Answering the most common questions about real estate deposits!

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Today we are here to answer the 4 most important questions about real estate deposits. There are key things to know if you’re a buyer, as well as key things for sellers to know. Without further ado, here they are:

1. How much does my deposit need to be?

In Toronto, 5% is a typical deposit, but sometimes you can get away with 4%. If you are a seller, you want the highest deposit possible for security against the buyer possibly changing their mind about buying. 

2. When does the deposit need to be provided to the seller?

In the standard agreement of purchase and sale, the fine print states that the buyer has 24 hours upon acceptance of an offer to provide the deposit. If you are a buyer competing with other offers, however, it’s smart to have certified funds available to give to the seller with your offer. This way the seller won’t have to worry about a buyer who might not show up the next day with the certified funds. Sometimes a seller will even take the 2nd highest offer if that buyer has certified funds when the highest offer only has a regular cheque that still needs to be cashed, or the seller has to take a risk on the buyer to show up the next day with certified funds.

3. Can a buyer get their deposit back before a sale goes firm?

Yes they can. If a buyer purchases a property based on financing or a home inspection for example, and is not satisfied with either, the buyer can back out of the deal and get their deposit back with no penalty. This leads to the final and most common question we hear.

4. If a sale is firm, can the buyer change their mind and get the deposit back?

The answer in most cases is no. If the buyer did end up not wanting to close on the property, not only would they most likely lose the deposit, but the seller could also sue for further damages. Some circumstances will allow a buyer to back out and get their deposit back, such as in cases where the seller or seller's agent had made misrepresentations about a property or not disclosed a critical piece of information that needed to be disclosed.

If you’re planning on selling over the next few months, properties are selling very well right now in August, and we expect that to continue into the fall. It is still a seller's market for most neighbourhoods in the Toronto area. If you have any questions, feel free to give us a call. We would love to speak with you anytime.

How We Help Our Real Estate Investor Clients Profit!

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 Our investor clients say they love the beginning of the month when they receive their rental payments in their bank accounts for their investment properties. Today's video is dedicated to helping you find great tenants that pay great rents, pay on time and keep your home in good order.

The first thing you need to do is to be ready to market your property immediately after a tenant tells you that they are going to move out. You don't want your property to sit vacant at any point in time, and we help our clients secure great tenants with our marketing program and very thorough screening process.

The first thing we do in the screening process is to run a credit check report and look for scores in the 700+ range. We want to ensure that they can pay rent on time and that they have a good credit history.

The second thing we ask for is a letter of employment, indicating their salary and whether or not they have solid, full-time employment.

References from previous landlords are important too. We want to make sure that previous landlords didn't have problems with them and it's also important to meet with the tenant before you sign a lease just to make sure that you get a positive first impression.

If you are thinking of completing any renovations prior to your next tenant moving in then you can consider such items as replacing old carpet or floors or painting to allow you to keep your property at a good level or repair and possibly even increase the rent.

Before the tenant moves in it is a wise idea to take pictures of your property to ensure that the state of the property at the end of the lease is the same as when you rented it to them.

One of the most important parts of the process is preparing the lease, and we will do that for you. Because the Landlord And Tenant Act favours the tenant, we want to make sure that you have all the appropriate clauses in your rental agreement to best protect you.

Please don't hesitate to give us a call if you need assistance with buying an investment property. We would love to help you make a profit with owning real estate investment properties!