Defects When Buying A Home ~ Part 2

Would You Buy A Haunted House? With Halloween just having passed, (although it seems that was a long time ago) it seems fitting to discuss psychological defects and real estate. Homes that carry psychological defects are sometimes called stigmatized properties – although they are not always the same. For example, a home that was formerly a meth manufacturing lab can be called a stigmatized property not only because of the stigma that comes with the drug activity and crime surrounding the house, but the health hazards that come with chemical residues left in the home. This type of stigmatized property has actual, tangible defects that may make it unsuitable to live in.

Haunted houses are referred to as homes with psychological defects, as are homes where violent crimes or incidents such as murders and suicides have taken place. These homes are also called stigmatizes houses, and may involve other forms of stigma, including: ~ Phenomena stigma: the home is notoriously “haunted” by ghosts or Public stigma: The house made famous in the Amityville Horror books and movies is a great example of a notoriously creepy house, where in fact six people were murdered.

Older, more romantic cities like New Orleans may actually use the rumour of a ghost in a home to their advantage, as a marketing point when selling, but this can have serious drawbacks. In 1990 in New York, a man sued the seller of his future new home after he’d made the down payment because he learned this house was haunted. Unfortunately, the realtor had marketed the house was haunted and used this as a selling point when listing it, but then stopped saying so. Because he had publicly claimed this house had such a defect, the appeals court took it as a fact and treated the haunting as a latent defect; one that could not be found by a regular home inspection and was deliberate misrepresentation by the seller because he failed to mention it to this new buyer. The Supreme Court had originally dismissed the lawsuit, saying the realtor didn’t have to disclose it despite agreeing that due to the seller’s behaviour, the home was considered haunted by law.

For sellers, the foggy outcome of many stigmatized property cases, and the chance of buyers backing out of the deal once they find out about the home’s history, means that it’s just plain wise to tell the buyers what you know.

 

Defects When Buying A Home ~ Part 1

Latent and Patent Defects ~

When you buy a home, it is important to have a professional home inspection conducted on the property to ensure you know what you are buying, and that there are no hidden problems. Having said that, home inspections are not always failsafe, and that’s why it is important to understand what types of defects you can encounter in a new home, and how to deal with them. The two primary types of defects when buying a home are patent defects and latent defects.

Patent Defects ~

A home inspection and even the home buyer themselves will find patent defects on a casual walk through ~ a cracked wall, a broken window, or water damage from a basement flood, for example. All of these are visible to the naked eye and would be found in a regular home inspection. When a home buyer chooses to buy a home with these defects, they are agreeing to buy the home as is because the defects can plainly and obviously be seen and the seller bears no responsibility as they have not hidden or misrepresented the defects. The buyer can however, create various clauses in the sale contract to ensure the seller fixes these items or pays for their repair.

Latent Defects ~

Latent defects are much trickier defects to deal with, especially when it comes to real estate law. In most home transactions, the phrase “buyer beware” is often used to ensure that buyers are well-aware of what they are buying before they commit. This is where a home inspection will hopefully uncover any hidden problems … but what about hidden defects that not even a home inspection will find? Latent defects can include basements that have a tendency to seriously flood, a hidden mold problem, poor ventilation or blocked drains. Essentially, serious defects that can make the home dangerous or unfit for habitation and may not be found until months after you have moved in the new home. These defects can potentially lead to a lawsuit. If it can be proven that the seller knew about these defects and willfully hid them or didn’t mention them, the buyer may have a good case against them. But in some cases, the seller may legitimately not have known about them.

I always recommend that my buyers be present during the home inspection; we go through the home together with the home inspector.

If you discover your new home has latent defects, that you deem to be major, you should contact your real estate agent or real estate lawyer.

 

Kilgour Estates Penthouse

 

Provincial Government Sets 2011 Rent Increase Guideline

The Ministry of Municipal Affairs and Housing has released the province’s rent increase guideline for 2011. The 2011 guideline will be 0.7 per cent. The new rent increase guideline applies to a rent increase that begins any time between January 1, 2011 and December 31, 2011. For previous years’ increase guidelines, please see the table below.

