Top Real Estate Lessons of 2012

                                                      By Mark Weisleder
Fri Dec 28 2012

Buyer Beware

Between signing a real estate deal and closing, there are plenty of things that can go wrong. By being prepared you can make sure that your deal is kept on the straight and narrow.

Here are some recurring themes I saw this year.

1. Appliance disappointments


Sellers will only guarantee that the appliances and home systems they leave behind will be working on closing. If something breaks down shortly thereafter, it is not the seller’s responsibility. Buyers should consider insurance against these types of breakdowns. Some companies that provide these policies are Canadian Home Shield, Resrx and Direct Energy. As with any insurance policy, check the deductibles and what is and what is not covered.

2. Closing day disappointments


Sellers have to move out as soon as title changes hands. This can be as early as 9 a.m., although most deals close between 1 p.m. and 4 pm. If the seller is still there after the title changes, they can be liable for any extra moving costs the buyer incurs.

Sellers must also be sure they give their lawyer the right keys so the buyer can get in. On more than one occasion in my experience, the seller left one key but there were two locks on the front door. The buyer had to pay a locksmith and sent the bill to the seller. The same goes for junk left behind. If you leave it, you may have to pay the costs to remove it.

3. Arrange bridge financing


Most buyers want to close their sale and purchase on the same day. Sometimes it doesn’t go smoothly. For example, if the person buying your home is late closing, your lawyer may not be able to get the money to the lawyer who is acting for the person selling their home to you in time. This can result in the seller cancelling the deal if you are late, or charging a penalty to extend it for another day. In addition, you will likely pay additional moving costs as your seller may not have left the home by the time your movers arrive.

Bridge financing gives you the ability to have the funds on hand if needed and merely pay interest on the money for one or two days.

4. Appraisal policy requirements


More and more lenders are requesting that an appraisal be done a few days prior to closing, after the buyer has waived their financing condition. If the appraisal says your home is not worth what you paid for it, they will not lend you what you expected, and you will have to come up with this additional down payment yourself. This can be disastrous at the last minute.

Ask about your lender’s policy regarding appraisals before you apply for any mortgage loan. Make sure they will provide all approvals before you have to waive any finance condition.

5. The new home HST rebate


People who buy a new home or condominium from a builder must understand that the HST rebate is built into the sale price. The builder will get this money, after closing, from the Canada Revenue Agency (CRA), so long as you move into the home. If you are not moving in, but intend to rent it out or resell it immediately, you will have to pay this HST, typically between $20,000 and $30,000, to the builder on closing. Otherwise CRA may chase you for the money later.


So this is just some of the things you need to be aware of when purchasing a home.  It is always best to consult your Realtor if you have any questions about any of these things. 
By being properly prepared in advance, you should enjoy a positive home closing experience in 2013.



Happy New Year

Happy New Year 2013

As 2012 comes to an end, I want to take a moment and thank each and everyone of you for friendships, your business and your support and laughter.   May 2013 bring you all great success, good health and magic moments to make memories that will carry you through the years to come.   

Remember, people may never remember what you said but they will always remember how you made them feel … xo

To your success,
Michelle Makos

First Time Buyers – Tread Carefully

Your government is increasingly worried about you getting into the housing market, if you haven’t figured it out by now.
Ottawa has made it harder for you to get credit and is trying to limit how much debt you can take on. Has the message sunk in yet? The real estate industry says yes, and points to a dramatic drop in sales over the past few months as proof new mortgage regulations have stifled the market.
The lesson for consumers is to tread slowly.
It’s a reality check for a lot of buyers in the market for what they could realistically afford.

To find out more about this … read more

Thinking of Selling? Get a free home evaluation

Selling My Home
If over the holidays, you should decide that you need to make a move…. let’s talk.  I can give you an idea of what you need to do to prepare your home for the upcoming Spring market and to get the most amount of money for your home.  Spring market starts soon……..let’s get together and look at your options.
Feel free to email me at michelle.makos@rogers.com or call me at 905-831-3300 or 416-300-3004.  

Most Common Selling Mistakes

Thinking of Selling Your Home in 2013?

What are the five most common mistakes people make when listing their home for sale?   Look and listen.
Have a question?  Call me or email me at michelle.makos@rogers.com.    If you would like a free home evaluation, let me know.   I am here if you need my help.

Real estate is my business.  I treat every client like they are my only client.  It is your biggest investment, choose someone who cares about YOU.   Have a super day and wonderful 2013.  Cheers, xo

How much extra do I need to close my deal?

