First Time Home Buyers – 30 Year Amortization

General Nicole Perri 11 Oct

Hello First Time Home Buyers!! On December 15th, 2024 the housing market just got a lot more accessible for you.

This major mortgage change allows you to purchase a home with less than a 20% down payment and have access to a 30-year amortization.

What does that even mean???

With a 30-year amortization, it increases affordability allowing you to either:

Purchase a higher value home you otherwise would not have qualified for OR
Lower your monthly payments compared to the payment of a 25-year amortization.

This is HUGE for first-time buyers who were not qualifying for a mortgage with increased housing prices we see in Ontario. This change alone will help you get out of your parent’s basement and into your own home!

Of course with the good news, there are always some considerations. With a loan that is 30 years long compared to 25 years means that you will be paying more interest over the life of your mortgage. You will also need to consider that you will be in debt for 5 years longer as well. Of course, there are ways to lower both of these two negatives, reach out to find out more on how we can shave a few years off of your mortgage by making 1 simple tweak.

Reach out to today to get started on your application, let’s get you into your home!

Nicole Perri, Mortgage Agent Level 2

Email: nperri@dominionlending.ca

Phone: (289) 828-6425

Your New Home Moving Checklist

General Nicole Perri 18 Jul

Your New Home Moving Checklist

Congratulations on your decision to buy a new home! Over the years we have seen clients begin this journey with so many questions – and we are here to help! As you prepare to move into your new home, we know there’s a lot to consider and even more to do.

In this edition, we are sharing our new home moving checklist so you can rest easy at night knowing you aren’t forgetting anything crucial.

The Timeline

8 Weeks Before the Move: Start Planning

Create a Moving Budget: Save yourself the financial stress closer to your moving date by budgeting the costs you will need in the next couple of months. Think about hiring movers, buying packing supplies, and other expenses you will come across.

Research Moving Companies: Start investigating possible moving companies. We always recommend reading online reviews and asking friends and family. Get quotes from at least 3 companies and always ensure they are licensed and insured.

6 Weeks Before the Move: Sort, Purge & Organize

Sort Your Belongings: Go through every room of your house and decide what you want to keep, donate and discard.

Use it or lose it: Start using cleaning products, perishable foods, items in your freezer and cupboards.

Purchase Packing Supplies: Stock up on boxes, packing tape, bubble wrap, markers, etc. You can find free boxes at local stores or purchase them from moving companies.

Organize & Update Important Contacts:

School Records: Register your child to transfer to their new school if leaving your current area. Then go to your child’s school and arrange for their records to be transferred to the new school.
Veterinarian: Contact your vet and send your pet’s records to the new vet clinic.
Insurance: Contact your insurance provider to update your home insurance policy to your new address.

4 Weeks Before the Move: Schedule & Start to Pack

Book your moving company or arrange for a truck rental.

Start Packing: Begin putting items you don’t use frequently into boxes and LABEL them. Think of items like your seasonal clothing, books, and decor.

Schedule disconnection/connection of utilities at the old and new house (to end the day after you move):

Home Phone – Online, by phone or in person
Internet – Online, by phone or in person
Cable – Online, by phone or in person
Water – Online or by phone
Gas – Online or by phone
Electricity – Online with your local electricity company or by phone
Water Heater Rental – Online or by phone

Continue to Organize and Update Important Contacts:

Subscriptions (Physical): Magazines, books, newspapers, etc – Online, by phone, in person or via email
Ontario Works – With your caseworker or at a Social Assistance Office
Employment Insurance (EI) – Online using your My Service Canada Account, by phone at 1 (800) 206-7218, or in person at a Service Canada Centre
Old Age Security – By phone at 1 (800) 277-9914, mail your documents to the nearest service Canada Centre or visit them in person
Canada Post: Fill out a “Change of Address” form at Canada Post in-store or online to have your mail forwarded to the new address.
Charities – Online or by phone

New Address Stationary: Order new address labels or stationary as needed.

