Buyers

Wooly Bully Offer!

 
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Bully offers have always been a part of the Toronto real estate market. Over the last few years though, they've become much more commonplace than ever before.

They've became so prevalent in fact, that almost every listing with a scheduled offer-date now includes the following note, "The seller reserves the right to consider preemptive offers".

(Yes, bully offers are now often being referred to as "preemptive offers". Us realtors are capable of putting a positive spin on any negative, and we're apparently trying to class-up the term a bit.)

It used to be, a listing would hit the market on a Tuesday or Wednesday with a scheduled offer-date for the following week, and the sellers would wait until then to review any offers.

This would give everyone plenty of time to see the home and do their due diligence before submitting an offer.

Buyers would have time to crunch their numbers and work with their mortgage person to get the financing in order, they'd have time to take a look at the pre-listing home inspection (or do their own inspection), and they'd be able sleep on it all for a few days before deciding whether or not to participate on offer-night.

Times have changed.

We're at a point now where sellers cannot bank on the fact that a home will still be available for sale come offer-night.

The new reality is that buyers have to be prepared to go and see a listing within just a few hours of it hitting the market, and potentially submit an offer that night!

And of course it goes without saying that their offer has to be a damn good one. No conditions, a significant deposit, and a price well-above asking.

This is just the way it is now; the whole concept of "offer-night" in the Toronto real estate market has been disrupted.

Our advice: move quickly to view a property you’re interested in… there’s no telling how long it’ll stick around.

 
 

If you're thinking of making a move and want an agent who's able move quickly and help you submit a competitive bully offer, feel free to contact us for more info.

Looking At Semi-Detached Homes? You Might Want To Consider Row Houses As Well

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"Semi-detached is fine, but we're definitely not interested in houses that are attached on both sides."

I hear this from clients all the time, but I always try to get them to at least consider the potential of a row house before writing it off completely.

Some buyers are more open to the idea than others.

The objections are always the same though...

Aren't row houses narrower than semi-detached?

Not necessarily.

I've been in row houses that feel remarkably wide inside.

Clients of mine recently bought a row house in Leslieville, primarily because the main floor was so wide & spacious. We had already seen plenty of semi-detached homes in the area, and this row house was wider than any of them!

My clients were able to scoop it up relatively quickly and at a fair price, in part I think because it was a row house. It simply flew under the radar of the competition.

Aren't row houses darker on the inside, compared to semi-detached?

Not always.

Take a look at the floor plan below (paying attention to where the windows are), and keep in mind that this is a very common layout for semi-detached homes and homes that are attached on both sides.

Note that every room has a window, including the rooms that sit in the middle of the house (the dining room on the main floor, and the middle bedroom on the 2nd floor).

With this floor plan, regardless of whether the home is semi-detached or attached on both sides, the amount of light coming into the house is essentially the same.

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Like I said, some buyers are more open to the idea of a row house than others. I've had plenty of clients flat out refuse to look at them.

"I don't want to live with neighbours attached on both sides."

"The only access we'll have to the backyard is through the house."

Fair enough. To each their own, and these are all valid objections for some people.

If you can get past these "negatives" though, some row houses really do have a lot to offer.

And some row house actually outshine their semi-detached counterparts. Just ask my clients who bought in Leslieville...

If you're thinking of purchasing a semi-detached or row house, please contact us for more info.

Does My Deposit Cheque Need To Be Certified?

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In my recent blog post on real estate deposits (read it here) I answered some of the key questions that my clients often have: “How much should the deposit be?”  “When is the deposit due?” 

There’s another question that often gets asked and deserves a little attention here: “Does my deposit cheque need to be certified?”

In every MLS listing there’s a section towards the bottom for “broker’s remarks” (note: these remarks aren’t available on the public versions of listings). 

It’s in this section where listing agents will specify things like showing restrictions, offer dates, etc. 

And it’s here that we’ll often see the instruction, “deposit to be certified”.

Why Does The Seller Want My Deposit Cheque To Be Certified?

A seller wants a certified cheque because it gives them greater peace-of-mind than a standard personal cheque does. 

A certified cheque tells the seller a few very important things:

  • The buyer went to the trouble of walking into a bank and paying $5.00 - $10.00 to have the cheque drawn up.

  • The buyer is serious and is submitting their offer with the genuine intent of purchasing.

  • The buyer does indeed have the deposit funds available.

  • The cheque can be deposited immediately into the Listing Brokerage’s trust fund and there’s no worry as to whether or not the funds will clear.

Not to say that a buyer who's only providing a personal cheque isn't serious or doesn't have the funds available... 

It's just that a certified cheque holds more weight in most sellers' eyes.

Give Yourself The Upper Hand When Competing With Other Buyers

In a seller’s market, where buyers are doing everything they can to set their offer apart from the competition, having the deposit certified is a must. 

I’ve seen a buyer with the highest offer actually lose out to someone with a lower offer simply because the lower offer came with a certified deposit cheque. 

