Thursday, December 22, 2011

Kindness is contagious – even in real estate.

Everyone is moving in so many directions this time of year.  Be careful what you are missing.  

I watched a YouTube video the other day - one person picked up a wallet dropped by a shopper and followed them to return it.  That person helped a senior with her packages across the street.  The senior gave a young woman the change she needed for the parking meter……
You get the picture.  (See Below)

Remember the movie – “Pay it Forward” – that’s what was happening and although it had likely be choreographed for the video if you stop to think of your every day routines you’ll have to admit, kindness is contagious.

Selling real estate through the holidays can be so much more stressful for everyone concerned, than other times of the year.  The sellers are busy preparing for their families and their visitors – the last thing they really want are strangers traipsing through their homes – even though the house is decorated so beautifully.

Buyers would not commonly choose this time of year to buy so they are likely dealing with a job change or transfer – which means kids changing schools and leaving friends ... not happy about it.  Spouses upset for the timing of the pending move – a new community, new friends – a job change for them that was not planned.

REALTORS®, while preparing their own homes for Christmas, are frantically getting their yearend paper work done for the tax man – perhaps noticing they didn’t make all the installment payments they should have and the start of the New Year will be a little lean – especially given the market and economic climate they have been working through this last 24 months.  The tax man doesn’t care if the market is struggling.  Listening to upset clients and their children complain about the move, or, “the yard is not big enough”, or “the school is not close enough”, falls into a distant din as they think about what to get for their own children that is affordable, and will still put a smile on their faces.

Remember, all the support staff, the law offices, the property inspectors, the movers….they are all having the same issues you are.  Be Kind, be compassionate, be patient, be generous.

Let the true meaning of the season rule your demeanor, not that last sweater in the sale bin, or that collapsed sale.  Your smile may be just the thing to drop someone else’s rising blood pressure.  Your small act of kindness may set the example that triggers the next and the next.  Help a senior cross a slippery patch on the sidewalk, open a door, let someone else have that parking space – you’ll find another, let that driver merge in front of you as he seems to be in so much more of a hurry than you, deliver the keys to a colleague - don’t make then pick them up, help a client move some boxes, invite the new kids to go skating with yours.

Remember…..  ‘Kindness is contagious so this Christmas Season – and throughout the New Year – be the first link in that chain.

Many Blessings of the Season to you and your families from me and mine.

When the going gets "Tough"...just call me.

Susan Tough

Wednesday, December 7, 2011

Our Christmas Party!

It’s Christmas... It’s Christmas, that wonderful season, when children are good for a very good reason.  They’ve almost got wings sprouting out of their backs, and that’s when their guardian angels relax.   

Well the guardian angels could certainly take a break last Friday.  Coldwell Banker Horizon Realty had their Christmas party at the Beautiful venue of the Kelowna Golf and Country Club.  For the last 10 years the REALTORS®, staff and owners of Horizon Realty participate in collecting cold hard cash and fund raising for the benefit of the Salvation Army Toys for Tots campaign.  Every year they step up to the plate at their annual Christmas Party, in a very big way. 

With the theme “Christmas in Paris” to inspire them, the party goers opened their hearts and wallets by buying draw tickets  for door prizes donated by Coldwell Banker Horizon Realty and Mortgage Alliance Homeline Mortgage.  

As well, they purchased extraordinary long stem roses from the Kelowna Rose Garden  and cigars that were generously donated by the Watson Brothers Real Estate Team. 

 In total $2,000 was raised!!  (rounded up from $1400 with an additional $600 graciously donated by the owners of Coldwell Banker Horizon Realty) I'm so proud of the crew I work with!!!

In addition to the party fund raising the REALTORS® involve their clients by pushing out invitations to participate with us for this worthy cause.  Other businesses like Turner Audi, and Montgomery Miles Law Offices have also joined in.  The front office of our Harvey location is getting full – but there is still time to help us make a difference in the lives of local families over the holidays so bring in your new, unwrapped toy before December 16th.  

