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Posts in First-time buyers

New listing: bungalow on Valia Rd **SOLD**

July 7th, 2014 Posted by First-time buyers, SOLD!! No Comment yet

This bungalow is perfect for the first time buyer! Recently renovated (pictures coming soon!), it features 3 bedrooms, 2 bathrooms and 2 kitchens. Improvements include a new upstairs kitchen (granite counters, porcelain tile, brand new stainless steel appliances) and bathroom (new tile and vanity), re-finished hardwood floors and a renovated basement kitchen. The house is freshly painted with new trim throughout.

Set on one of the larger lots in the neighbourhood (56x127ft), the property features a huge back yard and a private drive for up to five vehicles. The back deck has a new railing and is freshly stained.

The local schools are William P Miller PS (K-8) and Sir Oliver Mowat CI. Close to shopping, parks and the TTC! There’s no ‘hold-back’ on offers, so if you want to see this one call me today!

 

 

Bully offers

February 5th, 2014 Posted by Commentary, First-time buyers No Comment yet

Before I started blogging I used to send out an e-newsletter to my clients. Way back in January, 2008, I wrote a piece about bully offers. At the time, they were a relatively new phenomenon. In the years since, the practice has surged and waned, never going away completely, but not always playing a prominent role in the market place. Over the last few weeks we have seen a handful of big plays, resulting in some eye-popping numbers. It’s hard to say how much influence they have on the overall monthly numbers, but it is fair to say that the bully offer is something to consider/watch out for – depending upon your perspective. Anyway, here (below) is what I wrote back then:

As some of you have experienced recently, there is a relatively new phenomenon occurring in the Toronto real estate market: the Bully Offer. By now, most market watchers are familiar with the typical marketing cycle for homes listed for sale. The listing is posted this week, an open house is scheduled for the weekend, and offers will be reviewed next week. In the hectic Toronto market it has become important to make sure that we do sufficient marketing of a listing to ensure as good exposure as possible; we don’t want a listing being scooped up in one day. That leaves everybody wondering if the listing could have sold for more money – and maximizing the proceeds from a sale is the listing real estate agent’s duty to the Seller.

This procedure has basically become the de facto standard in recent years. However, a counter-strategy has emerged that can really make things difficult for everybody. A “bully offer” is one registered prior to the scheduled date – often several days early – to be presented ASAP. The Listing Agent is obliged to present the offer to the Sellers. The ball is then in the Sellers’ court: do they take the ‘bird in hand’, or wait for the scheduled date in the hopes of getting competition? To be attractive to the Seller, the bully offer is typically (almost always, in fact) for more money than the asking price, and often ‘firm’, meaning with no conditions attached. It’s a tough decision that can only be made by each Seller on a case-by-case basis.

What about other potential Buyers? The Listing Agent is obliged to inform only Buyer Agents who have registered an offer intended for the scheduled date. Since we usually don’t register until the scheduled day of offers, every other Buyer who has looked at the house may be left out. However, it seems most Listing Agents are taking the time to notify every other agent who has shown the property. (Also, I typically call the Listing Agent if my Buyers express any interest at all in a property; I ask to be kept up to date with changes or developments.) A bully offer puts tremendous pressure on the other Buyers, who may have been counting on more time to make their decision, arrange financing, etc. But, that’s the point of the bully offer – to ‘box out’ the competition.

How do you beat a bully offer? Firstly, be as ready as you can be to make a purchase: have your financing pre-approved and your deposit money readily accessible. Secondly, if you are interested in a property, consider a pre-home inspection. That costs money, and you might still get out-bid, but that will allow you to make a ‘firm’ offer, if necessary. Thirdly, try not to fall in love with any particular house! You may not get the house, and if you are emotionally committed to it you risk disappointment. (Remember: in any negotiation, you have to be ready to walk away if you don’t get what you want/need.) If you are ready and willing to make a competitive offer, you have just as good a chance against a bully offer as any other situation.

Being prepared to deal with bully offers is now part of the whole buying process. No matter what we encounter, I always recommend that my clients be flexible and co-operative in negotiations – even if the other side starts to get prickly. Staying cool and ‘professional’ helps get you through even the most difficult negotiations.

***

Toronto Real Estate – What’s going to happen in 2014?

January 13th, 2014 Posted by First-time buyers, Interest Rates, Market Commentary, Mortgage No Comment yet

Twenty-fourteen is shaping up to be another great year for the Toronto real estate market. As I have said many times before, Toronto is unlike other markets. It drives me nuts when people talk about the ‘Canadian real estate market’, as if trends in smaller cities and towns have anything to do with Toronto. Our economy is diverse and our population continues to grow, so there’s no mystery as to why residential real estate prices also keep growing. Of course it makes sense that the real estate market here is out-pacing many markets elsewhere in the country. How could it not?

