Episode 14: Sandra Rinomato – A Practical (and Personal) Guide to First-Time Home Buying

Erin Davis: Hi there. Welcome to REAL TIME. I’m your host, Erin Davis, and I promise, you’re in not just for some REAL TIME, but a great time with our guests today, Sandra Rinomato. This is the podcast for REALTORS®, and it’s brought to you by CREA, the Canadian Real Estate Association. Here, we talk about ideas surrounding Canadian real estate, and topics that impact you as a REALTOR®.

Buying your first home can be equal parts, exciting and intimidating, but for some, it can feel like a distant dream. In episode 14 of REAL TIME, we sit down with REALTOR®, author and TV, host Sandra Rinomato, to discuss the process on both a practical and personal level, to give first-time homebuyers more knowledge and confidence, and to help REALTORS® bring more value to their clients.

What a pleasure it is to have you talking with us today, Sandra. Longtime fan, and you’ve got a new book, and we’ve got so much to dive into, so let’s do it. What do you say?

Sandra Rinomato: Awesome. I’m ready, Erin.

Erin: Okay. What makes the experience of buying a home so different for a first-time buyer?

Sandra: Wow. Well, there’s so much culture shock, if you’ll allow me to use that expression, because they’re considering taking on what they consider to be enormous debt with a mortgage, and they’ve never owned a place before, so there’s a lot of things to take into consideration: if the roof caves in, I have to fix it, or if the furnace breaks, I have to fix it. There’s all of that to worry about as well. Plus, they don’t really know how they’re going to use the space. They’ve never owned before, they don’t know the responsibilities, they aren’t really familiar with the ongoing costs associated with homeownership, and it’s pretty scary. Especially if nobody in their family has ever purchased before, never been a homeowner, there’s a lot to consider. There are a lot of emotions involved in this, and false beliefs come up, and all kinds of stuff, like especially– Like I’m the baby of the family, so it was like, “Well, you can’t do that, you’re not old enough to do that,” I’m not 30, but you’re going, “I’m 30 years old, guys, it’s time.”

There’s a whole lot of things that are unknown, they’re afraid of the unknown, as we are as human beings.

Erin: We don’t know what we don’t know until you do it, right?

Sandra: Yes.

Erin: Yes. Now, homeownership isn’t right for everyone, but in your new book, Home Worthy, you talk about exploring your values, beliefs and goals before investing in real estate. Finding out if it is right for you. What does that mean to you, Sandra?

Sandra: There’s a whole lot of psychology behind this. First of all, is it the right time of your life? Is your family growing? Are you prepared to do this? Why are you doing this? Then that whole why exercise, going seven levels deep into the reasons why you want to become a homeowner, or invest in real estate, for that matter, you need to do that exercise because you’re going to learn a lot about yourself, and you’re going to uncover a lot of things. You’re going to become aware of some of your beliefs, and those beliefs are going to crop up at certain times of the home buying journey to either hold you back or propel you forward. It’s best to shine the light on them, awareness of what you truly believe will help you overcome obstacles.

When you say, “Well, I want to buy a home because of this reason,” it’s probably a nice reason, but it’s probably superficial. When you start asking yourself, “Well, why is that important to me?” Or if your REALTOR® helps you do this, “Why is that important to you?” Then you go down to level two and you start thinking about it. By the time you’re at level five, if you’re being completely honest with yourself, by the time you’re at level five, you’re emotional, you’re a sobbing mess. If you’re doing it right, you will be, and you’re connecting to something really powerful within you, and that is your driving force. That is the true you. These are the reasons why you want to become a homeowner, and these reasons can vary. It’s not just about building wealth or keeping up with the Joneses.

I’ve worked with some REALTORS® exploring their reasons why, but also just homeowners understanding what’s really driving their purchase, is really fascinating.

Erin: It sounds like that a buyer’s belief will either stump them, trip them up, or push them forward. What I’m hearing you say is that connecting with a REALTOR® early on sounds like a really good idea, because it’s going to take time to do that digging, to get to the tear level.

Sandra: Well, I don’t want REALTORS® around the country to be making people cry. 

I think, yes, you’re nailing it. Your belief system, understanding what do you believe about homeownership. Homeownership is only for rich people. I’ve heard that one. I’m a woman, I can’t buy a home on my own. I hear that all the time. Understanding what is driving your belief will help you uncover some truths about yourself and your goals, understanding what your true goal is will help you overcome obstacles.

When you’re buying in a busy city like Vancouver, Toronto, other places in Ontario, when you’re buying in those busy cities, you have to overcome an objection a day, it seems, or an obstacle a day. When you drill down to the reasons why, and you understand yourself, and you connect with that emotion, you’re going to be able to burst through that objection. You’re going to be able to burst through that obstacle, you’re going to find a way over it, under it, around it or just through it. It’s going to be one after another sometimes. It’s not always as easy as, “Oh, I qualify for this much mortgage, let’s go look at a few places and buy one.” It’s rarely that easy because of all the obstacles.

Erin: You mentioned women homebuyers and first buyers. You do pinpoint that in your book. I promise, we’ll get to that a little later in the interview as well, Sandra, but let’s go back to the emotions. the emotional experience of home buying. How does it differ for a first-time buyer other than the fears, for example? What about second, third, fourth-time buyers, how do the emotions differ there?

Sandra: For a second-time buyer, or let’s say a downsizer, or perhaps someone looking for their forever home, sure, there are a ton of emotions involved in that as well, and they’re different. Now you’ve already been a homeowner. Now perhaps you’re thinking, “Well, I’ve overcome that fear. Now I know what it’s like.” It’s easy to be a homeowner for you, if you had a good experience, and I’m not worried about the maintenance. I know I have to pay for maintenance, whether it’s in condo fees, or if I own a freehold, I’m going to have to save money for a new furnace and all those things. 