Cleaning and Repair Services: Arrange for cleaning and house repairs if needed before the move.

2 Weeks Before the Move: Final Preparation

Schedule for Move-in Day: Book the day off work for moving day and hire a babysitter if needed.

Confirm Moving Details: Call your movers to confirm logistics and make any last-minute adjustments if necessary.

Meal Prep: Plan your meals so you do not have leftover food to pack.

Return All Borrowed Belongings: Library books, items from your neighbours, etc.

Notify Friends & Family: Tell your friends and family about the change of address.

Start your Essentials Bag: Set aside fresh towels and linens to be used on moving day so you aren’t searching for them after a long day.

Continue to pack and clean as you go.

Take furniture apart if necessary.

Create a Home Owner Package: Compile a package of appliance warranties, instructions, etc for the new homeowners.

Continue to Organize and Update Important Contacts:

Service Ontario: Update your Drivers license, Heath Card/OHIP, Vehicle and land registration, and Ontario Photo Card – Online or in person at a service Ontario location
Banks – Online account, in person, or over the phone
Credit Card Companies – Online account, in person, or over the phone
Canadian Pension Plan (CPP) – Over the phone at 1 (800) 277-9914 or in person at a Service Canada Centre
Cell Phone Provider – Online, in person, or over the phone or
Boat Permit – Online on the Pleasure Craft Electronic Licensing System
OSAP Loans and Bursary – Online through the OSAP website
Scholarship Programs – Online or by phone
NEXUS – Online or by phone
Household Services (Cleaners, Gardeners, Maintenence, etc.)

The Week of the Move

Defrost the freezer, and clean the fridge and oven.

Get payment ready for the moving company.

Make a schedule/plan for moving day.

Continue To Pack an Essentials Bag: Have toiletries, a change of clothes and important documents along with the linens and fresh towels you already packed.

Continue to clean the house as you pack.

Set Aside boxes and items that you’re moving yourself.

Final Walkthrough: Before leaving your old home, walk through every room and ensure nothing is left behind. Turn off all lights and lock all doors and windows before leaving.

Once You’ve Moved In

Ensure all appliances and fixtures work on move-in day.

Change all batteries in all smoke and carbon monoxide detectors.

Pick up the garbage collection calendar from the city.

Introduce yourself to your neighbours!

Continue to Organize and Update Important Contacts:

Subscriptions / Streaming: Netflix, Disney +, Prime, Spotify, Apple, etc. – On your online account or on the phone
Rewards programs – Online or over the phone
Gym Memberships – By Phone or In Person on your last visit before the move
Elections Canada – Online on the Elections Canada website
Elections Ontario – Online by updating your voter registration on the Elections Canada Website
Canada Revenue Agency (CRA) – Online or by phone at 1 (877) 899-3599
Canadian Firearms Program of the Royal Canadian Mounted Police (Armed Permit) – Online or by phone at 1 (800) 731-400
Employer – Contact your HR department either by phone or in person
Pharmacist – On your last visit before the move
Dentist – On your next visit
Doctor – On your next visit
Library – On your next visit or by phone
University – Online or by phone to your registrar’s office
Car Manufacturer – By phone
Car Dealership – By phone or in person
Union – By phone call your local
Professional Associations – By phone or in person

You did it!

Congratulations! You have now purchased your new home and completed all the steps to get there! You’ve navigated through the process, tackled the checklist and now it’s time to enjoy all of your hard work! Here’s to a fresh start, wonderful moments and endless joy in your new home.

Congratulations, once again!

