4 1

for more detailed GTA statistics: jAmesmeTcAlfe.info

416-931-4161James Metcalfe BROKER

www.OurHomeToronto.com | Service@OurHomeToronto.com

REAL ESTATE UPDATE

Royal LePage Real Estate Services Ltd.Johnston & Daniel Division, Brokerage

477 Mount Pleasant Rd., Toronto, ON M4S 2L9

JUNE 2013

NEW RECORD RESALE PRICE IN MAY

The average price of a resale home in the GTA in May was $542,174 - which represented a 5% increase versus the May 2012 average price of $514,567. This also easily eclipsed the April 2013 average price of $526,335 and established another new record high price. Price growth occurred across all key market segments as follows: single-detached homes (+5%), semi-detached homes (+4%), townhomes (+2%) and condo apartments (+2%). The MLS® Home Price Index (HPI) Composite Benchmark was up by 2.8% versus last year. This index factors out sales mix issues and is therefore a very reliable indicator of real price changes. These results continue to support the Toronto Real Estate Board’s price growth forecast of 3.5% for 2013 as a whole.

From a volume perspective, the month of May witnessed a 3% decline in sales (10,182 transactions versus 10,544 in May 2012). Despite this modest downturn, it should be noted that the rate of decline has now lessened substantially for the second consecutive month. This recent strengthening trend supports the viewpoint that a growing number of households who put their decision to purchase on hold as a result of stricter lending guidelines for government insured mortgages are starting to become active again in the home ownership market. Volume performance varied considerably by market segment as follows: single-detached homes (+1%), semi-detached homes (-4%), townhomes (-7%) and condo apartments (-9%).

GTA RESALE HOME SALES8 9 10 11 12

GTA Resale Home Sales

MARJAN MAY SEP NOVJUL

3,000

1,500

4,500

6,000

7,500

9,000

10,500

12,000201320122011

GTA AVERAGE RESALE PRICE8 9 10 11 12

GTA Resale Home Sales

MARJAN MAY SEP NOVJUL

201320122011$540,000

$560,000

$420,000

$440,000

$460,000

$480,000

$500,000

$520,000

Every six months, CAAMP (Canadian Association of Accredited Mortgage Professionals) produces a mortgage market survey which provides an excellent insight into the pulse of the Canadian mortgage market. The report is always chock full of up-to-date facts. Their recent Spring 2013 Report was no exception. Here are a few highlights:

Overall Housing Market Stats

- # of households in Canada: 13.7 million

- # of renters: 4.05 million (30%)

- # of homeowners: 9.65 million (70%)

- # of homeowners who are mortgage-free: 3.70 million (38%)

- # of homeowners who have mortgages or home equity lines of credit: 5.95 million (62%)

Mortgage Rate Discounting

Among those who selected a 5-year fi xed rate since the

beginning of 2012, the average rate was 3.05% and the average discount was 2.20% off the “posted” rate. Moreover, every single mortgage sold had an actual interest rate that was lower than the posted rate. This fact fl ies in the face of those who claim that banks still routinely stick people with posted rates.

Rate Type

For homes bought from 2012 to present. 85% of new mortgagors selected a fi xed rate mortgage; 13% selected a variable or adjustable rate mortgage and the remainder selected a combination or hybrid mortgage.

For more information on the study, please visit: www.caamp.org

As usual, your client referrals are both highly valued and much appreciated. Until next time, take care!

“The fi rst time I sang in the church choir, two hundred people changed their religion.”  – Fred Allen

“The fi rst time I sang in the church choir, two hundred people changed their religion.”  – Rita Rudner

“If you live to ne one hundred, you’ve got it made. Very few people die past that age.” – George Burns

“The reason there are two senators for each state is so that one of them can be the designated driver.” – Jay Leno

t

WALKING AWAY FROM A HOUSE DEAL

3

Here are ten worthwhile home improvement projects and the percentage of cost typically recouped at resale (in a seller’s market):

1. Painting: If you’re only going to do one thing, paint. Interior/exterior painting is one of the very few improvements on which you are likely to realize a profi t - as long as you choose tasteful, current, neutral colours and the work is very professional. Payback: As much as 300%.