In this case, the seller wanted to rest easy that night knowing that it was a done deal and he was willing to pay (in the form of selling for a bit less) for that peace-of-mind.

Can I Provide A Bank Draft Instead?

In my experience, a bank draft is just as good as a certified cheque. 

I’ve never had a listing agent show preference of one over the other and both seem to hold the same weight with sellers. 

And bank drafts are sometimes a bit cheaper/easier to obtain (be sure to check with your banker which option is best for you).

If you’re thinking of making a move and would like to know how we can help, contact us for more info.

Elements Of An Offer Explained: The Deposit

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An offer-to-purchase real estate is made up of many elements, some of which are arguably more important than others. 

In most cases, price sits at the top of the list. 

Conditions are another biggie, followed by any significant clauses, the closing date, inclusions, exclusions... 

And of course, one of the most important elements of an offer – the deposit.

The deposit forms a few key functions. 

First, it shows good faith on the buyer’s part and gives the seller peace-of-mind that the person they’re dealing with is qualified and sincere. 

Secondly, the deposit amount is applied to the purchase price of the home when the sale closes.

How Much Should The Deposit Be?

There’s no set amount when it comes to real estate deposits, but 5% of the purchase price is generally a good rule of thumb. 

Having said that, I’ve seen deposits of less than 5%, especially when it comes to first-time buyers (eg. $20,000 on a $500,000 property). 

Deposits of greater than 5% are not out of the ordinary either. 

We see these often in multiple-offer scenarios, where buyers are doing everything they can to give themselves the upper hand over their competition.

When Is The Deposit Due?

The pre-printed deposit section of an Agreement of Purchase and Sale gives three options for when the deposit is to be paid: Herewith, Upon Acceptance, or as otherwise described in this Agreement

The following image is a screenshot of the Deposit clause as it appears on the standard APS:

Elements Of An Offer Explained: The Deposit Photo

Elements Of An Offer Explained: The Deposit Photo

You can see that "Upon Acceptance" means that the deposit is to be delivered to the Deposit Holder (most often the Listing Brokerage) within 24 hours of the acceptance of the Agreement. 

"Herewith" is just as it sounds, the deposit is submitted along with the offer. 

"As otherwise described in this Agreement" can mean a few things. 

The buyer and seller may agree, for example, that the deposit be delivered within 48 hours (as opposed to 24 hours). 

Or they may agree to an initial deposit PLUS subsequent additional deposit(s) upon removal of conditions. 

For example, the buyer will fork over $10,000 now and then an additional $5,000 once they secure financing.

Aside from "How Much?" and "When?", another common question I get from buyers is, "Does My Deposit Cheque Need To Be Certified?"  

This is a great question... Stay tuned for a future blog post in which I'll give the answer.

If you’re thinking of making a move and would like to know how we can help, please contact us for more info.

The Importance Of Having A Mortgage Pre-Approval

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When I meet with a new buyer client, one of the very first questions I ask is, “Have you been pre-approved for a mortgage?” 

More often than not, they’ve haven’t. 

Sure, they’ve done a bit of research on their own; plugged some numbers into an online mortgage calculator, crunched a few more numbers to see what they’re comfortable spending each month...  

Don’t get me wrong – this preliminary leg work is great in that it gives you a ballpark idea of what you’re in the market for. 

It’s not the same as having an actual pre-approval though.

What Is A Mortgage Pre-Approval?

Generally, you can get pre-qualified for a mortgage over the phone or online. 

You provide a breakdown of your employment history, your income, a list of assets and liabilities, and an approximate down payment amount. 

Based on this info, your mortgage broker will let you know how much you’re pre-qualified to spend and what sort of interest rate they can offer you.

An actual pre-approval is a bit different. 

It takes the process a step further by having you complete a mortgage application and provide your mortgage broker with the necessary documentation to verify the info provided in your pre-qualification (income verification letter from employer, banking info, proof of financial assets and liabilities, source and amount of down payment and deposit, proof of source of funds to cover closing costs, etc.).

I stress to my clients that having an actual pre-approval in place is essential.  Here are a few of the key reasons why:

Knowing What You Can Afford

There no sense in shopping for a Jalopy if you can easily afford a Jaguar. 

By the same token, why waste your time on a Jaguar if you’re really in the market for a Jeep? 

A mortgage pre-approval gives buyers a firm budget to work with. 

It helps to streamline the home searching process and allows us to focus specifically on those properties that are within reach.

Locking In An Interest Rate

A mortgage pre-approval locks in a current interest rate for you, for a period of a few months. 

If rates start to increase while you’re out shopping for a home, you’re guaranteed the original, lower rate. 

If rates actually go down while you’re out shopping, you’ll get the new, lower rate. 

It’s a win-win situation.

Giving You The Upper Hand Over Other Buyers

It’s common knowledge that the Toronto real estate market can be highly competitive, especially for buyers. 

It helps when I can tell sellers that my buyer clients have been pre-approved. 

It gives the sellers some peace-of-mind and reassures them that they’re dealing with serious, qualified purchasers. 

