Buying Steps

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Buying Steps2020-08-31T13:51:33+00:00

Step by Step toward buying a property.

The following explains step by step in details process how to purchase a property for buyers in Ontario. A PPS Realty Realtor’s day to day life experience with buyer clients.

Mortgage qualification2020-04-21T01:58:44+00:00

It’s recommended to check the buyer’s mortgage qualification prior to start viewing properties with PPS Realtor. (Mortgage brokers click here (to check on mortgage broker license validity).

Contact PPS Realtor2020-08-19T14:51:39+00:00

Estate Council of Ontario-RECO is providing an online search tool allows consumer to check on Realtor’s license validity and any outstanding offense currently applied on them click here to view. It’s highly recommended to go through this step with each and every profession you meet during the process (Note Realtor’s license renewal is every 2 years and its automatically renewed giving that they pass continuing education courses)

Buyer Representation Agreement: also know as BRA click here , this standard agreement created by Ontario Real Estate Association- OREA in order to out both parties the Realtor and the buyer in agreement during the process of purchasing a property. PPS Realtor has schedule “A” click here to add the specific Rebate agreement details as required by RECO. The BRA is recommended to be signed as soon as possible and not later than the time putting the first offer.

The first meeting with PPS Realtor focuses on the buyer’s need which helps the PPS Realtor to understand the right criteria may suits the buyer and the search criteria can be conducted by two ways:

  1. Search alert: it’s a tool set up by PPS Realtor according to buyer’s criteria and sends automatically on a daily basis (if any results) to the buyers email from MLS-TREB. MLS live view click here. MLS search alert view click here
  2. Search access: it is shared by the PPS Realtor and sent to buyer to sign up for Collaborate tool click here (private access) click here which is syndicated with live MLS-TREB. The buyer can navigate and set up alerts on live MLS and view all data with exception of sold data.
Showing arrangement2020-04-21T01:58:49+00:00

When the buyer is interested to view some properties, PPS Realtor would arrange for the showing appointments through booking call process to the listing brokerage. Normally the showing visit duration is one hour with given notice period in advance and most of tenanted properties required 24 hours’ notice

Before showing2020-08-19T14:52:25+00:00

The MLS data sheet is shared with the clients. it contains most of the information initially needed to be known by the client, however some information may not be mentioned and needed to be provided by PPS Realtor separately e.g. age of the property click here or exact year built, exact square footage click here (its available for condo apartments only), offer presentation time click here (if any), showing instructions click here (time allowed to visit).

During showing2020-08-18T17:48:43+00:00

Arriving within the allowed time is very important to visit the property (given time mostly is 1 hour or less), delaying the showing might be a challenge, and PPS Realtor has to be presented at the time of showing, its recommended to take note of showing by the buyer or his Realtor especially when they schedule to visit multiple properties in one day. It’s also recommended to arrange the showing in sequence according to distance between showing for more time efficiency. It might be a challenge sometimes as some sellers have their own preferred timing to allow access to the listing. Most but not all of property occupancies leave the premises to give some privacy to the visitors.

If you decided to go to open house showing without PPS Realtor, is not bad idea, as some listings are scheduled for weekends (Sat & Sun 2:00-4:00pm) and can be found on website click here, so you may notice some listing Realtors at open house soliciting a buyer visits without his Realtor ( its legal unless the buyer works with other Realtor) as an effort to gain a lead out of the open house, therefore you need to let them know that you are working with a PPS Realtor. The downside of working with a listing Realtor to buy the same property listed with him (this practice called double ending or multiple representation will explain it later in details)

After showing2020-08-18T17:52:03+00:00

If the buyer is interested in any property or short listed a number of properties, PPS Realtor will start due diligence process through the following steps:

  1. Provide property exact year built report pulled from public record system click here
  2. Recent sold properties in the neighborhood within 3, 6, 9 or 12 months depends on the availability of historical transactions click here. Note the sold data information might be available now days on public domain on average basis, but an adjustment needed to be done by the PPS Realtor in order to compare apples to apples e.g. extra bedroom, bathroom, finished basement, bigger square footage etc. Click here to see Comparative Market Analysis-CMA detailed report for adjustment (CMA detailed report mostly created for listing purpose)
  3. Recent sold data history pulled from GeoWarehouse e.g. neighborhood sales index click here, property info and historical sales click here, neighborhood demographic report click here.
  4. Exact floor plan square footage click here which cost $5.0 and paid by PPS Realtor note that MLS sheet shows range square footage only and its mandatory for condo apartments only (it’s still range e.g. 800-999 Sqft), however freehold is not, but PPS realtor do provide this info for free.
  5. Comprehensive schools rating report click here, this service is provided exclusively by PPS Realtor for free (paid service, but its free for PPS Realtor clients)
  6. Neighborhood heat map report click here, this report shows the sales turnover in the neighborhood and the price growth over years. It’s very beneficial for investors.
Offer preparation2020-08-18T17:54:44+00:00