2. Kitchen remodeling: Typically one of the most expensive improvement projects, and you can quickly run up a huge bill. Careful planning and shopping will help minimize costs here. When remodelling the kitchen, remember to keep the project in line with the style and quality of the rest of the house and neighbourhood.  Just as there’s no point in putting a pricey granite countertop on dated-looking 1970s cabinets, there’s no point in installing a $50,000 kitchen in a $200,000 house.   Payback: 68-120%.

3. Bathroom addition: If your home has only one bathroom and is meant to house more than two people, a bathroom addition should be one of your top priorities. If most homes in your neighbourhood have two, three or more bathrooms, and yours has just one or one-and-a-half, you will defi nitely increase your property value by adding a bath. Payback: 80-130%.

4. Bathroom remodeling: Upgrading a pokey bathroom will enhance the value of your home and add to your daily comfort and enjoyment. White porcelain is the safe, timeless choice here. Payback: 65-120%.

5. Finishing unfi nished space: Whether it’s an attic or a basement, by fi nishing these spaces you add signifi cant value to your home, increasing square footage without having to build. Payback: 50-90%.

6. Window/door replacement: If your windows or doors are wasting energy or simply decrepit-looking, replacements can be an excellent use of your home improvement dollars. Stick to standard styles; odd shapes and highly customized arrangements do little for resale value. Payback: 50-90%.

7. Deck addition/improvement/expansion: Decks are one of the few exterior improvements with any signifi cant return, apart from painting. Payback: 65-90%.

8. Additions of bedrooms, family rooms, sunrooms, conservatories, garages, etc: Increasing square footage is almost always an excellent use of remodelling dollars, but don’t expand your home so much that there’s little outdoor space left. Payback: 50-83%.

9. Home offi ce remodeling: This project is becoming increasingly popular. Be sure to plan for plenty of electrical and cable outlets to accommodate all the required machines and gadgets. Payback:  60-73%.

10. Energy effi ciency retrofi ts: If your primary concern is return on investment, proceed with caution. Some retrofi ts, like better insulation and high-effi ciency furnaces, pay for themselves relatively quickly. Others, like solar panels, heat recovery ventilators, and tankless water heaters, may take years to pay for themselves. Payback: Highly variable.

Two projects that are unlikely to pay off at resale: swimming pools (which may even adversely affect your property value) and excessive landscaping (buyers may admire it but few will pay extra tens of thousands even if that’s what you spent to improve the grounds). And remember that badly done remodelling/renovation projects will cost you in two ways. You won’t pay just for labour and materials; you’ll pay when buyers see a project that has to be redone. 

Buying a home can be a tough decision, but once the decision is made and the ball is rolling, you may not be able to change your mind. Here are the answers to some frequently asked questions regarding changing you mind on a real estate transaction.

Is there a buyer’s remorse period in Ontario?

If you are buying a new condominium from a builder, you have 10 days to change your mind. You do not need a reason. This does not apply if you buy a new house from a builder and does not apply if you are buying a resale home or condominium. Why condos only? The clause is included in the Condominium Act.

Can a buyer sign an offer and then walk away?

The Ontario real estate contract gives a buyer 24 hours to pay the deposit, once the offer is accepted by the seller. The buyer cannot just change their mind or they can be sued. For example, the buyer offers $300,000 for a house which is accepted. The buyer changes his mind and doesn’t pay the deposit and walks away from the deal. The seller resells the property for $275,000. They can still sue the fi rst buyer for the difference, or $25,000.

Can buyers use conditional clauses as escape hatches?

Most real estate contracts are conditional on the buyer being able to get a mortgage and being satisfi ed with a home inspection. Other conditions include being satisfi ed with a condominium status certifi cate when buying a resale condo.

