Property

Question 1

What are the considerations when buying a property ?

Answer 1

• Affordability
• Initial expenses
• Location
• New or old neighbourhood
• Lifestyle and Flexibility
• Aesthetic values

Question 2

Name three advantages and disadvantages of renting

Answer 2

Advantages:
- no property rates
- no homeowners insurance
- no risk of losing money if the property prices decreases

Disadvantages:
- Rent can increase annually
- no tax advantages
- may not have pets

Question 3

Name the advantages and disadvantages of buying a house

Answer 3

Advantages:
- the value of the house may increase
- can get a second mortgage loan
- gain equity as the loan decreases

Disadvantages:
- the value of the house may decrease
- take longer to sell and may delay the move
- closing costs

Question 4

What are the drivers of fixed property prices ?

Answer 4

Macro factors:
-The economy
- Interest rates
- Building costs

Property Cycle:

Micro factors:
-location
-availability of land
-condition

Question 5

Who are the different role players when buying or selling a home?

Answer 5

• the estate agent
• attorneys
• the bank
• home loan originators

Question 6

What are some of the seller’s costs ?

Answer 6

• Agent’s commission
• Compliance certificates
• Rates and taxes
• Bond cancellation fee
• Capital gains tax

Question 7

What are some of the buyers costs?

Answer 7

• Transfer duties
• Attorney costs

Question 8

What is bond refinancing ?

Answer 8

The replacement of a current mortgage loan with a new one

Question 9

What is flipping and what are the most common mistakes ?

Answer 9

When you find a property under market value, buy it and upgrade it, and sell it for profit

Mistakes:
- lie on loan applications
- overpaid for property
- lacked cash to upgrade
- quit day job
- hired unlicensed contractor
- bought property unseen
- bought out of province property
- underestimated upgrade costs
- poor exit strategy