Closing Costs

Closing costs are the additional charges you will need to have money for when your house closes.   Many people are often surprised at the additional costs over and above the price of the home. 
According to the CMHC and Genworth Financial you should have at least 1.5% of the purchase price for closing costs in addition to the down payment (have around 2.5% to be on the safe side). The costs vary among provinces and cities.
Home Inspection Fee Generally Required with Resale Homes
Certified Home Inspector
Below you will find a brief explanation of these costs. Please note these are some of the closing costs you may encounter depending on your specific situation. Use this as a guideline then talk with your lawyer who can provide a more realistic estimate for your situation.

Appraisal Fee Generally Required with New Homes

An appraisal provides the lender with a professional opinion of the market value of the property. This cost is normally the responsibility of the homeowner and it can cost between $100 – $300.

Home Inspection Fee Generally Required with Resale Homes

A qualified home inspection, top to bottom, is for the benefit of the buyer. A home inspection can cost anywhere from $300 – $400 and is well worth the investment. When hiring a home inspector make sure the inspector has liability insurance just in case they overlook something.

Fire Insurance

Mortgage lenders require a certificate of fire insurance to be in place from the time you take possession of the home. The amount required is generally the amount of the mortgage or the replacement cost of the home. This cost can vary on the property size, amount of coverage, the insurance company and the municipality. The cost can vary anywhere from $250-$600 annually for most properties.

Provincial Sales Tax on Mortgage Insurance

If your mortgage is insured, (CMHC or Genworth Financial), you will be required to pay the applicable taxes on the insurance premium on closing. While the insurance premium can be added to the mortgage amount, the tax must be paid at closing.

Land Survey Fee or Title Insurance Fee

A recent survey of the property is usually required by lenders. If one is not available the cost can range between $600 – $900 for a new survey. In lieu of the survey most lenders today will accept title insurance which can cost considerably less.

Legal Costs and Disbursements

Lawyers and notaries charge fees for their services involved in drafting the title deed, preparing the mortgage, and conducting the various searches.
Disbursements are out-of-pocket expenses incurred during the process such as registrations, searches, and supplies. Shop around or ask your Realtor, some are cheaper than others.

Land Transfer Tax

Most provinces charge a land transfer tax payable by the purchaser. The amount varies depending on the province. Land transfer tax is based on the purchase price. First time home buyers purchasing a new or re-sale home may be entitled to a refund.

New Home Warranty

Land Transfer Tax
Added expenses
In most provinces new homes are covered by a new home warranty program. The cost to the purchaser for this warranty is approximately $600 and should the builder default or fail to build to an agreed-upon standard the fund will finish or repair the deficiencies to a maximum amount. For more information on Ontario new home warranty visit http://www.tarion.com.

HST

HST is payable on the purchase of a newly constructed homes only. If you are purchasing a new home make sure you know who pays this, you or the builder. On the offer the purchase price will say “Plus HST” or “HST Included” and who gets any HST rebates. Many builders have included this cost into the purchase price so the buyer does not have to come up with it at closing.

Closing Adjustments

An estimate should be made for closing adjustments for bills the seller has prepaid such as property taxes, utility bills, and other charges. Any bills after the closing date are the responsibility of the purchaser. A lawyer will let you know what they are once the various searches have been completed.

3 Deadly Mistakes Every Homebuyer Should Avoid

3 Deadly mistakes every homebuyer should avoid.

Deadly Mistake #1: Thinking you can’t afford it.
Today, buying the home of your dreams is easier than ever before.  Many people who thought that buying the home they wanted was simply out of their reach are now enjoying a new lifestyle in their very own new home. 

Buying a home is the smartest financial decision you will ever make.  In fact, most Canadian home owners would be financially broke at retirement if it wasn’t for one saving grace – the equity in their home.  Furthermore, mortgage rates are more flexible today than ever and tax allowances favor home ownership.

Real estate values have always risen steadily.  Of course there are peaks and valleys, but the long term the trend is a consistent increase.  This means that every month when you make a mortgage payment the amount that you owe on the home goes down and the value typically increases.  This owe less-worth more situation is called equity build-up and is the reason you can’t afford not to buy.

Even if you have little money for a down payment or credit problems, chances are that you can still buy that new home.  It just comes down to knowing the right strategies, and working with the right people.  See below.

Deadly Mistake #2: Not hiring a buyer’s agent to represent you.
Buying property is a complex and stressful task.  In fact, it is often the biggest single investment you will make in your lifetime.  At the same time, real estate transactions have become increasingly complicated.  New technology, laws, procedures and competition from other buyers require buyer agents to perform at an ever-increasing level of professionalism.  For many homebuyers, the process turns into a terrible, stressful ordeal.  In addition, making the wrong decisions can end up costing you thousands of dollars.  It does not have to be this way!