In another complimentary effort, Coldwell Banker Horizon Realty has partnered with the Kelowna Ten Thousand Villages for a designated shopping day on December 13th.  The Partnership program supports the “Fair Trade” philosophy,“helping to build a sustainable future” . Through Fair Trade, artisans receive the respect, dignity and hope that comes from working hard and earning fair value for their work.  When purchases are made at this store, proceeds skip the middle man and go back to the artisans and their families.   On the Partnership day – December 13th – 15% of the sales achieved will be shared with our charity of choice – the Salvation Army Toys for Tots”.  If you still have shopping to do – please consider doing it at Ten Thousand Villages in Burtch Plaza on Highway 97, on December 13th. Enjoy the exception selection of unique, artistic and practical gifts to choose from and the pride in knowing your dollars are helping to fill TWO very deserving needs.
Christmas giving – warms the heat - the soul
.... and can be fun too.

When the going gets "Tough"...just call me.

Susan Tough

Wednesday, November 16, 2011

Things Italian...

Yes it's spectacular   There are, however, some unique ........  features – 

TRAINS: train travel is fast, really affordable, especially if you pre buy before you go over, and very efficient- they are always on time so don’t ever be late. Not all are created equal. The fast track ones even offer first class - pretty cool. Cloth seats, air, even a lovely attendant that goes by and offers hand sanitizers (good to have) snacks and coffee and wait for it..... Clean washrooms. Don't be fooled... there are different standards.
The smaller the towns you are traveling between, the more the standard falls: No attendant. Plastic seats, no place for your luggage (that's easy to use) and the washrooms- just hold it-- really!    Even the yucky trains run on time though. In any case be very very prepared to walk down a lot of stairs in order to cross under the platforms and walk UP A LOT of stairs to the platform you need- remembering you are on your own with your luggage. Be wary of nice young men at the platforms offering to help you with your luggage.  After they have helped you it’s made very clear they want money and get quite cranky if you don't pay. Other than in the major cities, don't expect to find 'staff' or ‘info counters’ to help you read the schedule. There is usually an equally confused fellow tourist, or even helpful local, to confer with. 

PUBLIC WASHROOMS are not their strong suit. Often no paper – ladies, there is even less chance you'll find an actual toilet seat - low dirty bowl and sometimes (like the ones on Mykonos in Greece) a hole on the floor.   The ones you have to pay to use (1 euro is common) are usually very presentable. Good value for that euro! Always have a couple of coins in your pocket handy so you aren’t caught off guard.

The AUTO GRILL – Italy may not have the corner on the market for these but they are fabulous to come across.  Located along the busiest of highways, an Auto Grill is a huge gas bar, tourist info, maps, clean washrooms (pay one euro), Macs or 7 Eleven on steroids for pop and junk food AND They also have a huge buffet restaurant – usually suspended over top the multilane highway so it can be accessed from either direction. You walk through – (1) see what you want – (2) line up to pay telling them what you are going to get, and (3)then go back through to get your food – mac and cheese and pastas of many varieties, pizza, sandwiches’, soups, great salad bar options, burgers, I even think I remember seeing fried chicken once. They are very clean and very well staffed.  Usually have picnic area/tables to use as well.

Smoking and Cell phones – everyone does it and has one – and do both – EVERYWHERE.

BEDS –small, hard but very clean-even two star. - In my experience. 
HOTELS – 2 -3 STAR Small, simple and usually clean, but in my opinion – their average standard and ours are quite different.  One of my travel buddies called it, “relaxed”.  4 star come quite close to our Best Westerns or Sheratons but the beds are still small and hard. Usually offer an above average continental breakfast – we always had fresh fruit, fresh waffles or omelettes made upon request.

COFFEE:  Oh they do that sooooooooo well.   Cafe Americano is close to what you expect from home only top notch beans. Many hotels have self serve machines in their breakfast rooms (which are common) with all the options: cappuccino, Latte, espresso, Americana - even the basic places make good coffee.

OLIVE OIL at every meal even if you don't ask for it. You always have to ask for (and may not get) burro (butter).  Get with the program- use olive oil. It is as detailed and defined industry as wine making. Almost every winery& wine shop sells many varieties of olive oil.  Most wineries farm their own.

