Why the seller or listing agent should order the Condo Status certificate package

Condo status certificate should be available at listing time

What is the condo status certificate?
This is a package of information which contains extensive detail on the legal description, governance, policies and finances of a specific condominium corporation.  It is prepared by the Condominium Property Manager and is a snapshot at a certain point in time, meant to provide pertinent details to a potential buyer and their lawyer, concerning that condo and the unit being purchased.

What is the critical information contained in the package?
All of the information is important but the key things include the Declaration which details the legal description and governance rules under which the condo was created.  The budgets and status of the reserve fund are very important, as is whether there are any pending lawsuits or special assessments.  Condo rules and policies are critical, too.  Ie if an investor wants to rent out a unit, they will need to know what rules are in place. Ie short term rentals may be ruled out thus Airbnb or other short term rentals may be excluded.

What is the typical review process?
These are normally ordered from the Property Manager by the buyer’s lawyer, once a conditional sale has been agreed between buyer and seller.  The Property Manager has 10 business days to update/research and produce the package and make it available for buyer and lawyer review. Normally, this gets done in 5-7 days and some Property Managers also offer an expedited service for a higher fee.  Normal fee for the package is $100 and we have been quoted up to $200 for expedited service.  The lawyer pays this and the delivery charge and gets reimbursed by the buyer.

The lawyer then reviews the package and highlights any unusual circumstances for the buyer and answers any specific buyer questions.

What’s wrong with this process?

Lost buyers and time lag:
Often there can be information contained in the Status package that may cause a buyer to rethink their interest in the unit or the price they might be prepared to pay for it.  If this is so, the buyer may walk from the deal and the unit remains unsold.  Other interested buyers may have moved on by this point and be lost to the seller as prospective buyers, especially given the lag time between the agreement and buyer and lawyer review of the status package which is typically 7 or 8 days after agreement.

Buyer feels committed to purchase at time of agreement:
There is also a psychological tendency for buyers to want to complete a deal once it has been made and they often do not pay enough attention post agreement to details which may deter them from completing the deal.  For this same reason, there is a “cooling off” for new construction condo purchases (often sold in high pressure, if not timeshare manner) while buyers and hopefully, their lawyers review all the detailed information in the new construction or pre-construction condo.
Disclosure package. Unfortunately, in the case of resale condos, the seller pays a big price should the buyer get cold feet while awaiting the condo package.

Sale falling through delays seller plans and may leave a stigma:
When a conditional sale falls through, it listing gets put back on the active market but this takes some time and there may be a question mark or stigma attached to the listing.  Other buyers and their Realtor will be asking: why did that sale fall through?  Is there something wrong with the property? Something come up on inspection? Something in the condo docs?

Best practices recommendation:
The seller or listing agent should order and pay for the condo docs (currently, this done by the buyer’s lawyer or agent) , so they are available at time of listing for interested parties to peruse prior to making an offer to purchase.  If this is done the buyer, their agent and lawyer can clarify any details in the condo documents and make a better informed purchase decision.  This is guaranteed to help minimize the number of sales that are currently falling through (which are at an all-time high, 10-15% in our opinion) and potentially set up a multiple offer situation for a condo seller.

$100 seems like a pretty inexpensive way to do all the above, don’t you think?

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 oasisrealty@rogers.com
Oasisrealtyottawa.com

If you have any comments on this post or any other real estate matter, feel free to indicate below!

 

 

Should showings continue after a conditional sale?

What’s the point?  If it’s already sold….

Sellers can be excused for not really wanting to continue with additional showings after agreeing a conditional sale with a buyer.  It is understandable that sellers might wish to take a breather, after all the preparations for listing the property and the rush and stress of the initial deluge of showings.

Buyers, too, generally have little enthusiasm for a property that appears to be already “spoken for” by another buyer.  After all, why get all excited about the property, when another buyer is in control of that property during the conditional period.  Many buyers are afraid that they will be disappointed after seeing the “one that got away”

Even buyer representatives can be somewhat reticent about investing time in showing a property that their buyer’s cannot buy.

For the above reasons and more, the number of showings on properties with conditional sales in place drops 90% or more.

…but what if the conditional sale does not “firm up”?

10-15% of conditional sales are falling through in our current market!
Given the current seller’s market conditions, extremely low listing inventory, offer dates and multiple offers, many more conditional sales are falling through than is usually the case.  Historically, conditional sales don’t complete only about 5% of the time but over the last 18-24 months this figure has grown to the point where as many as 10-15% of conditional sales are falling through! See the number of properties shown as being ” back on market”  in this recent 7 day snapshot from our Realtor dashboard.

See a previous post on why sales fall through here: http://blog.oasisrealtyottawa.com/conditional-sales-falling-like-autumn-leaves/

Property effectively “off the market”
Sellers will have missed buyers during the conditional sales period and there can be a bit of a stigma associated with a sale falling through.   Some buyers and their agents may wonder if there was some issue around inspection that surfaced to kill the previous deal, for example.

