Despite the fight to the bitter end, the new land transfer tax was approved by the City of Toronto in October.
It's important to understand how it works if you are thinking of buying or selling as it will affect everyone, especially if you were thinking of postponing any activity until the spring.
I've attached the details from the Toronto Real Estate Board but here is a good summary...
A second land transfer tax, on top of the provincial land transfer tax, has been approved at the following rates for residential homes:
*An easy-to-use calculator is available at http://www.nohomebuyingtax.com/
0.5% of the amount of the purchase price up to and including $55,000
1% of the amount of the purchase price between $55,000 and $400,000
2% of the amount of the purchase price above $400,000
When does it take effect?
February 1, 2008
But there are exceptions...
1. Grandfathered Transactions
If you enter into an agreement of purchase and sale by December 31, 2007, and your close date is on or after February 1, 2008 you will be charged the tax but the city will rebate you in full afterwards.
2. First Time Home Buyers
First time home buyers of new and re-sale homes will receive a rebate of the Toronto land transfer tax of up to $3,725 (this equals a 100% rebate on homes purchased for up to $400,000).
Here's how we're seeing it affect the market...
If you are thinking of selling, be prepared to move and close before February 1, 2008! If you are not able or willing to do so, you may find buyers negotating the equivalent tax from their originally intended offers. On a $500,000 home this would work out to $5,725.
If you are thinking of buying, the motivation to move faster just got stronger. Again, the hit to your bank account means thousands of dollars. And you cannot roll this tax into your mortgage as you can with CMHC insurance premiums.
Even if you buy before December 31st but close on or after February 1, 2008 you will still have to come up with the funds and wait to be refunded by the city.
For the details directly from the city, click here.
And about that U.S. economy and our soaring loonie...
The U.S. economy has been like a little black cloud following us around that occassionally has slivers of light but is bothersome nonetheless.
While I already visited this topic, I thought it was worth doing a quick update and checking in with the economists given the track record of the dollar lately.
Should we be worried as home owners, or future home buyers? Will our property values drop? Will the market crash?Here is a great snapshot from TD's quarterly economic forecast from October....
- Canada's economic growth to soften, but economic expansion will continue
- Canadian dollar to remain close to, or slightly above, parity over the next six months
- U.S. economic slowdown to persist through 2008, but a recession unlikely
- Comination of strong loonie and U.S. weaknesses will hamper selected Canadian industries, including: manufacturing, tourism and hospitality
- Domestic Canadian economy and Canadian real estate markets will remain solid
They go to say...
"The Canadian housing market remains strong. We do not believe that there is a bubble in Canadian real estate, as prices and sales growth have been driven by economic fundamentals, not speculation or inappropriate lending behaviour that characterized the U.S. experience."
To see the full report, click here.
Who do you know who would enjoy this blog? Please forward it on!
Regards,Mark
http://www.markrichards.ca/
info@markrichards.ca
416. 728.2499
Thursday, November 15, 2007
Wednesday, November 14, 2007
October 2007 Market Watch
October 2007 was another record breaking month with sales up 15% over October 2006!
"There is every indication that 2007 will be a banner year for resale housing activity in the Greater Toronto Area," said TREB President Maureen O'Neill. "The effects of the City of Toronto's new land transfer tax will definitely be felt in 2008 but we are also confident that consumers will see the value of real estate as a solid long-term investment.:
Prices rose in October, with the average climbing 11% over the $356,423 recorded in October 2006. (!) An incredible return when you consider your principal home is not subject to personal taxes or capital gains when you sell.
Neighbourhood Watch - October 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $670,473
Semi-detached: $432,162
Condo: $356,143
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $454,854
Semi-Detached: $443,529
Condo: $211,500
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $529,250
Semi-Detached: $432,162
Condo:$257,000
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $958,411
Semi-Detached: $588,383
Condo: $257,064
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $2,156,542
Semi-Detached: $1,264,111
Condo: $732,414
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $913,797
Semi-Detached: $629,349
Condo: $761,640
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,500,871
Semi-Detached: n/a
Condo: $629,250
Source: Toronto Real Estate Board October 2007
MarketWatch - for the full report, click here.
Who do you know who is interested in buying or selling? Please forward my blog or pass on my info...
info@markrichards.ca
"There is every indication that 2007 will be a banner year for resale housing activity in the Greater Toronto Area," said TREB President Maureen O'Neill. "The effects of the City of Toronto's new land transfer tax will definitely be felt in 2008 but we are also confident that consumers will see the value of real estate as a solid long-term investment.:
Prices rose in October, with the average climbing 11% over the $356,423 recorded in October 2006. (!) An incredible return when you consider your principal home is not subject to personal taxes or capital gains when you sell.
Neighbourhood Watch - October 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $670,473
Semi-detached: $432,162
Condo: $356,143
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $454,854
Semi-Detached: $443,529
Condo: $211,500
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $529,250
Semi-Detached: $432,162
Condo:$257,000
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $958,411
Semi-Detached: $588,383
Condo: $257,064
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $2,156,542
Semi-Detached: $1,264,111
Condo: $732,414
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $913,797
Semi-Detached: $629,349
Condo: $761,640
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,500,871
Semi-Detached: n/a
Condo: $629,250
Source: Toronto Real Estate Board October 2007
MarketWatch - for the full report, click here.
Who do you know who is interested in buying or selling? Please forward my blog or pass on my info...
info@markrichards.ca
Thursday, October 18, 2007
My Extreme Makeover
I'm not sure if my wife just doesn't think I'm good looking enough or if she doesn't want me to be recognized on the street but my 'identity' as undergone an extreme makeover!
Check out my new website by clicking here ...
And here is the back of my new business card...
Click on comments below and tell me what you think!
My Little Black Book for Your Home
When you own a home, the shopping will never end. Trust me.
You might consider it a fun experience or, you might rather clean the toilet with your toothbrush. :)
Now on home #3, my wife and I have had done a lot of research and shopping and have found some of the best places and best finds for everything that you need for your home.
Many clients ask me after closing where to find great furniture, contractors, finishins, supplies etc...so now I'm going to share our shopping secrets with you. Don't forget to say Mark sent you!
(most of the suppliers have a live link to their websites - just click on the name if it's green!)
Renovations
Contractors
Give me a call directly if you are looking for a contractor. I have a few good guys but it depends on what you need. I also have other trades but again, it depends on what you are looking for.
Selba Kitchens - Paula Murphy 416-967-3600
For a full range of kitchen styles and budgets, Paula is the one to go to.
ecoEnergy Government Retro Fit Grants
To get rebates and grants for your home improvements, be sure to check this out and have an energy audit done before you start any work!
Home Improvement Materials & Supplies
Flea Market Tiles at 1345 Morningside Rd. (416-822-1201)
A cozy little store with an extensive array of ceramic, glass, marble, granite and porcelain tiles that are surplus from home builders. Owner Tony DiMarco claims his prices are about half of those in tonier stores. But make sure you measure carefully, and pick up a few extra tiles, because there's no guarantee you'll ever find more of the same tile.
Habitat ReStore
They sell good-quality used and surplus building materials and end of stock or trade show items at deeply discounted prices. Proceeds from the sales support the construction of Habitat houses in the community. It's a bit of a mish-mash of stock, but if you're planning any kind of renovation, check them out often. My wife just found an incredible chandelier from a tradeshow display - retails for $1500, got it for $225!!
Lee Valley Tools
So much more than tools! They offer an incredible selection of great quality cabinet hardware and things you never expected. Plus they are a tool junkie's dream.
Home Depot
The usual suspects, Home Depot & Rona. My preference is Home Depot where the staff tend to be former trades people and know their stuff. From my experience I'm guessing Rona's hiring base is the local high school. If you know what you need and just want to get in and out, don't go crazy going to specialty stores. Just hit the big box.
Caplan's Appliance Store
Check out their clearance centre!! We found a high-end dishwasher and got $400 off and there was a barely visible scratch on the side of the door. They also give decent discounts if you are buying an appliance package - i.e. everything for your kitchen - and they don't have to be the same brands.
Sunrise Landscaping Building Supply
More personal service and assistance than the big-box places. The only plant matter they sell is sod but great for stonework, lumber etc.
Roman Bath Centre
Great and unique bath products, good prices. We went there first to make our fixture and porecelain selection for our reno then checked out TUBS.
Tubs
They have a huge showroom just off the Queensway at their Etobicoke location. The other great thing is that they have at least 20 model suites set up so if you're trying to get ideas first, check them out. They also have selections of tile and more product range than most places so you should be able to find everything you need.
Audio, Video & Sound
I have a a couple of guys but it's by referral only so give me a call if you're looking for a great deal on plasmas, lcd's etc.
Clean-Up
European Cleaners 905.686.2379
If you can, it's well worth it to have them come in a clean your old place post-move and make sure your new place is spotless before you move in. Moving is stressful and busy enough without having to worry about mopping and cleaning two places (this is assuming that you were brought up right and taught to leave your home in the condition you would want it in for yourself!)
Healthy Home Carpet Care - Garvin 416.783.3434
Nicest guy and he can get stains out that you'd never think possible!
Paneless Perfection Window & Eaves Cleaning 416.779.7263
Junk Removal - John 416.792.8748
There are so many frachises but John is my guy. He's reasonable and fast.
Staging & Decor
(this is all in the family :)
Decor - Heather Richards Interiors - (416) 706-0813
Staging & Home Organization - Kelly Richards Design - (416) 301-2862
Home Furnishings
Craigslist
Great for buying items that would not be ideal for shipping or that you want to see first as they organize by what's available with your city.
Ebay
Great for smaller items - just be careful about getting stung with delivery or duty if you are shopping from sellers in the U.S.
GH Johnston - 950 Dupont StToronto, 416-532-6700
Great, decent quality and a great art section at the back.
EQ3 416-815-2002
My wife loves EQ3 as they have innovative furniture with style but very affordable prices.
Elte or Up Country
For those with fine taste and the budget to match!
Au Lit Fine Linens Outlet at 2045 Yonge St. - 416-489-5245
Owned by mother/daughter duo Peggy Byron and Joanna Goodman. Tucked above and just south of Au Lit's main storefront, the outlet is a great place to get high-end linens at up to 50 per cent off regular prices. It's a good spot even just to get inspired about trends in colours and textures.
Homesense
Somtimes you can luck out and get some great finds. We've bought great contemporary lamps for $99 that retail for $299. Other great buys include dishware, towels, mirrors and even area rugs.
A note on Ikea...
Ikea can be great for some things, not so great for others. Vanities, organizational solutions, accessories etc. Just try not to buy the truly recognizable things like lamps, billy bookcases etc. if you are doing quality finishes everywhere else. Also, be careful about supplies like faucets. We bought one for our condo and ended up having to spend more money on our plumber because it did not fit regular North American standards.
Other Resources
A lot of the time you spend on your home is involved in research and figuring out what you want. Here are our favorite places and things to browse for inspiration, product reviews and info.
Websites
HGTV
Great for when you're watching the channel and see something you like - they have shopping guides for most things shown on their programs.
Cityline
Check out their extensive database of video clips for home tours. They are a great source for inspiration.
Home Builder Canada
This is an industry site but a great source of information for product reviews and manufacturers of all types of materials and supplies.
Magazines
Living Etc.
This is a UK publication...the brits may have a strange sense of humour but they have our favorite decor magazine. They brialliantly show how you can mix elements of traditional and contemporary and for a unique but lasting look - and they showcase a great mix of homes...grand and compact.
Metropolitan Home
A higher-end view of the world of decor but with usability and comfort considered.
Other Tips
For Ideas...
Whether you are in your dream home or just starting out, buy a photo album and cut out any pictures in magazines of rooms, furniture, elements or ideas that you really like. Put them in the album. Not only is this a great way to get to know your own style but when you are ready to buy or renovate, it's a great reference point and guide to help in the decision making process.
For Sanity...
If you are in a relationship then draw a line in the sand and decide who gets executive decision making powers. i.e. I get the final call on anything structural, anything in the basement and electrical. My wife gets the final call on decor, finishes and kitchen. That's not to say that you shouldn't play nice and consider what your partner wants. It just means you can ignore it afterwards if you choose and not argue about it :)
Everyone has their great place and finds. I'd love to hear yours and keep sharing so please comment below!
Who do you know who would enjoy this blog? Please forward it on or send me their email address and I'll add them on.