Add to the picture this year the improving US and global economies. The jobs numbers that came out last week in Canada (net losses) and the US (weaker than expected growth) show that the ‘recovery’ is still, well, in recovery. However, there is a growing sense of inevitability that the US will finally show some upward momentum this year. Even Europe seems to have stumbled towards stability. As the American economy grows, so do Canadian exports, which will give a boost to our own mostly-stable, but slow-growing, economy. Once real growth kicks in we’ll be in for a few good years. (How many is anybody’s guess. This C.D. Howe report indicates that the pre-recession growth cycle was 16 years. We should be so lucky this time around!)

Another major factor this year is interest rates. I think that we are probably still on course for flat rates this year and into next. Even when rates do start to rise, they’ll most likely rise slowly, so as not to jolt the economy. We’ve got another few years of near-record low rates ahead of us. (My first mortgage, in 2001, was for 8.9% – more than double current rates – which was considered a great deal in those days. Perspective is important!)

The supply shortage that has been a feature of the Toronto market since late 2008/early 2009 has yet to ease. As a full-time, professional Realtor I spend a lot of time talking to other agents. As we start 2014 there is a continuing urgency among my colleagues to find homes for our buyer clients. The view ‘on the ground’ is that tight supply will continue to drive prices up, particularly for single family homes and small income properties. I believe that it’s safe to expect a 5-7% year-over-year increase in 2014.

On that latter note, specifically, I continue to encourage my clients, especially first-time buyers, to consider an income property. In the short term, the income will help you afford not only the purchase (assuming you live there, which is an important factor), but a decent lifestyle. If kids are in the plan, or even if you just want more privacy down the road, you can keep the income property and use the equity to move on at some point. Not surprisingly, though, duplexes and triplexes are in high demand/low supply. It’s not a slam dunk, but it’s definitely worth thinking about.

Mortgage rate tip: one of the big bank mortgage pros that we work with told a group of Realtors last week that he expects a mortgage rate ‘sale’ some time in February or March. It has happened in each of the last few years, so he thinks it will happen again. Watch for it, and if you are in the market, try to nail down an interest rate deal before the busy spring market. 

5 More Buyer Tips

January 10th, 2014 Posted by First-time buyers No Comment yet

The ‘First 5‘ buyer tips I posted previously are just to get a buyer started. There’s lots more to it. Here are five more topics to consider.

6) Hire a home inspector. Please, hire a home inspector. They don’t have X-ray vision, and they are not clairvoyant, but they will poke around a house and look for problems – and potential problems. Even the best house will have a few bumps and bruises. Knowing what they are will help you prepare to deal with them. Also, most inspectors are fountains of knowledge about home systems (furnace, A/C, plumbing, roofs, etc.), so they’ll give you a tutorial about your prospective new house.

7) Know the neighbourhood. If it’s new to you, spend some time there (walking, shopping, or just hanging out) and get to know it. Review comparable sales so that you can compare each house you see to recent activity. Stalk it (but not in a creepy way). Walk up and down the street; talk to local residents. Tell them that you are thinking of buying that house for sale and ask what they love about the neighbourhood. Ask if there are any concerns. You’ll have to beware goofy gossip, but the fact is that you can get great info just by chatting with the locals.

8) Map the route to work (or school, or wherever). Take note of transit options from the house of interest to where you need to go and, if you drive, your routes (and escape routes) both to work and out of town.

9) Get focused. It’s normal to start out with a few target neighbourhoods. But, over time, as you see more houses and spend more time on your search, do your best to narrow your search to (ideally) the one area where you are sure you want to be. Of course, you may pick one area, look there for a while, then feel the need to move on – for example if prices move out of your budget. If that happens just take a step back, re-evaluate and refocus on another neighbourhood. 

10) Stick to your budget. This is obviously important, but especially so these days. There seems to be another wave of ‘light’ appraisals sweeping the city. It’s not that buyers are ‘over-paying’; that’s an exceedingly rare thing in Toronto. The issue is skittish (and sometimes out-of-area) appraisers… no offense to any appraisers out there. They have a job to do, and that’s to help the lenders manage their risk. I think that the market sometimes  just moves faster than their comfort level. As a buyer, you don’t want to find out at the last minute that your lender thinks that house is actually worth $25,000 less than you agreed to pay. In that case, you’ll have to somehow come up with that $25,000, and that’s easier said than done. So, be careful. 🙂

There’s always more, but these ‘next five’ basic principles will help you with your new home search. Keep reading my blog for market info and more tips. Also, check out my Facebook page, follow me on Twitter – and please do call me if you want more help!