Work with a buyer’s agent who has a keen understanding of the real estate business and who is on your side.  Buyer’s agents have a fiduciary duty to you.  That means they are loyal to only you and are obligated to look out for your best interests.  Buyer’s agents can help you find the best home, the best lender and the best inspector.  Best of all, in most cases, the buyer’s agent is paid out of the seller’s commission, even though he/she works for you.

Trying to buy a home without an agent at all is, well… unthinkable.

Deadly Mistake #3: Getting a cheap inspection.

Buying a home is probably the most expensive purchase you will ever make.  This is no time to shop for a cheap inspection.  The cost of a home inspection is very small relative to the home being inspected.  The additional cost of hiring a certified inspector is almost insignificant.  As a homebuyer, you have recently been crunching the numbers, negotiating offers, adding up closing costs, shopping for mortgages and trying to get the best deals.  Do not stop now.  Do not let your real estate agent, a patty-cake inspector or anyone else talk you into skimping here.  

NACHI front-ends its membership requirements.  NACHI turns down more than 1/2 the inspectors who want to join because they can’t fulfill the membership requirements. 

NACHI certified inspectors perform the best inspections by far.  NACHI certified inspectors earn their fees many times over.  They do more, they deserve more, and yes they generally charge a little more.  Do yourself a favor…and pay a little more for the quality inspection you deserve.

What is Title Insurance and Why Do I Need It?

Title Insurance Explained

Title insurance is growing in popularity in Canada. But what is it exactly? Should you get it? Do you need it? Whether title insurance is right for you is something you should discuss with your lawyer, as it depends on the circumstances of your transaction. This article will provide you with some background information about title insurance to help you make an informed decision.

Title to Property

Title is the legal term for ownership of property. Buyers want “good and marketable” title to a property – good title means title appropriate for the buyer’s purposes; marketable title means title the buyer can convey to someone else. Prior to closing, public records are “searched” to determine the previous ownership of the property, as well as prior dealings related to it. The search might reveal, for example, existing mortgages, liens for outstanding taxes, utility charges, etc., registered against the property. At closing the buyer expects property that is free of such claims, so normally they must be cleared up before closing. For example, the seller’s mortgage will be discharged and outstanding monetary expenses (such as taxes and utility charges) will be paid for (or adjusted for) at closing.
Sometimes problems (or defects) regarding title are not discovered before closing, or are not remedied before closing. Such defects can make the property less marketable when the buyer subsequently sells and, depending on the nature of the problem, can also cost money to remedy. For example, the survey might have failed to show that a dock and boathouse built on a river adjoining a vacation property was built without permission. The buyer of the property could be out-of-pocket if he is later forced to remove the dock and boathouse. Or, the property might have been conveyed to a previous owner fraudulently, in which case there is the risk that the real owner may come forward at some point and demand their rights with respect to the property.

Who is Protected With Title Insurance?

Title insurance policies can be issued in favour of a purchaser (on new/resale homes, condos and vacation properties), a lender, or both the purchaser and lender. Lenders will sometimes require title insurance as a condition of making the loan. Title insurance protects purchasers and/or lenders against loss or damage sustained if a claim that is covered under the terms of the policy is made.
Types of risks that are usually covered under a title insurance policy include: survey irregularities; forced removal of existing structures; claims due to fraud, forgery or duress; unregistered easements and rights of-way; lack of pedestrian or vehicular access to the property; work orders; zoning and set back non-compliance or deficiencies; etc. For a risk to be covered, generally it has to have existed as of the date of the policy. As with any type of insurance policy, certain types of risks might not be covered, for example, native land claims and environmental hazards are normally excluded. Be sure to discuss with your lawyer what risks are covered and what are excluded.
The insured purchaser is indemnified for actual loss of damage sustained up to the amount of the policy, which is based on the purchase price. As well, some policies have inflation coverage, which means that if the fair market value of the property increases, the policy amount will also increase (up to a set maximum).

How Long is the Insurance Coverage?

In the case of title insurance covering the purchaser, title insurance remains in effect as long as the insured purchaser has title to the land. Some policies also protect those who received title as a result of the purchaser’s death, or certain family members (e.g., a spouse or children) to whom the property may have been transferred for a nominal consideration.
In the case of title insurance covering a lender, the policy remains in effect as long as the mortgage remains on title. A lender covered under a title insurance policy is insured in the event the lender realizes on its security and suffers actual loss or damage with respect to a risk covered under the policy. Lenders are usually covered up to the principal amount of the mortgage.
The premium for title insurance is paid once (at the time of purchase). Generally speaking, in Canada the purchaser of the property pays for the title insurance, though there can be situations where the seller pays for it. Some policies automatically cover both the purchaser and lender; others will cover both for a small additional fee.

