The most important things to consider when choosing a real estate agent

One way or another, we all seek the comfort of our own habits – where we get fuel for our car, where we buy our groceries and even where we get our hair cut. Habits are great; they do not require us to analyze or think about the impact of these decisions. We know what we’re getting into.

If only buying or selling a home were so easy. But it’s not. We only do it a handful of times during our lifetime, and the consequences making a bad decision can leave us with wallowing in regret for years. Is your home sale going to maximize all the dollars that you’ve put into the place over the years? Will your new home be worth the debt load you’ll be taking on? Is it really a wise and fiscally responsible investment decision?

In such an emotionally charged environment, how do we bring reason to the table? For most people, the answer is a real estate agent. But which one?

Well, let’s start with choosing the agent to sell our house. Remember, this is someone we are committing to for at least 60 days as they market our home on MLS.

Some call this phase just another beauty and popularity contest, and in many ways it is.

Those well-coiffed, well-dressed agents driving their fancy European cars are all trying to make their best first impressions with you. They will tell you, with barest modesty, they are the Number 1 agent for you and their track record proves it.

The first test should be: Does this agent really look like the one who you saw promote themselves on billboards, their website and their business cards? What has caused them to age so quickly in the last week or two since you received their Sold Card or Market Activity Newsletter in your mailbox? The stress of their work must be taking a very great toll on their youthfulness. Not that you have to pick the youngest and best looking agent, but why do all agents need to look like they did in their high school or university graduation pictures? I would give them a failing grade for creating a physical gap between what they pretend to be and who they actually are.

However, maybe they can also make your 70-year-old home needing so much work and repairs look like it was just built only last week.

Assess their competency on the pricing recommendations they give you for your home. Have they been thorough enough in showing you every comparable sale in your neighborhood?

Do not buy in to the latest trend in pricing low to create excessive demand and encourage many competitive bidders for your home. It is best to price at close and near to the market and if there is excessive demand at the time, you will benefit from the free natural market forces and sell at full asking price or over. To set the bar too low only confuses and frustrates most buyers.

Remember, less than 10 per cent of listing agents double end or sell their own listings. So how they set the table and encourage the full and unabashed cooperation from the rest of the real estate community is crucial. Do they have a favourable industry reputation and track record and can they positively work well with all of the dozens of agents who may be showing your home to their prospective buyers? How are they going to manage possible multiple-offer scenarios?

You need to be comfortable that they both have these skills and experience, and that they can operate under the pressure of competing bidders. Ask them how many competitive offer scenarios they have been involved in with their listings. How many bidders were there and what was the ultimate selling price?

Are these agents always available to you by text, email and/or cell phone and is it going to be them alone or are you being handed over to their assistant or team member? It’s as if you needed an operation: You choose the surgeon, but do you care if you end up with the resident or intern? You must confirm this service commitment as the busiest agents will be handing you off to their less experienced team members who will be doing most if not all of the work.

When choosing the buying agent your move may be across town or to another city. Of course your selling agent may not have the knowledge, experience and market intelligence needed to uncover the subtle nuances that could exist in your new neighborhood. This is so critical to you.

Bottom line? Choosing your agent requires patience. You should interview at least two or three and have the winning agent back at least once more to follow up on your selling or buying requirements.

That’s not to say all this preparation will eliminate your own stress in buying and selling, not by a long shot. But starting with the right choice for your agent can certainly improve your chances of a happy ending to your real estate adventure.

Stephen Moranis, B.Comm., MBA, FRI, CMR has been active in the North American Real Estate Industry for more than 40 years. He is a former President of the Toronto Real Estate Board and a former Director of the Canadian Real Estate Association.

Do you have a real estate question or topic that you would like to know more about? Email Stephen at smoranis@foresthill.com or text him at 416-818-3110

Do you need a home inspection when you buy a condo?

We all think buying a condominium will make our lives a lot easier and more convenient, right? No driveways to shovel; no leaking roofs; no broken furnaces or HVAC’s in the summer heat. But believe me, things go wrong with condos, too, which is why I have advised on countless occasions that condo buyers get what potential home owners almost always get: a professional inspector.

