Toronto first-time buyers could benefit from tax changes

first time buyers

 

First-time investors and home buyers in Toronto could benefit if a recommendation to the city’s Budget Committee is implemented.

The Toronto Real Estate Board (TREB) has recommended that the land transfer tax (LTT) first-time buyer rebate maximum and the LTT tax rebate thresholds are adjusted upwards for inflation.

“This rebate has not been adjusted for inflation since this tax was first implemented,” wrote John Lusink, chair of TREB’s government relations committee, in a letter to the Budget Committee.

“Since that time, because of rising house prices, the average LTT paid to the City has increased by a whopping 102 per cent, but the maximum allowed rebate for first-time buyers has been left unchanged. Under the current structure, even a first-time buyer purchasing a below average priced home would not be exempt from Land Transfer Tax.”

Toronto based investors and real estate professionals agree. TREB’s argument makes absolute sense .  I certainly agree with this.
“Since the average price of Toronto homes has gone up significantly since the land transfer rebate was introduced in 2008, it only makes sense that the rebate made available should go up as well.

“Toronto home buyers are getting hit hard with the double Land Transfer Tax and many first-time buyers are being pushed out of the market by these taxes,” he continued.

“With average Toronto home prices up to $610,000 in 2014 from $400,000 in 2008, the government should adjust the tax rate thresholds to account for inflation. At their existing thresholds most buyers are being forced to pay the maximum LTT.”

 

What is a real estate deposit?

Successful business lady smiling at the camera while working in office

I’m buying a home and want to understand what is a real estate deposit and what do I need to know about it.  Here are a few questions that I hear often.

1.  When must a deposit be paid under the standard Ontario Real Estate Contract?

In Ontario, the standard contract gives buyers two choices: you can pay your deposit when you present your offer to the seller or you can agree to pay within 24 hours of the seller accepting your offer.  Most buyers prefer the second option.  If you are in a bidding war you are typic

2.  How is a deposit different from a down payment?

A deposit is the funds that you agree to pay on signing an purchase agreement.  It will be part of of your downpayment when you close on your house.  Your down payment is the total amount that you put into your house on closing.  The difference between the purchase price and your down payment is your mortgage (the amount that you agree to pay a lender for your home over time)

3.  How much should my deposit be?

There is no set rule on how much the deposit needs to be.  Some sellers identify their expectations when they list their home.  Some real estate agents suggest 5% is a strong deposit.  Sellers will view a higher deposit as a stronger offer. It may sway a seller to accept your offer over anothe offer with a lower deposit.

4.  Under what circumstances would I lose my deposit?

If you decide not to close on your home after signing a binding contract, you will lose your deposit.  (you also stand to lose far more than your deposit, so be careful)

5.  What happens to my deposit when I close on my house

Your deposit will be included in money that you have paid towards the purchase house of you home.  Your lawyer will take care of this.

Great Tips to De-stress Moving

hand offers house key as concept

hand offers house key as concept

Here are a few of the tips that I give my clients before they move in:

1. Don’t move at the beginning or end of the month. Everyone else does; you can’t get trucks, people, or utilities installed, etc. If at all possible, try to move mid-month, both for your own sanity as well as for the sake of your pocketbook.

2. Stake out the parking spots in front of your new home. Be willing to take a ticket or two (which usually range from $45-$65) to make it easier and faster to get in and out–otherwise you are paying people to carry your stuff up and down the street. But don’t block a hydrant — you’ll get towed.

3. Don’t move yourself. Your desk job hasn’t given you the stamina to cart heavy boxes, and unless you were born to a life of manual labor, you probably don’t know the tricks of maneuvering furniture through tight spaces. Even if you do, there’s a good chance your furniture simply won’t make it upstairs. The first time you gouge the door with a sofa negates the cost advantage, so please don’t try to be a hero.

4. Get rid of all liquids in glass bottles before you move. I recommend having a Drink All My Alcohol Party a week before moving. Likewise, if you haven’t cracked your textbooks since college, you might want to sell them use the money to fund decorations for your new home.