WINE – well –that’s a whole other Blog. It is as superb, as available and even more affordable than you could imagine.  ‘Geographica Typica’ means the ‘wine of the region’.  Making that choice is a great rule of thumb to follow and always a safe bet if you’re not sure what to order.  The least expensive house wine is usually fabulous.  A couple of times we would make our choice and the waiter would say, “ That’s too expensive – try this one instead – it’s even better” –they never led us wrong.  YUM!

Overall – the Italians are welcoming and helpful.  If I had to choose only one adjective to describe them and their beautiful county it would be PASSIONATE!

They are passionate about the coffee they drink, the wine they make, the clothes they wear, the conversations they have, the music they listen to, the work they do and they way they play.  We could take some lessons from them on enjoying life to the fullest.

 When the going gets "Tough"...just call me.

Susan Tough

Monday, October 3, 2011

Is it a reliable source?

These notes are a follow up from my BLOG about first time Buyers from a couple of weeks ago and the many, many questions consumers can have when looking for and buying real estate.

While the internet is a useful tool for prospective home buyers, sometimes people forget about other aspects of the home searching process when looking for a home.
As useful as the internet is, and as much information as REALTORS(R) have placed online, buying a home is still a complex process, especially for those with little experience. 

Many studies show that people shopping for a home sometimes assume they can do everything themselves. Depriving themselves of the assistance of a real estate agent can make it harder for home buyers to find an appropriate property and leave them unprepared for what's next if they locate one.

Using narrow searches

One pitfall many home buyers fall into is relying on a single search engine to find possible homes. REALTORS® do not necessarily use every site available to them when they market a property so this may eliminate a lot of available prospects from the search.

While narrowing down your search criteria is a necessary step, focusing on one resource can remove good choices from consideration as easily as poor ones.

MSN Real Estate suggests selecting several search tools and using them in tandem. This can fill in gaps and allow home buyers to compare results. That way, the home buyer has a better overall picture.

Missing out on resources

Real Estate search engines consistently report that one major time-waster among home buyers is looking at homes they cannot afford. Getting pre-approved for a mortgage is one way to determine what price range to shop within and avoid wasting time on properties over the budget. My previous BLOG addresses the huge benefits of working with a Mortgage Broker – one Broker that knows all your information – rather than shopping it out through many.  Refer back to that BLOG to remind yourself of the benefits a preapproval from a trusted Mortgage Broker can bring to the success of a transaction.

Another resource home buyers may be unaware of is real estate auto search feeds or email alerts. They can help fill in knowledge gaps about the market and provide current information.

A good Real Estate Agent can have years of experience in a locality, and may know what neighbourhoods to look in just from a description and price range of what the home buyer wants. In addition to finding more listings and their ability to narrow things down more efficiently, agents stay informed about current developments in an area, which may be difficult for home buyers not from the area.

Communicate clearly and concisely with your REALTOR® – they are in the best position to weed out the bad and highlight the good – they will look at your options with a more open mind and help you to consider possible properties or areas you may not know exist.  After all, that’s what they are there for!  The Multiple Listing Service® provides much more detail to the professional REALTOR® than it does to the public. While you shop on your own - you could be making decisions based on incomplete information. 
Personally, I am extremely grateful that I am associated with what is considered to be the strongest and most reliable MLS® available to the public; it makes my job as Broker/Manager easier, and simply put, without their innovation, talent, and dedication to the partnership REALTORS ® would be dead in the water and your search for your next home would be much more frustrating.

When the going gets "Tough"...just call me.

Susan Tough

Thursday, September 22, 2011

Why should I use a Mortgage Broker?

At our office meeting the other day one of the agents stood up and gave his appreciation to our in-house mortgage broker for helping his clients acquire financing.  The story was that the clients had gone to their bank for financing for the home they wanted to purchase and were refused.  This agent then recommended they talk to a mortgage broker.  The mortgage broker was able to help them and even got them a better rate of interest. The clients were very happy to be able to purchase the home.

