 I hope that you enjoyed the July long weekend and celebrated Canada's birthday in style. This time of year usually signals a slower summer market and this year is no exceprion. However, the summer often brings some good buying opportuniies, without the pressure of competing offers.
Buying or selling real estate involves a wide range of exhilarating emotions. This month we discuss how to keep your emotions in check to ensure your real estate roller coaster ride is smooth and enjoyable.
We also explore the popular photo editing app Instagram as well as improvements to the Tarion new home warranty program.and changes to mortgage lending rules.
Apparenty, many Canadians are not aware of the recent changes made to mortgage lending rules. Please take a minute to read this article and see how these changes may affect you.
Thanks so much for checking out this month's newsletter. Please let us know if you have any questions or comments regarding the articles, or real estate in general -- it would be great to hear from you!
Sincerely,
Armand
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| Toronto Market Update |
 There were 9,422 home sales through the TorontoMLS system in June 2012. This was down by 5.4 per cent in comparison to June 2011.
The year-over-year decline was largest in the City of Toronto, where sales were down by 13 per cent while sales in the rest of the Toronto Real Estate Board (TREB) market area were comparable to a year ago. These 'declines' were vs. a very strong June 2011.
The average selling price in June was $508,622 – up by 7.3 per cent compared to June 2011.
The mortgage payment associated with the average priced home in June, assuming five per cent down and a five-year fixed rate mortgage amortized over 25 years, would account for approximately 35 per cent of the average household’s income in the GTA after adding property tax and utility payments.
This remains below the 39 per cent ceiling recently announced by Mr. Flaherty in his most recent mortgagte guidelein changes. Please have a look at the article in this issue about the new mortgage rules.
Below is a breakdown of sales and prices by type of home and by the 416 vs. 905 areas.
| Summary of TorontoMLS Sales and Average Price June 1 - 30 |
2012
| 2011
|
Sales
| Average Price
| New Listings
| Sales
| Average Price
| New Listings
|
| City of Toronto ("416") | 3,520
| $554,077
| 6,742
| 4,053
| $511,591
| 6,102
|
| Rest of GTA ("905") | 5,902
| $481,512
| 9,937
| 5,906
| $448,579
| 8,653
|
| GTA | 9,422
| $508,622
| 16,679
| 9,959
| $474,223
| 14,755
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| TorontoMLS Sales & Average Price By Home Type June 1 - 30 |
| Sales | Average Price
|
| 416 | 905
| Total
| 416
| 905
| Total
|
| Detached | 1,257
| 3,432
| 4,689
| 803,671
| 572,748
| 634,652
|
| Yr./Yr. % Change | -9%
| 2%
| -1%
| 10%
| 7%
| 7%
|
| Semi-Detached | 403
| 645
| 1,048
| 562,057
| 398,366
| 461,312
|
| Yr./Yr. % Change | -15%
| 7%
| -3%
| 6%
| 8%
| 5%
|
| Townhouse | 407
| 1,081
| 1,488
| 448,993
| 357,452
| 382,491
|
| Yr./Yr. % Change | -8%
| 3%
| 0%
| 9%
| 6%
| 6%
|
| Condo Apartment | 1,415
| 581
| 1,996
| 364,597
| 287,118
| 342,044
|
| Yr./Yr. % Change | -18%
| -20%
| -18%
| 2%
| 2%
| 2%
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| Are You Ready for the Real Estate Roller Coaster? |
 Buying or selling a home is a huge financial task that can trigger a roller coaster of emotions. When you're being tossed around at every turn, it's critical to hang on and keep your feelings on track.
When you put your home on the market, you need to view it as just a house. Don’t be offended if someone wants to rip up your kitchen or paint over the wood trim. It's natural for people to complain when they're interested in something so while criticisms may seem negative, they're actually a good sign!
Never take things personally as it can cause negotiations to fall apart. Sentimental home owners who've invested years of hard work and personal love into a home are often put off by a low offer even though it's just a starting point. Having a real estate agent act as your 3rd party negotiator will help keep emotions at bay.
If you’re lucky enough to generate multiple offers, make sure you consider more than just the price. Conditional offers can send you for a real loop. There's nothing worse than accepting an offer just because it's over the asking price only to have it fall apart a month later when you could have accepted a firm cash offer that was almost as good.
Be aware of tactics such as low balling where an attractive price is initially offered only to be adjusted at a later point on the basis that circumstances have changed. In the meantime, your hopes have been raised to the point where you've already envisioned spending the proceeds. Recognizing these types of negotiation strategies will help you keep a balanced perspective.