Condominium suite inspections are a limited subset of a standard home inspection, and typically include the electrical system, heating and air conditioning, plumbing, window and door operation, and functional condition of finishes. Most common elements are excluded with the exception of suite balconies or what is known as “exclusive use” common areas. These inspections can cost from $250 and up, depending upon the size of suite and the time required.

The status certificate on the general state of the condo and condominium corporation isn’t enough: an inspection gives added legal, financial and emotional security and cannot be more emphatically recommended. The right inspector will examine all of the interior systems of the suite and provide a detailed report which will help you predict and anticipate your future maintenance costs and may uncover deficiencies which may lead you to renegotiate your purchase price before going firm.

Choose your inspector carefully — one that has the qualifications and who has done many condo inspections. Ensure in advance that they are qualified to and will look at the structure of the building, electrical systems, plumbing systems, walls, floors, ceilings, furnace and air conditioning systems, as well as the plumbing fixtures in your entire suite, and a sampling of lighting and electrical receptacles.

A recent horror story is the existence and discovery of Kitec, a brand of PEX plastic water piping that has a history of leakage, a class action lawsuit, and that is no longer being manufactured. It was installed from 1995 to 2007 and it is difficult to find in a condo suite as it is covered by interior finishes. Costs to replace it range from $ 5,000 to $ 20,000 and it must be looked for.

Here are some of the other things inspectors and potential owners need to look for:

• Spotting on floors and walls, or floors that are sloped or warped, or loose carpets and tiles, all allude to water damage.

• Cracked walls suggest a structural problem

• Spotting on walls and windows may indicate mold in the unit.

• Check for cracked glass panes, and screens that work, cabinetry drawers and doors that are level, easily opened and closed and fully operational.

• Ensure there are no gaps or missing caulking in all of the tile work.

• Check the exterior and common areas of the building to see what maintenance has been done by the building’s ownership.

• Ensure there is enough water pressure with both hot and cold taps, and that all drains are working well.

• If you notice any foul smells in the unit, trust your instincts. Can the source be identified? Is the unit properly ducted and vented?

• Ensure that the electrical systems and HVAC systems work, if there is an HVAC in your unit AND a central building system unit, have both inspected. Find out if and when the HVAC filters were changed and the ducts cleaned.

And a few more things from the to-do list for potential condo owners …

Ask if there has been a technical audit of the building, done in connection with the reserve fund. This will help you determine the actual condition of the building.

Obtain and read the minutes of the condominium corporation meetings for the last few years as this will disclose signs of exterior and/or maintenance problems. Ask for proof of all major structural repairs, the fees incurred and the relevant repairs that were done. Remember, you you will be liable for repairs once you become a partial owner of the condominium corporation.

You must ask if the condominium corporation is involved in any ongoing and pending litigation. Conflict among condo boards, owners and property managers have become increasingly more common with a rising number of condo lawsuits happening.

New condominium buyers are protected by Provincial regulations during the warranty period. This is when you can inspect your suite during the pre-delivery period, and this is the time for you to sort out the issues still covered by the builder and the new home warranty. Any building beyond warranty and especially if older than 10 years should always have a condominium inspection to identify potential problem areas.

Make sure your inspector reviews the most recent status certificate to determine the general condition of the building and its’ potential deficiencies. Most importantly, determine if there is enough working capital in the condo reserve fund for immediate and/or future repair items and other contingencies without you being subjected to a new assessment and cash call.

Of course, all of this inspecting doesn’t guarantee to eliminate future issues with your condo, but it will surely make you a much more informed owner.

Stephen Moranis, B.Comm., MBA, FRI, CMR has been active in the North American Real Estate Industry for more than 40 years. He is a former President of the Toronto Real Estate Board and a former Director of the Canadian Real Estate Association.

Do you have a real estate question or topic that you would like to know more about? Email Stephen at smoranis@foresthill.com or text him at 416-818-3110.

How do I secure a mortgage as a self-employed buyer?

Today, there are so many individuals who are self-employed or are working in the underground economy that the conventional criteria in being approved for a home mortgage do not apply.

