Fair Housing Plan introduced

Ontario’s housing market has seen very dynamic growth in recent years, with prices in the Greater Toronto Area and the Greater Golden Horseshoe rising significantly. This has been supported by economic fundamentals, including a growing population, rising employment, higher incomes and very low borrowing costs. In an effort to address the situation, Ontario’s Fair Housing Plan was introduced last month by the Ministry of Finance, offering a comprehensive package of measures to help more people find affordable homes and to bring stability to the real estate market. The plan includes actions to address demand for housing, protect renters, increase housing supply and protect homebuyers.

Actions included in the plan include:

• Legislation that, if passed, would implement a new 15-per-cent Non-Resident Speculation Tax (NRST) on the price of homes in the Greater Golden Horseshoe (GGH) purchased by individuals who are not citizens or permanent residents of Canada or by foreign corporations.

• Expanding rent control to all private rental units in Ontario, including those built after 1991. This will ensure increases in rental costs can only rise at the rate posted in the annual provincial rent increase guideline.

• Legislation that would, if passed, empower the City of Toronto, and potentially other interested municipalities, to introduce a vacant homes property tax to encourage property owners to sell unoccupied units or rent them out, to address concerns about residential units potentially being left vacant by speculators.

• Establishing a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market and discuss the impact of the measures in the Fair Housing Plan and any additional steps that are needed.

For a full explanation of actions outlined in the Fair Housing Plan, visit https://news.ontario.ca/mof/en/2017/04/ontarios-fair-housing-plan.html


First-timers: Are you ready to buy?

While interest rates remain low, there have been a few changes in recent months and some even bigger changes in recent years that have made purchasing a home tougher for first-time buyers. Prices across most of the country are on the rise and housing stock is low in many areas, creating a fast-paced, red-hot real estate market that is leaving some in the dust.

Here are three things you should consider before you start the hunt for your first home:

Can you afford it?Without a doubt, this is the most important question of all when planning the largest purchase of your life. In addition to mortgage payments, be sure to factor in all the added costs that homeowners face. Closing costs, property tax, monthly utility bills, home maintenance and repairs will add up quickly and with the new mortgage rules that went into effect last fall, getting pre-approved is tougher.

Is your down payment sufficient? While it’s ideal to put down 20 percent (to avoid paying mortgage insurance, which can tack an extra $50 to $100 per month onto your debt load) the law in Canada requires purchasers to pay, up front, at least five percent of the purchase price. If you’re having trouble coming up with this amount, talk to your lender or a financial planner for suggestions on saving money faster.

Is home ownership right for you,right now? This is a valid question for Millennials who are considering taking the leap into owning real estate. Buying a home is a major life event and, while owning real estate is always a wise investment, if you have a career that could include a transfer a year down the road or there’s a chance you may return to school to further your education, the timing might not be right. Location is another factor to consider. Do you foresee yourself in this town or city for a number of years? Buying and selling a home and moving are costly steps, so be sure you’ve found the right location to set down your roots.

With some thoughtful consideration, you will make the right choice. Having a trusted realtor on your side will always be a benefit, so take some time to find the professional who’s right for you!

What forms are needed when buying or selling a home?

When it comes to buying or selling a home, there are a few important documents that will come into play during the process. Some of these forms include pre-written clauses that your realtor will discuss and explain to you. Due to the nature of these contracts, be sure to read them thoroughly and always, always ask for clarification if needed.

Seller Representation Agreement (Listing Agreement): The listing agreement serves a number of functions. It establishes the relationship between the brokerage (and real estate representative) and the seller, it outlines specifics about the property for sale and it explains the services that will be performed and remuneration agreed upon. A Data Input Form will also be completed, describing the property in more depth i.e. legal description, age, room dimensions, zoning, etc.

Seller Property Information Statement (SPIS): Completing this form is optional for sellers. This form expands on information already provided about the property for sale, including items like restrictive covenants, known easements, details about past renovations, moisture issues, etc. If a SPIS has been provided by the seller, the salesperson should inform potential buyers of its existence. It is important to note that the SPIS is not a warranty or guarantee for buyers and should not replace a home inspection.

Buyer Representation Agreement: This agreement is an authority granted by a buyer to a real estate brokerage to act on his or her behalf during the purchase of a property. It outlines and explains the responsibilities of both parties and the commission arrangement. While a realtor in Ontario is required to complete the agreement and submit it to the buyer before any offer is made, the buyer is under no obligation to sign it.

Agreement of Purchase and Sale: An agreement of purchase and sale is like a conversation in writing that expresses the buyer’s wish to purchase a property and the proposed terms of sale. It only becomes legally binding when everything is mutually agreed upon and signed by both parties. Commonly referred to as an offer, this document summarizes the terms that the buyer is seeking. Items always covered in the agreement of purchase and sale will be deposit amount and sale price, conditions, chattels and fixtures, completion (closing) date, etc.

While the exact forms may vary from city to city across the province, the fundamental concept behind each is the same.

Six things to look for during an open house

If you’re on the hunt for a new home, that may involve visiting one, two, or half a dozen open houses. Some choose to visit open houses even if they are not ready to buy just so they have an idea of what the market has to offer when the time to purchase does come along. Whatever your reason for frequenting open houses, it’s important that you are looking for and noticing the right things so that you can make an informed decision.

If you are working with a realtor they will likely draw your attention to these items, but for those who are navigating the residential real estate waters on their own, here are six things you should pay close attention to during an open house:

1.The neighbours and neighbourhood – When you buy a house, you also are buying into its neighbourhood and the people in it, so take the time to walk down the street. Look at how well homes are cared for, how much traffic goes by, transit options if that’s important to you and demographics. If you have little kids, it’s nice to be on a street with other children.