And of course being pre-approved helps when there are multiple offers. 

Sellers are much more likely to work with an offer that doesn’t have a financing condition in it.  

I've actually seen sellers reject the highest priced offer because it had a financing condition in it and accept a lower priced offer because it didn't.

In a real estate market that's as active as Toronto's, any advantage you can give yourself is going to make a difference  

A mortgage pre-approval is key in giving you the power to act quickly and confidently when the right property comes along.  

Happy hunting!

If you’re thinking of making a move and would like to know how we can help, please contact us for more info.

The Power Of A Firm Offer

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In a seller’s market, where demand outweighs supply and properties often receive multiple offers, buyers need to do everything they can to give themselves the upper hand.

One of the most powerful ways to strengthen their position when competing with other buyers is to submit a firm offer-to-purchase.

Think about it - if you’re a seller with two offers in front of you and one of them is conditional upon the buyer arranging financing and the other one isn’t (all other things being equal), which one are you going to go with?

Accepting a firm offer means there’s no waiting period to suffer through with the possibility that the buyer will walk away from the deal.

A firm offer means you can go to bed that night knowing that you’re property is sold and it’s a done deal.

Peace-of-mind like this carries a lot of weight.

Keep in mind though; submitting a firm offer is not to be taken lightly.

Preparation is key and there’s work to be done ahead of time by the buyer, their realtor, their mortgage broker, and possibly their lawyer.

Financing Condition:

Obtaining a mortgage pre-approval is crucial, but it’s not worth much if your broker is surprised with significant details when the time comes to actually arrange the financing (eg. “I forgot to mention that I’ve got a $30,000 student loan I’m slowly chipping away at.”).

Be sure to provide accurate income and debt figures so that your pre-approval is solid and you can comfortably go in without this condition.

Home Inspection Condition:

If the sellers are "holding-back" on offers, get in there and have a home inspection done prior to the offer date.

Yes, it’s going to cost you approx $600.00 and you may not even end up getting the property.

But six hundred bucks is peanuts compared to the hundreds of thousands (or more!) you’ll be dropping on your home purchase.

Having the inspection done ahead of time will allow you to come to the table sans condition and give you a better shot at sealing the deal.

A number of sellers will actually have their own “pre-listing” home inspection done ahead of time and the results will be made available to all prospective buyers.

Status Certificate Condition (condominiums):

The best case scenario here is that the seller has already obtained a current Status Certificate and copies are made available to all prospective buyers for their lawyers to review prior to the offer date.

If the docs are not available ahead of time, the buyer and their realtor need to have a discussion about the risks of submitting a firm offer without seeing the Status Certificate.

There is some homework that the realtor can do to give their client some peace-of-mind in this area, but it needs to be clear that there are still risks involved and nothing can substitute for a lawyer's thorough review of the documents.

Succeeding as a buyer in a seller's market is hard work.

There's plenty of competition out there right now and you need to find every advantage you can.

Being able to submit a firm offer certainly tips the scales in your favour.

If you’re thinking of making a move and would like to know how we can help, please to contact us for more info.

What's In A Status Certificate Anyway?

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When working with a new buyer client, part of my job is to educate them as to the elements of an offer.  Different types of properties require different clauses and conditions.  If they’re in the market for a resale condominium then chances are we’ll be including a condition that allows for the buyer’s lawyer to review the Status Certificate.

What’s in a Status Certificate anyway?

A status certificate is a document, or rather a group of documents, that outlines the rules, regulations, and financial health of a particular condominium corporation.  All in all, the sucker is about an inch thick and it’s far from “light reading”.  It is essential reading though. 

Some of the more pertinent pieces of information found in these documents include:

  • Arrears or increases in common expenses.

  • The amount of the Reserve Fund and whether or not it’s sufficient to cover any major work.

  • Whether or not the Condo Corp is a party to any legal proceedings.

  • Whether or not there are any Special Assessments levied against the Condo Corp.

  • The number of suites known by management to be leased out, as opposed to owner-occupied.

  • Whether or not pets are allowed in the building, and if so, what restrictions apply.

What does all of this mean to me as a Purchaser?

Well, the financial well-being of the condo corp is certainly of great importance.  Legal proceedings, special assessments (due to roof repairs, parking garage repairs, etc), and reserve fund deficits can result in direct costs to the condo owners. 

As for the specific unit being purchased, the Status Certificate will show whether or not the seller is up to date with their maintenance fee payments. 

Also, the rules and regulations need to be checked if you plan on owning pets in the building as some condos place restrictions on the number and/or size of pets allowed.

If you’re thinking of making a move and would like to know how we can help, please contact me for more info.

Should I Buy First Or Should I Sell First? (Part II)

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In a previous blog post (read it here) I explored some of the unique factors involved when selling one property and buying another at the same time.  I touched briefly on market conditions, budgetary concerns, and the best way to avoid being pressured into making a purchase you’re not completely happy with.  There's one more factor I'd like to take a look at - Timing.

