Buying a house in rural SE Manitoba
In my years as a real estate professional in Steinbach and much of SouthEastern Manitoba, I’ve helped many people navigate the myriad of confusing things that come up while shopping for their next home.
One of the most common questions is, “What’s the difference between a deposit and a down payment?”
Allow me to help clear that up.
What is a Deposit (and Why should I Make One?)
A deposit is money that accompanies the Offer to Purchase. Basically, it’s trust money, the point of which is to show that you are serious about offering to buy the house, and can be trusted not to waste the seller’s time or somehow torpedo their efforts to sell their house to others. Your money says you will not change your mind and, if you do, you’re willing to compensate them for their wasted time.
What Happens to the Deposit If Your Offer is NOT Accepted?
Nothing. The cheque will not be cashed. It will be returned to you.
What Happens to the Deposit If Your Offer IS Accepted?
If your offer to purchase is accepted, the Cheque will be deposited into the listing broker’s trust account. Later, when the deal goes through and the purchase becomes official, the funds are forwarded to the lawyer’s office and distributed toward the purchase price according to standard practice.
TIP: Bigger deposits give you an advantage. The bigger your deposit, the more seriously the Seller will take you and your offer.
What happens if they deposit our check and then we can’t meet the conditions on the offer? (What if we don’t get financing? What if the home inspection fails? What if…?)
We will fill out a simple form requesting the deposit to be released and the funds will be returned to you.
What is a Down Payment?
The down payment is what your lender will require of you before approving your mortgage. This is between you and the lender and does not involve the real estate agent or seller.
For a traditional mortgage you will need 5% of the sale price for a down payment.
When arranging your down payment, if you can manage to put down 20% of the purchase price (or more), you will avoid the cost of paying an insurer like CMHC or Genworth.
If you do not have sufficient down payment available and you have a steady job, stable income, and a good credit rating, I can hook you up with a mobile specialist who has different products available and you may possibly be eligible to buy without a full down payment.
There are LOADS of other questions that crop up in real estate.
Good news – I have some awesome resources to set you up for a successful and pleasant buying experience.
Check out my HomeBuyer’s Information Package HERE
Tina Plett, Sutton Group-Kilkenny Real Estate
Online house hunting can only do so much.
You cannot smell a house online.
Or open that mysterious door in the basement, or inspect the walls and ceilings for water damage.
You can rule out many homes online, but there are things about a property that you won’t know till you arrive.
This is where, with your own personally retained agent, you begin looking at houses. Lots of them. Sometimes lots and lots of them.
One such (fictional) couple was at the stage of looking. They had smartly retained me to represent them, and off we went looking for that perfect-for-them house.
Here’s how their search went down.
House one: He loved the garage but the master bedroom wasn’t big enough for her.
House two: She loved the kitchen but he didn’t want to be bothered with making the basement windows bigger so the children could safely sleep downstairs.
House three: The wood stove was something he had always wanted but she thought it was not safe for the toddler to be around. I suggested they could remove it but that would create a renovation project they didn’t want to pay for.
House four: She loved the character in the old house but he wasn’t interested in a property that only had a holding tank. It would be an added monthly living expense that they didn’t need.
House five: The floors had all been replaced, which was hugely appealing to both of them. However, the laminate floors had been poorly installed and already had areas separating and swelling from moisture. They both were super disappointed.
House Six: The backyard was amazing. They could both see themselves enjoying summer out here. Too bad the ceiling had been dripping and was causing mould in the upper level of the one and a half story home. Their son’s allergies would not work with that.
House seven: The ad in the magazine said it was a few minutes from the city. It took forty-two minutes to drive to the property and there were eleven miles of gravel road to travel. It was just too far to drive.
House eight: The open-concept living area appealed to both of them. She loved the large windows… until she saw who lived next door. She would not live next door to his ex-girlfriend. Not happening.
House nine: The smell of cigarette smoke was so strong they never even looked through the entire house.
House ten: The backyard photos were the reason they wanted to see this one. The towering apartment blocks next to the home put a damper on the private backyard life they had imagined. They ruled it out before we even looked inside. That was a quick walk though.
House eleven: Ten acres. Finally. They could have horses and other pets. The current owners enjoyed pets also. They just were not very attentive about cleaning up the cat litter. The rugs were torn in the doorways and in the stairs, apparently having been used as a scratching post. There were snakes, lizards, ferrets, hamsters, dogs, and birds living in the house.
The grass on the ten acres had not been cut in years and the grounds had become a dumping ground for old car parts. They certainly could not see their son playing on these grounds. How long would it take to clean the place? I think I saw her gag at the thought.
