Whether it’s your first time buying or selling your home or you’re an experienced pro, sometimes unforeseen issues crop up that threaten the completion of your sale. Nobody wants to lose out on their dream home or have a buyer drop out last minute due to complications with the transaction, meaning being educated and knowledgeable is a critical step in the home buying or selling process. That’s why we’ve compiled 5 real estate scenarios and how to deal with them so you can keep the transaction moving forward and eliminate any potential issues at the source.
What can I do if there’s an issue with my new home, but I didn’t get a home inspection?
Let’s suppose you didn’t get a home inspection done, the transaction is complete, and now there’s an issue with your new home that needs to be addressed – what can you do? For starters, you’ll want to check to see if the issue is still covered under warranty, whether that be the manufacturer’s warranty or if you or the seller purchased a home warranty. Beyond this, it can be challenging to determine who is responsible for the repair since no home inspection was completed.
Although the seller is responsible for disclosing known issues with the home, unfortunately, in Ontario, there is a rule called ‘caveat emptor’ or ‘buyer beware,’ which essentially states that a buyer is responsible for uncovering any issues with the home. Keep in mind, though, even if your province has the caveat emptor rule in place, the seller can still be held liable if they’ve lied or deliberately concealed significant problems with the home, meaning it might be time to take another look at your contract and seek legal representation.
What can I do if I’ve bought a home but the tenants refuse to leave?
So, you’ve purchased your new home and are ready to move in or bring in fresh tenants, but the old tenants refuse to leave – what now? According to Ontario law, you cannot evict a tenant with an existing lease in place, and the lease will remain legally in effect even after the closing date. However, this doesn’t mean you are left with no options.
Although you can’t ask the current owner to evict the tenants, you can get them to explain the situation and ask if the tenants would find other living accommodations. Another option is trying to negotiate a closing date that coincides with the end of the lease; that way, you can get the tenants out while also gaining ownership of the home. Finally, if none of these other suggestions work, you could always wait until the lease expires with the tenants and simply not renew their lease. Now, if they refuse to leave after the lease is up, this is a different story, and it would be best to refer to the Landlord and Tenant Board (LTB) from Tribunals Ontario on what to do next.
What can I do if my dream home comes on the market, but I hadn’t planned on moving?
We encounter this situation more than you’d think; a homeowner isn’t looking for a new home when suddenly their dream home lands on the market, and now all they can think about is moving into this new home.
You don’t want to fall victim to real estate regret, meaning the best plan of action would be to first determine if making the move is physically and economically feasible at this time. Next, you’ll need to decide what to do with your existing home. Oftentimes, you’ll have to sell your current home in order to be eligible for a new mortgage; however, sometimes, you might be able to take on a second mortgage while keeping the first home as a rental or income property. In this case, you not only get to live in your dream home, but your income property can help you cover the costs of having a dual mortgage.
What can I do if my lender refuses financing at the last minute?
Having a lender refuse financing at the last minute is every home buyer’s worst nightmare. So, what can you do if this happens to you? Well, one thing that many Canadians don’t realize is that when a lender first tells you you’re approved, it’s technically a pre-approval pending the verification of things like your income, job status, and current gross debt service ratio (GDS). If nothing significant changes with your financial standing between your pre-approval and closing date, you should have no problem getting the mortgage funded in time for your closing. This is precisely why your mortgage broker will advise you not to make any other major financial investments while you’re trying to close on your home (like financing a car) as it can affect your approval status.
However, if you are refused financing at the last minute, the first step would be to speak with your broker to identify why this has happened. You may not be able to rectify the situation with that lender, but at least you can understand what occurred so you can avoid it in the future. Unfortunately, if you’re unable to get your lender back on board, the only other option would be to seek other mortgage lenders.
What happens if I need to change the closing date?
Whether it’s because you don’t want to be stuck paying two mortgages, living in a rental home in the interim, or applying for a bridge mortgage, sometimes you need to change your closing date – but how do you do that?
On the surface, changing the closing date sounds like a reasonable request, but any changes to the terms of the Agreement of Purchase and Sale (APS) would have to be prepared and signed by both parties. Another thing to note is that the other party has no obligation, legal or otherwise, to agree to the change, so unless both sides come to a mutual agreement, the initial terms of the APS will stand. Of course, you can request that your realtor speaks with the listing agent to try and come to an agreement but remember, there is no guarantee.
Probably the biggest key takeaway here is that when you’re looking to buy or sell a home, you must properly follow all the steps to protect yourself as best as possible. For example, getting a professional home inspection can save you a world of trouble down the line, just like resisting that new car until after your mortgage has completely closed will save you from being denied approval last minute. Of course, sometimes, issues can’t really be avoided – like if current tenants have a lease agreement and refuse to leave – but every problem has a solution, even if it’s a more long-term one. And sometimes, problems aren’t even really problems at all, depending on your perspective, like in the case of needing to sell your current home so you can buy your dream home. Ultimately, we wanted to share these 5 real estate scenarios with you so that you could be better prepared on how to deal with them if or when they arise.
If you’ve been searching for an experienced realtor in the Golden Horseshoe region to represent you as a buyer or seller in your next home transaction, be sure to check out my featured listings and do not hesitate to reach out to me directly!