You live in an older house and you are going to be selling.  You don't know the complete history of your home and you know potential buyers will be asking questions regarding things like knob and tube wiring, UFFI insulation, oil tanks, etc.  Before your home is listed, I recommend you do a pre-listing home inspection.  This will give buyers coming to view your home the knowledge to make an informed decision when putting in an offer. If you live in one of the many neighbourhoods in Toronto where there are bidding wars on homes, then buyers will feel more confident putting in an offer on your home without necessarily doing their own inspection.  Often the inspector who did the initial inspection can go over his or her findings with prospective buyers for an additional fee.

Now, if you are buying an older home and I am your agent, I would reccomend you do your own inspection and hire your own unbiased inspector.  If you are in a situation where there will be multiple offers on a home, there is usually some time between when you view it and the offer date, for you to complete an inspection prior to making your offer. The advantage of this is that you can go into a negotiaiton with less conditions on your offer and potentially edge out other competitors.  I always insist that my buyers perform a home inspection, otherwise you may be asking for issues in the future.

If you need a referral to a qualified home inspector, just let me know and I can provide a list to you.

So you have your heart set on purchasing a condominium.  There are a few things to keep in mind when purchasing a condominium.

First let's talk about buying a new condo from a builder. You can visit the sales office with your Buyer's Agent so they can work with the builder. You will also want your agent to add some clauses to the agreement that are to your advantage. You should also have the agreement thoroughly reviewed by your Real Estate Lawyer. Make sure you are able to assign your agreement if you are buying pre-construction so you can transfer your agreement if your situation changes before you can take possession. Often it takes the builder three or more years to finish construction.

If you are buying a resale condominium, make sure you have your lawyer thoroughly review the Status Certificate. This document is available for a fee from the Condominium Corporation and usually can be available within 7-10 days. This document outlines common expenses, reserve fund status, anticipated increases in common expenses, any legal proceedings or claims against the condo corporation, and anticipated changes to the common elements. If there are deficits, large legal proceedings, or not enough money in the reserve fund you will want to get out of the Purchase and Sale Agreement.  This is why it is improtant that your offer should contain a Status Certificate clause.

Let me know what type of condominium you want to buy.

As promised in my last post the topic today is bridge financing.

Wikipedia defines bridge financing as a method of financing, used to maintain liquidity while waiting for an anticipated and reasonably expected inflow of cash. Bridge financing is commonly used when the cash flow from a sale of an asset is expected after the cash outlay for the purchase of an asset. For example, when selling a house, the owner may not receive the cash for 90 days, but has already purchased a new home and must pay for it in 30 days. Bridge financing covers the 60 day gap in cash flows.

What types of bridge financing are available?

There are two options:

• A lump-sum personal loan with a fixed interest rate, with lump sum repayment at maturity.
• A personal demand loan with interest-only payments.

So how much does bridge financing cost?

Here is a scenario:

Explanation:

Assume you have just accepted an unconditional offer to purchase your current property on October 30. After paying off your mortgage and covering your disposition costs, you will be left with net proceeds of $180,750 (see item A).

You then buy a new property, but the sellers want you to take possession on October 2, which is 28 days before you will complete the sale of your existing home.

After making a $35,000 deposit, you decide to use $130,750 (see item B) of the net proceeds from the sale (you hold back $50,000 for closing costs and minor renovations).

You need that $130,750 on October 12, but you won’t receive it from your buyer until October 30. As such, your mortgage planner helps you secure an 18-day bridge loan at prime +3% (6% in today’s terms) at a total cost of $598 (see item C). Problem solved.

While not all lenders offer bridge financing, an experienced, independent mortgage planner will have access to several who do. So instead of worrying about lining up your closing dates on the same day and trying for perfection in an imperfect world, use bridge financing as an easy and cost-effective tool when coordinating buying and selling transactions.

Bridging is not ideal but often a necessity. Let's work together to get closing dates that work to your advantage.

Lot's of agents may recommend buying first but this is not in the best interest of you. Why? Most are hoping to get your listing and you may not be able to sell your home in time to close on the new home. I will talk more about bridge financing in my next post but it's an expensive way to go.

Another factor to consider is it a Buyer's Market or a Seller's Market. Right now in most neighbourhoods in Toronto, it is a Seller's Market. There is low inventory of homes and lots of active buyers. This can mean you get a great price on your home. It will be a bit more of a challenge to find your move up home because of low inventory but there are still great options. In a Seller's Market I feel it is best to sell first to see what you get for you home and then go shopping for your new home. Then you can negotiate a closing date that works with your sold home's closing.

If we were in a Buyer's Market, I would still recommend selling first. In this scenario, there are more choices for buyers and they can negotiate more with sellers because there is just more for them to choose from.  You want to make sure you get the right terms for you, especially price and closing dateto enable you to find your new home.

Toronto, August 16, 2011 –There were 3,214 sales through the TorontoMLS® system during the first 14 days of August, representing more than a 22.5 per cent increase compared to the same period in August 2010.  Year-to-date sales through the 14th of August were all but caught up to last year’s total –down by half a per cent compared to 2010.

“The unsettled situation in financial markets over the past few weeks did not appear to sap the confidence of GTA home buyers during the first half of August,” said Toronto Real Estate Board President Richard Silver. “Revised forecasts for future Bank of Canada interest rate decisions coupled with the recent announcement by the US Federal Reserve, suggest that interest rate hikes in Canada are on hold at least until sometime in 2012. This is a positive for affordability and should help sustain buyer confidence moving forward.