Regards,
Mark
http://www.markrichards.ca/
info@markrichards.ca
(416) 728-2499
You might consider it a fun experience or, you might rather clean the toilet with your toothbrush. :)
Now on home #3, my wife and I have had done a lot of research and shopping and have found some of the best places and best finds for everything that you need for your home.
Many clients ask me after closing where to find great furniture, contractors, finishins, supplies etc...so now I'm going to share our shopping secrets with you. Don't forget to say Mark sent you!
(most of the suppliers have a live link to their websites - just click on the name if it's green!)
Renovations
Contractors
Give me a call directly if you are looking for a contractor. I have a few good guys but it depends on what you need. I also have other trades but again, it depends on what you are looking for.
Selba Kitchens - Paula Murphy 416-967-3600
For a full range of kitchen styles and budgets, Paula is the one to go to.
ecoEnergy Government Retro Fit Grants
To get rebates and grants for your home improvements, be sure to check this out and have an energy audit done before you start any work!
Home Improvement Materials & Supplies
Flea Market Tiles at 1345 Morningside Rd. (416-822-1201)
A cozy little store with an extensive array of ceramic, glass, marble, granite and porcelain tiles that are surplus from home builders. Owner Tony DiMarco claims his prices are about half of those in tonier stores. But make sure you measure carefully, and pick up a few extra tiles, because there's no guarantee you'll ever find more of the same tile.
Habitat ReStore
They sell good-quality used and surplus building materials and end of stock or trade show items at deeply discounted prices. Proceeds from the sales support the construction of Habitat houses in the community. It's a bit of a mish-mash of stock, but if you're planning any kind of renovation, check them out often. My wife just found an incredible chandelier from a tradeshow display - retails for $1500, got it for $225!!
Lee Valley Tools
So much more than tools! They offer an incredible selection of great quality cabinet hardware and things you never expected. Plus they are a tool junkie's dream.
Home Depot
The usual suspects, Home Depot & Rona. My preference is Home Depot where the staff tend to be former trades people and know their stuff. From my experience I'm guessing Rona's hiring base is the local high school. If you know what you need and just want to get in and out, don't go crazy going to specialty stores. Just hit the big box.
Caplan's Appliance Store
Check out their clearance centre!! We found a high-end dishwasher and got $400 off and there was a barely visible scratch on the side of the door. They also give decent discounts if you are buying an appliance package - i.e. everything for your kitchen - and they don't have to be the same brands.
Sunrise Landscaping Building Supply
More personal service and assistance than the big-box places. The only plant matter they sell is sod but great for stonework, lumber etc.
Roman Bath Centre
Great and unique bath products, good prices. We went there first to make our fixture and porecelain selection for our reno then checked out TUBS.
Tubs
They have a huge showroom just off the Queensway at their Etobicoke location. The other great thing is that they have at least 20 model suites set up so if you're trying to get ideas first, check them out. They also have selections of tile and more product range than most places so you should be able to find everything you need.
Audio, Video & Sound
I have a a couple of guys but it's by referral only so give me a call if you're looking for a great deal on plasmas, lcd's etc.
Clean-Up
European Cleaners 905.686.2379
If you can, it's well worth it to have them come in a clean your old place post-move and make sure your new place is spotless before you move in. Moving is stressful and busy enough without having to worry about mopping and cleaning two places (this is assuming that you were brought up right and taught to leave your home in the condition you would want it in for yourself!)
Healthy Home Carpet Care - Garvin 416.783.3434
Nicest guy and he can get stains out that you'd never think possible!
Paneless Perfection Window & Eaves Cleaning 416.779.7263
Junk Removal - John 416.792.8748
There are so many frachises but John is my guy. He's reasonable and fast.
Staging & Decor
(this is all in the family :)
Decor - Heather Richards Interiors - (416) 706-0813
Staging & Home Organization - Kelly Richards Design - (416) 301-2862
Home Furnishings
Craigslist
Great for buying items that would not be ideal for shipping or that you want to see first as they organize by what's available with your city.
Ebay
Great for smaller items - just be careful about getting stung with delivery or duty if you are shopping from sellers in the U.S.
GH Johnston - 950 Dupont StToronto, 416-532-6700
Great, decent quality and a great art section at the back.
EQ3 416-815-2002
My wife loves EQ3 as they have innovative furniture with style but very affordable prices.
Elte or Up Country
For those with fine taste and the budget to match!
Au Lit Fine Linens Outlet at 2045 Yonge St. - 416-489-5245
Owned by mother/daughter duo Peggy Byron and Joanna Goodman. Tucked above and just south of Au Lit's main storefront, the outlet is a great place to get high-end linens at up to 50 per cent off regular prices. It's a good spot even just to get inspired about trends in colours and textures.
Homesense
Somtimes you can luck out and get some great finds. We've bought great contemporary lamps for $99 that retail for $299. Other great buys include dishware, towels, mirrors and even area rugs.
A note on Ikea...
Ikea can be great for some things, not so great for others. Vanities, organizational solutions, accessories etc. Just try not to buy the truly recognizable things like lamps, billy bookcases etc. if you are doing quality finishes everywhere else. Also, be careful about supplies like faucets. We bought one for our condo and ended up having to spend more money on our plumber because it did not fit regular North American standards.
Other Resources
A lot of the time you spend on your home is involved in research and figuring out what you want. Here are our favorite places and things to browse for inspiration, product reviews and info.
Websites
HGTV
Great for when you're watching the channel and see something you like - they have shopping guides for most things shown on their programs.
Cityline
Check out their extensive database of video clips for home tours. They are a great source for inspiration.
Home Builder Canada
This is an industry site but a great source of information for product reviews and manufacturers of all types of materials and supplies.
Magazines
Living Etc.
This is a UK publication...the brits may have a strange sense of humour but they have our favorite decor magazine. They brialliantly show how you can mix elements of traditional and contemporary and for a unique but lasting look - and they showcase a great mix of homes...grand and compact.
Metropolitan Home
A higher-end view of the world of decor but with usability and comfort considered.
Other Tips
For Ideas...
Whether you are in your dream home or just starting out, buy a photo album and cut out any pictures in magazines of rooms, furniture, elements or ideas that you really like. Put them in the album. Not only is this a great way to get to know your own style but when you are ready to buy or renovate, it's a great reference point and guide to help in the decision making process.
For Sanity...
If you are in a relationship then draw a line in the sand and decide who gets executive decision making powers. i.e. I get the final call on anything structural, anything in the basement and electrical. My wife gets the final call on decor, finishes and kitchen. That's not to say that you shouldn't play nice and consider what your partner wants. It just means you can ignore it afterwards if you choose and not argue about it :)
Everyone has their great place and finds. I'd love to hear yours and keep sharing so please comment below!
Who do you know who would enjoy this blog? Please forward it on or send me their email address and I'll add them on.
Regards,
Mark
http://www.markrichards.ca/
info@markrichards.ca
(416) 728-2499
September 2007 Market Watch
September put in another excellent performance, with 6,866 single family units changing hands through the TorontoMLS system, Toronto Real Estate Board (TREB) President Maureen O’Neill announced today.
“This figure was up four per cent from last year (6,622 sales), and off only six per cent from the record 7,326 sales recorded during September of 2005.” Year-to-date sales, at 73,827, were up 12 per cent over 2006.
“They are also,” the President went on to note, “up 11 per cent over the first nine months of 2005, which turned out to be the best year ever recorded in the history of TREB.”
Prices rebounded in September, rising five per cent over August to $380,132. On a year-over-year basis they were up also up five per cent, to $371,848 from the $352,318 recorded during the first nine months of 2006.
Breaking down the total, 2,613 sales were reported in TREB’s 28 West districts and averaged $351,328; 1,298 sales were reported in the 14 Central districts and averaged $501,419; 1,380 sales were reported in the 23 North districts and averaged $404,663; and 1,575 sales were reported in TREB’s 21 East districts and averaged $306,467. "
Neighbourhood Watch - September 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $683,226
Semi-detached: $460,294
Condo: $315,625
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $438,519
Semi-Detached: $418,137
Condo: $196,148
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $489,306
Semi-Detached: $425,464
Condo:$351,000
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $936,249
Semi-Detached: $570,343
Condo: $291,875
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $2,190,237
Semi-Detached: $734,000
Condo: $700,667
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $773,127
Semi-Detached: $561,792
Condo: $567,039
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,818,169
Semi-Detached: n/a
Condo: $513,000
Source: Toronto Real Estate Board September 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
“This figure was up four per cent from last year (6,622 sales), and off only six per cent from the record 7,326 sales recorded during September of 2005.” Year-to-date sales, at 73,827, were up 12 per cent over 2006.
“They are also,” the President went on to note, “up 11 per cent over the first nine months of 2005, which turned out to be the best year ever recorded in the history of TREB.”
Prices rebounded in September, rising five per cent over August to $380,132. On a year-over-year basis they were up also up five per cent, to $371,848 from the $352,318 recorded during the first nine months of 2006.
Breaking down the total, 2,613 sales were reported in TREB’s 28 West districts and averaged $351,328; 1,298 sales were reported in the 14 Central districts and averaged $501,419; 1,380 sales were reported in the 23 North districts and averaged $404,663; and 1,575 sales were reported in TREB’s 21 East districts and averaged $306,467. "
Neighbourhood Watch - September 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $683,226
Semi-detached: $460,294
Condo: $315,625
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $438,519
Semi-Detached: $418,137
Condo: $196,148
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $489,306
Semi-Detached: $425,464
Condo:$351,000
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $936,249
Semi-Detached: $570,343
Condo: $291,875
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $2,190,237
Semi-Detached: $734,000
Condo: $700,667
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $773,127
Semi-Detached: $561,792
Condo: $567,039
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,818,169
Semi-Detached: n/a
Condo: $513,000
Source: Toronto Real Estate Board September 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
Thursday, September 20, 2007
Boom or Bubble?
With the insane record-setting activity in the real estate market over the summer, there is a lot of buzz about whether the market bubble is going to burst or if this is an ongoing boom.
If you've been a part of any a conversation on this topic, discussion has probably come up about the U.S. market.
Creditors are losing their shirts, home owners are defaulting on their mortgages at unprecedented rates, the state of the economy and frightening 'living on credit' approach is pushing a crash in the U.S. real estate market.
How can it not affect the Canadian market?
The Toronto Star recently featured an article that has some great insight that I support...
"U.S. housing woes are not headed here."
'Oh Canada, Get a load of this boom!" What a great headline, especially since I found it on the front page of the real estate section of the Chicago Tribune (Aug. 5, 2007).
Americans are quite envious of our housing market as they suffer through the subprime mortgage meltdown. I'm often asked if the same thing could happen here and I'm happy to say the answer is `no,' at least according to Peter Vukanovich, president of Genworth Financial Canada, which, next to CMHC is the largest mortgage insurer in Canada.
Vukanovich says there are many important differences in lending practices and regulatory systems in the two countries. The Genworth head explains that subprime mortgages typically have higher interest rates and fees than "prime" mortgages and often include features such as "teaser" rates that offer the homebuyer very low payments for a short time, or the option to make interest-only payments.
As well, whereas Canadian lenders are very strict about debt ratios, income verification and credit checks, the American lenders are not nearly as diligent.
Vukanovich notes that here in Canada, most loans are made for five-year terms with fixed monthly payments that will not jump quickly to unaffordable levels. Also, mortgage interest is not tax deductible here, so we have an incentive to pay off our mortgages as quickly as possible.
Another important difference in Canada is that mortgage default insurance is required under federal financial services law for those making less than a 20 per cent down payment. As a result, 95 per cent of the loans made in Canada are considered "prime" lending quality versus a much smaller number in the United States.
By acting as a lender's "second set of eyes," mortgage insurers see that underwriting standards are consistently applied to about half the market – approximately 450,000 mortgages in 2006.
Mortgage default insurance works by transferring the homeowner's risk of default from the lender to the mortgage insurer. It also benefits Canadian homebuyers by allowing them to obtain loans at lower interest rates than would otherwise be charged if lenders retained the risk of default.
"If Canada had a U.S.-style system, at least one-third of all Canadians who currently have low-cost insured prime mortgages would pay higher interest rates and additional fees," Vukanovich says.
"All told, Canadians can take comfort in knowing that our mortgage default insurance system is one of the most efficient, safest and stable in the world. "
The whole U.S. house of (credit) cards assumed rising housing markets and stable or declining interest rates. Unfortunately, the U.S. has seen the opposite trends.
We're very fortunate to be avoiding that fiasco here in Canada, although we are certainly feeling the side effects on the stock market side. For years, there were just two mortgage insurance companies in Canada, but we are starting to see some new players. I think competition is great, but we must ensure that responsible lending standards prevail.
