Why You NEED A Pre-Approval In Today’s Market.
In: Mortgage News
2 Jun 2011Welcome to the Spring/Summer of 2011, where multiple offers on homes are the norm, 105% and higher above asking price is not uncommon, and mortgage rate fluctuations of 0.35% can happen overnight. In my 11 years in this industry I have not seen this particular set of circumstances all occurring at once and to the extremes that I see them today.
A main factor contributing to multiple offers is the current low inventory of quality homes on the market, and with the record year after year increase in home purchase prices an offer on a home above asking is considered acceptable in a buyers eyes as they expect the value to increase even more. This can be a problem for homebuyers as they may end up paying more for their dream home then they or their bank expects. There is nothing more disappointing than falling in love with a home, getting into a bidding war, and then finding out that multiple offers has taken it out of your price range.
As for the rates we have been hovering around the lowest mortgage rates in the last 25 years only to see them jump up 0.35% in one day and then fall back down again. All the bank experts are in agreement that the low rates we have recently enjoyed cannot be sustained and they will most certainly head back up never to return again (barring another financial meltdown). This can be a shock to those who do not take the steps necessary to secure their mortgage rate while they can.
This perfect storm I am describing above means more and more buyers are in need of something to hold on to for security and stability. Never before has the ‘Pre-Approval’ been so important to today’s Real Estate and Mortgage Market. It is an easy, no-obligation confirmation that a Bank/Lender will support your home purchase, providing you with a maximum approvable mortgage amount and rate hold. It could save time and frustration in the purchase process, and thousands in total mortgage payments.
When your Real Estate Agent tells you that a multiple offer situation is possible on your dream home they will often advise you go in with your maximum bid from the get go and to sweeten the deal for the seller they may even ask that you waive your financing condition upfront. These two tactics will often help put you to the top of the pile and in a good position to win the offer on the home, getting you into the home you really want. A pre-approval prepared in advance will ensure that the Bank/Lender is prepared to grant you the mortgage amount you will require and if you waive that financing condition you will need to know up-front that the bank has your back. The financing condition is there to protect the buyer but if it has to be waived the pre-approval will give you some assurance you have the mortgage. Please note that a pre-approval does not guarantee you a final mortgage approval but it is the closest thing you can get to the real thing without having an offer to purchase on a home. If at all possible ask your Real Estate Agent if one or two business days condition on financing is at all possible, it is shorter than the average 5 business days and will give you a little more piece of mind.
Rates have dropped back down to near record lows once again for the end of May, this will not likely last and the last year has seen a few jumps back to towards the 25 year rate averages (5yr closed/fixed rates of 5.5%). With 3.99% for a 5 year closed fixed rate available from many lenders today, and some offering even less, the time to lock these rates in would be now. Many Banks/Lenders can hold rates for 120 days and many guarantee the client their lowest rate available in that time period. Waiting till you put an offer on a home may be too late to secure a rate. Rates change at the whims of the market, and the earlier you lock in a rate with a pre-approval the better chance you will have to cash in on the rate drops and be protected from the rate increases. A difference of 0.35% on a $350,000 mortgage will mean lower monthly payments and a lower remaining mortgage balance totalling approx $6000 in your pocket at the end of your 5 year mortgage term. That money should stay with you and not be paid to the banks if at all possible. The pre-approval is the only way to take advantage of rate fluctuations in the months before your home purchase. Make sure to get the pre-approval in writing from your Mortgage Agent or the Bank/Lender of your choice.
With a pre-approval in hand you have some security in this uncertain time. Your rate is secure, and you know how much the banks are ready to approve you for. Today that security can mean all the difference when asked to waive a financing condition, or getting into a bidding war. Piece of mind in this market is hard to come by but it’s just a phone call away. Contact your Bank/Lender or better yet a Mortgage Agent today to make sure that you are prepared for tomorrow. Happy house hunting!
For further information on how to save money while obtaining a mortgage please call
Abraham Niyazi
Mortgage Agent
Lic# M08010640
How to Take Advantage of a Real Estate Bubble
In: Real Estate News
26 May 2011Like we previously mentioned, it is very hard to predict when a bubble will burst. The housing market in Canada may or may not be in a real estate bubble. If so, it might never “burst” or it might simply drop to the highs of a few years ago. The most drastic scenario is that prices slide like they have in the USA, where prices are now at 2003 levels.
Some people avoid buying a home, and wait for the prices to drop. If they have been waiting for a few years, they will most likely not be further ahead if the bubble does burst. For example, even if prices drop by 20%, we will only be at the 2009 average house price.
Real estate bubbles do not specifically affect people who are planning on staying put for the next 10-20 years. These people are usually between the ages of 35 and 55. This age group has generally moved on from their 1st home, have children and are living in an adequate home. They have no need or desire to move.
Owners who are selling their home to upgrade to a larger home, are not really at risk when it comes to a real estate bubble. They will be selling at a high price and buying at a high price.
There are a few groups of people who will be selling or buying their first home, and for them a housing bubble can make a difference. These are the groups of people will be most affected by a real estate market crash (or even a slight decline).These include seniors and 1st time home buyers.
Seniors Tip: Sell Now!
The best advice for seniors who are considering moving in the next 3 years could be to “sell now”. House prices have reached all time highs. Experts are predicting that the factors that result in high house prices have never been more ideal. Low mortgage rates, strong job market, beneficial mortgage rules, and a strong demand for home ownership are all contributing to high prices. Will these factors be the same in 3 years? Will mortgage rates still be at all time lows? Will mortgage rules still allow 5% down and 30 year amortizations (remember the recent move from 35 to 30 years!) If you know that you will need to downsize, one tip might be to sell while the market is hot and house prices are at all time highs.
1st Time Buyers Tip: Do The Math!
The other demographic group that should carefully consider buying in a real estate bubble is 1st time home buyers. Typically 1st time home buyers have low down payments. The average price for a home in Canada in more than $350,000 and in cities like Toronto and Vancouver, the average price is much higher. If a bubble does burst or simply drop by 5-10%, then 1st time home buyers will have their equity wiped out very quickly. Also remember that real estate fees, taxes, CMHC, and legal costs can make up 5-10% of your equity. If you put 5% down on a $400,000 home, that money is already spoken for if you have to sell for the same price. If the price of the home drops to $380,000, then you will have lost your equity and you will need to come up with money if you have to sell. For this reason, 1st time home buyers should be very concerned that they are not buying at the top of a declining real estate market.
PropertySold.ca
Toronto Real Estate Bubble: House Prices Keep Rising
In: Real Estate News
24 May 2011More and more people are speculating that we are in the midst of a Toronto Real Estate Bubble. In Toronto, the MLS average house price has been increasing for the past 14 years, and 2011 is no exception. Over these 14 years, the average price has gone from $198K to $457K. A rising average house price is no surprize. No one would expect the price of housing to remain constant. It should increase as inflation increases, demand increases, and as salaries increase. However, the question is now whether it is increasing too quickly.