Nicole Perri, Mortgage Agent Level 2

5 Tips to Manage Financial Stress

General Nicole Perri 6 Jun

With the continued rise of inflation, interest rates and the overall cost of living, uncertainty is high among Canadians. But don’t fret! Here are some tips to help you manage your financial stress and power through these latest economic changes:

Prioritize What You Can Control

It can be easy to feel like you have no control over your financial situation, especially in today’s economy. However, dwelling on things you cannot fix will only cause more stress. Instead, we recommend focusing on what you can control within your situation. For instance, check out your phone bill and services to see if you can reduce the cost (even temporarily). Review your grocery bill and look for stores with sales, switching to cheaper brands or perhaps buying in bulk. You’ll not only save money, but you will feel like you have more control to help reduce stress.

Pay Essential Bills

If you’re struggling to pay your monthly bills, prioritizing them can help you gain some control. Knowing which bills are most important to pay first can ensure you’re not scrambling to decide what to pay. Prioritizing your bills can also help you uncover unnecessary spending and you may find something that can be eliminated, even temporarily.

Automate Payments and Savings

Do you find yourself struggling to keep up with your bills and payments, or keep saying you’ll save money but aren’t? Consider automation for your finances a step in the right direction. Paying your bills on time will help reduce stress and protect you from wasting money on penalties for missed payments. You can also set up automatic money transfers on the days you are paid to move funds into a separate, savings account before you even see it. You’ll reduce the likelihood of skipping adding to your savings that month.

Find Ways to Earn More Money

When cash flow is a problem and you are feeling the strain of trying to afford your current lifestyle, looking for ways to earn additional money can be a lifesaver! Consider part-time work for the weekends, consulting in your area of expertise or picking up extra hours at your current place of work. Now is also a great time to discuss with your manager if you are due for a raise.

Talk to Your Mortgage Professional

For most people, their mortgage is their largest monthly bill. If you are feeling the financial crunch, now is a great time to talk to your mortgage broker about potentially changing your payment schedule or even looking for a different mortgage product with better rates (ideally if you are at the end of your term). Do not hesitate to be honest about your situation and ask what your options are. Regardless of where you find yourself financially, there are often many solutions to help reduce and resolve your stress and ensure that you have healthy monthly cash flow.

What You Need to Know About Smart Homes

General Nicole Perri 10 May

Technology is constantly evolving to our needs as a society and individuals. One of these exciting developments has been the creation of smart homes.

What is a Smart Home?

A smart home is where homeowners can control thermostats, lighting, appliances and other devices remotely. This can be done over the internet through a smartphone or tablet. These can be set up through wired or wireless systems, allowing you full control wherever you are.

Benefits of Smart Homes

Easy Home Management

One of the biggest and most appealing aspects of a smart home is the easy home management it provides. The integrated systems give you full control over every smart aspect of your home. It also allows you to view insights and data, which can help you analyze daily habits and energy use.

Energy Savings

Smart homes provide opportunity for extensive energy efficiency and cost savings, depending on how you use the technology. Precise control over heating and cooling systems allows the system to learn your schedule and set preferences for the highest energy efficiency outcome. In addition, you can manage lighting to turn on and off at specified times to prevent energy waste. These homes are often stocked with top-of-the-line appliances and electronics, with improved energy efficiency leading to further cost savings.

Increase Appliance Functionality

Using smart appliances and electronics allows you to get even more out of these household tools. For instance, a smart oven can help you cook your chicken to perfection. A built-in audio system can provide the perfect atmosphere for any party. Plus, connecting your appliances and other systems will improve automation and give you even more to love about your home.

Flexibility

With the ever-changing smart home technology, this affords you greater flexibility when it comes to your home and your changing needs. Smart homes are typically highly flexible, allowing you to easily swap out old models for updated versions.

Improved Home Security

Incorporating security and surveillance features, such as cameras, into your smart home network will help you maximize your home security. There are options for home automation systems containing motion detectors, automated locks and surveillance cameras so that you always know what is going on. You can even set it to receive security alerts in real-time!

Growing Industry

Another advantage to smart homes is that this is a growing industry. Technology is constantly being worked on and improved. This means bigger and smarter tech will be available in the coming years, allowing for even greater cost savings, automation and control.

