you use and that typically most people gravitate to light and warm colours rather than dark and bold.

Get the Right Tools

If you are planning on doing the renovation yourself make sure you have all the tools you need to do it properly. This means that you may have to borrow or rent what you don’t have. Do not try to make the wrong tool do the job. This can lead to expensive mistakes and sadly even to injury to yourself or damage to the tool you are trying to make do the job. Knives are not screw drivers and chop saws are not miter saws so please be careful and make sure you have the right equipment to do the job safely.

You may even need to rent stand lights so you can properly see what you are working on and space heaters to keep you warm in the addition until the new heating is connected.

Embrace the Chaos

Once you have done the budget, designed and purchased the materials, sit down in and enjoy your last moment of calm for a while. Then take a big breath and embrace the chaos. While it is always best to try working in a clean and tidy space you need to accept that a clean and tidy work space is not a clean and tidy home. You will have disrupted meal times, dusty surfaces and hard to find possessions for the duration of the project. So embrace it, find humor in it and don’t get mad at each other or the kids over things that cannot change until the job is done.

 

I hope these tips will be useful and not too negative. Renovating your Muskoka home or cottage can be an exciting and worthwhile endeavor and if done well, will bring you many years of enjoyment and a good return on your investment when the time is right to sell.

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.