Here is a list of reasons to use a mortgage broker:

  1. You get independent advice on your financial options. As independent mortgage brokers and mortgage agents, they’re not tied to any one lender or range of products. Their goal is to help you successfully finance your home or property. They’ll start by getting to know you and your home ownership goals. They’ll make a recommendation, drawing from available mortgage products that match your needs, and you will decide together on what’s right for you.
  2. Save time with one-stop shopping. It could take weeks for you to organize appointments with competing mortgage lenders — and they know you’d probably rather spend your time house-hunting! They work directly with dozens of lenders, and can quickly narrow down a list of those that suit you best. It makes comparison-shopping fast, easy, and convenient. 
  3. We negotiate on your behalf. Many people are uncertain or uncomfortable negotiating mortgages directly with their bank. Brokers negotiate mortgages each and every day on behalf of Canadian home buyers. You can count on their market knowledge to secure competitive rates and terms that benefit you. 
  4. More choice means more competitive rates. They have access to a network of major lenders in Canada, so your options are extensive. In addition to traditional lenders, they also know what’s being offered by credit unions, trust companies, and other sources. And they can help you take care of other requirements before your closing date, such as sourcing mortgage default insurance if your down payment is less than 20% of the purchase price.
  5. Ensure that you’re getting the best rates and terms. Even if you've already been pre-approved for a mortgage by your bank or another financial institution, you’re not obliged to stop shopping! Let a mortgage broker investigate to see if there is an alternative to better suit your needs.
  6. Get access to special deals and add-ons. Many financial institutions would love to have you as a client, which is why they often offer incentives to attract creditworthy customers. These can include retail points programs, discounts on appliances, shopping clubs, and more. The mortgage broker does the math on which offers might be worth your attention when it comes to financing or mortgage insurance — so you get the perks you deserve. 
  7. Things move quickly! Their job isn't done until your closing date goes smoothly. They’ll help ensure your mortgage transaction takes place on time and to your satisfaction.
  8. Get expert advice. When it comes to mortgages, rates, and the housing market, they’ll speak to you in plain language. They can explain the various mortgage terms and conditions so you can choose confidently.
  9. No cost to you. There’s absolutely no charge for their services on typical residential mortgage transactions. How can a mortgage broker afford to do that? Like many other professional services, such as insurance, mortgage brokers are generally paid a finder’s fee when they introduce trustworthy, dependable customers to a financial institution. These fees are quite standard and nearly industry-wide so that the focus remains on you, the customer.
  10. Ongoing support and consultation. Even once your mortgage is signed and paperwork is complete, your mortgage broker is here if you need any advice on closing details or even future referral needs. They are happy to be of assistance when you need it.
I think that says it all.  Thanks to Mortgage Alliance Homeline Mortgage for providing this information to me.

When the going gets "Tough"...just call me.

Susan Tough

Thursday, September 15, 2011

Why do I have to tell you what they paid me?

Question:   We have a client who has a rental property and has offered our REALTOR® a referral fee if we send renters their way.

Is this allowed?

If a REALTOR® is not licensed to provide property management services and, as above, refer a tenant to a client – the referral fee (if received) must still be paid through the Brokerage as Property Management activity is included in the ‘trading services’ definition.

Licensed REALTORS® and Property Managers are under the obligation to report any and all remuneration (referrals, finder’s fees, commissions, expense reimbursements, bonuses) that is earned as a result of ANY ‘trading services’ activity, to their Brokerage.  Funds must be remitted to the Brokerage from the client and then paid out to the REALTOR® through the Brokerages Commission Trust account.  If a licensee accepts any remuneration directly from a client (Buyer, Seller, Landlord) they are in breach of their agent agreement to the client and the rules of their licence and Brokerage. Under the definition of Trading Services in section 1 of the Real Estate Services Act, “finding real estate for a party to acquire or finding a party to acquire real estate”, includes tenants and/or leases and as such licensees with a trading service license can provide this service however; they could not provide any of the other services defined under Rental Property Management Services in section 1 of the Real Estate Services Act they risk a suspension, fine, both or loss of their license issued by the Real Estate Council of British Columbia.

Something an innocent as a REALTOR® pocketing money a client reimbursed them for some special advertising they requested can cause the REALTOR® and the Brokerage many hours of investigation, reports and possible Hearing with the Real Estate Council.
To put it simply – Don’t do it!!

When the going gets "Tough"...just call me.

