Doing Real Estate Transactions with Canadians

Doing Real Estate Transactions with

Canadians In Canada & America

Presented by

Dr. Margot Weinstein, CIPS, TRC, FIABCI CEO, MW Leadership Consultants LLCBroker, Metropolitan Real Estate GroupProfessor, Homburg Academy-UWIProfessor, REALTOR® University, NAR

1www.drmargotweinstein.com

Quebec

Ontario

Saskatchewan

AlbertaBritish Columbia

Roughly the same size As U.S. (3.8 million square miles), but

only has 1/10 the people (34.6 million). It's 3 times the size

of Mexico, with 1/3 the people.

Canada is sparsely populated: Climate in northern 1/2 cold

that ground remains frozen for most of the year. 2

Manitoba

www.drmargotweinstein.com

Facts About Canada

US & Canada shares longest border in the world

Population over 40 million

90% of Canadians live within 160 kilometres

or 100 miles 0f U.S. border

Main business province is Ontario

Largest resource province is Alberta


Canada`s Exports

3/4 of exports go to U.S.

Trade with U.S. & Mexico has tripled since 1994 due to

North American Free Trade Agreement (NAFTA).

Oil

Motor vehicles and parts

Industrial machinery

Aircrafts


Canada's Exports

Canada is U.S. largest supplier of energy (i.e. oil, gas,

uranium, & electric power) (Source: "Canada's Economy," CIA

World Facebook.)

Canada profited with the discovery of oil sands in Alberta.

Canada: 3rd largest oil reserves in the world behind only

Saudi Arabia and Venezuela: ranks 9th in the world in

recoverable shale oil and 5th in shale gas (Source: U.S.

Energy Information Administration).

Canada: 11th largest oil exporter, recently surpassing Mexico.

(Source: "Canada Places in Top Ten," Calgary Herald.)



https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html

https://www.thebalance.com/oil-reserves-definition-categories-world-s-largest-3305873

https://www.thebalance.com/what-is-shale-oil-and-how-is-it-produced-3306195

Canada`s Economy

Exports $400 billion

Canada is the US’s largest supplier of oil

The US largest trading partner

China is second

Not affected as much by the 2008 recession as other countries.


Chinese population in Canadian regions

Immigration Trends in Canada


Permanent residents by country

Immigration Trends

in Canada


Business in Canada

One of the most profitable places in the world for

international business and direct foreign investment

In 2012 study, The best country for business in the

G-20 according to Forbes Magazine’s

6th Happiest nation in the world

Didn’t suffer 2008 economic downturn due to stricter

mortgage qualification requirements


Immigration Trends in Canada

Over 250,000 immigrants become permanent

residents in Canada each year

Every year over 150,000 foreign workers come

to Canada

60% are skilled workers, investors, entrepreneurs

and their families

Immigration is boosting the Real Estate

Business


Famous Canadians Hockey players

Celebrities

Business people: I interviewed

Isadore Sharpe Founder, Four

Seasons, and Steve Morris, Founder,

Exit Realty International

Steve Morris,

Exit Realty

More on Morris:

https://www.youtube.com/watch?v=velg5d2cdn8

https://www.youtube.com/watch?v=KIAUe0vvIZo

https://www.amazon.com/Real-Estate-Success-

Leadership-Strategies/dp/151513125411www.drmargotweinstein.com





https://www.youtube.com/watch?v=KIAUe0vvIZo

https://www.amazon.com/Real-Estate-Success-Leadership-Strategies/dp/1515131254

Part of several Trade organizations;

North American Free Trade Association (NAFTA ) what

happens with NAFTA will impact economy!

Organization of Economic Co-operation and Development

(OECD)

World Trade Organization (WTO)

Maintain up to date property costs with changes to NAFTA

we may see a real estate bubble in next couple years.

Organizations in Canada


Canadian Culture

13

Similarity in culture and

business. Subtle

differences:

For French Canadians, print

all material in French and

English.

Canadians are very polite:

Say “Sorry” on average

45,000 a day.

If from U.S., don’t say "we

Americans"


More Cultural Differences

Personal space and body movement or gestures differ between the English and the French provinces and cities.

In English areas, body movement is minimal. Usually there no touching other than handshakes, and personal space - how close someone stands - is about two feet.

In French areas, people stand closer together. They frequently touch and gestures are more expressive.

Restrain your arm gestures when meeting and talking with Canadians - other than with French Canadians.


