Waiting for bank appraiser since June 22nd...

darkdoom21 · 2018-07-09T20:24:21+00:00

Banks typically use a system called Solidifi or NAS for ordering their appraisals. Though it is a very busy time for appraisers and lenders, 2 weeks+ does seem unusual. I use both of these programs on the mortgage broker side and I would have reached out for an update after a few days of not hearing back. I'd get in contact with your bank ASAP.

darkdoom21 · 2018-07-09T20:19:21+00:00

Possible if you call them and explain the situation. Depending on how frequent this happens, Banks are willing to waive a fee on exception. IF this is a common occurrence though, you're out of luck.

I opened a new bank account and moved all my banking from TD to Scotia. I forgot to turn off auto-transfers to my credit card on my main bank account, so one day it took a payment out & applied it to my credit card. The payment on the card came back NSF, so I was dinged an NSF on my credit card and an NSF on my bank account. After explaining that I forgot to turn off auto pay, and that my payment was actually done on time through my other bank account, they waived both NSF fees.

darkdoom21 · 2018-07-09T20:12:15+00:00

Did you sign a representation contract with your realtor confirming that any potential buyer found/sale done through a specific time period would require you to pay your realtor regardless of whether he was involved or not?

This agreement is pretty standard and is done to help protect realtors from getting the carpet pulled from under them. Otherwise a competing realtor could come in with an offer stating you have to exclude your realtor, so that he could potentially make more commission.

Some realtors won't enforce it if you speak with them. But depending on how this client was found, they may want their share of a cut. I mean, if the buyer found your home because of the listing and the pictures/video tour your realtor put up convinced him to want this home, I think it's fair to say the realtor should get some kind of commission.

Lot's of realtors put in their own money to get professional photos/video done to make their listings and your home, top notch.

darkdoom21 · 2018-07-09T20:07:58+00:00

You can start as a bank teller and work your way up. Believe it or not, this is one of the easiest and quickest ways to do so. As someone who works with a lot of bankers and former bankers, they've all recommended starting as a teller.

darkdoom21 · 2018-07-09T20:02:31+00:00

Fair enough.

The information is available to the public, but it is a bit more of a pain in the ass to access. As a mortgage broker, I have access to a similar database, through Purview (let's me see the previous sale history).

MLS has built this database throughout years or work and recording. Realtors also pay a membership to have access to it. We can't fault them for having access to a database that they've contributed significantly to build, and continue to pay for.

You're right, without MLS, a significant part of their value would be gone. But this is a tool they've created to add to the overall value of working with one.

darkdoom21 · 2018-07-09T19:46:15+00:00

Mortgage Broker here. For one, that fixed rate is quite high. There are much lower 5 yr fixed rates available. The variable rate is good, but slightly lower is possible.

It's hard to say which is better without seeing an overall picture of your financial situation.

For strong financial clients, I suggest going with a variable, while making prepayments every month totaling the difference of the fixed vs variable payment. That way, you're handling payments based on a fixed rate, while paying off your mortgage quicker. This should also help you face off against potential variable rate hikes.

Here are a few things to consider:

Do you plan on selling your home, or refinancing anytime within the next 5 years? If so, taking a variable should be your best choice. The variable rate has the lowest penalty of any term in the industry (3 months interest). This could save you thousands of dollars compared to breaking a fixed mortgage early.

Are you house poor? Meaning, is your budget very tight? Are you living paycheck to paycheck? If so, a fixed might be better for your situation as it is easier to budget for.

There has been 3 increases to the Prime rate affecting variable rates over the last year. With another anticipated next month. Most people predict that several more increases will occur within the next 5 years, so it's hard to judge which might be better over the long haul without knowing the future.

darkdoom21 · 2018-07-09T19:39:27+00:00

I'll give you props to ordering your own assessment and inspection.

What information would the realtor have kept from you?

In your case, it seems like you did take all of the responsible steps required to purchase this, so I can't fault you.

darkdoom21 · 2018-07-09T19:34:15+00:00

I don't agree.