The new rent increase guideline becomes effective January 1, 2010 and establishes the maximum amount that a landlord can increase a tenant’s rent without making an application to the Ontario Rental Housing Tribunal.

This guideline does not apply when renting a vacant unit. Under the Tenant Protection Act, 1997, when a unit becomes vacant, a landlord is free to charge whatever rent he/she chooses. Once the unit is rented, however, the guideline increase applies for subsequent increases to that tenant.

In the past, the rent increase guideline included a base increase of two per cent, plus an amount for increases to landlord operating costs. In 2005, the provincial government announced that the increase guideline would include only an amount for operating cost increases, while proposals to reform rent control are considered. This has been continued for 2010.

The guideline applies to most private residential rental accomodation covered by the Tenant Protection Act, 1997. The guideline does not apply to residential dwellings first occupied (by any owner or tenant) on or after November 1, 1991.

For more information on rent increases, please contact the Ontario Rental Housing Tribunal at 416-645-8080 or 1-888-332-3234.

Source: www.torontorealestateboard.com

 

Toronto Real Estate Board – Market Watch – April 2011

 

Toronto Housing Market Update: Spring 2011

With the impending return of warmer weather, the migratory birds and our lengthening daylight hours, the Central Toronto Real Estate Market continues to gain momentum.  We currently find ourselves in the crest of the first bell curve of the annual real estate cycle. The Toronto Real Estate Board reported that March 2011 was the second best March on record, even though it was 11% less than last year, in terms of the number of transactions.  Historically, it is during this time of the year, after the passing of the private and public school March breaks, that we start to see increased activity in the market.   Specifically pertaining to this year, we have witnessed a shortage of listings, and while buyers have been plentiful, many have been unsuccessful in fulfilling their needs and requirements.

In economic terms, demand has exceeded supply.  Surprisingly, in light of the supply-demand inequity, the market did not migrate to a full seller’s market.   The threat of rising interest rates may have tempered this occurrence as the market remained somewhat balanced.  In the last few weeks, we have started to see listing inventories grow to levels not seen in quite some time.  Well priced properties are often going in competition as many buyers have waited on the sidelines patiently waiting for properties meeting their criteria.  Sellers’ with over-priced properties are finding their homes languishing and often stagnating. 

Pricing strategy is a key element in the successful sale of properties in the Central Toronto market.  Market savvy listing agents understand and counsel their sellers’ on the strategic importance of proceeding with offer presentation dates based on individual property variables.   On the other side of the equation, the media and the Toronto Real Estate Board have been educating buyers on the importance of a signed B.R.A. (Buyer Representation Agreement) ensuring their interests are being looked after and their agency representation is complete. 

On a macro-economic level, according to TD Economics, the Bank of Canada does not appear to be under pressure to resume interest rate increases in the near future.  The impact of higher inflationary costs and the rising Canadian dollars are being watched very closely.  TD Economics predicts that the next round of interest rate increases will likely occur in July.

From a Central Toronto real estate market perspective, we are still in the midst of historically low interest rates; are still a destination city for immigrants and investors looking for a safe haven; and our house prices are globally well situated.  The prognosis is good for a solid spring market in Central Toronto.

 

Ed’s Cry for Help – Are More Changes to Mortgage Rules Coming?

I came across this great article on the Muddy York Blog, which I thought I would share with you.  It is written by Dave Larock, who is a mortgage planner and is a well published writer within the real estate industry. I hope you enjoy the article:

By Dave Larock

Ed Clark, CEO of Toronto Dominion Bank, recently implored our federal government to reduce the maximum allowable mortgage amortization period from 35 years to 25 years. His justification was that Canadians were borrowing too much, and that unless the government stepped in and made every lender change their policies, none would. In short, Ed was asking the government to “save us from ourselves”.  Meanwhile, Mark Carney, our central  bank Governor, has repeatedly expressed concern over Canada’s rising debt levels, basically saying, “I have to keep rates low now but the Feds had better do something about all that borrowing”. Even Prime Minister Harper recently weighed in, telling CTV that his government will change mortgage rules if Canadians continue to wade deeper into debt. Today’s post will outline the concerns around Canada’s rising debt levels and explore what changes to Canada’s mortgage rules may be coming.