In the past 3 years, the average price for a home in Toronto has increased by approximately $80,000. From $379K in 2008 to $457 in 2011. When we examine this recent surge in prices, it is difficult to point out one specific reason or driving force. There has not been an increase in the Toronto population and there has not been a dramatic increase in salaries. Interest rates have been low, and steady, for the past 3 years. Without a specific driving factor, this is leading some people to speculate that we are in the midst of a Toronto Real Estate Bubble.
The thing about bubbles is that just when you think they can’t go any higher, they do. Then at the next higher peak, everyone says that there is no way they can go higher. Then they do. Again. And again. It’s for this reason that it is almost impossible to know when a bubble will burst. It could have been easy to say that 2009′s real estate high was the peak. “10 years of growth. This must be the top”. You would have been wrong. Same applied to 2010 and now in 2011. Is this the top of the bubble? Will the market crash? Odds are the you are just as likely to be saying the same thing in 2012 and 2013.
However, the market will correct or “burst”…eventually. But some people have been predicting the market will crash since 2008. In 2008 they said “sell your home at the top”. “Don’t buy now”. “The market will crash from these highs.” Now in 2011, they are still saying the same thing. Even if the market “crashes” and the average price drops by $80,000, we would simply be at the same high that we had in 2008. RIght? The same point applies to the people predicting the housing bubble bursting in 2011 and say “don’t buy now”. Prices might rise in 2012, and 2013 and then drop back to 2011 prices.
Perhaps the best advise is to always analyse your own personal situation, make some calculations, and make a smart move. For example, is it smart to considering buying a $500,000 home in Toronto with $25,000 down at a variable interest rate? What if you are at the top of your budget and will just barely be able to make payments on that home? What if you can rent the same house for less than the interest costs of carrying that $475,000 mortgage?
Housing bubbles have burst in Ireland, USA, Britian, Spain, and many other countries. When those real estate bubbles burst, the people most affected were the ones with little equity and who bought more house than they could afford.
So we may or may not be experiencing a house bubble in Canada. This bubble may or may not burst. But perhaps the best advice is to try and avoid being one of those buyers who buy a home with little equity and who can barely afford a variable rate.
PropertySold.ca
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- Tags: bubble, burst, demand, estate, first time buyers, gta, hot, housing, market, mls, price increase, real, rising house prices, toronto
Real Estate’s Worst Nightmare: Stink Bids, Low Ball Offers, MLS Vultures
In: Real Estate News
24 May 2011There is a very “unpolitically correct” quote in the real estate comedy movie called The Money Pit. Tom Hank’s character asks his real estate agent “why would somebody sell a million dollar home for $200,000″. The real estate agent’s response is “Who knows. Divorce, loan sharks, sudden death…the point is that you can benefit from another human beings’ misfortune. It’s the basis of real estate”.
If you ask anyone about stink bids and low-ball offers, you will hear a multitude of different opinions. Some people are disgusted by those who have the nerve to submit a very low offer. The dream of some buyers is to buy a home for much less than the market value. Some buyers put in low ball offers and stink bids because they want to buy a home with a value of $400,000 for only $300,000. Stink bids are often the worst nightmare for real estate agents and sellers.
While these types of offers are not really prevalent in a hot real estate market, they become more popular when sales start to drop and homes remain on the market for more than 2 months.
Why do some buyers get personally insulted by a low offer?
Usually a seller should be able to laugh-off a low offer and politely decline the offer, or counter with a price closer to their asking price. However, if a seller is not able to emotionally detached themselves from their property when they sell, they tend to get personally insulted by a low offer. The frustration is often magnified if the seller has not had a lot of interest in their home. Additionally, if the seller has already bought another home and are feeling the pinch of two mortgages and bank fees, then can get really upset with a low-ball offer.
Stink-bids Can Backfire On Buyers
Stink bids will rarely lead to a successful sale for the “stinkbidder”. Often low offers help make another, higher, bid look more attractive and actually help other buyers. Plus a stink bid can upset a buyer to the point that they will not accept any offers from that buyer, even if the buyer eventually comes back with a good offer. Often, instead of accepting a low offer for $50,000 less, the sellers will simply lower the asking price by $50,000, producing more interest in the home.
How to Successfully Make a Lowball Offer
If you are a buyer who wants to find that desperate seller and perhaps score yourself a great deal, you will need to have a good strategy. You cannot simply fax in some ridiculous offer and expect to be successful. Some tips to give yourself better odds, include:
1) First find out as much information as you can about why the owners are selling. Perhaps talk to neighbours, the agent, the sellers. If you can determine if the sellers need to sell, then you might have a chance to get a good price.
2) Find some statistics to back up your low offer. Perhaps another property sold in the area for a low price. You will need to justify your offer in some way.
3) On your first visits to the property, try to identify items that will need to be fixed or replaced within the next 5 years (furnace, roof, windows, floors, appliances, plumbing). Apply a cost to those items and attempt to provide some rational to your low offer. If you can at least make the seller understand your offer, you might get them to consider the offer. Some “stink buyers” actually use the “questionable” strategy of starting with a higher conditional offer, having it accepted, and then having the home inspection point out a significant amount of repairs. Then the “buyers” ask for the price to be reduced. This leads to tying up the offer so other buyers can’t buy, and frustrating the sellers. Some sellers become so frustrated that they agree to the reduced price.
It is important to note that in Ontario, Listing Real Estate Agents are obliged with the unpleasant task of presenting all offers to their clients (regardless of content). So they must “present” all offers even if they are low-ball offers. Of course, most agents will just call their client and say “there is an offer for X amount of money” and the seller’s response is “no thanks”. End of story.
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- Tags: ball, estate, hot market, low, lowball, mls, offer, real, real estate deals, stink bid, toronto, vultures
Real Estate Agent Marketing Tools
In: Real Estate News
20 May 2011Real Estate Agents have a few different marketing alternatives when deciding on how to successfully market a home for sale. Typically these tools will be presented to a potential seller (new listing) at the listing presentation.
At a typically listing appointment, the Real Estate Agent will discuss their experience, compare recently sold properties to determine an asking price, and then they will tell (or negotiate) the real estate commission. Along with intangible qualities of experience, knowledge, and negotiating skills, there is the tangible requirement to market the property. The goal of marketing the property is to attract as many buyers as possible in order to obtain the highest selling price.
Even though only one buyer will eventually be purchasing the home, it’s very important to attract as many buyers as possible. Multiple buyers can create multiple bids. It is also human instinct to want what is in high demand. If a potential buyer sees that there is other interest in the property, they are more likely to put in a quick, quality offer (instead of just waiting and putting in a stink bid).
So the ultimate marketing goal of the Real Estate Agent is to create a demand for the property.
1) Placing the home on MLS.ca/Realtor.ca. This is a no-brainer. MLS.ca/Realtor.ca is Canada’s most visited real estate listing website. Now that PropertySold.ca’s customers can also place their For Sale By Owner property on MLS.ca (through our partner brokerage).
2) Placing a Real Estate Lawn sign infront of the property. Lawn signs are ofter more important than seller’s think. Often times a buying who lives in the neighbourhood will purchase or tell a friend. Without a lawn sign, this potential buyer would not know the home was for sale.