In the event the buyer is interested in submit an offer on one of the properties (it’s not recommended to submit offer on more than one at the same time as they might be accepted and will be bonded agreement on both properties). PPS Realtor will prepare the offer (Agreement of Purchase and sale-APS) using electronic signature offer click here (it’s legal & allowed by RECO) using OREA standard forms click here. There are different forms used depending on the type of property listed e.g. Freehold forms click here, Condo Apartment of Townhouse click here, or Common Elements Townhouses click here. Also it’s required to submit form-801 click here to confirm the offer submission. There are number of conditions mostly used to protect buyers interest and schedule attached to the main offer, for Freehold click here & for Condo click here and other conditions depending on the nature of transaction.

It’s important to mention that both freehold and condo properties are full ownership no deference, only that condo has restriction on the property in term of use and modification. Condo management company collect all maintenance feed from unit owners and manages the maintenance of the property accordingly, so the relationship between condo fees and property price is the higher the condo fees the lower the price and vise versa. Public element townhouse management companies have fewer restrictions on the property as they merely manage the road maintenance, the condo fees mostly increases at least with inflation rate in the market, and decision to increase is voted by majority of condo board members which elected by unit owners and having proxy to act on their behalf.

Offer presentation2020-08-19T14:47:14+00:00

There are two types of offer presentation situations in the market:

  1. Single offer presentation: When there is only one buyer offer presented at the time, and in this situation there is no competition with other bidders or buyers on the same property, mostly this type of presentation is less tense and gives the buyers power of bargaining.
  2. Multiple offer presentation: When there is more than one offer presented at the time on the same property, and in this situation there is a competition between buyers which may lead to bidding war and increasing of offered price in order to win (note: most of the listing Realtor notify all of the buyer’s Realtors who visited the property in order to know whether they are interested into putting offer on the listing) and this cannot be avoid as the listing agent is looking for the best interest of the seller. This type of presentation is more tense and put more pressure on the buyers.

How to confirm of existing of multiple offers?

Buyer’s Realtor may contact the listing brokerage to confirm submission of other offers, contact the listing Realtor and obtain a written email of text confirm receiving of other offers and sometimes asking the listing Realtor to show or prove existing of form-801 click here which confirms of offer submission and can only be sent after the buyers sign an actual offer not merely interested to participate. This is the best practice available to confirm existence of other offers as of now hopping to have better tools to know in future like technology.

How is the flow of multiple offer presentations work?

Multiple offer presentation might happen in two ways:

  1. Planned multiple offer: when the listing Realtor mention at the broker remark section on MLS sheet which is only available for Realtors e.g. “offer presentation time is on Monday Mar. 11, 2019, please submit offer no later than 4:00pm and presentation time would be at 5:00pm. Seller may accept pre-emptive offers” Pre-emptive offer means when the seller accepts offers prior to the offer presentation said time, mostly happened when a bully offer is submitted which might be very attractive to the seller, in this case the listing Realtor duty by rules of MLS to contact all of the Realtors visited the property with their buyer clients and inform them about a new presentation time which might be in most cases very soon.
  2. Non-planned multiple offer may occurred when a single offer is submitted subsequently the listing Realtor informs all of the other buyer Realtors who viewed the property as a result one of more of them might be interested, this situation likely to happen when the buyer Realtor put an offer with long irrevocable time e.g. 48 hours. In sometimes the listing Realtor mention on the brokerage remark section on MLS sheet (it’s not visible to the public domain) that allow 48 hours more or less irrevocable time as seller out of country or so, this might be true or made up by the listing Realtor to allow him to contact all of the other buyer Realtors who already visited the property and get their attention to hurry up and submit an offer. PPS Realtors are aware and do their best to avoid such situation if possible. Click here to read article for PPS Realty about many tricks used by the Realtors in the market.

