Michelle’s January Newletter

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Let me know what you think? Comments always welcome. 🙂 Have a Super Sunday everyone.
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Thinking on moving to Pickering, Ontario?

Decisions, Decisions
Make sure if you are looking for a home in Pickering, Ontario – check out this page.  It is specific to Pickering, Ontario homes for sale – you can search by neighbourhood, area (east, west, north, south) and also by home type, detached, semi, condo, townhouse.

I have lived in Pickering for 23 years and know what is going on and where !  I was an active member on the Stop The Stink campaign as well as the Pickering Municipal Election.  If you need to know something about Pickering, I’m your girl !  

Looking forward to your comments about the page and please like it if you found the information valuable to you.

To your success !  Cheers !

BUYERS OUT $10,000 – Had to share !

Buyers out $10,000 as house deal falls apart

Buyers need to be sure they want to buy a house before they put down a deposit - they might lose it if they change their mind.

Buyers need to be sure they want to buy a house before they put down a deposit – they might lose it if they change their mind.

Keith Beaty/Toronto Star

If a house deal falls apart because the buyer can’t close and the seller then sells the property to someone else for more, who gets the deposit?
Here’s what can happen:
In early September 2003, Shankar Iyer and Bala Ramachandran agreed to pay $289,000 for a new home from Pleasant Developments Inc. They accompanied their offer with a $10,000 deposit and the builder accepted it on September 16. The buyers got cold feet and the next day changed their mind, asking for the return of the deposit.
The builder refused to return it and resold the house for $700 less than the original deal, but kept the deposit. The couple sued in Small Claims Court for the return of the deposit. When it came to the hearing, the question for the court was whether the builder could keep it all. The judge decided the builder could only keep $700 — the amount by which the sale was reduced — and was ordered to give the balance of $9,300 to the buyer.
The builder appealed. Three years later, Judge Brown of the Ontario Superior Court of Justice decided the builder could keep the entire deposit, even though he did not suffer any loss.
He quoted the law on the subject as follows:
“Even in the case where the seller re-sells at a purchase price that is high enough to compensate for any loss from the first sale, the seller may nevertheless retain the deposit.”
What this means is that, where it is the buyer’s fault that a deal does not close, the seller can keep the deposit. There is an exception to this rule if the amount of the deposit is out of all proportion to the losses suffered. In those cases, the loss of the deposit may be considered a penalty and then it will not be paid to the seller and will be returned to the buyer.
The buyers tried to argue that the loss of the $10,000 was out of all proportion to the losses suffered by the seller. The judge noted that the deposit paid was only 3.6 per cent of the purchase price.
In my opinion, the deposit would have to be greater than 10 per cent of the purchase price in order for the buyer to recover it if the seller suffered little or no damages.
Here are the lessons:
1.Understand your rights are before you sign a real estate contract and make a deposit.
2.If you are a buyer, understand that once an agreement is signed and accepted, you cannot simply change your mind, even one day later.
3.If a buyer defaults on their obligations, then not only can the seller sue for any damages, they can in most cases sue for the deposit, even if they have suffered no damages at all.
4.If a matter goes to court, any deposit will remain in the real estate brokerage trust account until the parties sign a mutual release or the matter is decided by a court, which in this case, took more than 2 years.
Mark Weisleder is a Toronto real estate lawyer. Contact him at mark@markweisleder.com

Top 10 Housing Predictions from Dave Liniger

Great video and I predict he is correct !  🙂   2013 and is the year to get IN the market, not out of it !!  Mortgage rates will remain steady and standards will remain tight but rents will increase causing more people to buy !  Canada only caught a cold where the U.S. caught the flu !  Recovery is on the way for them and Canada will also benefit.  Real estate is your best investment.
For all your real estate needs, choose wisely.  Call Me today to discuss your needs.   Let’s get started…