When buying a home, do your research ahead of time to avoid emotional shopping. Although you want to keep an open mind, falling in love with a "fixer upper" when you’re looking for a turnkey home will probably end up being a mistake no matter what the price. Making a hasty decision based solely on an emotional reaction will likely result in buyer’s remorse.
It’s completely normal for home buyers and sellers to experience a wide range of intense emotions as they navigate through the complex real estate process. Just remember not to take things personally or let your emotions rule every decision. If you get on the real estate roller coaster with a competent agent by your side, not only will you enjoy the ride but you'll want to do it again and again!
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| A Picture's Worth a Thousand Clicks |
 An ironic example of our longing for the "good old days" is to snap a photo with a state of the art smartphone and then tweak it with a faded, black and white nostalgic type effect.
Instagram is a photo editing app that Facebook paid a whopping one billion dollars for! The concept is simple. Take a photo on your smartphone, add a cool looking filter inspired by those old Polaroid pics, blur it out a little and then share it with whoever you like.
With over 40 million users, Instagram has totally redefined photography. Once modified, the photo which is squared off for that vintage look can be easily shared on various popular platforms such as Facebook, Twitter and Flickr. People can even purchase canvas prints, cards and posters of Instagram photos which means your pics could one day find themselves hanging on walls all over the world!
Many people now use images to help tell their story and in today's age, that means a picture's worth a thousand clicks. Joining a community of millions not only puts you and your photos in touch with a huge audience but it also allows you to follow others who share similar interests. Instagram doesn't cost a cent so step off the sidelines and perhaps you'll discover an extraordinary hidden talent.
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| A Summary of New Mortgage Rule Changes |
June 21, 2012-- The Honourable Jim Flaherty, Minister of Finance, announced four measures for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent:
- Reduce the maximum amortization period to 25 years from 30 years.
- Lower the maximum amount Canadians can borrow when refinancing to 80 per cent from 85 per cent of the value of their homes.
- Fix the maximum gross debt service ratio at 39 per cent and the maximum total debt service ratio at 44 per cent.
- Limit the availability of government-backed insured mortgages to homes with a purchase price of less than $1 million.
One note of importance: If you have an existing mortgage that has a 30 or 35 year amortization period, this term will remain in effect when the time come to renew your mortgage.
The new rules will take effect on July 9, 2012.
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| Tarion Changes are Good For Consumers |
 The Tarion Warranty Corp. has introduced a number of program changes which will benefit consumers by providing better disclosure of extra charges in builder sales agreements. Bob Aaron, a real estate lawyer and columnist for the Torotno Star, has written an article detailing these changes. Below is a summary of the key points. Click on the link below to see the full article.
By law, every agreement of purchase and sale for a new home or condominium must now contain a lengthy disclosure statement called an addendum.
The attachment, called Schedule B, has two separate parts. Part I will contain in one place an itemized list of all charges, fees or other adjustments to the final purchase price or balance payable on closing, where the dollar value is set out in the builder’s agreement of purchase and sale.
The description of the charges can be brief summaries, but there will be a reference to the relevant section of text in the purchase agreement.
Charges listed in this section may be items such as the Tarion enrolment fee, a charge for holding the purchaser’s deposits in trust, a fee to discharge the builder’s construction financing, the builder’s $73.45 transaction levy payable to the Law Society, and a fixed charge to subsidize the builder’s legal fees.
Part II of the new schedule is headed “All other adjustments — to be determined in accordance with the purchase agreement.”
This will set out all additional charges, fees or other anticipated adjustments to the final purchase price, which are to be calculated after the purchase agreement is signed, according to the written terms of the agreement.
For condominium purchases, charges in this section may include items such as:
• The unit’s proportionate share of the cost of installation of gas, hydro, sewers and water service and meters in the project.
• Any new taxes, levies or development charges imposed on the unit by any level of government after the agreement was signed.
• A levy against the unit for parks, public artwork or other municipal charges,
• HST on the value of the appliances included with the unit.
• Interest on the balance of the purchase price from the day of final closing to the next banking day.
• The amount of any increase in municipal, education or transit development charges imposed after the project went on the market.
• A portion of the costs associated with a development agreement entered into with the city.
• A portion of the building’s first common elements study.
Each charge will be cross-referenced back to the appropriate text in the purchase agreement so buyers can determine whether it is unlimited or capped at a particular amount.
http://www.thestar.com/yourhome/real%20estate/article/1221946--tarion-changes-good-for-purchasers
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