House twelve: They wrote an offer. They just wanted to move already. We went back to do a home inspection and when we arrived we found the basement flooded. There was no sump pit or sump pump.
The spring melt was coming up through the floor and the beautiful new rug was soaking wet. Thankfully, because they had the offer subject to a home inspection, they were able to get out of the deal.
Houses thirteen to thirty-one: They compared each of these homes with the one they had fallen in love with and written an offer on. None of them compared. After a while, all the houses started to look the same.
House number thirty two: Adequate size. Treed yard with a garden. Finished basement. Bi-level with large basement windows. The floors were about five years old but they looked nice. The garage was not insulated but it was attached to the house and they liked that. The kitchen wasn’t as big as she wanted but it had a huge walk-in pantry. They could picture their life here.
I watched them as they quietly took it all in. They were in no hurry to leave. They started picturing where they would place their furniture. It all just made sense. Finally, they had found their home.
You might be wondering if I’m exaggerating. I don’t actually show that many houses before closing a deal, right? I must have just gotten caught up in the fictional storytelling.
YES, I’ve absolutely shown upwards of thirty houses to a single client. It’s happened a few times.
The fact is, house-hunting takes time. Lots of time.
If you take anything away from this story, I hope it is an appreciation of the buyer representative who dedicates themselves to you and your process.
We work hard, and are glad to show you loads of listings, regardless of whose sign is on the yard.
Accredited Buyer Representative
Sutton Group-Kilkenny Real Estate
Years ago, I had the honor of helping a young couple buy their first home. They were the first, and very proud, owners of that home, and had enjoyed it a lot.
Now, with baby number two on the way, they decided to move. With their eyes on the future, they wanted to live in a community where they would want to send their children to school.
As we checked out a few houses, he carried one child in his arms, and she carried the other one low in her belly. The little one would arrive soon. From house to house she rubbed her belly and pressed her palms to her aching back.
They wanted a floor plan similar to the home they had already lived in, and we found one. They imagined the toddler’s room here and the new baby’s room there…
Her face glowed with the dreamy expectation of a first-time mom.
This location and home suited them perfectly, so we immediately marketed their home. It sold, and they made an offer on the house they’d chosen.
Then something happened that’s never happened in my career before.
At the same time the conditions on their house were removed, their baby was being born!
It was a doubly fantastic day for them.
Now came the awkward part. I needed to get their signatures to complete the deal on their purchase.
I drove over to the Ste. Anne hospital.
A nurse led me down the hall toward the birthing room. That’s right. I was going into the very room that she had just given birth. It was a generously sized room with high timber frame ceilings.
I felt like an intruder as I entered the room. I felt like a huge interruption to their glorious first hours with their newborn son.
But she held the wrapped baby, beaming. She seemed so deeply satisfied. And my arriving, whether it was the signing of papers or the sharing of the moment, seemed to only heighten their joy.
They were the happiest clients I have ever encountered.
These are the moments I live for!
I adore being part of the process, watching people (and families) grow, learn, and become.
The deepest, most rewarding part of my profession is the people. It’s a deep honor to be invited into these intimate moments, to glimpse people’s beautiful hearts, – even nearly get shot by them! – and to help them find that home in which to make memories.
In ten years, I may forget the addresses, siding, or square footage, but I’ll always remember the people.
Tina Plett, Sutton Group-Kilkenny Real Estate
I left their house with an offer in hand.
The snow might have been crunching, but I didn’t notice. I was practically floating.
After only seven days, the place was about to be sold. Better than that, both sides had been dreams to work with.
It’s the deal every agent wants. And I got it.
I put the car into gear and grinned while the car radio pumped out the perfect beat for celebration.
It was evening in January, and had been dark for hours. That morning I’d navigated the roads during icy rain, and the roads were a bit dicey now that everything had frozen again.
So I took it slow and steady.
There I was, bopping like a thrilled teenager and driving like a grandpa.
I grinned and danced for a few miles… and then I saw it.
There, in the ditch near the highway, was the overturned car. The wheels were up in the air and the lights were still on. A young man stood beside the car.
It must have just happened.
So I did what anyone else would do.
I drove on by and left him there.
Aww, don`t worry. I turned around and came right back! (I told you it was dark and slippery, right?)
I pulled onto the shoulder and approached the young man. He looked to be maybe eighteen or twenty. He was pretty shaken up but didn’t appear to be hurt.
“You okay?” I called to him from the roadside.
