At Home In Durham Update for Friday Dec 5th

Today's round up is more like a Feedback Friday, lol....Have A Great Weekend Everyone! :)

Divorce & Real Estate - 5 Things You Might Not Know, But Should!

Breaking up is hard to do! Like REALLY hard! 

                                                                  via Tom Copeland

Sadly the breakdown of a relationship can often become a battle royale where nobody comes out a winner....Every situation is different but here are a few things I learned during a recent transaction helping the "Mrs" move on after selling the matrimonial home:

1. Proceeds from the sale of your home...how come you're broke & homeless now? Your Ex can tie up those funds by requesting they be put into trust until all issues related to the disposition of assets are resolved...leaving you with no access to funds for a downpayment on your next home. If you can't buy right away then you may need to find a short-term rental or move in with family for however long it takes for your case to make its way through the courts.

2.Your mortgage pre-approval ....not worth the paper it's written on? Even if your support payments have been nailed down & agreed to by both parties you may have to go to an alternative lender in order to get a mortgage because none of the "big" banks will approve you without a history of those support payments being made. 

    

 - One of the things that is looked at during the approval process is the ratio of your income to the support payments you will be receiving...the concern being that if your Ex doesn't make the payments, can you afford the mortgage on your own? You can apply to the provincial Family Responsibility Office (FRO) to ensure that you receive your support payments when you're supposed to. 

    

 - An alternative or "B" lender will charge you a higher interest rate to assume the greater risk so it's best to go with the shortest term possible...a year could work but some banks want to see a minimum of 2 years support payment history. A higher interest rate, typically 1-1.5% more than what an "A" lender is offering,  for a short period of time can be worth it if it allows you to get settled in a new place right away.

    

 - Once you get a mortgage commitment, there will be a number of conditions you will have to meet by closing day in order to have your purchase funded & one of those is a binding separation agreement.

3. Mortgage Insurance...the final frontier. No doubt you already know that you need a minimum of 5% down to purchase a home but if you have less than 20% to put down on your next place then you will have the additional hurdle of getting Mortgage Insurance approval for what's considered a high ratio mortgage. 

    

 - We have 3 insurers here in Canada, CMHC, Genworth Canada & Canada Guaranty. The only way to get this approval is through a "live" deal which means you have to have an accepted conditional offer to put through the underwriting process. This is where it's key to have a financing condition in your offer! It IS possible to get approval from a lender but have the deal die when trying to insure it.

- Your best bets to get through this process are good credit, have your debt service ratios in line (this will usually be addressed in pre-qualifying) & work with a mortgage broker who is experienced in putting these deals together. A mortgage broker has the ability to go through hundreds of lenders to get you what you need including working their own professional relationships to your advantage. 

- My go-to broker is Al Smith at Mortgage Alliance he knows his stuff & he really went to the mat for our mutual client & got her what she needed, when she needed it!

4. Bridge financing...good luck with that! It's such a civilized & inexpensive way to buy & sell these days by literally buying yourself a few days grace between moving out of your old home & into your new one. But did you know that you will need your Ex to sign off on that bridge contract? If your mortgage commitment has a condition of downpayment funds coming from the proceeds of the sale of your matrimonial home then, yes, you will need them to sign because they have an "interest" in the matrimonial home. On the one hand it makes sense in terms of the lender's risk management but from a "human" standpoint it's frustrating because if you're going through a nasty break up you're likely going to have to make your closing dates the same day because your Ex's priority is probably not about helping make your life easier, right?

5. Get it in writing...EVERY. LITTLE. THING!  I'm a big believer in maximizing the value of what's most likely your biggest asset so when I come in to do an evaluation on your home I will give you ranges for "As-Is" condition & "Improved" condition. If you choose to go ahead & make improvements prior to listing your home for sale then I can't stress enough the importance of putting in writing who will be paying, how much & when & then having all parties sign off on it. Work orders, estimates, warranties or any other related documentation should be in both names if the cost is to be shared. I'd even suggest having the agreement be witnessed. Not putting your agreement in writing can leave one of you holding the bag...unpaid tradespeople can take you to small claims court, put a lien on your property or send your debt to a collection agency. Avoid the headaches & possible damage to your credit & get it in writing!

So there you have it! My top 5 takeaways for navigating the real estate side of a break up...

Sadly January is know as "Divorce Month" in legal circles as many couples decide to "get through" the holidays & deal with it all in the New Year. If it's something you've been considering then I've included some resources below to get you started.