As you’ve overcome all of those unknowns, now you’re familiar with that, those are put aside. You still may, however, have some fears because now you’re increasing your mortgage. And over the last 10 years, or a number of years, you’ve watched your mortgage principal go down because you’ve paid it off quickly, in 15 years, let’s say, and you haven’t had a mortgage, or you only have a small, small mortgage left, and now you’re going to be increasing that again. You look at your lifestyle, and you say, “Am I ready to do that again?” It’s almost like getting a new puppy, “Am I really ready to take that on? They have to go out every hour, and all the crying and the sharp teeth and everything.”

You really have to understand what you’re doing, and those emotions come into play. Quite often, if you’re buying with someone else or family, you have those considerations now. Now it’s like, what do the kids want? Where do the kids want to live? Are the kids going to want to leave school? They each need their own room, or we need space for this activity, and that activity is going to be close to the skating or the hockey or the soccer or the ballet or whatever it is, right?

Erin: Yes. Well, how far into the future, Sandra, do you think that we should look when we’re deciding what we need or want to buy? The last year has taught us that life can change in a moment, and we shouldn’t wait, and we shouldn’t expect, we can always hope, but how far ahead do you think realistically we should look?

Sandra: That’s a really interesting question. Some people who are starting to plan a family, obviously they can’t buy a one-bedroom. You have to look at your immediate future, certainly, but if you don’t have the budget, let’s say you’re just a single person and you don’t have the budget for a three-bedroom home, but you can afford a two-bedroom condo or a one-bedroom condo, and you want to become a homeowner, it’s the right time of your life, you’ve planned for this, you know why you want to become a homeowner, then get what you can afford.

In my city, Toronto, very expensive, Vancouver, very expensive, other cities across Canada also becoming very expensive. Sometimes your budget will dictate what you can buy and where you can buy. If you’re thinking, “Well, at some point, I’m going to have a family and I’m going to need a three-bedroom home,” but right now, you can use the space in a one-bedroom or perhaps a one-bedroom plus den condo, then go for it. I don’t think you should hold back for what you project your life to be 5, 10, 20 years down the road. As you said, look at what has happened to us in the last year. Nobody saw this coming, and it has changed everybody’s life.

Life is what happens when you’re busy making plans, so deal with what you have going on today. What can you afford? Where do you want to live? I talk to a lot of people who are 50 and over, and they want to invest in a little investment property, maybe a condo, “Maybe we’ll buy a condo downtown somewhere so that when we sell our house and retire, we’ll move into it, but for now, I’m going to rent it out.” I say, “Well, when do you think you’re going to retire?” They say, “I don’t know, maybe 5, 10 years from now.” Okay. Well, worry about it then, because you don’t know what your lifestyle will be 5 or 10 years from now. Maybe you won’t want to live in this city at all. Maybe you want to live somewhere else in Canada or somewhere else in the world. Maybe you won’t like condos. Maybe you won’t like where that condo is located. Strictly focus on the investment part of it. Treat it like a business and put the tenants in it. Also, because you aren’t emotionally attached to it, you’re not going to get that upset when the tenant has chipped the Corian counter or something like that. Don’t buy now for what you project your lifestyle to be 10 years from now, make it work for you now.

Erin: As you’ve said, the bottom line is owning real estate, and that gives you options.

Sandra: You don’t want to be stuck. I remember watching a judge on TV. I was folding laundry. I was multitasking. She was yelling at this woman for allowing herself to get stuck. She had painted herself into a corner. She had no options in life, and then she lightened up and she said, but it’s never too late. You can start building options. Owning real estate gives you options. You’ll have options at any point in your life.

I remember working with a woman who was in her late 50s, and she started asking me what it was like to be a REALTOR®. She had a great job. She was running this company for this guy. I said, “Why? Are you thinking of leaving this job?” She said, “Well, he’s closing down the company, and they’re moving outside of Toronto. I live in Toronto. I own a home, and I’m not going to commute an hour and a half every day, and I’m certainly not leaving my neighbourhood and my family and friends to go live in a new city for a job.” I said, “Wow, aren’t you worried? How are you going to support yourself?” She goes, “No, I’m not worried. I only have two mortgage payments left, and then I own my house outright.” She had options.

She could sell and downsize. She could rent out her basement. She could renovate and flip and then buy something more affordable for her. She says, “All I have to pay for are the utilities and some maintenance.” She said, “I’ll get a part-time job and be more than fine.” I thought, wow, that is amazing. That is a great testimony to what homeownership can do for you. She had options. She will never be stuck.

Erin: Coming up. How a buyer’s why helps you both decide the where and managing reality versus wish list, as our chat with Sandra continues. I hope you’re enjoying this Episode 14 of our REAL TIME podcast. Why not check out some of our other discussions with award-winning author, Jesse Thistle, TV icon, Sarah Richardson, marketing genius, Terry Riley, and his timeless advice on how you can connect with clients and build your business. So much to explore, and it’s all on REAL TIME on Spotify, Apple, Stitcher, or visit CREA.ca/podcast for more.

Knowing you want to own a home, making that decision and saying that you’re ready to do it, that’s one thing, but how do you decide how much home to own, Sandra, and, of course, location, location, location, where to buy?

Sandra: You really have to do your soul searching there. What kind of location are you envisioning yourself in? What’s important to you in your lifestyle? Working with various buyers, they want to buy downtown because that’s where they spend their leisure time, but they don’t work in the city. That’s fine. They want to hang out, go to clubs or fancy restaurants or wonderful theater and opera and whatever. They want to be downtown for their leisure time, but for work, they don’t mind a little bit of a commute, and there’s others that I do not want to commute. I want to live where I work, and then if I want to go to restaurants, I will commute to that. It really depends on your lifestyle for location, but also what the neighbourhood offers. Is it safe? Is it historically a safe investment? Is it gentrifying? What people live there? Your personal preferences and desires.

I’ve had people buying a certain area because there was a particular coffee shop in the neighbourhood, and that made them happy. It’s not the one you think.