Both buyers and sellers should pursue showings:
A buyer may get a “leg up” on a such a property, should it fall through, as many buyers will have moved on and not be in a position to quickly get in to see the property, once it shows up as “back-on-the-market”  An aggressive buyer (and agent) may even want to submit an offer to show the seller their level of interest and if anything happens with the original buyer, they are then in a position to control the property. (still not a high % play, but if it is the “right” property, it may be worth the time investment.)

Sellers: be open to showings and keep the property readily available and accessible. 
We had an interesting experience recently where we booked a showing on a property that had been conditionally sold to find that snow had not been shovelled and the property was not accessible or safe for viewing.  Surprisingly enough, the conditional sale on that property fell through and it was back on the market a few days later. Also no surprise: our buyers had moved on a purchased something else in the meantime.

So while it is normal to lose interest in doing showings post conditional sale, all parties are best to remember “it’s not over ‘til it’s over!

Gord McCormick, Broker of Record
Oasis Realty Brokerage
613-435-4692              oasisrealtyottawa.com

 

4 hidden MLS listing sections buyers and sellers don’t get to see

Our MLS listings are very detailed and provide lots of opportunity for complete disclosure of information that is pertinent to buyers.  Like all things however, the quality of the listing is only as good as the quality of data input by the individual Realtor.  Also, a lot of brokerages don’t do a terrific job of oversight or quality control on their listings but this is a matter for another post.

What we do wish to discuss here, are the sections of the listing that can be very useful for a buyer to know and can also be critical to the success of the listing, as well as the buyer purchasing decision.

Here are some of the key sections of the listings that buyers don’t see:

Realtor remarks:
This short section allows the listing agent to detail ancillary information like listing conditions, closing date preferences, utility costs, special instructions, special assessments, rental items or lease obligations or other notes that are generally directed to the Realtor members but almost always are pertinent for buyers as well.

CTSO:
This is the acronym for “Commission-to-selling-office”.  This is critically important and both buyers and sellers should know what is contained in this small section.  This section tells the buyer agents what % commission is being offered on the listed property and may be the most important hidden section of all, since it speaks to compensation.

Many sellers don’t understand what is posted there for their listing and what effect it may have on a buyer agent’s enthusiasm for that listing.  Also, FSBO sites or “mere posting”   listings often show $.01 in this field with instructions in the Realtor remarks to contact the seller directly to understand what commission they are offering or not.

Buyers need to know what is shown in this section, as they may be liable to pay directly any difference between their contracted commission rate in their Buyer Representation Agreement and that offered by the specific listing.  While most commission rates to the selling office are 2.5%, they can vary widely.  Government relocations for example may be seen at only 1.85%.  Some brokerages offer 2, some 2.25 and some do a flat fee  commission amount for as little as a $3,000 commission to the buyer brokerage and representative.

Sales History:
The sales history section of the listing is very critical for buyers to see (and also sellers, prior to listing time) as this documents the current sales activity and most previous MLS® listing history.  It can be useful for buyers to know how long the property has been on the market and also what the previous sales timelines and results were.  For example, if a property had some kind of stigma, unique feature or location disadvantage and it took a long time to sell during previous listings, the odds are the same will be true again.  This buyer should try to remember this when calculating an offer price and also remember it in future when their turn comes to sell the property.

Noting when price changes or conditional sales have occurred is also relevant information contained in this area.

Listing attachments:
Our Realtor system has a feature that allows us to any number of attachments to the listing to provide further information such as floor plans, surveys, lease agreements, work orders, permits, upgrade lists, pre-listing home inspections, property appraisals, tax bills, maintenance records/history or any other pertinent record that helps the buyer representative better explain the home features and history to the prospective buyer.

This attachment field is not as well used as it might be, but more and more we are seeing useful and detailed information being added by the most conscientious and professional listing agents.

Both buyers and sellers should be asking their respective agents if there is pertinent information in any of these fields that are pertinent to their decision making.

Follow us on social media for more buying and selling tips and news on Ottawa real estate.  https://www.facebook.com/oasisrealtyottawa/  @OasisrealtyOTT

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692  oasisrealty@rogers.com
www.oasisrealtyottawa.com

Strong sales kick off Ottawa real estate 2019

January is normally the 2nd lowest monthly sales in the Nation’s Capital which would be no surprise to most.  This year however, buyers and sellers shook off the winter blues (and the snowiest January on record) and pumped out a 15.8% unit sales increase, in what was a record January.

Listing inventory remained a key factor, as residential inventory was 20.3% lower than a year ago and condo listing inventory was down 30.9%.

New listing trend is somewhat positive, as new residential listings were up 2.2% from a year ago, though condo listings were down 11.8%.  So our seller’s market conditions continue.

Some average price growth, with residential properties sold up slightly by 1.5% to $432,829 and the average condo selling price was $283,990 up 7.7%

If you are contemplating a move to or around Ottawa this year, please give us a call and we would be happy to help you navigate this challenging market.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage  613-435-4592 www.oasisrealtyottawa.com