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Frequently Asked Questions
Real Estate related freequently asked questions and answers
1. Who pays the realtor's commission?
2. How much deposit is required?
3. What information is needed to apply for a mortgage?
4. Are basement apartments permitted in Greater Toronto?
5. What are the Usual Adjustments?
6. Are basement apartments permitted in Greater Toronto?
7. Can I apply for a mortgage to purchase a property before I?ve found one?
8. Are there programs for mortgage applicants who have been turned down elsewhere due to income, credit, length of time on the job, being a new resident, past bankrupt, self-employed, on commission, divorced or for other reasons?
9. Are Power Of Sale or Foreclosures a good deal?
10. What is the difference between a freehold and a condo townhouse?
11. I am immigrating to Canada. Are there any restrictions on me in regards to residential real estate?
12. What are Buyer's and Seller's Markets?
13. Can I buy a home with no-money-down?
14. Can I buy an Investment Property in Ontario if I am not a Citizen or legal resident of Canada? Who can help me if I want to buy or sell an investment property in Canada? Can I get the finance for the Investment Purchase
Real Estate related freequently asked questions and answers
1. Who pays the realtor's commission? 
The commission is usually paid by the seller out of the funds from the transaction The amount of commission is stipulated in the listing agreement and on MLS listings it is shared between the listing broker and the brokerage bringing the offer from the buyer. There can be other scenarios where the buyer pays his agent but this is rare. One party can only pay the agent. Agents are paid commission, a percentage of the sale of a property. They do not receive salary and do not get paid unless they sell something. Most agent pay for all of there own expenses, including advertising, web presence, automobile and fuel, health care, etc. These expenses are incurred whether or not a sale is made.
2. How much deposit is required?
The amount of deposit varies in different regions. In the Greater Toronto area it is usually about 5 percent of the purchase price. This deposit is payable immediately upon acceptance of the offer and is held in trust to be applied to the purchase price on closing. In smaller cities the deposit is often much less.
3. What information is needed to apply for a mortgage?
A completed mortgage application form, A copy of the listing with a property photo, A copy of the accepted agreement of Purchase and Sale, An income verification letter from your employer and some recent pay slips, An evidence of the source of your down payment
4. Are basement apartments permitted in Greater Toronto?
Land transfer tax is usually the largest tax payable and it is paid by the buyer on closing to the Ontario government to register the transaction. Visit my Land transfer tax calculator for a quick calculation. GST is payable on services such as lawyer?s fees, realtor's commission, surveyor's fees etc. GST is payable on the purchase of new homes and condominiums; substantially renovated homes; some vacant land. GST is NOT payable on resale homes. The sale of your principal residence is exempt from capital gains tax but capital gains tax may be payable on income properties or additional properties other than your principal residence. Non-resident tax on income or capital gains by non-residents must be withheld at source.
5. What are the Usual Adjustments?
In every resale offer, the purchase price is payable "subject to the usual adjustments". Adjustments fine-tune the income and expenses of a real estate transaction as of the day of closing so that each party is responsible for the time that they actually own the house. Municipal property and school taxes are always adjusted, so if a seller paid too much, the buyer pays the excess back to the seller and vice-versa. The principal amount of the mortgage is adjusted to the day, together with any interest adjustments and any money held by the lender in a tax account for the property. Condominium fees, utilities, fire insurance and first and last month's rental deposits on a rental property are also adjusted. These are the extra closing costs you need to budget for so be sure you have your lawyer give you an estimate prior to closing.
6. Are basement apartments permitted in Greater Toronto?
For many years the legal status of basement apartments, flats and other accessory residential units, which have been added to houses, has been unclear. Many municipalities passed zoning by-laws prohibiting these types of apartments in houses. Nevertheless, many thousands of basement apartments and other accessory rental units were constructed. Although the exact number is unknown, it is estimated that as many as 100,000 illegal units were in use across the province in 1993. In 1994 the N.D.P. government proclaimed Bill 120 the Residents Rights Act. This Bill permitted second units in houses, regardless of Municipal Zoning, provided that Health and Fire safety standards were met. The Ontario Fire Marshal's Office proclaimed Ontario Regulation 385/94 in July of this same year. (Retrofit section dealing with Two Unit Residential Occupancies).
These two pieces of legislation both mandated the permissibility of, and the safety requirements for Basement Apartments in Ontario. On November 26, 1995 the new Conservative government introduced Bill 20, restoring back to municipalities the right to outlaw basement apartments. This in effect drove these second units back underground. Owners feared prosecution from not only safety authorities, but also local zoning regulations. Units prior to November 16, 1995 Grandfathered However if the unit existed prior to this date (November 16, 1995) it was grandfathered, provided it met health and fire standards. The onus is on the owner to prove that this is in fact the case and can be accomplished through the production of rent receipts, presence of tenants on voters list, or in some cases the signing of an affidavit from the municipality. For full information about basement apartments, Please visit: http://www.pcfirecode.com/Basement_Apartments.htm
7. Can I apply for a mortgage to purchase a property before I have found one?
Yes. This is called a Pre-Approval, meaning you have been pre-approved before you actually find a house to purchase. Visit my Mortgage Rates & Info page for more details.