When it comes to lifestyle, you have to understand yourself very well, and understand your why again, and that will help you choose location. Now, how much house to buy, or how much property to buy, again, will be dictated very much by your budget, but if money is no object, then it just comes down to, what’s going to make you happy? What is going to fulfill you? How do you envision your life in that space? Will it provide the ultimate result that you are after?

Erin: You mentioned budget, so let’s go there. How should a first-time buyer, Sandra, manage expectations around budget versus wish list? We all have this idea of our forever home the first time we buy, and that may not be realistic, is it?

Sandra: No, definitely not. I truly believe that you work your way up the property ladder, especially now that prices are so high. To think that you’re going to live there for the next 30 years, is unrealistic anyway, especially as a first-time buyer, because you don’t know what’s going to happen. Maybe you’re going to get a job transfer. Maybe you’re going to get tired of the weather or other things that are happening in your city, and you’re going to want to move to a different part of the country or outside of the country. So many unknown factors that will determine your life 5, 10, 30 years from now.

Your budget could determine not only are you buying a big home or a small home, but are you buying a condominium versus a freehold? Is this something you want to work up to? Because some people do not want to own a freehold because of the work that goes along with it.

These are considerations that you should take into your thought and your planning before you make a decision. Sometimes it’s just a matter of your REALTOR® pointing things out to you, or touring properties with the eyes of a potential buyer, because that’s the difference. Especially when it comes to unrealistic expectations of first-time buyers, you’ve never gone through a property with the eyes of a buyer. Now you’re looking at things differently because you’re paying for it, and you are looking at what you can comfortably afford. Then you start thinking about other things, well, where is this located? What can I buy? Does that suit me?

I will never say to someone, just get into the market because you’re getting priced out. I don’t believe that. I believe when you’re ready, you will find a way to make it work. Again, if you are attached to and aligned with your reasons why you want to become a homeowner, the options become available to you. You will start to see opportunities, and a professional REALTOR® will always be able to help you sort of find another way to get there. If you have an idea that you want to live in this address and you want that kind of a house, and right now you just can’t afford that, that’s way beyond your affordability, no problem. We’re going to find another way to get you those feelings, those feelings of pride of home ownership, or the independence, or whatever it is that you’re after, we can achieve that in this neighbourhood or this type of dwelling.

Erin: Are starter homes still a relevant concept in today’s market?

Sandra: Probably more than ever.

Erin: Really?

Sandra: Yes. I remember hearing stories, elderly aunts telling me they bought their first house and they lived there forever. That doesn’t happen very much anymore because the cost of real estate is higher in many places. The availability of affordable housing can be a one-bedroom condo. How are you going to have three kids there, and two great Danes and four cats?

Erin: Of course.

Sandra: Realistically, again, you don’t know what your lifestyle will be 10 years from now, 20 years from now. Just look at what your lifestyle is today, what do you want today, what’s going to make you happy, what’s going to give you all of those good feelings, what can you afford, and what will prove to be a solid investment for you. Don’t just buy real estate for the sake of buying real estate. You make your money when you buy, not when you sell. That means buy wisely. Take your time, understand, ask your REALTOR® if you don’t understand. If you are the REALTOR®, keep explaining it to them, why this is not a good purchase, or why this is a good purchase.

For example, I love to explain to people why purchasing a stigmatized property will make them sad in the end, because when you go to sell it, if you had bought property A, which is stigmatized, versus property B, which is not stigmatized, property A will not appreciate at the same rate as property B. That might annoy you. You make your money when you buy, buy wisely. Buy with the guidance of your professional REALTOR®.

Erin: Explain to me what stigmatized is in this case?

Sandra: Stigmatized would be something like a property backing out onto a very busy, noisy highway, or hydro towers that some people believe have negative effect on your health. Things like that, or stigmatize a property could be one where people think it’s haunted, or even perhaps a violent death that could be a stigmatized property.

Erin: Something you could be able to Google and find a news story about it, for example.

Sandra: Oh, and trust me, your neighbors will tell you the day you move in. “Hey, did you know?” 

Erin: Great. That’s so good. Okay. What about, Sandra, a move-in ready home versus one that needs work? I guess that all depends on the buyer?

Sandra: Yes. You would think that everybody wants move in ready magazine quality, but it’s not necessarily true because some people are afraid that the work wasn’t done properly, it wasn’t done to code. We can’t see how the plumbing was done, or a lot of these places are renovated without the proper building permits, so all that glitters is not gold. You don’t want to buy this pay top dollar and then find out that everything’s breaking down.

Then there are the people that don’t have the time or the resources to do any renovations. They put their entire savings into the down-payment, and they don’t even have $10,000 to renovate a small kitchen or something like that. They want it done for them. Quite often working with buyers, they realize that they can’t get that shiny new object, and that they may be better off getting to what they can afford in the same neighbourhood that will make them happy and deliver the results that they want. They will have to look at a property that will not be recently renovated with expensive quality stuff.

You’re walking into a house that hasn’t been renovated in 30 years or longer. You’ve got that 1970s or 1990s kitchen that you really don’t like, but you start to think, “Gee, but the reality is, I could paint the cupboards, change the laminate countertop to something stone, put in some stainless-steel appliances, paint the walls, change the light fixtures, put in nicer baseboards, change the doors and the hardware. You know what, I think will be very comfortable here.”

A lot of people opt for that because then down the road, and I think it’s a great idea actually to live in a house for a little while before you renovate because now you know how you use the space, and when you think you would like the kitchen to look like this, actually, when we’re both in here cooking and the kids are running around at our feet, we need the kitchen to look like this instead. Rather than doing it before you move in or as soon as you move in, you might make a mistake. You see that happen quite often.

Erin: Knowing a couple who moved into a home that they are the second owners of this home and they’re thinking, “You know what, we’d like to paint this so that these colours reflect our personality,” as per our last podcast with Tiffany Pratt, but realizing too, they’ve got a toddler and a six-year-old, “We’re going to wait. We’re going to take our time. Let the kids scuff up these walls and do it later. You can always, always wait.”