Online Property Resources

Properties can be found

on the internet via

property websites.

www.rightmove.co.uk,

also feature properties

in Canada,

real estate listing sites

based in Canada such

as www.remax.ca.


http://www.rightmove.co.uk/

http://www.remax.ca/

Residency

Citizenship: An American citizen or permanent resident

doesn’t need a visa to visit or travel through Canada;

Restrictions are related to the length of your stay. Rules

and regulations for visitors to Canada.

Non-Resident: If you stay in Canada for 6 months or

less each year, the government considers you a non-

resident, but you can still open a bank account and buy

property.

Resident: If you live in Canada for more than 6 months

per year, you must apply for immigrant status.


http://www.cic.gc.ca/english/visit/index.asp

Canada’s Real Estate Transaction

Real estate agents self-employed & earn fees in

the form of commission.

Commission varies from 3-7% properties types &

different around the country.

In British Columbia and Alberta the typical rate is

7/3%, i.e. 7% on the first 100,000 and 3% on the

remainder.

In Ontario and Quebec: usual rate is 5%. The

services of a realtor are free for the buyer.

Most candaians leave Canada live in us.

https://www.realtor.ca/US-Visitors.aspx




Real Estate Terms

Buyers’ agents new in Canada defined:

Buyers’ agents represent the buyer instead of

the seller, and should provide an unbiased

opinion on properties, as buyers’ agents aren’t

selling properties on their own listings like real

estate agents. They are generally paid a

percentage of the sales commission paid to the

listing Realtor. Buyers’ agents should also be

licensed real estate agents.

Realtor: A real estate agent, broker or an

associate who holds active membership in a local

real estate board that is affiliated with the

National Association of Realtors and the Canadian

Real Estate Association.18www.drmargotweinstein.com

Facts on Canadian REALTORS®

Exchange Rate: Prices shown on

www.REALTOR.ca are in Canadian dollars.

For currency exchange rate: Bank of Canada's

Daily Currency Converter.

Real Estate Property Taxes: If purchasing

property in Canada as a U.S. citizen, client

may be required to file tax forms to the

Canada Revenue Agency (CRA): real estate tax

rules and regulations for American visitors.


http://www.realtor.ca/

http://www.bankofcanada.ca/rates/exchange/daily-converter/

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/dsp/menu-eng.html

Canada’s Real Estate Terms

Buyer often referred to as the Purchaser

The Seller often referred to as Vendor

Principal: a person who has engaged an Agent

to act for and on his/her behalf either to buy

or sell a home

Dual Agency: Real estate agent is representing

both buyer and seller in the same transaction.

Agent allowed when promises confidentiality,

loyalty and full disclosure to both parties

simultaneous, it necessary to limit these duties

in the situation, if both arties consent 20www.drmargotweinstein.com

Restrictions on Property Ownership

Most provinces have no restrictions on foreign ownership of

property. Majority of Provinces (British Columbia, Ontario,

Quebec, Nova Scotia, Newfoundland, New Brunswick) have

no restrictions on foreign ownership of real estate in

Canada, some limit the amount of property/land that a

non-resident can purchase.

Some places do limit to the amount of land one is able to

purchase.

In Vancouver there is now a 15% additional tax for non-

Canadian citizens and non-permanent residents, due to

the huge rise in house prices there stemming from

foreign, particularly Chinese, investment in the property

market.


Restrictions in Buying

Property in Canada

On Prince Edward Island, non-resident

buyers must apply to the Island Regulatory

and Appeals Commission for land over 5

acres in size, or land with a shore frontage

greater than 165 feet. In Manitoba, non-

residents are prevented from owning

farmland unless they actually plan to move

there within 2 years.

Non-residents may not own land over 10

acres in size in Saskatchewan, whilst in

Alberta they may only own up to 2 plots of

land not exceeding 20 acres in total.


Making An Offer

Once an offer is made and accepted, a deposit is

payable.

When buying a house in Canada, an offer must be made

in writing so all aspects of the transaction are clearly

outlined within the offer.

Once the buyer has signed the document, it becomes

legally binding. If you withdraw from the offer at this

stage, you may lose your deposit and may also be

sued.

FIXTUREs: Make sure that every item staying in the

property, e.g.. carpets, fixtures and appliances, is

written on the offer as 'chattels included'.


Realtor Add TWO Clauses

Realtor should include two clauses stating that the offer

will only proceed:

Subject to building inspection

The buyer is able to meet your financial obligations.