Then it occurred to me someone else could be in that car… and not able to come out. Suddenly I was very glad for my warm coat and moccasin boots – I’d be able to come down and help if need be.
“Is anyone with you?”
“No, it’s just me.”
What a relief.
I offered him a ride, which he gladly took.
He pulled on the seatbelt and looked straight ahead, no doubt stunned by the accident. His request was to be taken home. I wasn’t sure that was better than going to the hospital, but we headed toward his home anyway.
You know… you can never tell by looking at someone what kind of home life they come from. I wondered about this young man. Would he be afraid to tell his parents about it? Would there be hell to pay when he got home? Luckily, car rides are great for getting to know someone, and I used the opportunity.
When we came to talking about his parents, he smiled and seemed to warm up to having a conversation.
“Oh no, I’m not worried about my dad,” he smiled.
With joy and gratitude in his voice and words, he told me how his dad has always been there for him, and they’re a solid, safe place for him in this crazy world.
I brought him home and waved him off, so thankful and relieved he was safe.
The next day, two exciting things happened.
First, the offer I’d delivered was accepted. Yay! SOLD sign, here I come!
The other cool thing that happened was that I got a phone call from the boy’s father.
He was so glad that I’d stopped to help his son. Not just that, but our conversation had brought peace and comfort to him in a pretty scary moment.
I was thrilled about selling the house.
But the most meaningful part of that day was hearing how anything I did or said encouraged someone else.
I read somewhere that a day’s success should not be measured by the harvest reaped, but by the seeds sown.
To me, that was a successful day.
Forget about money and houses and debt and stress – life is about people, and serving others is my true thrill.
Tina Plett, Sutton Group-Kilkenny Real Estate
The rich taste of eggnog and aroma of delectable spiced ginger cookies have faded away.
Some people think that once the tree and lights are put away, winter’s sparkle is gone, and the grey must inevitably settle on us. Buckle up, it’s all dim and sad until spring…
Here’s the thing.
January shimmers with the romantic splendor of no other month.
At each country property I show, soft white snow trims the evergreens. Snow stretches atop fences like a garland and frost sparkles on branches like crystal fireflies. It’s almost as though the properties heard we were coming, and excitedly dressed up in their Sunday best.
It’s impossible to feel grey and dull when glimpsing that kind of dazzling display.
The other day the most stunning sun dog blazed in rainbows around the sun. I stopped in my tracks to admire them. It amazed me to think that their incredible beauty is simply light reflected by ice crystals.
That’s what I want. I want to reflect Light – to be the clean, clear crystal that reflects all the colors light contains.
What the heck does that mean, right?
I guess to me it means sharing. I want to share what I know and how I live and work so that my colleagues can gain success. Watching my peers grow and succeed gives me great joy. The joy is immensely more if I get to participate by helping somehow – even if it’s as an example seen from afar.
January’s clean, crisp freshness is its splendor.
I feel … like January.
I’m clean and free of the clutter of resentment and bitterness I once carried.
Before me is 2016 – a fresh layer of snow on which I get to make new tracks.
Wait – do you smell that?
Yep, it’s adventure.
This is gonna be good…
What new tracks do you hope to walk this year?
Tina Plett, Sutton Group-Kilkenny Real Estate
In southeastern Manitoba, home sales have slowed. And sellers are getting frustrated.
For the last decade, our area has enjoyed a boom – a fast-paced market where buyers were tripping over themselves to secure the house they desperately wanted to buy. Prices swelled, there were competing offers, and it was a thrilling ride.
In the last year or so, something changed. We suddenly have an abundance of homes to choose from in today’s market. Buyers are now able to take their time (and they surely do), and browse the wide selection. They are no longer desperate to get whatever they can.
This is why to sell a home takes much longer than it did only a year or two ago.
Homes listed on MLS can take twice as long to sell than they would have in the past. It can take six months (or more) to sell your house in the R16 region.
If you’re a seller, this is disappointing news.
If you’re a seller in a hurry to sell, this is downright scary.
There is a way around it, but new markets call for new ways of thinking. Are you ready to adapt to the new market? If you are willing to change with the times, you’ll have an easier time. Stubborn adherence to past prices, old marketing, or even just your own perceptions though, can cause you a world of unnecessary hurt.
If you’re eager to sell, and willing to accept that the tides have changed, here’s how to change with them.
If your home is listed at 100% of market value, expect the sale to take six months or more.
Pricing at 95% of market value would bring you back up around 2-4 months.
Listing at 85% of market value may take closer to 3-8 weeks.
If your home is listed at 70% of market value though, which is what investors typically pay, you can expect a sale very quickly – in 1-3 weeks!