Susan Tough

Thursday, September 8, 2011

Out of the mouths of babes……

Do you remember when you bought your first home??  I do.   My REALTOR® was a girlfriend and long time, very experienced one.  She looked after everything.
 My daughter bought her first home a while ago.  She was not near me or in a city I was familiar with so providing her with my assistance was difficult.  I thought I had hooked her up with a good REALTOR® – turns out…..not so much.
After the process was done and I had returned from Israel– I received an education in “first time buying” from Samantha (my daughter).
As productive REALTORS® we do things over and over again – we often forget to address some of the many details we take for granted.

  • How do we know what inspector to use – are they all qualified and insured? What and when do I have to pay them?  Can we use any little thing that’s found in the inspection to get  out of the deal?
  • Do we get qualified for financing  first or do we look around for what we want first?  Do I need a Bank or a mortgage broker?  What is mortgage insurance and why do I need it?  It’s expensive – do I have to come up with that extra money or can the mortgage amount include it?
  • The down payment is a gift - how does it have to be recorded?  Is it OK that we receive it a couple of days before we have to close the purchase?  When do we need the deposit money to be available? Does it matter to our qualification for a mortgage?
  • Is an appraisal always required?  Why or why not and do we have to pay for it?
  • Property transfer tax – what is that? How do you avoid it?  Does it matter if you are a First time buyer in BC or anywhere?
  • Do I need a lawyer? Will I have to pay them – how much? – Before they do the work or does it come from the financing? 
  • How much time do we need from writing the offer, doing our due diligence, removing our subjects and then completing the purchase?
  • If we ask for the appliances can they switch them out for older ones – or different ones? 
  • How expensive is house insurance?  When do we have to have it arranged? What do we need to know about the house to tell the insurance company in order to get a quote?
  • Utilities – are they automatically hooked up?  What if we have never had a utility account before?
  • If the seller paid the property tax do we have to pay them back?  Are there different ways we can pay our property taxes every year?
  • What are strata fees?  What do you mean – there are rules we have to follow to live in a strata complex?

As a REALTOR® reading this, ask yourself if you have provided the answers to all of these questions in a timely manner to your Buyers.  Are they worried about things they have not communicated to you?  Do they even know what questions to ask? – Not likely.  With something as big and new as a first time home purchase, the clients have no idea how much they don’t know.  It’s the REALTORS® job to anticipate those questions, provide guidance and answers to help the clients be prepared for each step that comes along.  It will make the process much less stressful for the Buyer and likely facilitate the transaction closing smoothly, without issue.
As a Buyer reading this – did your REALTOR® have the answers to all of these questions?  DO you feel you were adequately prepared and helped through the process – did it go smoothly?  If you are just now contemplating a purchase – interview potential REALTORS® - ask them for references. Arm yourself with the questions above and be sure you feel confident they know the answers.   Purchasing a property, whether it’s your first or fifth, is a very big deal.  One that should be exciting, positive and with minimal stress (it’s hard to avoid completely).  The right REALTOR® can make a huge difference to your experience.
If you need help finding one or if you would like the answers to these questions – just ask. 

When the going gets "Tough"...just call me.

Susan Tough

Tuesday, August 23, 2011

What’s important is that the “story is told”!

I won’t quote all the studies that have been done but I will tell you, there are plenty.  They all say the same thing – the consumer shopping for real estate wants:
  1. photos – several
  2. detail – a lot of detail
  3. video tours –not photos turned into a slide show – actual video

So if video is Number # 3 on the consumers wish list – why are only on third of REALTORS® using them?

  • 1 out of 5 consumers between the ages of 50-64 are watching – today!
  • 1 out of 4 consumers between the ages of 30-49 are watching – today!

I recently sat in on a free on-line video seminar with the Matthew Ferrara Learning Network Video Tips & Tricks.

I took away some truly amazing stats on the Power of Video from Matthew’s presentation.

  • Over 2 billion videos are viewed every day. 
  • 144 million people watch video every month.
  • Canadians watch more online video than Television

They aren’t captured by photos set to music – they want the ‘story’ of the ‘home’.
Creating a video that works takes planning – you have to think differently.
What’s the message or property opportunity you are really trying to convey?

