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Archive for September, 2013

Ottawa resale market on the up and up

Members of the Ottawa Real Estate Board sold 1,219 residential properties, including condominiums, in August through the Board’s Multiple Listing Service® system, compared with 1,145 in August 2012, an increase of 6.5 per cent. The five – year average for August sales is 1,202.

“It has been one year since the Canadian Government introduced new mortgage rules, and although the Ottawa market has been slow – moving since the beginning of the year, this month’s numbers are quite the opposite,” says Tim Lee, President of the Ottawa Real Estate Board. “With residential and condominium units sold up a respectable amount since last year, it breaks the downward cycle.

In addition, average sale prices evened out in August, creating a welcome lull in inflating property prices.” The average sale price of all residential properties, including condominiums, sold in August in the Ottawa area was $348,519, a slight increase of 0.4 per cent over August 2012. The average sale price for a condominium property was $257,494, a decrease of 5.4 per cent from August 2012. The average sale price for a residential property was $374,663, an increase of 1.8 per cent over August 2012.

“Inventory on hand has decreased since last month, and is starting to return to more normal levels,” says Lee. “Ottawa continues to be a healthy, balanced market, and, as always, a great city to live in. Ottawa consumers remain in a very enviable position.”

Single level condominium apartments: August’s figures showed 122 sales for the month, compared with 116 in August 2012. The average price in August 2013 was $269,766, a decrease of 11.5 per cent over the previous August.

Two storey condominium townhomes: August’s figures showed 125 sales for the month, compared with 109 in August 2012. The average price in August 2013 was $235,963, an increase of 1.0 per cent over the previous year’s August.

How long is a banking day?

By Robert Hof

Sheri-Lee Weslock agreed to sell her home in Burlington to Neil Sexton on March 30, 2008, for $647,500. The deal was conditional for 4 banking days on the buyer obtaining satisfactory financing. If the notice was not delivered, the deal would be cancelled. Mr. Sexton claimed that his real estate agent told him that the clause meant that he had until 4 pm on the last day, being April 3, 2008, to deliver the waiver, or the deal would be cancelled. There was no reference to 4 pm in the condition. Mr. Sexton admits that he faxed his waiver to his agent at 3:30 pm on April 3, 2008 but that he then immediately changed his mind and told his agent not to send it after all, because he did not have confirmation that he had obtained his financing. The waiver was however, faxed to the seller’s agent at 6:30 pm on April 3, 2008. This was not disputed.

Mr. Sexton attempted to cancel the deal the next day, saying that he did not get his financing, did not intend to send the waiver and if it was sent, it was sent too late, because the banking day already ended.

Ms. Weslock then re-sold the property for $520,000 because the market turned and sued Mr. Sexton for her loss, which including carrying and other costs, which exceeded $180,000.In a Superior Court decision dated February 7, 2012, Judge William Hourigan determined that a banking day is no different than a regular day and ends at 11:59 pm. If Mr. Sexton had wanted the condition to be time sensitive, such as 4 pm, it should have said so in the condition. Therefore, the waiver sent by Mr. Sexton was in fact sent in time and he could not get out of the deal. Mr. Sexton thus had to pay the entire buyer loss of $180,000 plus $14,000 in costs. Mr. Sexton represented himself, without a lawyer.

There are many lessons to be learned from this case. Under the Real Estate and Business Brokers Act, a business day means a day that is not Saturday, Sunday or a statutory holiday. However, that is not the universally accepted definition of a business or banking day. There are also arguments as to when you start counting the days. In addition, many banks are now open on Saturdays and Sundays.

In my opinion, not only should the words “calendar day” be used in any condition, it is better to pick an exact date when the condition will expire and it should also be clear that the condition is open until 11:59 on the final day, so that there is no confusion or misinterpretation. Never send in a waiver for a financing condition until you have a written signed commitment from a lender agreeing to give you your money.

Click here to read the article:

http://www.thestar.com/business/2013/09/23/how_long_is_a_banking_day.html


Are you house rich or house poor?

By Robert Hof

From The Financial Post

According to Statistics Canada, about one-quarter of Canadians are spending too much on housing costs. “Too much” is defined by Canada Mortgage and Housing Corporation (CMHC) as 30% or more of household income. Are you house rich and cash poor? First off, it’s important to understand what CMHC’s “household income” refers to in order to measure if you are over or under the suggested 30% threshold. They define household income as pre-tax household income, which is a questionable metric due to our tax code.

Full article –http://tinyurl.com/nx4jesw


How to keep your house price secret on title

By Robert Hof

More and more buyers have been requesting that the amount they are paying for a home not show on the government’s title records. You can keep this information off your title by paying the Provincial land transfer tax in advance to the Ministry of Finance in Oshawa and by supplying the proper supporting information, including the agreement of purchase and sale, draft deed, statement of adjustments, 3 copies of the signed land transfer tax affidavit and a certified cheque for the tax owing. If your property is in Toronto, than the Toronto Municipal Land Transfer Tax can also be paid in advance, at the Toronto Revenue Services office in North York, by supplying the same information and paying the tax. Once this is completed, all that will show on your title is the sum of $1 or $2 as the purchase price. If it is your first home, you will still be entitled to the applicable first time buyer rebate.

Click here to read the article:

http://www.thestar.com/business/personal_finance/2013/09/13/how_to_keep_you_homes_purchase_price_secret.html


CREA Updates Resale Housing Forecast

CREA’s previous two forecasts anticipated that national sales activity in 2013 would improve following the slow start to the year, buoyed by the continuation of low interest rates amid a constructive economic backdrop and the return of buyers who deferred purchase decisions or were otherwise sidelined in the wake of tighter mortgage rules and lending guidelines implemented last year. View Article.


Why condo owners need insurance coverage

By Robert Hof

A recent study commissioned by Allstate Insurance demonstrated that many new condominium buyers are confused about the need to obtain a separate insurance policy to cover their unit and belongings after closing. These buyers believe that the condominium insurance policy will protect them. This is not true. While the condominium insurance will cover the building and the common elements, it does not generally cover any improvements you make to your unit, your contents, any liability if someone gets injured in your unit or if a damage such as a leak starts in your unit and damages another unit. In addition, you may still be responsible for any deductible amount in your condominium building coverage as well.

The good news is that there are policies of insurance that can be obtained to protect against all of the above noted occurrences, including coverage against certain special assessments that may be imposed as a result of damages to the common elements.

Please read the attached article to learn more about this:

http://www.thestar.com/business/personal_finance/2013/09/06/why_condo_owners_need_household_insurance.html


Get it in writing when family members take title together

By Robert Hof

There are many situations when family members take title together, whether for estate planning purposes or in most cases, when one member cannot qualify for financing alone. Others then go on title but have an agreement that they will not contribute to the upkeep of the property. If this relationship is not reduced to writing, then problems will occur later if disputes arise.

If it is intended that one owner will be holding title to the property in trust for someone else, get everything in writing at the time that the property is purchased, to avoid any problems later.

Click here to read the article:

http://www.thestar.com/business/personal_finance/2013/08/30/get_it_in_writing_when_family_members_take_title_together.html

Thanks, Mark Weisleder,  for more excellent information.