If you do not have a T4 confirmation of employment income, then shopping for a mortgage through the many self-employed programs is a very confusing and tricky process. A pre-approved mortgage presents you as a much more serious buyer to sellers and real estate agents, especially if you become involved in today’s commonplace bidding wars. If you want to win the battle, though, removing all conditions such as satisfactory financing is mandatory.

All mortgage pre-approvals are free and there is no obligation to use the lender who pre-approves you for financing. It is best to sit down with a bank and/or mortgage broker to discuss the many options that are available for you as a self-employed individual.

The growing segment of self-employed residential mortgage borrowers has come under much scrutiny over the last few years as the federal government tries to ensure there is not a credit collapse like the one in the U.S. in 2008 during a period of sub-prime mortgages with high debt to equity values.

All of the major Canadian banks have created innovative lending programs to meet the unique and specific needs of entrepreneurs and self-employed individuals. Major mortgage lenders are trying to streamline the mortgage approval process, which in many cases does not require specific detailed financial statements or income verification. In some cases you do not have to prove your actual income, but you will be required to have a higher down payment, generally in the 35 per cent range of equity to debt being borrowed.

Your personal credit profile must be strong for credit approval and your income must be reasonable for the nature and tenure of your business. There are programs where you can borrow up to 80 per cent of the purchase price or value of the property with no default insurance, or up to 95 per cent with default insurance. Minimum down payments require 10 per cent, of which 5 per cent must come from the borrower’s own resources. The remainder of the down payment may be gifted from an immediate family member.

In many cases, commission sales income is not eligible for self-employed insured guidelines. In these circumstances, lenders can loan up to 90 per cent for purchase financing and up to 80 per cent for refinancing. You must show a minimum history of 2 years of being self-employed.

Across the country, the maximum loan amounts vary for self-employed persons. For Greater Toronto, Vancouver and Calgary, it’s up to $750,000. For other locations, a maximum loan amount of $600,000 applies. Of course, there are many exceptions on a case-by-case basis and knowledgeable bank representatives and/or mortgage brokers can help you sift through the process.

Speak to a minimum of two lending institutions and/or mortgage brokers about being pre-approved under the self-employed mortgage programs. Mortgage brokers are an excellent source as they can help with damaged credit. And remember that features matter. These may range from good prepayment privileges with fair penalties, if at all, and good portability and refinance policies.

There’s no secret in finding the right plan — comparison shopping wins every time.

Stephen Moranis, B.Comm., MBA, FRI, CMR has been active in the North American Real Estate Industry for more than 40 years. He is a former President of the Toronto Real Estate Board and a former Director of the Canadian Real Estate Association.

Do you have a real estate question or topic that you would like to know more about? Email Stephen at smoranis@foresthill.com or text him at 416.818.3110

Buy first, then sell? Or vice versa?

You are now in the grips of looking for a new home for any number of reasons. You have been transferred, you are expecting your first child or you are blending new families together.

So you will find yourself facing the eternal question of what to do first: Buy the new home, or sell the old one? This is a very tricky juggling of two mutually exclusive and independent events.

It would be great if you could simultaneously buy and sell together. Sometimes this is possible, but you need to make sure that you have chosen a good realtor who can help you both strategize and operationalize this outcome.

In a perfect world, you would hope to have an offer on your own home to consider at the same time that you are making an offer on your next home.

This is not practically feasible for most of us. Normally in a hot market, selling your home is not the problem; finding the next home to buy most definitely is. With shrinking inventories of homes for sale and the demand to buy being greater than the supply of homes for sale, clearly selling is not the problem, but buying is.

What are you to do to reduce your risk of being homeless or having to carry two homes at the same time? First, you must establish your home value and differential. How much is your home worth and what is your budget for your next home? Do you have your financing in place to bridge the gap and the possibility that you might have two homes to financially carry at the very same time?

The most cautious and safest advice is to put your home up for sale and start looking at the same time. If an offer comes in on your current home you can then accept it conditional upon finding suitable accommodations, as well as putting in a sliding closing or completion date which will allow you to both advance and/or delay the closing date by a range of, say, 90-120 days.

Of course you need a willing buyer to accept this condition, but this clearly reduces your risk of being homeless once your current residence has then sold firm. Sure, there are interim accommodation backstops like rentals, friends and family, but this is inconvenient to your family and there is the additional cost for the storage of your furniture and possessions.