Many buyers think these conditions give them the right to just change their minds. It is not that easy. The case law has demonstrated that buyers must try and satisfy any condition in good faith. This means that you need a legitimate reason why you found the home inspection report or condominium status certifi cate unsatisfactory.

Who gets the deposit when buyers change their mind?

In most cases, the deposit is held by the seller’s real estate brokerage, in trust. Under the law, when a deal breaks down, the brokerage cannot pay the deposit to anyone without either a mutual release or direction signed by both the buyer and the seller, or an order of the court. As such, when deals do not close, if there is no agreement, the deposit can be locked up for a long time, and the buyer will not have access to it to make an offer on another property.

Is there a “legal” way for a buyer to get out of a deal?

It depends. If, for example, there was a right on your title for the City to access 20 per cent of your property for any reason, known as an easement, and that was not disclosed to the buyer, they can usually cancel the agreement without penalty. However, there have been other cases that indicate if there is a problem with a city work order or title problem for which the seller can obtain title insurance to protect the buyer, then the buyer cannot refuse to close. A buyer can also cancel if there has been substantial damage to the property before closing, such as a fl ood that was not repaired. You can’t refuse to close if the oven is not working.

The better answer in all of these situations is to be very careful and serious before you make any decision to buy a home. Changing your mind later can be very expensive.

This article was contributed by HGTV. Please visit them at www.hgtv.ca.

TEN HOME IMPROVEMENT PROJECTS THAT ADD VALUE

2

LEGALLYSPEAKING

This article was contributed by Mark Weisleder, a Toronto-based real estate lawyer and author. Please visit him at www.markweisleder.com.

HOUSESMART

t

WALKING AWAY FROM A HOUSE DEAL

3

Here are ten worthwhile home improvement projects and the percentage of cost typically recouped at resale (in a seller’s market):

1. Painting: If you’re only going to do one thing, paint. Interior/exterior painting is one of the very few improvements on which you are likely to realize a profi t - as long as you choose tasteful, current, neutral colours and the work is very professional. Payback: As much as 300%.

2. Kitchen remodeling: Typically one of the most expensive improvement projects, and you can quickly run up a huge bill. Careful planning and shopping will help minimize costs here. When remodelling the kitchen, remember to keep the project in line with the style and quality of the rest of the house and neighbourhood.  Just as there’s no point in putting a pricey granite countertop on dated-looking 1970s cabinets, there’s no point in installing a $50,000 kitchen in a $200,000 house.   Payback: 68-120%.

3. Bathroom addition: If your home has only one bathroom and is meant to house more than two people, a bathroom addition should be one of your top priorities. If most homes in your neighbourhood have two, three or more bathrooms, and yours has just one or one-and-a-half, you will defi nitely increase your property value by adding a bath. Payback: 80-130%.

4. Bathroom remodeling: Upgrading a pokey bathroom will enhance the value of your home and add to your daily comfort and enjoyment. White porcelain is the safe, timeless choice here. Payback: 65-120%.

5. Finishing unfi nished space: Whether it’s an attic or a basement, by fi nishing these spaces you add signifi cant value to your home, increasing square footage without having to build. Payback: 50-90%.

6. Window/door replacement: If your windows or doors are wasting energy or simply decrepit-looking, replacements can be an excellent use of your home improvement dollars. Stick to standard styles; odd shapes and highly customized arrangements do little for resale value. Payback: 50-90%.

7. Deck addition/improvement/expansion: Decks are one of the few exterior improvements with any signifi cant return, apart from painting. Payback: 65-90%.

8. Additions of bedrooms, family rooms, sunrooms, conservatories, garages, etc: Increasing square footage is almost always an excellent use of remodelling dollars, but don’t expand your home so much that there’s little outdoor space left. Payback: 50-83%.

