Thursday, August 31, 2017

Basement Flooding 101


In our area of Windsor, Ontario, we had some very heavy rains this week. Although nothing comparable to some of the devastation in the Houston, Texas area, many people suffered substantial damage from basement flooding. The condo building I live in had 2.5 feet of water in the parking garage ☹. We thought this friendly reminder on basement flooding tips would be timely.

Follow any directives to turn off utilities. If you’re advised to switch off the main power source to your home, flip each breaker and then turn off the main breaker. You may also need to shut off the main valve for your home’s gas and water.

  1. Be aware that submerged outlets or electrical cords may energize standing water. Keep the power off and do not enter a flooded area until it has been determined to be safe to do so by a professional.
  2. Have an electrician inspect electrical appliances that have been wet. Do not turn on or plug in appliances unless and electrician tells you it's safe.
  3. If the flooding is due to a sewage backup (or you are not sure), do not flush the toilet, run a washing machine, dishwasher or any other feature with a drain since this will likely increase the flooding.
  4. Report the issue to the municipality. Documentation of flood locations helps municipal staff determine if any work is required on municipal infrastructure.
  5. During clean up, provide as much ventilation as you can. Open windows if weather permits and use fans to dry things out.
  6. Call your insurance company immediately. They will advise you on standard clean up procedures, contractors to call and claim information.
  7. Make sure you take lots of pictures and document items that have been damaged or need to be replaced. Before you head out and start buying new stuff, make sure you are familiar with the coverage you have with your insurer. Keep any and all receipts for emergency work done, purchases, and/or repairs.
  8. Insurance companies look favourably on homeowners wanting to undertake work on their own to reduce the likelihood of future flooding. Repeat claims with no efforts to reduce future risk may be sufficient for an insurance company to drop that form of coverage in the future.
  9. Take preventative measures in the future to make sure the water stays away from your basement as much as possible. These include: making sure downspouts are extended and flow away from the foundation, gutters are clean and flowing, grading isn’t low in any areas and if it is having it filled it to flow away from the house, and having the sewer lines checked annually to make sure they are flowing and not backed up and possibly having them eeled out if need be.
  10. If the preventative measures don’t work at keeping the water away, you may need to look at additional upgrades including: adding in a sump or multiple sumps with battery back ups, a back flow (check flow valve) to stop the sewer back up, doing the weeping tile along the perimeter of the basement, and digging up the exterior of the house to add a waterproof membrane.
Sometimes when we get a huge rain storm in a short period of time, there isn’t much you as a homeowner can do. Knowing some of these tips can help keep you safe next time and hopefully minimize the damage. Stay dry out there!


Friday, August 18, 2017

Escalation Clause? What Is That?



Have you heard the term escalation clause?  Chances are you haven’t unless you’ve been involved in a bidding war as either a buyer or seller in the last few years.  Today we are going to discuss the controversial subject of escalation clauses and what you should know.

What Is An Escalation Clause?
An escalation clause is a clause in the schedule of an offer which is designed to defeat competing offers by automatically increasing the Buyer’s purchase price by a pre-set amount over the highest offer.  Usually there will be some sort of cap placed on the escalation clause where the buyer won’t go over that amount should the best offer exceed it.

When Would An Escalation Clause Be Used?
An escalation clause would be used in a multiple offer situation (bidding war), where the buyer wanted to ensure they have the highest offer price.

How Would An Escalation Clause Work?
An escalation clause would state that the buyer agrees to pay a certain increment over the highest offer received.  For example, say there were 5 offers on a listing and one of them had an escalation clause, stating that they would pay $5,000 more than the highest offer received.  Suppose then that the highest offer was $500,000.  The buyer with the escalation clause would then agree to increase their offer to $505,000.  The logistics of how to accept the escalated offer vary, but the most common way would include the seller countering the buyer’s offer at $505,000 and having the buyer accept.

Why Is This Subject Controversial?
There are a few inherent conflicts with the inclusion of escalation clauses in bidding wars:

  1. It hurts the confidence of buyers when submitting an offer.  Feeling that dealing with this sort offer is unfair, buyers may decide not to participate in these competitive situations.  That could affect the confidence of the market overall.  Some of these bidding war practices already have buyers feeling discouraged, so it feels like piling on.
  2. There is a privacy issue.  The only people in a multiple offer situation who are supposed to see the contents of buyer’s offers are the listing agent and the seller.  In an escalation clause situation, inherently the price of the highest offer is disclosed to the buyer with the escalation clause – this really cant be avoided.  And this contradicts many RECO rules.

What Is Happening In The Market Because of Escalation Clauses?
Although not illegal, the escalation clause use has been frowned upon in the market in our experience.  Generally, we are seeing listing agents and sellers deciding not to deal with offers that include these clauses, and stating so right in the listing.  This eliminates the potential unfairness to prospective bidders and increases the confidence in the offer process.

What Do We Think Will Ultimately Happen To Escalation Clauses?
We think they will eventually be banned by the governing bodies.  The cons seem to far outweigh the pros in the market.  And real estate professionals have been banning them from their listings for a while now.


So there you have it readers.  Do you or anyone you know have any experience with escalation clauses?

Thursday, August 3, 2017

Real Estate Insider: August 2017 News Report




Thanks for joining us for another edition of the Real Estate Insider! We've come across so many topics we know you won't want to pass up. So kick back with a coffee and browse through our collection of findings.


Controversy over the Escalation Clause! A clause designed to automatically defeat competing purchase offers, it sometimes unintentionally discloses the price and contents of competing offers. Should they be banned all together? Most realtors think so. >>

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Nationalism at its finest! Meridian shows its pride for Canada’s 150th birthday by offering a 15 month fixed mortgage rate at 1.5% to help people live the Canadian dream. >>
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‘Flipping Crazy’ Canadian TV series aimed to give viewers a first hand interaction with the step by step process of house flipping set to debut on Amazon later this fall. >>

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Whose side are you on? Ontario may be forcing Realtors to choose by banning the ability to represent both the Buyer and the Seller in a deal, fearing it could create unethical behavior. >>
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Communicate value, not statistics! With vast information available to everyone at the click of a button, it’s how you interpret the information that makes you valuable as an agent. Learn how to translate information rather than regurgitate it to prove your worth as an agent. >>

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Location, Location… Location? Is living in Toronto or Vancouver really worth 70-80% of your total income? If you want to live there you better believe so! With housing affordability deteriorating across Canada, a rate hike is causing fears that some people in these highly sought after areas might run out of money for necessities. >>

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Canada’s banks are on the ball! Less than 24 hours after the BoC announced they would raise its rate 25 basis points, banks such as RBC wasted no time raising its rate 0.25% with hopes that this raise will be a positive development in the housing market. >>

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Getting back under control. The measures taken by policy makers to try and cool down the rapidly inflating housing market seem to be taking effect, as June home sales experienced the biggest decline since 2010. >>

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Are self driving mobile homes the “starter home” of the future? With the ability to commute while you sleep, eat, work, etc. The synergistic relationship that this vehicle offers could be very appealing in the near future! >>

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Windsor’s hot selling market is showing its effect on the rental market, with rent increasing by 2% from last month. >>

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Don’t go with your gut! This company is taking the guesswork out of potential tenant screenings, giving you the data necessary to make an informed decision, instead of relying on a simple interview or credit report. >>

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Condo owners get ready! New rules and regulations protecting condo owners are taking place this fall. >>



That's a wrap for this edition. Have a real estate topic you think we should cover? We want to hear from you! Send us your comments and your suggestion could be our next blog topic. Happy reading and enjoy the rest of summer!