Randy Miller

Broker Of Record

Urban Avenue Realty Ltd., Brokerage

Whitby & Brooklin Real Estate

Office 905-430-1800

Direct 905-430-9444

Email: randy@randymiller.ca

Categories

Buying a first home

 The truth is, home ownership is one of the cornerstones of financial security, and if you’re thinking of buying a place don’t forget to consider your registered retirement savings plan (RRSP) as a source of some funds for a downpayment. The Home Buyer’s Plan (HBP) in our tax law makes it easy to use RRSP assets to help with a home purchase. Here’s a primer.

Eligibility

In order to use funds from your RRSP to help in a home purchase, you’ll have to be a first-time home buyer. This means that you may not have owned a home in the past five calendar years. More specifically, you’ll be out of luck if you owned a home during the window of time that starts Jan. 1 of the fourth calendar year before the year in which you make a withdrawal under the HPB, and ending 31 days before the date of the withdrawal. (If you have a disability or are buying a home for a related person with a disability, or are helping such a person to buy a home, the five-year condition may not apply)

If you’re married, each spouse can make a withdrawal under the HPB provided that neither of you has owned a home in the five-year period I’ve described, and you’re buying the home jointly. Even if your spouse has owned a home in the last five years, you can still make a withdrawal under the HBP as long as your spouse’s home was not your principal residence while you’ve been married or living common-law.

By the way, simply being pre-approved for a mortgage isn’t enough; you’ll have to actually enter into a purchase agreement to be eligible for a withdrawal under the HBP, and it has to be your intention to move into the home as your principal residence no later than one year after buying or building it. So, you can’t use the HPB to buy a rental property.

Withdrawals

You, and your spouse if he’s eligible, can each withdraw up to $25,000 from your RRSPs under the HBP. You have to be resident in Canada at the time you make the withdrawal, and you have to withdraw all the funds in the same calendar year. You can only make withdrawals from your own RRSP (that is, an RRSP under which you’re the annuitant), and not a plan under which your spouse is the annuitant.

Also, you can’t generally make withdrawals from a locked-in RRSP or a group RRSP under the HBP, and any RRSP contributions that you make must stay in your RRSP for at least 90 days before you can withdraw those funds under the HBP, otherwise you won’t get a tax deduction for those contributions.

You’ll have to close your home purchase by Oct. 1 of the year following the year of withdrawal (the taxman calls this the “completion date”). For example, if you make a withdrawal under the HBP in 2015, you’ll have to take possession of your new home no later than Oct. 1, 2016. Be aware that you can extend the completion date by one year if certain conditions are met.

Finally, you or your spouse cannot own the home for more than 30 days before you make a withdrawal under the HBP. So it’s best to make the withdrawal before the closing date if you can.

Repayments

You’ll have to repay the amounts borrowed from your RRSP under the HBP in equal instalments over 15 years, and your repayments will have to start in the second calendar year after the year of withdrawal (that is, in 2017 for withdrawals made in 2015). If you fail to repay the amounts, the shortfall is taxable to you in the year you missed the repayment. Also, be aware that you can’t claim a deduction for amounts repaid to your RRSP under the HBP. If you want more information on the HBP, check out the taxman’s booklet RC4135, Home Buyer’s Plan, which you’ll find at www.cra.gc.ca.

Source:
 Buying a home can be easier with the help of your RRSP by TIM CESTNICK. The Globe and Mail.

Whitby Brooklin Homes for Sale

Randy Miller
Broker of Record
Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800

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Roadsign good credit

One of the most important aspects of your financial life is your credit score. Your credit score follows you forever and it will play a huge role in how insurance companies, banks and other lending institutions categorize your worthiness as a customer.

It’s vital that you take steps to improve your credit score, because any credit such as a car loan or mortgage financing may be more expensive (a higher interest rate), or its unobtainable.

What does the Credit Score actually tells you?

The credit score is an assessment of your financial health, at a specific point in time. It indicates the risk you represent for lenders, compared with other consumers. This is done by converting certain aspects of your credit repayment history to a number based on a formula called the “FICO formula”. The result of this is known as a Credit Score.

When you get your Credit Score, you will see a number between 300 and 900 at the top – this is your score. The average score is in the mid-700s at present. You will also receive an interpretation of your score, and this will be more useful to you than the number itself. It will explain why your score is at its current level.

If your scores are above 760, you’re probably already getting the best rates. If they’re anywhere below that mark, though, they could stand some improvement.

Here are the main factors that make your credit score lower:

  • Too much credit. Having too many credit cards can hurt your score. If you have several consumer accounts try to consolidate those balances and close the accounts.
     
  • Your account balances are too high: As a rule of thumb keep your credit card balances below 35% of the available limit. High balances ongoing will negatively affect your credit score.
     
  • You have late payments, or are behind on making minimum payments
     
  • Legal judgements for non-payment of bills, child support, etc.
     
  • Bankruptcy or consumer proposals

  • There is not enough recent revolving account information on your credit report. Using your credit cards regularly and paying them on time builds your score higher.


So you’ve had a few problems getting the bills paid lately, and you’re wondering what you can do to repair the damage to your credit. Or maybe your credit is OK, but you’d like to make it better. After all, the better your credit, the less you pay in interest and, typically, for insurance.

Here are some tips on how to improve your credit score:

  • Get a credit card if you don’t have one: Don’t fall for the myth that you have to carry a balance to have good scores. Having and using a credit card or two can really build your scores. If you can’t qualify for a regular credit card, consider a secured credit card, where the issuing bank gives you a credit line equal to the deposit you make. Look for a card that reports to all three credit bureaus.
     
  • Add an installment loan to the mix: You’ll get the fastest improvement in your scores if you show you’re responsible with both major kinds of credit: revolving (credit cards) and installment (personal loans, auto, mortgages and student loans). If you don’t already have an installment loan on your credit reports, consider adding a small personal loan that you can pay back over time. Again, you’ll want the loan to be reported to all three bureaus, and you’ll probably get the best deal from a community bank or credit union.
     
  • Always pay your bills on time. Although the payment of your utility bills, such as phone, cable and electricity, is not recorded in your credit report, some cell phone companies may report late payments to the credit-reporting agencies, which could affect your score.
     
  • Try to pay your bills in full by the due date. If you aren't able to do this, pay at least the required minimum amount shown on your monthly credit card statement.
     
  • Try to pay your debts as quickly as possible.
     
  • Don't go over the credit limit on your credit card. Try to keep your balance well below the limit. The higher your balance, the more impact it has on your credit score. You often can increase your scores by limiting your charges to 30% or less of a card’s limit; 10% is even better. If you regularly use more than half your limit on a card, consider using other cards to ease the load or try making a payment before the statement closing date to reduce the balance that’s reported to the bureaus. Just be sure to make a second payment between the closing date and the due date, so you don’t get reported as late.
     
  • Reduce the number of credit applications you make. If too many potential lenders ask about your credit in a short period of time, this may have a negative effect on your score. However, your score does not change when you ask for information about your own credit report.
     
  • Make sure you have a credit history. You may have a low score because you do not have a record of owing money and paying it back. You can build a credit history by using a credit card. The older your credit history, the better. But if you stop using your oldest cards, the issuers may decide to close the accounts or stop updating them to the credit bureaus. The accounts may still appear, but they won’t be given as much weight in the credit-scoring formula as your active accounts.
     
  • If you’ve been a good customer, a lender might agree to simply erase that one late payment from your credit history. You usually have to make the request in writing, and your chances for a “goodwill adjustment” improve the better your record with the company (and the better your credit in general). But it can’t hurt to ask.


Following these steps should help you improve your credit score within months. Once you establish good credit habits, though, and follow them consistently, you will be able to improve your credit score, and then maintain this higher score. You’ll get access to better financial products and services, and even save money over time.

To find out more about credit scores and reports, you can also visit the Financial Consumer Agency of Canada website and download or request a free copy of their guide, Understanding Your Credit Report and Credit Score. This guide provides practical, straightforward information on how to obtain and understand your credit report and score, as well as how to build and maintain a good credit history.

To find out your credit score, contact Canada's two most popular credit-reporting agencies: Equifax Canada and TransUnion Canada. These agencies can provide you with an online copy of your credit score as well as a credit report - a detailed summary of your credit history, employment history and personal financial information. (You can request your credit report by mail for free but your score is not included. If you request your credit report online a fee is charged and your credit score is included.) 

Are you planning to buy a house? Shopping for a mortgage can be confusing, the product features vary significantly. Having sold real estate in Whitby and the Durham Region for over 25 years, I can help you with the buying process. If you wish, I can refer you to a mortgage specialist that can explain the products and help you choose the right mortgage product. Try out my Mortgage Calculator and contact me today! 

Randy Miller
Broker of Record

Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800

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red house mortgage rate

On the heels of headlines forecasting ‘inevitable interest rate hikes’ came the announcement of a 0.25% rate reduction to the Bank of Canada’s overnight lending rate.