Considerations for Smart Homes

I bet you are probably pretty excited now that you know what smart homes can do! However, before you jump in there are a couple of considerations to keep in mind.

What are your future plans?
How much automation do you want/need?
What systems are most important to you (lighting, audio, climate, security, etc)?
What is your budget?

It is important to understand how much technology you are comfortable with, and what systems are most important to you. This way you can create a plan and a budget to upgrade your current home.

Smart technology has come a long way! Smart homes are already incredibly intuitive and automated, with more technology and advancements to come. While some of us will always remain the “labour of love” type, many of us have less time and energy than we used to. Smart homes not only help save you money but time and energy too so you can focus on more important things.

What are my Amortization Options?

General Nicole Perri 8 Mar

Your mortgage amortization period is the number of years it will take you to pay off your mortgage. Depending on your choice, the amortization period will affect how quickly you become mortgage-free. It will also determine how much interest you pay over the lifetime of your mortgage. A longer lifetime equals more interest, whereas a shorter lifetime equals less interest but also bigger payments.

Amortization Benchmarks

Let’s start by looking at the mortgage industry benchmark amortization period. 25 years is the standard that is used by most lenders when it comes to discussing mortgage products. It is also typically the basis for standard mortgage calculators. While this is the standard, it is not the only option when it comes to your mortgage amortization. Mortgage amortizations can be as short as 5 years and as long as 50 years!

Benefits of a Shorter Amortization

Opting for a shorter amortization period will result in paying less interest overall during the life of your mortgage. Choosing this amortization schedule means you will also become mortgage-free faster and have access to your home equity sooner! However, if you pay off your mortgage over a shorter time frame, you will have higher monthly payments. A shorter amortization may not work for you if your income is irregular, you are at the maximum end of your monthly budget or this is your first home. Since this leaves you with more cash flow tied up in your monthly mortgage payments.

Benefits of a Longer Amortization

When it comes to choosing a longer amortization period, there are still advantages. The first is that you have smaller monthly mortgage payments, which can make home ownership less daunting for first-time buyers. It can also free up additional monthly cash flow for other bills. Secondly, choosing a longer amortization can often get you into your dream home sooner. With your payments happening over a longer period, you may qualify for a higher value mortgage than a shorter amortization.

Let’s Chat!

We would be happy to help pick your amortization that best suits your unique requirements and ensure you have adequate cash flow. It’s important to mention that you are not stuck with the amortization you choose at the time you get your mortgage. You can shorten or lengthen your amortization, as well as consider making extra payments on your mortgage , at a later date.

Ideally, you are re-evaluating your mortgage at renewal time (every 3, 5, or 10 years depending on your mortgage). It’s a great time to review your amortization, payment schedules and make changes that are no longer working for you.

If you have any questions, don’t hesitate to reach out to Nicole today!

How to Avoid Costly Mistakes When Building a New Home

General Nicole Perri 6 Feb

Building a new home is super exciting as you begin to create the perfect space for you and your family. However, building a home is not without its costs and potential surprises. To mitigate bumps on your homebuilding journey and avoid costly mistakes, consider the following tips:

Set a Realistic Budget

When building your own home, it is vital to be realistic about your budget and what you can afford. Make a list of wants versus needs to determine what is required, and where you can spend extra money should your budget allow for it. When constructing your budget, don’t forget to include construction costs like materials, labour, permits, inspections, landscaping and unforeseen contingencies. The contingency fund should be approximately 10-15% of your budget put aside to cover unforeseen issues or changes.

Hire Reputable Individuals

From your architect, and contractor to your landscaper and inspector, it’s vital to have the right people in the right positions. This will ensure that you not only get the best advice, but experienced individuals will also help to steer you through the process and mitigate potential issues. Be sure to do your research, ask for references and ensure the individual(s) you hire are licensed and insured.

While you’re researching individuals, it can also be a good idea to get multiple quotes to weigh your options.