3) Additional Real Estate Advertising is necessary in today’s real estate market. Even though many people go directly to MLS.ca, a significant amount of people only search on Google, Yahoo, and Bing. MLS listed properties DO NOT show up in these search results. This is way a PropertySold.ca listing is very important. PropertySold.ca makes sure your shows up at the top of search engines. Real estate agents and private sellers can both advertise homes for sale on PropertySold.ca
4) Open Houses – Despite that some real estate agents say “Open Houses” do not attract buyers, this simply is not the case. Some buyers are just in the “looking stage”. They do not engage a real estate agents or actively visit properties, but when their is an open house, they will visit. If your home is the one they want, they will take action and make it happen. Open houses can easily turn a looker into a buyer!
5) Feature sheet are another tool that Real Estate Agents use. These can help keep your property in the minds of all buyers. When a buyer visits 5 homes on a weekend, make sure your looks the best (in person and on paper).
So these are some of the most popular tools a real estate agent can use to sell your home. The more your agent markets your home, the more interested buyers will visit. Make sure that your agent is 5 out of 5 in their real estate marketing efforts.
PropertySold.ca
MLS Defines Different Types of Real Estate in Canada: What’s Your Style?
In: Real Estate News
18 May 2011Some people love their condo. Some people only want a detached home. Some people want a semi-detached or link home. Lets look at some of the different types of homes available for sale in Canada. Here are some stats from the Toronto Real Estate Board and the approximate % of homes sold:
Detached – 48%
Semi-Detached – 11%
Condo Townhouse – 7%
Condo Apt – 22%
Link – 2%
Att/Row/Twnhouse – 7%
Detached Homes:
Detached homes for sale make up approximately 48% of home sales in the Greater Toronto Area. Detached homes are, on average, the most expensive real estate. There are generally no maintenance or condo fees associated with detached homes. Detached homes are not connected in any way to another property.
Semi-Detached
Semi-Detached homes for sale are connected to a separate property on one side. The connecting property is also only connected on one side. Or another way to define Semi-Detached homes is that they are one building divided into 2 separate living areas. In Toronto, Semi-Detached homes make up 11% of properties sold. These are usually the second most expense real estate (on average).
Condo Townhouse
Condo Townhouses are identified as being 3 or more units connected together. They have typically no more than 3 levels. They will have associated condo fees that can cover such items as snow and lawn maintenance, general exterior maintenance (roof, facade). In Toronto, these make up 7% of home sales.
Link
Link homes can be connected underground though a common basement foundation wall. However, above ground, they can appear as detached homes. They are not too common, but homebuyers need to know that their is a material difference between a link and detached home.
Condo Apartment
Very common in Toronto, tradition condos are units in a high rise building (more than 3 floors). These units come with maintenance fees that typically cover all expenses except electricity and gas. Toronto have built an incredible number of new condos in the past 10 years. They are very popular with first time homebuyers because they are affordable and often located in a convenient area of the city. In Toronto, these make up 22% of home sales.
Att/Row/Twnhouse
Homes that are connected with more than 2 units can also be classified as Att/Row/Twnhouse. These transactions made up 7% of the sales in Toronto.
So which is the best type of property to buy? Feel free to leave your comments. Do you prefer the “maintenance free” condos? Do you calculate the cost/benefit of spending more for a detached than a similar sized semi-detached. There are lots of different styles of homes.
Of course for those picky buyers there are many other factors to consider including: location, age of the home, lot size, features, bedrooms, bathrooms, layout…
When it comes to interest rates on mortgages in Canada, the variable rate is dependant on the Bank of Canada lending rate. If this rate goes up, then variable mortgages rates will increase. Fixed rate mortgage rates are more dependant on the bond market. Fixed mortgage rates will typically not immediately increase based on movements in the Bank of Canada rate.
The Bank of Canada lending rate is reviewed 8 times a year. The specific dates can be viewed at www.bankofcanada.ca. These rate reviews are be becoming more and more important to Canadian homeowners who purchased homes with large variable rate mortgages.
According to a Toronto Star article, 60% of all mortgages in Canada are fixed rate mortgages and 35% are variable rate (5% have an adjustable rate mortgage). There are 5.7 million mortgages in Canada. This means that approximately 3.7 million Canadian homeowners have a fixed rate mortgage and another 2 million have with a variable rate mortgage. Because variable rate mortgages will raise and fall based on the Bank of Canada lending rate, 2 million people can be affected, up to eight times a year.
In a recent article, The Toronto Star writer, Tony Wong, points to a CAAMP report that says 3-4% (200,000 owners) of Canadian mortgage holders say that they “have absolutely no room for additional monthly increases in their payments.” He also points out that report shows another 13% (700,000 owners) of homeowners could not afford another $200 per month on their mortgage payment. In total, this is 900,000 Canadians that could be in financial difficulty if interest rates rise. (In the case of $200 a month increase: for anyone with a $250,000 mortgage, this is only a 1% increase in their mortgage rate.)
When PropertySold.ca talks to our friends, family, and customers, most people have the opinion that “there is no way that the Government will increase rates and put so many people in financial trouble.” We agree that the Canadian Government would not purposely raise interest rates “just because”, but there are so many different factors that effect the Bank of Canada rate. The Government might have no choice to raise the rate and the homeowners with unaffordable mortgages might just become a casualty of rate increases.
Recently the new rules have been created to try and slow Canadian’s appetite for housing and large mortgages. The maximum amortization has been reduced to 30 years, and CMHC insured home equity rules have been adjusted. The Toronto Real Estate Board reported that April’s sales were down by 17% and new listings had decreased by 30%. However, the average price increased approximately $40,000 from the previous April. The 9,041 Torontonians who purchased a home in April paid, on average more than anyone else…ever.
The Real Estate Market is very important to Canadians. More than 9 million Canadians own a home. Housing prices and mortgage rates affect so many people. It will be very interesting to see how rates move and whether the Government will be implementing more rules to slow down the number, and size, of mortgages taken out by Canadians. Some people suggest that instead of raising the interest rate and harming close to one million mortgages, that the Government might increase the minimum downpayment to 10%. This would result in slowing real estate sales and most likely reduce prices, but it would not affect homeowners’ monthly payments.
PropertySold.ca
Every year for the past 16 years, the average price for a home for sale in Toronto has increased. According to the Toronto Real Estate Board’s month report, the real estate market in Toronto has gone from an average price os $198,150 in 1996 to an average price of $431,463 in 2010, and an average price of $457,876 so far in 2011.
This is 16 years without a decline. Even in the financial crisis of 2008, the average price for a home in Toronto grew from $376,236 to $379,347. In April of 2011, a new average price record was set: $477,407. These statistics indicate that the real estate market in Toronto has been on fire.
The average price for home in Toronto can vary throughout the year. November and December typically have the lowest prices of the year (although not always) and March, April, and May typically have a higher average price. Although it’s difficult to generalize by month because if the market is rising quickly thought the year, then home prices at the end of the year will be higher than the beginning.
There are a multitude of factors that affect the average price for a home in Toronto. These include:
Supply (number of listings)
Interest Rates
Employment Rate
Mortgage Rules
Demand (desire to own a home)
In the past 16 years we have seen these factors positively affect the average price:
Supply (number of listings): The supply of homes (resale and new) has remained steady and has not outpaced demand.
Interest Rates: Interest rates have been remained low or declined for the past 16 years.