Why GTA Housing Market Will Stay Strong In 2013
Great article written by Mark Weisleder.  Had to share !!!   
By Mark Weisleder | Moneyville. ca
Many economists predicted a local real estate crash this year, with prices falling by up to 25 percent. I didn’t see that prediction coming true and it didn’t. Nor do I believe it will happen in 2013.
Here’s why:
  1. Homes are more affordable
    In 1990, the average GTA home cost half of what it does today. But interest rates were 12 percent for a five-year term at the time. So, if a two-bedroom condo cost $250,000 in 1990 and you had a 20-per-cent down payment, your monthly carrying costs, including interest, taxes and common expenses, were about $2,500. The average rental for a two-bedroom condo at the time was $1,100, according to the Housing New Canadians research group. So the economics of ownership made no sense.

    Today, even with a price of $500,000, if you have a 20-per-cent down payment, with current interest rates at 3 percent, the total monthly payment is what it was in 1990. It is still $2,500 per month, including common expenses and taxes. But in downtown Toronto, the average rent paid for a two-bedroom unit is now close to $2,500 per month.

    Most tenants who can afford $2,500 a month or more in rent can probably afford to buy a home now, if they have 10 percent down payment or more.

  2. The lesson from 2012
    Toronto Real Estate Board statistics up until Nov. 30 show 82,200 units had sold in the GTA so far this year. In 2011, it was 84,900, and in 2010 it was 81,900. The average price on Nov. 30 was 2 percent higher than a year ago. If anything, the market has remained very stable for the past three years.
  3. Impact of mortgage rule changes is minor 
    The mortgage rule changes imposed in early July lowered the amortization period to 25 years if you were putting less than 20 percent down and lowered the percentage of your income that could be used for borrowing from 44 percent to 39 percent. The result was that buyers who would have purchased in late summer or fall moved up their purchasing decision to the spring. By fall, this meant many would-be first-time buyers were looking to rent instead of buy. This contributed to low vacancy rates.
  4. 2013 will be fine 
    Despite the doom and gloom, Toronto condo rental vacancy rates are 1.7 percent. This means that for those people who cannot sell their condos, there are plenty of renters who can cover the monthly costs.
  5. Debt-to-income ratio not relevant
    As our American friends like to say, “That dog won’t hunt.” Every month we are told that because the ratio of household debt to household income continues to rise — and is now at 164 percent — there is a danger of a real estate collapse.

    What this really means is that the average Canadian household has an income of $100,000 and total debt of $164,000 (of which their real estate debt constitutes-two thirds). Again, as stated earlier, with interest rates at 3 percent, this is not a dangerous problem.

    If interest rates were 12 percent, as they were in 1990, or if all your debt was on your credit cards (with interest rates averaging 18 percent), then this would be a serious problem.

    Note to readers: Pay down or eliminate your credit card debt in 2013.

    Note to government: With mortgage interest rates at 3 percent, it is almost criminal for lenders to be able to charge 18 percent on consumer credit cards.

  6. Interest rates may not rise until 2015
    The U.S. Federal Reserve is now saying it won’t raise rates until 2015. Our rates can’t differ much from theirs without harming our economy with a strong dollar and slower growth.
These are all things to keep in mind in the coming year. Somebody has been predicting a Canadian real estate market collapse for the past 12 years. It hasn’t happened yet and won’t happen in 2013.

Bank of Canada – Rate remains unchanged

OTTAWA – January 23rd, 2013 – News Release

In Canada, the slowdown in the second half of 2012 was more pronounced than the Bank had anticipated, owing to weaker business investment and exports. Caution about high debt levels has begun to restrain household spending. The Bank expects economic growth to pick up through 2013. Business investment and exports are projected to rebound as foreign demand strengthens, uncertainty diminishes and the temporary factors that have weighed on resource sector activity are unwound. Nonetheless, exports should remain below their pre-recession peak until the second half of 2014 owing to a lower track for foreign demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar.  

Next scheduled Bank of Canada announcement is March 6th, 2013.   

For the full story … CLICK HERE