Category: consumer (6)

mortgage-clamp-down-Sano-Stante-Real-EstateIn an effort to cool the consumers appetite for debt in this current low interest climate, the Fed’s have further tightened the screws on Bank lending. The Canadian Government’s “Financial Stability Board” has published new guidelines for underwriting mortgages. Following is a summary of the proposed changes which may take effect by September 2012:

  • Lines of credit should not exceed 65% of the homes value. While a customer can still borrow 80% LTV, at least 15% will need to be in an amortizing segment. Existing clients may be grandfathered but there will be some cases as it relates to structural changes in an existing loan plan where the new rule may apply.
  • For debt service coverage (TDS) at a minimum. the qualifying rate for all variable interest mortgages regardless of the term and fixed rate mortgages with a term of less than 5 years should be the greater of the contracted mortgage rate of the five year benchmark rate (Bank of Canada).
  • GDS Calculations will require supporting documents (tax, utility bills, etc) or clear and consistent benchmarks that adequately assess these additional costs.
  • Banks will be required to clearly define “non-conforming loans”. This may include some forms of equity, low documentation etc. In these cases LTV should not exceed 65%.

If you are contemplating taking a HLOC at 80% LTV now is the time to get your application processed before the new guidelines take effect. You may not need to use all the money, but better to have access to it and not use it, than to be clamped down to 65% LTV.

For more information on this, or other Calgary real estate facts call us anytime 403-289-3435

home inspection

Home Inspection

When buying a new or used home, after negotiating the price and terms, it is typical to include a period of due diligence to ensure the Buyer that the home is sound beyond the initial appearance. This is when a Buyer will perform a home inspection of the property.

Typically a period of five to ten days is negotiated in the contract to allow for the Buyer to engage a qualified home inspector to inspect the property and produce a report. If the report is not satisfactory to the Buyer then the Buyer has the option of not proceeding with the purchase.

Sometimes the inspection uncovers issues that the Seller was unaware of and perhaps would have repaired if they were aware of the issue, especially if the issue would cause further damage if left unattended (such as a leaking toilet seal or roof leak). For issues such as these, it is common that the Seller would agree to repair them prior to closing date. This revision can be written into the agreement as a term of sale satisfying the Buyer to remove their (inspection) condition with an agreed holdback amount should the repairs not be performed by the closing date. If the issues are larger or the Buyer feels uncomfortable with the number or scope of issues uncovered then they would exercise their option to not proceed with the purchase.

If the parties are dealing in good faith, such issue should be substantial and not frivolous or repairable to exercise the option of cancelling the contract. However if the Buyer is satisfied with the inspection or new terms emerging from the inspection they are required to waive their condition within the prescribed due diligence period.

Inspections should not be used as a lever to renegotiate a new contract, except as noted above or if the issue is clearly an issue that could not have been discovered prior to an inspection and the issue is substantive. For example, an uneven floor in an early century home is not a valid reason to use for an inspection because this issue was readily apparent on the Buyer’s original visit without a home inspector. On the other hand, defects such as moisture concealed behind gypsum or mold in a crawlspace are issues that may not be readily visible on a first visit but discovered upon an inspection and are valid issues to raise with the Seller. A roof that has never leaked and is discovered to be 10 years old does not provide you an argument to renegotiate the contract in order to pro-rate the remaining value.

Remember to negotiate in good faith. The Seller is often in the same frame of mind as you the Buyer, so if issues are presented in the proper context a Seller will often thank you for discovering them so that he can repair them before they cause you both further grief and conclude the sale amicably. Sano Stante Real Estate has experts with over three decades of experience in Calgary. Call us.

question-markWhat is the protocol for viewing listings that are not listed by my REALTOR®

This is the area where many well intended clients make an oops because they are “nice” and simply don’t know the protocol in the real estate world.

Here’s the scenario: You are driving around on a Sunday afternoon and see a home that just got listed (maybe the REALTOR® is putting the sign on the lawn). You stop and call the REALTOR®, enquiring about the home. Discovering that it’s the perfect home for your family, in the excitement of the moment you ask to view it. The REALTOR®says that he is two minutes away and so you view the home with the other REALTOR®. You may even decide to buy it on the spot signing an offer with that other nice REALTOR®who was so accommodating. Then you call the REALTOR®whom you’ve been working with for the past three months and announce with all the excitement of a new father that you found a home! You may hear a pause at the other end of the line while your REALTOR®recovers from the shock.

First let me say that this is not very common that it concludes this way, but many well intended buyers have called another REALTOR® to show them a property because they didn’t want to bother their REALTOR®. This simply has the effect of allowing the potential scenario described above or conversely wasting the time of the other REALTOR®after you tell them “Thanks, we love the property and will call our REALTOR®to write the offer”.

Best practice  is to select a REALTOR® that you are comfortable working with and know is looking after your best interest. Any service provider will work harder for you when they are certain that their efforts will ultimately be rewarded and your REALTOR® is no different relying that you will eventually buy a home through them.

Open Houses are an opportunity to view homes with or without your REALTOR® and there are no implied obligations when touring an open house. As a courtesy and to make your tour more comfortable, inform the hosting REALTOR® that you are working with “your” REALTOR®. They will appreciate knowing this because their job at an open house (besides selling the home) is to obtain new clients so this puts everyone at ease. If you wanted further updates on the home, they will contact your REALTOR®with the information for you.