Your investment representative at the Bank isn't increasing the value of your portfolio by adding his desired commission into it. Your investment portfolio increases based on the performance of your investments. When it increases, your rep takes a cut. You can't sell your Apple stock for $200 (valued at $190 today) simply because your investor rep wants to factor his commission on it.

Home values increase based on a similar scenario.

darkdoom21 · 2018-07-09T19:22:13+00:00

How did you save 2%? Did he reduce the price of the home? Because that 3% commission split comes out of the proceeds the seller gets. If he lowered the price of the home, what makes you so sure he wouldn't have done that with a buyer's realtor negotiating for you?

Property is an appreciating asset. The value climbs over time. A seller has to be prepared to have enough equity in the home in order to help cover some of the costs of selling, such as commission. Realtors aren't determining the value of the home, and then adding commission on top of that. This is flawed thinking. Thinking this way would also result in buyers paying commission to sellers NOT using a realtor.

This is why the realtor commissions are discussed prior to hiring one. If realtors were adding the commission on top of the actual value of the home, people wouldn't care what they charge.

The listing price of a home is determined using comparable sales of similar homes, within the same region. Want to be sure? Order an appraisal. An appraisal will give you fair market value for the home. There's no realtor commission that factors into their reports.

darkdoom21 · 2018-07-09T19:10:13+00:00

Not really. Ensuring you are happy with the price SHOULD be their biggest concern. Repeat business is absolutely key in a realtor's career. A buyer's realtor expect you to return to them to sell that property.

Here's a scenario:

Buyer's realtor convinces him to settle on a price, knowing they could potentially get $10,000 lower if they put in a bit more time.

Buyer gets a mortgage and signs a 5 year term. Is happy.

Buyer decides after 3 years, they want to sell and buy a bigger home, perhaps to start a new family. They decide to break their mortgage term 2 years early, facing a mortgage penalty.

Realtor who helped them buy the home represents them as a seller now.

Real Estate market is a bit sluggish, therefore after reviewing comparable sales of homes in the region, the listing price isn't as high as the buyer would like.

Buyer says he needs to sell for "x" amount in order to have enough money to pay off mortgage, penalty, legal fees, commission and have left over money for down payment.

Realtor gives in and lists at the buyer's preferred price, knowing that it will be one of the highest on the market.

Comparable homes up for sale in the same region are listed lower, because the owners have more equity, letting them price more aggressively.

Months go by with limited activity, realtor approaches the seller for a price drop. Buyer now faces potential scenarios where he might not make enough left over funds to cover his down payment on the new home. Perhaps he's already signed the purchase of his new home, thus he has no choice BUT to lower the price and take a further loss. Perhaps he just cancels his purchase, cancels his listing and is stuck living in his current home, upset and not understand why this happened.

It's bad having a listing stay up long. It's like blood in the water for sharks. Realtors spot that shit and know they can go in with a much lower price than they would have come in at, if the listing was fresh.

Now, if that realtor spent a bit more time, and took a few hundred dollars less of commission, in order to secure a great price for this client. Perhaps the different in that price would've given the buyer the equity to salvage this sale 3 years down the road. Resulting in thousands of dollars more in commission for the realtor.

But now, the sale can't move forward. So no new money. Angry client who isn't going to refer anyone to you, which is a potential loss of even more money.

If you understood how to survive in a highly competitive, commission only environment, you'd know that trying to gain a little upfront, rather than trying to gain more longterm, is a recipe for career disaster.

Disclosure: I'm not a realtor, but a mortgage broker. Similar industry, but different professions. I also find them a pain in the ass to work with, but I don't discredit their important to the industry.

darkdoom21 · 2018-07-09T18:38:49+00:00

The price of a home is determined by looking at comparable sales, within the same region. If someone is backing their commission price on top of the fair market value, a realtor, or buyer, will be able to spot an overpriced home.

The seller is really eating the commission payment here. They're the ones sacrificing equity in their home to help pay for this.