You must determine the equity in your home as a start and if you are buying up do you have your financing in place for this move? Ask your bank if they will extend to you bridge financing in the circumstance that your home is sold but not yet closed and you have to close on your new home in advance for a period of 60-120 days for renovations and decorating.

This is a very common requirement of most second-time buyers who are moving homes.

Making an offer on your new home conditional on selling your current home is clearly a strategy to consider, but in a hot market with multiple offers and bidding wars most sellers do not need to take the risk on your conditional offer to purchase when they have unconditional offers to accept for their property. In situations where the seller will accept this kind of offer, they will want an escape clause of 24-72 hours to allow them to continue to offer their property for sale and if they get a bona fide offer they then can give you notice to go firm or walk away.

Contingency offers are generally not accepted because of the inherent uncertainty involved.

Buying and selling homes at the same time is twice the adventure and each situation has its own unique challenges. You have to be flexible and not fixate on the little things. Remember, your goal is to achieve a sale and a purchase at or near the same time

Selling your home while buying another is something you just can’t rush as it requires patience.

Stephen Moranis, B.Comm., MBA, FRI, CMR has been active in the North American Real Estate Industry for more than 40 years. He is a former President of the Toronto Real Estate Board and a former Director of the Canadian Real Estate Association.

Do you have a real estate question or topic that you would like to know more about? Email Stephen at smoranis@foresthill.com or text him at 416-818-3110.

Showing your home: what to expect and how to prepare

You’ve listed your home for sale at what you hope is the right price. Now, the fun and activity really begins: the beeline of showings and inspections on your property.

No question this is a big invasion of privacy and interruption to the normal family routine; at the same time, it’s so important to ensure that your home puts its best face forward in presenting itself to potential buyers.

Your agent will likely suggest de-cluttering the home and possibly even staging it, which is a professional way of making it look like it just came out of a home and designer magazine’s photo shoot. This might require some furniture and accessories brought in to enhance the look and feel of the home. These strategies are all good; it just depends upon time and budget considerations on what you chose to do to make your home look as good as possible.

Of course neat and tidy are important buzzwords to keep in mind when staging your home. The kids need to make their beds every day, and everyone needs to keep as many things in order as they can. The home needs to look good on nearly a 24/7 basis, since you never know when you’ll get the call that someone wants to show your property.

Your listing agents’ office is the coordinator of agent appointment visits to inspect or show your home; this could be agents only or agents with their buyer prospects. How you want the showings on your home conducted and supervised is your call. You should be concerned not only about people taking their shoes off when they visit, but more importantly the security and safety of the showings at all times. It is good to keep valuables out of sight so that they don’t suddenly go missing during the buyer visits. Agents have insurance against theft and damage while they are marketing your property, but you still don’t want a family heirloom broken or stolen while your home is up for sale.

No buyers should be coming directly to see your home; they should always arrive with a licensed agent. The coordination of access to your home should be discussed and agreed upon at the time you sign your listing agreement with your real estate listing agent. Will you give them a key for all showings and/or inspections only with them in attendance or allow them to have a key in a lockbox on your property for showings that could be requested on a near immediate basis? This is your decision and make sure that you determine the best strategy that works for your comfort, safety and concerns, but that allows for ease and convenience of all possible buyer showings on a moment’s notice if requested.

You may choose to have your agent or one of their licensed team members physically present for all showings on your home; this is your choice. Each homeowner has their own set of concerns that need to be addressed and accommodated (what to do with pets, for example) while their home is up for sale.

In my experience, the best way to present and show your home is to have your agent attend in advance of all showings to prepare, tidy and mini-stage the home before all showings. This allows them to turn on lights, draw curtains and do whatever else may be required to present your home in the best possible fashion. Your agent can stack the showings for their own convenience and be in attendance at your home for possibly 2 or 3 showings consecutively or all at once. This could also add to buyer interest, if they see that there are other interested parties. Your agent is also there to answer any questions that the buyer’s agent and their clients may have while they are going through the house. This is so important to deal with any possible concerns and/or objections right away.