Review Contracts Carefully

Read and understand all contracts and agreements thoroughly between your contractor and yourself, your designer, your home inspector, etc. Ensure that everything is in writing and that you both are on the same page regarding expectations, timelines, and costs.

Make and Follow Your Plan

Once you have your budget and the right people on the project, it is time to plan. You will work with an architect or designer to ensure that your home aligns with your needs, lifestyle and budget. This should also include future plans – do you want to have children? Plan on adopting a pet or two? Do you possibly need space for an older family member in a few years? Getting this right from the beginning will help to avoid potential changes to the plan, timeline, and cost down the line.

Choose Your Materials Carefully

Investing in energy-efficient features and materials can help you reduce long-term utility costs. While initially, these installations may be more costly, they will work to save you money in the long run. Whenever possible, make sure these materials are also as durable as possible to ensure longevity and low maintenance requirements.

Secure the Necessary Permits

Ensure that you obtain all required permits and approvals before starting construction. One of the most important reasons to do this is to ensure that the work being done is safe. Having permits and inspections is also vital to ensure you can get insurance on your new build. Non-permitted renovations can result in trouble securing insurance, on top of fines and other potentially costly issues.

Invest in Inspections

Having inspections done throughout the process of building your home can save you issues down the line by ensuring that all the installations are done correctly and safely and that your house meets the proper codes for electrical, plumbing, etc.

By taking proper steps and being proactive throughout the home-building process, you can minimize the risk of costly mistakes and ensure that your new home meets your expectations while staying within your budget.

Mortgage Types 101

General Nicole Perri 8 Dec

Get to know the important basics before you choose your mortgage.

You have to select what is most important to you – lower rates or flexibility. Before you choose a mortgage, take some time to study the different mortgage types:

Closed Mortgage

If you want consistency concerning rates and the length of your mortgage agreement, a closed mortgage is best for you. Interest rates are typically lower (and do not change with the length of the term). However, a closed mortgage does not offer much flexibility in paying off your mortgage sooner – with the exception of a once-a-year lump sum payment up to 20% of your entire mortgage.

Predictability and consistency for payment amount
Often comes with lower interest rates
Limited flexibility with paying down the mortgage faster
Cannot change interest rate during the term of the mortgage

Convertible Mortgage

Want the best of both worlds? Then consider a convertible mortgage. Convertible mortgages are flexible yet offer minimal risk. Often with a lower interest rate than an open mortgage, convertible mortgages provide the opportunity to switch to a longer-term closed mortgage without penalty.

Provides an opportunity to take advantage of lower interest rates and switch to a closed rate without penalty
Offers lower interest rates than an open mortgage

Open Mortgage

If you are looking for flexibility with regard to paying off your mortgage, consider an open mortgage. No penalty is incurred if you decide to make lump sump payments or pay off your mortgage before the term expires; however, this flexibility often comes with a higher interest rate – which can result in higher monthly payments.

Maximum flexibility; no penalty for making lump sum payments or paying off your entire mortgage before the term expires
Higher interest rate
Best for those looking to pay off their mortgage as soon as possible

Still not sure which type of mortgage is best for you? Contact Nicole Perri today!

6 Things For Co-Signers To Consider

General Nicole Perri 14 Nov

Are you thinking about co-signing on a loan? If you’re looking to help out a family member or loved one, a co-signer can help overcome stress testing and borrowing limits.

However, it is important to be aware of the implications when co-signing on any loan.

Credit History

If you are acting as a co-signor on any loan, you allow them access to your credit history. This means, if the borrower is late on payments or have any issues with repayment, it will affect your credit.

Legal Implications

Always be sure to understand the taxes, legal and estate situations that accompany co-signing, should the borrower fail to pay. A lawyer can help you review the loan agreement and advise of any noteworthy items.

Timeline

Understand how many years the co-signer agreement will be in place and what your options are for making changes. This will help you determine the scope of the loan and if you can make changes at any point should the borrower become able to assume the entirety of the mortgage on their own in the future.