Sandra: My friend built a house. She has a young daughter, and they had a birthday party shortly after they moved in. One of the kids found a pen and wrote on their freshly painted wall. 

Erin: Oh, no. Great. That child turned out to be Banksy.

Back to REALTOR®, author of the book, Home Worthy, and TV host, Sandra Rinomato, in a moment, talking about the bones of a potential property and a project she recommends for people budgeting for a house. Honestly, it’s like your own reality show. When it comes to your audiences, whether you’re looking to connect with local leads, grow your network, or find valuable content, REALTOR.ca has you covered. Just visit REALTOR.ca today. Reliable real estate resources, all under one roof. 

Now back to Sandra Rinomato, Peeling back the layers on REAL TIME.

Now, we’ve talked about maybe some of the skeletons in the closet. On a more positive note, let’s talk about bones. What do the bones of a house mean to you? You hear this so often. How important is it to you as you’re showing a first-time buyer a place, Sandra?

Sandra: I like to think of it as the structure. Is there structural integrity? Is it a solid foundation? Is the wiring and the mechanicals, are they up to date or good enough? Those are the bones. Also, I like to think of the flow of the property, because although many people think, “Oh, we’ll just tear down this wall, and we’ll build out an addition,” it’s not as easy as you may think because inside that wall that you think you’re going to tear down, maybe it’s a load-bearing wall. That’s extra cost. Maybe it has the air duct venting in there and you need to remove that and reposition it. That creates a whole other problem.

It’s not as easy as you think to just tear down a wall or add on to the property. When it comes to the flow, you want to see, “Does this make sense for my lifestyle? When we walk in here, do I feel like, “Yes, we would use the space like this.”? It really helps with real estate staging, to have one purpose per room. If it’s the dining room, just make it a dining room. Don’t put the piano in there and a treadmill. It’s just a dining room, people, so that the buyers coming through can see the flow of the property. Oh yes, this makes perfectly good sense. It’s not an eat-in kitchen so you want to obviously right beside the kitchen and there’s a nice flow there. Or when you walk in, there’s this weird wall obstructing or, for some people walking from the outside right into their living room is an issue. Those are the things that cannot easily be changed, and I would look at that. When I say good bones, it’s like “You know what, this is a good solid home, and it’s got a decent flow. I like it.”

Erin: Although you can’t always look behind the walls, especially the ones that maybe were fixed up a little bit in preparation for sale, there are things you can look for in terms of the structural integrity. Ideally buy a home inspector, but we’re talking about do things look like there’s been some flooding or some leaking or any number of those things. You just have to have an eye for, right?

Sandra: Exactly, a trip up to the attic, and looking at the rafters. Maybe there was a bad leak for years, and they never replaced the roof in time, and now it’s affected the structural integrity of those rafters, or it was a grow-op and they’re warped, or one thing after another can be seen through the attic. If the basement is finished, it’s okay. There’s usually a portion of the basement that’s not finished, maybe a furnace room. You can still see, is there water coming in, is there efflorescence, which is a residue on the cinderblock, that shows that moisture is coming in. You can do an exterior walk around to see places where perhaps the grading dips towards the house that could be problematic or other issues, the neighbor’s driveway. Asphalt is right up to your window well, that could be a problem. You can certainly do some due diligence just by inspecting it with your eyes. I recommend to get a home inspection report done for yourself as a buyer.

Erin: Sandra, you have an amazing idea, and it could be some really tough medicine. I wouldn’t want to do it, but you go for it, about budgets and tracking for one month. What is it?

Sandra: I did this years and years ago, and I was floored. People who are budgeting for a house, this is what I recommend to you. For one month, track every dollar you spend. It’s really easy to do it with a debit card or a credit card, because you can see, at the end of the month, where your money went, because I don’t know about you, but I open up my credit card bill and I go, “What? I don’t remember shopping there. Oh, yes, it’s that thing.” You can see where you’re spending your money, and that’s important.

Also, you have to track the annual expenses, as well as your monthly expenses, let’s say a car loan or a loan repayment that you pay every month. Those are static. Those you know you can add those in. Don’t forget the annual stuff, including insurance, or perhaps travel or gifts. You don’t want to underestimate how much you truly spend. When you look at and you say, “I spend that much money every month,” I guarantee, nobody who’s ever done this experiment has ever come out and say, “Yes, I knew that.” No, they’re all floored. It’s really eye-opening, and you go, “Wow, I have to earn that much money. That’s how much money I really spend?”

You don’t do it so that you chastise yourself and say, “Okay, that’s it. I am never going to spend money on entertainment again because I spend so much money every month on entertainment.” That’s not realistic. When you’re budgeting for a home, you can look at your lifestyle and say, “Well, no, I really enjoy that. That makes me happy, and I am going to continue to do that.” If you don’t do that, that’s where that expression house poor comes in because you can’t do the things you love doing anymore, because you didn’t do this exercise. Because when the lender qualifies you, they will look at your overall expenses and say, “Okay, you qualify for this much mortgage loan.”

Taking that information, plus your spending habits, only changing something if you really want to. If you look at it and say, “Oh my gosh, I can’t believe I’m spending that much money on x.” Then stop it. Maybe pare it down by 10%, something very realistic, then you can plan going forward and know exactly what your spending habits are, how much money you need to earn every month, and how much you’re already carrying.

For many of the first-time buyers, they say, “You know what, I’m already spending all that money anyway.” When the guy said the mortgage is going to be this much, and your property’s just going to be this much, and your utility is going to be this much, I freaked out, but I’m spending that anyway. It really is a good exercise. I really recommend people doing it. Just for 30 days, track it and understand where your money’s going.

Erin: It doesn’t have to be punitive, just in enlightening.

Sandra: Exactly.