The average number of buyer showings on a home can vary dramatically, from only a handful to potentially dozens. Be prepared for this activity aspect of marketing your home, as without property showings, buyers rarely make offers. They also may be visiting your home multiple times with their home inspectors, contractors, interior decorators, mortgage appraisers and family members, all of whom are important stakeholders providing the buyer with feedback before they make an offer.

Stephen Moranis, B.Comm., MBA, FRI, CMR has been active in the North American Real Estate Industry for more than 40 years. He is a former President of the Toronto Real Estate Board and a former Director of the Canadian Real Estate Association.

Do you have a real estate question or topic that you would like to know more about? Email Stephen at smoranis@foresthill.com or text him at 416.818.3110

Real estate commissions: What does it cost and who really pays?

The real estate industry operates on being paid only upon a successful result. This means that if your property does not sell or close, you do not pay.

The fact that the fees associated with real estate are based on this contingency is good for consumers. But does this mean that a successful seller pays for the collective work done by real estate agents in all of those unsuccessful transactions? This may be a reason why fees have hovered around 5% for some time now, even as house prices have escalated tremendously over the past 20 years. I guess the real question is what is a fair fee to pay for a successful real estate transaction and how does it all work in paying for the services of both the sellers’ agent and the buyers’ agent?

To put it all in perspective, a lawyer might charge upwards of $1,000 per hour for their services, and where half of the lawyers lose half of the time also happily will take contingency cases on a 30-50 per cent basis. In comparison, the real estate industry offers better value by charging only on success. But how it all works is tricky and requires some understanding.

Once you have chosen a real estate agent to sell your home, they present you with a listing agreement which is probably a Multiple Listing Sale (MLS) and you have to agree on a fee for their services. This is not only for what they will do for you, as it also includes the amount that you will be offering to the buyers’ agent for participating in the transaction. Let’s start here as all buyers’ agents are paid by the seller through their listing agent upon a sale. This means that once the deal closes and the seller gets their money, both agents get paid.

The commission offered to the buyers’ agent is publicly disclosed on the MLS listing, and this is a key incentive to buyer agents. If your listing offers 3% to the buyers’ agent, this is going to be more positively viewed by them than if you are offering 2.5% or less. You should offer a commission that is consistent with what’s being offered in your area. For comparison, ask your listing agent to show you all of the broker full listings, as this is where the commission rates are fully disclosed to the real estate industry. My advice is that if all of the competitive neighbourhood listings are offering 2.5% to the buyers’ agents, you should consider offering the same amount or possibly more for your listing to stand out stronger to the agents compared to the other listings being offered for sale.

This takes care of the buyer agent; however, in most cases, the sellers’ agent is doing more of the work. They should have the incentive to try and earn an amount equal to what’s being paid to the buyers’ agent.

Have a candid discussion with your agent to confirm all of the things that they are including in their package of real estate services: MLS listing, sign on the property, advertising, floor plans, photographs, video tour, drone photography, full colour brochure, pre-home inspection, etc. Go over everything that they propose to do and the costs (to you as well as to them), then discuss and decide on a fair fee.

What if your agent double-ends the property without the help of a buyers’ agent? Should the overall fee be reduced? This is difficult to do if there are competing offers as your agent is required to make disclosures about this and can alienate the buyers’ agents who are participating in the multiple offer bidding at the time.

Good real estate agents provide excellent and fulsome services that are varied and unique. The ones who deliver you a successful transaction with no problems deserve to earn a fair fee, which may not be the lowest. I always say that you get what you pay for. Make sure that everything is crystal clear from the outset on the total cost of their services to you, as well as what is included and what is not. Consider, as well, that the fees are subject to HST.

Remember: the buyer is really paying the cost of the fees, which are built into your asking price. Allow your agent to be properly incented to do the best job that they can. Let them show their mettle by pushing the buyer to a price that gets you the net that you want!

Stephen Moranis, B.Comm., MBA, FRI, CMR has been active in the North American Real Estate Industry for more than 40 years. He is a former President of the Toronto Real Estate Board and a former Director of the Canadian Real Estate Association.