2.The exterior – Before or after touring the inside, feel free to walk around the perimeter of the home, checking the foundation, eavestroughs, condition of walkways, decks and patios, paint on window sills and/or siding, etc.

3.The walls – Inside, keep a close eye on the walls. Nail holes and paint in need of an update are not an issue; you want to look for any signs of major cracking. This could be an indication of structural problems.

4.Smells – Believe it or not, nasty odours rank as one of the top factors in deterring a home sale. Strong smells from pets, tobacco and food scents can be a major turn off and might not be as easy to eradicate as you think. In some situations, it may be necessary to remove carpet and window coverings and paint walls to get rid of strong smells. Learn to recognize the smell of mould, a likely symptom of expensive water damage.

5.The big ticket items – Ask the listing salesperson about the age of the roof, furnace, plumbing, electrical and windows if not included in the feature sheet. These are all costly upgrades that some buyers might not want to be burdened with.

6.Overall cleanliness – Take a peek along baseboards, in closets, behind toilets and in window tracks for dirt. A home that is clean is likely a home that has been well cared for!

Sell your home with fabulous photography

It’s a visual world we live in. With today’s technology, people love to scour the internet looking at photos of homes for sale. Listings can be viewed easily on Realtor.ca and there’s no doubt that excellent pictures will help sell your home. If you want to attract serious buyers, it’s wise to prepare your home properly and post only high quality pictures.

The exterior shot of your home is of the utmost importance as it will likely be the first photo people see. Great curb appeal is something people look for, even during the winter months. A fantastic exterior shot can make the difference whether or not your property warrants a visit. Take outside photos on an overcast day to avoid dark shadows on your home. Touch up garage doors and paint eaves troughs if necessary. Clean windows and make your front entrance welcoming. Have your driveway, porch and walkway neatly shoveled. Add some winter greens to empty window boxes and make sure recycling/garbage bins are out of sight.

For the interior, little things such as fresh flowers, citrus fruits in a bowl and a lit fireplace make for a desirable picture. Also;

Clear rooms of clutter. Everything should be in its place.

Open all blinds, drapes and curtains to allow for maximum natural light.

Neatly arrange clean towels in the bathroom.

Put away all toiletries.

Clear all surfaces in the kitchen, including small appliances.

Remove magnets/pictures/notes from refrigerator and keep the top clear.

Hide unnecessary electrical wiring.

Do not have any pets or pet related items in view.

Remove personal photographs and family portraits.

Pictures are an important ingredient to any successful real estate marketing campaign, so ensure that your home is being viewed in its very best light.

Ontario government gives tax break to first-time home buyers

Have you heard? In its 2016 Fall Economic Statement, the Government of Ontario committed to increasing the land transfer tax (LTT) rebate for first-time home buyers from $2,000 to $4,000. The new LTT rebate will help more young families achieve their dreams of home ownership.

“Finding an affordable home has become a struggle for thousands of young couples,” said Ray Ferris, president of the Ontario Real Estate Association (OREA). “This tax break will reduce a first-time buyer’s closing costs and help them save more for their down payment.”

According to research prepared by Altus Group Economics for OREA, an improved LTT rebate will create 5,000 jobs and $268 million in economic spinoffs. Research shows that home ownership contributes to families becoming happier and healthier, and enjoying improvements in their children’s school performance.

“Home ownership changes you for the better,” said OREA CEO Designate, Tim Hudak. “It builds strong communities and stable neighborhoods. A tax break for first-time buyers will give a lot of young families the leg up they need to get into home ownership.”

What the new mortgage regulations mean for buyers

What’s been described during the past few weeks as a ‘sledgehammer crackdown’ on the Canadian housing market, the new mortgage regulations, some of which came into effect last month, are aimed at strengthening the country’s housing finance system ‘to help protect the long-term financial security of borrowers’ and ‘to improve tax fairness for Canadian homeowners’.

In simple terms, the changes will help ensure that homeowners are not taking on larger mortgages than they can afford. This will be accomplished using a stress test on all new insured mortgages, including those where the borrower has more than 20 percent for a down payment. The test will show whether or not a buyer is able to keep up with mortgage payments should interest rates increase and must be based on the Bank of Canada’s five-year fixed posted rate of 4.64 percent, regardless of the rate that is being offered by the lender.

The mortgage rate stress test will also look at the percentage of household income that is being dedicated to household expenses (GDS). The monthly mortgage payment, heat and taxes cannot exceed 39 percent of the borrowers income. In addition, the TDS (total debt service, which includes the previous stated monthly expenses plus debt repayment) must not exceed 44 percent.

Another aspect of the new regulations covers changes to the ‘eligibility rules for newly insured low-ratio government-backed insured mortgages. These new criteria will help target the funding support provided by government-backed low-ratio mortgage insurance towards safer forms of lending’. Effective November 30, low-ratio mortgages to be insured will include the following requirements:

  • Maximum amortization of 25 years
  • Purchase price under $1,000,000
  • Minimum credit score of 600
  • Owner-occupied (if a single unit)

The government has also introduced new reporting rules for the primary residence capital gains exemption. This regulation is aimed at addressing the issue of foreign investors ‘flipping’ Canadian properties while claiming a primary residence tax exemption.

For more information, visit https://www.fin.gc.ca/n16/data/16-117_2-eng.asp.