The majority of Mortgage Brokers found themselves spending the first two work weeks of 2015 calming clients in the face of multiple headlines forecasting interest rate ‘shocks’ ahead. In turn, the past two weeks were spent explaining to variable-rate clients the subtle, yet important difference between the bank of Canada’s Prime rate and their mortgage lenders' ‘Prime’ rate.

Lenders base variable-rate mortgages on what is referred to as their own internal Prime rate. Although historically lenders have moved in lockstep with the Bank of Canada decisions, there was some initial reticence to lower effective interest rates on current variable-rate mortgages and after nearly a week without movement Lenders reduced their internal Prime rate from 3.00 to 2.85% sharing some of the Bank of Canada’s reduction with variable rate mortgage and line of credit holders, but not all of the rate reduction.

One important point is that the Bank of Canada’s Prime rate is specifically NOT used to qualify clients for mortgages. In other words, Canadians do not currently qualify for any more mortgage debt today than they did the day before the rate reduction announcement. Accordingly this reduction in interest rates does not directly strengthen purchasing power for home buyers, and thus should do little to add more fuel to real estate values.

It is further worth noting that, historically, as lenders reduce their own Prime lending rate on variable-rate products, the discounts offered on these products - mortgages, lines of credit, etc . tend to be adjusted upward, negating any potential gains for new mortgage applicants. Existing closed variable-rate discounts will of course continue to be honoured until the end of the client's mortgage term.

In short, although this rate reduction may bode well for clients currently in a variable-rate mortgage, it may not be of significant net benefit for clients applying for a variable-rate product in the coming weeks. Although today we have both deep discounts on variable rate products, and the new lower 2.85% Lender Prime rate. New applicants may have their cake and eat it too.

Fixed rates, although largely dictated by the bond market, have been edging downward since Jan 5. Despite this material and documented decline, there had not been a major headline noting this. Rather headlines were largely promoting the opposite of what was occurring in reality. The day that the Bank of Canada announced the cut of 0.25%, the bond market saw a (then) record low of 0.83% and has since dipped below 0.60%.

This has created significant increases in lenders' fixed-rate profit margins, and arguably calls for further rate reductions to fixed-rate products, in particular the five-year fixed-rate mortgage. However, as with the cut to Prime, lenders have thus far been slow to respond. Offering 0.05% and 0.010% reductions and reaping the increased profits. Lenders remain unlikely to make any significant moves until one breaks ranks. With strong property values coupled with strong sales activity in most major markets, there seems little incentive - or fundamental desire - on the part of lenders to reduce rates further.

What is evident at this time is that variable-rate clients will continue to be the big winners into the foreseeable future, and those clients who prefer a fixed-rate product will also continue to benefit from historic lows as well. 

If you are planning to buy a house in Whitby, Brooklin or other areas within Durham Region, contact me. I can help you with the buying process and refer you to a mortgage specialist that can explain the products and help you choose the right mortgage product.

Randy Miller
Broker of Record

Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800

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Rent vs Own

According to a survey of 1,300 millennials released this week by EliteDaily and Millennial Branding, nearly six in 10 millennials (59%) say they’d rather rent a home than buy one, with just one in four saying they are either very or completely likely to purchase a home in the next five years. A decision that could cost them more than $700,000 over the course of their lives.

(This anti-home-buying trend can already be seen: Currently, only about one in four millennials own a home, down from about one in three in the mid-70s and early 80s, according to data from the Demand Institute.) That’s “bad news for the real estate industry,” the report concludes.

The reasons for this sentiment are many. More than six in 10 feel they simply can’t afford it, the survey revealed (whether or not they actually can’t afford it is another question entirely). Plus, millennials tend to marry and have children later (two events that often inspire home purchases) and are a generation that doesn’t like feeling stuck in one place, says Dan Schawbel, the founder of Millennial Branding.

Whatever the reason, this decision may be a costly one. “In most markets it is still cheaper to buy than to rent [each month]” — even when you factor in the insurance and property tax payments, in addition to the mortgage payments, says Daren Blomquist, vice president of RealtyTrac. And because interest rates are so low, now is a good time to buy in many markets — at least if you plan on staying in the home over the long term (Blomquist says that, as a very rough rule of thumb, if you don’t plan on staying in the home you are buying for at least five years, it may make sense to rent instead of buy).

Plus, you’re working toward owning an asset when you buy — that’s not the case when you rent. Considering that the median home in America costs $190,000 and historic annual home price appreciation is around 3%, according to data from RealtyTrac, a millennial who bought an average home today (and put $19,000 — that’s 10% — down) with a 30-year fixed rate mortgage at 4% would outright own a home worth $426,000 in 2045, and pay a total of roughly $373,000 for it (mortgage, taxes and insurance included) — a difference of $52,000. Plus, after 30 years, the person could live rent-free — a compelling prospect for retirement.

If that same millennial rented — let’s assume he pays $1,312 a month in rent this year (which is the average fair market rent for a three-bedroom nationwide, according to RealtyTrac) — and his rent appreciates at a rate of 2.7% a year (the average increase over the past decade, RealtyTrac says), he’ll end up shelling out nearly $717,000 in rent over that 30-year period — all without an asset to show for it in the end. Of course, he can cut that by having roommates, but at some age, he’s probably going to want out of the roommate game, unless it’s a spouse or love interest.

That said, many millennials will likely rent now but buy a home down the road. But waiting to buy has its costs, too — interest rates and median home prices are likely to rise down the road. At current rates of appreciation, in 10 years the average home (now priced at $190,000) would be selling for about $249,000. If interest rates return to their historical norm (from over the past 15 years) of 5.6%, a monthly house payment (including mortgage, taxes and insurance) on a $249,000 home would be $1,574 a month, a 52% increase over the $1,037 house payment for a median priced home now; plus, over that 30 years, you’d pay a total of $566,640 (assuming you put 10% down) for a home worth $558,356 at the end of that period. “In this scenario you wouldn’t come out positive on your investment in the property until a year after the mortgage was paid off, in 2056 — at which point the home would have a projected value of $573,608,” explains Blomquist.

Of course, there are some compelling reasons to rent. You have more flexibility when renting, as you aren’t tied to a mortgage payment, and savvy investors can likely get higher than 3% annual returns elsewhere. And, quite frankly, “if you can’t afford it, don’t buy,” says Blomquist; you don’t want to end up in a situation where you have to foreclose on a home.

By Catey Hill, marketwatch.com

If you are thinking of buying a home in Whitby or Brooklin, or other areas within Durham Region, let me be your personal guide on your journey to home ownership. My priority is to provide outstanding service to you and make you happy by finding the perfect home for you! Contact me today!

Randy Miller
Broker of Record
Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-430-1800

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Buyers Beware

 

 

When residential properties are for sale and the seller is shown to be a bank, this usually indicates that the owner could not make their mortgage payments and the lender is selling the property to recover the mortgage amount owing. If you are considering making an offer on one of these homes, here are 5 things you need to know: 

1.    The process that most lenders will follow in Ontario is Power of Sale, and not Foreclosure. The main reason is that a Power of Sale can be completed much faster than a Foreclosure. Powers of Sale can be completed generally in 3-4 months, while the Foreclosure process will typically take up to a year to complete. Banks also prefer this method as it permits them to get bad loans off their books quickly and if there is any shortfall, they can immediately sue the original borrower for the deficiency.

2.    Lenders are supposed to try and get fair market value for the property that is sold, so it is not automatic that you will be able to buy the property at a substantial discount. Use a professional buyer agent to make sure you know what this property is worth before making any offer.

3.    The lender will usually contain special clauses in this contract that will be important to any buyer. For example, all appliances will be sold on an "as is" basis, with no warranty, meaning you are out of luck if the appliances are not working when you close. No warranty will be given regarding the room sizes or even the lot size for the property. If there is a tenant on the property, no guarantees are given about the length of any lease or how much the tenant may be paying in rent. If HST is payable, for example if the property had a business running in it before the lender took over, or if it had been substantially renovated, then this extra HST has to be paid by the buyer on closing. Finally, if the original owner comes up with the money before closing to pay off the mortgage, then the deal is over.

4.    In order to deal with the above clauses, buyers should make sure that any purchase is conditional upon a detailed home inspection condition so that everything can be verified, including the condition of the home, the room and lot sizes, and whether there was any business, such as a day care, operating in the home before closing. This could involve discussions with the neighbours as well as well as any tenant that the buyer will be assuming after closing. Regarding the lot size, ask the bank's real estate agent if the bank has any survey relating to the property and if not, check at www.landsurveyrecords.com  or www.protectyourboundaries.ca as there are over 1.5 million surveys available for purchase through these websites to assist you when the boundaries are not certain.

5.    Buyers should attempt to close the deal quickly, once they have satisfied themselves as to all conditions, to avoid having the original owners come back and pay off the mortgage before closing, thus ending the deal.

When you understand what is involved in buying a home from the bank, you should not have any unwelcome surprises either before or after closing.