Do you have a real estate question or topic that you would like to know more about? Email Stephen at smoranis@foresthill.com or text him at 416.818.3110

Pre-construction condos: Should you use a realtor?

Should you use a realtor when buying a new pre-construction condo?

The answer for this is a definite YES. Toronto realtor Matt Smith, who specializes in helping buyers navigate through the complicated process of buying new condos, has shared with me the many pitfalls and disadvantages of buyers going it alone when dealing with the builders’ sales staff.

Above all else, realize that the builder’s sales team works for the builder and only the builder. That is where their loyalties lie. They simply have zero interest in protecting you or your rights, or in getting you the best deal or best location within the building. By using your own real estate agent, you get the advantages of comparative shopping as well as their specialized knowledge of these complicated transactions, which can potentially save you both legal and financial problems and surprises down the road. It is important to declare and introduce your realtor with the builder when you register as a client at the new condo site.

Here are twelve ways a realtor can help you through the process:

1. Your realtor can gain you access to VIP events. This is where the best prices and floor plans are available for sale. By the time the building goes to public market, often the choice units have been sold with up to 50% of the units being taken before the general public gets to pick any suites. VIP realtor events help you get better suites and prices.

2. Your realtor knows how to ask the right questions – and many you don’t know to ask.

3. Your realtor can guide you through the important steps during the 10 days of the Cooling Off Period. Skipping these steps can create problems.

4. Your realtor can help negotiate the agreement in your best interest. Many things are negotiable and your experienced agent can help you navigate through this process.

5. Your realtor has access to MLS. This is important for pricing advice so that you can compare both new and resale properties and be better informed on what is a fair price.

6. Your realtor can explain the importance of “The Right To Assign.“ Once the property is constructed there is interim occupancy then there is registration. You as a new buyer may want to assign (sell your rights) your agreement at any time during this lengthy period and you may be just selling your paper. The purchase agreement must spell out the fees and conditions for this privilege so that you know these well in advance. Many builders will deny this right and you should know this before you buy.

7. Your realtor understands how to read the building plans. It is important to know where the garbage chute, elevators and stairwells are, as well as your underground parking space, storage locker and additional amenities such as the pool, party room and gym.

8. Your realtor has a good general understanding of the neighbourhood and any potential new developments that could restrict your views later on and cause traffic issues.

9. Your realtor can help you coordinate all of the closing costs and details with your lawyer.

10. Your realtor can explain how the HST will affect your closing costs and can help determine whether you are eligible for any HST rebates on your purchase.

11. Your realtor can explain to you how the interim occupancy costs work, and more importantly, how the builder calculates these charges.

12. Your realtor can explain the changing reality of your monthly condo fees. The builder generally underestimates these fees for a variety of reasons, and you should be aware that the fees that may be quoted can escalate and sometimes very dramatically in the first few years. You probably should budget for increases of somewhere between 10 and 20 percent, though many actual condo fees have gone up significantly more than that.

The expert advice of a knowledgeable realtor can save you tens of thousands of dollars on a pre-construction condominium. They can help you negotiate everything from upgrades to a cap on your development closing costs, which can be significantly more than a resale condo. The builder has also built in the fees to the buyer’s agent – in fact, they do not reduce the purchase price if you don’t use one. This transaction has so many nuances and subtleties that it is definitely worthwhile to get the help of an experienced professional.

Stephen Moranis, B.Comm., MBA, FRI, CMR has been active in the North American Real Estate Industry for more than 40 years. He is a former President of the Toronto Real Estate Board and a former Director of the Canadian Real Estate Association.

Do you have a real estate question or topic that you would like to know more about? Email Stephen at smoranis@foresthill.com or text him at 416.818.3110

Do you need a home inspection when you buy a condo?

We all think buying a condominium will make our lives a lot easier and more convenient, right? No driveways to shovel; no leaking roofs; no broken furnaces or HVAC’s in the summer heat. But believe me, things go wrong with condos, too, which is why I have advised on countless occasions that condo buyers get what potential home owners almost always get: a professional inspector.

Condominium suite inspections are a limited subset of a standard home inspection, and typically include the electrical system, heating and air conditioning, plumbing, window and door operation, and functional condition of finishes. Most common elements are excluded with the exception of suite balconies or what is known as “exclusive use” common areas. These inspections can cost from $250 and up, depending upon the size of suite and the time required.

