Transcript of the video:
Hi everybody, it’s Rowan Smith with The Mortgage Centre. It’s been a little while since I did a post, and I’m busy cleaning up a lot of problems. I figured that this would be a great to do a blog specifically targeted toward realtors for things to do during the offer process regarding contracts that will make life infinitely easier for me if I’m trying to do financing for you, or for any of the banks that are trying to do financing with you.
So, the first thing has to do with contracts and signatures. There’s a number of financial institutions that insist that the contract signatures be witnessed. Now, I know that the real estate board doesn’t require that every single contract signature be witnessed. They’ll allow it to be unwitnessed, but the banks want it witnessed in many, many cases. The CIBC is particularly strict on this matter, so you must have all witnessed lines filled out and signed.
The next thing is the property condition disclosure statement. Oftentimes, if the person has never seen the property, the seller has never seen the property, maybe because it’s been an investment property. Or they bought a rental five years ago, and they haven’t been inside of it, and they can’t answer a lot of the questions. We still need something to show that there has, in fact, been… A property condition disclosure statement has, in fact, been issued.
If I go to them and say, “Oh, no. There isn’t one,” but there has to be, oftentimes the contract will specifically make mention of the fact that a PCDS makes up a component of this contract, so you have to provide it. If there is no way they can answer those questions, have them just throw a line through it. Put, “Never lived in,” and sign it. That’s better than me not having anything, because I go to the bank, and the bank says, “What are we hiding? Is it a grow-op?” And they just don’t want to put that down, a past grow-op, a meth lab, or anything of that nature.”
So, property condition disclosure statements, even if they’re going to be blank, you still need them.
Subject to removal deadlines. Try to line them up, not on a Saturday or Sunday. I get this constantly, where we get a contract. The subject to removal date is set to a Saturday, which is no better than the Friday. So, getting the extra day on the weekend doesn’t really help us for financing anyway. It doesn’t really help us, because the banks aren’t going to be open to work with us.
If you’re going to go for Saturday, you might as well go for Monday, and on that note, be cognizant of when holidays are. We’ve been having a lot of contracts come in lately, especially during the May long weekend with the subject to removal date on the actually holiday, which, again, I can’t have a bank look at anything, so it might as well have been the Friday before, which doesn’t help anybody.
Be particularly cognizant during the negotiation time, and during the excitement, and the back and forth on the prices. You have the subject to removal deadline, and we set it for, say, June 14th. And as the dates progress, and the negotiation takes a few days, no one ever bumps that out. And then once we’ve finally got it accepted, we have one day or two business days to get an approval done, which might be possible, but it might not, depending on which bank the client has to go with.
So, just make sure that as the negotiation proceeds, and as it get further and further along in the contract negotiation process, that the subject to removal dates are being bumped up correspondingly, so we still have a number of good days in there.
Lastly, when it comes to strata documents, if you have a listing and you’ve… Typically, the protocol in this market, being such as it is, realtors usually don’t order the strata form B, and all the strata documentation when they take the listing. In a perfect world, that would be the case, but I understand there’s some cost to do that, so it’s not always in your best interest, especially if you feel that the owner has listed it too high, and would not list lower, and you don’t think it’s actually going to go through.
That said, if it’s a competitively priced property, either A: Order the form B and all of the strata documentation up front, or you have to be willing to pay for it on a rush basis. I had three deals in that last month were my buyers were buying a property. The listing agent did not order up the strata documents, and then, of course, it was part of our contract. Once that buyer requested them, it then took seven days, because the realtor didn’t want to pay the extra $100 or $50, or whatever it is for a rush.
Now had they ordered them initially, there wouldn’t have been that fee. Of course, that’s a separate issue. But had they ordered them on a rush basis, we would have had them in 24 to 28 hours, and there would have been no problem.
Instead, we had to extend, extend, extend and it really annoyed the sellers and the buyers involved, and it could have easily been taken care of by just getting those documents on a rush basis.
So, those are the thing that I consistently see, I think, that realtors can do a lot better of. The realtors that I work with on a regular basis all are very good at this. But as I meet new people who are agents coming into the field, this is something that will come back and make your life a lot easier, if you can follow these tenets.
For The Mortgage Centre, I’m Rowan Smith.