The bottom line is that our lending practices are solid and our housing market remains strong and insulated from the woes of our neighbours to the south.
**************************************************************************
PS - With the dollar at par, now is a great time to purchase a vacation property in the states!
Who do you know who is ready to buy or sell? If you or anyone you know is ready to take the first step, share my blog with them or give me a call. info@markrichards.ca
Regards,
Mark
(416) 728-2499
If you've been a part of any a conversation on this topic, discussion has probably come up about the U.S. market.
Creditors are losing their shirts, home owners are defaulting on their mortgages at unprecedented rates, the state of the economy and frightening 'living on credit' approach is pushing a crash in the U.S. real estate market.
How can it not affect the Canadian market?
The Toronto Star recently featured an article that has some great insight that I support...
"U.S. housing woes are not headed here."
'Oh Canada, Get a load of this boom!" What a great headline, especially since I found it on the front page of the real estate section of the Chicago Tribune (Aug. 5, 2007).
Americans are quite envious of our housing market as they suffer through the subprime mortgage meltdown. I'm often asked if the same thing could happen here and I'm happy to say the answer is `no,' at least according to Peter Vukanovich, president of Genworth Financial Canada, which, next to CMHC is the largest mortgage insurer in Canada.
Vukanovich says there are many important differences in lending practices and regulatory systems in the two countries. The Genworth head explains that subprime mortgages typically have higher interest rates and fees than "prime" mortgages and often include features such as "teaser" rates that offer the homebuyer very low payments for a short time, or the option to make interest-only payments.
As well, whereas Canadian lenders are very strict about debt ratios, income verification and credit checks, the American lenders are not nearly as diligent.
Vukanovich notes that here in Canada, most loans are made for five-year terms with fixed monthly payments that will not jump quickly to unaffordable levels. Also, mortgage interest is not tax deductible here, so we have an incentive to pay off our mortgages as quickly as possible.
Another important difference in Canada is that mortgage default insurance is required under federal financial services law for those making less than a 20 per cent down payment. As a result, 95 per cent of the loans made in Canada are considered "prime" lending quality versus a much smaller number in the United States.
By acting as a lender's "second set of eyes," mortgage insurers see that underwriting standards are consistently applied to about half the market – approximately 450,000 mortgages in 2006.
Mortgage default insurance works by transferring the homeowner's risk of default from the lender to the mortgage insurer. It also benefits Canadian homebuyers by allowing them to obtain loans at lower interest rates than would otherwise be charged if lenders retained the risk of default.
"If Canada had a U.S.-style system, at least one-third of all Canadians who currently have low-cost insured prime mortgages would pay higher interest rates and additional fees," Vukanovich says.
"All told, Canadians can take comfort in knowing that our mortgage default insurance system is one of the most efficient, safest and stable in the world. "
The whole U.S. house of (credit) cards assumed rising housing markets and stable or declining interest rates. Unfortunately, the U.S. has seen the opposite trends.
We're very fortunate to be avoiding that fiasco here in Canada, although we are certainly feeling the side effects on the stock market side. For years, there were just two mortgage insurance companies in Canada, but we are starting to see some new players. I think competition is great, but we must ensure that responsible lending standards prevail.
The bottom line is that our lending practices are solid and our housing market remains strong and insulated from the woes of our neighbours to the south.
**************************************************************************
PS - With the dollar at par, now is a great time to purchase a vacation property in the states!
Who do you know who is ready to buy or sell? If you or anyone you know is ready to take the first step, share my blog with them or give me a call. info@markrichards.ca
Regards,
Mark
(416) 728-2499
Wednesday, September 19, 2007
August 2007 Market Watch
I'm getting tired! August became the fifth record-breaking month in a row with 8,059 sales. It was 15% more active than last year and 7% higher than the all time record.
The average price is up 7% over August 2006 at $361,890. TREB President Donald Bentley stated, "While the last decade has seen five record breaking years, and a good possibility of a sixth in 2007, year-over-year price increases have remained in the single digits. This kind of activity is sustainable for a long time."
With all the buzz about the U.S. economy, I'm featuring an article this month (see above) from the Toronto Star that talks about whether it will impact the Canadian real estate market.
Neighbourhood Watch - August 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $572,766
Semi-detached: $460,384
Condo: $283,500
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $369,307
Semi-Detached: $375,195
Condo: $164,375
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)D
etached: $423,108
Semi-Detached: $374,750
Condo:$367,000
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $843,705
Semi-Detached: $509,000
Condo: $275,474
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,564,750
Semi-Detached: $3,100,000
Condo: $349,650
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $870,043
Semi-Detached: $553,906
Condo: $450,200
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,866,624
Semi-Detached: n/a
Condo: $834,800
Source: Toronto Real Estate Board April 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
The average price is up 7% over August 2006 at $361,890. TREB President Donald Bentley stated, "While the last decade has seen five record breaking years, and a good possibility of a sixth in 2007, year-over-year price increases have remained in the single digits. This kind of activity is sustainable for a long time."
With all the buzz about the U.S. economy, I'm featuring an article this month (see above) from the Toronto Star that talks about whether it will impact the Canadian real estate market.
Neighbourhood Watch - August 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $572,766
Semi-detached: $460,384
Condo: $283,500
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $369,307
Semi-Detached: $375,195
Condo: $164,375
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)D
etached: $423,108
Semi-Detached: $374,750
Condo:$367,000
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $843,705
Semi-Detached: $509,000
Condo: $275,474
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,564,750
Semi-Detached: $3,100,000
Condo: $349,650
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $870,043
Semi-Detached: $553,906
Condo: $450,200
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,866,624
Semi-Detached: n/a
Condo: $834,800
Source: Toronto Real Estate Board April 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
Monday, August 20, 2007
Playing the Game
In today's heated market, there are still a lot of sought-after neighbourhoods where homes command multiple offers and the sold price well exceeds the asking price.
One lucky home buyer is successful but many others are left in the wake still without a home, scratching their heads wondering, "What happened"?
We'll walk you through the strategy of multiple offers, the process and how you can best prepare yourself to buy or sell in this situation.
For those of you who are unfamiliar with this approach, it's where a home seller will accept offers within a certain time frame from potential buyers. Each buyer will put in an offer not knowing what other buyers are offering. The best offer wins.
Let's start from the perspective of the home seller...
Using a multiple offer or 'bidding' approach can be a great way to sell your home fast and for great money. But it takes a lot of preparation and nerves.
The Preparation
First, your home must be immaculate and staged properly. This does not just mean decluttering and cleaning. Invest in a professional stager, and although it may take thousands of dollars to fix up your home, the return will be well worth it.
Potential buyers need to see that they can move in without any work needed. It also has to appeal to the widest range of buyers so take the usual staging advice into practice - perception is everything.
Get a home inspection done before you list the home. This will eliminate the ability for any buyers to use this a condition of their offer. It will also save any suprises that could make the deal go south.
The Price
Sellers will usually price below market value. This can be frustrating for buyers who get excited about a great home for such a good price. But that is the point! You want as many people to see the home as possible. The more people see it, the more offers there will be which usually translates to a higher sale price.
You should also price below the mental thresholds of people's shopping range. If you were going to price at $460,000, get it down to $439,000 below the $450,000 mark. Buyers usually set search parameters in $50,000 increments. If you are just above their max, they won't even see it. If you are just below you'll make your home available to another huge group of buyers.
If you price it too close to the current market value, you may drive away potential buyers since there is an understanding that a seller doing an offer night is going to price lower than market value and people want to feel like there is a chance they can get a deal.
Many home owners are afraid they will only sell their home for the list price and are reluctant to go too low. If you don't know what you're doing, it could backfire. But if you understand the exact current market conditions (seasonality, supply, demand, comparables etc.) and the home is in great shape then you will be too.
Offer Night
You've been holding your breath for a week and now it's time to tango. Offers can be accepted at your home or at the real estate office. Typically each realtor will come in and present their offer.
You can't just look at the numbers. There are a lot of things to consider - close date, conditions, the size of deposit. Some of these things may be worth more than a few thousand bucks or a lower offer may be the more secure one.
You may select the top few offers and take a chance to ask the agents to go back to their clients and sharpen their pencils, but this can be risky...if they feel pushed they may walk away and you can be left with nothing. Tread lightly and don't get greedy!
Now for the Buyer's perspective...
You've been looking at homes and have finally fallen in love. Anyone who tells you not to get emotional and attached has never bought a home before. That's how you're supposed to feel about your future home and largest investment!
You decide to put in an offer. How do you play it? How do you win? And without paying too much?
Sadly, there are no guarantees. But there are a few things you can do to give yourself the best shot possible.
Be Prepared
Always have your financing approved and ready to go. An offer with a financing condition is one of the weakest approaches. Make sure you leave time on the day of the offer to get a certified cheque from your bank for a decent size deposit (which of course you get back right away if your offer is not accepted).
These days, $20,000 plus on the average home is about right. If you have more available to you, just think about how you feel looking at a cheque in hand. The more the better.
Make the Offer Clean
If at all possible, do not include any conditions in the offer. However, if there are conditions that you need to protect yourself you need to work within your comfort level.
Get a home inspection done prior to the offer if the owner has not done so already. It may seem like wasted money if you don't get the house. But you certainly don't want it to be the actual reason you didn't get it.
If there are any questions about the property that you need to know beforehand, do your research first instead of making your offer conditional on the ability to expand the house or add parking etc.
Give the Owners what they Want
If possible, give the home owners exactly what they want. Most important can be the close date. If it's a matter of staying at the in-laws for a couple of weeks to get the house, do what you have to do!
Don't get petty - if they want to take the chandelier, don't ask for it back in your offer.
Name Your Price
This is the hardest part! A friend once described it as being like a poker game. You don't know what everyone else has and you have to make your bet blind.
Wait until the end to put in your offer. Why? A couple of reasons. You want to see how many offers are in - there is a theory that the more that are submitted the higher it's going to go. You also don't want to inflate the price other bidders after you are putting in.
Determine what you are willing to pay for the house. So many people get caught up in the thought that they are paying $X over the asking price. The asking price is usually artificially low anyway so you cannot use that as a benchmark.
Pay attention to the recent sale price of comparable homes in the area. If you had never seen the asking price, what would you be willing to pay?
Next determine how far you are willing to go to get the home. Some people are comfortable with upping their bid by another ten thousand dollars just to get the house. Think how you would feel if you lost it by just a few thousand.
Whatever the number is, at the end of the day you have to feel comfortable with your bid to the point that if you didn't get the house, you are ok with it because you would not have paid more. Or if you win, you will never grumble about paying too much.
Another Strategy
Some people simply lose patience with the whole process, especially if they've been down that road before and lost. They'll find a home they want and will do what's called "bullying" an offer. They will try to put in an offer before the offer date.
This will only work if the offer is substantial and worth it for the home seller to jeapoardize the multiple offer process. If they agree to view your offer, legally they still have to offer any buyer who has viewed the home with an agent the opportunity to submit and offer.
But this strategy can win as it may rush other buyers to the point where they will back out and there simply isn't the opportunity to show it more people. Your offer should have a very short irreovoable time on it. Just enough to be reasonable but not long enough to let the competition get their act in gear!
In Conclusion
After all of this, even if you win you may never know what the other bids were. It is confidential information. How crazy is that?!
If you are going to play this game as a seller or a buyer, make every decision without regret and do not look back. It really does work out in the end.
Just make sure you get the research you need to make the best decisions possible on price and bidding and of course, trust your realtor to guide you though every step.
Who do you know who is ready to buy or sell? If you or anyone you know is ready to take the first step, share my blog with them or give me a call. info@markrichards.ca
Regards,
Mark
One lucky home buyer is successful but many others are left in the wake still without a home, scratching their heads wondering, "What happened"?
We'll walk you through the strategy of multiple offers, the process and how you can best prepare yourself to buy or sell in this situation.
For those of you who are unfamiliar with this approach, it's where a home seller will accept offers within a certain time frame from potential buyers. Each buyer will put in an offer not knowing what other buyers are offering. The best offer wins.
Let's start from the perspective of the home seller...
Using a multiple offer or 'bidding' approach can be a great way to sell your home fast and for great money. But it takes a lot of preparation and nerves.
The Preparation
First, your home must be immaculate and staged properly. This does not just mean decluttering and cleaning. Invest in a professional stager, and although it may take thousands of dollars to fix up your home, the return will be well worth it.