Part of my job as a Realtor is to help clients time the closings of their purchases and sales as perfectly as possible.  If you're buying and selling at the same time, you'll ideally want to take possession of your new home a few days prior to giving up possession on your old one.  This way, you've got a few days' overlap with both properties.  This allows for a bit of breathing room with regards to booking movers, switching over telephone and internet connections, etc.

However, it's not always possible to line up the closings as closely as we'd like.  In anticipation of this possibility I ask my clients, "Would you rather have two homes for a few weeks or no home for a few weeks?"

Having two homes for a few weeks can be an issue as most buyers rely on the proceeds from the sale of one home to go towards the purchase of another.  Thankfully, bridge financing can help to "bridge" this gap.  Of course, bridge financing can only be obtained if there's a firm sale on the purchaser's property...

Having no home for a few weeks is obviously going to be much more of an issue for the majority of buyers.  Sure, there's the possibility of a short term rental during the interim.  But who wants to move everything into the rental and then turn around and move again shortly after?  I have seen people do it though - especially if their dream home comes along and they don't want to risk it passing them by.

If my clients and I anticipate that timing the closings may be an issue, I include a clause in the agreement that allows them the power to either move up or extend the closing date if they need to.  This doesn't always fly though - it depends largely on the other party's own particular situation and what kind of leverage position my clients are in. 

Ultimately, "Should I buy first or should I sell first?" is a question without an easy answer.  Each situation is different from the next and the same strategy isn't going to work for every buyer/seller.  Be sure to consult your realtor for advice on how best to proceed.

If you’re thinking of making a move and would like to know how we can help, please contact me for more info.

Should I Buy First Or Should I Sell First?

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As my career in real estate continues to grow (I’ll be entering my 13th year in the business next month), I find myself getting more and more repeat business from past clients.  Generally, this comes in the form of them wanting to sell the home I helped them buy a few years ago and move up to something bigger.  While this particular buying/selling scenario is not uncommon, it does have its own unique set of factors to keep in mind.  The easiest way to explore these is with the question, “Should I buy first or should I sell first?”

Buying First

When the time comes for someone to sell and move up, they usually have a pretty good idea of what they want in their new home.  More closets.  A powder room.  Some outdoor space.  Room for a home office.  The list goes on...  I can tell you from experience that my clients have an even more specific list of "must haves" the second or third time around.

Buying first is a great option as it allows you time to shop for the home you truly want as opposed to settling for whatever happens to be on the market at the time.  In the Toronto market inventory is often tight and it can sometimes take awhile for buyers to find and secure the right home.  The last thing you want is to be pressured into a purchase simply because the deadline on your own sale is approaching fast.  Buying first can give you more breathing room and peace of mind in this respect. 

Selling First

Selling first is a good option for some as it allows for a better idea of what their buying budget is.  What if your home sells for $50,000 more than you're expecting?  An extra 50K can certainly help check off more of the boxes on your buying wish list.  On the flip side, what if your home sell for $50,000 less than you're expecting?  No one wants to be in the position of having over spent on their purchase and coming up short on their sale.

Of course, when making any major real estate decision, current market conditions need to be considered.  In a balanced market, less weight would be given to this factor.  The reality though is that the Toronto real estate market is rarely balanced!  In a Seller's Market, buying first is generally going to be the safer option.  In a Buyer's Market, selling first will likely be the way to go. 

If you’re thinking of making a move and would like to know how we can help, please contact us for more info.

Who Actually Benefits From An Open House?

 
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There’s a misconception out there that open houses are not worth doing.

A lot of realtors think they're a waste of time. And a lot of sellers assume that the only people who come to open house are nosy neighbours and tire kickers.

Some people think that open houses do nothing more than benefit the listing agent, who uses them to try and capture new buyer leads.

In my opinion though, open houses are definiely worth doing and should be an important part of any home's marketing strategy.

In fact, an open house can potentially benefit all of the parties invloved in the buying/selling process.

How does the seller benefit?

The seller benefits from the added exposure the property gets. Open houses allow any number of potential buyers to view the property who were not able to book a private showing during the week. Yes, this includes nosy neighbors and tire kickers, but that's to be expected.

How does the buyer benefit?

The buyer benefits because it allows them added opportunities to get in to see the property. There are some buyers whose schedule does not allow them to book a showing with their realtor during the week, and open houses allow them a more relaxed time frame on the weekend to see the property.

Open houses are also great for buyers who have already seen the property with the realtor and want to come back for a second showing on the weekend. Perhaps bringing in family members, contractors, etc.

How does the buyer's realtor benefit?

The buyer's realtor benefits because it allows them to get their clients into the property if they are not available to show it themselves. Often times, buyers who are working with a realtor will still go out on their own and tour open houses on the weekends. They will then report back to their realtor if any of the houses are of interest and go from there.

How does the listing agent benefit?

The listing agent's most important job is to market the property and expose it to the highest number of potential buyers possible. Public open houses are an excellent way of doing this!