  • Create a story board – map out what you really want to get across to the consumer:
  • Never walk through with a list –“this is the bathroom... this in the living room....”
  • The truth be told – if the bathroom is not over the top spectacular – it should not be included in photos or video
  • Be sure it’s not garbage day with the garbage cans lined up and down the street 
  • Is the lawn cut or the driveway cleanly shovelled?
  • Have a conversation with the home owners- why do they love it
  • Have a conversation with the consumer watching 

Consider all parts of the video that present what is being conveyed about the subject:

  • Voice, 
  • Surroundings, 
  • Neighbourhood
  • Lighting  
  • Reflections

Modern ‘musts’ from those who study these things are :

  • The agent must appear in the video
  • Not just music playing but a narration – even off screen
  • HD quality
  • You Tube distribution

A good quality microphone is a great investment.  Some of today’s cameras that double as a camera and video camera fall short on their audio capability.  There are small wireless mics with a receiver available between $200 and $500.

Finding music to embed that does not have a copyright can be difficult and not always necessary.  The consumer wants to get the feel of the home and you are often the best medium to convey that.  If you are nervous, go slow.  Greet them on camera, Close on camera – these are called bumpers. You can then add a voice over to the video footage and talk about the lifestyle the buyer can enjoy as they live in this wonderful new home.

Natural light is the best to work with.  Not everyone can afford –or needs to hire a professional crew.  Pay attention the time of day, the weather, the sun.  Maybe the soft light of early evening shows one particular home off better than another.  Be careful not to catch yourself in the reflection of a mirror or polished surface.  If your in-house lighting is harsh it can create reflection of surfaces that record poorly digitally.

Preparing the home to put its best foot forward is something you want to do with/as the home owner for every listing, regardless of shooting a video.  Ensure you aren’t showing that rust stained drip spot on the sink or those broken switch plate covers.  Ensure the seller pays attention to the small details – they are usually quite easy to fix.  A clean and uncluttered home shows so much better in video – and in person.  “Mrs. Seller, Maybe some of those unique furniture pieces that mean so much to you need to be removed prior to listing – and videotaping.”  It’s an old saying but it is still very true ..........

“you only have one chance to make a good first impression”.

A tripod is important.  You never appear as steady as you think you are. distribution is available to anyone these days.  It’s free, huge, enjoys a lot of traffic, is GPS enabled and socially distributed. The title and tags used are very important for the video to be found.  Double check once it’s loaded, that it mapped correctly.  Decide if you will allow your videos to be embedded in other websites.  You can make that choice as you load your video.  It’s also a great idea to use built in traffic review – how many views? – from what medium?. You can learn a lot about the consumer you are attracting.

Coldwell Banker® Agents have a huge advantage over everyone else with their own channel, ON LOCATION®.

  • 2.6 million views since its inception
  • Coldwell Banker On Location owns 96% of the Real Estate Market Video content on
  • 51% of all online content viewed is video

The volume pushed through the channel helps with search engine optimization – meaning your videos are found before others and show higher in the search results.  ON LOCATION® is marketed by the Brand as well as every Coldwell Banker® office.  They help expose your videos.

While you consider your story board ask yourself, “How long should my video be?”  They should be as long as it takes you to tell the story of this particular home. Many will tell you, however, that much more than 2 ½ minutes and you’ll lose your audience. For expansive properties and very large homes you may need an extra minute or so to capture the feeling you truly want to convey.  You might want to consider doing three or four short 30 second bits on areas of the home.

Don’t be afraid to try different formats – what’s important is that the “story is told”.

When the going gets "Tough"... just call me.  Susan Tough

Thursday, August 11, 2011

Deposits – how much? – When?

I’m often asked by our REALTORS® “how much should my Buyer offer, or my Seller accept, as a deposit on a Contract of Purchase and Sale?”
Like many topics in real estate, there are numerous points to consider.

As the REALTOR®- Who are you currently working for – the Buyer or the Seller?

As the Buyer: 

  • what amount of funds are immediately available to you?
  • Are you wanting to show this seller you have good intentions and are a serious purchaser.
  • What are you prepared to risk?

As the Seller:  

  • how long away is possession?
  • How serious do these Buyers appear to be?
  • What would be fair compensation should the Buyer fail to complete?

The process for the handling of the deposit funds is important to know – regardless who you are in the transaction.  The Buyer’s real estate Agent will collect a personal cheque (not ideal), a certified cheque (much better) or a bank draft (the best option for all parties concerned) and it will be payable to the name of  their REALTORS® real estate Brokerage.