 

The 2011 Prognosis for the Central Toronto Real Estate Market

As 2010 concluded, we were greeted with a report from TD Economics stating that the Canadian housing market has “sidestepped both worst-case scenarios of a bubble and crash and the resale market appears to have landed safely and somewhat earlier than anticipated”.  According to the Bank of Canada “the recovery in Canada is proceeding at a modest rate and inflation dynamics have been broadly in line with the Bank’s expectations”.  The recovery is expected to be more gradual than initially projected with growth of 2.3% in 2011 and 2.6% in 2012; with the economy running at full capacity by the end of 2012.

In Canada, all 400,000 jobs lost during the recent recession have been regained, compared to only one-fifth of the lost jobs in the United States being regained.  It is also expected that the “economic growth in Canada will be less reliant on household spending and government stimulus measures, while business investment and exports should pick up the slack”, according to Mark Carney, Governor, Bank of Canada.

There was much speculation that interest rates would rise after the second quarter of 2010, but fortunately these rate increases never materialized.  In October of 2010, the Bank of Canada announced that it would maintain its policy interest at 1%.  The Bank stated that at 1%, “the policy rate leaves in place considerable monetary stimulus, which is consistent with achieving 2% inflation target in an environment of significant supply in Canada”.  It now appears that interest rates should hold steady well into 2011, this bodes well for anyone looking to purchase or re-finance their homes.

In 2011, compared to 2010, the markets will not have to assimilate a new tax, such as the Harmonized Sales Tax, or have the added stimulus of a Renovation Tax credit.  There is much anticipation over the newly elected Toronto City Council’s campaign promise to eliminate the onerous Toronto Land Transfer Tax.  The Toronto Land Transfer adds a substantial expense for the Toronto homebuyer and impacts the overall affordability of a home purchase in Toronto.

Heading into 2011, the Central Toronto market is still relatively active with the typical seasonal slowdown, though not as prevalent as observed in prior years.   The listing inventory levels are still quite low and the buyers are still in abundance.   The buyers tend to be very selective and the importance of pricing is paramount to both sides of the transaction.   Over-priced listings are continuing to stagnate and properly priced listings are often going in competition.  A window of opportunity now exists with the low inventory levels for anyone thinking of selling before the start of the Spring market.

According to the President of the Toronto Real Estate Board, “we are moving into a healthy market in 2011, which will continue to support growth in the average selling price of a home”.  Many experts are anticipating a slight drop in unit sales volume in 2011, while experiencing a slight increase in the price of a home – this signifies a more balanced market for 2011.   Historically low interest rates; supported by Toronto’s net influx of migrates and Toronto’s increased global stature translates into an excellent prognosis for the real estate market in 2011.

Source:  Muddy York Blog (www.muddyyork.com)

 

Fun Holiday Activities in Toronto for the Whole Family!

The holidays provide a great opportunity to get out and make some memories with your family while the kids are out of school on winter break. There are plenty of events happening in and around the city this year, with ample opportunity for quality time spent together throughout the end of December until early January.  So check it out, have fun and get busy …

Boxing Day at the Zoo ~ 361A Old Finch Avenue

For 35 years, the Toronto Zoo has held its annual Christmas Treats Walk on Boxing Day. Head for the front entrance at 10 a.m. and bring a non-perishable food item donation to participate in this one-hour tour of the zoo to see all of the zoo animals receiving their holiday treats. Admission is also half-price all day!

Victorian Toronto Christmas ~ 82 Bond Street

Been watching too many holiday movies this year? Yearning for a historic, Victorian~style Christmas with all of the sights and sounds traditionally associated with the holidays? Visit MacKenzie House, one of the City of Toronto’s heritage museums. The Victorian era is when most of the traditions associated with today’s holiday atmosphere originated, from exchanging cards to decorating trees. Revisit this era at the museum with mulled cider, cookies and a step back in time until January 2nd.