Remember, that your REALTOR® knows your requirements best. If you see a new listing they are usually aware of it or are you best source to obtain the information fastest. Many times there will be some factor that precludes the property from being your best choice and your REALTOR® will inform you of that, saving both you and them valuable time.


For your convenience and protection you should contact your current real estate Agent and not the property owner or the Agent listing the property. Your real estate agent knows your requirements and can provide you unbiased information to help you filter unsuitable property and locate the best property for your needs. They can objectively screen properties for you and often will be privy to information that you may not otherwise obtain. If you have a Client relationship with your current real estate agent they have a legal fiduciary responsibility to uphold your best interest.

The real estate agent that you would be calling off of a sign has the obligation to treat you as a customer (not a client relationship). this means that the Agent has a duty to provide you factual information, but does not have the higher duty of care and responsibility that your own real estate agent has if you have a client relationship.

Additionally, you may have signed a Buyer Agency contract with your Agent that spells out terms under which your Agent is obligated to perform his services and the terms that you are required to reimburse the Agent. Notwithstanding any Buyer Agency Contract you have entered into, it remains in your best interest to have your Agent contact the other party to obtain information for you. If the property becomes one that you ultimately decide to purchase, you risk unwillingly provide information to the other party that could hinder your ability to negotiate the best terms. In almost every case, it remains in your best interest to allow your Agent to obtain the information on your behalf. Aside from all the above points, referring to your existing Agent establishes a level of trust that is inherent in every good working relationship.

Remember that having the address or the MLS® system number is helpful and will assist your agent in gathering information regarding the property. For a more in-depth discussion about agency and relationships check out the Real Estate Council of Alberta.  Sano Stante Real Estate group offers over 27 years of expert real estate experience. Call us to receive the best real estate service available.

realtorThis is a must have for anyone interested in staying aprised of the real estate market. Anyone with an iphone now has real time access to local listing information of any home listed on the website. The application uses your smart phone’s GPS to determine your location and queries for listings within the vicinity. The listings will display in either a list, map or aerial view and you have the option to define filters which will allow you to set minimum search criteria including the ability to view open houses or only new listings since a set date. You can also search by MLS# or by property location (city only). You can also find a Realtor by using the search Realtor function. The best feature is that you can set “your agent” in the program so that your agent is saved as the default contact. If you discover or are driving past a property that interests you, rather than having to speak to a stranger, contacting your favorite agent is only one click away. Check out the new mobile app  for the iPhone at itunes app store

The opinions expressed in this blog are the personal opinions of Sano Stante and do not reflect the opinions of any other organization or affiliation.

CREA and the Competition Bureau

Here’s a tale of misinformation and ambition, the perfect combination for a hot news article and the story has hit the press with vigor. The Press reports that the Competition Bureau will save consumers from an alledged real estate cartel in CREA, who they claim have been restricting business models to the detriment of consumers. To prove their case they will be taking CREA to a tribunal. That’s the spin, but the reality of this story is much different than what’s been reported by the media.  Now here’s the rest of the story:

Canada is fortunate to have a national listing website where the consumer can view all properties listed by members of organized real estate (or Realtors ©). This is a boon to consumers who also have access to many other listing sites such as Kijiji, WeList, Craigslist, Google, Point2 and countless others. In countries such as the USA, regional sites exist because of the absence of a unified national site sponsored by Realtors© and these third party sites add another layer of cost to the home selling process as they compete to obtain listings from local boards. Realtors© in Canada have access to cooperating listings via their local boards MLS system from which they can decide where to advertise the listing on any other site such as and a host of others. Independent homeowners can list on many of these sites as well, with the exception of© which is owned and paid for by members of CREA.

The success of Canada’s MLS system has been a great service to consumers who need only visit one site to obtain all Realtor © listings across the country. This is perceived as market dominance by the Competition Bureau who erroneously believes that access to this system is restricted for consumers who wish for minimal services and a nominal fee. In response, CREA has explained that many low cost business models, as well as every other creative business model, are allowed without restriction (except those rules which exist for the protection of the consumer and integrity of data). For the intrepid Seller there exists a plethora of available models from sell-it-yourself to minimal listing services existing within organized real estate (on©) and some on other stand-alone sites. While the consumer has a wide variety of choice, many consumers choose the professional services of a Realtor© to ensure they obtain the best price and to save them the inconvenience and hours of work that are required to sell a home in today’s marketplace.

So what is the media saying about this story? First, the repeated misrepresentation of a 5% commission on every real estate transaction.  This has led to the misconception that there are tens of thousands of dollars to be saved by eliminating a Realtor’s© services, but what hasn’t been said is that all Realtors© work for fees that are established independently, and negotiated with the Seller at the time, and every time they are engaged. Second, the Media has mistakenly reported that the Competition Bureau will open up access to© for all consumers to list their home themselves. Even the Bureau knows this is a flawed solution, but they are not disputing the spin because this can only bolster their case in the court of public opinion. What will likely happen will be a continuation of what is already available today.  The public may list through the services of any Realtor© at their negotiated price to advertise their home on© and may exercise their option to use the remainder of an Realtor’s© services and experience to facilitate one of the largest personal transactions they will encounter in their lifetime.

And why has CREA been so quiet about setting the record straight? CREA has been simply factual in their statements, for which a good news story does not make, so the media instead opts to spin a David & Goliath story (controversy sells papers). When this case goes to the tribunal CREA’s expectation is to win the case, however the media bias I have witnessed on this story has not served the interests of the public or industry.