Story provided by Mark Weisleder BA., LLB

Research, professional knowledge and advice make for good decision-making. Knowledge is power and helps the buyer make the best decisions possible for his family. So it’s important to find the right agent that has experience with sale-of-power properties. Contact me today! I will be working for you every step of the way to make sure that you get what you want.


Randy Miller
Broker of Record
Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-831-2222

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Disclosure and latent defect

I found an article by Christopher Seepe on REMonline.com that might interest you:

"On the issue of disclosure and latent defects, an Ontario Small Claims Court judge recently awarded a ruling in favour of a buyer who alleged that the seller had not disclosed a defect that had repeatedly occurred over many years prior to the seller selling the property.

The buyer purchased a three-storey 40-year-old apartment building in Durham Region in April 2011 from the seller. In January 2014, tenants reported substantial deterioration of in-suite walls. Water had entered into the plaster walls and swelled like boils.

The buyer also found several areas of uncharacteristic white stains on the external brick walls. As water moves through brick, it can pick up salt that is not bound as part of the brick. The salty water that evaporates at the brick’s surface leaves behind a white flakey-looking deposit called efflorescence.

Specialists determined that the cause was condensation forming between the walls, a problem common with buildings built before vapour barriers were mandated in the building code. The buyer then learned from a long-term tenant that the wall problems were a regularly recurring event. The tenant swore an affidavit that was admitted into evidence in the trial.

The Agreement of Purchase and Sale (APS) included a clause, “The seller states that, to the best of the seller’s knowledge and belief, there is no known damage to the basement, roof, or elsewhere in or on the property caused by water seepage or flooding.” 

The Ontario Limitations Act (2002) generally states caveat emptor – “buyer beware.” A buyer can only file a claim of defect within two years from the date of purchase, with generally no recourse after that. However, the act differentiates between two types of defects:

A “patent” defect is one that can be discovered by observation (“obviousness”) or inspection using generally accepted industry-standard practices.

A “latent” defect is one that is present but is not obvious, visible, apparent or actualized and can’t be discovered by industry-standard inspection practices.

A seller has no obligation to disclose a defect that is obvious, such as a clearly-visible water-soaked crack in a foundation wall. The buyer must also be able to prove that the seller knew about the latent defect. If the defect is proved to have existed prior to selling the property but the seller didn’t know about it (perhaps the defect didn’t appear while the seller owned the property), then the seller can’t be held liable, even innocently.

In the trial discussed above, the tenant’s affidavit strengthened the buyer’s case. The judge determined the seller knew, or ought to have known, that there was recurring water damage caused by an untreated defect in the property. The judge stated he “sympathized with the defendant” but the defendant clearly breached the “no water damage” clause in the fully-executed APS.

The small claims court can’t award punitive damages, and “betterment” costs are excluded – that is, repairs that improved the property. For example, if the original roof was 10 years old with a 20-year life expectancy, the court might rule that the buyer received a betterment of 10 years and then award only half the new roof’s cost. The buyer was also not permitted to recover personal expenses related to attending meetings, overseeing repairs and travel. Presumably this is because the value of one’s time is highly subjective and would inevitably be contested. It could also be a source of considerable abuse in inflating costs.

There are several cases in law regarding the responsibility of disclosure and latent defects: McGrath v. MacLean (1979), Krawchuck v. Scherbak (2011) and Dennis v. Gray (2011).

In Krawchuck v. Scherbak, the real estate agent was found to be 50 per cent at fault for their lack of diligence in reconciling misleading statements made by their client, failing to inform their client of the implications of their false statements and failing to bring these issues to the attention of the purchaser.
In a decision released in May 2014, a deputy Judge of the Barrie (Ontario) Small Claims Court said in his judgement that a seller must disclose to the buyer anything they know about a defect that has caused any loss of use or enjoyment of a meaningful part of the premises.

Since the case of McLean v. MacGrath, and in light of Dennis v. Gray, the principle of caveat emptor appears to be either becoming more specifically defined or more exceptions are occurring. The evolving principle appears to be that if a seller properly discloses an actual or perceived defect in a property, then this should protect them from the risk of litigation and the accusation that the seller didn’t comply with their duty to disclose. Perhaps this will mean the seller has to provide a price discount or perhaps it will lead to sellers pricing their properties as they should have been in the first place. Either way, it’ll still likely be less expensive that settling a court action."

Purchasing or selling real estate is a complex process and every element of the transaction is best handled by an experienced professional. Don’t take chances, go with proven results and experience. With 25 years of full-time local service in Whitby, Brooklin, Ajax, Pickering, Oshawa, Courtice and Bowmanville, I can make your purchase or selling worry-free. Contact me today!


Randy Miller
Broker of Record
Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby

905-831-2222

 

 

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Here is a great article from Mark Weisleder that might interest you. The Real Estate Council of Ontario did a survey of first time buyers in Ontario and found that one of the top issues that buyers had was they wished they understood the real estate contract and the process involved in buying a home a lot better, before they bought their home. Here are 5 things to know so that you will not be surprised either before or after closing.

1.    How much is the bank really lending me?

When you go to your lender to arrange financing, many buyers wrongly assume that if you are borrowing $300,000, then that is the amount you will receive on closing. Not true. In many cases, the lender may deduct a mortgage processing fee, which can be approximately $250. If the lender is paying your property taxes, they may deduct an amount right off the top in order to create a tax account for you, sometimes up to an additional $1,000. If your closing is for example on January 10, 2015, and your first payment is March 1, 2015, then the lender may deduct in advance interest from January 10, 2015 to February 1, 2015. Finally, if you are using CMHC or Genworth to obtain insurance for your mortgage, for example if you do not have 20% of the down payment, then not only will the premium be deducted from the principal amount of your mortgage, but an additional 8% PST will also be deducted on closing. Buyers often tell me that the PST charge was not explained to them by anyone. Ask your mortgage broker or lender in advance about all of these potential charges so you are prepared for what you will have to bring in on closing.

2.    What does "more or less" mean when they are discussing the frontage and depth of a property, or the square footage?

What this means is that if there is an error in the dimensions or square footage up to 5%, a buyer can typically not complain about it after closing. If the boundary lines matter to you, make the deal conditional on your receiving an up to date survey that demonstrates the actual boundary lines. If the square footage matters, arrange to hire a professional to measure it for you. Most offers contain a disclaimer that the seller does not warrant anything anyways so you need to protect yourself if this matters to you.

3.    The seller told me the counter tops were made of granite but I found out later they weren't; can I sue after closing?

The answer is usually no, since the fine print indicates that if it is not in the Agreement, it didn't matter to the buyer or the seller. Therefore, if anything about the property does matter to you, whether it is any feature or item contained in a listing, be sure to include it in your agreement of purchase and sale as well.

4.    I bought and sold my home on the same day. Even though I was packed up at 1 pm, I could not get into my new home until 6 pm, meaning that I had to pay the movers for an extra 5 hours. Can this be avoided?

This can be a real problem, especially at the end of the month. The safe way to avoid this is to close your purchase a few days early and obtain bridge financing so that you can move when it is convenient for you. The interest you will pay to do this is much less than what you will pay movers to wait around.

5.    I don't agree with the terms of the furnace rental contract. Can I just cancel it?

Unfortunately, the answer is usually no, unless you are prepared to pay a penalty. In the fine print, the buyer agrees to assume every rental contract that is disclosed. Before you sign, ask for the details of any rental contract in advance so that you are aware of what it will cost to either assume the contract and continue making the payments or the cost to cancel it after closing.

When you understand the fine print and the process before you sign any real estate agreement, you should not receive unwelcome surprises later.

By Mark Weisleder 

Purchasing or selling real estate is a complex process and every element of the transaction is best handled by an experienced professional. Don’t take chances, go with proven results and experience. With 25 years of full-time local service in Whitby, Brooklin, Ajax, Pickering, Oshawa, Courtice and Bowmanville, I can make your purchase or selling worry-free. Contact me today!

Randy Miller
Broker of Record
Royal Heritage Realty Ltd., Brokerage
905-430-1800

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Flooded Basement


The basement floods after closing. Can the buyer sue the seller? The agreement contained wrong information about the property dimensions but also included a disclaimer clause. Can the buyer sue if there is a problem after closing? Do you need to disclose a murder that occurred in a home? These are not simple questions, but if you remember the following principles, you should be able to understand the law.


Here are 5 key lessons to remember:


1.    When there is a flood after closing, the buyer will have to prove that the seller knew about this defect and that it was serious or else that the seller actively concealed the defect from the buyer. It will also depend on whether the buyer conducted a home inspection and in the case of basement water, whether the seller actually finished the basement themselves. A buyer will have to prove that the seller must have known about the problem during their ownership. Buyers will have to take pictures of the damage and bring in an experienced contractor who will be able to look at the damage and then give an expert opinion, in court if necessary, that the seller either must have known about the problem or did work behind the walls to conceal the problem. If the buyer cannot prove this, they will likely not be successful.