Employment Rate: Apart from the financial crisis, employment rate has remained at an adequate level.
Mortgage Rules: Mortage rules have, until recently, softened to make it easier for home ownership.
Demand (desire to own a home): Demand to own a home seems to be at an all time high. 70% of Canadians now own homes. It’s become part of our culture to frown upon renting and applaud home ownership.
How high can the average price for a home for sale in Toronto climb? This question does not have an answer yet. Every time we see a new high set, we wonder is this it? But until now, there has always been an higher high! The Canadian Real Estate Association is forecasting new highs for 2011!
Why Home Sellers Want To Save Money:
Real Estate home sellers have usually invested a lot of time and money into their home. After most people purchase a home, they want to complete renovations in order to upgrade their home. This is especially true in urban centres like Toronto, Etobicoke, North York, and Scarborough, where older homes are being purchased and fixed up. Buying and renovating also occurs in newer urban centres such as Mississauga and Brampton. In Brampton and Mississauga, where the home was perhaps built in the 80′s or 90′s might just need a new kitchen, floors and paint versus having to rewire or do structural repairs. Either way you look at it, typically most home buyers tend to invest in their home to make it better.
As everyone knows, renovations can be very expensive, so it comes as no surprise that when it comes time to sell, home owners want to keep as much money as possible.
The Easiest Way To Save Money When Selling Real Estate:
Because home owner want to keep as much money as possible from the sale of their home, they usually choose to try to save money on the real estate commissions when they sell. Real Estate commissions are negotiable, but tend to average 5% (on the high side) and 3.5% (on the low side). Their percentage equates to a large amount of money. On a $400,000 home, 5% is $20,000 and 3.5% is $14,000. Plus home sellers need to pay taxes (HST in ON and BC!!) on those commissions.
Home owners who want to save on Real Estate fees usually consider selling their home themselves. They will advertise, negotiate, and then use a lawyer to review the contract and close the deal. Because Real Estate Agents are typically responsible for the advertising of a property for sale, when you don’t use an agent, home sellers need to advertise the home themselves. For that, they come to PropertySold.ca
For Sale By Owner MLS Exposure For $499, No Hidden Fees, No Extra Costs:
For Sale By Owners want to expose their home for sale to the most amount of people with spending the least amount of fees. If you are located in Canada you will want your home to be shown on MLS.ca (or Realtor.ca).
PropertySold.ca partnered with a Toronto Based Real Estate Brokerage Located in Vaughan. Our partnership allows For Sale By Owner home sellers to advertise their property on MLS.ca. This service was integrated with our new website, launched a few weeks ago. How is it going? AMAZING!
Get Listed on the Canada MLS For a Flat Fee
PropertySold.ca’s customers are estatic about being able to advertise on MLS.ca for a small fee. In the past few weeks we have had 40 customers choose the option to post on MLS.ca. Each day this number is growing by leaps and bounds. Here is a link to the properties being advertised on MLS by our partner Brokerage.
Real Estate Purchase + Improvements
In: Mortgage News
11 May 2011Have you ever found yourself saying ‘Wow this would be the home of my dreams but man the bathrooms or kitchen is out of date, or its going to need some repairs or renovations to make this home just right.’ Don’t immediately walk away from that open house or place your home on the market for sale in frustration. With mortgage rates still hovering around the lowest they have ever been there is no way to borrow money cheaper from your lender than a mortgage.
If you are talking about a home you already own the first thing you would look at is a refinance. Its the easiest way to borrow money but with refinances limited to 90% of your current home value there may not be enough room to borrow. If you are buying a home you have a set amount of down payment available so you could put less money down keeping the rest for renovations but you need at least 5% down payment and 1.5% in reserve for closing costs. If either of these scenarios means you are short on funds for the work you need done the Purchase Plus Improvements mortgage product may be the answer you are looking for.
A little known product, with many advantages, it is gaining ground as mortgage rates are cheaper than borrowing the money to make improvements or repairs from a line of credit or loan. Purchasing a home that requires updates to the inside or outside will often mean that you will pay less than a similar home on the street with those improvements already made. That lower purchase price also means a lower land transfer tax when buying and you now have the opportunity to make the upgrades to suit your needs and personal style. Every year, the Appraisal Institute of Canada surveys its members and compiles a list of renovations that yield the best return on investment. Year after year, refurbished kitchens and bathrooms head the payback list: 75 per cent to 100 per cent of the outlay for these projects can be recovered upon resale. Not only do you basically get your money back when you sell, it is much easier to sell when the home has been renovated.
The process is straightforward but does add a few extra steps to the purchase process. In order to get approved for financing the lenders require that you submit your agreement of purchase and sale along with a description and cost estimate for the proposed repairs or improvements from a qualified contractor. This may require that you make the offer conditional on financing for a longer than normal period because you will have to arrange for a qualified contractor to come in and get you a quote. For a refinance plus improvements you can collect this quote before you you make your application for financing and have it ready for submission. For renovations or repairs the estimate should include:
1. description of the work including types of materials being installed and their quantities for example 500 sq feet of laminate flooring.
2. total cost of the all work with applicable taxes.
For larger projects more detailed info may be required such as floor plans etc..
There are some limits to the Program that you should be aware of. For conventional mortgages (80% loan to value) Improvements cannot exceed the lesser of 20% of the property lending value (original purchase price or as is value of the home) $500,000 home means max $100,000 available funds.
For insured mortgages Genworth will allow up to 20% of the original purchase price (or as is value) to a max of $40,000 in improvements. CMHC will allow up to 10% of the as-improved value so a $500,000 home with $50,000 in improvements means an approximate improved value of $550,000 making $55,000 in available funds.
These limits can be exceeded when greater improvements or renovations are needed but then we get into a construction mortgage which will have multiple advances and different guidelines. In any case you can expect normal rates and no extra costs other than an appraisal which is often required to confirm the value and the completion of the work.
That is the Purchase plus improvements program in a nut-shell. Don’t walk away from your dream home because a few repairs or improvements are needed, you may end up settling for something less than ideal. Instead make that dream home even better with your personal touch and improvements that will pay for themselves in everyday use and when you resell.
For any mortgage / refinance questions please call Abraham Niyazi, our in house mortgage specialist or submit a request through one of our mortgage applications. You can also post a question in our Questions & Answers section.
Canadian Housing Market Heats Up in Toronto, Vancouver, Ottawa, and Montreal
In: Real Estate News
10 May 2011Garry Marr (one of our favourite real estate reporters!) recently reported that the Canadian Real Estate Association has raised their forecast for Canadian Home Sales. Gary juxtaposes this “raised housing forecast” against the data from the US, which shows that American home values fell by 3%, and that “American home values have fallen 29.5% from their peak in July 2006″.
Gary Marr’s article can be read here!
This is a fantastic article on the reality of the housing market in Canada vs. U.S.A. The article contains quotes from Garth Turner (Canada’s real estate contrairian), as well as a BMO senior economist who point out that “Canada housing cannot continue to rise faster than incomes forever. ”
Also mentioned are factors that affect the price of homes for sale in Canada. Supply of homes for sale include resale listings and new home for sale being added to the inventory of available homes for sale. Resale listings have been declining month over month and CMHC said that 179,000 homes were constructed on a seasonally adjusted annualized basis in April. This indicates that Canada is not over supplied, which could aide in a stable housing market in Canada.
