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Land Transfer Tax

Land Transfer Tax is one of the largest costs in buying a home, other than the deposit and the mortgage. It is payable at the time of closing.

Your individual land transfer tax calculation should be calculated and verified by your legal advisor/lawyer.

Please note the Ontario Provincial Government does amend the LTT from time to time. Visit Ontario’s Land Transfer Tax Website for the latest rates and information.

>>> Land Transfer Tax Calculator

Note to users: Although we try to ensure the accuracy of our information, it is not guaranteed, and we advise you to confirm all information with your solicitor/lawyer.

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Do You Need A Real Estate Sales Representative?

Working with a sales repWith the easy accessibility of information on the internet today, many purchasers ask themselves the question, “Do I need a real estate sales representative?” Many people start their search on “the net”, by checking out the industry sites for listings of homes in neighbourhoods of interest, information on financing, costs related to buying, etc.

This is actually a good idea at the beginning, especially if you are not sure where you want to live.

With all of that information so available, would you want to work with someone exclusively?

Following are just a few of the reasons why you should:

Sales Representatives and Brokers are aware of homes a number of days in advance of their appearance on the Internet. We also have more details about the specific homes then may be displayed on websites.

Once you have decided on the type of home and preferred locations, sales reps can notify you quickly once new listings appear on the “hot sheets.” Most new listings are published right away, but, some are not! You could miss the one you are waiting for. We check a couple of times a day for new listings and have automated systems checking more often than that.

Sales reps can be pre-inspected for you, so you don’t waste valuable time looking at those that would be of no interest. We all know the following… some ads or pictures may make it actually sound better than it is.

You may also require assistance with neighbourhood information, sale prices and home values, schools, etc. Sales reps also understand the condition of homes; costs of buying; agency and how it affects you; explanation of the offer and closing procedures; trends, negotiation and much more. Often they can point you to better financing options.

Contact us at Lakeview Realty Inc. to explain the full benefits of working with one of our sales representives.

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What do all those abbreviations mean?

What does it all mean … all of the short forms in listings, ads or feature sheets?    

The following are just a few of the common abbreviations you might see.

A/C Air
conditioning
Apt. Apartment
Appls. Appliance
Bach. Bachelor
Balc. Balcony
B/I Built-in
Bkr. Breakfast
Bsmt. Basement
Bth.,
Bthrm.
Bathroom
Br,
Bed., Bdrm.
Bedroom
Brdlm.
w/l
Broadloom
where laid
Bldg. Building
Bung. Bungalow
Cath.
Ceil
Cathedral
ceiling
C/A or
C.a.c.
Central
air, central air conditioning
C vac,
C/vac., Central vac.
Central
vacuum
Condo. Condominium
Det. Detached
Db. Double
Elf. Electric
light fixtures
Ex. Exercise
Exp. Exposure
Ext. Exterior
Fam.
Rm.
Family
room
Foy. Foyer
Fncd. Fenced
Fn.
Bsmt.
Finished
basement
Frpl.,
Fpl., Fp.
Fireplace
Fl. Floor
Fur. Furnace
Gam. Games
Gb&
e.
Gas
burner & equipment (furnace)
Gar. Garage
Hdwd
Flr., Hrdwd Flr.
Hardwood
floor
Incl. Included
Kit.
Kitch.
Kitchen
Lau. Laundry
Lib. Library
Lof. Loft
Lrg.,
Lge.
Large
LR. Living
room
Lux. Luxury
Nur. Nursery
Obf. Open
brick fireplace
Off. Office
O/L’s Over
looks
Pan. Pantry
Pla. Play
Pkg.,
Prkg.
Parking
Ph. Penthouse
Pc. Piece
Priv.,
Pr.
Private
Rec. Recreation
Reno.,
Reno’d.
Renovated
Rm. Room
Sep
Entr.
Separate
entrance
Sit. Sitting
S/L Storage/locker
Sol. Solarium
Spac. Spacious
Stry. Storey
S&S Storms
& screens
Sub
Div.
Subdivision
Tan. Tandem
Twnhse. Townhouse
Utl. Utility
W/O Walk
out
W/W Wall to
wall
W/D Washer/dryer
Wkshp. Workshop
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Agency Overview – Working With a Brokerage

Realtors work within the Law of Agency

As of January 1st, 1995, the Ontario Real Estate Association required agents to disclose to everyone involved, who it is they represent.