9. Home offi ce remodeling: This project is becoming increasingly popular. Be sure to plan for plenty of electrical and cable outlets to accommodate all the required machines and gadgets. Payback:  60-73%.

10. Energy effi ciency retrofi ts: If your primary concern is return on investment, proceed with caution. Some retrofi ts, like better insulation and high-effi ciency furnaces, pay for themselves relatively quickly. Others, like solar panels, heat recovery ventilators, and tankless water heaters, may take years to pay for themselves. Payback: Highly variable.

Two projects that are unlikely to pay off at resale: swimming pools (which may even adversely affect your property value) and excessive landscaping (buyers may admire it but few will pay extra tens of thousands even if that’s what you spent to improve the grounds). And remember that badly done remodelling/renovation projects will cost you in two ways. You won’t pay just for labour and materials; you’ll pay when buyers see a project that has to be redone. 

Buying a home can be a tough decision, but once the decision is made and the ball is rolling, you may not be able to change your mind. Here are the answers to some frequently asked questions regarding changing you mind on a real estate transaction.

Is there a buyer’s remorse period in Ontario?

If you are buying a new condominium from a builder, you have 10 days to change your mind. You do not need a reason. This does not apply if you buy a new house from a builder and does not apply if you are buying a resale home or condominium. Why condos only? The clause is included in the Condominium Act.

Can a buyer sign an offer and then walk away?

The Ontario real estate contract gives a buyer 24 hours to pay the deposit, once the offer is accepted by the seller. The buyer cannot just change their mind or they can be sued. For example, the buyer offers $300,000 for a house which is accepted. The buyer changes his mind and doesn’t pay the deposit and walks away from the deal. The seller resells the property for $275,000. They can still sue the fi rst buyer for the difference, or $25,000.

Can buyers use conditional clauses as escape hatches?

Most real estate contracts are conditional on the buyer being able to get a mortgage and being satisfi ed with a home inspection. Other conditions include being satisfi ed with a condominium status certifi cate when buying a resale condo.

Many buyers think these conditions give them the right to just change their minds. It is not that easy. The case law has demonstrated that buyers must try and satisfy any condition in good faith. This means that you need a legitimate reason why you found the home inspection report or condominium status certifi cate unsatisfactory.

Who gets the deposit when buyers change their mind?

In most cases, the deposit is held by the seller’s real estate brokerage, in trust. Under the law, when a deal breaks down, the brokerage cannot pay the deposit to anyone without either a mutual release or direction signed by both the buyer and the seller, or an order of the court. As such, when deals do not close, if there is no agreement, the deposit can be locked up for a long time, and the buyer will not have access to it to make an offer on another property.

Is there a “legal” way for a buyer to get out of a deal?

It depends. If, for example, there was a right on your title for the City to access 20 per cent of your property for any reason, known as an easement, and that was not disclosed to the buyer, they can usually cancel the agreement without penalty. However, there have been other cases that indicate if there is a problem with a city work order or title problem for which the seller can obtain title insurance to protect the buyer, then the buyer cannot refuse to close. A buyer can also cancel if there has been substantial damage to the property before closing, such as a fl ood that was not repaired. You can’t refuse to close if the oven is not working.

The better answer in all of these situations is to be very careful and serious before you make any decision to buy a home. Changing your mind later can be very expensive.

This article was contributed by HGTV. Please visit them at www.hgtv.ca.

TEN HOME IMPROVEMENT PROJECTS THAT ADD VALUE

2

LEGALLYSPEAKING

This article was contributed by Mark Weisleder, a Toronto-based real estate lawyer and author. Please visit him at www.markweisleder.com.