PropertySold.ca’s home listings have been increasing significantly with the launch of our new website. Our new website now includes
- For Sale By Owner listings
- For Sale By Owner listings on MLS
- Real Estate Agent listings
- Builders and Developer’s listings
All of our listings are index in Google and our website is exposed at the top of the most popular search engines. Our website traffic provides incredible exposure for homes for sale.
PropertySold.ca
Flat Fee and Discount Listing on MLS for a Flat Fee Attracting Attention
In: Real Estate News
10 May 2011When the competition bureau helped change the MLS rules back in 2010, they helped create a new opportunity for home sellers to sell privately and be advertised on MLS. PropertySold.ca created a MLS partnership with Real Estate Brokerages across Canada that allowed For Sale By Owner home sellers to advertise their property on Local Board MLS Systems and Realtor.ca for $499. PropertySold.ca’s customers were listed on the Toronto Real Estate Board and also were posted on Realtor.ca in the city and area where the home is located. For example, a FBSO home seller in Ottawa would be listed on the Toronto Real Estate Board, but the listing would be displayed on the Ottawa Realtor.ca search map, on the street where the home is located.
There were a few other For Sale By Owner companies who partnered with other brokerages in other areas of Ontario and they did not list their properties on the Toronto Real Estate Board. These other brokerages also attempted post homes located in other Provinces. Recently these brokerages have received notice to remove listings from MLS if the listings are not located in the Province where the brokerage is located. The Toronto Star reported that that these brokerages have received direction to remove listings in Alberta, PEI, and Quebec. The Globe and Mail reported that one real estate brokerage received a $50,000 fine for advertising listings in Quebec.
Traditionally, brokerages have only been allowed to post listings in the province where they are located. PropertySold.ca allows our customers to post their listing on MLS through our partner’s brokerages. All listings will appear on Realtor.ca and also be posting on the Toronto Real Estate Board’s MLS system. We also have partnerships with other brokerages who a registered in other Provinces. For example, if you want to sell your home For Sale By Owner in Vancouver, you will be able to subscribe to sell your home on PropertySold.ca and also post on Realtor.ca through a local agent in Vancouver. The Vancouver agent will post your home on their local MLS real estate board system.
PropertySold.ca launched our new website last month and a significant number of our For Sale By Owner sellers are choosing to sell their home privately and also be listed on MLS. The MLS listing will show a front photo of the home for sale, plus the basic listing information including price, address, lot size, as well as a description that directs the buyers to find more information about the property for sale on the Realtor’s website. The home for sale on MLS will be shown on the MLS map as well as in the search results. More photos and information can be found on the PropertySold.ca real estate listing website.
The benefits of listing on MLS and being listed on PropertySold.ca as a For Sale by Owner listing is that buyers searching on MLS without an agent will be able to find the seller’s property and contact the seller directly. If the buyer has an agent and wants to use an agent to aide in the contract negotiations for the property, the seller can negotiate a commission with the agent if desired. Sellers can save thousands on Real Estate Commissions, plus get MLS exposure for their property for sale. Buyers can easily find homes for sale by searching on Google, PropertySold.ca or on MLS.ca.
PropertySold.ca
Finally! Real Estate Agents have been asking to post their homes on PropertySold.ca for the past 7 years. PropertySold.ca shows up at the top of internet searches for most real estate search terms. Real Estate agents have wanted to drive more traffic to their homes and, in tern, make more money by helping buyers find homes for sale.
With the launch of our new website, Real Estate Agents are able to take advantage of our search engine technology and get their listing to the top of real estate searches. Everyone knows that when a home is posted on MLS.ca, it is not indexed in Google. When a home buyer searches for the agent’s listing on Google, the MLS.ca listing is nowhere to be found.
Now agents can post on PropertySold.ca and find more buyers. Here is an example of an agent posting on PropertySold.ca:
http://quebec.propertysold.ca/montreal/7320/774-rue-versailles
When a home buyer searches for “774 Rue Versailles”, the PropertySold.ca listing is the top result (actually, the top 3 results!).
ProeprtySold.ca
The Toronto Real Estate Board recently released their real estate statistics for the first 2 weeks of April. Listen to this! The average price in Toronto was $483,165. A 12% increase over the first two weeks on 2010. “12%”!!! This is an astounding number. This is more than $50,000 over the average selling price of $430,271 for the first 2 weeks on April, 2009.
It is safe to say that the real estate market is still smoking hot!
Our new propertysold.ca website is also smoking hot! Our new listings and sold homes has been increasing dramatically since our new site was launched a few weeks ago. Many of our new listings are choosing to list their home on Propertysold.ca and also on MLS.ca through our partner brokerage. We are also receiving many new listing from real estate agents looking for more exposure for their properties.
To see all our new packages, please click here: Sell your home on PropertySold.ca
PropertySold.ca
Canadians Waiting To Buy A Home
In: Mortgage News
12 Apr 2011There seems to be a shift in thinking for our young Canadians. A recent study conducted by RBC found that 55 per cent of legal age Canadians under 35 are considering holding off on a home purchase till next year. This result is 10 percentage points above the national average. For many their main argument was focused on mortgage costs taking up too much of their income.
For those Canadians feeling this way I must advise the importance of getting expert advice on the matter of actual cost of owning a home and keep in mind the future of the market going forward. It may not make sense to wait after all is said and done.
As for the financial aspect when owing a home there are costs involved that are not immediately apparent to the first time homebuyer. Anyone who owns a home today is familiar with the cost of running a home above and beyond the mortgage itself. Yearly property tax, and monthly bills are a factor that cannot be ignored. Depending on your Province and City these costs vary but you are paying for a home of your own, to enjoy as you please without a landlord telling you what you can and cannot do in your personal space.
Take into account these costs when deciding what price range to start your home search at. Talk to a licensed Mortgage Agent who can break down the costs and calculate how much the lenders will be willing to provide for the home purchase. You may find that the total monthly cost is higher than renting but keep in mind each month the mortgage is being paid down and in 25-30 years you should be mortgage free (if not sooner). That time may seem far off for anyone under 35 but that will bring them right into retirement age and possibly a reduced income. A mortgage free home would be ideal in that situation. The longer you wait the longer it takes you to get to that point, and let’s face it if you are renting you are already paying a mortgage, your landlords.
The future of rates does not look very rosy either, if our youth that mortgage payments may be a little high then consider the rate forecast for the next 2 years. We are coming off historical lows in mortgage interest rates. With our steadily improving economy the rates will continue to rise and the monthly cost of owning the home will rise as well. A long term fixed rate will mean a steady monthly payment for the next 5-10 years. That will give young Canadians time for their careers, pay, and position to move higher allowing them to insure that the future mortgage payments can be made. Interest rates work in a cycle, if they are high when renewal time comes take a 6 month or 1 year rate and see if they come back down. Here again a Licensed Mortgage Agent should be able to advise you as to the future rate trends.