The Way It Was

In the past, many buyers thought that agents helping them were working in their best interests. The law, however, states that their duty lies with their client. Until now, that was always the Vendor. A buyer could always expect competent service, but in most cases, both agents were “working for the Vendor”

Now.. The buyer has a choice as to how he/she is represented.

  • The Agent is the Real Estate Company (the Broker) and all it’s salespeople
  • The Client is the party who contracts for an Agent to act on behalf of that party and assist with their real estate transaction
  • A customer is a person who receives services from another person’s agent, but they are not the Client of that person

Clear as mud?

Client.. Buyer Broker Situation.

This has become probably the most common situation now because a purchaser can hire an agent to work on their behalf to negotiate the best price and terms for them.

The buyer then becomes “their Client” and the agent must disclose any information that may affect their decisions.

The Sales Rep owes a fiduciary duty to that buyer.. confidentiality, disclosure, accountability etc. and will be able to give direct advice as to market activity, strategy etc.

The agent would work with the buyer to the fullest, making sure their interests are protected. This would include providing regular information on new listings, sales, and other pertinent information.

The best part is … There are no additional costs to hire an agent to represent you. (unless otherwise arranged). The buyer’s agent can be paid by the listing broker, as agreed upon in the listing agreement and MLS arrangements.

If the buyer chooses to be a client, then he/she must sign a Purchaser Agency Agreement with the agent, whereby the buyer agrees to work with that agent exclusively for a designated period of time.

If a buyer doesn’t choose this, then the agent is working for the Vendor, as before.

This can be a fairly lengthy topic, and this is just meant to be a very brief overview. Here are a few facts that may help you understand the relationships a little better:

REALTORS are governed by the legal concept of “ Agency.”

An agent is legally obligated to look after the best interests of the person he or she is working for. The agent must be loyal to that person.

A real estate company may be your agent – if you have clearly established an agency relationship with that REALTOR. But often, you may assume such an obligation exists when it does not.
REALTORS believe it is important that the people they work with understand when an agency relationship exists and when it does not – and understand what it means.

In real estate, there are different possible forms of agency relationship:

1 . Seller’s Agent

When a real estate company is a “seller’s agent,” it must do what is best for the seller of a property.

A written contract, called a listing agreement, establishes seller agency. It also explains services the company will provide, establishes a fee arrangement for the REALTOR’s services and specifies what obligations a seller may have.

A seller’s agent must tell the seller anything known about a buyer. For instance, if a seller’s agent knows a buyer is willing to offer more for a property, that information must be shared with the seller.

Confidences a seller shares with a seller’s agent must be kept confidential from potential buyers and others.

Although confidential information about the seller cannot be discussed, a buyer working with a seller’s agent can expect fair and honest service from the seller’s agent and disclosure of pertinent information about the property.

2. Buyer’s Agent

A real estate company acting as a “buyer’s agent” must do what is best for the buyer.

A written contract, called a buyer agency agreement, establishes buyer agency. It also explains services the company will provide, establishes a fee arrangement for the REALTOR’s services and specifies what obligations a buyer may have.

Typically, buyers will be obliged to work exclusively with that company for a period of time.

Confidences a buyer shares with the buyer’s agent must be kept confidential.

Although confidential information about the buyer cannot be disclosed, a seller working with a buyer’s agent can expect to be treated fairly and honestly.

3. Dual Agent

Occasionally a real estate company will be the agent of both the buyer and the seller. The buyer and seller must consent to this arrangement in their listing and buyer agency agreements. Under this “dual agency” arrangement, the company must do what is best for both the buyer and the seller.
Since the company’s loyalty is divided between the buyer and the seller who have conflicting interests, it is absolutely essential that a dual agency relationship is established in a written agency agreement. This agreement specifically describes the rights and duties of everyone involved and any limitations to those rights and duties.