Personal Income Tax

Depending on the loan, you may have an obligation to pay capital gains taxes. Hence, it’s a good idea to review your tax situation with an accountant before signing off on the agreement to ensure no surprises.

Relationship with Borrower

This is a vital consideration for going in on any loan. Do you trust the individual? Are you aware of their financial situation? Are you willing to potentially put yourself at risk to assist them? These are all important questions as many of us may want to help out family or loved ones, although it is important to ensure that the individual is reliable.

Future Finances

Lastly, consider your future finances and if you have any plans that could be impacted by an additional loan. How much flexibility do you need for yourself and your family? If you have plans to refinance for a renovation or make changes to your mortgage, being a co-signor could affect your options.

In summary, co-signing for a loan always requires careful consideration as it is a large responsibility. However, when done correctly with people you trust, it’s a great way to assist loved ones with homeownership. If you are considering co-signing on a loan and have any questions, please don’t hesitate to contact Nicole Perri today!

Mortgage Portability

General Nicole Perri 6 Oct

When it comes to getting a mortgage, an overlooked element is the option to port the loan down the line.

Porting your mortgage is an option within your mortgage agreement. It enables you to move to another property without having to lose your existing interest rate, mortgage balance and term. Thereby allowing you to move or ‘port’ your mortgage over to the new home. Plus, the ability to port also saves you money by avoiding early discharge penalties if you break your mortgage before the term is up.

Typically, portability options are offered on fixed-rate mortgages. Lenders often use a “blended” system where your current mortgage rate stays the same on the mortgage amount ported over to the new property and the new balance is calculated using the current interest rate. When it comes to variable-rate mortgages, you may not have the same option. However, when breaking a variable-rate mortgage, you would only be faced with a three-month interest penalty charge. While this can range up to $4,000, it is much lower than the average penalty to break a fixed mortgage. In addition, there are cases where you can be reimbursed the fee with your new mortgage.

There are a few considerations to keep in mind when porting your mortgage:

Timeframe

Some portability options require the sale and purchase to occur on the same day. Other lenders offer a week to do this, some a month, and others up to three months.

Terms

Keep in mind, that some lenders don’t allow a changed term or might force you into a longer term as part of agreeing to port your mortgage.

Penalty Reimbursements

Some lenders may reimburse your entire penalty, whether you are a fixed or variable borrower if you simply get a new mortgage with the same lender – replacing the one being discharged. Additionally, some lenders will even allow you to move into a brand-new term of your choice and start fresh. Keep in mind, that there can be cases where it’s better to pay a penalty at the time of selling. This will get you into a new term at a brand-new rate that could save back your penalty over the course of the new term.

To get all the details about mortgage portability and find out if you have this option contact Nicole Perri today!

Co-Written By DLC Marketing Team & Nicole Perri

Market Beware: Subject Free Offers

General Nicole Perri 8 Sep

When it comes to purchasing a home, most offers include conditions or subjects. These are requirements that need to be completed before the sale can be finalized and the property is transferred. Some of the most common subjects include:

Financing approval
Home inspection
Fire/home insurance protection
Strata document review if appliable

The purpose of these subjects is to protect the buyer from making a poor investment. It can ensure that there are no hidden surprises when it comes to insurance or the state of the property.

These conditions are written up in the purchase offer with a date of removal. This is agreed to by the seller before the sale is finalized. Assuming the subjects are lifted by the date of removal, the sale can go through. If the subjects are not lifted, the buyer can waive the offer and the purchase becomes void.

However recently, especially in heightened housing markets, there has been an emergence of subject-free (or condition-free) offers. These are purchase offers without any requirements of criteria. Essentially, what you see is what you get.

