REDISCOVER REAL ESTATE

Toronto House Prices are on Fire!

Toronto home sales caught fire in the first half of May, but at this frenzied pace, homeowners better hope that fire doesn’t burn everything down.

The latest numbers from the Toronto Real Estate Board suggest a market so strong that it might just be overheating: Sales volumes jumped 19.6 per cent compared to the first half of May in 2013, and prices followed.

The average cost to buy a house in Toronto, including condos, soared to $663,787, up 11.5 per cent in the space of a year. In the Greater Toronto Area, prices were up 8.9 per cent, to $542,047 on average.

Condo prices in Toronto were up 12.2 per cent, to just under $400,000 on average, while single-family homes jumped 13 per cent to $966,867. (By Teranet’s measure, single-family houses have already surpassed the 41 million mark.)

So is this a sign of a strong, healthy market or a sign of extreme overheating?

Compare those house prices to inflation, which was running at a 1.5-per-cent clip last time StatsCan checked, and to wage growth, which is clocking in at about 2.3 per cent per year. Toronto’s house prices are far out of proportion, and affordability is inevitably deteriorating.

Toronto’s real estate board isn’t sounding the alarm just yet. >>read full article HERE

 

Looking to invest, sell or refinance? Know your options. I can help! Direct line: 416-219-6662

 

 

 

Thinking of selling your home without a Realtor?

Selling a home by yourself can mean more money in your pocket, but it’s a lot of hard work and there are some very important things to think about. Mark Weisleder, a reputable a Toronto real estate lawyer believes that in many cases you will be better protected and make more money selling your house if you use an agent. Not always, but in many cases.

Here are five key factors to consider when thinking of selling a property without a real estate agent:

You don’t have to pay upfront: Do-it-Yourself marketing companies are not real estate agents. You usually pay $1,000-to- $2,000 up front, for pictures, videos and to have your home listed on the MLS system. However, you get no money back if your home doesn’t sell. With a real estate agent, if your home doesn’t sell, you pay nothing, even though the agent may have spent a lot of time marketing and using all of their own and their company contacts to sell your home.

A bidding war is unlikely: Bidding wars are the norm in the GTA and other parts of Ontario. In virtually all cases, the home is sold by a real estate agent. The reason is that it takes experience to price the home properly. Second, the process is fair because no one knows what anyone else is bidding. With a private seller, there is no duty of confidentiality, so the seller can tell one buyer what another buyer is bidding. Buyers do not trust the process so there is no bidding war. 

You negotiate on your own: When you do it yourself, it is difficult to know what a fair price is for your home. You might have to pay an appraiser to find out. When a buyer hears that you are saving commission, they will want to split the savings. So you don’t get all the commission savings and you also have to negotiate with a buyer who is likely represented by a real estate agent. This agent will use all their experience to figure out how low you will go, while giving nothing away about their own buyer.

Not knowing your obligations: You have to disclose problems with your home and you cannot hide or cover up anything. Otherwise, you can still be sued after closing. Who wants a court fight long after you move?

Lenders are more cautious when they see a private deal: I have seen deals collapse this way. In one case, the lender sent their own appraiser because they were concerned the buyer paid too much money. The appraiser agreed and the buyer’s loan commitment was cancelled. The deal died. In another case, the seller was worried the buyers did not have proper financing. They wanted more proof about the buyer’s financial situation than the buyer was willing to give. Lawyers became involved when things could not be worked out amicably. When buyers are represented by agents, they are usually pre-qualified in advance so the seller can have comfort that they will have the money available to close the deal on time.

When you’re out for a walk this weekend have a look at the For Sale signs and see how many are represented by realtors. There’s a reason for that.

By all means, try and sell your house on your own, just beware that it’s not as easy as it looks.

By: Mark Weisleder, Toronto Star May 9, 2014

Mark Weisleder is a Toronto real estate lawyer. Contact him at [email protected]

Thinking of selling? Know your options. I can help! Direct line: 416-219-6662

 

 

 

 

Investors to face tighter access to mortgage insurance

Investors who rely on mortgage default insurance for their purchases may find it harder to win, with the Canadian Mortgage and Housing Corporation (CMHC) cutting the number of insured mortgages it will issue in 2014.
 
CMHC announced in its 2013 annual report that it expects to have a total of $545 billion worth of insurance in force by the end of the year.
 
For the 2013 fiscal year, the crown corporation announced as of December 31 it had a total of $557 billion insurance in force, a $9 billion decrease over prior year. The total number of insured loans was not to exceed $600 billion, under section II of the NHA.
 
The number one insurer of mortgage-backed insurance also announced that it expects profits to drop in 2014.
 
“Projected Net Income is expected to decline from $1,507 million in 2013 to $1,297 million in 2014 and, in subsequent years of the planning period, to range between $1,248 million and $1,280 million as a result of lower revenues due to lower volumes combined with a slightly upward trend in insurance claims,” the report claims.
 
This, despite the fact that all mortgage insurers hiked their rates by 15 per cent effective May 1 of this year.
 
The report followed news that as of May 31 CMHC will no longer insure second homes and self-employed individuals who do not have third party income verification.
 
“CMHC helps Canadians meet their housing needs and contributes to the stability of the housing market and finance system” Steven Mennill, Senior Vice-President, Insurance with CMHC announced at the time of the cutbacks. “As part of the review of its mortgage loan insurance business, CMHC is evaluating its products and services to ensure they are aligned with these objectives.”

Source: Canadian Real Estate Wealth

Looking to buy and you're a first-time home buyer? Know your options. I can help! Direct line: 416-219-6662

 

 

 

Land transfer tax carries huge costs for Toronto, report says...

Study commissioned by Ontario Real Estate Association claims municipal home sales levy has led to a $2.3B drop in economic activity, and repealing it would create thousands of jobs.

Toronto could see a $2-billion economic boost — and the creation of 12,000 new jobs over the next five years — if it repeals the municipal land transfer tax, says a new report.

“It’s bad for our economy and bad for homebuyers,” says Costa Poulopoulos, president of the Ontario Real Estate Association, which commissioned the report, released Tuesday.

It found that Toronto has seen an estimated decline of more than 38,000 home transactions since the tax was imposed in 2008, making home ownership more expensive and Toronto the only city in Canada where homebuyers are double-taxed: they have to pay both a municipal and a provincial land transfer tax on the purchase of a home.

That loss of sales has translated into a roughly $2.3-billion drop in economic activity in Toronto since 2008, and a $1.2-billion reduction in GDP, the report notes. It also says there would be nearly 15,000 more jobs in sectors from real estate to law to furniture and appliances stores without the Toronto-only land transfer tax.

The economic analysis was done by Altus Group Economic Consulting, relying heavily on two previous studies: a 2012 C.D. Howe Institute report that estimated the impact of the tax on housing transactions, as well as a 2013 study for the Canadian Real Estate Association that examined the economic impact of a typical house transaction in Ontario. >> full article here

By: Susan Pigg Business Reporter, Published on Tue Apr 29 2014

  

Looking to buy? Know your options and costs. I can help! Direct line: 416-219-6662