Protection and Peace of Mind

Title insurance can help ensure that a closing is not delayed due to defects in title. And, if an issue relating to title arises with respect to a risk covered under the policy, the title insurance covers the legal fees and expenses associated with defending the insured’s title and pays in the event of loss.

If you have any further questions, please do not hesitate to contact me and I would be happy to explain it or answer any questions you may have.

Winning in Multiple Offers

THINKING OF COMPETING IN MULTIPLE OFFERS?   BIDDING WAR BASICS

Multiple offers
When you’ve found that perfect little house you’d like to call your home, the last thing you want is to have to compete with other potential buyers.
But bidding wars – especially in hot real estate markets and urban centres – are more of a reality now than ever. So what do you need to know to stand the best chance at signing on the dotted “sold” line? Winning a bidding war is always a roll of the dice, but read on for the real deal on how to prepare before entering the multiple-bid realty trenches.

Have Your Pre-Approval In Place
Get pre-approved for a mortgage so you know the maximal financing available to you.

By pre-qualifying for a loan, you’ll not only be aware of your offer’s ultimate ceiling, but you’ll shop around – and bid – accordingly. Speak with a broker to evaluate your options before you settle. A thumbs-up from the bank, along with agreeing to put down the biggest deposit or downpayment you can afford, can also help establish to sellers that you’re serious about buying their property.
Keeping Up with the Jones’
You don’t have to actually keep up with the Jones family, but when it comes to the houses you’re serious about bidding on, you do need to be aware of comparative market analysis. In other words, do research to learn what the fair market value for any house you’re interested in is considered to be, as well as the fair market value of similar houses that neighbour them. Real estate websites are good resources to get a sense of what’s out there. When you find out what comparable houses to the ones you’re looking at are going for, you’ll know if you’re shopping way beyond your means, or well within it. Knowing the current market value a house will fetch may also help you determine what you think other bidders will offer, to in turn establish the bid you want to make. Your Realtor should be protecting your best interests.  Keep in mind, if the bank appraises the home and it doesn’t appraise for the price your offered, then what????

Play Clean
Don’t add unusual requests, terms or conditions to your bid, like, for example, buying someone’s home on the basis that you’ll first sell yours. Additional clauses contingent upon any extenuating circumstances can cause headache to vendors, who may have another offer at the exact price you’re tendering, but one without any loopholes. Which one would you choose? By nixing the contingency plan and making a “clean” or firm offer, you stand a better chance at getting what you want.

Inspect the Goods
Set aside a fund for pre-buy home inspections, which should cost about 1 per cent of the house’s asking price. This is often money well spent. If it turns out that the house you think you want to buy has a roof that’s about to fall in, better to know before you bid – especially since it might make you look twice at a very similar piece of property around the corner that is going for the same asking price, but with, for example, a recently renovated roof. Consider setting up a home inspection fund in case you end up in a bunch of bidding wars on houses lost to other buyers, since you’ll also have lost your home-inspection fee.

Don’t Get “Fluffed”
Fancy art, furniture that’s moving out with the homeowner and gorgeous draperies may make a formerly drab house look fab, but none of those things will be there when you buy the house. As soon as the showing’s over, the homeowner may well ship that Persian rug back to the prop rental store it was leased from. Also, the drama in the colour of the paint in the living room, dining room and bedroom might look impressive, but might not suit your furniture…at all. Just because a house may show famously, doesn’t mean it’s the right one for you. Make sure you’re not being taken in by the smoke and mirrors of objects that are not part of the home’s innate architectural charm.

Uneven Steven
Don’t bid $250,000 on a house whose asking price is $250,000 when you’re in a bidding war and your budget could easily permit you to extend $251,200. It may seem as though bidding an odd number would make little difference, but not only will your bid stand out from the rest, it may just beat an offer that came in at a slightly lower figure with a more common-sounding bid.

Revisit Kansas
Try to go back to see the house that seemed so magical to you on first viewing more than once – and more than a couple of times, if possible. One reason is that what strikes you as a great first impression may make a poorer second or third impression. Another reason is that more than a few sentimental homeowners have sold their house to a young family that somehow reminds them of themselves when they were starting out. Often, if you are able to meet the homeowner and they establish a connection with you, they may look upon your offer more favorably than that of another bidder – even if your competitor’s bid is higher.