Potential buyers need to see that they can move in without any work needed. It also has to appeal to the widest range of buyers so take the usual staging advice into practice - perception is everything.
Get a home inspection done before you list the home. This will eliminate the ability for any buyers to use this a condition of their offer. It will also save any suprises that could make the deal go south.
The Price
Sellers will usually price below market value. This can be frustrating for buyers who get excited about a great home for such a good price. But that is the point! You want as many people to see the home as possible. The more people see it, the more offers there will be which usually translates to a higher sale price.
You should also price below the mental thresholds of people's shopping range. If you were going to price at $460,000, get it down to $439,000 below the $450,000 mark. Buyers usually set search parameters in $50,000 increments. If you are just above their max, they won't even see it. If you are just below you'll make your home available to another huge group of buyers.
If you price it too close to the current market value, you may drive away potential buyers since there is an understanding that a seller doing an offer night is going to price lower than market value and people want to feel like there is a chance they can get a deal.
Many home owners are afraid they will only sell their home for the list price and are reluctant to go too low. If you don't know what you're doing, it could backfire. But if you understand the exact current market conditions (seasonality, supply, demand, comparables etc.) and the home is in great shape then you will be too.
Offer Night
You've been holding your breath for a week and now it's time to tango. Offers can be accepted at your home or at the real estate office. Typically each realtor will come in and present their offer.
You can't just look at the numbers. There are a lot of things to consider - close date, conditions, the size of deposit. Some of these things may be worth more than a few thousand bucks or a lower offer may be the more secure one.
You may select the top few offers and take a chance to ask the agents to go back to their clients and sharpen their pencils, but this can be risky...if they feel pushed they may walk away and you can be left with nothing. Tread lightly and don't get greedy!
Now for the Buyer's perspective...
You've been looking at homes and have finally fallen in love. Anyone who tells you not to get emotional and attached has never bought a home before. That's how you're supposed to feel about your future home and largest investment!
You decide to put in an offer. How do you play it? How do you win? And without paying too much?
Sadly, there are no guarantees. But there are a few things you can do to give yourself the best shot possible.
Be Prepared
Always have your financing approved and ready to go. An offer with a financing condition is one of the weakest approaches. Make sure you leave time on the day of the offer to get a certified cheque from your bank for a decent size deposit (which of course you get back right away if your offer is not accepted).
These days, $20,000 plus on the average home is about right. If you have more available to you, just think about how you feel looking at a cheque in hand. The more the better.
Make the Offer Clean
If at all possible, do not include any conditions in the offer. However, if there are conditions that you need to protect yourself you need to work within your comfort level.
Get a home inspection done prior to the offer if the owner has not done so already. It may seem like wasted money if you don't get the house. But you certainly don't want it to be the actual reason you didn't get it.
If there are any questions about the property that you need to know beforehand, do your research first instead of making your offer conditional on the ability to expand the house or add parking etc.
Give the Owners what they Want
If possible, give the home owners exactly what they want. Most important can be the close date. If it's a matter of staying at the in-laws for a couple of weeks to get the house, do what you have to do!
Don't get petty - if they want to take the chandelier, don't ask for it back in your offer.
Name Your Price
This is the hardest part! A friend once described it as being like a poker game. You don't know what everyone else has and you have to make your bet blind.
Wait until the end to put in your offer. Why? A couple of reasons. You want to see how many offers are in - there is a theory that the more that are submitted the higher it's going to go. You also don't want to inflate the price other bidders after you are putting in.
Determine what you are willing to pay for the house. So many people get caught up in the thought that they are paying $X over the asking price. The asking price is usually artificially low anyway so you cannot use that as a benchmark.
Pay attention to the recent sale price of comparable homes in the area. If you had never seen the asking price, what would you be willing to pay?
Next determine how far you are willing to go to get the home. Some people are comfortable with upping their bid by another ten thousand dollars just to get the house. Think how you would feel if you lost it by just a few thousand.
Whatever the number is, at the end of the day you have to feel comfortable with your bid to the point that if you didn't get the house, you are ok with it because you would not have paid more. Or if you win, you will never grumble about paying too much.
Another Strategy
Some people simply lose patience with the whole process, especially if they've been down that road before and lost. They'll find a home they want and will do what's called "bullying" an offer. They will try to put in an offer before the offer date.
This will only work if the offer is substantial and worth it for the home seller to jeapoardize the multiple offer process. If they agree to view your offer, legally they still have to offer any buyer who has viewed the home with an agent the opportunity to submit and offer.
But this strategy can win as it may rush other buyers to the point where they will back out and there simply isn't the opportunity to show it more people. Your offer should have a very short irreovoable time on it. Just enough to be reasonable but not long enough to let the competition get their act in gear!
In Conclusion
After all of this, even if you win you may never know what the other bids were. It is confidential information. How crazy is that?!
If you are going to play this game as a seller or a buyer, make every decision without regret and do not look back. It really does work out in the end.
Just make sure you get the research you need to make the best decisions possible on price and bidding and of course, trust your realtor to guide you though every step.
Who do you know who is ready to buy or sell? If you or anyone you know is ready to take the first step, share my blog with them or give me a call. info@markrichards.ca
Regards,
Mark
Sunday, August 19, 2007
July 2007 Market Watch
July is the fourth month in a row that sales have broken monthly records!
"We are running 14 percent ahead of the seven month total for 2005 which became our best year ever." says TREB President Donald Bentley. "The local resale market is as healthy as it has ever been."
Average prices declined two percent to $366,012 but the decline is due to seasonality with home buyers and sellers enjoying the summer. Overall, the year-to-date average of $373,326 is up five percent over the same time frame in 2006.
The summer can be a great time for buyers who don't want as much competition for great homes but keep in mind that supply is also lower. Eveyrone is looking forward to stong fall market where you'll see a lot more come on the market in the second half of September once everyone gets back into the swing of things after summer.
Competition and multiple offers are still common place in sought-after neighbourhoods even in the summer market so buyers have to be prepared to go for the home they want.
Check out average prices in your neighbourhood to see what is happening in today's market...
Neighbourhood Watch - July 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $675,840
Semi-detached: $408,842
Condo: $292,614
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $403,116
Semi-Detached: $377,372
Condo: $185,327
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $434,541
Semi-Detached: $403,020
Condo:$361,517
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $841,974
Semi-Detached: $590,000
Condo: $225,376
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,570,036
Semi-Detached: $1,112,500
Condo: $509,545
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $1,662,486
Semi-Detached: $375,542
Condo: $596,500
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,921,327
Semi-Detached: $394,176
Condo: $576,143
Source: Toronto Real Estate Board April 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
"We are running 14 percent ahead of the seven month total for 2005 which became our best year ever." says TREB President Donald Bentley. "The local resale market is as healthy as it has ever been."
Average prices declined two percent to $366,012 but the decline is due to seasonality with home buyers and sellers enjoying the summer. Overall, the year-to-date average of $373,326 is up five percent over the same time frame in 2006.
The summer can be a great time for buyers who don't want as much competition for great homes but keep in mind that supply is also lower. Eveyrone is looking forward to stong fall market where you'll see a lot more come on the market in the second half of September once everyone gets back into the swing of things after summer.
Competition and multiple offers are still common place in sought-after neighbourhoods even in the summer market so buyers have to be prepared to go for the home they want.
Check out average prices in your neighbourhood to see what is happening in today's market...
Neighbourhood Watch - July 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $675,840
Semi-detached: $408,842
Condo: $292,614
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $403,116
Semi-Detached: $377,372
Condo: $185,327
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $434,541
Semi-Detached: $403,020
Condo:$361,517
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $841,974
Semi-Detached: $590,000
Condo: $225,376
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,570,036
Semi-Detached: $1,112,500
Condo: $509,545
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $1,662,486
Semi-Detached: $375,542
Condo: $596,500
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,921,327
Semi-Detached: $394,176
Condo: $576,143
Source: Toronto Real Estate Board April 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
Thursday, July 19, 2007
Too Many Hands In Your Pocket!
It seems lately that all sorts of people are trying to put their hands in your pocket....the goverment, the bank, the government again.
There's been a great deal of contreversy about the proposed 100% increase to land transfer taxes, possible increases to property taxes and additional fees for everything else that you do in life.
On top of that, the prime rate recently increased by .25%.
The fact is, all of these changes, proposed and otherwise affect everyone, whether you are a current home owner, or just getting into the market.
I'm going to show you a few examples of how all of this is going to affect your bank account while giving you the update to sort through where all of these changes stand.
Proposed 100% increase to Land Trasfer Tax
This one is not easy to swallow, but easy to calcuate - just double the normal tax...
Purchase Price = Current tax = New total tax
$250,000 = $2,225 x 2 = $4,450
$400,000 = $4,475 x 2 = $8,950
$750,000 = $11,475 x 2 = $22,950
$1,000,000 = $16,475 x 2 = $32,950
What will happen if they don't vote to implement this tax? The city is threatening that property taxes would have to increase 18% to make up the shortfall.
Home Value = Current Property Tax = Proposed Increase
$250,000 = $2,132.11 = $387.78
$400,000 = $3,411.37 = $614.00
$750,000 = $6,396.33 = $1,511.34
$1,000,000 = $8,528.43 = $1,535.12
The proposed 18% increase to the property taxes seems to hurt a little less at first glance, but depending on how long you may own your home it could be a more painful alternative.
So where do things stand right now?
On July 16th, Toronto city council voted to defer the decision until the provincial election in late October. The apparent rationale for this is that the provincial candidates will be pressured to backfill the city's budget shortfall to win the race.
But Miller wisely warned, "This was an election issue four years ago. Anyone in this chamber who sincerely believes that the province - whoever the party is - is suddenly going to upload $750,000 million on October 23rd is sorely misguided." I tend to agree with him.
Others feel the city has not worked hard enough or smart enough to come up with alternative solutions to the shortfall and need the time to get creative.
At the end of the day, the land transfer tax increase is a clean, quick and tempting way for the city to come up with a cool $750,000 million. If you're thinking of waiting to buy until 2008, you may want to reconsider!
The Prime Rate
The prime lending rate just jumped up .25%. For those of you who like to think big, .25% may not seem like a big deal. But let's consider the impact....
The average home in Toronto is currently valued at $381,963. Say you mortgage 100% at 5.00% over 25 years.
Your montly mortgage payment would be $2,221.52. If the rate jumps .25% your payment would increase to $2,276.19.
That's a difference of $54.67 per month, or 3.64 bottles of wine depending on your taste.
But over the life of your mortgage, assuming bi-monthly payments, that's a difference of $16,299! (or 1,086 bottles of wine)
If you're thinking of putting off getting into the market, consider the incentive to invest now before rates go up any further.
Don't feel too bad about owning a home...
Although these are all big dollars involved in the cost of home ownership, don't let it get you down (but please let the city know how you feel).
After all, if you own a home, you have enjoyed some great growth in equity. Based on the average price of a home in the GTA today at $381,963, and value increases, here's what you do have in your pocket:
Average Home Price in Year = Growth in Equity
(This is tax free if it's your primary residence!)
2000 - $243,255 = $138,708
2001 - $251,508 = $130,455
2002 - $275,231 = $106,732
2003 - $293,067 = $88,896
2004 - $315,231 = $66,732
2005 - $335,907 = $46,056
2006 - $351,941 = $30,022
So keep putting money in your pocket and do your best to keep everyone else out. :)
To make your voice heard on the proposed tax increases, check out:
http://www.nohomebuyingtax.com/
Who do you know who is ready to buy or sell? If you or anyone you know is ready to take the first step, share my blog with them or give me a call.
Regards,
Mark
Mark Richards
416-728-2499
mrichards@trebnet.com
There's been a great deal of contreversy about the proposed 100% increase to land transfer taxes, possible increases to property taxes and additional fees for everything else that you do in life.
On top of that, the prime rate recently increased by .25%.
The fact is, all of these changes, proposed and otherwise affect everyone, whether you are a current home owner, or just getting into the market.
I'm going to show you a few examples of how all of this is going to affect your bank account while giving you the update to sort through where all of these changes stand.
Proposed 100% increase to Land Trasfer Tax
This one is not easy to swallow, but easy to calcuate - just double the normal tax...
Purchase Price = Current tax = New total tax
$250,000 = $2,225 x 2 = $4,450
$400,000 = $4,475 x 2 = $8,950
$750,000 = $11,475 x 2 = $22,950
$1,000,000 = $16,475 x 2 = $32,950
What will happen if they don't vote to implement this tax? The city is threatening that property taxes would have to increase 18% to make up the shortfall.