Yes, the listing agent might connect with some buyers at the open house who do not yet have a realtor (this is how I found the majority of my buyer clients when I first started in the industry). I'll be the first to admit that this side benefit no doubt strengthens a realtor's motivation to dedicate 3 - 4 hours of of their time on a Saturday or Sunday.

Still, the primary goal when a listing agent holds open houses is to expose the property and get it sold!

If you’re thinking of making a move and would like to know how we can help, please contact us for more info.

Who's Actually Going To Be Affected By The New Mortgage Stress-Test?

 
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Since last week’s announcement by the Office of the Superintendent of Financial Institutions (OSFI) about the upcoming changes to the Canadian mortgage rules, I’ve seen plenty of buyers fret that their budgets are going to be reduced by as much as 20%.

This isn’t necessarily the case though, and not every buyer needs to stress about the new stress test. Let’s recap what sort of changes are coming once the new rules are implemented on January 1st, 2018.

The Biggest Change

Once the new rules come into play no-one will be able to qualify at less than the benchmark rate (which today is set at 4.89%). And in fact, borrowers with a down payment of more than 20% will have to qualify at either the benchmark rate or their contract rate + 2%, whichever is greater. So it’s quite possible that some borrowers will have to qualify at a rate that is greater than the current benchmark rate of 4.89%!

To give you some perspective: Since the last round of mortgage rule changes came into effect last year, only default-insured borrowers (these borrowers typically have a down payment of less than 20%) have had to qualify at the benchmark rate.

Borrowers with a down payment of more than 20% (and not default-insured) have had the benefit of only needing to qualify at their contract rate (which is typically less than the benchmark rate).

Come January 1st 2018 though, all borrowers, regardless of their down payment amount and regardless of whether or not their mortgage is default-insured, will have to qualify at the benchmark rate (or possibly higher).

Not Everyone Will Actually Be Affected

I’ve spoken to a handful of buyer clients this past week (after urging them to check-in with their mortgage broker regarding the new rules), and all of them are happy to report back that they will not be affected.

Why not?Because not every borrower pushes their mortgage amount to the maximum.

For example, if a buyer qualifies for a maximum purchase price of $1,000,000 but only plans on spending a maximum of $800,000, then they won’t actually be affected by the new rules.

Buyers are often approved for mortgages that are significantly higher than what they actually want to spend. I’ve worked with plenty of buyers who are simply amazed at how much the bank will lend them and have no intention of going anywhere near that maximum number.

Some will certainly be affected by the new rules though.  Specifically those who do need to push their mortgage amount to the maximum.

Consider first time buyers, for example. They have no home equity to throw into the pot, and rely only on whatever down payment they have saved. These buyers would typically need to push their mortgage amount to the maximum in order to break into the market.

Will You Be Affected?

At this point, there are still some unanswered questions with regards to the timing of the implementation of the new rules. We’re advising all of our buyer clients to reach-out to their mortgage brokers immediately to secure financing options before the changes come.

If you have any questions just give give us a shout and we’ll put you in touch with a mortgage specialist who can help.

Multiple-Offers Are Still Very Much A Part Of The Toronto Real Estate Landscape

Multiple-Offers Are Still Very Much A Part Of The Toronto Real Estate Landscape Photo

Multiple-Offers Are Still Very Much A Part Of The Toronto Real Estate Landscape Photo

We're in the 2nd week of the fall real estate market now, and anyone who's been following along knows that in the past 4.5 months (ever since the Liberals announced their "16-Point Fair Housing Plan16-Point Fair Housing Plan" in April) we've seen a decline in the number of sales and, perhaps more notably, a decline in average sale prices.

Q:  Do these declines mean that there's now room for price negotiation on every single property that comes on the market? A:  Nope.

In fact... plenty of houses are selling for 100% of the list price. And an even larger number of houses are selling for more than the list price!

Despite all the talk of a "buyer's market", there are still plenty of buyers out there willing to pay full price for the right property, or even compete with other buyers and pay more than the list price if need be.

Let's take a look at all sales in the first 10 days of September for some insight (we'll go as far west as the Humber River, as far east as Victoria Park, and as far north as the 401):

Houses

  • 83 sales total

  • 58 sales at less than the list price

  • 10 sales at 100% of the list price

  • 15 sales at more than the list price (the highest being 119% of the list price)

Condos

  • 162 sales total

  • 77 sales at less than the list price

  • 37 sales at 100% of list price

  • 48 sales at more than the list price (the highest being 117% of the list price)

Percentage-wise, this breaks down as follows:

Houses

  • 70% of houses sold for less than the list price

  • 12% of houses sold for 100% of the list price

  • 18% of houses sold for more than the list price

Condos

  • 47.5% of condos sold for less than the list price

  • 23% of condos sold for 100% of the list price

  • 29.5% of condos sold for more than the list price

While these numbers don't reach the heights that we saw in January - April 2017 (in March, for example, there were a total of 2,145 combined house & condo sales - 73% of which sold for more than the list price), they do show us that buyers aren't being scared out of moving forward with their home searches. If a property warrants it, buyers will make agressive offers and fight for what they want.