2.    The defect must make the property uninhabitable or dangerous. This means that the defect must be so serious that the buyer may not be able to continue living in the property. This would include a foundation problem. It is not clear if this would include a disclosure that the property was previously used as a grow op, as it would depend on the extent of the operation and whether it was actually remedied according to accepted industry standards. It would also depend on whether the buyer could obtain insurance for the property. Suffice to say that if the seller does not disclose a minor basement leak, the buyer will not be successful suing about it after closing.


3.    The law is not settled as to whether a seller needs to disclose a property stigma, whether it is a murder, suicide or neighbourhood condition, such as a pedophile who lives next door. Most appraisers will tell you that this will affect a property's value. However, it will still be hard to prove that this stigma would make the home uninhabitable and this is why many lawyers will tell you that you do not have to disclose property stigmas. 


4.    If you advertise the boundaries of a property in a listing, can the buyer get damages or get out of the deal if it turns out the boundaries are incorrect? Will it make a difference if there is a disclaimer clause in the offer itself, saying that the information, while believed to be correct, is not guaranteed and should not be relied upon without independent verification? In most cases, if the disclaimer is there, the buyer will not be able to sue the seller for any damages and will need to make sure that they do their own proper due diligence in advance. The lesson for any buyer is to make sure that if there is a disclaimer present, that you check a survey of the property or make the deal conditional on your own independent verification of all boundary lines.


5.    If you have any concerns about disclosure, ask the sellers point blank if they have had any water in the basement, murders or grow houses on the property in the past, or insert a clause to this effect in your offer. The sellers then have to respond truthfully. Speak to the neighbours and ask if any repairs were done at the property during the past year or whether there are any other issues with the property that you should know about. Also ask the neighbours about anything peculiar going on in the neighbourhood, including asking about the neighbours on either side of the property you are interested in buying. A major reason sellers sell a home is simply to get away from a neighbour.


When you understand the rules about disclosure and properly protect yourself, you should be able to minimize any problems that could arise after closing.


By Mark Weisleder, a Toronto lawyer, author, course developer and public speaker for the real estate industry


Randy Miller 
Broker of Record
Royal Heritage Realty Ltd., Brokerage  
905-430-1800


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Chattels and Fixtures


Here is a great article from Mark Weisleder, a real estate laywer, author and speaker:

 

5 things to remember about chattels and fixtures

The buyer notices that the oven is not working when they do their final home visit, 2 days before closing. Can the buyer refuse to close or hold back money to repair the oven? These are just some of the questions that I receive from anxious buyers during the course of a home purchase.

Here are 5 key lessons to remember:


1. The buyer cannot refuse to close a real estate deal if an appliance is not working, or if there are minor damages on the property, unless the contract says so. What the standard real estate contract says is that the buyer can only refuse to close if there has been substantial damage to the property before closing. This would cover a house burning down or a major flood before closing, but would not cover a cracked window or appliance that is not working.


2. The buyer or the buyer lawyer is also not permitted to decide on their own to hold back money to complete any repairs, unless the contract says so. In my experience, sellers rarely agree to any clause in an agreement that permits a buyer to hold back money, for example, to make sure that the seller has completed any required repairs before closing. The problem is that in practice, buyers will typically say that they are not satisfied with the repairs and the holdback money cannot be released to anyone.


3. Here is my advice to settle repair or damage issues: get an estimate for the damage and then have your lawyer send it to the seller lawyer, offering to just settle the matter by the seller either fixing the problem before closing or the seller providing a credit equal to the estimate and the buyer fixes it themselves after closing. I am usually able to work this out with seller lawyers before closing. Unfortunately, if there is no settlement, there is no automatic right to hold back money and the buyer will be required to sue the seller in Small Claims Court after closing to get their money back. This is not a good solution for anyone, because of the time it takes to go to court to resolve this. Be reasonable and solve your problem.


4. What if the oven breaks down 2 days after closing? Unfortunately, the way the contract is written, the buyer does not get an extended warranty. The seller will typically only warrant that appliances and home systems will be working on closing, not after closing. Make sure that even if you are not moving in until a few days after closing that you go to your home immediately after closing and check to make sure that everything is working properly. If anything is not working or there is a damage, have your lawyer immediately contact the seller lawyer the next day about your issue. Also consider buying after sale insurance protection to cover your home systems and appliances. Canadian Home Shield is a company that offers this type of protection at a reasonable price.


5. Little things matter. If your seller is removing a chandelier, make sure they are required to replace it with a standard light fixture so you do not walk into a dark home on closing. If your seller is removing a TV bracket from the wall, make sure that they are required to fill in any holes that are created. Make sure you are to be given 2 full sets of keys, FOBs if a condominium, garage door openers and mail box keys. If the agreement is silent, the seller may only get you one set and it is costly to obtain a duplicate set, in most cases.


When you understand the rules about chattels and fixtures and properly protect yourself, you should be able to minimize any problems that arise after closing.

 

By Mark Weisleder

Randy Miller 
Broker  
Re/Max Rouge River Realty Ltd., Brokerage  
905-668-1800 or 905-427-1400


 

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Today I found an interesting blog article about 'Bidding Wars' which I want to share with you. It tells the story of a couple who tried to find their dreamhome in Toronto and all the bidding wars they found themselves in. Bidding wars are a seller's dream but can be a buyer's nightmare...

Cait: Walk us through your first bidding war. What happened?

KL: The first bidding war we got into was for a condo, which is very rare; this is when we realized how competitive the family-friendly condo market was in Toronto. Generally, it’s a good idea to see a home at least twice: once privately (so you can look at it in-detail) and again at the open house (to see how many people show interest in the property). However, with this first property, offers were accepted anytime and there were three offers on the first day it was listed.

You can usually submit your offer 1 of 3 ways: at the property itself, at the listing agent’s office, or you can send it in via fax. Most real estate agents will recommend you do it in-person (i.e. not via fax), so you can build some rapport with the listing agent and sellers, as well as be available to change your offer on the spot. For the condo, the listing agent held the offer presentations at her office, which was in Markham – and on a Friday night at 10pm. It was a really strange experience, and our real estate agent said he’d never seen that before, especially for a downtown Toronto condo.

Anyway, as the buyer, you don’t go in yourself. You basically sit and wait, while your real estate agent goes in and presents your offer to the listing agent + sellers. It’s done this way so hopeful buyers don’t get emotional, make rash decisions, etc. and also adds a level of professionalism to the whole experience. But I was literally sitting in a car waiting while our agent presented our offer and then we waited together until all the other offers were presented. After that, the listing agent + seller may decide to accept an offer (in the first round) or choose a few offers that are close and ask if you’d like to improve yours (in a second round). We didn’t make it past the first round.

Cait: Were you disappointed you’d lost?

KL: I was. I’d fallen in love with that condo and had basically already moved in, in my head. Then people tell you “everything happens for a reason” and you kind of roll your eyes at that, especially when you’re disappointed… but it’s true! It’s good we lost that one, or else we wouldn’t have bought the amazing house we have now.

Cait: Did you stop looking at condos after you lost?

KL: No, we still looked at them a bit, but just added houses to the mix. When we did the cash flow analysis on large two-bedroom condos with large corresponding condo fees versus houses, a three-bedroom house was not that much more expensive.

Cait: What was different about the second bidding war you entered?

KL: Once we decided to start looking at houses, I fell in love with the first one we saw – and this is a bad idea! Our real estate agent always told us to see multiple properties, so we wouldn’t make any rash decisions or jump into something just because we loved the “idea” of it. But after seeing so many condos, that first house had everything we were looking for in a condo, and I loved the idea that we could actually afford a house!

This brought us into another highly competitive segment of the market for renovated three-bedroom starter homes. The next house we decided to submit an offer on had an “offer date”, which meant all offers were accepted only on that date. On top of being in the neighbourhood we wanted, the house was nicely updated and had a basement apartment. (Tip: If you see a home that has income potential, be prepared for the bidding war to be extra competitive!)

We registered our offer early, at our real estate agent’s suggestion, because when you do so, the listing agent has to tell you if any bully offers come in. (A bully offer is when someone submits an offer that they think is amazing, in hopes they can buy the house before it goes to a bidding war.) Most of the time, sellers won’t even look at bully offers, because they know they can get more out of a bidding war – but it’s still good to know if any have been submitted, because then you can get a sense of how competitive the bidding war is going to be. In the end, 10 offers were registered on the house, which is high, even for Toronto. All offers were presented at the house itself, which meant there were 10 hopeful buyers + their real estate agents waiting around to present.

Before you enter a bidding war, you and your real estate agent will decide between two different strategies: either go all-in with your “first and best” offer, or bid slightly below it and know that you’d be happy to go up another increment (say $10,000). Typically, if there are a lot of people (and therefore a lot of offers), you’ll want to go all-in with your highest offer. If there are only 2-3 people, though, you may go in lower and know you have some wiggle room. Because there were 9 other people making offers, we decided to go all-in. Our real estate agent thought we had a good offer, but also warned us that it would likely sell for more because of the income potential. (We’re also grateful he was honest and told us not to bid any more than we already had, as he didn’t think the house was worth more.) Like our first bidding war, we didn’t even make it past the first round. And here’s where the numbers may shock people: we went in at $140,000 over asking, and we still lost by $35,000.