Home Value = Current Property Tax = Proposed Increase
$250,000 = $2,132.11 = $387.78
$400,000 = $3,411.37 = $614.00
$750,000 = $6,396.33 = $1,511.34
$1,000,000 = $8,528.43 = $1,535.12
The proposed 18% increase to the property taxes seems to hurt a little less at first glance, but depending on how long you may own your home it could be a more painful alternative.
So where do things stand right now?
On July 16th, Toronto city council voted to defer the decision until the provincial election in late October. The apparent rationale for this is that the provincial candidates will be pressured to backfill the city's budget shortfall to win the race.
But Miller wisely warned, "This was an election issue four years ago. Anyone in this chamber who sincerely believes that the province - whoever the party is - is suddenly going to upload $750,000 million on October 23rd is sorely misguided." I tend to agree with him.
Others feel the city has not worked hard enough or smart enough to come up with alternative solutions to the shortfall and need the time to get creative.
At the end of the day, the land transfer tax increase is a clean, quick and tempting way for the city to come up with a cool $750,000 million. If you're thinking of waiting to buy until 2008, you may want to reconsider!
The Prime Rate
The prime lending rate just jumped up .25%. For those of you who like to think big, .25% may not seem like a big deal. But let's consider the impact....
The average home in Toronto is currently valued at $381,963. Say you mortgage 100% at 5.00% over 25 years.
Your montly mortgage payment would be $2,221.52. If the rate jumps .25% your payment would increase to $2,276.19.
That's a difference of $54.67 per month, or 3.64 bottles of wine depending on your taste.
But over the life of your mortgage, assuming bi-monthly payments, that's a difference of $16,299! (or 1,086 bottles of wine)
If you're thinking of putting off getting into the market, consider the incentive to invest now before rates go up any further.
Don't feel too bad about owning a home...
Although these are all big dollars involved in the cost of home ownership, don't let it get you down (but please let the city know how you feel).
After all, if you own a home, you have enjoyed some great growth in equity. Based on the average price of a home in the GTA today at $381,963, and value increases, here's what you do have in your pocket:
Average Home Price in Year = Growth in Equity
(This is tax free if it's your primary residence!)
2000 - $243,255 = $138,708
2001 - $251,508 = $130,455
2002 - $275,231 = $106,732
2003 - $293,067 = $88,896
2004 - $315,231 = $66,732
2005 - $335,907 = $46,056
2006 - $351,941 = $30,022
So keep putting money in your pocket and do your best to keep everyone else out. :)
To make your voice heard on the proposed tax increases, check out:
http://www.nohomebuyingtax.com/
Who do you know who is ready to buy or sell? If you or anyone you know is ready to take the first step, share my blog with them or give me a call.
Regards,
Mark
Mark Richards
416-728-2499
mrichards@trebnet.com
June 2007 Market Watch
A few of the home buyers are finally taking a bit of a vacation from shopping.
But even though the number of home sales slowed down by 6% compared to record-breaking May, June's sales were still up almost 20% over the same month last year.
The average price of a home went down slightly by less than one percent to $381,963, but don't take that as a sign of a declining market. It's simply a reflection of the slower summer season.
It's still a great time to buy. Inventory is still good but other shoppers may be on holidays.
If you are selling and have flexibility in timing, try to hold off until the fall. But if you have to sell now, you will still see solid activity.
On a record-breaking note, a Forest Hill home may be the most expensive piece of Toronto residential property - it sold for $15.8 million. Just think, if they bought it next year, they might have had to pay an extra $312,000 in proposed land transfer tax increases!
Neighbourhood Watch - June 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $647,049
Semi-detached: $477,510
Condo: $319,133
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $415,256
Semi-Detached: $388,488
Condo: $185,710
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $459,592
Semi-Detached: $419,510
Condo:$388,280
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $836,540
Semi-Detached: $512,750
Condo: $258,986
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,973,567
Semi-Detached: $1,448,333
Condo: $589,200
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $1,434,230
Semi-Detached: $462,913
Condo: $452,680
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,548,882
Semi-Detached: $390,000
Condo: $413,892
Source: Toronto Real Estate Board April 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
But even though the number of home sales slowed down by 6% compared to record-breaking May, June's sales were still up almost 20% over the same month last year.
The average price of a home went down slightly by less than one percent to $381,963, but don't take that as a sign of a declining market. It's simply a reflection of the slower summer season.
It's still a great time to buy. Inventory is still good but other shoppers may be on holidays.
If you are selling and have flexibility in timing, try to hold off until the fall. But if you have to sell now, you will still see solid activity.
On a record-breaking note, a Forest Hill home may be the most expensive piece of Toronto residential property - it sold for $15.8 million. Just think, if they bought it next year, they might have had to pay an extra $312,000 in proposed land transfer tax increases!
Neighbourhood Watch - June 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $647,049
Semi-detached: $477,510
Condo: $319,133
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $415,256
Semi-Detached: $388,488
Condo: $185,710
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $459,592
Semi-Detached: $419,510
Condo:$388,280
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $836,540
Semi-Detached: $512,750
Condo: $258,986
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,973,567
Semi-Detached: $1,448,333
Condo: $589,200
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $1,434,230
Semi-Detached: $462,913
Condo: $452,680
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,548,882
Semi-Detached: $390,000
Condo: $413,892
Source: Toronto Real Estate Board April 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
Tuesday, June 19, 2007
How to Survive Real Estate
While buying or selling a home may be one of the most exciting things you can do, it is also one of the most stressful. Anyone who says otherwise either doesn't know, or is lying!
Having just recently bought a new house and having sold my own home, I can tell you first hand from my experience...increasingly gray hair, a wife ready to permanently check-into a spa and no idea where most of my belongings are.
But we came out the other side with a new home we're looking forward to renovating, a 'perfect' home to live in the meantime until closing (minus the nice pillows the stagers brought in), and a sale price that made it all worth it.
But where does all this trouble start?
Let's walk through the rollercoaster of real estate and I'll give you a few good tips to minimize the stress along the way.
Let the shopping begin...
Sure, it starts innocently enough. Maybe it's your first home or you just started snooping at open houses. At some point, you get serious. The dreaming begins, you start to see your entire life unfold...all the great parties you'll host, the children running around in the yard, the visions of new kitchens dancing in your head.
Get your financing in order.
My wife says it's like finding a pair of Manalo Blahniks in her size, on sale, and no wallet in her purse. It's even worse to put a financing condition on a property that is getting multiple offers or putting an offer in without it and wondering if your banker will answer your call.
It's ok to want it.
While the shopping has been fun, the time comes when you find THE place. If you're competing with other home buyers for a home, you can't help but get your hopes up, despite everyone telling you not to. So go with it, let yourself want it but realize that if it doesn't work out, there truly is a reason.
Go big or go home.
If you are going to put an offer in, prepare to make your best offer. It's not just about price. First, get over paying more than what they are asking. Many people 'hold back' and list their home below market value to generate more interest in their home anyway. Pretend you never saw the listing price. What would you be willing to pay for the home?
Keep it clean.
Make your offer 'clean', as they say in the business. A home inspection may have been done already and your financing should already be in order. Try to work with their possession date. Living with the in-laws for a month may not be your idea of fun but if it means you get the home you want, it's worth it. Well, maybe.
Time to Sell Your Home...
You may not have one to sell, but if you do, this is where it gets a bit scary.
In today's market, people are often buying before they have sold. And when they've bought, it usually leaves them 2-3 months to get rid of their old place.
My wife has had a lot of experience with this approach, but when we bought our first house before I was an agent, we still had to sell our condo. I thought I was going to have a heart attack.
It's not as risky as you think.
If your home is made as attractive as possible to buyers, and is priced appropriately for the current market conditions (not when your cousin sold three months ago) then it will sell. You also have some financing options to bridge your mortages for up to 60 days.
Your home is a product to market.
It still shocks me when I see a home for sale with the christmas lights still up. You should be treating your home as a product that needs to be marketed to get the best price. So yes, this means putting your kids ant farm away and taking down the holiday decor.
Get Time, Get Help and if you can, Get Out.
You should plan to take a couple of days off work and book a weekend to get your home ready. Otherwise you will burn out and hate life. This is also a fantastic time to call in all of those favours for free labour, or find someone you can pay who can do all of the heavy lifting and won't ask for a beer every five minutes. Try not to live in your home while you are showing it unless you don't mind getting kicked out every two hours and have a cleaning fairy hidden in your closet.
Setting the Stage
Many people will gripe about the cost of professional staging, or even better, think they can do it themselves. I have a philosophy in life that people should focus on what they do best and let the professionals do the rest. There is a reason why they are professionals and why home staging has exploded as a strategy. It works. Hire them, even at a minimum for a consultation. Do everything they tell you.
Let it go.
When preparing your house for sale, you need to get accept that it is no longer yours. It is the prospective buyer's home. You will not suffer any ill effects if your wedding pictures are not on display. Nor will you be in big trouble if you put the sports gear you no longer use anyway in storage. Neutral paint colours will not kill your spirit. In fact, you may feel suprisingly light from the elimination of junk and visual clutter.
Prepare for a good fight.
If you have the good fortune to have a partner throughout all this, then you can share in the excitement. But you also get to share in the stress. My wife and I made every effort to keep 'please' and 'thank you' in our conversations but we knew that one of us would snap at some point and a few words starting with 'f' and 'a' got in there a few times. Neither of us took it personally and let the other have a good meltdown here and there. A glass of wine makes an excellent mediator for repair.
Allow for maximum distraction.
Plan for some good times while the house is on the market. The waiting is probably the worst of it so the more you can do to fill your time the better. Just think, the house is perfect so you don't have anything to do at home for once! You may be staying with the in-laws so what better reason to get out.
Trust the man.
Back to letting the professionals do what they do best... Follow the advice given to you but make your goals, risk tolerance and options clear up front. Share what is most important to you in the process. Is it selling by a certain date? Getting a certain price? Minimizing risk or going for gold? You can also call me anytime to talk about what's happening. It's my job to be there for you.
Celebrate.
You're now the proud buyer, seller or both. Make sure you celebrate with those who helped you....and don't forget to thank your real estate agent over a pint or two :)
Who do you know who is ready to buy or sell? If you or anyone you know is ready to take the first step, share my blog with them or give me a call.
Regards,
Mark
Mark Richards
Sales Representative
416-690-2181
mrichards@trebnet.com
Having just recently bought a new house and having sold my own home, I can tell you first hand from my experience...increasingly gray hair, a wife ready to permanently check-into a spa and no idea where most of my belongings are.
But we came out the other side with a new home we're looking forward to renovating, a 'perfect' home to live in the meantime until closing (minus the nice pillows the stagers brought in), and a sale price that made it all worth it.
But where does all this trouble start?
Let's walk through the rollercoaster of real estate and I'll give you a few good tips to minimize the stress along the way.
Let the shopping begin...
Sure, it starts innocently enough. Maybe it's your first home or you just started snooping at open houses. At some point, you get serious. The dreaming begins, you start to see your entire life unfold...all the great parties you'll host, the children running around in the yard, the visions of new kitchens dancing in your head.
Get your financing in order.
My wife says it's like finding a pair of Manalo Blahniks in her size, on sale, and no wallet in her purse. It's even worse to put a financing condition on a property that is getting multiple offers or putting an offer in without it and wondering if your banker will answer your call.
It's ok to want it.
While the shopping has been fun, the time comes when you find THE place. If you're competing with other home buyers for a home, you can't help but get your hopes up, despite everyone telling you not to. So go with it, let yourself want it but realize that if it doesn't work out, there truly is a reason.
Go big or go home.
If you are going to put an offer in, prepare to make your best offer. It's not just about price. First, get over paying more than what they are asking. Many people 'hold back' and list their home below market value to generate more interest in their home anyway. Pretend you never saw the listing price. What would you be willing to pay for the home?
Keep it clean.
Make your offer 'clean', as they say in the business. A home inspection may have been done already and your financing should already be in order. Try to work with their possession date. Living with the in-laws for a month may not be your idea of fun but if it means you get the home you want, it's worth it. Well, maybe.
Time to Sell Your Home...
You may not have one to sell, but if you do, this is where it gets a bit scary.
In today's market, people are often buying before they have sold. And when they've bought, it usually leaves them 2-3 months to get rid of their old place.
My wife has had a lot of experience with this approach, but when we bought our first house before I was an agent, we still had to sell our condo. I thought I was going to have a heart attack.