Let's see what the rest of the month brings...

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Buy In The Summer And Then Sell In The Fall?

Buy In The Summer And Then Sell In The Fall? Photo

Buy In The Summer And Then Sell In The Fall? Photo

"Should I stay or should I go?"

The classic 1982 Clash song (which I fondly remember being a highlight on the dancefloor at the Dance Cave, circa '99-'01) is a fitting soundtrack for anyone considering a move in the current Toronto real estate market.

While buying is nowhere near as stressful as it was in the first four months of the year, selling is a different story. We're in a transitioning market now and selling your home isn't as simple a process these days.

This change in the market has many buyers and sellers confused about how to proceed.

I've got a number of clients right now who are hesitantly contemplating a "move-up" purchase into something larger than their current space.

While they're tickled by the fact that they aren't shopping for a home in the same feeding-frenzy market we saw in January - April, the prospect of having to sell their home in this more relaxed market has them second-guessing whether or not now is the right time to make a move.

While their hesitation is certainly warranted, I don't think anyone should be totally writting-off the possibilty of a move in this current market.

Keep in mind, shopping for a home in the fall might not be the relaxed affair it is right now. Although no one can predict exactly what's going to happen in the fall, we need to consider the possibilty that market activity will pick-up again and we'll all be looking back at May/June/July/August as a four-month blip.

A few possibilties to consider when looking at how the market might be spurred towards greater activity in September:

  1. With today's interest rate increase by the Bank of Canada (I'm writing this blog post on July 12th, the same day that the Bank of Canada has announced their first rate increase in 7 years), there are going to be buyers out there motivated to make a purchase before their current pre-approval rate-hold expires in 90-120 days.

  2. After "taking the summer off" from their home search, buyers who've been sitting on the sidelines since the Liberals announced their 16-Point Fair Housing Plan in April will simply decide to get off the fence and take the plunge.

If the market does start to warm-up again in September we could all be looking back saying, "those who bought in the summer and then sold in the fall did very well for themselves...".

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Deposit Cheque: Don't Show Up Empty-Handed!

Deposit Cheque: Don't Show Up Empty-Handed! Photo

Deposit Cheque: Don't Show Up Empty-Handed! Photo

Early in my real estate career, I was working with a young couple looking to purchase a loft in the city's west end.

Back then, just like now, most properties were receiving multiple offers and selling for above the asking price.

And just like now, listing agents were requesting that all potential buyers show up on the offer date with a certified deposit cheque in hand.

I don't recall the specifics now, but on the first offer we did together those clients of mine were not able to obtain a deposit cheque prior to submitting the offer.

Of the five offers that were submitted that night, my clients had the highest price.

The property should've been theirs...

The sellers ended up working with the second highest offer though, because we didn't have that damn deposit cheque in hand.

Needless to say, those clients never submitted another offer without being sure to have the certified deposit cheque ahead of time.

Fast forward to 2017, and just the other night I saw the same thing happen again (thankfully, it wasn't my clients who made the mistake this time).

A condo in the east-end received 20 offers and sold for $710,000. The highest offer was actually $730,000... but those buyers did not have a certified deposit cheque in hand.

Imagine the disappointment there - being the highest of 20 offers and still not getting the property!

There's almost 10 years distance between those two stories, but the lesson is the same for each: show up on offer night empty-handed, and you might go home empty-handed too.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Toronto Land Transfer Taxes Are Increasing. Ugh.

Toronto Land Transfer Tax Costs Are Going Up On March 1st Photo

Toronto Land Transfer Tax Costs Are Going Up On March 1st Photo

If you haven't already heard, the City of Toronto Council has approved changes to the Toronto Land Transfer Tax which will result in additional costs for some home buyers with a closing date on or after March 1, 2017 (which is when the tax will be harmonized with the provincial LTT).

Click here to see the detailed City of Toronto Notice on the "original" proposed changes posted in December 2016 (NOTE: changes made to original proposals as per below).

Status

The following changes to the Toronto Land Transfer Tax were considered and approved by Toronto City Council on February 15, 2017. The changes are effective AS OF MARCH 1, 2017, for real estate transactions closing on or after this date:

  • Added an additional LTT of 0.5% of the value of a residential or non-residential property from $250,000 to $400,000 (an additional $750)

  • Added an additional LTT of 0.5% of the value of a residential property above $2 million

  • Added an additional LTT of 0.5% of the value above $400,000 of a non-residential property

  • Increasing the maximum allowed First-Time Home Buyer Rebate to $4,475, up from $3,725

  • Amended the first-time home buyer rebate program eligibility rules to restrict rebate eligibility to Canadian citizens or permanent residents of Canada

TREB Efforts Achieved Significant Concessions – First-Time Buyers Protected

TREB (Toronto Real Estate Board) undertook a comprehensive campaign to oppose the proposed changes. As a result of these efforts, significant concessions were made to the proposals that went forward for City Council's consideration as follows:

  • Under the original proposal, first-time buyers would have been forced to pay an additional $475 in Toronto LTT. However, TREB pushed for an increase in the rebate from $3,725 to $4,475, meaning first-time buyers will not face an increase.