Cait: That’s crazy!

KL: Yea, list prices on houses are basically irrelevant in Toronto. Actually, that’s not always true. Most houses are underpriced to spark a bidding war, but once in a while you’ll find a house that’s listed for what the sellers want. When you see something that’s accurately priced, you freak out and mentally add like $100,000 on top of that. It takes time and a lot of viewings to figure out what a house is worth, which is why it’s really important to not fall in love with the first place you see. Plus, if there’s one truth to the Toronto housing market, it’s this: a house is worth whatever amount a buyer is willing to pay.

Cait: Are you happy you lost the second bidding war?

KL: We would’ve been happy if we’d won, but it’s also fine that we lost. Looking back, the house was on a busier street, it didn’t have great curb appeal, the upgrades weren’t done exactly to our taste, and my partner actually wasn’t keen on having a basement apartment because he didn’t like the idea of having a stranger living in our house. We definitely weren’t willing to pay $35,000 more for it, even with income potential. But if our offer had won, we would’ve been ahead on a monthly cash-flow basis, compared to the house we ended up buying.

Cait: Let’s talk about the third and final bidding war you ended up in, then. Walk us through what happened.

KL: By the time we went into this one, we had built up the right mentality for bidding wars. After losing a couple bidding wars already, you can’t help but feel defeated, and you’re not exactly hopeful the next one will be a success. This mentality is both good and bad. It’s good because it prevents you from getting attached, and it helps you map out your plan from a strategic standpoint vs. an emotional one. But it’s a little depressing, too! After seeing so many homes, and losing two bidding wars already, I was emotionally exhausted and didn’t have any hope that we’d actually win this one – but we wanted to try.

We saw the property multiple times, first privately and then again at the open house. When we were at the open house, we saw a lot of foot traffic, so we knew it would be another competitive situation. I told you (and showed you) all about the house last week and we obviously loved it. I could tell my partner really loved it, because he upped our budget by quite a bit in the end. I also think we’d also just gotten to the point where we had to decide to go all-in – like really all-in, with as much as we could – because we just wanted to buy a house and move on with our lives.

This time, there were 14 offers! The listing agent gave every real estate agent a 5-minute slot to present, so our real estate agent and I (and Kingston!) went for a walk around the neighbourhood during that time. We didn’t feel great about our offer, this time, just because of how many offers there were. But less than 2 hours later, we got a callback saying that ours was 1 of 6 offers that were extremely close to each other, and asking if we had any room to improve.

When you go into the second round, you can do one of two things: leave your offer as-is, or improve it. Since there’s a chance your original offer was the highest one already, you can take the gamble and choose not to increase it. But we decided to improve our offer, because we really liked the house. Thirty minutes later, we got another callback saying that ours was 1 of 3 offers that were extremely close, and asking if we could improve our offer yet again. (A third round!) With the help of our agent, we were able to improve our offer a little bit again. The sellers also asked if we could move up the closing date by 2 weeks, which was no problem for us, because we were renters (didn’t have another house to sell first) and could move anytime. The date is what helped seal the deal, because we won!

Cait: What conditions did you release in your offer?

KL: When you enter a bidding war, you need to make a clean offer (no financing or home inspection conditions) or else there’s little-to-no chance you’ll win. So we released both, and decided to use the seller’s home inspection.

Cait: What are the risks involved with releasing both conditions?

KL: You usually don’t need to get a home inspection on a condo in Toronto – at least not new ones – so we felt fine about the first one. But for the houses, we just had to read through and trust that the seller’s home inspection was accurate. Some people still feel more confident commissioning their own inspection, but that can get expensive when you end up participating in multiple bidding wars.

Source: http://www.ratehub.ca/mortgage-blog/2014/10/team-case-study-on-winning-and-losing-bidding-wars/

 

If you find yourself in a bidding war for the house of your dreams, prepare to be flexible and accept that the seller is in control. How much the property is worth depends on how much the buyer is prepared to pay. In a bidding war, I can help you determine how much the house is really worth cause the last thing you want is to over-pay for a house. I'm an experienced real estate agent who knows the market and I can help you get the house of your dreams. So, contact me today!  

 

 

Randy Miller 
Broker  
Re/Max Rouge River Realty Ltd., Brokerage  
905-668-1800 or 905-427-1400

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Canadian Real Estate Market News


Home sales, prices to rise

 

Canada Mortgage and Housing Corp. has released a new report with everything you could possibly want to know about projected sales and prices across the country, forecasting a “steady” showing nationwide next year, followed by “some moderation” in 2016.

 

Housing starts in Canada, it predicted today, will range next year from 172,800 to 204,000, and in 2016 from 168,000 to 205,800.

 

Resales next year will come in between 457,000 and 507,300, and in 2016 between 448,000 and 508,000.

Prices are particularly interesting.

 

Average prices this year, which, of course, differ widely across Canada, are expected to range from $401,600 to $405,400, which means a so-called point forecast of $404,800.

 

Next year, according to CMHC, prices will be between $403,600 and $417,800, for an increase in the point measure to $410,600.

 

Then in 2016, expect prices to range between $407,300 and $424,500, or a point forecast of $417,300.

West to east, here’s what CMHC forecasts in terms of average prices:


  • British Columbia: Average resale price to rise to $566,300 in 2015 and $573,000 in 2016.
  • Alberta: Average to rise to $407,800 and $417,500.
  • Saskatchewan: Average to rise to $303,000 and $309,300.
  • Manitoba: Average to rise to $272,600 and $278,800.
  • Ontario: Average to rise to $435,900 and $443,800.
  • Quebec: Average to rise $270,800 and $276,600.
  • New Brunswick: Average to dip to $161,500 and $161,000.
  • Nova Scotia: Average to rise to $216,000 and $217,000.
  • Prince Edward Island: Average to slip to $157,000 in both years.
  • Newfoundland and Labrador: Average to rise to $294,000 and $298,000.

 

These findings, of course, mask the wide ranges from city to city, which CMHC also looked at.

 

For example, the average in Calgary, forecast to jump 5 per cent this year to $459,000, should rise further, to $472,000 in 2015 and $483,000 a year later.

 

Source: By MICHAEL BABAD, The Globe and Mail,

http://www.theglobeandmail.com/report-on-business/top-business-stories/from-west-to-east-a-look-at-projected-house-price-gains-across-canada/article21379179/

 

Randy Miller 

Broker  

Re/Max Rouge River Realty Ltd., Brokerage  

905-668-1800 or 905-427-1400

 

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House of Horror

 

Mark Weisleder, real estate lawyer, author and speaker, on how to stay out of trouble when buying a house:

Make sure your lender has done their appraisal of your home

Just because you are pre-approved for financing, it does not mean you will get your money on closing. There are always more lender conditions to satisfy, whether it is income verification, proof of down payment and a satisfactory appraisal of your home, to make sure you didn't overpay. Make sure you satisfy all requirements before you waive any finance condition. I have seen many cases where lenders have refused to advance money on the closing date because of incomplete information or problems with the home's appraisal. This can cause delays in closing, extra moving expenses and in worst case scenarios, a default in the deal where the buyer forfeits their deposit.

Visit the neighbourhood on foot

No seller will tell you about a neighbour from hell or problems with other homes on the street. They may also not disclose problems with their own homes or whether there had been a suicide or murder on the property. When you are doing your home inspection, have someone talk to your potential new neighbours and ask them directly if they saw any repair trucks at the home you are interested in, and whether there may be some strange people living nearby. It also helps to work with a real estate agent who is familiar with that neighbourhood as well, to avoid any surprises after closing.

Choose a home inspector carefully

The home inspection is a critical part of the process, so do your research. Make sure the company is registered before retaining them. The Ontario Association of Home Inspectors is a self-regulating body that defines qualifications for home inspectors, and grants the designation RHI, or Registered Home Inspector, to qualified practitioners in Ontario. Most inspection firms have a limitation of liability clause, which states that if they miss something that costs you money, they are not responsible. Ask the inspection company if they have ever been sued by a buyer. Also ask them whether they carry insurance in case they do get sued. Remember that home inspectors cannot see behind walls. In older homes especially, it is worth considering paying extra to check for moisture behind the walls, termites and drainage issues.

Go to City Hall

Visit your local building department and find out if any new developments are planned. New development may increase property values but also increase traffic. Check to see how many owners have applied for minor variances, to either build homes or additions that are larger than the by-law permits. This gives an indication of the future direction of this neighbourhood.