The status certificate on the general state of the condo and condominium corporation isn’t enough: an inspection gives added legal, financial and emotional security and cannot be more emphatically recommended. The right inspector will examine all of the interior systems of the suite and provide a detailed report which will help you predict and anticipate your future maintenance costs and may uncover deficiencies which may lead you to renegotiate your purchase price before going firm.

Choose your inspector carefully — one that has the qualifications and who has done many condo inspections. Ensure in advance that they are qualified to and will look at the structure of the building, electrical systems, plumbing systems, walls, floors, ceilings, furnace and air conditioning systems, as well as the plumbing fixtures in your entire suite, and a sampling of lighting and electrical receptacles.

A recent horror story is the existence and discovery of Kitec, a brand of PEX plastic water piping that has a history of leakage, a class action lawsuit, and that is no longer being manufactured. It was installed from 1995 to 2007 and it is difficult to find in a condo suite as it is covered by interior finishes. Costs to replace it range from $ 5,000 to $ 20,000 and it must be looked for.

Here are some of the other things inspectors and potential owners need to look for:

• Spotting on floors and walls, or floors that are sloped or warped, or loose carpets and tiles, all allude to water damage.

• Cracked walls suggest a structural problem

• Spotting on walls and windows may indicate mold in the unit.

• Check for cracked glass panes, and screens that work, cabinetry drawers and doors that are level, easily opened and closed and fully operational.

• Ensure there are no gaps or missing caulking in all of the tile work.

• Check the exterior and common areas of the building to see what maintenance has been done by the building’s ownership.

• Ensure there is enough water pressure with both hot and cold taps, and that all drains are working well.

• If you notice any foul smells in the unit, trust your instincts. Can the source be identified? Is the unit properly ducted and vented?

• Ensure that the electrical systems and HVAC systems work, if there is an HVAC in your unit AND a central building system unit, have both inspected. Find out if and when the HVAC filters were changed and the ducts cleaned.

And a few more things from the to-do list for potential condo owners …

Ask if there has been a technical audit of the building, done in connection with the reserve fund. This will help you determine the actual condition of the building.

Obtain and read the minutes of the condominium corporation meetings for the last few years as this will disclose signs of exterior and/or maintenance problems. Ask for proof of all major structural repairs, the fees incurred and the relevant repairs that were done. Remember, you you will be liable for repairs once you become a partial owner of the condominium corporation.

You must ask if the condominium corporation is involved in any ongoing and pending litigation. Conflict among condo boards, owners and property managers have become increasingly more common with a rising number of condo lawsuits happening.

New condominium buyers are protected by Provincial regulations during the warranty period. This is when you can inspect your suite during the pre-delivery period, and this is the time for you to sort out the issues still covered by the builder and the new home warranty. Any building beyond warranty and especially if older than 10 years should always have a condominium inspection to identify potential problem areas.

Make sure your inspector reviews the most recent status certificate to determine the general condition of the building and its’ potential deficiencies. Most importantly, determine if there is enough working capital in the condo reserve fund for immediate and/or future repair items and other contingencies without you being subjected to a new assessment and cash call.

Of course, all of this inspecting doesn’t guarantee to eliminate future issues with your condo, but it will surely make you a much more informed owner.

Stephen Moranis, B.Comm., MBA, FRI, CMR has been active in the North American Real Estate Industry for more than 40 years. He is a former President of the Toronto Real Estate Board and a former Director of the Canadian Real Estate Association.

Do you have a real estate question or topic that you would like to know more about? Email Stephen at smoranis@foresthill.com or text him at 416-818-3110.

BNN Interview with Catherine Himelfarb Borden

Catherine Himelfarb Borden of Forest Hill Real Estate talks about the growth in foreign investor interest that her family-owned firm has seen in the last number of years. She also talks about why there are buyers from abroad buying five or 10 properties as opposed to just one. Interestingly, she says it’s often an investment for other family members who may move as well.

http://www.bnn.ca/Video/player.aspx?vid=869457

Cathy on BNN May 2016

Cathy on BNN May 2016