Erin: When we return with author, REALTOR®, TV host, Sandra Rinomato, digging into hidden costs your clients need to know about, and rising to the top in a bidding war. The win may be in the details. 

Looking for the latest news and stats legal matters and advocacy updates, we have just the place. It’s CREA Cafe. Stay connected to the world of Canadian Real Estate on CREACafe.ca. 

Now, back to our inspiring and just delightful guest, REALTOR® Sandra Rinomato on REAL TIME. 

What are some of the hidden costs? Now, these are the things that when we look at the price of a house we go, okay, I’ve done this, I’ve done this, I’ve crunched this and this and this, but there’s so much more that happens on closing date or thereabouts, and we’re talking about like land transfer taxes and so on. This comes under the purview of the REALTOR® and informing their client customer, doesn’t it?

Sandra: Yes, absolutely. I think your REALTOR® should be a great advisor to you, and especially when you’re working with first-time buyers, I think REALTORS® really need to be an expert in that field and know all things real estate, and explain them in a way to the customer, that they will understand it. Even if you have to say it over and over again and find a different way to explain it to them, make sure that they truly understand it.

Land transfer tax, for example, in the province of Ontario, you pay land transfer tax, but as a first-time buyer, you get a rebate, which means you’re forgiven a portion of it, but only up to a certain amount.

Then if you’re fortunate enough to live in the city of Toronto, which is the only city in the country that has a second land transfer tax, a municipal land transfer tax, you have to take that in consideration, and those are paid on the day of closing. You can’t add that to your mortgage loan. The way you can add the CMHC fee, if that is in fact a situation that you’re in, if you have less than 20% down, you may be subject to CMHC fee, which is the loan insurer. If you have 5% down, your insurance is going to be higher than if you have 10, 15, 20, it’s on a graduated scale, so it becomes less and less as you get closer to the 20%.

Those are expenses that you need to be aware of. Also, your mortgage lender will talk to you about this, because they’re going to ask you about your down payment, and your down payment is immediately eroded by the land transfer taxes that you have to pay, because, again, those are paid in cash on the day of closing.

You think you have $50,000, but it ends up, after paying your land transfer taxes, you really only have $45,000. That could affect how much loan you get, mortgage loan, that could affect your rate, if it’s significant. Those are things to really take into consideration.

When you work with a professional REALTOR®, we do have a network of trusted professionals, like a good mortgage lender, who will explain this stuff to you, and a lawyer who will explain things. You’ve got lawyers’ fees, and they vary from lawyer to lawyer, so you want to ask about those, including all of the disbursements. For example, if you’ve never had utilities in your name, you might have to put down a deposit of a certain amount of money until you’ve proven that you are credit worthy for two years, and then they give that back to you, but you have to put that out.

All those little expenses, maybe an appraisal, the cost of an appraisal, depending on who your lender is. Maybe the cost of the home inspection, maybe even you bought the house without the home inspection because you were in a fierce bidding war, and then you think, you know what, I really want to know about my house, so I am going to hire a home inspector to come through, show me all the things. If you buy an older home, there might be things that are not to code that you might want to address as a homeowner over the period of time that you own the property, especially if they are things like plumbing or electrical issues.

Maybe you want the home inspection. Those are some of the hidden costs that perhaps you’re not aware of, so you do you have to budget for those because that’s cash out of pocket.

Erin: Sandra, you’ve raised the specter of home inspections, and it’s something that’s happening more and more often that in the flurry of activity and the heat of the moment and the competition, if you want to move yourself up from number eight to number two in a bidding war, you may let that home inspection go, and it’s something of course that is never ever, ever recommended, but it’s happening, and it’s a nerve-racking tactic for many, many buyers. What do you recommend to your clients in this case, or to anybody who’s listening, because we know how vitally important home inspections are.

Sandra: Right now, it’s happening that they are going in with no conditions whatsoever, so there’s no financing condition, there’s no home inspection condition, there’s no pool inspection condition. There’s no condition on insurability, so for example, if you are in a floodplain in Toronto, there are areas that the insurers are not too happy to insure you. That could be an issue. People are buying these properties because they have to. In order to be competitive, you have to go in with what we call a firm offer.

Now, a firm offer means you buy it today, you own it. There’s no condition. You can’t think about it and back out tomorrow, or find out your financing fell through, you can’t back out, and you have a hefty deposit with your offer. You stand at risk of losing that money, and of course being sued because a contract is a contract, and contract law in Canada is very serious.

Should you go in without a home inspection condition? You want to avoid it as much as possible, especially a first-time buyer who isn’t particularly savvy with even how to take care of their home. A home inspection report can have something in it like, just move this downspout so that it’s further away and discharges further away from your home to prevent future water in your basement. It could be little things like that, that are $10 to fix, you want that stuff. Where’s my water shut off? Where’s my water meter? You want to drain the water so that the pipes don’t freeze with your garden hose, that sort of stuff. You may want to do that anyways, but in many cases, with multiple offers, the buyer doesn’t have the opportunity to bring in a home inspector because it’s $600 or $700 in some places, or more.

In many cases, buyers are bidding on a house and not getting it. If you knew you’re getting it for sure, you don’t mind paying the $600, but tomorrow night, you’re going on another bidding war and you lose that one and it’s several offers before you actually get the house, they can get pretty costly and time consuming and disheartening.

My recommendation to every home seller out there, and the listing agents, please consider getting a pre-sale home inspection report done before you list the house, because you are serving as a REALTOR®, as a listing agent, you are serving your client’s best interest. How? You have a seller, and now your seller is providing a home inspection report from a reputable company that knows the area and people know them in that area, and you can hand it out to the potential buyers to review. The buyers have an idea of what they’re getting into. Now, it could have all kinds of unsavory things in it, and then a really strong seller’s market, that’s not going to stop them, but they’re going to know what they’re dealing with. The seller might say, “Well, I don’t want to find out things are wrong with my property, then I have to fix them.” No, you don’t necessarily have to fix them at all, you’re just disclosing, and it’s better to disclose those deficiencies in writing, and offer it to the buyer so that it doesn’t come back to haunt you. Then maybe things that you weren’t aware of.