Then there are those who insist on listing above that value. Theirs can be a dark road.
That road often ends in the listing becoming stale, receiving low-ball offers, and then either selling for way, way, way below even market value, or being repossessed because the owners could not finance the long haul that kind of greed demands.
The bottom line is that you can control your bottom line.
You can’t force people to buy, but you can certainly sweeten the deal for them. And in a buyers’ market, that’s an essential element to selling your home.
Like much of life, it seems the home seller must choose between time or money.
Which are you willing to pay?
We reserve the right to refuse service.
We reserve the right to choose if we want to work with you. We reserve the right to terminate a business agreement.
We, Tina Plett and Eniko Crozier, are service oriented at heart and we have been known to go the extra mile and serve our clients beyond their expectations. We delight in pleasing our clients. We are consistent. We strive to be on time. We invest ourselves emotionally, mentally, physically and FINANCIALLY to obtain the objectives of our clients.
We are passionate about what we do and deliberate and strategic in how we do it.
We offer to work seven days a week and we can do that because we are respectful to each other and we take turns giving each other a day off and time off when needed. Eniko has her day off on Tuesday. Tina has her day off on Wednesday.
When you meet with one of us for a seller consultation or a buyer consultation we will tell you more about the services we offer.
So why this bold Opening statement?
We respect ourselves and we want to be treated with respect. We have no interest in abusive relationships even in business. The commissions we receive from a sale are not worth losing our integrity or self respect. We will not tolerate abuse in any form.
Our time is valuable. Our spouses and children sacrifice time with us so that we can Serve you.
We have no interest in being a tour guide. We are real estate professionals. Give us one good reason why we should spend our evenings and weekends with you driving around looking at houses unless we are the ones getting paid. How would you feel if you put in 40 hrs of work and then find out that someone else got the paycheck?
So let us save you some time. If you want to list your house and want us to lie about it having been a grow op, then don’t call us. We refuse your business. If you want to go shopping for houses with five different real estate agents so that you can go every night of the week with someone else, then don’t call us. We will refuse your business. If you want $600,000. for your property after we have shown you proof that the market stats show that it is worth $180,000. then we refuse your business.
If you think I am exaggerating to make a point you are mistaken. If you think we are out of line to draw these boundaries for our business then we are not a good fit to work together.
We may request to meet with you before we show you a house. We may ask to see your identification. We may ask you for a pre approval letter from your mortgage broker before we start showing you houses.
Working with a real estate professional should be a mutual decision. The seller or buyer should not allow themselves to be bullied into doing business with an agent. The agent need not feel obligated to take all business opportunities.
Some opportunities that have come our way have been out of our area of expertise. For example, we decline commercial listings. We decline condo listings. We are happy to refer you to a competent agent who is qualified to work in these fields.
However, we can’t wait to hit the road and come over if you are asking us to list a rural property. We will list and sell in Steinbach and Winnipeg and everywhere in between.
We specialize in residential resale homes and have experience in new home sales.
In conlusion, we want to enjoy our work. We want to be safe. Your jobsite may require steel toe boots and hard hats. Our safety is in three words. No thank you.
Do you ever think you’ll never be able to buy a house?
You’re not alone.
Raising the down payment is the most difficult part for the first time home buyer. Climbing house prices only make the joy of home ownership seem even more impossible. With the average house price in Manitoba hovering around $250,000, a 5% down payment of $12,500 can feel unattainable.
Some are lucky enough to have the down payment gifted to them by family, though it robs them of the joy of accomplishing it on their own, and they never develop the financial skills it takes to earn it. (… so I’m not sure how lucky they really are)
For most though, the down payment must be worked for. And it’s tough. (That’s why there are so many rentals!)
If you’re one of the many who struggle with even believing the joy of home ownership is possible for you, I have some good news.
These three little-known secrets will propel you toward that down payment faster than you though possible. Ready?
Pay your bills on time.
It doesn’t sound like much, but paying bills is not a private matter. Late payments and arrears affect your credit rating. The bank who will one day fund your home purchase will look at your bill payment history to see if you’re able to pay on time every time. If you are, they are much more likely to give you a mortgage – another bill to pay – and trust you to pay it back.
It might sound weird, but it takes money to borrow money. In decades past, a person without debt was seen as a wise financial steward. That is no longer the case. These days, a person who has never borrowed money looks to be incapable of managing debt, so why would anyone lend to them? It’s one of those chicken-egg conundrums. You can’t borrow if you don’t have debt, and you can’t have debt without borrowing.