Include everything you expect to receive on closing

There is no such thing as too much detail. Insert clearly everything you expect to receive on closing, including window coverings, drapes, mirrors, closet organizers, TV brackets, garage door openers and even 2 sets of keys and FOBs in a condominium. If the seller wants to remove the chandelier, make sure they install a cheaper fixture before closing, so you do not enter a dark house when you move in.

Basement apartments must be legal

If the home contains a basement apartment and the income is important to you, make sure that it legally complies with zoning and the fire code by-laws. If it doesn't, then all it takes is one complaint from a neighbour and you may be forced to spend thousands of dollars to make it comply after you buy.

Check about your insurance premium early

Find an insurance agent right away and if possible, check what it will cost to obtain insurance as soon as you sign your agreement and before you waive any conditions. An insurance agent can check the history of claims in the neighbourhood and can let you know about claims for sewage back-ups or vandalism. If it has old knob and tube wiring, or the place used to be a grow house, you will have difficulty arranging insurance. This is important information that any buyer should have before deciding to waive their conditions and complete the deal.


By following these steps, you can avoid horrors after closing.


Purchasing or selling real estate is a complex process and every element of the transaction is best handled by an experienced professional. Don’t take chances, go with proven results and experience. Contact me today, I can make your purchase or selling worry-free.


 

Randy Miller 

Broker  

Re/Max Rouge River Realty Ltd., Brokerage  

905-668-1800 or 905-427-1400


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 How to sell a house where pets live


Almost everybody loves pets. Me too,  but just not when I am helping clients buy and sell houses. And the reason for this is simple:  Pets can distract in many different ways.


Your pets stink. As a loving pet owner, you may not realize this because you’ve grown accustomed to it. But don’t expect a potential buyer to feel the same way. Potential buyers don’t want to purchase stinky houses.


Allergies. Some buyers are allergic to pets (their saliva, fur and urin). You can’t blame the buyers for leaving your house before even having seen it.


Fear. Especially if people are coming with small kids, pets can become a problem. Pets are not always predictable. Some buyers are afraid of being bitten or terrified of catching fleas.


Barking and Meowing. Pets sometimes get noisy and this distracts the showing.


Nervousness. The buyers may feel uncomfortable when a pet rubs, sniffs, or jumps on them. Even if buyers like your pet they may miss out on the wonderful features of your house because they concentrate too much on your pet.

 


What to do before a showing

Owning pets could reduce the value of your house if potential buyers notice odors or other pet issues. If you want to get the highest final sale price, you'll have to stage your house and create the illusion that you are not a pet owner  or at least eliminate any signs that your animals were destructive.

Dogs, cats, birds, fish, reptiles, bunnies, hamsters, guinea pigs: they all shed or/and stink (litter boxes, cages, fish tanks). So what can you do before showing your house?

The best thing to do to ensure top price for your home is to relocate your pets while your home is on the market. Removing the family pet while selling a home is not usually the option most homeowners want to hear, but it is the best solution not only for potential buyers who want to tour a home which smells fresh and clean and is free from pet hair, but also for the pets who can be upset with strangers touring the property on a daily basis. Let a friend or family member take care of your pet or send it to a boarding kennel until the house is sold.  Putting your pets in the back yard, in the garage or in another room that you keep locked is insufficient, and it's not fair to them.

If you don’t want to take the professional advice and absolutely refuse to move your pets out of the house, then at least minimize their presence in your home.


Get rid of the evidence!


Deep cleaning. Before your house goes on the market, make sure that it gets a huge deep cleaning, behind all furniture, all closets, under all beds, etc.!


Remove litter boxes. Keep cat litter boxes and dog potty pads out of sight and impeccably clean. Nothing turns off buyers faster than opening the door of a house and being greeted by a full or stinky cat box.


Remove stains. Hire professionals to remove pet stains. Buyers will spot them and form unfavorable opinions about the rest of the house. If the stains can't be removed, then remove the floor covering and replace it.


Get rid of the stink. Not only are odors very obvious when buyers first enter your a home, they are usually very difficult to get rid of (cat urine is the worst). Home buyers know this and could immediately scratch your house off their list. Have all of the carpet and underlay in the home replaced or at the very least professionally cleaned.  You should also have your furniture steam cleaned at the same time.


Other useful tips:

  • Remove pictures of your pet (e.g. photo of showing your cat asleep on the bed)
  • Seal up pet doors
  • Put away food and water bowls when not in use
  • Vacuum  as often as possible
  • Put away pet toys
  • Remove cat trees
  • Pack up all cages, carriers and other tell-tale signs

Curb appeal. The outside of your home is the first thing potential buyers will see, so it's the first place you should look for signs of pet damage.  Curb appeal is hugely important to buyers, so lets make sure that all outside areas of your home are pet free as well.  From your front yard, your back yard, your courtyard, etc.  Make sure your backyard shows no signs of pets. The most obvious issue to address is holes in the yard from a dog that's been digging. Make sure to fill any holes before you open your home to buyers.  Remove all toys and ‘poop’ that may be present.


Selling a home is not easy. With a pet it’s even harder. But if you keep all the above things in mind, it’s all worth it in the end… 


If a move is in your future, let’s sit down and talk about your plans. I will be working for you every step of the way to make sure that you get the highest possible price for your home in the shortest period of time. So, contact me today!

 

Randy Miller 

Broker  

Re/Max Rouge River Realty Ltd., Brokerage  

905-668-1800 or 905-427-1400


 

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Canadian Real Estate Market stays hot


There are early indications that September appears to have been another strong month for Canadian home sales.


That is based on data that some local real estate boards have released in recent days about how their housing markets fared last month. The number of existing homes that changed hands in Toronto was up 10.9 per cent from a year earlier, in Calgary it was up almost 12 per cent, and in Vancouver 17.7 per cent. And that’s in comparison to a reasonably strong month: sales in September, 2013, were slightly above the 10-year average for that month.


A comprehensive picture won’t be available until the Canadian Real Estate Board, which represents realtors, compiles all of the local statistics and releases national September data on Oct. 15. Many cities have not released their numbers publicly yet, and the ones that have tend to be in some of the country’s stronger housing markets. Quebec and the Atlantic region, where more markets are struggling, are not represented below.


But the strength of Calgary, Toronto and Vancouver’s housing markets tends to pull up the national averages, and so the numbers here suggest that the national figures will point to a market that still has momentum.


CALGARY HOUSING MARKET


-Sales were up almost 12 per cent in September from a year ago. The local real estate board says the unexpected strength came from a surge in condo and townhouse sales.


-Condo sales so far this year are 21 per cent higher than during the same period last year, while the number of sales of detached homes has risen by just 7 per cent. Affordability is driving the shift. Two years ago, 44 per cent of the detached houses that sold from January through to the end of September went for less than $400,000, according to the real estate board. So far this year only one quarter of the houses have sold for less than that.


-The average price of a detached house in the city was $567,653 in September, up 10.81 per cent from a year earlier. The average price of a condo was $326,264, up 9.21 per cent. For townhouses it was $352,813, up 4.21 per cent.


-The average length of time it takes to sell a home continues to tick downwards. Year-to-date the average number of days a home is on the market before it sells (for all types of homes) is 34, down from 42 in the same period last year.


TORONTO HOUSING MARKET


-Sales were up 10.9 per cent from a year earlier. So far this year sales in the city are 6.9 per cent higher than during the same period last year.


-The average selling price was $573,676, up 7.7 per cent from a year earlier. The average selling price year-to-date is $563,813, up 8.5 per cent from last year.


-“If the current pace of sales growth remains in place, we could be flirting with a new record for residential sales reported by (Toronto Real Estate Board) members this year,” TREB’s director of market analysis, Jason Mercer, stated in a press release.


-The average selling price of detached homes in the downtown area covered by the 416 area code was $951,792, up 11.5 per cent from a year earlier. For condos in the same area it was $395,505, up 9.2 per cent.


DURHAM REGION 

No Fall for Durham Housing Market


Durham Region Association of REALTORS® (DRAR) reported 970 sales in September 2014, which represents a 14.8 per cent increase compared to 845 sales in September 2013. On a year-to-date basis, sales were up 5 per cent annually through the first three quarters of the year.


President Jane Hurst states that the increase in sales activity stems from increasing buyer interest. "We also saw a 21.7 per cent increase in the number of resale homes entering the market since last month". The number of new listings that entered the market in September 2014 was 1,471 compared to 1,209 in August 2014.


There was also a large increase in the average selling price in Durham. The average price of resale homes in Durham Region in the month of September reached was $401,713. This represents a 13.6 per cent increase over the same period last year.


Avg. Selling Price Durham Region


Property values continue to rise, people are still willing to buy and borrowing rates are low which keeps home ownership affordable.  Everything combined makes Durham Region a great place to work and live.


(Source: The Globe and Mail, Tara Perkins)


If you are looking for a house in Durham Region or are already a homeowner and wish to move to a new house in Pickering, Ajax, Whitby, Brooklin, Oshawa, Courtice or Bowmanville, please contact me for more information.