Once your offer is complete, it presented to the seller and

negotiations are made. This may include changes in price,

completion date and chattels. The changes are initialed

by the seller and returned to you (the buyer) for your

initials. The resulting Agreement of Purchase and Sale will

state the purchase price and the deposit. The deposit is

placed in a trust account and is credited towards the

purchase price once the offer has been accepted by both

the seller and the buyer and the transaction is complete.


Canadian Banking Buying property may be good investment by data

released by BMO last year showing Canadian homes

were 41 percent more expensive than in the U.S.

Interest rates were historical low for last several years.

Moody’s ranked Canada’s banking system number

one in the world for financial strength for past nine

years.

CAD is Canadians sign of money below:


Canadian Mortgages differ In US

Maximum amortization: Canadians Mortgages: Calculated

on a 25-30 year amortization rate, with the contract

renegotiation every five years. While in U.S., the

mortgage lasts for 30 years without a renegotiation.

In U.S., you may deduct mortgage interest payments,

but not deduct them in Canada.

Need Income qualifications

www26www.drmargotweinstein.com

Getting A Mortgage

Permanent residents and Canadian citizens, a

mortgage typically can be obtained at 75% of the

purchase price over a 25-year term.

Non-residents typically take out a 65% mortgage and

have to pay 35% as a down payment.

Qualifying for a mortgage depends on your credit

rating, assets, income and savings. The estate agent

can help you to look for a mortgage broker.

After submitting the application, the relevant

documentation approval usually takes 1-2 days. The

documentation required typically includes proof of

income, tax returns, ID and bank statements, among

other things.


Mortgage Documents

Foreign banks cannot register mortgages in

Canada, so any mortgage would have to be raised

via a Canadian mortgage broker. (Please see

'Transferring Funds' for more information).

The borrower will require the services of a

Canadian lawyer or notary public to prepare the

mortgage documents and registration at the

Land Titles office.

Documents can be couriered outside Canada for

signing - this will need to be arranged with the

lawyer and lender well in advance of the

completion date.


https://www.assignmentscanada.ca/transferringfunds.html

Mortgage Documents

Lawyer: Prepares the mortgage documents the

borrower and can help when negotiating and

signing the deeds to the property.

Legal fees around $1,500 fees and disbursements

by the end of the buying process. Lawyers review

the Offer to Purchase, search the title, draw up

mortgage documents and tend to the closing

details. Lawyer fees varies between Provinces &

depend on the complexity of the sale and the type

of property.

Find suitable lawyer on sites such

as www.canadian-lawyers.ca,


http://www.canadian-lawyers.ca/

Transaction Costs

Realtor's Fees are paid by the vendor and are negotiable between 3 & 7% of the home's market value. As an example, Realtors often charge 7% on the first $100,000 of the sale price and 3% on the remainder. GST of 5% is also applied to the Realtor's commission and is payable by the vendor.

Appraisal Fee Your lender may require a property appraisal at your expense. The cost is between $200-$300.

Survey Fee Your lender will require an up-to-date survey. If the Seller does not have one, you will have to pay to have one done. This can be approximately $150-$350.

Lawyer's Fees Lawyers review the Offer to Purchase, search the title, draw up mortgage documents and tend to the closing details. The fee will be approximately $500-$1500. This amount varies between Provinces depending on the complexity of the sale and the type of property.


Transaction Costs

Home Inspection Fee is usually around $450. This is

the equivalent of a survey in the UK and other

countries and is carried out at the purchaser's

request.

Property Insurance which covers the replacement

value of the structure of your home and its contents.

Service Charges can be in the region of $35-$50 to

hook up new services and utilities.

Condominium (Strata) Fees are charged monthly and

cover building insurance and maintenance. The

building’s property manager will provide you with the

fee. For a newly built condo worth $250,000, expect

to pay approximately $200 per month (this varies

from building to building).31www.drmargotweinstein.com

Tax Guide

Canada Law (Canada Revenue Agency)

US Law (Internal Revenue Service)

US/Canada Tax Treaty

Environmental Law: Canadians insist

offenders of environmental laws be

held accountable

French Language: The Charter of the

French Language makes French the

official language of the Province of

Quebec and confers on every person

the right to be communicated with in

French


Guide To Invest in Canada

Resource Tax Laws in Canada. Bryant Andrus, CFP®

1-800-678-5007; [email protected]

www.keatsconnelly.com

www.buyingrealestateintheus.ca


Useful Resources:

Canada Mortgage and Housing Corporation

Citizenship and Immigration Canada

Canadian Real Estate Lawyers

Canadian Real Estate Association

Advice on Moving to Canada

Canadian Cities

Canada Revenue Agency

Investing in Canada

Taxes for Non-Residents - Canada Customs and Revenue Agency


http://www.cmhc-schl.gc.ca/

http://www.cic.gc.ca/

http://www.lawyerlocate.ca/

http://www.crea.ca/

http://canada.gc.ca/home.html

http://www.canada-city.ca/

http://www.cra-arc.gc.ca/

http://www.investincanada.gc.ca/

http://www.cra-arc.gc.ca/tx/nnrsdnts/menu-eng.html

PART II: Canadians Buying in

The United States.