 

 

‘First 5’ Buyer tips

January 7th, 2014 Posted by Budget, First-time buyers, Mortgage pre-approval No Comment yet

The Toronto real estate market is in a sustained ‘sellers’ market state. Buyers have to be prepared to take action when they find a house they want. For you first-time buyers (and those of you who haven’t done this in a while), there’s lots that you need to know – not just about the market, but about the process. We’re not talking rocket science here, but almost every purchase or sale has something unique about it. Knowing the basics will help you to prepare yourself for your experience.

The following is by no means a comprehensive list; rather, it’s sort of a “Top 5” – or better yet, a “First 5” things you should know:

1) Be an educated Buyer. Learn as much as you can about the market before you buy. (I help all of my clients with this stage – and by reading this you are off to a great start!) The Toronto real estate market is extremely competitive, and you don’t want to be caught napping….

2) Be honest and open with your Realtor®. I work for you and can best help you if I have a good understanding of your needs. Once I know your needs, my job is to be your objective guide in the process, and to ensure your needs and interests are met and protected. The more info I have from (and about) you, the better I can do my job.

3) Get pre-approved for your mortgage as soon as possible. This helps you to determine your budget, and locks in today’s best rate for you. I’ll refer you to a few mortgage professionals, if you want. You speak to them all and pick the one you think is the best fit for you.

4) Buy the best home you can afford in the best neighborhood you can afford. You are almost always better off with the least expensive home in the area rather than the most expensive. That said, I strongly recommend that you be conservative with your budget.

5) There are no perfect homes. Be ready to make compromises and concessions. Know what’s most important to you and ‘give’ on those things that aren’t.

There you have it: five basic principles to get you started on your new home search. Be sure to visit my blog again for more tips, check out my Facebook page, follow me on Twitter – and please do call me if you want more help!

St George St: 1 bedroom condo **SOLD**

May 13th, 2013 Posted by Condos, First-time buyers, SOLD!! No Comment yet

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This great one-bedroom condo flat is located in The Annex, an area famous for its tree-lined streets and grand old mansions. Many were built in the unique ‘Annex style’ (a mix of Richardson Romanesque and Queen Anne Style), a fact not lost on the developers of Lennox Mews (E.J. Lennox being a famous architect credited with the origin of the style).

The product of a 1997 conversion project, 228 St George St is steeped in the history of the area, with features that reflect the era of its original construction. The exterior is characteristic red brick, the main foyer is rich with wainscoting, but the interior (of unit 5) is modern – while maintaining that classy feeling. East- and south-facing, unit 5 features lots of windows, wood floors and trim, a renovated kitchen and Ensuite laundry.

Located just a few blocks north of Bloor St, 228 St George is walking distance to U of T, Yorkville, museums, the arts, restaurants, pubs, shopping and public transit – perfect for students, first-time buyers and professionals who want to live in the heart of the city and enjoy the charm of old Toronto.

** SOLD **

Rosevear Ave: Three bedroom starter – SOLD!!

May 7th, 2013 Posted by Buying opportunity, First-time buyers, SOLD!! No Comment yet

15RosevearExterior

This three bedroom home is perfect for a first-time buyer. Located just off the Danforth between Main St and Victoria Park Ave, it has been steadily improved over the last few years. The home now features a new kitchen with stainless steel appliances, new hardwood on the main floor, brand new broadloom up the stairs and throughout the second floor, updated 2nd floor bath, and a main floor laundry room off the kitchen. (Full list of improvements available.)

The location offers quick access to shopping, public transit, local parks and schools (Secord ES, D.A. Morrison MS, East York CI, Danforth Collegiate and Tech. Catholic: St Brigid). The basement has both front and back separate entrances, and the front pad parking is legal. All together, this house is a tremendous value.

Junior 1-bedroom at 33 Lombard St SOLD!

February 19th, 2013 Posted by Condos, First-time buyers, Hot Listings No Comment yet

The Spire condo at the corner of Church and Adelaide is a fantastic place. Rich with amenities, it retains an air of modesty (dare I say class) that is sometimes lacking in downtown Toronto condominiums. In a town thick with condo towers, The Spire managed to impress one local critic. He describes it in the most appropriate terms.

This unit is high enough to offer a truly impressive view of the city (and to make me just a bit weak in the knees…). While there seems to be an almost-obsessive urge among condo buyers to seek out the south-facing condo, the north view is stunning and dynamic – especially at night. From The Spire one gets a really neat view straight up Church St all the way to distant Bloor St. Most local buildings don’t challenge The Spire’s height, so one can enjoy gazing eastwards towards Leslieville and the Beach, or west towards downtown for a different kind of impressive sight.

Gorgeous St James Cathedral and park are just across the street. The St Lawrence Market is a short walk south, as is the St Lawrence Centre for the Arts. Union Station and the Eaton’s Centre are also within walking distance, and TTC options abound. I used to work just a block away, so I can also assure you that there are plenty of pubs, restaurants (and shops) all nearby as well 😉

A junior one bedroom with a full-sized balcony, the unit features wood floors, stainless steel appliances, floor-to-ceiling windows, a full 4-piece bath with a soaker tub, his-and-hers closets and Ensuite laundry. It’s perfect for the urban first-time buyer (or someone looking for a pied-a-terre…).