8. Are there programs for mortgage applicants who have been turned down elsewhere due to income, credit, length of time on the job, being a new resident, past bankrupt, self employed, on commission, divorced or for other reasons?
Yes. Mortgage funds for home buyers and existing home owners who require mortgages strictly on the sufficient equity in the subject homes can be arranged.
9. Are Power Of Sale or Foreclosures a good deal?
Yes and No. Power of Sale and Foreclosure properties are always sold "As Is" for the Lender to avoid liability, regardless of the condition of the property. The Lender will not guarantee that the appliances or anything else will be there when you take it over. The owner that defaulted on the mortgage has the right to redeem themselves right up until closing, so the sale might not go through. Lenders cannot compromise on the price. They need to try to get market value for the property. If they don't, the owner can sue for the difference. Properties in poor repair can go cheap, but that's only because Lenders are more realistic when it comes to pricing than most of us. 
10. What is the difference between a freehold and a condo townhouse?
There are two kinds of townhouses in Toronto: freehold and condo. In freehold, you own the land and the house and there is no condominium fee. A condo townhouse gives you ownership of the unit and a share of the common areas. There is a monthly fee for maintenance, etc. of the condo townhouses, there are ones in which each house is one home and there are ones called stacked townhouses in which 2 floors are one home and the other 2 are another home.
11. I am immigrating to Canada. Are there any restrictions on me in regards to residential real estate?
Only in regards to financing. Canadian citizens can purchase homes with up to 90% financing (95% for homes under $300,000). Persons new to Canada need a 35% for a down payment, and applicants must provide satisfactory credit bureau rating. If the applicant can provide written verification of Landed Immigrant status, then the lender can accept a 25% down payment as long as the property is owner occupied. The applicant must provide full financial disclosure and documents, as verification is required. Lending ratios must be within guidelines. The down payment must come from the applicant's own resources (not be a family loan).
12. What are Buyer's and Seller's Markets?
Buyer's and Seller's Markets are just as you would guess... a Buyer's Market is favorable to buyers and a Seller's Market favorable to sellers. In general, when ``days on market" is less than 30 days, it's a strong seller's market and you may be faced with multiple offers on your home which could possibly create a bidding war. Most homeowners quickly realize that they will face the same situation if they are buying in the same area, so the joy of the discovery is usually short-lived. On the other hand, in a slow-moving buyer's market, homes may get re-listed with several agents as sellers get discouraged or want to make their look like a new' listing on the Multiple Listing Service (MLS). When the marketing time is over 75 days, you are in a buyer's market, which means there are more homes competing with yours on the market. You may have to offer price reductions and other concessions to get your home sold. Another criterion used to determine the market condition is the `sale to list price ratio'. Nationally, homes generally sell between 94 - 97% of asking price, depending on the market.
13. Can I buy a home with no-money-down?
Yes, Kind of, You will still need money for the deposit check that accompanies the offer, and later for lawyers, movers, etc. Today there is lenders that have introduced a 100% mortgage which is designed to let people with good cash flow but absolutely no savings buy a nice house with juicy monthly payments. Another no-money-down mortgage will offer people the normal 95% financing now allowed, and then throw in the other 5% as cash-back on closing. The catch is just that borrowers need to take out a long-term mortgage, preferably one that has a rate locked in for the next five to seven years. Now, for some people, this kind of financing makes perfect sense. They may are burdened by an expensive divorce, for example. Or perhaps it's a young, professional couple with great jobs but not much cash left after buying that first Volvo. For these buyers, it means they can have a house without waiting -- which is just the way people like to live these days.
14. Can I buy an Investment Property in Ontario if I am not a Citizen or legal resident of Canada? Who can help me if I want to buy or sell an investment property in Canada? Can I get the finance for the Investment Purchase?
Yes, Any one can buy or sell an investment property in Canada without being a citizen or legal resident of Canada and get the finance too for the purchase subject to certain conditions, Any real estate broker/agent will be able to help in such transaction, Please contact me for further information and analysis: email: trahman@trebnet.com, I will be able to provide you the entire services in this regards from initial planning to closing and management of the property if needed be.
I F Y O U A R E B U Y I N G: Please Click: Buyers_Page : Property_Buyers_Requisition
I F Y O U A R E S E L L I N G : Please Click: Sellers_Page : Property_Sellers_Requisition | 