It's not as risky as you think.
If your home is made as attractive as possible to buyers, and is priced appropriately for the current market conditions (not when your cousin sold three months ago) then it will sell. You also have some financing options to bridge your mortages for up to 60 days.
Your home is a product to market.
It still shocks me when I see a home for sale with the christmas lights still up. You should be treating your home as a product that needs to be marketed to get the best price. So yes, this means putting your kids ant farm away and taking down the holiday decor.
Get Time, Get Help and if you can, Get Out.
You should plan to take a couple of days off work and book a weekend to get your home ready. Otherwise you will burn out and hate life. This is also a fantastic time to call in all of those favours for free labour, or find someone you can pay who can do all of the heavy lifting and won't ask for a beer every five minutes. Try not to live in your home while you are showing it unless you don't mind getting kicked out every two hours and have a cleaning fairy hidden in your closet.
Setting the Stage
Many people will gripe about the cost of professional staging, or even better, think they can do it themselves. I have a philosophy in life that people should focus on what they do best and let the professionals do the rest. There is a reason why they are professionals and why home staging has exploded as a strategy. It works. Hire them, even at a minimum for a consultation. Do everything they tell you.
Let it go.
When preparing your house for sale, you need to get accept that it is no longer yours. It is the prospective buyer's home. You will not suffer any ill effects if your wedding pictures are not on display. Nor will you be in big trouble if you put the sports gear you no longer use anyway in storage. Neutral paint colours will not kill your spirit. In fact, you may feel suprisingly light from the elimination of junk and visual clutter.
Prepare for a good fight.
If you have the good fortune to have a partner throughout all this, then you can share in the excitement. But you also get to share in the stress. My wife and I made every effort to keep 'please' and 'thank you' in our conversations but we knew that one of us would snap at some point and a few words starting with 'f' and 'a' got in there a few times. Neither of us took it personally and let the other have a good meltdown here and there. A glass of wine makes an excellent mediator for repair.
Allow for maximum distraction.
Plan for some good times while the house is on the market. The waiting is probably the worst of it so the more you can do to fill your time the better. Just think, the house is perfect so you don't have anything to do at home for once! You may be staying with the in-laws so what better reason to get out.
Trust the man.
Back to letting the professionals do what they do best... Follow the advice given to you but make your goals, risk tolerance and options clear up front. Share what is most important to you in the process. Is it selling by a certain date? Getting a certain price? Minimizing risk or going for gold? You can also call me anytime to talk about what's happening. It's my job to be there for you.
Celebrate.
You're now the proud buyer, seller or both. Make sure you celebrate with those who helped you....and don't forget to thank your real estate agent over a pint or two :)
Who do you know who is ready to buy or sell? If you or anyone you know is ready to take the first step, share my blog with them or give me a call.
Regards,
Mark
Mark Richards
Sales Representative
416-690-2181
mrichards@trebnet.com
Monday, June 18, 2007
May 2007 Market Watch
Busy, busy , busy....May blows away the record books!
We all thought April was something to talk about, having set the record for the most sales in the Toronto Real Estate Board's history. But May kicked April out by a whopping 18% increase for a total of 11,146 sales, now the best month ever in history.
So what does this mean for home owners and home buyers?
A better economy. According to stats compiled by the Canadian Real Estate Association, every home sale generates about $27,000 in economic activity (renovations, furniture purchases, etc.) over and above direct expenditures for the transaction.
This all adds up to a contribution of about $300 million to the local economy.
And check out headlines from the Toronto Stare today who reported that the City of Toronto is proposing an increase to land transfer taxes that could reap $300 million for transit and road spending to bridge the budget shortfall. The average home buyer would have to shell out an additional $1,900 for a home worth $382,787.
With all of this money flying around, who's spending what in your neighbourhood?
Neighbourhood Watch - May 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $682,630
Semi-detached: $427,301
Condo: $293,475
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $380,091
Semi-Detached: $383,680
Condo: $177,658
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $462,205
Semi-Detached: $415,843
Condo:$306,267
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $854,433
Semi-Detached: $628,440
Condo: $361,532
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,542,038
Semi-Detached: $1,030,700
Condo: $536,346
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $851,433
Semi-Detached: $362,277
Condo: $453,313
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,429,394
Semi-Detached: n/a
Condo: $677,550
Source: Toronto Real Estate Board April 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
We all thought April was something to talk about, having set the record for the most sales in the Toronto Real Estate Board's history. But May kicked April out by a whopping 18% increase for a total of 11,146 sales, now the best month ever in history.
So what does this mean for home owners and home buyers?
A better economy. According to stats compiled by the Canadian Real Estate Association, every home sale generates about $27,000 in economic activity (renovations, furniture purchases, etc.) over and above direct expenditures for the transaction.
This all adds up to a contribution of about $300 million to the local economy.
And check out headlines from the Toronto Stare today who reported that the City of Toronto is proposing an increase to land transfer taxes that could reap $300 million for transit and road spending to bridge the budget shortfall. The average home buyer would have to shell out an additional $1,900 for a home worth $382,787.
With all of this money flying around, who's spending what in your neighbourhood?
Neighbourhood Watch - May 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $682,630
Semi-detached: $427,301
Condo: $293,475
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $380,091
Semi-Detached: $383,680
Condo: $177,658
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $462,205
Semi-Detached: $415,843
Condo:$306,267
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $854,433
Semi-Detached: $628,440
Condo: $361,532
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,542,038
Semi-Detached: $1,030,700
Condo: $536,346
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $851,433
Semi-Detached: $362,277
Condo: $453,313
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,429,394
Semi-Detached: n/a
Condo: $677,550
Source: Toronto Real Estate Board April 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
Thursday, May 17, 2007
The Truth About Real Estate
This blog is inspired by a great article published by the Toronto Star late last year...
We've all heard them at various cocktail parties or the minute you tell someone you're thinking of buying..."Buy the worst house on the best block!"
Here's a look at which real estate truisms are worth paying attention to and which are as fluffy as your down pillow.
Truism #1: Location, Location, Location
First, let's define 'location'. It can mean more than just the neighbourhood.
Some of the obvious location features of a home are always going to help home owners retain and increase value in both good markets and bad...being in a sought-after neighbourhood, proximity to downtown, access to highways, great schools, lakes etc.
If you can afford to get into the typically desirable areas such as Rosedale and Lawrence Park you are, of course, going to see steady increases in value. For those who are thinking towards the future, there are many indicators of a great 'future' location.
Let's take Leslieville and Riverdale for example. We've seen huge increases in values in those areas, even though years ago they were less than desireable and still have a long way to go. But look at the fundamental characteristics of those areas.
They are both close to the waterfront and main highways like the DVP and Gardiner. They offer great TTC access and are less than 15 minutes from downtown.
Look for areas where the 'early adopters' are hanging out, where the hot new restaurants seem to be opening, and if you can, get in before the first Starbucks opens! Case in point - Logan and Queen. Not a great area even a year ago and guess who just opened on the corner.
Also look at the edge of great neighbourhoods. The stretch from Woodbine to Coxwell was not considered to be part of 'The Beach' but now commands property values that are just as high, and you don't have to deal with the tourist traffic.
Other things to note when considering location...
You may be in a great area or up and coming area, but watch out for low-income housing (sorry folks, this is true), homes where the neighbour is a nasty parking lot or where you have great view of the back of those new restaurants who will be dumping garbage in their bins, the noisy TTC streetcar turn-arounds, train tracks etc.
Think about your buying area first, then consider the immediate radius around your future property.
Truism #2: Always Buy the Worst House on the Best Street
Fabulous idea if you have the funds to renovate. If done well and within budget, home owners can stand to make a great deal of equity or profit. It may also be the only way you can afford to get into the neighbourhood.
But watch out for fundamental property and building flaws that could make it a money pit. Or features than can not be rectified with a reasonable amount of money.
When it comes time to sell, you will only get as much as your home is worth, not how much the best house on the street is worth. If you have a 2 bedroom home and the biggest, best house is a 3 bedroom in similar condition, it will always get more money.
You also need to consider you own personal goals. Do you want to live in the worst house on the street? Or do you actually want to be in the best house? Are you buying for re-sale value in years to come or are you buying the right house for your family?
It all depends on what you are looking for.
Truism #3: Price To Sell
Of course you want to price to sell—but what’s the right price?
Some sellers deliberately price low or 'hold back' to encourage multiple bids with the hopes of getting a final offer over the asking price and possibly over market value. But your home has to be highly appealing and in a sought-after neighbourhood.
This means investing in professional staging and effective marketing. It also means being able to tolerate risk. Other sellers prefer to price in accordance with the highest sale on the block. They assume or think their home is comparable. Or they say, "Let's just put it on at $X price and see what happens" hoping they will luck-out.
But both routes are risky. Going too low in the hopes of sparking a bidding war can just as easily backfire, leaving the seller with offers that don’t exceed the too-low price, while pricing too high can mean you’ll just have to cut the price later.
The experts suggest…consulting the experts.
Have the house appraised by a realtor. They should provide you with a detailed Comparative Market Analysis that shows what other comparable homes in your area have sold for that. Then make a cold-eyed comparison: how does your house really stack up?
It also depends on your circumstances and those of the market. Have you already purchased another home and need to sell by a certain date? Or are you flexible and able to tolerate some risk? Is there very little supply in your neighbourhood or 'for sale' signs everywhere?
At the end of the day, your home is worth what the market is willing to pay. If you are not comfortable with 'holding back' for multiple offers then price as close to the current market comparables to get the best price for your home.
Know anyone who is looking to buy? Please forward this blog on!
info@markrichards.ca
(416) 728-2499
Regards,
Mark
We've all heard them at various cocktail parties or the minute you tell someone you're thinking of buying..."Buy the worst house on the best block!"
Here's a look at which real estate truisms are worth paying attention to and which are as fluffy as your down pillow.
Truism #1: Location, Location, Location
First, let's define 'location'. It can mean more than just the neighbourhood.
Some of the obvious location features of a home are always going to help home owners retain and increase value in both good markets and bad...being in a sought-after neighbourhood, proximity to downtown, access to highways, great schools, lakes etc.
If you can afford to get into the typically desirable areas such as Rosedale and Lawrence Park you are, of course, going to see steady increases in value. For those who are thinking towards the future, there are many indicators of a great 'future' location.
Let's take Leslieville and Riverdale for example. We've seen huge increases in values in those areas, even though years ago they were less than desireable and still have a long way to go. But look at the fundamental characteristics of those areas.
They are both close to the waterfront and main highways like the DVP and Gardiner. They offer great TTC access and are less than 15 minutes from downtown.
Look for areas where the 'early adopters' are hanging out, where the hot new restaurants seem to be opening, and if you can, get in before the first Starbucks opens! Case in point - Logan and Queen. Not a great area even a year ago and guess who just opened on the corner.
Also look at the edge of great neighbourhoods. The stretch from Woodbine to Coxwell was not considered to be part of 'The Beach' but now commands property values that are just as high, and you don't have to deal with the tourist traffic.
Other things to note when considering location...
You may be in a great area or up and coming area, but watch out for low-income housing (sorry folks, this is true), homes where the neighbour is a nasty parking lot or where you have great view of the back of those new restaurants who will be dumping garbage in their bins, the noisy TTC streetcar turn-arounds, train tracks etc.
Think about your buying area first, then consider the immediate radius around your future property.
Truism #2: Always Buy the Worst House on the Best Street
Fabulous idea if you have the funds to renovate. If done well and within budget, home owners can stand to make a great deal of equity or profit. It may also be the only way you can afford to get into the neighbourhood.
But watch out for fundamental property and building flaws that could make it a money pit. Or features than can not be rectified with a reasonable amount of money.
When it comes time to sell, you will only get as much as your home is worth, not how much the best house on the street is worth. If you have a 2 bedroom home and the biggest, best house is a 3 bedroom in similar condition, it will always get more money.
You also need to consider you own personal goals. Do you want to live in the worst house on the street? Or do you actually want to be in the best house? Are you buying for re-sale value in years to come or are you buying the right house for your family?
It all depends on what you are looking for.
Truism #3: Price To Sell
Of course you want to price to sell—but what’s the right price?
Some sellers deliberately price low or 'hold back' to encourage multiple bids with the hopes of getting a final offer over the asking price and possibly over market value. But your home has to be highly appealing and in a sought-after neighbourhood.
This means investing in professional staging and effective marketing. It also means being able to tolerate risk. Other sellers prefer to price in accordance with the highest sale on the block. They assume or think their home is comparable. Or they say, "Let's just put it on at $X price and see what happens" hoping they will luck-out.
