Changing the way business is done in Ottawa

There are probably quite a few people that read this blog that do not have any experience whatsoever in real estate. This is fine. It's one of the main reasons that I have this blog. I enjoy sharing my knowledge and experience with everyone. As such, I am going to talk a little bit about another speaker that was at the OREIO roundtable on Monday.

The speaker was a lawyer. Now, lawyer's tend to have the mindset that anything that can go wrong will go wrong and that's not necessarily a bad thing. You want to be protected by the law in case something does not work out for you, especially in real estate. With such high dollar amounts, a bad deal in real estate can take years or even decades to recover from. I was definitely listening closely to what he had to say.

With the recent decline in the markets, there is a greater likelihood that someone will be pulling out of a signed deal. A potential buyer could have second thoughts when purchasing a home, especially if they have just lost their job. Now, as a seller, you need to protect yourself against this. Typically, a deposit is given at the time of offer to show the vendor the seriousness of a bid on a property. In Ottawa, the amount has usually been a token amount, about $1000. This is not the rule, but fairly custom in Ottawa.

Now, the $1000 is all that the vendor has against the buyer if the buyer backs out. This is not sufficient. If you have pulled your house off the market to work a deal, you are possibly letting other potential buyers slip by. You need to be compensated for this. It is not uncommon for a property in Toronto for the deposit to be in the $20,000-$30,000 range. This allows the vendor to recover some of the legal fees and some of the headaches that accompany this type of failed deal.

The lawyer's message was clear. Ask for larger deposits when selling your home. If buyer's are serious in your property they will put up or shut up. It's important that you protect yourself from a bad deal, especially given the deteriorating economic environment.

Another whim...

Tonight I go and visit Jeff. I've convinced myself to try and sell my downtown property. What prompted this? Simple. Money!!!

The house next door, which I once considered purchasing, is now listed on the market for $249,000. Now, I believe that my house is in better shape. Therefore, I think I should be able to get a decent return on my original investment of $200,000. This is a nice little chunk of change. There are many costs on my end that I need to worry about, but I am going to discuss this with Jeff and we're going to see if the numbers are going to work for me.

There is still a strong chance that I keep my place. I'm thinking that I will offer my home up in the hope that an investor would be coming along that wishes to purchase both halves of the semi. If that's the case, I'm hoping that he's going to pay a slight premium and that I will have made some money without actually doing anything to the property except hold it.

If I sell the place, I think I will go with a condo centrally located. Realistically, I do not really want to live with anyone. I'd like the privacy that I get with a condo. The place would also be smaller so I wouldn't have to spend a fortune on furnishing the place either.

This is my latest whim, but I expect that not much will happen from it. I have set a short timeline to help gauge interest, but if nothing happens too soon, I will continue to look for renters and move in September 1st.

Room sizes

I am going to try to update this blog as much as I can. I am going to include as much information as possible in order to allow people to develop an opinion. I would like for people to share that opinion through polls and comments to help me decide which ideas are best for my new home.

Currently, the lawyer is working out the final details of the agreement. The house is under a lease and the tenants are going to be living there until the end of August. The lawyer will have to credit my account for rent and other miscellaneous adjustments. I'm getting anxious as the final closing date is February 11, 2008. It is the day I officially own my 2nd home.

The home is a semi-detached which mean that I only own half of the building. It is 2 storeys tall, and there is a basement that is semi-finished.

In addition to that information, I have some room sizes to help give you, the reader, a better idea of how my house is laid out. Until I get some new pictures, this will be the best that I can offer in terms of a visualization.

On the main level:

Living room - 12.00 x 9.9
Dining room - 14.50 x 10.75
Kitchen - 11.40 x 10.6
Den/bedroom/home office - 10 x 9.6

On the 2nd level:

Master Bedroom - 14.25 x 11.9
Bedroom 2 - 12.10 x 8.6
Bedroom 3 - 11.4 x 8.6
Bathroom - ???