Erin: In a field of say, 10, how do you recommend that your client move up that line? If all things are played out equal or seem to be in terms of this bidding war, how does your client rise to the top?

Sandra: Well, you know what’s funny, Erin, is that I sit on both sides of the table. I sit on the seller’s side, and I sit on the buyer’s side. Quite often as a seller’s agent, I see offers come in that have issues in their offers that the seller will never accept. As a buyer, don’t put anything in there that isn’t on the listing. As a listing agent, make sure that the information on the listing, on the MLS listing, is complete and accurate. If the closing date, preferred closing date is June 15th, put that in there. Because we call ahead. If it just says June TBA, we call ahead and we say. “What’s the preferred closing date for your seller?” They say, “Well, anytime in June.” Then you get to the table and they say, “Well, actually June 1st or July 15th.” Now it’s a problem.

As a buyer’s representative, you want to make sure that you are giving them everything they’re asking for, and sometimes, yes, you’re right, there are multiple offers that have exactly what is on the listing, and then a variety of prices. One thing you can do is increase your deposit, and why that’s important to a seller, is that when somebody has more money, more skin in the game, they’re less likely to back out.

Let’s say something bad happens, they don’t get their financing, well, when there’s 100 grand or 200 grand on the line, that’s their deposit, they’re going to work really hard to make sure that they get some kind of mortgage funding, even if they have to sell it the next day after closing on it, because they don’t want to walk away from their 100 grand or 200 grand, and the other thing is, have it there at offer time. Go convince your buyers to go get the bank draft.

I’ve heard many REALTORS® say, well, they don’t want to because then if they don’t get the house, then what? Well, then you take the bank draft back. I know many banks will say, “Are you trying to buy a house?” “Yes.” “Okay, well, I’m not going to charge you for this next bank draft, or I’m not going to charge you to deposit that money again,” because they know, they’re going through it themselves when they see it every day.

That small inconvenience could win you the deal, because if I’m representing a seller, and as I see two beautiful offers, and they’re identical, and one of them has the deposit cheque and the other does not, if we accept the one that does not have the deposit bank draft, guess what? That’s a conditional offer. That person may never show up with that cheque, and then you’re sitting there and you have not, in fact, sold your house, and you have to go through it again.

Having $100,000 paying draft versus zero, I know which offer I’m going for.

Erin: It’ll always save so much more than that heart-string letter that you were considering writing.

Sandra: Yes, in rare occasions, I have seen the letter work. For example, in a situation where the home seller is still emotionally tied to the property, and they don’t want a builder to come in and tear it down. It doesn’t make sense. It’s not rational because you are going to get your $2 million and move on. Let go with the memories here, you’ve made the decision to move on, so move on. Let go. Then they get a letter from a young family that says, “We’re not going to tear the house down. We’re going to move in.” They go, “Oh, that’s nice. I want to sell it to them.” That might happen.

Especially if they have an aversion to builders, for some reason. Maybe they’ve been hounding them, pounding on their door, sell me your house, sell me your house, or whatever. It might just help to sway them in your direction. At that point, if you don’t have the most money, the seller might say, “Okay, well, that other offer is higher than yours. I tell you what, I want to work with your offer, but you have to increase it, and increase it by this amount.” They can say that. The seller can actually sign it back to you. That doesn’t happen very often.

The seller will instruct their agent to say, “You know what, go back and ask them for 25 grand. If they increase their offer by 25 grand, we’ll sell it to them.” The seller doesn’t necessarily have to send all of the offers back. That is misinformation. The seller can do whatever they want. If the seller has 10 offers, they don’t have to send all 10 offers back to improve. As a matter of fact, in most cases, the seller will just take the highest and best offer. If there’s an outlier, there’s one that’s way above the crowd, it’s a beautiful offer. There’s nothing weird in it. You warrant that the pool is going to be in good working order for 17 years. Some other warranty in there that they don’t want to take on. It’s a beautiful clean offer, they might just take it. Other REALTORS® and buyers are like, “Well, I thought they were going to send us back.” No, nobody ever promised you that.

When I’m training my agents, I say, “Go in with your highest and your best offer, and then walk away.” If you’re asked to improve, you can revisit it at that moment. Just go on the premise that you will not be given a second chance.

Erin: Lots more with Sandra Rinomato to come, including some fascinating and surprising stats in her book, looking at women versus men in buyers numbers, and shaking off the past in terms of our limitations. Writing the book of you, we’ll talk about that too. Everything you and your clients need have served up to you all in one place, at REALTOR.ca Living Room. Share the latest insights from your go-to source for content, timely articles, inspiring design tutorials, and everything you and your clients need to make that dream home a reality. Visit REALTOR.ca Living Room today. Now back to author, TV host, and of course REALTOR®, Sandra Rinomato, on REAL TIME.

Let’s talk about an interesting stat we referred to earlier from your book, Home Worthy. You note, Sandra, that one in four buyers, 25%, are single women compared to only 10% being single men. Why?

Sandra: First of all, isn’t that an amazing statistic, and would probably shock a lot of people when they hear it. I like that, because society has changed so much. I grew up with an aunt who was a very forward-thinking woman. She had a career, and she worked for the airline. She was out in Honolulu and she walked into a builder site. They were building condos, and condos were a little bit untested at that time. Lenders weren’t that crazy about funding a condo. They were a new thing. She walked into the builder’s office and she wanted to invest in a condo in Honolulu. Imagine how much money she would have made? Oh my gosh, anyway.

Erin: Honestly.