Step 1...Get some legal advice!

- The Bracken Family Law Firm is a good place to start. A complimentary consultation will give you a better idea of what's involved in the process.

Step 2...Know your numbers!

- Contact me to get an evaluation done on your home along with a complimentary customized worksheet to help you determine the costs involved in selling & your equity position

     

- Contact a Mortgage professional to better understand which option makes the most sense for your future housing, buying or renting.

Following these steps should help you figure out what makes the most sense for YOU & I wish you the best in your journey.

Additional Helpful Links:

The Office of the Children's Lawyer (OCL) - For child custody/access issues

Families First Mediation - Mediation services is another option to consider

The Pros & Cons of Selling Your Home During The Holidays

I recently suggested to someone that they shouldn't take too long to get their house on the market because things would be slowing down shortly for the holidays....and then I realized that's old school thinking, a knee-jerk response that doesn't necessarily apply to the realities of TODAY's market! We've been in a Sellers' market for so long here in the Durham region that in a lot of cases it's simply not true!

First off there are segments of the market that NEVER slow down, there is year-round demand for certain price-points, certain locations & homes that have certain features. With the ongoing shortage of inventory, the Buyers ARE out there, regardless of what time of year it is, just waiting for THAT home, the one they've been waiting for, to finally hit the market!

So let's look at some PROS of listing your home for sale during the Holiday season:

                                                         via Decoholic

1. Homes FEEL more HOMEY during the holidays...the decorations, the lights, the smells, oh my!! Think about it, every year we basically "stage" our homes for the holidays, both for our own personal enjoyment & for entertaining family & friends. That staging, when it's done well, done tastefully, can invoke very powerful emotions in potential Buyers & that can translate into greater desirability for your home & often more money in your pocket!

2. The serious Buyers are out there looking & the tire-kickers are busy with the hustle & bustle of the season. This could mean that your open house may be quieter & there will be less showings booked but the quality of both those activities may be better!

3. There's less competition! This is a big one! The fewer homes on the market for those serious Buyers to choose from, the better it is for a Seller! Let's face it, regardless of which side of the transaction you're on you need to find & utilize whatever advantages you can!

4. And finally, if you're able to be strategic when choosing your closing date then you may be able to carry that advantage over to the buying side in the New Year...advantages like being ready, willing & able to jump on new inventory in January, not having to worry about a "sale of purchaser's property condition" otherwise known as the dreaded SPP & again, depending on your closing date, it could buy you time so you don't feel like you're "settling" when purchasing your next home. The flip side of this is that there are plenty of Buyers who would love to get in right away so if you need a quick closing, you're covered there too!

As for the CONS:

1. Let's face it, selling your home is a pain at the best of times but doing it over the holidays adds another layer of inconvenience because there are so many other things going on as well! You're trying to shop & wrap, entertain & recover and all the while you need to keep your home looking like a model, not to mention having to drop everything & leave when a showing is requested!

2. You'd better get it right the first time when it comes to pricing, presentation & promotion otherwise all the hard work & inconvenience will be for nothing....You never get a 2nd chance to make a 1st impression still holds true! Being successful in today's real estate market is so much more than just slapping up a sign on your front lawn & putting it on the MLS®! That first buzz, those first impressions...focus on the RIGHT things in order to maximize the value of your largest asset so that you can reap the rewards!

3. How you normally live in your home is different than how you will need to live in it when it's on the market...this holds true all year long but it bears mentioning again when it comes to how you decorate for the holidays...tasteful & restrained are the keys here! I always talk about the "HGTV" effect with my clients & the pressure for perfection that Buyers seem to expect as a result, so it should come as no surprise that your holiday decorating may need to be tweaked as well!

4. We live in a multi-cultural society & not everyone celebrates Christmas...or perhaps YOU don't celebrate Christmas....are you worried about turning Buyers off? Instead of being holiday specific you can still create that homey appeal with "winter" decorating touches!

Speak to your REALTOR® about finding a strategy that works for YOUR circumstances & they should be able to help you find a way to align it with Buyers' expectations. It CAN be done & done well regardless of what time of the year it is! And don't forget you do have the ability to control the process to a certain extent...while it's not ideal to limit showings, designating certain days or times that your home is not available will help you keep your sanity throughout the process, lol! ;)

Don't have a REALTOR® yet? Whether you're looking to buy or sell, call or text me at 905-447-4077 or email Kelly@HomeInDurham.ca , together we can go over your options & create the right plan for you!