  • Many first-time buyers would have lost eligibility for the first-time buyer rebate entirely, meaning a total LTT increase of $4,475. TREB pushed back and all first-time buyers will be eligible for a rebate.

  • As a result of TREB's efforts, first-time home buyers will NOT see any change.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Do You Think I Could Fit A Turkey In There?

DraggedImage.5508d873686f4243a0613471c5a16799

DraggedImage.5508d873686f4243a0613471c5a16799

Back in 2012, I wrote about the frustrating fact that builders were making kitchens smaller and less functional than they'd been in the past (read that blog post here). I noted the lack of counter & cupboard space, and I illustrated the difficulty of trying to place a dining room table in a layout where there simply wasn’t enough room for one.

Here we are, four years later, and the trend is still going strong! Prep space and storage are still tight, and European-sized appliances have become the norm.

This becomes quite an issue when I’m working with a buyer who tells me they want to be in a new condo and have a “chef’s kitchen” with all the bells-and-whistles.

Unfortunately, these two features rarely go hand-in-hand. Not unless you’re spending the big bucks!

Great kitchens are oftenonly found in larger condos now (mirroring the trend towards only making parking available to purchasers of larger units).

What about those buyers who are in the market for something smaller though? A one-bedroom + den in the 650 - 700 sq ft range, for example?

It just so happens I’m working with a buyer right now who’s shopping in that range. She has a healthy budget, she wants to be in a newer building, and she wants a kitchen that’ll allow her to her enjoy her love of cooking.

Sounds totally reasonable, right?

Unfortunately not. The kitchens we’re seeing are falling short of what she wants.

I still remember the look of disappointment on her face when she saw her first Miele 24” oven.

”Do you think I could fit a turkey in there?”

That’s one of the questions I hear most often when a buyer sees one of these tiny appliances for the first time.

“I want to be able to have family or friends over for dinner, and cook a decent meal.”

While you can actually roast a (small) turkey in a 24” oven, there isn’t room for much else! And forget about heating multiple dishes at once (which can make cooking for a bunch of dinner guests rather difficult).

Granted, this isn’t an issue for every buyer. I know plenty of people who don’t cook much, and could care less about counter space or the size of their appliances.

For the ones that do care though, it’s frustrating.

The fact is, in today’s Toronto condo market, buyers have to make some concessions if they want to be in a new building. And the size of the kitchen is often one of those concessions.

Like I said in that 2012 blog post mentioned above, condo kitchens ain’t what they used to be.

If you're thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Who Lists Their Home For Sale In Mid-December?

Who Lists Their Home For Sale In Mid-December? Photo

Who Lists Their Home For Sale In Mid-December? Photo

Who lists their home for sale in mid-December?

People who have to sell, that’s who.

Otherwise they’d wait until the 2nd week in January, which is when the spring market starts and an influx of buyers begin (or resume) their hunt.

Sure, there are still some buyers out there looking in the middle of December. Not many though. And the ones that are looking are likely doing so half-assed, as they’re distracted with holiday obligations, etc.

Sellers in the Toronto real estate market don’t always have a choice though, when it comes to timing the sale of their home. Sometimes, listing in mid-December is their only option.

For example, let’s say you make a purchase at the end of November, with a 60 day closing. The good news here is that you go into the holiday season knowing that you’ve bought a house, and the stress of searching for a home is off your plate. But now you’ve got a home to sell, just as the market is about to slow down!

Some of you are thinking, “Well, don’t buy a home at the end of November then! Make your purchase in September or October instead.”

The reality is that buying a home in the Toronto real estate market can be tough; there’s a tonne of competition when it comes to good houses and if an opportunity presents itself you have to jump on it, whether or not it’s actually the best time of year to make a move.

This isn’t necessarily a bad thing though.

If you have a great house in a great neighbourhood, and you’re able to get your act together quickly enough to list within that first week of December, then you’re likely going to be okay.

You might actually benefit from the fact that there won’t be many other listings to compete with, and you’ll appeal to those buyers who are seriously looking to lock down a purchase before the holiday season starts.

When To Wait

If it’s going to take a couple of weeks of prep time to get your home ready, then you need to consider putting off listing until the new year.

Or if you’ve got the kind of property that might take a little longer to sell (it ain’t the purdiest house on the block, and/or it’s in a less-than-desirable neighbourhood), you might want to avoid sitting on the market during the holiday season. A house like this is going to look staler than last year’s fruit cake by the time mid-January rolls around (zing!).

Not everyone has the stress tolerance to wait though.

Going back to the example above, if the home you purchased is closing on February 1st, then waiting until the new year to list only allows you a couple of weeks to get yourself a firm sale (this is assuming that bridge financing is going to be an option). A tight deadline like this is too stressful for some sellers, and they decide to swallow the risks of listing in mid-December.