HOUSESMART

4 1

James Metcalfe BROKER

416-931-4161 www.OurHomeToronto.com | Service@OurHomeToronto.com

In accordance with PIPEDA, to be removed from this mailing list please e-mail or phone this request to the REALTOR® Not intended to solicit buyers or sellers currently under contract with a broker. The information and opinions contained in this newsletter are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for damages resulting from using the published information. This newsletter is provided with the understanding that it does not render legal, accounting or other professional advice. Statistics are courtesy of the Toronto Real Estate Board. Copyright © 2013 Mission Response Inc. 416.236.0543 All Rights Reserved. K0191

“YOUR REFERRALS ARE SINCERELY APPRECIATED! THANK YOU!”

Royal LePage Real Estate Services Ltd.Johnston & Daniel Division, Brokerage

477 Mount Pleasant Rd., Toronto, ON M4S 2L9

JUNE 2013

NEW RECORD RESALE PRICE IN MAY

The average price of a resale home in the GTA in May was $542,174 - which represented a 5% increase versus the May 2012 average price of $514,567. This also easily eclipsed the April 2013 average price of $526,335 and established another new record high price. Price growth occurred across all key market segments as follows: single-detached homes (+5%), semi-detached homes (+4%), townhomes (+2%) and condo apartments (+2%). The MLS® Home Price Index (HPI) Composite Benchmark was up by 2.8% versus last year. This index factors out sales mix issues and is therefore a very reliable indicator of real price changes. These results continue to support the Toronto Real Estate Board’s price growth forecast of 3.5% for 2013 as a whole.

From a volume perspective, the month of May witnessed a 3% decline in sales (10,182 transactions versus 10,544 in May 2012). Despite this modest downturn, it should be noted that the rate of decline has now lessened substantially for the second consecutive month. This recent strengthening trend supports the viewpoint that a growing number of households who put their decision to purchase on hold as a result of stricter lending guidelines for government insured mortgages are starting to become active again in the home ownership market. Volume performance varied considerably by market segment as follows: single-detached homes (+1%), semi-detached homes (-4%), townhomes (-7%) and condo apartments (-9%).

GTA RESALE HOME SALES8 9 10 11 12

GTA Resale Home Sales

MARJAN MAY SEP NOVJUL

3,000

1,500

4,500

6,000

7,500

9,000

10,500

12,000201320122011

GTA AVERAGE RESALE PRICE8 9 10 11 12

GTA Resale Home Sales

MARJAN MAY SEP NOVJUL

201320122011$540,000

$560,000

$420,000

$440,000

$460,000

$480,000

$500,000

$520,000

Every six months, CAAMP (Canadian Association of Accredited Mortgage Professionals) produces a mortgage market survey which provides an excellent insight into the pulse of the Canadian mortgage market. The report is always chock full of up-to-date facts. Their recent Spring 2013 Report was no exception. Here are a few highlights:

Overall Housing Market Stats

- # of households in Canada: 13.7 million

- # of renters: 4.05 million (30%)

- # of homeowners: 9.65 million (70%)

- # of homeowners who are mortgage-free: 3.70 million (38%)

- # of homeowners who have mortgages or home equity lines of credit: 5.95 million (62%)

Mortgage Rate Discounting

Among those who selected a 5-year fi xed rate since the

beginning of 2012, the average rate was 3.05% and the average discount was 2.20% off the “posted” rate. Moreover, every single mortgage sold had an actual interest rate that was lower than the posted rate. This fact fl ies in the face of those who claim that banks still routinely stick people with posted rates.

Rate Type

For homes bought from 2012 to present. 85% of new mortgagors selected a fi xed rate mortgage; 13% selected a variable or adjustable rate mortgage and the remainder selected a combination or hybrid mortgage.

For more information on the study, please visit: www.caamp.org

As usual, your client referrals are both highly valued and much appreciated. Until next time, take care!

“The fi rst time I sang in the church choir, two hundred people changed their religion.”  – Fred Allen

“The fi rst time I sang in the church choir, two hundred people changed their religion.”  – Rita Rudner

“If you live to ne one hundred, you’ve got it made. Very few people die past that age.” – George Burns

“The reason there are two senators for each state is so that one of them can be the designated driver.” – Jay Leno