Home prices have also been climbing year after year since 1996, it’s not getting any cheaper to buy. Talks of housing bubbles have been floating around for years now and house price have their own cycle as well, if they go down they will come back up again. The best advice to protect yourself against market corrections is choose a home that will suit your needs for any future plans you may have like children or retirement. The longer you hold on to a property the more insulated you are from price fluctuations.
Waiting to buy a home next year rather than right now does not seem like the best course of action at this time. Rising rates mean buyers qualify for less, and rising prices mean you get less home for your buying dollar. Just make sure you talk to a professional regarding costs and mortgage qualification.
Brokers: Rate hike won’t come before May or July
Why we might see a rate hike sooner rather than later
Housing starts up modestly : CMHC
Survey: first-time buyers confident about financial health
Brokers disagree with poll suggesting young homebuyers deferring purchase
Younger Canadians intent on buying homes — next year
Fewer young homebuyers may dampen home prices: CCPA economist
First-time buyers lead home sales: RE/MAX
First-time buyers helping to fuel real-estate gains
Building permits rise more than expected in February
Home sales fall but prices rise
TREB Releases Promising March Figures for the GTA
Real estate: A ‘secret’ tax shelter
TOP 5: tax tips that will save you cash
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- Tags: application, Canadians, home owner, homebuyer, interest rate, mortgage, price, purchase, RBC, young buyer
Rates On The Rise, But Are They Here To Stay?
In: Mortgage News
7 Apr 2011When talking about the future of rates there are many factors to consider among them are the local economy, world economy, Bond Markets, World Markets, and current political climate. But predicting the future of rates is like predicting where a helium balloon will end up if you let it go. You got a general idea based on the direction the wind is blowing but that can quickly change. April 5th saw a relatively large increase of the 5yr fixed rates by 0.35% with many major lenders, as of today other lenders have followed suit. The overnight lending rate for the variable mortgage terms remained the same. The question on everybody’s mind is ‘will the rates come back down or continue to rise?’ That brings us to our balloon example, the experts have a good idea but they are not completely sure themselves.
Even with the uncertainty built into rate forecasts it still bears paying attention to what the experts say our future rates will look like, after all they are trained in their field, have access to information that the average consumer may never see and they get paid well to know their job and advise their employers so future financial strategies can be implemented.
Below you will find the latest year end summaries by each of the major Canadian Banks.
The Bank of Canada’s overnight rate helps set the lenders variable mortgage rates.
| Bank | 2011 | 2012 |
| BMO | 2.00 | 3.50 |
| CIBC | 2.00 | 2.25 |
| NBC | 2.00 | 2.75 |
| RBC | 2.00 | 3.00 |
| Scotia | 1.50 | 2.25 |
| TD | 2.00 | 3.00 |
Year-end Avg 2.00 2.75
Chg vs Today +1.00 +1.75
(All figures are rounded to the nearest .25 point increment.)
Latest 5-Year Government Bond Yield Forecast Government bond yields drive 5-year fixed mortgage rates.
| Bank | 2011 | 2012 |
| BMO | 3.58 | 4.15 |
| NBC | 3.46 | 3.88 |
| RBC | 3.30 | 4.05 |
| Scotia | 2.75 | 3.00 |
| TD | 3.50 | 3.80 |
Year-end Avg 3.32 3.78
Chg vs Today +0.53 +0.99
There are a few things to take into account for the short term. Canada’s economy expanded 0.5% in January, we also saw a strong start to our GDP numbers which grew matching that of Decembers. The Conference Board of Canada projected an overall economic growth of 2.4% this year indicating further that the rebound appears on solid ground. Normally these and other factors would indicate a certain and early interest rate hike by the Bank of Canada, but Governor Mark Carney is not expected to even signal a hike in his benchmark rate when the central bank next meets given the optics of doing so during an election campaign.
Still, the overnight rate will inevitably rise later this year from its current level of 1 per cent, possibly in July. TD senior economist Pascal
Gauthier sums up the common sentiment amongst the experts on the future of rates; “We remain of the view that July is the most opportune time for the next hike…Once engaged, the hiking cycle will likely persist at a gradual pace of a quarter-point at each meeting for the remainder of the year, bringing it to 2 per cent by year-end. Looking out further, unless a sizable downside risk materializes between now and then, the overnight rate will likely reach 3 per cent by year-end 2012.”
Where will the balloon actually land?….Somewhere over there 
Please see the attached links to the source information for the above article.
- What is the bond market telling us?
- Strong economy sets stage for summer interest rate hike
- Brokers: TD rate hike signals industry shift
- Canadian Interest Rate Forecast
The views expressed above are the opinion of the Author and should not be considered professional financial advice.
For More Information About Mortgages and Rates Please Call Abrahim Niyazi @ 1-866-RATE-708
In January, Canadian Finance Minister Jim Flaherty announced changes in the nation’s mortgage rules, limiting the amortization period on “high-ratio” mortgages, and imposing new constraints on home equity lines of credit. Beginning on March 18, 2011, the maximum amortization on a home mortgage with less than 20% down will drop from thirty-five to thirty years.
Through this change our Government would like to see Canadian families continue to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire. Although the change clearly encourages home buyers to put down at least 20%, the minimum down-payment requirement remains unchanged. The minimum down-payment stays at 5%. Some lenders will continue to offer thirty-five years mortgages to home buyers with 20% or more to put down on their home purchases, but for some lenders’ mortgage insurance requirement changes sometimes prompt them to change their conventional amortization policies. I would not be surprised if the whole industry limited amortizations to 30 years for all mortgages. In 2008 October The Department of Finance tightened the rules from 40 year max amortizations to 35 year max amortizations for government backed mortgages, today the 40 year mortgage is all but extinct.
Slightly higher monthly payments; major savings on interest payments
The government’s own website explains, “For any given mortgage loan, a lower amortization period would result in a moderate increase in the monthly payment along with a significant reduction in the total interest paid over the amortization period. This measure is consistent with the principle of encouraging savings through home ownership.” (http://www.fin.gc.ca/n11/data/11-003_1-eng.asp) Noting the average Canadian home sold for approximately $300,000(Cdn) in 2010, the government calculated the monthly payment on a 5% mortgage would increase $97 per month, but the homeowner would save more than $55,000 in interest charges over the life of the loan.
Protecting against a mortgage meltdown
Announcing the changes, Canadian Finance Minister Jim Flaherty told Reuters News Service, “The main reason we’re taking the action is for the longer term, that we avoid even the beginning of the development of the kinds of issues that have happened in some other countries that have been very damaging to families.” Flaherty specifically cited examples of housing market meltdowns in the United States, Great Britain, and Ireland, conceding the new measures would “have some moderating effect on the (housing) market.”
Most experts predict the rules-changes will have far more impact on applications for home equity lines of credit than on requests for loans to finance new-home purchases. Flaherty outlined policy-makers’ concerns, recalling how resale prices dropped in 2008, and sharply rebounded in 2009 as a result of record-low mortgage rates that made refinancing and qualification for HELOCs far easier for average customers. Consequently, Canadians’ household debt spiked sharply, climbing to an all-time high–$6.1 trillion(Cdn), or 148 percent of Canadians’ disposable income.