5. Change the locks asap. Who knows who the prior owners gave keys to? New cylinders are around $10-12 at the local hardware store, and only take a few minutes to install.

6. Got kids? Moving day would be a great day to have them visit their grandparents. This gets the the two most stressful sets of people out of your life on moving day.

10 tips for first-time homebuyers

first time home buyersThe real estate market can be tough to navigate for first-time homebuyers.
Here are 10 tips for first-time homebuyers:
1. Determine what you can afford. The first step is to meet with a lender, review your finances and find out how much you can afford to spend on a home and how much you have for your down payment. Experts warn also not to shop for the most expensive home you qualify for, unless you truly can live with the payment that comes with it.

2. Make a list of your criteria and priorities for your first home. Purchasing your home will require compromise and its important that you have thought through what you are prepared to give up to get into the market.

3. Shop for a mortgage. Don’t use whatever lender your agent recommends without doing some independent shopping. Another classic mistake: calling 10 lenders and asking for their interest rates. A lender can’t be held to those quotes. It’s better to look up mortgage rates online, then call three or four lenders and mortgage brokers and ask them for a written list showing their fees.
4. Get pre-approved. Getting a lender to pre-approve a loan before you shop can make your offers more attractive, while avoiding deals falling apart because loans don’t get approved during escrow.
Get all the documentation you’ll need for the loan process –  tax returns, pay stubs, bank account statements. Find out from your lender exactly what you’ll need.
5. Pick an agent who’s right for you. Get referrals for agents from friends and family, then talk to each one. Look for someone with whom you can communicate. Actually interview them as if they were job applicants since, after all, they do work for you.

6. Find a home you can afford. Make a wish list of where you want to live and what you want to have in your home. But don’t fall so in love with a particular home that you don’t see its flaws. Move on if the asking price is unrealistic or the seller is unreasonable. Or if the bidding rises beyond your budget.

7. Scope out the neighbourhood. Your agent likely can provide local school ratings and area demographics. You can get crime reports from local police departments or their websites. Then walk and drive the neighbourhood, returning at different times of the day and different days of the week. Visit local supermarkets to see who goes there.
And talk to the neighbours. That’s the only way to learn about the neighbour from hell, the incessantly barking dog or whether trains blow their whistles nearby.

8. Make a realistic offer. First-time buyers should find out what comparable homes sold for, learn the true value of the property and make a realistic offer. A good agent will be diplomatic, but honest if your offer is too low. If the home is priced right, bid the asking price or a little over. You might, however, run into trouble getting a loan if your offer is higher than the lender’s appraised value of the home. Lenders won’t approve the loan if the appraisal is less than the loan amount.

9. Find a good home inspector. Talk to two or three inspectors rather than blindly accepting one your agent recommends. Get referrals from family and trusted friends to make sure you find someone working for your best interest and who isn’t trying to help his or her friend, the agent, close the deal. Be aware of deadlines during escrow. And respond in a timely manner to the home and termite inspections, seller disclosures and the preliminary title report so you don’t miss your chance to opt out if a problem arises.
10.  Be patient.  Finding a home in the Toronto market is not easy, it takes work, perseverance and patience.  If you stick to the plan, I am confident that you will find that home.  And of course, if you need help with the process, I would be happy to help.

Thinking of Buying a Condo?

How to be prepared when buying a condo

Condo Living -Being well informed can make it a great experience

Condo Living -Being well informed can make it a great experience

If you are thinking of buying a condo this is a great read – published by the Ontario Gov’t and answers many questions that may be on your mind when assessing condo life. Understand what’s involved in buying a condo, and your rights and responsibilities as a condo owner.  A few of questions you want to answer before you buy

  1. Do I know what the condo fees are, and how are they determined?
  2. What are my repair and maintenance responsibilities, & what do the condo fees cover?
  3. What does the corporation insurance cover and do I need extra insurance?
  4. How much is in the reserve fund and is it sufficient?
  5. Who is living in the building? Owners or renters – what is the mix?

Find answers to these questions and more in this guide.