As soon as the cheque is given to the representing REALTOR®, they MUST immediately turn it into their Brokerage for deposit into the Trust account – along with a copy of the accepted offer the deposit was taken for. They don’t hold it in their file or pocket until subjects are removed, or until the next time they make it into the office.  Holding clients’ money once they are in receipt of it is a serious breach of a REALTORS® duty and obligation.

The Brokerage will deposit the funds into a Trust account.  Trust Law governs what can be done with that money after that.  The only way the Brokerage can remove the money from their trust account is: 

  • receiving written approval from all parties to the contract, 
  • receiving written notice and instruction from the lawyers 
  • or receiving written notice and instruction from  the courts.

Ideally, the subjects are removed by the Buyer and the contract goes Firm.  The Brokerage will receive written instruction from the Lawyers conveying the transaction to release those funds into their trust account and the deposit becomes part of the Buyers’ purchase funds that are paid through to the Seller at completion.

Now – back to the questions above.
If a REALTOR® is working for their Buyer, they would rather not require their Buyer to put up any deposit until they know the Buyer will remove all their subjects and make the firm commitment to purchase the property.  The Buyer may have their deposit funds tied up in RSP’s or GIC’s and can’t access the funds immediately at acceptance.  Some Buyer’s have given a deposit cheque thinking it just sits in the file and is not cashed until completion – they are very surprised when they get a call from their bank saying the cashing of that cheque has overdrawn their account.  It’s important the REALTOR® makes it clear that once we are in receipt of the funds – the cheque will be deposited and cashed.

If a REALTOR® is working for their Seller – they would be considered remiss, by not insisting that a deposit be taken upon acceptance.  The Real Estate Council and Continued Education Training, teaches REALTORS® that their sellers position is not adequately protected if no deposit is taken at acceptance.

The opposing sides to this often comes to light when a Buyer provides an initial deposit amount upon acceptance, doesn’t remove their subjects for one reason or another, and the Seller, upset that the deal is falling apart, refuses to sign the General Release.  This form is the “written permission from all parties to the contract” needed by the real estate brokerage to release the funds back to the Buyer.  Now, the Seller doesn’t necessarily have a legal right to refuse the return of the deposit but sometimes they believe the Buyer didn’t perform their due diligence adequately and feel the need to cause a fuss.  This is not probable…but possible. The fact that it could happen should be explained to the Buyer – rather than the REALTOR® saying, “Oh of course you’ll get your money back”. REALTORS® are usually successful in helping all parties involved to see the reasonable side of things, the form is signed and the funds returned to the Buyer.

The contract is often drafted that once the Buyer removes their subjects, another deposit amount is paid to the Brokerage.  This is added to the first amount received at acceptance – if it was – and the total deposit is sent through to the conveyancing lawyer to form part of the Buyer’s purchase price.  The lawyers will instruct the Brokerage to hold back the commission amount due to their REALTOR® and pay the balance through for the transaction.

If the Buyer, after the deal has gone firm, then defaults and fails to close the purchase, the deposit amount is usually claimed by the seller.  In this case, the Seller has a stronger legal position to lay claim to those funds.  The release of the deposit from the lawyers trust account is then negotiated the easy way or the hard way, most often by the lawyers acting for both sides.  When a Buyer fails to close on firm offer, they rarely get their deposit money back.

With all that in mind – the last question is “HOW MUCH?” Clients coming from different trading areas may have thoughts on what they feel is fair and expected.  The REALTOR® is in the best position to provide guidance.  If the offer is one of two or three others, the amount of the deposit can speak volumes to a deciding Seller – or judge, in the case of a foreclosure transaction.  The past real estate experiences either the Buyer or the Seller can affect their opinion of what to ‘give’ or ‘accept’.  The value of the property has a huge bearing on the amount of a deposit that is deemed ‘adequate’.  10%, give or take, is often a bench mark.

All circumstances vary and like all other terms in the Contract of Purchase and Sale, the Deposit can have an impact on the success of the negotiation.  A good REALTOR® knows that and can provide valuable guidance to their clients.

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Susan Tough