Minimal effect on home sales
Most experts agree the changes will have minimal impact on the Canadian real estate market, but they do send a big message. Most characterize the change in amortization periods as “a prudent tweak” rather than a major overhaul. In a press release, The Canadian Association of Accredited Mortgage Professionals said the government had found “the fine line” between protecting Canadians against over-extending themselves and maintaining the real estate market’s health.
Phil Soper President and CEO of Brookfield Real Estate Services and Royal LePage broke down the rule-changes’ ramifications three ways, telling reporters, “”The actual impact will likely be smaller than the message. The real key here is that the first-time buyer wasn’t impacted negatively by this announcement. Refinancing impacts people who are in homes and it directly targets people’s indebtedness, but it shouldn’t take real estate transactions off the table.”
While we may not see many home buyers dropping out of the market due to these changes, the lower amortization means that their incomes will qualify them for less ‘home’ than it does now. Two results become clear, Canadians will be buying lower priced and possibly smaller homes and home prices will have to come down to meet that shift in demand. The final result will be exactly what Mr. Flaherty is hoping for.
Propertysold.ca is Canada’s premier internet real estate company. Our websites show up at the top of search engines for thousands of real estate searches. Our 2010 top 5 North York searches were:
North York Real Estate
Houses for sale in north york Ontario
Houses for sale in north york
North york condos for sale
North york condo for sale
We are experts at driving buyers to homes advertised on our website through real estate searches on Google, Yahoo, and Bing. In 2010 we received 83,982 pageviews from buyers looking for Real Estate in North York.
PropertySold.ca received a total of 3,510,352 visitors and 18,322,988 pageviews in 2010.
Buyers, Sellers and Real Estate Professionals are able to take advantage of our website visitors.
Buyers are able to find houses, condos and townhouses for sale.
Sellers are able to advertise their properties and receive excellent internet exposure.
Real estate professionals are able to market themselves to buyers and sellers by becoming a “Local Real Estate Professional” in the city of their choice. Real Estate professionals can contact william@propertysold.ca for more information.
PropertySold.ca
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- Tags: advertising, agents, buyers, condo, homes, house, north york, real estate, salesperson, sellers
North York Real Estate: Houses and Condos For Sale, 2010 Statistics
In: Real Estate News
21 Jan 2011
North York is a great place to live! Close to highways (401, 400, 404) and located along the Yonge Subway line, North York has always had a great demand for real estate. On the Toronto Real Estate Board, North York is comprised of areas C6, C7, C14 and C15. 2010 was a great year for Real Estate in North York. Lets review the real estate statistics in North York for 2010.
Here are the real estate statistics for all properties sold (including Detached houses, Semi-detached houses, Condo Apartments, and Condo Townhouses) in North York in 2010:
Listed = 8776
Sold = 4809
Average Price = $460,478
Days on the Market = 26
The totals above were calculated from the individual areas of North York. Here are their totals:
C6 (North of 401, West of Don River, East of Allen Rd, South of Steeles)
Listed = 658
Sold = 328
Average Price = $538,485
Days on the Market = 28
C7 (North of 401, East of Don River, West of Yonge, South of Steeles)
Listed = 2304
Sold = 1255
Average Price = $439,230
Days on the Market = 26
C14 (North of 401, East of Yonge, West of Bayview, South of Steeles)
Listed = 3397
Sold = 1911
Average Price = $474,515
Days on the Market = 25
C15 (North of 401, East of Bayview, West of Victoria Park, South of Steeles)
Listed = 2417
Sold = 1315
Average Price = $440,903
Days on the Market = 25
If you would like more detailed real estate statistics for North York, please contact william@propertysold.ca
Canadian Foreclosures, Power of Sales, and Distressed Sales…What you need to know
In: Real Estate News
21 Jan 2011Perhaps you have seen the newspaper ads or the internet banners that say “Foreclosure Properties”, “Power of sales in Canada”, or “buy distressed properties”…perhaps if you “sign up” or “provide your contact information”, you will get access to thousands of powers of sales and get “great deals”?
If you see these ads, we suggest that you look the other way! Run! Don’t Call! Don’t sign up! Here’s why…
1. The Power of Sale homes sell for market value!
Each “Power of Sale” home goes on mls.ca/realtor.ca. All the other buyers looking for a home for sale will see the house. If it’s a good home and priced right, it will most likely sell for what it’s worth (which is market value – the same price as a similar home in the same area). Many people are under the impression that “Power of sale” houses will sell for thousands of dollars less and the buyer will get a “great deal”. This is often not the case. If a Power of sale home does sell for less, it’s most likely because many power of sale homes are “handyman specials”. These homes have usually not been well looked after. They need a lot of work. This is why they might sell for less than the average price, but they still sell for “market price” because everyone saw the home and had the opportunity to put in a bid.
2. Banks don’t want to lose money.
Banks lent the money to the owner that was unable to pay their mortgage. When the bank takes over the home, they try to sell it in order to make their money (and their expenses) back. Banks do not want to sell a home that they take over, for a cheap price. Banks are in the business of making money: not losing money. This is why you will often see “power of sale” homes not selling for thousands of dollars less than other similar homes.
3. The Foreclosure rate in Canada is very low.
In fact less than 1% of mortgages in Canada are in arrears. . This is very low. There are just not that many “power of sales” in Canada.
However, there are some Powers Of Sale in Canada. A Real Estate Agent can look on their local MLS board and see who the “owner” of the home for sale and occasionally the seller’s name is a bank (For example, the seller might be Royal Bank, CIBC, Home Trust).
4. Some Agents use the “prospect” of Power of Sales or distressed properties in order to get customers.
This is the main reason to not reply or inquire when you see ads for “Distressed properties” or “Power of sale” properties. Some real estate agents create websites and promise access to “cheap” properties. They do this because some people respond and end up becoming clients (so these ads do work – from an agent point of view!). However, most real estate agents are unable to search specifically for “power of sale” properties on their local MLS because most MLS databases do not have the ability to search by “owner” name. These properties need to be found by going “one by one” through real estate listings.
5. How to Find and Buy Distressed Properties, Power of sale properties, or foreclosures.
However, agents can find power of sale properties on their local MLS (by going one-by-one through listings), if that is what a buyer is interested in. So we would recommend (if you are looking for these properties) to contact an agent that you are comfortable with. It would be useful to find an agent who has experience with power of sale properties or is knowledgeable about the legal aspects of bank sale properties.
What buyers need to know is that there is no “special”, “secret” list of foreclosed homes or distressed properties. Looking for a home for sale at a low price takes research, patience, and knowledge. Instead of searching specifically for a bank sale, you should be looking at all homes for sale regardless of the seller or situation.
PropertySold.ca
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- Tags: agent, bank sale, buyers, canada, Canadian, cheap, condo, distressed properties, Forclosures, home, house, leads, mls, power of sale, properties, sellers
MLS Canada Sold Listings and Properties: Finding Sold Prices In Ontario
In: Real Estate News
18 Jan 2011It seems like everyone is curious about real estate. Specifically everyone wants to know the selling price of the home up the street . Home owners, sellers and buyers are all interested in this information because home values affect all the other values of homes in the neighbourhood (Home values are usually based on comparing recent similar home prices).