Most of multiple offers now days are presented electronically (by email & e-signature), however some are still preferred to present at the listed property or listing brokerage (buyer Realtor meets with listing Realtor and seller to present in person and buyers are not allow to be with their Realtor at the property premises). It doesn’t have an impact on the acceptance of the offers rather for best conveniences may suite different clients.

Rules of the multiple offers are very strict by RECO. The listing Realtor cannot share any of the offers information between the buyer Realtors and their clients e.g. price, deposit, conditions, closing date, name of buyers. This type of rules may cause lots of uncertainties for the buyers during the bidding offers, and it has been criticized widely by public in the last few years which led to the regulators to put this practice under study and consultation in order to do the necessary changes if needed. Click here to read article for PPS Realty about this matter.

How to decide on the multiple offers?

Generally listing Realtors ask the buyer Realtors to submit their best offers, however buyers like to negotiate, so they don’t come with best prices at first round. Unfortunately there are no certain rules for such process, but when listing Realtor present all of the offers to the seller, its totally depend on the seller, whether accept immediately one of the offers or ask for second round to give opportunities to the buyers to improve their offers and hopefully get higher price, therefore the listing Realtor will ask the buyer Realtor to come with second best offers in term of pricing, conditions and other terms without sharing information of any other offers between them. No sign back will be committed by the listing Realtor in order to be free of any obligation. Most of the time the multiple offers takes 2-3 rounds of counter offers back and forth especially when the offers prices are very close to each other. In fact the more offers are submitted the less round goes, meanwhile listing Realtor would prefer to work on high price offers rather than lower ones. The listing Realtor and seller goal is to get the cleanest offer, meaning with no or less conditions like finance, inspection and extra. PPS Realtor strategy is do your due diligence on the property estimated market price and stick to your budget regardless being dragged after higher and higher bids which caused a turmoil in 2017 and 2017 market. Our Realtors goal is to maintain long relationship with clients not just a mere transaction, buyers would know sooner or later whether they paid more than the market price or not.

Multiple representations2020-08-19T14:42:55+00:00

Is also known as double ending in the market click here to read about our article, which mostly occurs when the same Realtor represent the seller and buyer at the same time for the same property, where the seller Realtor sign a representation agreement with seller and customer service agreement click here with buyer. This practice is allowed in the market and widely criticized by public in the last few years as cannot be perfectly fair for both parties mostly the buyers. The regulators are working to change this practice since a while but no definite outcomes as of yet. Its recommended when multiple representations happened in multiple presentations situation to clarify whether there is commission cutting by the seller in case the buyer who is represented by the listing Realtor wins the bidding offer with lower price as the listing Realtor agreed to lower the overall commission which is built in the price in particular on buying side, some recent rules ask the listing Realtors to disclose such event immediately to all other buyer Realtors, realistically the listing Realtor mostly would lean toward the buyer who he represents to gain higher commission (double commission) whether its full or cut commission and its totally unfair when all other buyers and their Realtors don’t know any details about all offers submitted, meanwhile the only buyer who is represented by the listing Realtor knows which perfectly helps him to offer the right price and win the bidding. So that’s why it’s recommended to pull out of the race due to the said reasons unless otherwise the buyers understand the negative outcomes which might be disappointed for them later. (Sometimes the sold price appears to be lower than the higher offer due to commission cutting practice)

Offer accepted2020-04-21T01:52:29+00:00

The offers maybe accepted firm or conditionally in both scenarios they are binding agreement, and the buyer has to arrange for the deposit within 24 hours from accepting time giving the banks are open in the area to arrange for fund. It’s mostly required to have a Bank Draft or Certified cheque drawn from a chartered bank in Canada and addressed to the beneficiary the listing brokerage, however it’s by law that allowed personal cheques or wire transfer to be considered as deposit, but most of the brokerages preferred to do not accept them to avoid fraud or insufficient funds . In the event the buyer has to arrange for deposit from GIC account some listing Realtors may accept more than 24 hours period of time to come up with deposit. The deposit has to be delivered to the listing brokerage with copy of receipt provided for proof. (Needed for the lender or mortgage broker and buyer brokerage)

What would happen if no deposit is submitted the after accepted offer?

The accepted firm or conditional offer is still valid and binding all parties especially on buyer side and it’s not recommended to do so in order to get off the deal. The seller may sue the buyer at court.

