Frequently Asked Questions
How does Properly work?
Properly allows you to buy a home before selling your existing home, so you’ll never miss out on a great home because you haven’t sold your current one.
Here is how it works:
- Find out your purchasing power so that you can start house shopping! This is the combination of your available savings, the amount of mortgage you qualify for, and the equity you’ll unlock from the sale of your home (based on Properly’s guaranteed backup offer).
- Get your estimated sale price and your guaranteed backup offer from Properly. Your Customer Experience Manager will gather some details about your home so that our team can provide an estimated sale price for your home within 2 business days (our estimates are 99% accurate based on 190,000+ sold homes). You’ll also receive your guaranteed backup offer - the price Properly will buy your home for if it doesn’t sell after being on the market for 90 days. Properly's backup offer is 93% of your home's estimated sale price.
- Get pre-approved for a mortgage with your financial institution of choice. A pre-approval means that a lender has reviewed your current income and credit history and has stated in writing the amount of mortgage loan that you qualify for. We generally suggest that our customers speak with a few different lenders to compare rates.
- Start viewing properties with your Properly Sales Representative (REALTOR®) and make an offer. We’ll match you with a top rated agent experienced with the homes you’re interested in.
- Use your new home purchase contract and Properly guaranteed backup offer to get fully approved for financing to buy your new home. To get fully approved for financing, lenders require the purchase contract for your new home. Take your Properly guaranteed backup offer and your new home purchase contract to your bank to get final approval for a mortgage on your new home. Your bank will also provide a bridge loan to cover the amount of equity that will be unlocked once your current home has sold, paid for by Properly.
- Move in and enjoy your new home!
- Your Properly Sales Representative (REALTOR®) will list and sell your former home on the market on your behalf after you’ve moved out. They’ll make sure the home and listing looks amazing with staging, marketing, professional photography, cleaning and handyman services so that it sells for top dollar. Until the home has sold, Properly will pay your mortgage and the bridge loan costs!
- Receive funds from your former home’s sale, less standard real estate commissions (5% of the sale price). Using these funds, your lawyer will help you pay off the mortgage on your former home and the bridge loan you obtained for your new home down payment.
What happens if my home doesn’t sell?
You are not on the hook for two properties if your home doesn’t sell. While very rare, if your home hasn’t sold for a higher price than our guaranteed backup offer within 90 days, Properly will buy your home from you at the guaranteed backup offer price less standard real estate commissions (5%). Our team is incentivized to sell your home for the highest price while it is listed on the market, since we receive commissions that are directly proportional to your home’s selling price.
If Properly buys your home directly, we’ll still try to sell it for the highest amount possible. If we end up selling your home at a higher price than we paid, we’ll refund 90% of the upside back to you.
Can I work with any financial institution for my mortgage and bridge loan?
Yes, you can take your Properly guaranteed backup offer to any financial institution to get approved to buy your new home before listing your old home on the market. We recommend taking your offer to multiple lenders to ensure you get the best possible mortgage terms.
How do I know Properly won’t just buy the home even if I get a higher offer on the market?
Your realtor is bound by fiduciary duties to present any and all offers to you that are obtained during the listing period. Properly is also not incentivized to buy the home in order to earn a profit: if Properly buys your home from you because it does not sell while on the market, but goes on to sell it for a higher price than the Properly guaranteed backup offer, we’ll refund you 90% of the difference. This is detailed in our guaranteed backup offer contract. Additionally, because of land transfer taxes, holding costs (financing, insurance, utilities, etc.) and real estate commissions, Properly typically loses money when we end up buying a home.
We provide this service so that you have the comfort of knowing that your home will sell, but our objective is to sell your home on market for the highest possible price and not to actually buy it.
What if I get a higher offer on the market but the closing date is too far out?
90 days after you close on your home purchase, Properly would buy your former home from you at the guaranteed backup offer price. 90 days is the maximum number of days that most major Canadian lenders will offer a bridge loan for.
It is rare for a home to not sell within the 90 day window. In the event that it doesn’t, or that the closing date on a sale is beyond the 90 day cutoff, Properly will purchase the home and refund 90% of any profits earned back to you. This 90 day cutoff exists because it is the maximum amount of time that Canadian lenders are willing to extend a bridge loan.
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