The solution? Borrow small amounts of money – secured loans and credit cards are available – and then demonstrate your financial savvy by paying it off on time every time.
For the uninitiated, a secured loan would look like the bank using your car as collateral, or a credit card company keeping $500 of your cash in exchange for a $500 credit line. In that case, you’re essentially buying credit. Not to worry though, they return your cash once you’ve demonstrated you are trustworthy.
Save, But Just a Little.
Everyone knows a down payment needs to be saved up. But it doesn’t necessarily have to look like rice and beans sacrificial living, or getting a fourth job. (Though if you can hack that, power to you!)
For most, it’s unrealistic to expect that of ourselves. That’s why I’m a big fan of saving small. And there are a bunch of ways to do it.
Every time you break a dollar bill, keep the change in a jar. When the jar’s full, deposit it all in a separate down payment savings account.
Dedicate certain side income to your down payment fund. Garage sale proceeds, selling produce from your garden, overtime, tips, whatever extra you can skim off without really noticing, do it.
You can also skim on a schedule, having 5% of each check automatically deposited into your trusty savings account. Quick math: 5% of $40,000/year net earnings = $2000/year from that one effort alone.
Scotia Bank’s Bank The Rest® Program
If you are a Scotia Bank member, you have another option. In effort to help Canadians save more, they launched the Bank The Rest® savings program. This allows you to round up your purchases to the next multiple of $1 or $5 as you decide, and the difference is automatically transferred to your savings account.
You know how the interest on an overdue bill can add up quickly? If you combine all of these elements, the money starts adding up just as fast. We’re talking thousands of dollars in your account every year.
Before too long, you’ll be well on your way to a healthy down payment. As a bonus, along the way you will have increased your credit rating, and developed some killer financial skills that your peers will envy.
Yes, I know it will take time.
But how much more time will it take if you wait to start?
Yes, I know it will take work.
But let me ask you something: What worthwhile thing have you ever had that didn’t require work?
You must gain control over your money or the lack of it will forever control you.
A long, long, long time ago, before the invention of the printing press and internet, knowledge was power. Those who were in-the-know leveraged their special access to information for personal and professional gain. Those without such information could only submit themselves to the expertise of the elite.
Times have changed. Information is widely available and accessible. Information is no longer power. In the new age of Relationship Marketing, relationship is power.
“Technology has enabled the transition into the new economy, but connections in the new economy are fueled by a focus on two specific aspects…” one of which, Seth Godin explains, is generosity. “Generosity is critical because no one wants to connect to the selfish person, or to the people that are only taking. Think always in terms of offering something of value to other people and they will willingly connect to you.”
Still, there are those who insist on using old methods in a new time. Some real estate agents continue to withhold critical information from a listing in effort to leverage power. Despite being obligated by industry standards (and the law) to provide such information, they omit such things as lot size, age of house, and other tidbits necessary for a CMHC mortgage approval. What these agents don’t know, is that it’s a tired, short-sighted trick, it annoys the daylights out of people, and it will cost them in the long run.
An investor client of mine echoes Seth Godin’s assertion, saying she won’t even look at properties where the information is clearly being withheld. She says of such agents, “We haven’t even met, and I feel manipulated. No thanks. There are hundreds of other properties to look at.” And she moves on to listings by more generous, cooperative-minded agents.
How It Makes Agents Look Dumb
Aside from irritating and repelling would-be buyers, the agents who employ such see-through tactics also risk damaging relationships with their peers. I have had to go many extra miles to find the information for my clients that these agents purposely leave out. I do it to serve my client well. But I shouldn’t have to. These agents are hired by the seller to do their job, and they sluff it. It sure bothers me when I have to do another agent’s job! Likewise, it irritates many other agents.
It’s a challenge to do a comparative market analysis to establish the value of a house when I don’t know what age house I am comparing it to.
Those who use these short-sighted tactics also risk torpedoing a buyer’s mortgage approval. CMHC has a four-hour turn around time for mortgage approvals … unless there is information missing from the application. Then the application gets tossed on the research pile, and all buyers, sellers, agents and lenders are left in limbo. All because of someone’s selfish sales ploy.
Why They Will Continue To Do It:
So why, on this green earth would an agent risk offending colleagues, sinking mortgage approvals, irritating would-be buyers, and looking dumb? One reason. Their hope is to double-end the deal. The logic goes something like this: if prospective buyers have to come directly to me for information (which I alone control), I will be the one to sign them, so will represent both buyer and seller, and keep the whole commission for myself. Hooray for me!!
I told you it was dumb…
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