 

I can answer all of your questions, help you find the right neighbourhood and the perfect house at a great price. Having sold real estate full time in Whitby and the surrounding areas for over 20 years, you can assured of exceptional local market knowledge and  skilled representation. Nothing beats experience.

 


Randy Miller 

Broker   

Re/Max Rouge River Realty Ltd., Brokerage 

905-668-1800 or 905-427-1400


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Mortgage Application


You are excited to buy your first home!  But where to start? Your mortgage financing is one of the most critical aspects of your first purchase. And you want to get it right. But with so many choices, brands and products  on the market, it can be a tough ride to homeownership. I have listed some mortgage mistakes you should avoid when trying to secure financing for your home.  Avoiding them will also save you time and money.


Mistake #1: Not shopping around.


Try to choose the best product for you and your situation. If you don’t take the time to compare different loan products you’re doing yourself a major disservice. Make sure you find the right bank to work with and snag the best deal. Mortgages are complex and you don’t want to just take whatever product or term the bank is pushing.


There are many different types of loans out there. There are fixed- and variable-rate products, hybrid and no-frills mortgages, lines of credit, term options, amortization choices, and more. All have their pros and cons, and should be carefully considered before applying for a mortgage.  Keep in mind, that there is no product that fits everybody. So if a certain product works for your neighbour, it does not necessarily mean that it works for you too.


The key is to get expert advice. Always explain your current situation and future goals in detail so that you get a product that best meets both your current and longer-term needs.


When renewal time rolls around you may feel an allegiance with the current financial institution that holds your loan. But they may not be able to offer you the best choices. Always shop the market for your best available option. That’s how you get the best mortgage rate and end up with terms customized to your unique situation.


Mistake #2: Not Reading Your Mortgage Documents


These are important documents to review and read as they contain all of the terms and conditions of the mortgage including your obligations, costs and privileges. Never sign documents without reading them. Make sure you understand everything. If you’re unsure about something, always ask for clarification. You need to understand and agree with that commitment, when signing the documents.


Mistake #3: Having a bad credit score


Make sure that your credit balances are in your favour when it comes to your mortgage application. Lenders are looking for an appropriate debt-to-income ratio. In other words, you need to have more income than you have debt. Avoid running up a balance on your credit cards and pay down existing debts as much as possible.

Regularly review your credit report to ensure there are no surprises long before you begin the mortgage process. A low credit score will lead to a much higher mortgage rate, and even disqualification if it drives your monthly mortgage payment high enough.


Don’t open new credit cards, take out new loans or use more of any existing credit lines before and during the application process. This can hurt your credit score, increase your debt load and could finally lead to disqualification.


Mortgage Application Denied


Mistake #4: Not thinking about the future


Do get your credit report and score months before you apply for a mortgage so you can fix anything that might affect your loan approval!


Don’t make any purchases on your credit cards that you can’t pay off and if you carry a balance on your credit cards, start paying them down. You shouldn’t even make large purchases with cash, because lenders want to see that you have enough savings to keep paying your mortgage in an emergency. You can buy your new leather couch and big-screen TV once the loan is funded and closed.


Avoid job hopping. Lenders are looking for income stability and consistency. They want to see you in consistent employment. You must prove that you will continue to make the money you are currently making to obtain the mortgage. Lenders will verify it just before closing.


 

If you are planning to buy a house in Whitby, Brooklin or other areas within Durham Region, contact me. I can help you with the buying process and refer you to a mortgage specialist that can explain the products and help you choose the right mortgage product.


                                                         

Randy Miller

Broker  

Re/Max Rouge River Realty Ltd., Brokerage

905-668-1800 or 905-427-1400

                                                           

 

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As reported in The Globe and Mail, policy makers in Ottawa have been taking some comfort from signs Canadian home prices have been moderating lately. They shouldn’t.

 

If Toronto-Dominion Bank economist Diana Petramala is correct, home prices might be on their way up again. That would be disappointing news to those in Ottawa who, until recently, were fairly certain they had successfully steered the housing market toward a soft landing. Under that scenario house prices were supposed to slowly lose some steam, rather than go through a major correction. Most economists agree that home prices are inflated, and, coupled with high consumer debt levels, pose a risk to the economy.

 

The Canadian Real Estate Association, which represents realtors and tracks the market by way of the MLS, released data Monday that showed that the number of newly listed homes fell 1.2 per cent from July to August. “Led by Greater Toronto, new supply was down in about 60 per cent of local markets,” CREA said.

 

“The number of homes for sale have not kept up with demand and the market moved more in favour of sellers,” Ms. Petramala wrote in a research note. “We continue to be surprised by the lack of listings on the market. The sales-to-listings ratio has moved back to the level reached at the end of last year, when prices were growing 8 per cent to 9 per cent year-over-year. This suggests that following four months of moderation, home-price growth may catch a second wind through the fall months.”

 

In Durham Region the home price growth continued in August. There were 919 sales in August 2014, down 3.8 per cent compared to 955 sales in August 2013. "However, year-to-date, Durham Region has seen 7,704 sales, up 3.7 per cent compared to 7,430 over the same period last year" explained Durham Region Association of REALTORS® (DRAR) President Jane Hurst.

 

August Average Home Prices Durham Region

 

The average price of resale homes in Durham Region in the month of August was $388,690. "August's average price is 7.7 per cent higher than August of last year" stated Hurst. The number of new listings that entered the market in August was 1,209, down 9.4 per cent from 1,323 in August 2013. Listings have decreased and prices have increased over the past year.

 

Hurst stated that so far this year, prices grow, sales remain steady and listings decrease in comparison to last year.


Sources:

 

To learn more about local market conditions, or insight into prices for real estate in Whitby, Brooklin or other areas within Durham Region, please contact me.


Randy Miller

Broker   

Re/Max Rouge River Realty Ltd., Brokerage

905-668-1800 or 905-427-1400


 

 

 

 

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Surprise! No insurance!

 

There is a lot of confusion out there by buyers and real estate salespeople as to what insurance is required when buying a condominium. The mistake is that some condo buyers think that the household insurance is somehow covered by their common expense payment each month. In most cases, it isn't and the buyer will still have to pay for part of the damages, even if they have done nothing wrong.

 

Condominium buildings do have an insurance policy that insures the building and the units but it does not cover everything and there are deductibles involved. It will not cover should damage occur, whether by a leaking pipe, fire or smoke damage. A building insurance policy typically will cover common areas, such as the structure, lobby and elevators, but does not cover an owner’s personal belongings. Nor does it cover any improvements that you have made to your unit or if you damage someone else’s unit or property or someone gets hurt while visiting your unit. As a result, most condominium buyers purchase a policy that provides coverage for their contents, any upgrades that they do to their unit and liability insurance to protect them if someone gets hurt visiting their unit.

 

Upgrades can include hardwood floor, ceramic tiles, carpets, cabinetry, appliances, counters and perhaps a sound system that you installed in your unit. The good news is that you can buy insurance to protect yourself from this type of liability.

 

Unit owners are generally responsible for any repairs and maintenance for anything in the unit itself. For this reason, it is generally advisable to have a condominium inspected by a home inspector to look at the plumbing, HVAC or other systems that may be the unit owner’s responsibility to maintain and repair, should a breakdown occur.

 

If you are buying a townhouse, then generally you will be more responsible for anything that occurs inside your home, so ensure that it is properly inspected before you buy and that you have your own sufficient insurance coverage over items that may not be covered by your condominium policy, such as flooding or sewage backup.

When you are buying a condominium, speak to the management company before and if necessary, the insurance company that insures the building, to make sure you understand what is covered and what isn’t.

 

In every condominium status certificate, there is a summary given of the insurance policy for the building, including any deductibles. One way to protect yourself is to send this certificate to your own insurance company and tell them that you wish to buy extra coverage for the deductibles noted on the policy. A good idea would be to use the same insurance company that your building is using for your own insurance package. This company likely understands the deductibles better than anyone and will make sure that your package covers any gap that may exist in the building insurance policy.

 

If you are buying a condominium as an investment, you still need to make sure that you have this type of insurance protection. Most tenants purchase insurance for their belongings and to cover liability. If you want the tenant to also pay for insurance for the deductibles, you need to say so in your lease agreement and make sure that the tenant provides proof that they have obtained all required insurance coverage before you give them the keys to the unit.


When you understand the insurance you need before you move into a condominium unit, you will be prepared should anything occur later.

 

By purchasing the right kind and amount of insurance before you move into your condo, you will avoid unwanted surprises or assessments if something happens later. If you need any help or have any questions concerning buying a condo, don't hesitate to contact me. 

 

 

Source: thestar.com, Why condo owners need household insurance by Mark Weisleder

 

Randy Miller

Broker    

Re/Max Rouge River Realty Ltd., Brokerage

905-668-1800 or 905-427-1400


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 Smaller is better

 

The traditional dream of a large and spacious home may be becoming a thing of the past. More and more people see the benefits of living in a smaller home. When you buy a house, there are a lot of expenses you have to face beside your new mortgage payments. Heating, electricity, insurance, and property taxes are just some of the additional bills you have to pay when you own a home. And the bigger the house, the bigger are the expenses.  