**UPDATE** The Toronto condo market isn’t as gloomy as some folks think. We received two offers on this great little unit. Pricing and presentation are super important – always. Call me if you need help!

 

HST Applies to Commission Paid to Realtors

February 14th, 2013 Posted by Commentary, First-time buyers, For Sellers, HST, Uncategorized No Comment yet

Professional real estate services are a ‘service’ like any other: the commission you pay to the service provider is subject to HST. This may seem obvious to some people, but I have been surprised a couple of times over the years to find that some folks didn’t realize that. Of course, we can usually review the facts in a simple, straight-forward conversation, but I think it’s important enough to mention here.

When I first started in real estate in 2001 my services were subject to just the 7% GST (which declined over time to 5%). The old Province of Ontario sales tax didn’t apply. However, when the taxes were merged into the HST, the rate went to 13%. Please note that in this example the tax applies not to the sale price of the house/condo, but rather to the commission paid for representation by a Realtor.

For example, in the case of a sale price of $400,000, a seller with an industry-standard 5% commission contract with her Realtor will pay $20,000 to the listing Brokerage (which will typically pay half of that amount to the co-operating Brokerage that represented the buyer). It’s that $20,000 that is subject to the HST. In this example, the seller has to pay $2,600 HST. The listing Brokerage collects that amount in trust for the Realtor, who then files with CRA and remits his taxes directly to CRA. (As a ‘small business’, I have an HST account, and can claim back some of the HST that I pay out during the course of my business. However, the rest goes to CRA.)

This is all separate from the HST that is payable on new construction. That HST is charged on the value of the new home, and is often built-in to the list price. Some of it is rebated to first-time buyers.

Here’s a bit more information about the HST in Ontario. If you have any questions about HST charged on real estate services, please do feel free to contact me. Either way, don’t forget that you will have to pay HST on the commission you pay your Realtor. 🙂

Condos vs. houses

October 10th, 2012 Posted by Buying opportunity, Condos, First-time buyers, Housing, In the media, Market Commentary, Mortgage pre-approval No Comment yet

As I have noted recently – and as has been widely reported in the media – there are two very different markets in Toronto real estate these days: condos and houses. Houses continue to increase in value, due in large part to relatively low supply, but I believe also because they appeal to a broader demographic. Condos, on the other hand, are in great supply (with many new projects situated downtown), often appeal to a different demographic (e.g. folks who can get by in 2 bedrooms or less and don’t want a yard), and have become the ‘whipping boy’ for a whole host of critics (banks, politicians, the media, etc.). It short, it ain’t a great time to be a condo in Toronto!

For those reasons, it’s understandable that buyers have become wary of condos. However, if a condo suits your lifestyle, and if you see the investment value (building equity, capital appreciation, potential income holding down the road) you shouldn’t allow yourself to be scared away. You know (at least, you *should* know…) your financial and life situation better than anybody else, so you can make your own call. Look at this period as an opportunity.

The market is somewhat ‘sideways’ these days – not going up, but not likely to go down much, either. Perhaps at some point we’ll hear about a construction project being cancelled, all the talking heads will say “I told ya so”, and the supply will adjust – and thus shall balance return! 😉

In the meantime, buyers can shop for value. Be extremely careful about your financing, as lenders are apparently getting skittish about condos. Some are afraid of a significant correction, and that’s their prerogative, ’cause it’s mostly their money. Be sure that your lender knows you are shopping for a condo, and ask if that affects the down payment they require as a term of your pre-approval. Whatever your max mortgage load is, be sure to spend a comfortable bit below that. Look for value in the market, and try to negotiate a better price.

These opportunities don’t happen very often in Toronto – the last one was in late 2008-early 2009 – and this one is limited to condos. We figure it will last 3-6 months, but I wouldn’t be surprised if it was shorter.

What if you are a seller? People sell for a million different reasons, many of them forced (e.g. job or relationship change). If you really have to sell it’s important to price properly. It really doesn’t matter what a comparable unit sold for 6 months ago. What sold last week – last month at the most? Price to the current market.

Of course, if you don’t really have to sell now is not the time to ‘test the market’. By doing so you are wasting your own time (inconveniencing yourself, or perhaps a tenant) and contributing to the current supply situation. Perhaps you could try again next year….

Whatever happens in the next few months, I am certain of this: the condo sky is not falling. I don’t know why so many people freak out whenever there’s a market correction. Every market (from condos to oil to pork bellies) goes through periodic corrections. As long as we stay within our means (which most of us do), and plan for contingencies, we’ll all be fine. After all, this isn’t exactly the Zombie Apocalypse, ya know!