According to NAR, Canada and China have been

the fastest growing source of international clients

for REALTORS

86% of Canadians pay cash and

14% finance

71 %of Canadian buyers

purchased properties in Florida, Arizona, and

California


Weinstein’s Recommended Reading


Canadian Home Buyer Preference

Florida38%

Arizona24%

California8%

Hawaii6%

Texas6%

Other18%


Canadians Buying in US


What Canadian Buyers are

Looking For

Central City/urban

12%

Small Town/Resor

t47%

Suburban Area41%

Detached Single-Family

93%

Other2%

Townhouse/ Condo/Apt

5%


Part III: Details on Markets

in

Canadian Cities


Business in Quebec

Over 900,000 immigrants live in Quebec

24.7% from Asia

22.1% from America

Aerospace sector of

Canada

Home of Cirque du Soleil


Business in Quebec: Montreal

Population: 1.65 million

Average house price: $329,339

Significant sale of condos in downtown Montreal

Many presales sell-outs

Buyers’ market – slow down perhaps this year


Luxury Real Estate in Quebec

Luxury single

family homes

start at $3 Million

in Montreal

Minimum 5000

square feet

Strong

international

influence

51%49%

Foreign Investment

Domestic

International


Business in Ontario

Ranked top in global competitiveness,

quality of life and innovation

Population: 14 million

Average housing price: $400,000.004


Immigrants in Ontario

According to Statistics Canada over 3.5

million immigrants live in Ontario

- 41% from Asia

-16% from Americas

45

41%

38%

16%

3% 2%Asia Europe

Americas Africa

Other


Business in Ontario - Toronto

One of the most multicultural cities in the world

Toronto Region Board of Trade: Canada's largest local

chamber of commerce

Banking and market center of Canada

High Demand luxury homes over 2 Million

High demand for large luxury homes- 8000 SF


Business in Saskatchewan


Strong resource economy for potash

and oil

Fast growing economy is attracting

investment


Business in Alberta

Strong economy and increasing revenue

Canada’s largest producer of oil and gas

– 6th largest in the world

World’s second largest exporter and fourth largest

producer of natural gas.


Real Estate in Alberta


Large amount of wealth in Calgary driving

luxury real estate market

Luxury Homes start at $2 M


Business in BC - Vancouver


Most expensive city in North America

Port Metro Vancouver:

Asia-Pacific Gateway

and Corridor

Ranked 1st for quality of living in North America


Vancouver Luxury Real Estate Market

Average starting price: $3 Million

Ranges from $2M - $4M depending on location

Sought after neighbourhoods: Shaughnessy, Point Grey, Kits,

Kerrisdale

Market influenced by foreign buyers

40% of SFH market

Chinese purchase secondary or investment properties in

Vancouver

Surge of buyers from

the U.S. & Iran

60%

40%

Foreign Investment

Domestic

International51www.drmargotweinstein.com

Business in BC - Richmond

50% Asian population – largest in Canada

Average price of a detached home in Richmond is

over $1 Million dollars

Very low crime rate


Business in BC - Whistler

Resort-style living attracting more long-term

buyers

Luxury real estate $2 M

25% international buyers

Tourism based economy


Conducting Business with Canadians

Opportunity to network and establish referrals into Canada

Thanks to My Networks who shared valuable resources for this presentation:FIABCI Canada, AREAA, CIPS Members, Ursula Morel, Canada.


Thank you!

Contact: Dr. Margot Weinstein Website: www.drmargotweinstein.com

Cell 312-656-2254; [email protected]

Book available on Amazon at https://www.amazon.com/Real-Estate-

Success-Leadership-Strategies/dp/1515131254


http://www.drmargotweinstein.com/

mailto:[email protected]

https://www.amazon.com/Real-Estate-Success-Leadership-Strategies/dp/1515131254