Lets examine at how a buyer or seller can find out how much a real estate listing (home, house, or condo) sold for. The first information that you need to know is whether the property (or properties) were sold on MLS in Canada or Privately (for sale by owner) or through a builder.
Land Registry Offices:
All properties Sold Prices in Ontario (or other provinces) are registered in the Land Registry Database. This is the largest database of home prices and these databases include MLS sales, Private Real Estate Sales and Builder Sales. The Land Registry databases also include all title transfers (for example between spouses in a divorces) so they contains a lot more information than selling prices between buyers and sellers. Homes are only registered here on the date that they are transferred (move-in/out date). This differs from real estate agents who record the sold price when the deal is negotiated.
The local land registry offices are located here. The land registry usually charges a fee per sold price. They also typically do not provide a list of all the recent sold homes. You need to specifically choose one home and ask for that information.
MLS Sold Home Prices
The second largest database would be the local Real Estate MLS database owned by the local real estate board(s). For example, the Toronto Real Estate Board has all the sold prices of homes sold by real estate agents in the Greater Toronto Area. If a home was did not involve real estate agents (FSBO, Builder), it would not be listed in the Toronto Real Estate Boards database. Other real estate boards (Niagara, Hamilton, London, Kitchener, Windosor…) would all keep a database of all their MLS home sales.
If a member of the public wants to get access to MLS sold prices they would need to contact a real estate agent. The question is whether a real estate agent will provide this information without being under contract with the person. Real Estate Agents are able to access Sold Home Prices very quickly and are able to generate reports that list all the recent homes sold in a neighbourhood. Real Estate Agents will usually show home owners the sold properties of homes in their neighbourhood when they complete a comparative market analysis.
PropertySold.ca
2011 has “arrived in style” for the Canadian Real Estate Market and for PropertySold.ca. Typically, buyers and sellers renew their interest in Real Estate immediately after the holiday season ends. Our website experienced this as we received 39,217 website visitors on January 3rd. Since then, we have averaged 22,210 website visitors per day over the first 2 weeks on January.
We saw another spike in Real Estate website visitors yesterday (23,665), when the Canadian Government announced “New Mortgage Rules” for the Canadian real estate market.
PropertySold.ca has become a very important source of real estate information and real estate news in Canada. Our record level of internet real estate traffic is resulting in more exposure for our private real estate properties for sale and this is resulting in more sold homes.
We will continue to work hard at answering your real estate questions and providing the best exposure for our properties for sale.
PropertySold.ca
30 Year Amortizations Starting March 18th: Tips For Sellers and Buyers – “Better Get Moving”
17 Jan 2011So today is January 17th and the Government of Canada announced three new mortgage rules.
- No more 35 year amortizations (for people with less than 20% down)
- Maximum amount of re-finance is 85% of home value
- Government will not insure HELOCs
Let’s look at the big change: No More 35 Year Amortizations
This change will have the most profound impact on sellers and buyers over the next 60 days.
Sellers:
LIST ASAP: if you are thinking about selling and were planning on listing in March, perhaps think again. A large chunk of buyers (the ones with less than 20% down) will be able to afford less of a mortgage starting on March 18th. This means that the pool of buyers for your home, just shrank! If you are thinking about listing. Then it could be wise to do it ASAP in order to make sure your pool of buyers doesn’t shrink.
PRICE RIGHT!: This might not be the time “test the market with your dream price”. There could be a flood of listings coming onto the market in order to sell before the mortgage rules change. The homes priced right will sell while buyers can still qualify for 35 year mortgages. The homes that don’t sell face a smaller pool of buyers after March 18th.
Buyers:
WAIT? It’s hard to have an good opinion for buyers. Here are some facts and you can make up your own mind: Home prices are at an all time high. There might be a lot of people trying to buy before the rules take affect (these are the people who really want to pay a high price for a home and pay interest for 35 years). When a lot of people buy, home prices usually go up (even higher).
PRICES COMING DOWN? No one can predict that. Some people sit on the fence for years and waiting for a crash while prices increase 5-10% a year. Some people buy their dream home regardless of price. Some real estate professionals say “better buy now or be priced out forever”. Once the rules change, who knows what will happen to prices or demand. Although the math says that people can afford less home when they can only choose a 30 year amort vs a 35 year amort, this does not guarantee that prices will drop.
So there seems to be more question marks for Buyers than for Sellers.
It’s going to be an interesting spring home market in Canada!
Propertysold.ca
Facebook just passed 500 million “friends” and PropertySold.ca just passed $500 million in Real Estate Sold. This is a great milestone for us!
$500 Million is the total value of all the property sold on our website to date. Since we launched in 2004, we have consistently strived to become Canada’s Most Visited Real Estate Website. Whether it has been providing excellent exposure for our properties for sale (we now receive 20,000 visitors per day!), or providing real estate help and information, or our up-to-the-minute real estate news information, we have always, and continue to have, a passion for Canadian Real Estate.
Our growth over the past year has been extraordinary and we forecast passing one billion dollars in Real Estate Sales within the next 2 years!
Happy Selling Everyone!
PropertySold.ca
New Mortgage Rules Set Maximum Amortization to 30 years = $40,000 drop in affordability?
In: Real Estate News
17 Jan 2011The new mortgage rules just announced, state that the new maximum amortization will be 30 years, instead of 35 years.
What does this mean for affordability and home prices in Canada
Example:
Let’s take an example of a family that makes $100,000 a year and has a $30,000 down payment. When they purchase a home, they will put $30,000 and the remainder amount will require a mortgage. Based on the old mortgage rules, they were able to amortize the mortgage over 35 years. According to the ING mortgage calculator they would have been able to borrow $507,330 and purchase a home for $537,330.
Now if we look at the example with the new mortgage rules of a 30 year amortization, this family can now only obtain a mortgage of $470,222 and the maximum home that they can purchase is now $500,222.
So essentially, the amount that this family can borrow to purchase a home has dropped by $37,108. Close to $40,000.
This means that any seller that is offering their home for $540,000, has just lost a buyer, because this family cannot afford to purchase a home for $540,000 (they were able with a 35 year amortization). This family’s maximum budget just dropped by $37,108 and now they can only purchase a home for $500,000.
This mortgage rule change should have a significant impact on real estate in Canada in 2011 in terms of sales, and average home prices.
PropertySold.ca
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- Tags: 30 year, affect, affordability, amortizations, canada, effect, house prices, impact, mortgage, new, rules, sold homes
Big news just announced in the housing market is that Finance Minister, Jim Flaherty just announced the following changes to the mortgage rules in Canada:
* Mortgage amortization periods will be reduced from 35 years to 30 years.
* The maximum amount Canadians can borrow to refinance their mortgages will be lowered from 90 per cent to 85 per cent of the value of their homes.
* The government will withdraw its insurance backing on lines of credit secured on homes, such as home equity lines of credit.
Here is a link to more information at the Globe and Mail
What effect will these changes have on the housing market?
When will these new changes take place? According to the government website:
The adjustments to the mortgage insurance guarantee framework will come into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured by homes will come into force on April 18, 2011.
What about the amortization reduction. When will that take place? We are looking into the answers. If you know, please leave your comments..
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