But both routes are risky. Going too low in the hopes of sparking a bidding war can just as easily backfire, leaving the seller with offers that don’t exceed the too-low price, while pricing too high can mean you’ll just have to cut the price later.
The experts suggest…consulting the experts.
Have the house appraised by a realtor. They should provide you with a detailed Comparative Market Analysis that shows what other comparable homes in your area have sold for that. Then make a cold-eyed comparison: how does your house really stack up?
It also depends on your circumstances and those of the market. Have you already purchased another home and need to sell by a certain date? Or are you flexible and able to tolerate some risk? Is there very little supply in your neighbourhood or 'for sale' signs everywhere?
At the end of the day, your home is worth what the market is willing to pay. If you are not comfortable with 'holding back' for multiple offers then price as close to the current market comparables to get the best price for your home.
Know anyone who is looking to buy? Please forward this blog on!
info@markrichards.ca
(416) 728-2499
Regards,
Mark
April 2007 Market Watch
Best Day Ever, Best Month Ever!
Did Toronto have home shopping fever or what?
The highest single day total of sales was on April 30th with 581 sales reported. Even more significant, April 2007 was the highest single month sales total ever reached - an astounding 9,452 sales! (that's 113% of April 2006).
And it looks like May is going to blow that number away with 5,003 sales reported during the first 15 days of this month.
So what does this mean for home owners and home buyers?
Year-to-date prices are rising steadily - nearly 5% over last year - with the average home in the GTA at $379,025. Values are increasing but buyers should not be waiting for the market to 'drop' to get into a home...you will be waiting a very long time, maybe forever!
The average time it took to sell a home fell to 28 days and the average sale price rose to 99% of the list price.
This is showing a lot of confidence in the market, and a lot of demand.
Looking to make a move or get into the market? Capitalize on your equity now or get into a position to start earning some.
As a city that is comparatively under-valued, real estate will continue to be a wise investment.
To find out what your home is worth, or to check out new listings, contact me at:
(416) 728-2499
info@markrichards.ca
Regards,
Mark
Neighbourhood Watch - April 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $629,591
Semi-detached: $467,974
Condo: $384,439
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $423,997
Semi-Detached: $410,992
Condo: $181,592
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $427,929
Semi-Detached: $397,596
Condo:$366,879
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $930,303
Semi-Detached: $555,609
Condo: $289,875
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,892,179
Semi-Detached: $547,000
Condo: $382,000
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $974,930
Semi-Detached: $451,153
Condo: $427,938
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,412,840
Semi-Detached: n/a
Condo: $504,625
Source: Toronto Real Estate Board April 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
Did Toronto have home shopping fever or what?
The highest single day total of sales was on April 30th with 581 sales reported. Even more significant, April 2007 was the highest single month sales total ever reached - an astounding 9,452 sales! (that's 113% of April 2006).
And it looks like May is going to blow that number away with 5,003 sales reported during the first 15 days of this month.
So what does this mean for home owners and home buyers?
Year-to-date prices are rising steadily - nearly 5% over last year - with the average home in the GTA at $379,025. Values are increasing but buyers should not be waiting for the market to 'drop' to get into a home...you will be waiting a very long time, maybe forever!
The average time it took to sell a home fell to 28 days and the average sale price rose to 99% of the list price.
This is showing a lot of confidence in the market, and a lot of demand.
Looking to make a move or get into the market? Capitalize on your equity now or get into a position to start earning some.
As a city that is comparatively under-valued, real estate will continue to be a wise investment.
To find out what your home is worth, or to check out new listings, contact me at:
(416) 728-2499
info@markrichards.ca
Regards,
Mark
Neighbourhood Watch - April 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $629,591
Semi-detached: $467,974
Condo: $384,439
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $423,997
Semi-Detached: $410,992
Condo: $181,592
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $427,929
Semi-Detached: $397,596
Condo:$366,879
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $930,303
Semi-Detached: $555,609
Condo: $289,875
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,892,179
Semi-Detached: $547,000
Condo: $382,000
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $974,930
Semi-Detached: $451,153
Condo: $427,938
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,412,840
Semi-Detached: n/a
Condo: $504,625
Source: Toronto Real Estate Board April 2007 MarketWatch - for the full report, click here.
To have this blog sent to someone you know who is looking to buy or sell, send their email to info@markrichards.ca
Monday, April 16, 2007
The Secret...and Your Home?
By now, most of you have heard of "The Secret". But what does it have to do with your home?
The Secret is based on the Law of Attraction - the belief that what you focus on will come to you.
If you have seen The Secret DVD, you may recall the story of one of the teachers, Dr. Assaraf.
Many years ago, he created a 'vision board' - a collage of pictures that represented the things he wanted in life, including the home he wanted to live in.
Over the years, he relocated and his vision board ended up in a storage for five years.
Finally, he and his family ended up in California, bought and renovated a place for a year and were getting settled in their new home. His son entered his office and noticed a few boxes sitting by the door and was curious about their contents.
Dr. Assaraf was trying to explain that his 'vision boards' were inside, and showed him the board he created five years prior.
He was shocked to see that the picture of the house he had put up so many years ago, wasn't just like the home they were in now. It was the SAME house.
He had bought his dream home and hadn't even realized it.
Why is this important? For a few reasons.
I've had different clients...ones who have a strong long term vision of the home they want and a plan to get it.
And then there are the ones who continually focus on the negative...they'll never get approved for a mortgage, they can't find a home they love, they don't deserve to live in a certain home etc...
There is a big difference between those clients. One ends up in a home that they love, the other never seems to get there.
You may have some limiting thoughts that you didn't even realize were happening!
My wife used to think that she didn't deserve to be in a great house until she reached a certain age or point in her life. That she somehow shouldn't have a home nicer than what her parents had at her age.
Now, I'm not suggesting you buy a home that you cannot afford. Focus on the process of getting to that home.
Here is a little bit of homework you can do to make your dream home a reality:
1. Describe your dream home in vivid detail...
- where is it located?
- what is the view like?
- how many bedrooms?
- how big is that plasma tv in the media room? (sorry, this was mine)
- is it full of character or contemporary in design?
2. Does this home exist?
If so, get a picture and put it up at your desk or on your fridge - somewhere you see on a daily basis.
3. Visualize.
I'm not suggesting you light up the incense and start humming with your legs in a pretzel (but please do so if this works for you). But take a moment to focus on visualizing yourself in this home and owning this home on a daily basis.
4. Eliminate all negative thoughts associated with your ability or likelihood to have this home one day.
Trust me, this does make a difference.
If you want to take the next step towards your dream home, contact me and my gift to you and anyone you refer to me will be a copy of 'The Secret' so you can learn more about it.
Now if you'll excuse me, I have to get back to attracting great clients and helping them find their perfect dream home. :)
Regards,
Mark
(416) 728-2499
The Secret is based on the Law of Attraction - the belief that what you focus on will come to you.
If you have seen The Secret DVD, you may recall the story of one of the teachers, Dr. Assaraf.
Many years ago, he created a 'vision board' - a collage of pictures that represented the things he wanted in life, including the home he wanted to live in.
Over the years, he relocated and his vision board ended up in a storage for five years.
Finally, he and his family ended up in California, bought and renovated a place for a year and were getting settled in their new home. His son entered his office and noticed a few boxes sitting by the door and was curious about their contents.
Dr. Assaraf was trying to explain that his 'vision boards' were inside, and showed him the board he created five years prior.
He was shocked to see that the picture of the house he had put up so many years ago, wasn't just like the home they were in now. It was the SAME house.
He had bought his dream home and hadn't even realized it.
Why is this important? For a few reasons.
I've had different clients...ones who have a strong long term vision of the home they want and a plan to get it.
And then there are the ones who continually focus on the negative...they'll never get approved for a mortgage, they can't find a home they love, they don't deserve to live in a certain home etc...
There is a big difference between those clients. One ends up in a home that they love, the other never seems to get there.
You may have some limiting thoughts that you didn't even realize were happening!
My wife used to think that she didn't deserve to be in a great house until she reached a certain age or point in her life. That she somehow shouldn't have a home nicer than what her parents had at her age.
Now, I'm not suggesting you buy a home that you cannot afford. Focus on the process of getting to that home.
Here is a little bit of homework you can do to make your dream home a reality:
1. Describe your dream home in vivid detail...- where is it located?
- what is the view like?
- how many bedrooms?
- how big is that plasma tv in the media room? (sorry, this was mine)
- is it full of character or contemporary in design?
2. Does this home exist?
If so, get a picture and put it up at your desk or on your fridge - somewhere you see on a daily basis.
3. Visualize.
I'm not suggesting you light up the incense and start humming with your legs in a pretzel (but please do so if this works for you). But take a moment to focus on visualizing yourself in this home and owning this home on a daily basis.
4. Eliminate all negative thoughts associated with your ability or likelihood to have this home one day.
Trust me, this does make a difference.
If you want to take the next step towards your dream home, contact me and my gift to you and anyone you refer to me will be a copy of 'The Secret' so you can learn more about it.
Now if you'll excuse me, I have to get back to attracting great clients and helping them find their perfect dream home. :)
Regards,
Mark
(416) 728-2499
March MarketWatch - Q1 Report
It's good news and more good news this month!
Average prices moved up three percent in March over 2006 to $365,285 which is ahead of inflation and good for home owners. "But not so rapidly that first-time home buyers will be pushed out of the market," said TREB President Dorothy Mason.
"The GTA continues to have strong employment numbers and a healthy economy," Mrs. Mason added. "Housing activity is solid and prices are steadily on the rise, so it remains an excellent time to be in the market."
Sales activity continues to be strong, getting the spring market off to a healthy start.
Every three months, I'm creating a trend report so you can see average prices over a quarterly period.
Check out the Q1 stats for your neighbourhood below...
Neighbourhood Watch - Q1: January to March 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $570,817
Semi-detached: $414,750
Condo: $370,223
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $404,628
Semi-Detached: $373,046
Condo: $159,153
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $423,133
Semi-Detached: $383,040
Condo:$323,407
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $808,511
Semi-Detached: $604,212
Condo: $244,901
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,102,741
Semi-Detached: $839,704
Condo: $429,847
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $938,015
Semi-Detached: $505,864
Condo: $530,938
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,663,716
Semi-Detached: n/a
Condo: $438,715
Source: Toronto Real Estate Board March 2007 MarketWatch - for the full report, click here.
Average prices moved up three percent in March over 2006 to $365,285 which is ahead of inflation and good for home owners. "But not so rapidly that first-time home buyers will be pushed out of the market," said TREB President Dorothy Mason.
"The GTA continues to have strong employment numbers and a healthy economy," Mrs. Mason added. "Housing activity is solid and prices are steadily on the rise, so it remains an excellent time to be in the market."
Sales activity continues to be strong, getting the spring market off to a healthy start.
Every three months, I'm creating a trend report so you can see average prices over a quarterly period.
Check out the Q1 stats for your neighbourhood below...
Neighbourhood Watch - Q1: January to March 2007
E02 -The Beach (coxwell, danforth, victoria park)
Detached: $570,817
Semi-detached: $414,750
Condo: $370,223
E03 - Danforth North (DVP, victoria park, danforth)
Detached: $404,628
Semi-Detached: $373,046
Condo: $159,153
E01 - Danforth South & Riverdale (DVP, danforth, coxwell)
Detached: $423,133
Semi-Detached: $383,040
Condo:$323,407
C04 - Bedford West & Lytton Park (allen, 401, yonge, eglinton)
Detached: $808,511
Semi-Detached: $604,212
Condo: $244,901
C09 - Rosedale (yonge, st.clair, bayview, bloor)
Detached: $1,102,741
Semi-Detached: $839,704
Condo: $429,847
C03 - Forest Hill (allen, eglinton, yonge, st.clair)
Detached: $938,015
Semi-Detached: $505,864
Condo: $530,938
C12- Lawrence Park/Bedford East (yonge, 401, leslie, eglinton)
Detached: $1,663,716
Semi-Detached: n/a
Condo: $438,715
Source: Toronto Real Estate Board March 2007 MarketWatch - for the full report, click here.
Wednesday, March 21, 2007
First Time Home Buyers
Wait! Don't close this window if you are already a home owner.
If you are, great! You know the benefits of homeownership and are probably sitting on a nice pile of equity right now.
But you may know someone who is still renting - maybe a friend, a family member. I truly hope you will pass this information on, because the next two articles are for them.