Who’s working for you?

It is important that you understand who the REALTOR is working for. For example, both the seller and the buyer may have their own agent which means they each have a REALTOR who is working for them.

Or, some buyers choose to contact the seller’s agent directly. Under this arrangement, the REALTOR is working for the seller, and must do what is best for the seller, but may provide many valuable services to the buyer.

A REALTOR working with a buyer may even be a “sub-agent” of the seller. Under sub-agency, both the listing agent and the co-operating agent must do what is best for the seller even though the sub-agent may provide many valuable services to the buyer.

If the seller and the buyer have the same agent, this is dual agency and the REALTOR is working for both the seller and the buyer.

Code of Ethics

REALTORS believe it is important that the people they work with understand their agency relationship. That’s why agency disclosure is included in a self-­imposed Code of Ethics, which is administered by the Real Estate Council of Ontario.

The Code requires REALTORS to disclose in writing the nature of the services they are providing and encourages REALTORS to obtain written acknowledgement of that disclosure. The Code also requires REALTORS to enter into a written agency agreement with any sellers or buyers they are representing.

For more detailed information, please contact us.

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Can You Afford a Home?

MortgagesYour “Dream Home” becomes a nightmare when you end up “house poor,” with most of your income going to pay for the mortgage and unexpected costs, with only a little left over for enjoyment.

When buying a home you need to be practical, realistic and informed. Lakeview Realty Inc. real estate specialists can assist you in finding the “right home.” We can also assist you in evaluating mortgage options, obtain financing and review the anticipated costs involved.

Are you considering applying for a Mortgage?

Why not make your first stop with our “In House Mortgage Specialist.”

Within this website, you will find an outline of the normal costs involved in buying a residential “resale” home and a guide for calculating mortgage payments (at different rates and amortization periods — Note the amortization period has nothing to do with the term of the mortgage. The term is the length of time before maturity and refinancing whereas the amortization period is the period that is used to calculate monthly payments.. this is a very basic definition).

If you require any assistance applying for a Mortgage, please contact us to set up a call or appointment.

What You Can Afford.

There are a few things to consider:

Down Payment & Closing Costs:

This is the amount that you have available on-hand to initially invest in a home, bearing in mind that you have to keep a “reserve” for closing costs and moving. The land transfer tax is the biggest closing cost. See the chart in the following pages, plus the other costs involved.

You will be required to make “a Deposit” in the downpayment when you make an Offer, and the balance of the down payment will be paid on closing. The difference between the purchase price and your down payment will be covered by the mortgage loan.

The Mortgage:

How much can you afford to borrow?

A conventional mortgage is a mortgage that does not exceed 75% of the sale price of the home, with a down payment of 25%. There are other options available. A first mortgage can be obtained for up to 95% of the value of the home with as little as 5% down. There are qualifications and conditions which we would be happy to discuss with you and provide the details.

The first step is to calculate the amount which you can afford to repay the financial institution for principal and interest on a monthly basis. Click here to try our Mortgage Calculator

Financial institutions do this by calculating your debt/service ratio.

They calculate this on two different levels.

The GDS. (gross debt service) is the maximum amount which they feel you should pay for Principal & Interest (P & I). Typically, 32% of your gross combined monthly income is the amount most commonly used.

The TDS (total debt service) is the other consideration. This amount factors in all other monthly expenses for items such as car loan or lease, personal loan(s), etc. Typically, 40% of your gross combined monthly expenses along with your mortgage payment is the factor used for TDS. This means that your monthly payments for P & I, plus your other monthly fixed costs would not exceed 40% of your gross, combined monthly income.

 Interest Rates & Other Variables:

The amount of the mortgage you can arrange, based on payments you can afford, depends on the interest rate and the amortization period you use. The lower the rate, (and the longer the amortization period) the larger the mortgage amount you can afford will be.

Terms of the mortgage and other things to consider might be:
-How open is the mortgage? (When can you pay it off without penalty/ or portions of it?)
-Is the mortgage portable? (Can you move it to another house if you buy another in the future?)

The details on this page are for general informational use only.