”The average selling price was up by almost seven percent annually during the first 14 days of August to $440,150.

“The rate of price growth reported for the first two weeks of August continued to point to sellers’ market conditions in the GTA,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.  “However, it should be noted that new listings grew at a slightly greater pace than sales.  A better supplied market in the second half of 2011 will result in prices growing at a more sustainable pace.”

From the Toronto Real Estate Board

The Home Buyers' Plan (HBP) is a program that any first time homebuyer can withdraw up to $25,000 from your registered retirement savings plan (RRSPs) to buy or build a home for yourself or for a related person with a disability.

When you make a contribution to your RRSP it can't be withdrawn for 90 days.

You have to repay all withdrawals to your RRSPs within 15 years. If you do not repay the amount due for a year, it will have to be included in your income for that year.

It's a great program for first time home buyer's who may not have enough savings for a down payment. Just remember to pay yourself back.

When Bob and Mary Watson decided to take the plunge and invest their savings into a home, they didn’t realize their dream would soon turn into a nightmare.

A man holding himself out to be a registered real estate professional was actually a fraudster who took their deposit and left them empty-handed.

in this case, the Watsons are a fictional couple. Their situation, however, is very real.

The consequences of dealing with someone who is unregistered were highlighted in a recent court case in which an Alliston man was sentenced to 15 months in jail for trading without registration.

Court was told he accepted trust deposits from consumers for real estate trades, then failed to deposit the funds into a trust account as required under the Real Estate and Business Brokers Act, 2002 (REBBA 2002).

If he had been registered with the real estate Council of ontario (RECO), those trust deposits would have been insured. But due to his unregistered status, the potential home buyers lost thousands of dollars.

“i think it’s important to note that consumers were not able to recover their deposits because (he) was not registered, and therefore, (the deposits were) not insured,” RECO lawyer Tim Snell said, following the sentencing.

RECO recommends that buyers and sellers confirm their real estate broker or salesperson is registered with RECO prior to entering into any agreement for services. Access the registrant search tool at www.reco.on.ca.

“Real estate brokers and salespeople registered by RECO have met stringent standards of qualification, including education and training, and must adhere to strict standards of conduct in providing services,” says Allan Johnston, registrar with RECO.

Consumer protection is a key part of RECO's mandate to protect the public interest by regulating the trade of real estate on behalf of Ontario Ministry of Consumer Services.

RECO not only enforces the standards required to obtain and maintain registration as a brokerage, broker or salesperson, it conducts routine inspections of brokerage offices to ensure compliance with REBBA 2002. it also addresses inquiries, concerns and complaints about the conduct of registrants.

From RECOConnects Summer Edition 2011

Toronto Real Estate Agents are required to disclose in a listing if a home has been used as a grow-op. Homes are converted into grow ops and can aversely affect the homes value since damage can be done to the foundation and structure by the modifications made to the home. Before a home can be resold it requires thorough inspection and remediation for mould and other issues. Often a home will be rewired to steal electricity from the grid and could need an electrical overhaul before it can be inhabited again.

Many owners default on their mortgage and the bank comes in to reposess the home. This can be good for buyers wanting to take on a project or refurbishing the house. Often these homes are heavily discounted to get them sold. Buyer beware since not all realtors disclose this information and always have a Buyer's Representation Agreement signed so your agent can ask questions on your behalf.

Just how comfortable would you feel opening your home to a complete stranger? imagine walking away, knowing that someone you’ve never met is wandering from room to room, eyeing up and down the one place you feel most safe.

Well it does happen. A traditional ‘open house’ is a very popular tool for home sellers. And what buyer wouldn’t want to inspect it closely before making the biggest purchase in their life. But it’s up to you – the owner – to protect your valuables when it comes time to schedule your open house.

That’s why it is important to take advantage of all the resources available – including your registered real estate professional – who can offer you tips and advice on how to plan for an open house.  Visit the Real Estate Council of Ontario (RECO) website at www.reco.on.ca to view the Preparing for an open House bulletin. RECO administers the Real Estate and Business Brokers Act, 2002 on behalf of the ontario government.

Police will tell you that thefts from open houses do happen. Just last year, durham region police say they recovered property worth half a million dollars after a couple from Oshawa was charged with stealing during open houses.

Your best approach is to ask your salesperson as many questions as possible about what you need to do to prepare. Will they limit the number of people allowed into the home during each showing? Will potential buyers be escorted during their visit to your home? make sure you understand what occurs during an open house. other tips include:

• remove or safely store small items such as jewelry and mP3 players

• Keep your bills, credit card receipts, and bank statements out of view

• remove medications from all rooms in the home including your medicine cabinet

• take inventory – and possibly photos – ahead of time so you know quickly if anything is missing

Published in RECOnnect for Home Buyer's and Seller's Summer 2011.

July was a great month again for the Toronto Real Estate Market. Although 2011 is down around 1% over last year (year-to-date), July was strong and expectations are that we will finish out the year higher than last year.

One of the reasons, this July was so much stronger than last year surround the confusion there was around the application of HST to the sale of resale homes. Just to clarify, HST is only charged on new homes, not on resale.

Prices have increased by 10% to an average of $459,000.  This is positive news for sellers and I think in the coming months there will be more inventory on the market and more choices for buyers, thus leading to a more balance market.