For those of you who are still renting and don't feel like home ownership is in your near future for whatever reason, read on.
There are two articles below, "How Much House Can Your Rent Buy?" and "New Mortgage Products Put Home Buying Within Reach".
And don't forget to check out the February 2007 Market Watch after these articles.
You'll be suprised to see how close home ownership is a possbility for you or someone you know...
If you are, great! You know the benefits of homeownership and are probably sitting on a nice pile of equity right now.
But you may know someone who is still renting - maybe a friend, a family member. I truly hope you will pass this information on, because the next two articles are for them.
For those of you who are still renting and don't feel like home ownership is in your near future for whatever reason, read on.
There are two articles below, "How Much House Can Your Rent Buy?" and "New Mortgage Products Put Home Buying Within Reach".
And don't forget to check out the February 2007 Market Watch after these articles.
You'll be suprised to see how close home ownership is a possbility for you or someone you know...
How much house can your rent buy?
This month, I'm featuring an article by my mortgage guru, Peter Majthenyi from Mortgage Architects.
This is for all of your renters out there so you can stop building up someone else's home equity and net worth!
If you are a landlord, I apologize. :)
In this article, Peter discusses how new mortgage options can make owning a home a reality...
How much home could your rent buy?
Buying a home is a big financial step, and it’s hard to know when you’re really ready to buy. No wonder that many Canadian renters are still sitting on the white picket fence when it comes to home ownership.
The exciting news is that it could be time to make your move. There’s a few reasons why.
To begin, it’s pretty simple math: if you can afford to rent, chances are that you can afford to buy your own home. Your monthly mortgage payments may be similar to your rent!
That monthly rent cheque doesn’t need to be money out the window; it could be money that’s building you equity in your very own home.
Let’s take a look at how rent and mortgage payments might compare.
If you’re paying $1250 in rent each month, for example, you could be carrying a mortgage of $186,726. If you’re paying $1500, that’s potentially a mortgage of $235,100. Forking over $1750 each month? You could be paying off a mortgage of $283,475!
How are the mortgage payments so affordable?
Firstly, right now you’re benefiting from historically low mortgage rates. Secondly, you now have access to longer-amortization mortgages that lower your monthly mortgage payment. (The examples above were based on that combination: a 5.3% rate and 40-year amortization, plus 3.70% insurance premium, property taxes and heat of $285 per month).
In addition to longer amortization mortgages, interest only mortgages are another option for reducing monthly mortgage payments and maximizing purchasing power.
Think you can’t buy a house because you haven’t saved up a downpayment? Think again.
There are several excellent mortgages available with zero downpayment required. In general, all you need to qualify is a good credit record, and the ability to meet your payments comfortably. Mortgage insurers and innovative lenders believe that Canadians benefit from homeownership – and they’re helping to make it more accessible.
Even if you’ve had past credit problems, new credit repair mortgages can help transition you to a brighter future. That’s more good news for renters!
One more hurdle that some renters worry about is showing enough income to qualify for a mortgage. If you’re self-employed, for example, there are mortgage options available that don’t require you to verify your income. If you have a good credit history and reliable income-earning capacity, then you may qualify for a no income verification mortgage loan.
Still sitting on the fence?
Think about this: every time you sign a rental or lease agreement, you are signing a long lasting contract that has no profit potential whatever – at least, not for you.
When you sign a mortgage loan agreement, not only do you sign onto home ownership, but you also sign up for a great equity-making opportunity too.
Buying a home makes both financial and emotional sense. There are the intangible pleasures that home ownership offers: increased freedom, privacy, and a sense of community, for example.
Then there are the more tangible rewards: for decades, Canadian homeowners have been able to leverage their property purchase into a large financial return.
You’re at a moment of real opportunity right now: this may be the perfect time for you to get on the right side of that picket fence!
If you have been thinking about owning a home, but don't know what is possible, I encourage you to give me or Peter a call to find out. You may be pleasantly suprised!
This is for all of your renters out there so you can stop building up someone else's home equity and net worth!
If you are a landlord, I apologize. :)
In this article, Peter discusses how new mortgage options can make owning a home a reality...
How much home could your rent buy?Buying a home is a big financial step, and it’s hard to know when you’re really ready to buy. No wonder that many Canadian renters are still sitting on the white picket fence when it comes to home ownership.
The exciting news is that it could be time to make your move. There’s a few reasons why.
To begin, it’s pretty simple math: if you can afford to rent, chances are that you can afford to buy your own home. Your monthly mortgage payments may be similar to your rent!
That monthly rent cheque doesn’t need to be money out the window; it could be money that’s building you equity in your very own home.
Let’s take a look at how rent and mortgage payments might compare.
If you’re paying $1250 in rent each month, for example, you could be carrying a mortgage of $186,726. If you’re paying $1500, that’s potentially a mortgage of $235,100. Forking over $1750 each month? You could be paying off a mortgage of $283,475!
How are the mortgage payments so affordable?
Firstly, right now you’re benefiting from historically low mortgage rates. Secondly, you now have access to longer-amortization mortgages that lower your monthly mortgage payment. (The examples above were based on that combination: a 5.3% rate and 40-year amortization, plus 3.70% insurance premium, property taxes and heat of $285 per month).
In addition to longer amortization mortgages, interest only mortgages are another option for reducing monthly mortgage payments and maximizing purchasing power.
Think you can’t buy a house because you haven’t saved up a downpayment? Think again.
There are several excellent mortgages available with zero downpayment required. In general, all you need to qualify is a good credit record, and the ability to meet your payments comfortably. Mortgage insurers and innovative lenders believe that Canadians benefit from homeownership – and they’re helping to make it more accessible.
Even if you’ve had past credit problems, new credit repair mortgages can help transition you to a brighter future. That’s more good news for renters!
One more hurdle that some renters worry about is showing enough income to qualify for a mortgage. If you’re self-employed, for example, there are mortgage options available that don’t require you to verify your income. If you have a good credit history and reliable income-earning capacity, then you may qualify for a no income verification mortgage loan.
Still sitting on the fence?
Think about this: every time you sign a rental or lease agreement, you are signing a long lasting contract that has no profit potential whatever – at least, not for you.
When you sign a mortgage loan agreement, not only do you sign onto home ownership, but you also sign up for a great equity-making opportunity too.
Buying a home makes both financial and emotional sense. There are the intangible pleasures that home ownership offers: increased freedom, privacy, and a sense of community, for example.
Then there are the more tangible rewards: for decades, Canadian homeowners have been able to leverage their property purchase into a large financial return.
You’re at a moment of real opportunity right now: this may be the perfect time for you to get on the right side of that picket fence!
If you have been thinking about owning a home, but don't know what is possible, I encourage you to give me or Peter a call to find out. You may be pleasantly suprised!
New mortgage products put home buying within reach!
Like many first time home buyers, you may be paying a decent amount of rent each month, and may have already figured out the downpayment situation.
But the cost of housing in Toronto may still seem prohibitive and you might not feel like you want to deal with the mortage payment to get into the home or neighbourhood that you want.
Good news. There are a number of new mortage products that offer a solution.
In this article, Peter discusses 30+ Year mortgages that may put home ownership within your reach...
Over 30-year mortages put that first home within reach.
Let's call them John and Julie. Recently married, they're still struggling to pay off student loans and the new car they've just purchased.
John and Julie have moved into a nicer apartment, but are watching their rent money go out the window while their more established friends enjoy the rise in the value of their homes.
Interest rates are enticingly low, but John and Julie still aren't sure they can handle mortgage payments, even though they feel that they're missing out on a great opportunity in today's market, and they do want their own place to decorate and enjoy.
There's good news for John and Julie. Homebuyers can now stretch mortgage amortizations - the length of time calculated to pay off a mortgage - to 30, 35 and even 40 years.
Not too long ago, it was almost impossible to get a mortgage amortization for more than 25 years. In 2005, the Canada Mortgage and Housing Corporation (CMHC) announced that they would insure 30-year mortgages with only 5% down in a special pilot project.
The move was calculated to help Canadians like John and Julie get into their own home. Canadians went house shopping and took advantage of the opportunity, causing CMHC to make the 30-year mortgage part of their ongoing product offering and even extending amortizations to 35 years.
In the spring of 2006, a 40-year amortization mortgage was introduced to the marketplace.
The rationale behind longer amortizations is simple; they help bring down the cost of monthly payments and bring home ownership within reach for young couples, new immigrants, self-employed Canadians, or prospective homebuyers with less-than-perfect credit.
They are also good news for homebuyers who are struggling in an area where real estate prices are rising rapidly, or need a solution to help them through a tough financial period.
What kind of difference can homebuyers expect?
Well, John and Julie hope to take out a mortgage of $250,000. At a rate of 6%, they would need to find $1600 per month to service the mortgage on a 25-year amortization. But they need only $1487 for a 30-year amortization or $1413 for a 35-year: similar to what they are currently paying for rent.
Their mortgage planner can help them factor in any additional costs, but these longer amortization mortgages put mortgage payments within reach.
They do increase the amount of overall interest paid, which is why they shouldn't be considered to simply reduce your monthly payment if you can afford a shorter amortization period.
So why would anyone want to spend over 30 years paying for a home and pay more interest in the long run?
With good mortgage planning, it doesn't have to work out that way. The long amortization period helps new homebuyers get into the housing market at a lower threshold.
As John and Julie finish paying off their loans, and as their income increases, they'll be able to shorten their amortization period and support a larger monthly payment.
But until then, they'll have an early advantage that allows them to enjoy their new home now and begin building home equity; otherwise they'd be watching their monthly rent payment work for their landlord rather than for them.
And that - says John and Julie - is a great beginning.
But the cost of housing in Toronto may still seem prohibitive and you might not feel like you want to deal with the mortage payment to get into the home or neighbourhood that you want.
Good news. There are a number of new mortage products that offer a solution.
In this article, Peter discusses 30+ Year mortgages that may put home ownership within your reach...
Over 30-year mortages put that first home within reach.Let's call them John and Julie. Recently married, they're still struggling to pay off student loans and the new car they've just purchased.
John and Julie have moved into a nicer apartment, but are watching their rent money go out the window while their more established friends enjoy the rise in the value of their homes.
Interest rates are enticingly low, but John and Julie still aren't sure they can handle mortgage payments, even though they feel that they're missing out on a great opportunity in today's market, and they do want their own place to decorate and enjoy.
There's good news for John and Julie. Homebuyers can now stretch mortgage amortizations - the length of time calculated to pay off a mortgage - to 30, 35 and even 40 years.
Not too long ago, it was almost impossible to get a mortgage amortization for more than 25 years. In 2005, the Canada Mortgage and Housing Corporation (CMHC) announced that they would insure 30-year mortgages with only 5% down in a special pilot project.
The move was calculated to help Canadians like John and Julie get into their own home. Canadians went house shopping and took advantage of the opportunity, causing CMHC to make the 30-year mortgage part of their ongoing product offering and even extending amortizations to 35 years.
In the spring of 2006, a 40-year amortization mortgage was introduced to the marketplace.
The rationale behind longer amortizations is simple; they help bring down the cost of monthly payments and bring home ownership within reach for young couples, new immigrants, self-employed Canadians, or prospective homebuyers with less-than-perfect credit.
They are also good news for homebuyers who are struggling in an area where real estate prices are rising rapidly, or need a solution to help them through a tough financial period.
What kind of difference can homebuyers expect?
Well, John and Julie hope to take out a mortgage of $250,000. At a rate of 6%, they would need to find $1600 per month to service the mortgage on a 25-year amortization. But they need only $1487 for a 30-year amortization or $1413 for a 35-year: similar to what they are currently paying for rent.
Their mortgage planner can help them factor in any additional costs, but these longer amortization mortgages put mortgage payments within reach.
They do increase the amount of overall interest paid, which is why they shouldn't be considered to simply reduce your monthly payment if you can afford a shorter amortization period.
So why would anyone want to spend over 30 years paying for a home and pay more interest in the long run?
With good mortgage planning, it doesn't have to work out that way. The long amortization period helps new homebuyers get into the housing market at a lower threshold.
As John and Julie finish paying off their loans, and as their income increases, they'll be able to shorten their amortization period and support a larger monthly payment.
But until then, they'll have an early advantage that allows them to enjoy their new home now and begin building home equity; otherwise they'd be watching their monthly rent payment work for their landlord rather than for them.
And that - says John and Julie - is a great beginning.
For more information about these producst, contact Peter at the number above or visit his website at www.mymortgageplanner.ca
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