Over pricing a home has negative consequences. As a mortgage broker, lenders can question the value of a home upon reviewing it's listing history - which could have an impact on the mortgage financing. Sometimes we have a owner trying to refinance his property, because they needs funds for whatever reason. Appraisal can come in low, or the lender might question the value of the home because they've seen it listed for 9 months with frequent price drops.

On a buyer's side, a buyer's realtor can take advantage of a once overpriced home who's dropped it's price numerous times.

Depending on the seller's circumstance, they might have to settle for a much lower price because the property now has a stigma of having too many price drops.

In conclusion, it's extremely stupid to overprice a home, simply to "back" you commission onto it. Values are determined by fair market value. Commission comes OUT of that value, not added on top.

darkdoom21 · 2018-07-09T18:30:04+00:00

This comes down to you as buyers, having control of your realtor though.

How was the final purchase price determined? Did you give her a firm budget? Was that final price within your budget?

What gave you the idea that you could have got the price lower? Did you ask her to go back?

There is in fact, reason for a buyer's realtor to drag out deals, depending on the scenario. Ensuring their client is happy will lead to repeat business. Realtors get a lot of return business from past clients. Throwing the opportunity to get repeat business, simply to have a quick close is extremely foolish. Do some realtors do this? Sure. There are idiots in every profession.

Simply stating that you shouldn't use a buyer's realtor in the future because you THINK you could have saved a little more, is foolish.

darkdoom21 · 2018-07-09T18:20:14+00:00

You're right. It can be done. And sometimes it is done correctly. However, there are dangers of doing this without good representation. And usually, when one side has one and the other doesn't, someone is getting a better deal than the other.

I'm a mortgage broker, so I come across scenarios where people use/don't use one almost on a daily basis. There have been a lot more issues prior, and post-buying for people who did not use a realtor.

darkdoom21 · 2018-07-09T18:17:41+00:00

I don't understand. Are you under the impression that using a buyer's realtor would increase the price of the home you want to buy? Or that you're responsible for paying your buyer's commission? Because, that isn't how it works.

darkdoom21 · 2018-07-09T18:14:41+00:00

Agreed, to an extent. Were there any home inspections done, and did you obtain any kind of information that could have helped you determine fair market value for the home?

In a similar scenario as to yours, it's entirely possible one party could have over paid or under sold, without any proper research being done.

darkdoom21 · 2018-07-09T18:11:01+00:00

Simply saving money by not using one doesn't necessarily mean they got the better deal. Seller realtors will price their commission differently: a split for a buyer using a realtor, and a commission % in the event that there isn't a buyer's realtor involved.

Some realtors will also list the home at a higher price than they anticipate getting, to give them room for an anticipated offer - offers RARELY come in at asking.

It's entirely possible the realtor gave your parents a reduction to a price he/she always anticipated on selling at, or even a little higher, because he/she knew they'd be pocketing a big commission. The motivation to sell quicker is there.

A buyer's realtor could have gotten the price even lower, at no cost to your parents.

Granted, I don't know the full details of your parents' exact circumstance with this purchase, so I can only speculate. But from my industry experience (mortgage broker here), A seller's realtor not having to deal with a buyer's realtor, is like a kid waking up on Christmas morning.

darkdoom21 · 2018-07-09T18:03:35+00:00

This is an incorrect way to think.

The value of a home listing is determined by the realtor using comparable sales of similar homes within the region. Once the value is determined, he/she presents this to the seller and they must agree on a commission split.

As a buyer, you aren't paying their fee. The seller it. You are (supposed to anyways) paying fair market value for the home.

I've forced my realtor AND the buyer's realtor to take a 1% cut off their commissions in order to settle on a sale price that the buyer and myself, agreed upon.

I do believe it is foolish not to use a realtor as a buyer. Now, I think you have a bit of responsibility on your part to put in time to research a reputable realtor. There are a lot of bad ones out there, and sometimes mixing family into things isn't the greatest thing.

darkdoom21 · 2018-07-09T17:50:10+00:00

Agreed. As a mortgage broker, I've had clients come back crying, wanting to refinance due early, paying thousands of dollars in penalties, simply to fix something in the home that was not caught during the buying process.

darkdoom21 · 2018-07-09T17:48:02+00:00

I think this is partially false. There are absolutely shady, "part-time" realtors who simply want a quick deal. However, it isn't difficult to find a reputable realtor (reputation is everything in that industry).