Please contact us today to discuss your specific financial and mortgage options.

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Canadians facing ‘increased borrowing power’ with real estate: study

BY TORONTO SUN

FIRST POSTED IN TORONTO SUN: | UPDATED: 

For Sale - Toronto SunHigher incomes and lower interest rates have allowed Canadians to take on larger mortgages during recent years, a new study found.

Those factors have also pushed the price of homes through the roof, according to the Fraser Institute report.

“Increased borrowing power — brought about by falling interest rates and rising incomes — is potentially the most overlooked and least understood factor influencing home prices across Canada,” said Niels Veldhuis, president of the Fraser Institute.

The study — Interest Rates and Mortgage Borrowing Power in Canada — says that between 2000 and 2016, interest rates dropped from 7% to 2.7%.

During that 15-year period, the lower interest rates … more

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Bank of Canada raised interest rates 1/4%

Bank of CanadaFor the first time in seven years, the Bank of Canada announced that it was hiking its key overnight rate by a quarter percentage point (25 basis points) bringing it to 0.75 percent as the economy has staged a broadly based economic expansion this year.

Read summary provided by a local mortgage broker, Mark Goode of Dominion Lending Centre.

 Michael J Preston, please email me questions or your comments.
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When is a good time to buy multi-unit residential properties?

Investing in OrilliaWhen is a good time to buy multi-unit residential properties? Anytime the fundamentals are good.

Several factors must be considered. A carefully completed due diligence check list is a must before proceeding.

First, a growing city will be ideal for possible future capital gains and income growth potential. The city or town you choose to invest in should have overwhelming evidence of growth and overall low vacancy rates (see CMHC free rental survey reports available online). In a perfect world, you will discover the location before competition drives prices up.

Second, a structurally sound building in good repair will provide a dependable cash flow and a growing positive return. Thirdly your financing can make it all happen or not. Vendor take-backs are not uncommon and can be a great way to make a purchase for those entering this investment arena. Now manage diligently! If you would rather not manage your self, hire a professional property management team.

What cities or towns may be worth a closer look?

If you move early you can grow and prosper as the community’s plan becomes a reality. You could be in place as prices begin to rapidly rise and the general investing public and investment clubs begin to react to the strong fundamentals and low prices compared to the cities already on the radar screen.

What cities would you choose? What about…

  • St John, New Brunswick (oil refinery, tidal power),
  • Sudbury Ontario (mining – huge reinvestment in the older mining properties and infrastructure),
  • Hamilton Ontario (dynamic city redefining it self with investment in the water front),
  • Kitchener – Waterloo, Ontario (highly educated workforce),
  • Windsor, Ontario, (a city that is also seeing the importance of diversity and is working hard to invest in its future; residential vacancy rates are low, many good properties to choose from at excellent prices, you can grow here, location, location especially important with this riskier city).

Lastly, you may find the best properties, possibly diamonds in the rough, in your own neighbour hood town or city.

In our area, Orillia, Ontario has been chosen (by the Real Estate Investment Network), along with Barrie, as their pick for the top ten Best Places to invest for potential capital gains growth.

So, keep your eyes open and your house in order so you can move on a deal when it presents itself. Any town and city can have multiple opportunities, especially during these more turbulent times.

Let’s talk about current real estate opportunities available today. Contact Michael J Preston 705-325-3600 or by email.

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Building a Future Retirement through Real Estate

By Michael J Preston, Lakeview Realty Inc., Broker of Record

I am a most adamant believer in Real Estate investment as a long term investment for safe, near sure returns. What other investment is there that will let you retire, possibly with millions of dollars, and it DOES NOT MATTER WHETHER THE PRICE GOES UP OR DOWN?  If you’re seriously considering investing in Real Estate for your retirement future, please give me a call so I can show you my active step by step plan to accomplish this goal.Is it time in your personal financial life to switch from Real Estate holdings to mortgages? Please call today and let’s discuss your options. The banks have built empires with mortgages, you can have a share of this wonderful investment too.

Michael J Preston    mjpreston@lakeviewrealty.ca   phone 705 325-3600