Sandra: The builder said, “Well, we’re not going to sell it to you unless you have a male cosigner.” That was that time. Women couldn’t get a credit card on their own. Women were not really buying cars on their own. Things have changed. Women are not getting married at 18, fresh out of high school. A lot of us are never getting married. A lot of us are pursuing careers. Then we wake up one morning, and we’re way far from 18 and we think, “You know what, I want to buy my own place. What am I waiting for?” You start to explore your own false beliefs and thought, “I should have bought 10 years ago or whatever number of years ago.” Now you start to seriously consider this.

Women are not getting married as young, if ever. Some women are not getting married at all, and they’re not having children, and they’re pursuing careers. They’re very happy living a life on their own or with a partner, but not being married. All of these things coming into play, society has changed greatly. Women are saying, “I don’t need to have that 1950s lifestyle to be able to own my own property. I can buy it on my own.” I think it’s so beautiful because by doing that, by realizing that, they change their destiny.

You don’t have to live that 1950s lifestyle. You don’t have to live that prescribed life. You are going to control your own destiny. I love it, and I love the wealth-building through homeownership. I think it’s very, very powerful. I think everybody should own real estate somewhere in their portfolio, even if you don’t live in your own home if you own an investment property, because actually, I talk to a lot of people who cannot afford to buy in their city. I say, “Well, what about buying an investment property in a less expensive place?” and they go, “Well, what do you mean?” I say, “Well, now your tenant is paying down your mortgage. You can buy a place. It doesn’t have to be your dream home because you’re not living in it. You become a landlord.” Now, there are a lot of things to know about being a landlord. It’s not as easy as you may think it is. There are some things you have to be aware of, educate yourself, contact your REALTOR® to help you understand the ins and outs. You can become a landlord, have your tenant pay down your mortgage, so you’re building equity two ways.

One, the tenant’s paying your mortgage down. Two, the property will go up in value over an extended period of time. Nobody’s telling you you’re going to make a million bucks in an hour, but over a long period of time, if you can buy real estate for the long-term, then I think you will see gains. If you’re never in a position where you have to sell it now, then you will always have options, and you can sell at the right time.

Erin: You’re all about empowering, and especially first-time buyers, and focusing on allowing women to create and change their own destinies, change the dream, and then just go from there. That’s fantastic.

On the flip side, what advice do you have for REALTORS® who are working with new homebuyers? It sounds like there are a lot of things, and being a great listener seems to be the first part of it.

Sandra: Oh, it’s so important. I remember shooting Property Virgins, and when I saw one of the first episodes where somebody was crying and I wasn’t around, they were talking to the director. The interview’s after we toured a property and she’s crying. I’m like, “What?” I was like, “Tom Hanks, there’s no crying in real estate.” I was shocked because quite often, the buyer won’t communicate honestly with you. As you’re touring the property, you have to be in tune with their body language. You have to ask them why they don’t like this one, or why they do like this one, and then bring them back to their why, their reason why they’re buying a home, and make sure that it is in fact aligned, and they’re not being swayed by beautiful furniture or pictures of the family on the wall and they see their lifestyle, and you really are a psychologist. You’re using a lot of psychology in real estate. You really have to open up the lines of communication. You have to work hard. Some people are way more verbose and open to sharing, and others are not.

Others may not share, especially you’re working with a couple, they may not want to share in front of you because they don’t know what their partner’s thinking. They want to go and discuss it in privacy. What happens, in that case, is they’ve gone away, they’ve talked about it overnight, and then tomorrow they say, “Okay, we want to look over here instead.” Now you have to uncover the reasons why. Talk to me guys, what happened? I don’t mind. If you tell me you hate the homes I’ve been showing you, I’m not going to be offended. I’m here to help you. Give me the information so that I can put it into my data bank of information which is in my head, and then I can try to solve your real estate problem. I can see where you want to go, and I can help you get there, but you need to have this flow of communication, and it’s sometimes more difficult than other times.

The other thing is when you’re working with first time buyers, you have to explain things in a feature advantage benefit. Don’t just give the features. Sometimes a real estate just gives the features. Well, it’s got this. In your head you’re saying, like you said, you wanted, but you have to explain. This delivers that thing you wanted. You said you wanted this, here it is. This is the feature and this is the benefit to you

Erin: That goes into your book of you at the end of the day too. Tell us about that.

Sandra: I mentor my agents, and I tell them, especially the new ones, every day you’re going to learn. You’re going to learn for the first five years. First three years, you’re learning multiple things every day. At the end of the day, just take some time to pause and reflect. Open up a book of you, just a notebook, and you can keep a series of them because you will go through a lot of them if you’d like to write.

Journaling is always good. Just reflect. “You know what, I nailed today. I said this, and then this happened, and oh my gosh, I solved that problem because we couldn’t find this. I found that, oh my gosh, I’m so proud of myself, or I don’t like the way I did that. I could do better. Instead of saying that or doing that, I should have does this. And you write it down, and you grow from that. When you go back and you read that stuff six months from now, I guarantee, there’s going to be some stuff in that book of you that you’re going to say, “Oh, my goodness. I was so smart back then. How did I forget that?” I’ve kept some from the beginning of my career. I have so many. I’m on my third one already this year. I love to write anything I learn. Really important stuff goes in there. I always have, and then I date it. On the front of the book, it will have like, it goes from January 1 to February 15, or whatever the dates are. And then I’ll read through them.

If you were running a billion-dollar corporation, you would have these reports prepared for you. They would come at you with explanations, but you are an entrepreneur. You’re running your own business as a REALTOR®. Don’t rob yourself of this beautiful experience. This is data about you. It is just about you. It’s amazing, amazing information. Any new REALTORS® out there, even if you’ve been doing it a couple of years, start writing in your book of you. It is so wonderful to review it. I go back a few years and I read it, yes, I forgot I wanted to do that to my website or whatever.

Because you do come up with these inspired thoughts and brilliant ideas and wonderful knowledge that you sometimes tend to forget because we get so busy working at the business. We’re so busy running here. We’re tending to this. We’re making sure we go through our checklist and do a good job, that we forget to work on our business. When those ideas come to you, it’s in your book of you. When you have time to stop and work on your business, the information is there. You don’t have to guess.