Either way, there are pros and cons to each option that a seller has to accept.

My advice is to work with a realtor who has guided clients through this process before. You need someone in your corner who has a handle on all the angles, especially at a time of year when there's so much else to stress about!

Happy Holidays!

If you're thinking of selling your home, and you want an agent who knows when the best time to list is, feel free to contact me for more info.

Would You Buy A Home Near The Tracks?

Close-to-Train-Tracks.jpg

Every buyer has a list of must-haves and deal-breakers when they start their home search.

As the search progresses, this list often changes.

Things that were initially important become less so when a buyer sees how little supply there is in the Toronto real estate market.

A few examples?

  • Having a powder room on the main floor.

  • Having a 4th bedroom on the 2nd floor.

  • Having a private driveway.

Don't get me wrong, none of the above items are impossible to find in a house in Toronto.

Depending on location though, any one of them might be very tough to come by.

Plain and simple: a Toronto home buyer needs to be willing to compromise at least a bit on their list of must-haves and deal-breakers.

One thing that almost always stays on the list though, is avoiding houses that are close to the train tracks.

This is such a negative in many buyer's minds, that it's not even up for discussion.

Anytime a new listing pops up that might work for one of my clients, I bring up the address on Google maps and check the house's specific location.

Too close to the tracks? Let's skip it.

Not every buyer has a clear-cut objection to being close to the tracks though.

Sometimes, if the house is only close-ish to the tracks, then it's okay.

Of course, every buyer's definition of close-ish is subjective!

I was recently working with some buyers who were shopping for a home in The Junction.

There's a pocket there, north of Dundas St. W, that sits just south of the train tracks. It contains streets like Quebec Ave, Clendenan Ave, and a handful of others.

A house popped up for sale there, only about 10 houses from the tracks. Certainly close enough to hear the train while sitting in the backyard or from inside the house when the windows are open.

Not close enough to deter my clients from considering it though.

Evidently, the tracks weren't an issue for a handful of other buyers either...

The house sold on offer-night, for a sale price well above list. In fact, it set a new record for that type of house in that area.

Another house popped up in that pocket a few weeks later, roughly the same distance from the tracks. This house broke the record price set by the previous house!

So, it's clear that being close to tracks isn't a deal-breaker for everyone.

What about a house that backs directly onto the tracks?

No doubt, this is a tough sell for most buyers. And if I had clients that were considering it, I'd certainly caution them about the resale-ability of the property.

For some buyers though, it offers the opportunity to finally get a home in a very competitive market. Their willingness to look at a house that backs onto the tracks opens up possibilities that other buyers won't consider.

What about you? Would you consider buying a house near the tracks?

If you're thinking of making a move and would like to know how we can help, please contact us for more info.

Say Goodbye To Your Condo!

The Toronto Star recently broke the news that Urbancorp has cancelled its Kingsclub Condominium complex on King Street West (read the article here).

In place of the condos, three towers of rental apartments are to be built instead.

What does this mean for anyone who bought a pre-construction unit in this development? Basically, they're screwed.

Yes, they'll get their deposits back. But all they'll have to show in return is a measly bit of interest .

Needless to say, these buyers are nonplussed.

When I first heard the news, I immediately thought of the South Park episode referenced in the photo at the top of this blog post. (If you haven't seen it, here's a short clip that sums up the episode nicely).

Aaaand... it's gone!

Over the past couple of weeks, I’ve had a bunch of clients ask whether or not anyone could have seen this coming.

I tell them all the same story:

I began my real estate career back in 2006, at a small boutique brokerage in the St Lawrence Market area.

My broker of record there had decades of experience in the real estate game, and had spent a handful of those years selling pre-construction condos.

He told us stories of how so many young buyers lost their deposits when the market crashed in the early 1990’s, because the units they had committed to buying were now worth 20% - 30% less than what they had agreed to pay and they could no longer get the financing they were counting on to close.

He also told us about the possibility (however rare it may be) that a condo development could indeed be cancelled if the right (or rather, wrong) set of circumstances were to occur.

These stories stuck with me, and whenever I have a client express interest in purchasing a pre-construction condo I provide them with a detailed list of "what could go wrong." And what happened at Kingsclub Condos is on that list.

Make no mistake, Urbancorp is within their legal right to do what they've done here. It still stinks though.

I keep going back to the question, "What else could these buyers have done with the deposit money that sat stagnant in a trust account for years?"

I'm sure some of them could've used that money to purchase a resale condo instead, rent it out, create some positive cashflow, and start building equity.

That opportunity is lost now though, and these buyers are back to square one.

If there's a positive to come out of this story, it's that we all now have a memorable, real-world example to point to when considering the risks involved in buying pre-construction.

Sure, what happened at Kingsclub Condos is a rare occurrence in the Toronto market, but I don't think any of us will soon forget it.

It'll stick around as a cautionary tale, the one about the time the developer told their buyers, "Kiss your condo goodbye!"

If you’re thinking of making a move and would like to know how we can help, please contact us for more info.