Helpful Guide to Buying a Condo

What are the signs of a up and coming neighbourhood?

up and coming neighbourhood
We all know have expensive the Toronto Real Estate market is to enter.  Many first time buyers are looking for an area that may be still under valued, a diamond in the rough, but changing quickly.  Here area a few tips to find that area:

  1.  New Large Businesses Moving in.  Most larger businesses do a fair amount of economic research and projections on the neighbourhood before moving in. Watching big industry and business moves can be a great way to spot emerging areas with strong fundamentals way before you might otherwise be able to see them yourself.
  2.  Convenient location in a land-impacted metro. In an area close to downtown Toronto like Mimico, demand for homes will continue to grow as population grows and as buyers are looking for close proximity to the city, for that easier commute. Supply of homes has not kept pace with the demand which has lead to a continual increase in prices.
  3.  Downsides have an expiration date. If there’s one major issue that has caused an area to be less desirable for decades, and that issue is being eliminated or ameliorated, it could set the neighborhood up for a turnaround. For example, an undesirable plant is located in the area but planned to be shut down.
  4. At least one major economic development is brewing. Never underestimate the power of a major economic development to overhaul a neighborhood’s fate. From Google and Microsoft building cloud storage data centers in Barrie, one large-scale employer or infrastructure development can be a very early, very strong sign that an area will see it’s real estate fortunes rise.
  5. Fixing is in the air. When you see that an area long known for its rundown homes has a number of homes being renovated and rehabbed from the inside out, this can be a sign of fledgling neighborhood turnaround. If you spot these sorts of projects visually, it might be worth taking a trip down to the City Building Permit counter to see whether the staff has seen the same uptick in individual owners’ investment in the area, and if so, what they think the story of the neighborhood might be – or might become. City staffers often have a wealth of information at the ready, everything from pending commercial development applications that could change the whole landscape of an area to projects the city itself has funded or will prioritize due to its own development initiatives.

If you are looking to find, relocate to one of these areas, please let me help. You can connect with me Here

Priceless Advice for Home Buyers

Happy Home Buyers
Finding the perfect home doesn’t happen in one day. It takes careful planning and lots of work. Fortunately, there are a number of things you can do to simplify the process.  This is really priceless advice for anyone looking to buy.

 Best Advice for Home Buyers

What Features Do You Need?

Do you need an extra bathroom, a garage, a fenced backyard, or lower utility bills? Do you want a fireplace, a short drive to work, or maybe minimal yard work? Once your list is complete, decide what’s most important to you.

What’s the Ideal Location?

Where you live obviously affects your lifestyle; it’s also one of the most significant influences on the value of your home. Your choice of location may be somewhat limited by the price you can afford. Even so, make sure to consider such things as distance to work, schools, shopping and entertainment.

What Kind of Home?

What type of property do you want? A single-family detached home is attractive to many people because it typically provides more living space and land. On the other hand, a condominium may be a more appropriate choice for you, with an emphasis on maintenance-free living. Determine what type of home best suits your desired lifestyle and budget.

What’s Your Budget based on money down and approved mortgage  ?

How much do you want to spend? Just as importantly, how much do you have to spend? How much is dependent on how much you have for a down payment, and how much you have been approved for with a mortgage.  The combination of the two is your maximum spend.  It is the maximum because only you can decide how much you want to spend.

2. Choosing a REALTOR®

A REALTOR® can help you answer all of these questions and help you navigate through what can be a complicated business transaction. Start by finding REALTORS® that are focused in your buying area. Then, talk to some of them and compare their services. It’s important that you’re comfortable and confident with the agent you choose.

3. Searching For a Home

A REALTOR® will use various tools to try and find properties that meet your specifications in your prefered neighbourhood and price point.  Avoid looking at homes that are outside of your budget.  There is no point falling in love with a home that you just cannot afford.

Buyer criteria for your home search

In a city as big as GTA, how do you possibly narrow in on a location for your first home that is right for you? In this video Amy takes a look at some criteria that may help you with your home search.