Erin: When we return, how to turn what you or your client may see as the impossible dream of homeownership into concrete steps towards reality? Grow your business on REALTOR.ca. Canada’s resource for all things real estate. Now, back to REALTOR®, author, TV host, Sandra Rinomato on REAL TIME.

What would you say to someone who wants to own a home but is struggling to see their dream being anything other than just a dream?

Sandra: There are some people that won’t even allow themselves to dream. I think that’s really sad. If you think it’s just pie in the sky, there’s a couple of things that could be holding you back. It’s either a lack of clarity, you don’t know what to do next. Call a professional REALTOR®. Maybe get some recommendations from friends or family that have used one, or when we can go to open houses, go into some open houses and meet one that you connect with. Talk to that REALTOR®, and ask them the questions. What do I do next? I’ve never bought a place. I don’t even know if I’m going to be able to. I don’t even know if I should buy a place.

Listen, you want clarity. What’s my first step? You may think your first step is looking at houses. That’s not even on the list of the first five things you need to do. Hire a professional right away, and one who is patient. One who knows this may not happen for two years, or six years. I don’t care, ask me now. If you don’t have clarity or focus, you don’t know what to do next, that could be a really big stumbling block for many, many people and they will never get started. Just knowing one tiny step, one action you can take that will propel you closer towards your dream, will work miracles. That’s one thing that could be holding people back.

The other thing is, some event is holding them back. I know with working with a lot of single women, sometimes it is things like, in our community, women don’t buy their own properties. That can be something that you can become aware of, shed light on, and realize that maybe it doesn’t necessarily have to be true for you. Maybe that worked 50 or 100 years ago, and maybe that worked in the old country. Here, I was raised by Italian immigrants, and they brought a veritable time capsule from small town, Southern Italy 1950. They raised their three daughters using that set of mores, and know how.

This is how we do things because it’s always been done this way, but it doesn’t have to be that way. Even some of the things they told me like, I remember my mom told me I should be a wife and mother and I thought, oh, well. She knows me better than I know myself. No, that’s not true. That is not true. Then I took on these other things myself. Maybe nobody ever said to me, Sandra, you can’t buy a home on your own, or you can’t have a career, but I took it on myself. I took those beliefs on their false beliefs, but I took them on, and working through them takes wisdom. It takes awareness.

You need to know who you truly really are. What are your beliefs? For example, homeownership isn’t for me. That’s only for rich people. Or, I’ve heard single women say this one. Well, I would buy my own place, but I’m just so worried, what if I buy a place and then I meet Mr. Right? I’m like, what’s the rest of the sentence? I don’t understand. What’s the problem? You can still date when you own real estate. I’m going to start rapping about it, but it was just such a bizarre belief. Why would you have such a limiting belief? Let’s shed awareness on it. Then they go, yes, you’re right. I just have options.

So what? The guy can move in with me or the person can move in with me, or I can rent that place out, move in with them, or we rent a place together, try out our relationship, see if it’s going to stick, and then we decide to sell our properties. Here’s the question to women. Why would you want to shrink yourself for someone you’ve never even met? Let alone for someone you have met. Why would you want to say my dream partner does not want me to have my act together? Let your light shine brightly. Achieve all that you want to achieve, all that you can achieve, because your shining light will be the beacon of hope for the young girls today, or perhaps another woman who never allowed themselves to dream of that lifestyle of owning her own property, of being independent, of maybe having a career earning her own money. These false beliefs go really, really deep. As soon as you shed light on them, as soon as you become aware, they disappear. Most of them just disappear. Others, you need to work on a little bit, but I’m telling you, everyone, not just women, when you are working on improving yourself, self-development, introspection, analyzing those false beliefs, becoming aware of who you truly are, you have to do this daily. This is daily work.

Erin: I can’t let you go. We’re a third through 2021. Tell me, Sandra, how are you hoping to describe this year when it’s said and done?

Sandra: You know what? I hope that people find the opportunity to grow, to find joy in the small things. Right now, the sun is shining. That is enough to make me happy, to feel the happiness that already resides in me. I’m one of those optimistic crazy people, I know. Really, I want you to connect with your joy. I hope that everybody out there can find it because, as you say, we’ve gone through a lot in the last 12 months. We’ve seen a lot of things change. There’s so many opportunities. Industries have changed. New millionaires are coming up. There’s a shift in the disbursement of wealth. You can’t take anything for granted now.

Small business owners, I know there’s one near my place, she’s doing tremendous business online because she was able to pivot her business. I guess what I want 2021 to be is a year of growth, and us connecting to our inner joy and peace. Love ourselves and love each other.

Erin: Sandra, it’s been such a pleasure. Thank you. Thank you. Thank you for your time with us today. It has been wonderful.

Sandra: Thanks, Erin. You know me. I hate to talk about real estate. It’s been a joy speaking with you, Erin. Thank you.

Erin: Thank you. Just a reminder, Sandra Rinomato has a book called Home Worthy. A great read, gift and source of inspiration and information, just like Sandra herself. 

Thinking about buying your first home, REALTOR.ca has everything you need to feel ready. Discover our tips for first time homebuyers. These helpful checklists, resources and tools cover everything from mortgage options to putting in an offer to the value of a professional REALTOR®. Be fully prepared to buy. Visit REALTOR.ca to learn more. Before we say goodbye for now, don’t forget to subscribe to our REAL TIME channels on Spotify, Apple and Stitcher, or just go to CREA.ca/podcast for more.

In the meantime, I hope you plan to join us for Episode 15 when we sit down with Nikki Greenberg, founder, Real Estate of the Future, and Founder, Women in PropTech. She’s a futurist and thought leader, and promises to have a lot of fascinating ideas to share. 

This podcast is produced by Rob Whitehead for Real Family Productions and Alphabet Creative. I’m Erin Davis, and we’ll talk to you next time on REAL TIME.