Mortgage condition2020-08-18T17:57:57+00:00

Buyers right away may submit their conditionally accepted offer to their lenders or mortgage brokers click here (to check on mortgage broker licence validity) to work on the approval within the given time e.g. 5 business days ( should provide agreement of purchase package/ offer, MLS sheet copy and deposit to the lender or mortgage broker), if lender approved, a commitment letter will be provided to the buyer/ borrower to sign and accept with 1-2 weeks, if the buyer is satisfied, then he can waive the condition before the deadline time e.g. 6:00pm on fifth day click here to view Waiver or Notice of Fulfilment click here, otherwise the deal will be null and void. The buyer has the right not to waive the mortgage or finance condition if he is not satisfied with the lenders commitment letter terms and conditions including the rate and down payment required, click here to view the condition.

Meanwhile, most of lenders now days in the market conduct an appraisal on the property whether through their own data, or by sending an appraisal person to the property (will call the listing brokerage and seek a visit to the property).

What happens if the appraisal price is less than the purchase price?

This is likely to happen in now days market with specially the properties sold way over asking price, that why it’s not advised to list below asking price or market price and then accept a higher price (although many listing Realtors still think it’s great sales technique to attract more buyers to visit and potentially more offers, but unfortunately not anymore) Banks when they see such thing a red flag comes up and send the appraisal person immediately and frankly to say some appraisal person are not good with what they do since the only source they use is the same MLS Realtor have access to (buyer may ask for different appraisal company or change the lender if refused, hopefully the appraisal amount differs). So the golden rule is list it right and will sell even with multiple offers if the property is very attractive. Since 2018 the real estate market in the Greater Toronto Area-GTA become like a beauty contest.

In case of lower appraisal, the buyer may seek the seller to lower the price which is most likely not going to happen, second remedies is the buyer increase the down payment e.g. a property selling price was $500k the appraisal came to $460k, the buyer may add $40k to bridge the gap. And the last remedy is the buyer walk out of the deal hopefully the offer is still conditional to arranging mortgage, noting that most of the lenders now days do the appraisal prior issue commitment letter to the buyers in order to avoid such situation unlike the old days during 2016 and 2017. How about if the buyer had a pre-approval and the deal was without finance condition of firm, in this case the buyer can=not walk out of the deal and has to increase the down payment subsequently. Note if buyer got a limit approved by the bank higher than asking price and the appraisal didn’t support the selling price, the bank still consider an increase in down payment even through the limit approved is higher.

Inspection condition2020-08-18T17:59:09+00:00

Buyer may arrange for Ontario licensed home inspector (unfortunately there is no an official source we can check on the home inspector license validity (you may check on their ID card issued by Ontario Association of Home Inspectors-OAHI click here or Canada Association of Home & Property Inspection-RHI click here), most of Realtors have a list of credible inspectors worked with them in the past, always ask for 3 and choose one) at any time during the condition period e.g. 5 banking days and ask his Realtor to arrange with listing Realtor and his seller client for visit time between 2-3 hours period in order to conduct a professional inspection. Inspections is highly recommended even for new built properties, even condo townhouses which many Realtors say no need as it’s taken care by the condo management company for townhouses, this not entirely true as management may cover exteriors e.g. roof (shingles only), doors & windows depending on the service agreement, however many may skip on condo apartment inspection due to nature of the building but still is good to have the inspection done. PPS Realtor would attend the inspection time and it’s highly recommended for the buyer to attend especially if he is first time home buyer. Most of inspectors produce an electronic inspection report shortly after inspection and sent to buyers email. It’s good to have the report kept as reference manual for your property.

What happens if the inspection report is not good?

There are two kind of defects finding after the inspections, first one is minor e.g. anything can be repaired with small and reasonable costs and major defects which is major damage in the property related to the structure, roofing, basement and may cause a diminish in property value due to high cost of fixing. The first kind of defect remedies might be negotiable between buyer and seller and it shouldn’t be deal breaker based on mutual agreement, however the big defect might allow the buyer to walk out of the deal and don’t not waive the inspection condition due to satisfaction element click here to read the wording. The buyer Realtor may include the repairing works required at Amendment form click here to secure the job completion by seller if agreed on such. Note that the some equipment cannot be properly checked by inspector due to specific experience is required or seasonality e.g. air-conditions during winter and heating furnace during summer, so there is a clause may protect the buyer if such event happened click here.