The Trail of Light ~ Downsview Park

Downsview Park’s annual Trail of Lights is one of Canada’s largest light shows. In fact,  it’s so large it has a drive-thru option. From Thursday to Sunday, stay toasty in your car while driving through the park and see the giant lit up arches and animated displays ~ some of which are two storeys tall ~ or walk the trail on Wednesday nights, from 6 p.m. to 11p.m. during the pedestrian~only Trail of Lights.

Skating at Nathan Phillips Square ~ Queen West and Bay Streets

During the winter months, the reflecting pool at Nathan Phillips Square turns into a skating rink. Skate in front of City Hall at one of the most popular rinks in the city. There are also skate rentals, snacks and hot chocolate available.

The Nutcracker ~ Four Seasons Centre for the Arts

The Nutcracker is a holiday tradition for many families in the Greater Toronto Area, and this year the National Ballet of Canada’s production of The Nutcracker is celebrating its 15th anniversary. The show runs until January 2nd, and 45 minutes before every performance the Four Seasons Centre for the Arts is hosting Nutcracker Story Time, so younger children will better be able to understand the performance.

Skiing in the City

In Toronto, you can go skiing without even leaving the city! There are ski hills at two different locations: Centennial Park and Earl Bales Park. Both have a snack bar, chair lifts, night skiing and equipment rentals, but you’ll have to visit Earl Bales to sit by the cozy fireplace.

New Year’s Eve Bash at Nathan Phillips Square ~ Queen West and Bay Streets

Every year, Nathan Phillips Square hosts a giant New Year’s Eve party with a free concert. A number of Canadian artists will be playing, and the concert can also be watched live on CityTV starting at 10 p.m.

New Year’s Eve Family Countdown at the Zoo ~ 361A Old Finch Avenue

For a more family~friendly New Year’s Eve alternative, the Toronto Zoo is hosting their annual Family Countdown. The festivities run from 6 p.m. to 9 p.m., and include a Justin Bieber Tribute Show, surprise animal guests and children’s television personalities Harry and his Bucket Full of Dinosaurs. If you’re looking for a more relaxing New Year’s party that ends long before midnight, this is the one to check out. The Indian Rhino, Indo-Malaya and African Rainforest Pavilions will also be open to visitors until 8:20 p.m..

 

~ Fall Market In Toronto ~

Here we are, it’s the first week of school, which means it’s September!!  I’m having a hard time believing September is here, and am wondering where did the summer go?  We’ve just returned from a wonderful family holiday in Cape Cod.  Thankfully we left…with the hurricane behind us…and were so happy to learn that the storm wasn’t nearly as bad as CNN had predicted (no surprise).    I’ve returned from this holiday, feeling totally rested, refreshed & eager to get back to work.  It’s amazing when we allow ourselves to step back, away from our day to day work/lives and see things with a fresh perspective, how important that is. 

My children are so excited to be going back to school, organized with nap sacs, uniforms are laid out, ready for the big day.  My youngest told me she felt sad that it was the last day of summer 2010 … yet also excited for the school start, and the fresh fall days to come.

I know exactly how she feels, as the back to school season always made me feel like it was the true start of the new year.    It’s a great time to feel energized, refreshed and ready to move forward.

The topic on everyone’s mind seems to be the economy and the real estate market.  With all the negative press it’s no wonder.  I’m beginning to feel, that these talented journalists’ are actually fear mongers.   What they are reporting is at odds with those of us, who are out there selling real estate, dealing with the buyers and sellers and working within this market environment.   

Summer is traditionally slow for buying & selling real estate, this slow down is perfectly normal.  Despite this, myself and my colleagues, have experienced well attended open houses, with buyers in good supply.  Over the summer, we have noted a lack of inventory,  yet it certainly appears that there are plenty of listings poised to come on the market this fall.

It is crucial to be informed of the facts, positive and negative so that the public can make informed, intelligent decisions.  Why are the papers always looking for so much drama & fear… ? because it sells…

We as Canadians have always been financially more conservative than our neighbours to the south.  If you are looking to buy or sell a home, work with a professional realtor, and do your homework…Toronto is an amazing world class, cosmopolitan city!!!