Listed below are the risks and outcomes of subject-free offers for buyers and sellers:

Pros of Subject-Free Offers

Buyers: The main benefit of a subject-free offer for a buyer is the ability to “beat the competition” in a heated market. However, it is not without risks.
Sellers: Typically, a subject-free offer will include a competitive price, willingness to work with the dates the seller prefers, and evidence that the buyer has already done as much research as possible. Due to a purchase of another home or a need to move immediately, subject-free offers expedite the deal.

Cons of Subject-Free Offers

For Sellers: When it comes to the individual selling the property, there is less risk with subject-free offers but not zero. While the benefit is there is no wait to accept the offer, they don’t know if financing will come through.

For Buyers: As a buyer submitting a subject-free offer, you are assuming a great deal of risk in several areas including financing, inspection, and insurance:

Financing

While buyers may feel that they have a pre-approval and so they don’t require a subject to financing, it is important to recognize that a pre-approval is not a guarantee of financing. The financing is subject to the lender approving the property and the sale; from the price and location to type of property or other variables the lender deems important. By submitting a subject-free offer without a financing guarantee, there is a risk that the deal can fall through. Further, in deals with a deposit, the buyer may lose their deposit if the offer falls through. This amount can vary in the thousands and is typically a percentage of the purchase price or down payment.

Inspection & Insurance

A buyer assumes massive risk when opting to skip the home inspection and home insurance protection subjects to have the offer accepted. They do not know what they are getting and whether or not the property is up to code for insurance.

Due Diligence

With subject-free offers, there is no opportunity for due diligence after the offer has been made. This requires the buyer to do all their research before their initial bid. Since it is firm and binding, a buyer who backs out will likely be met with severe legal ramifications. Submitting an offer without subjects is not due diligence and it is at the buyer’s behest.

Financing Around Subject-Free Offers

When submitting a subject-free offer, it is up to the buyer to do their due diligence before submitting. They will need to identify what the lender is looking for to make sure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a subject-free offer should do their very best to secure financing beforehand.

Contractual Obligations

Be mindful when it comes to purchasing offers versus purchase agreements. Purchase offers are written proposals to purchase, while purchase agreements are full contracts between buyer and seller.

The purchase offer acts as a letter of intent, setting the terms you propose to buy the home. If financing falls through, then the contract is breached and this is where the buyer may lose the deposit.

It is also important to be aware of a breach of contract if a seller chooses to take action. For example, if you submit a subject-free offer of $500,000 and cannot secure financing for that offer and the seller turns around and is only able to get a $400,000 deal with another buyer, they could potentially sue the initial buyer for the difference due to breach of contract.

Preparing a Subject-Free Offer

Despite the risks, there are some things you can do to mitigate potential issues, such as:

Get a Pre-Approval: Again, this is not a guarantee of financing when you make an offer.
Financing Review: Identify what the lender is looking for to make sure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a subject-free offer should do their very best to secure financing beforehand.
Do Your Due Diligence: Look into the property and determine if there have been major renovations or a history of damage. This could come in the form of a Property Disclosure Statement. While this statement cannot substitute a proper inspection, it can help identify potential issues or areas of concern. If possible, conduct an inspection before submitting your bid/offer.
Get Legal Advice: This can help you determine the potential risks and ramifications of the offer.
Title Review: Be sure to review the title of the property.
Insurance: Confirm that you can purchase insurance for the home. Although we may require an inspection, it can be substituted by a recent depreciation report.
Strata Documents (if applicable): Thoroughly review strata meeting minutes and any related documents to determine areas of concern.

Final Thoughts

There are ways to make subject-free offers safer, but it is still risky. Ultimately submitting an offer with subjects gives you the time and ability to gather information on the property.

If you are intent on submitting a subject-free offer, be sure to discuss it with your real estate agent. They can determine if a subject-free offer is necessary, or if a short closing window would work instead. A good realtor will keep you informed of potential interest and other bids during the process as well. Their goal should be to maximize your opportunity and minimize your risk. In addition, before making any offers, be sure to check with Nicole Perri to discuss your financing and mortgage options!

Written By Our Marketing Team.

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