Of course, there are lots of people who keep buying bigger and bigger homes, because they “outgrow” their smaller one, they receive a promotion at work, they are convinced that they can afford it, they hope to impress others or they think a large home is the home of their dreams. 

But let's look at the main benefits of living in a smaller home:

  • Home maintenance and utility cost. Think about what it costs to heat and cool a 3,200-square foot home. Home-improvement projects such as repainting the exterior, replacing the roof or changing the flooring cost more because of the size of these homes. You will also spend more money to furnish and decorate all of the extra rooms. Although in a small house everything gets used more, there is less to break, and therefore less to repair. A smaller house is cheaper to heat and light, but also cheaper on insulation, windows, and solar. You also save money on insurance and on property taxes.
  • Less debt and less risk.
  • You spend less time on cleaning. Anyone who has owned a house knows the amount of time, energy, and effort to maintain it. Living in a small home means you spend less time on housecleaning and maintenance. When you live in a small house, you can use the extra time to spend with your family.
  • Living in a smaller home is mentally freeing. Buy small and free your mind! When you have a smaller home, you have less space to store belongings. Moving into a smaller home forces you to intentionally pare down your belongings. Living in a smaller home forces you to make choices about what you keep and what you donate, sell or give away. A smaller house is also easier to organize.
  • Smaller homes allow quality upgrades! It costs a small fortune to upgrade countertops or replace cabinets and appliances in a huge kitchen. You have to buy so much more that you may have to make sacrifices in terms of quality. Living in a small house means you can splurge on quality upgrades because you have less to buy.
  • Wider market to sell. A smaller, more affordable house is affordable to a larger percentage of the population than a more expensive one. So small homes may be easier to sell. Energy costs continue to rise. That means energy-efficient homes, especially small energy-efficient homes, will be in high demand in the future. When you need to move, your small home will be much easier to sell than a mega-house with six bedrooms.
  • Family bonds. A smaller home results in more social interaction among the members of the family. People start to realize how cozy, comfortable and inexpensive small houses can be. Smaller homes just feel good, and living in one makes it easier to be close with your family. 

Many people dream of having a large house, but, bigger is not always better, and there are just as many benefits to living in a small house, as there are to living in a big one.

 

If you need help in finding the right home for you in Durham Region, don't hesitate to contact me. Whether you wish to buy a big or a small house, my goal is to get you the best home possible, without compromise at a fair price. With over 20 years of local, full-time experience, I will make the home buying process smooth and worry-free.



 

Randy Miller

Broker   

Re/Max Rouge River Realty Ltd., Brokerage

905-668-1800 or 905-427-1400


 

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The sizzling summer real estate market appears set to remain hot right through the fall.

 

John Andrew, a professor at Queen’s University, is watching with interest for the August numbers that the Canadian Real Estate Association will report in the coming days.

 

Low mortgage rates fuelled property sales in cities across Canada, with Toronto, Vancouver and Calgary seeing the most action, he says.

 

Prof. Andrew, who is the director of the executive seminars on corporate and investment real estate at Queen’s, predicts September and October will bring more of the same.

 

“I don’t think we’re going to see a significant downturn in sales until we see an uptick in mortgage rates.”


And when he says an uptick, he’s not referring to a month or two of gently rising rates – he’s talking about a sustained upward trend.

 

The Toronto Real Estate Board reported that sales rose 2.8 per cent in the Greater Toronto Area in August from a year earlier, while the average selling price rose 8.9 per cent. Prof. Andrew says the increase in sales in August came on a drop in listings. Sales in Durham Region, including Whitby and Brooklin have produced similar rising sales figures.

 

The market is still fairly balanced, he says, but it could tip over to a sellers’ market. He wonders if that, in turn, will encourage more homeowners to list their properties for sale. “As soon as people realize it’s a sellers’ market, they say ‘maybe it’s a good time to sell our house.”

 

Prof. Andrew notes the contrast between this year and last, when a sudden shift in the market came right after Labour Day. Last summer, mortgage rates edged up between June and September. Many people hadn’t been paying attention and that led to a sudden burst of buying in September when people were spurred on by the fear that rates would climb even higher.

 

Fluctuating bond yields have brought about the movement in mortgage rates over the past year.

 

The professor also points out that he used to make a note in his calendar of the days when the Bank of Canada’s interest rate committee was set to meet. He could expect a lot of calls from media on those days. More recently, those meetings have become a non-event, he says, because no one expects the central bank to make a change.


The low mortgage rates expected for the remainder of 2014 create an opportunity for all participants including first time buyers, move up buyers, investors, or by simply allowing people with existing mortgages to pay them off sooner.

 

For opportunities in Whitby and Brooklin and throughout Durham Region, contact me.


 

Randy Miller

Broker  

Re/Max Rouge River Realty Ltd., Brokerage

905-668-1800 or 905-427-1400

 



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House for rent


As a growing segment of the Canadian population watch house prices rise consistently and view the stock market as being far more risky because of movements up and down, owning a rental property seems far more appealing. Some people set out to become a landlord and purchase an investment property, while others choose to retain and rent out their existing home.

 

With a plan in place and the help of professionals,  becoming a landlord can be a wise investment. For many, having a few rental properties is a good substitute for pension or savings toward retirement.

 

Thousands of Canadians rely on residential income properties, whether close to home or abroad, to help them feather their financial nests.

 

Done right, investors stand to reap big rewards over the long haul, industry experts say. But property investment can also come at a heavy price to those who aren’t prepared to learn the market and do the less-than glamorous work of a landlord.

 

If talk about housing bubbles gives you ulcers, or you aren’t willing to answer the phone at 2 a.m. when the tenants call to tell you the pipes have burst, then investing in real estate might not be right for you.

 

“It’s like any business that you want to enter. It’s all about time, money and expertise. If you don’t have the time, you at least have to have the expertise and you have to have the money to make it fly,” says Phil McDowell, a mortgage broker in Calgary.

 

For those who are considering investing in a rental property, there are a few basic rules to keep in mind in order to mitigate the risk of the deal turning sour, says Melanie Reuter, director of research for the Canadian branch of the Real Estate Investment Network (REIN), an investor advisory organization based in British Columbia. The key is to look for a community or region that shows clear signs of growth and economic sustainability.  GTA rental vacancy rates are low, as  steady influx of residents moves to Toronto. Here in Durham Region, vacancy rates are about 2.3 per cent.

 

Ms. Reuter says it is equally important for investors to have a clear idea of the true monthly costs, including mortgage, interest and property tax, as well as potential extras, such as repairs, on-going maintenance costs, condo fees, property management fees, etc. She recommends those considering property investment should also set aside an emergency fund to cover repairs and maintenance, or unexpected vacancies.

 

Many investors choose to save money by doing the management work themselves, but that comes with its own costs. Landlords should expect to put effort into finding good tenants, avoiding bad ones and fielding the overnight phone calls when something goes wrong.

 

“We’ve all heard stories of someone who had the tenant from hell,” says Jason Abbott, a financial planner and president of Wealthdesigns.ca Inc. in Toronto. A real-estate investment fund may be a better option for someone who wants to be involved in real estate without having to manage a property or assume all of the risk, Mr. Abbott says. The one downside is that it can be a lot harder than more traditional funds to access your money should you need it.  “Mr. Britton recommends his clients treat property investment as they would any business. That includes hiring a tax professional to help them report an income property, including expenses, revenues and asset appreciation. Not reporting an income property can land an investor in hot water with Canada Revenue Agency.

 

“If you choose not to report, you are taking the chance you won’t be found out. If you are, it is not going to be pretty,” Mr. Britton says.

 

Mortgage rules require investors to have a minimum down payment of 20 per cent and to have proof through tax returns of the their income and assets. In most cases, it is important to have secure employment to prove you can cover a portion of the mortgage at any time. “You should be able to demonstrate that you’ve got a reserve fund available to you should you have a major repair or if the tenant skips,” Mr. McDowell says.  Homeowners who are interested in an income-generating property, but don’t have 20 per cent to put down, may want to consider a basement or suite within their own home, he adds. A primary residence with a rental suite requires a 5-per-cent down payment.

 

A growing number of my clients are purchasing investment properties to secure their future. Purchasing an investment property is a business decision and not a rash or emotional purchase. I can help you avoid the pitfalls and mistakes when buying an investment property here in Whitby, Brooklin, Oshawa, Courtice or Bowmanville. The expansion of Highway 407 is madding Durham Region more accessible and it is boosting house prices and rental rates. The refurbishment of Darlington will create a demand for rentals, creating opportunity for investors. If you are ready to buy an investment property and become a successful investor, contact me for  a consultation.


 



Randy Miller

Broker  

Re/Max Rouge River Realty Ltd., Brokerage

905-668-1800 or 905-427-1400

 

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