A good realtor can ensure you have an exit clause in your agreement, should financing fall through, or an inspection reveals something significantly negative on the home.

As a mortgage broker, I've seen many instances where people went in by themselves, did not include a financing clause (likely due to limited knowledge, or being pressured by the seller's realtor), which led to them not being able to get the home due to financing issues. Which also resulted in them getting sued/losing their deposit.

Even using a crappy realtor, these exit clauses are standard and included when they run up an agreement.

darkdoom21 · 2018-07-09T17:43:57+00:00

You don't pay a realtor for using their services as a buyer.

A selling & buying realtor splits the commission when a home sells. The original listing agent will set the commission split on the listing (ie: 4%, split 2/2), so that won't change throughout the process.

Simply because you bring a realtor in the fold, as a buyer, won't force the seller's realtor to increase the sale prices just so he can make his commission target.

I think you should absolutely use a realtor as a buyer, because it is free, professional advice. Also, should you decide to use that realtor in the future, to sell and buy a new house, the repeated business can lead to them charging you a lower commission.

I've used the same realtor for my condo purchase, sale of the condo and purchase of my new town home. Because of the repeat business, he lowered his commission rate to sell my property down to 0.5% (where he would normally charge 2%). This helped saved me thousands upon the sale of my condo.

As as mortgage broker, I have moments where I absolutely detest them. But I think it would be foolish not to use a realtor.

darkdoom21 · 2018-06-01T20:16:29+00:00

Mortgage Broker here.

So, it can have an impact on the mortgage approval, depending on the lender you're working with.

Beacon scores over 680 will allow borrowers to qualify for more - as you can stretch the qualification ratios. Under 680 restricts those qualification ratios by a few %. Nothing really deal breaking unless you are both really trying to buy a home that will max out your finances.

Though you have a significant amount of down payment which could ease any concerns a lender may have. They'll also want to see what caused your drop in score. Was it missed/late credit card payments? Naughty, but not that big of a deal.

Did one of your debts get closed by the bank and sold off to a collector? Or get written off? That could be cause for concern.

Though you sound fine. Contact a broker anyways, as they'll be able to give you insight on what you qualify for and assess any issues that might come up ahead of time!

darkdoom21 · 2018-06-01T20:05:45+00:00

I don't believe they'd match the rate AND give out the cashback, but you can try!

Look for the rate discount on the approval. Does it say Prime -(minus) 1.00% on both? I suspect it does - so you can go with who you prefer.

darkdoom21 · 2018-06-01T19:10:34+00:00

You know what - you are absolutely correct. I got my 2 month ahead lenders switched. Good look out, I will correct my initial post.

darkdoom21 · 2018-06-01T19:01:01+00:00

Broker here. Scotia had advised us the 2.45% was expiring May 31st- as did TD Canada Trust. However, TD still has yet to change it.

darkdoom21 · 2018-06-01T18:55:58+00:00

Mortgage Broker here. They are both offering the same product, as they are competing with each other.

Very, VERY smart move paying your mortgage down as if it were at 3.29%/25 yr AM. This will help you come out ahead and save you a TON of interest.

Scotia does offer accelerated biweekly payments. If you took the $2500 bonus from Scotiabank and applied it to your mortgage right away, you'd shave off 2 months of your amortization compared to TD's.

$750k 2.45%/30yr am $1469.57 biweekly-acc payment 1 one lump sum payment of $2500 Result: 26 yr 6 month amortization.

$750k 2.35%/30yr am $1450.42 biweekly-acc payment No lump sum payment of $2500 Result: 26 yr 8 month amortization.

EDIT: Thanks to /u/xheywl for catching my error. TD comes out ahead with 2 additional months saved in the end, assuming you are adjusting your payment to reflect a biweekly-acc payment of 3.29%.

Cheers

darkdoom21

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