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Archive for August, 2013

Steady as she goes. No major fluctuations in Ottawa resales

Members of the Ottawa Real Estate Board sold 1,339 residential properties, including condominiums, in July through the Board’s Multiple Listing Service® system, compared with 1,376 in July 2012, a decrease of 2.7 per cent.  July’s sales are just below the five-year average of 1,347.

“Although the number of residential properties, including condominiums, is down since last year, residential-class units sold increased 0.5 per cent from this time last year,” says Tim Lee, President of the Ottawa Real Estate Board. “The market has definitely cooled since last year, as a result of the introduction of new mortgage rules by the Government. However, Ottawa remains balanced and we are not seeing the major fluctuations that other large Canadian cities sometimes experience.”

The average sale price of all residential properties, including condominiums, sold in July in the Ottawa area was $359,551, an increase of 6.6 per cent over July 2012. The average sales price for a condominium property was $275,189, an increase of 3.7per cent from July 2012. The average sale price for a residential property was $381,156, an increase of 6.3 per cent over July 2012. Average sale price is calculated based on the total dollar volume of all properties sold.

“In July, 14 properties sold over $1 million,” says Lee. “This is an 80 per cent increase in this price range over July 2012. The fact many properties were sold over $1 million in July definitely increases the average sale price.”

Single level condominium apartments: July’s figures showed 138 sales for the month, compared with 151 in July 2012. The average price in July 2013 was $305,567, an increase of 2.5 per cent over the previous July.

Two story condominium townhomes: July’s figures showed 111 sales for the month, compared with 142 in July 2012. The average price in July 2013 was $241,524, an increase of 4.9 per cent over the previous year’s July.

As we head towards the end of summer, we look forward to increased activity in the marketplace.


What your home insurance won’t cover

By Robert Hof

When you hide something from your buyers, chances are you are going to have to pay for it after closing, as well as paying lawyers. And don’t expect your home insurance to cover your legal fees. Please see the attached case about a seller who tried to hide the fact that there was a prior fire on the property from a buyer. Insurance companies will not protect you if you deliberately mislead a buyer. This case underscores the importance about speaking to the neighbours whenever you are doing due diligence about any home. Neighbours will tell you things that the owner will not volunteer. Also, if it is important to your client, ask the seller or the seller’s agent point blank about it. If a seller is asked a question, they must respond truthfully. Remember that the next time you represent a seller as well.

Click here to read the article:

http://www.thestar.com/business/personal_finance/2013/08/26/what_your_home_insurance_wont_cover.html


Now is the time for home closing protection insurance

By Robert Hof

Since writing my column on how to avoid a real estate train wreck, I have received many inquiries from buyers, sellers and realtors about home closing protection insurance, and how it can solve many of the problems associated with delayed closings.

Due to the growing possibility of buyers being declined their financing at the last minute, sellers need some protection in the event their closing is delayed or cancelled and they are forced to carry 2 homes for an extended period of time.

One company that I have dealt with that provides this coverage is Canadian Home Shield. Their President, James Vlachos, who is an insurance broker, advises me that for as little as $99, sellers can purchase a $25,000 insurance policy that will cover all mortgage payments, real estate taxes, utilities and insurance premiums up to a total of $25,000 in the event that the deal does not close through no fault of the seller. I personally have had 2 seller clients recover over $9,000 in costs after a buyer failed to close their purchase agreement.

Buyers can also purchase breakdown insurance protection for their home systems and appliances. Since most real estate contracts provide that sellers only warrant their systems and appliances to the date of closing, this provides buyers with the opportunity to purchase additional insurance protection for a year after closing.

For further information, please see the attached website:

http://www.canadianhomeshield.com/

http://www.thestar.com/business/personal_finance/2013/08/16/bridge_financing_can_ease_closing_day_stress.html


Learn how to avoid a real estate train wreck

By Robert Hof

A real estate train wreck occurs when one deal fails to close which causes multiple deals to also fail to close. This typically happens when a client schedules both their sale and purchase to close on the same day. If there is a problem or delay with the sale closing, then the client will likely default on their purchase agreement. This could also impact other buyers and sellers in the same chain. As the attached article indicates, there are ways to reduce this potential problem from occurring, by using bridge financing and by asking your buyers and sellers in advance whether their deal with you is contingent on another deal closing. Be prepared so that you or your clients are not involved in their own train wreck.

Click here to read the article by Mark Weisleder in the Toronto Star:

http://www.thestar.com/business/personal_finance/2013/08/16/bridge_financing_can_ease_closing_day_stress.html


Seller financing can be a win-win for buyers and sellers

By Robert Hof

As a result of further restrictions announced by CMHC, it may be time for sellers to consider offering a seller take back mortgage as a means to entice more potential buyers to their property. It can also lead to tax savings for the seller if they are selling an investment property, However, as the attached article indicates, seller financing is not for everyone and the terms must be clearly specified in any agreement of purchase and sale.

Click here to read the article:

http://www.thestar.com/business/personal_finance/2013/08/12/is_seller_financing_an_answer_to_cmhc_restrictions.html

Thanks to Mark Weisleder


Is a buyer entitled to a pre-closing inspection?

By Robert Hof

Most salespeople include a pre-closing visit or inspection in the real estate agreement. If it is not included, is the buyer entitled to a visit anyways? Read the attached article which points out that under the agreement, there may be a right of inspection before closing to determine whether substantial damage has occurred between the time the offer was signed and closing. But since you may have to go to court to enforce this right, it is best to provide for it in your agreement.

http://www.thestar.com/business/personal_finance/2013/08/02/could_gta_flooding_be_used_as_home_sale_escape_hatch.html

By Mark Weisleder


CMHC’s Ottawa Housing Report

By Robert Hof

Very interesting and comprehensive look at the Ottawa housing situation from CMHC. A good read for anyone looking at buying or selling.

http://www.cmhc-schl.gc.ca/odpub/esub/64311/64311_2013_B01.pdf?fr=1376923302036


Canadian home sales hold steady in July

According to statistics released today by The Canadian Real Estate Association (CREA), national home sales were little changed on a month over month basis in July 2013. View PDF.

Canadian home sales hold steady in July

By Robert Hof

Ottawa, ON, August 15, 2013 –According to statistics released today by The Canadian Real Estate Association (CREA), national home sales were little changed on a month-over-month basis in July 2013.

Highlights:

  • National home sales edged up 0.2% from June to July.
  • Actual (not seasonally adjusted) activity came in 9.4% above levels in July 2012.
  • The number of newly listed homes edged down 0.4% from June to July.
  • The Canadian housing market has tightened but remains in balanced territory.
  • The national average sale price rose 8.4% on a year-over-year basis in July.
  • The MLS® Home Price Index (HPI) rose 2.7% year-over-year in July.

The number of home sales processed through the MLS® Systems of real estate Boards and Associations and other cooperative listing systems in Canada was little changed on a month-over-month basis in July 2013. Sales edged up just two-tenths of a percentage point to hold below levels reached prior to tightened mortgage regulations last year.