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The Types of Real Estate Contracts

Real estate contracts are used to protect the interests of the seller as well as the real estate agent. If you want to make it easier on yourself when selling a home, a real estate agent is the best way to do that.

Exclusive Right To Sell Listing

  • The Exclusive Right to Sell Listing Contract gives the agent the full right to do whatever he or she deems necessary to get the home or property sold.

One-Time Listing

  • The One-Time Listing is usually used by people who want to sell their own home but it also allows real estate agents to show the home, if sold, the agent makes a commission on the sale.


Open Listing

  • Open Listing is similar to One-Time Listing in that it allows the real estate agent to show your home and make a commission on the sale. However, this does not give the agent any exclusive or binding rights to the sell of your home.

Exclusive Agency Listing

  • The Exclusive Agency Listing gives the agent commission on the sales if the agent has been a part of the process of the home being sold. However, if the home is sold with no help from the agent, the agent receives no commission from the sale.


  • Always consult a lawyer before signing any contract. Contracts can be very complicated to read and you may not understand the fine print in the contract.


How to Assign a Real Estate Contract

Flipping houses has many connotations. Investors buy a property, rehab and renovate and then sell for a tidy profit. This requires a lot of work. There are house finders also known as wholesalers, flippers or bird dogs that find good deals, get the property tied up and under contract, and then find and assign the contract to the actual buyer for a fee. This process is known as assigning a contract, and requires little if any money.


    • 1

      Locate a suitable property. Write an all cash offer to purchase. Once all parties have signed, take it to a title company or escrow company so that they can get it ready to close by doing a title search, ordering a survey and home owner’s association information.

    • 2

      Make an offer. The offer should include the verbage “and or assigns” after you are name as the buyer. You should also retain the right to inspect and reinspect the property prior to closing, giving the seller at least a 30 minute notice before any inspections. This allows you to let other investors come and see the property to make a buying decision.

  • 3

    Get the seller to put a lock box on the door to help facilitate entry if they are not home.

  • 4

    Write in an escape clause in special provisions that will allow you to terminate the contract at no fault if you are unable to find another buyer. An escape clause could be as simple as “the offer is subject to my partner’s approval.”

  • 5

    Find a buyer who wants the home. Have them execute an assignment contract with you, effectively taking over your position to perform on the contract based on the terms and conditions set forth in the contract. An assignment fee will then be collected from the new buyer prior to closing. This fee is typically $1000-$3000, but can be anything that is mutually agreed upon. Also, have the new buyer reimburse you for any earnest money that has been deposited. Hopefully there was none required on the original contract.

  • 6

    Collect the fee. Give a copy of the assignment document to the title company with the buyers contact information. That’s it. You’ve just tied up a property, assigned the contract, and got paid prior to closing.

Test Posts!!!

In his fourth and final interest rate announcement of the year, Bank of Canada (BoC) Governor Stephen Poloz announced this morning that the overnight lending rate would continue to stay put at 1.00 per cent – a position it’s held since September 2010, which has created a favourable borrowing environment for Canadians.

However, the Organization for Economic Co-operation and Development (OECD) released a report this month that said with the Canadian economy getting ready to return to more stable growth, the days of low interest rates may be coming to an end – and soon.

“With spare capacity narrowing by the end of 2015, monetary policy tightening may need to begin by late 2014 to avoid a buildup of inflationary pressures,” it said. “It is assumed in the projection that the first policy rate increase occurs in the fourth quarter of 2014 and that the rate rises steadily to 2.25 per cent by the end of 2015.”

Of course, an interest rate increase of that size could drastically affect the mortgage payments and affordability for variable rate mortgage holders in Canada, and would likely cause lenders to increase their fixed mortgage rates as well.

OECD’s opinion is not a popular one. Most economists predict the central bank will leave the key interest rate at 1.00 per cent until the first quarter of 2015 – and some even believe the rate will go down, not up.

In an article published earlier this month, the BoC’s Deputy Governor John Murray demystified one myth about the central bank by saying it doesn’t necessarily need to boost interest rates to “normal levels”, even if the economic growth and rate of inflation are close to their targets.

“Headwinds and tailwinds are often present, threatening to push economic activity and inflation higher or lower,” he wrote. “Monetary policy needs to lean against these forces with opposing pressure from higher or lower interest rates to stabilize the economy and keep inflation on target.”

Unfortunately, today’s announcement from the BoC concluded that inflation has moved further below the central bank’s target of 2 per cent. Core inflation is being held down by significant excess supply, effects of heightened competition in the retail sector and lower gas prices.

“Overall, the balance of risks remains within the zone articulated in October. Weighing these considerations, the Bank judges that the substantial monetary policy stimulus currently in place remains appropriate and therefore has decided to maintain the target for the overnight rate at 1 per cent.”

The next interest rate announcement is scheduled for January 22, 2014.

Hello world!

break at the 3.5 year mark.

Is it possible to transfer your mortgage from one home to another? We recently sat down with Toronto mortgage broker James Laird for a little Q&A on the matter.

What does it mean to ‘port your mortgage’?

Porting your mortgage is when a homeowner transfers their mortgage from one property to another.

When would this happen?

Porting your mortgage is an option when you have sold your current home and purchased a new home.

Can anyone port their mortgage?

No.  Some lenders allow this and some do not.  So if you are planning on moving during the term of the mortgage, then this is a very important feature.  A good mortgage broker will be able to tell you which lenders allow porting, and which do not.

Why would I want to port my mortgage?

Porting is very valuable if the interest rate that you have secured is no longer offered on the market.  Conversely, if the current mortgage rates are lower than the rate that you have, then you will likely not want to port. However, you will have to consider the penalty of breaking your mortgage early if you choose not to port.

What if I need a bigger mortgage on my new home?

When a mortgage is ported, it is very common that you will require a larger loan than exists on your current residence.  This is not an issue.  Your lender will offer to do what is referred to as a ‘blend and extend.’ This is essentially a weighted average between the existing mortgage and interest rate and the new money required at a current mortgage rate.

For example:

Existing Mortgage:  $100,000

Interest rate: 3.0%

Require: $150,000 (so $100,000 will be ported and $50,000 will be ‘new money’)

Current Interest rate: 4.0%

Therefore, the ‘blend and extend’ will result in a $150,000 mortgage at 3.32%.

What happens if I move during the term of my mortgage and it isn’t portable?

Then you will have to pay the full penalty for breaking your mortgage early.  If you are in a variable rate, the penalty will be equal to three months of interest, and if you are in a fixed rate, the penalty will be the greater of three months of interest or the interest rate differential.  Therefore, having the flexibility to port can be the difference between paying a several thousand dollar penalty, and paying nothing.

Are all porting clauses the same?

No.  The biggest variance between different lenders’ porting clauses is how long they will allow you to complete the port – i.e. how much time are you allowed between the close of the sale of your current residence and the close of the sale of your new residence.  Lenders typically vary between 30 and 120 days.  Thirty days can sometimes be tight depending on individual circumstance, but 120 days is usually enough for a homeowner to complete the sell-buy comfortably.