Pull the Trigger
Try to figure out the vendor’s “trigger” – what it is that would make them sell. If you know that the homeowner has a certain closing date in mind which differs slightly from yours, offer to meet their ideal terms – sometimes this is all it takes to be selected over another bidder, even if the competing offer is higher. If you can afford to, add incentives like agreeing to pay all closing costs. And if you know the sellers are not looking forward to moving their weighty piano or basement-assembled pool table because it’s expensive to move and the closing date is tight, inquire about buying it to see if that will sweeten the deal.

Hide Your Hand
Bidding wars are a lot like gambling – the stakes are high and a lot of luck is involved. Rather than trying to figure out how much you can afford to bid without breaking the bank, try to strategically figure out the highest competing bid you’re trying to beat. If you don’t have finely honed psychic abilities, what helps is knowing the true value of the house. Let’s say you’re pre-approved for a $400,000 loan and the house you’re interested in bidding on would, according to your realtor’s estimation, be fairly priced at $350,000 as compared to other similar houses in the same ‘hood. If you know that the homeowners are not accepting offers ’til Saturday, and have listed the asking price at $345,000, and then find out Saturday that there are two other offers, think about what those two other offers might be. You may be smart to bid higher than their asking price and more than fair market value but still less than $400,000.

Know Right from Wrong
In the end, don’t get caught up in the excitement of bidding. There’s an age-old maxim: “buy the most expensive house you can afford.” This is a savvy real estate suggestion, because if you can afford a $325,000 three-bedroom home but instead settle for a $275,000 one-bedroom home thinking you’ve saved some money, you could regret it sooner than you think. Consider that if you need that extra bedroom space – like if you and your partner decide to have kids – you’ll be looking to buy a new house, sell your current living space and move house in a relatively short period of time. It’s just common sense to make the highest offer you can afford that you’re comfortable with. Every time you visit a new property ask yourself: Is this the wrong house? That’s right, the wrong house. Rather than falling blindly in love with any given dwelling, play devil’s advocate with yourself, scrutinizing how the house you’re looking at right now is any different from the one around the corner that you just looked at. In bidding wars, there’s a grave danger of overpaying if you get swept up in the auction-like fray – know when to fold ’em, walk away and run.

So before you engage in battle, arm yourself with credit pre-approval, a little research, an arsenal of financial strategies, heightened market value awareness and a great realtor. Then cross your fingers and go forth to find your own home sweet home.

Call Michelle Makos, Re/Max First if you would like to feel like your best interests will ALWAYS come first.  

Last Six Months of Real Estate in Review – 2012

December 5, 2012 – Greater Toronto Area REALTORS® reported 5,793 sales in November 2012 – down by 16 per cent compared to November 2011. Read more 

November 19,2012 –Greater Toronto Area REALTORS® reported 2,687 transactions through the TorontoMLS system during the first two weeks of November.  This result represented a 17.5 per cent decline compared to the same period in 2011. Read more


November 6, 2012 – Greater Toronto Area REALTORS® reported 6,896 transactions through the TorontoMLS system in October 2012 – a decrease of 7.1 per cent compared to October 2011. There were two more business days in October 2012 versus October 2011. On a per business day basis, transactions were down by 15.6 per cent. Read more

October 3, 2012 – Greater Toronto Area (GTA) REALTORS® reported 5,879 transactions through the TorontoMLS system in September 2012. The average selling price for these transactions was $503,662, representing an increase of more than 8.5 per cent compared to last year. Read more
September 7, 2012 – Bank of Canada announces no change

September 6, 2012 – Greater Toronto Area (GTA) REALTORS® reported 6,418 sales through the TorontoMLS system in August 2012, representing a year-over-decline of almost 12.5 per cent compared to 7,330 sales reported in August 2011Read More

August 3, 2012 – Greater Toronto REALTORS® reported 7,570 salesbody shot in July 2012, representing a decline of 1.5 per cent compared to 7,683 sales reported in July 2011. Read More

July 17, 2012 – Bank of Canada announces no change

July 5, 2012 – Greater Toronto REALTORS® reported 9,422 transactions through the TorontoMLS system in June 2012 – a 5.4 per cent decrease over the sales in May 2011. Read More

June 8, 2012 – I am very proud to announce that effective today I was elected to the Board of Directors for the Toronto Real Estate Board.  The largest real estate board in the World.  Position:  Director

June 5, 2012 — Greater Toronto REALTORS® reported 10,850 transactions through the TorontoMLS system in May 2012 – an 11 per cent increase over the 9,766 sales in May 2011. Sales growth was strongest in the ‘905’ regions surrounding the City of Toronto.  Read More

What Buyers Need to Know – Click here

OCTOBER 23rd 2012– BANK OF CANADA SET TO RELEASE NEW OVERNIGHT RATE
//