Delving into the details of real estate transactions with award winning Vancouver Realtor Paul Toffoli of toffoli.ca 604-787-6963
Mark: Hi, it’s Mark Bossert from Top Local Lead Generation. We’re here with Vancouver’s award winning real estate agent, Mr. Paul Toffoli. How’re you doing today Paul?
Paul: I’m well Mark, yourself?
Mark: I’m good. So we’re going to talk about subject removal, and I guess really what we have to start with is what’s the due diligence you have to do before you can do that?
Paul: Sure, as we’ve talked about previously, as part of the negotiation process we’re typically going to have certain subjects that are going to be part of an offer. So that would be things like: financing, inspection, property disclosure, title search - those are typical ones on single family homes. On strata properties like condo’s and town homes we’re going to have reviewing the strata documents, the minutes of the annual general meetings, the regular meetings - there are a whole other layer of things we could talk about when we go into strata’s. But basically over the course of say a week to ten days, we’re going to go through this process of due diligence where we’re going to make sure that the back is going to finance the property for my clients and that there’s no strings attached. People do get pre approval but there are strings attached, so you want to get all those strings dealt with. Then you have the home inspection done, read those strata documents, get any questions answered regarding those strata documents, look at the title and make sure that if there is anything on the title that it is something that can be easily removed - so there’s not a lis pendens or something else, that you’ve got the right names of the sellers on the contract, all those little details. And finally, any disclosure issues that may be dealt with. And there could be other things like the subject to the sale of the buyers current property, those types of things. So we go through that process, tick all those boxes, cross the t’s dot the i’s - however you want to put it - and make sure that everything is in order so that there’s a comfort level. It can be a little unnerving, a little stressful because it’s not something that people do everyday, but we go through that process and get as much information as we can so we have a comfort level when removing those subjects.
The subject removal is just very simple signature on the addendum of the contract, client or clients sign that, the seller does not need to sign that typically because most of these subjects will for the sole interest of the buyer. There can be seller subjects, but that’s a different story. Once the clients have gone through the process, and their comfortable that they’ve done all their due diligence, they’re ready to commit to 100% of purchasing the property then we sign a simple addendum to the contract that the subjects are removed. In conjunction with that, there’s typically a deposit that’s payable either at the time of the subject removal or within 24 or 48 hours of the subject removal, it’s typically done by bank draft. So the client goes to the bank, gets a bank draft from the teller in the amount of typically around 5% of the purchase price but that’s previously negotiated, part of the contract. They sign the subject removal, that deposit cheque comes into my office and goes into our trust account and goes towards the purchase price on closing. And that’s the next big step, is the closing. What happens then?
Mark: So what are some, you mentioned some strings with say financing. so can you give a couple common strings that people might run into?
Paul: So in financing, banks or mortgage brokers will typically go through a financing pre approval process, but that pre approval may be subject to seeing your notice of assessment of the last two years taxes; it may be subject to a confirmation letter from your employer saying that you’re a permanent employee, that you’re not on probation, stating what your salary is to make sure it lines up with what you told the mortgage broker; it could be subject to confirming any outstanding debts; any credit checks. That type of thing, so there’s usually a list of items. And you just want to make sure, that once you’re ready to remove subjects, all of those subjects from your bank, on your financing, are gone so you don’t have a risk of them saying, oh yeah, it’s fine except for NOA didn’t add up to what we thought it did and you can’t get your financing.
Mark: Right, so we’ve been talking with award winning realtor in Vancouver BC, Mr. Paul Toffoli. You can visit his website www.toffoli.ca or give him a call 604-787-6963. Thanks Paul