Use 2 deposits for buyer protection

Mark Weisleder

November 11, 2013

  

Unfortunate occurrences are taking place in the Toronto real estate market when buyers have a change of heart after inspecting a home. The sellers are refusing to return the deposit.

Here's what is happening:

Most real estate offers in the GTA today contain substantial deposits, in many cases $25,000 or higher. The accepted offer is conditional on the buyer being satisfied with the results of a home inspection report, completed by a professional home inspection company. The buyer conducts the inspection and then says they are not satisfied with the home, and ask for their money back. The sellers are upset, because if other buyers hear about this, they will ask what is wrong with the house. The seller can't answer because the first buyer does not have to give them a copy of the inspection report.

In general, the courts have indicated that when buyers are trying to satisfy any condition, including a home inspection condition, they must act honestly, reasonably and in good faith. Unfortunately this will have to be proven in court, and the result is that a buyer's deposit could be held up for up to 2 years while this is being argued.

Sellers are not entitled to a copy of the inspection report unless it says so in the clause itself. In my opinion, sellers should always include a clause in any offer that if the buyer wants to negotiate a reduction or cancel the deal because of problems in the inspection report, then the buyer must give the seller a copy of the report. This will give the seller the opportunity to check this for themselves, with their own inspector or contractor, and will be able to explain it to any future buyer.

If the buyer does not conduct the home inspection at all, or perhaps brings in an unqualified person to conduct the inspection, then I believe that these might be examples of not acting reasonably and in good faith and it would thus be difficult for a buyer to try and cancel the agreement and argue that they acted in good faith. It is thus very important that buyers always use qualified home inspectors to conduct any inspection of a home.

If a buyer is not in a bidding war, I advise that you consider 2 deposits, a small deposit when the deal is accepted, and a larger deposit once you are satisfied with all of your conditions. That way, if you are not satisfied, there is not much of a deposit that will be worth fighting over. It is very important for buyers to understand all their legal rights and obligations relating to conditions before signing any offer to buy a home. 

Cabbagetown Toronto; Toronto's Hidden Gem

Open Letter to Mayor Rob Ford

Dear Mayor Ford,

It is with great concern for our wonderful city that I am writing this open letter to you.

I listened to your response today about the allegations that have been made about your possible substance abuse and was very disappointed with your public statement.  While you addressed the crack cocaine issues, you completely avoided the broader issue of possible substance abuse, or other personal issues, that may be of concern to the citizens of Toronto.  These are concerns not only raised by the media, but also by members of your council and your inner circle.

You, as the Mayor, should be representing our city in a professional and positive manner.  You are not doing this by being evasive.  You are only creating more questions, and in doing so, are doing a great disservice to our city.

Further to this point, you have not been representing us, your constituents, in a positive manner for quite some time.  You always look completely dishevelled and often look like you have had too much to drink, or have some other problem that creates that appearance.

There is no excuse for a person in your position of importance to not be well dressed, and to present themselves in best light, when publicly representing the city of Toronto.

You are a person of reasonable wealth, so there is no excuse for you to not have clothing that fits properly and looks good.  Quite frankly, your public appearance is a disgrace.

If you want to continue to represent our city it should be your duty to ‘clean up your act’ both in the way you look and in the way that you behave.

I am proud of Toronto, but I am not proud of the Mayor, neither the ways he looks nor the way he behaves.

Your obligation should be to clean up your act, or quit!

Sincerely,

Armand Gilks

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Georgian Bay/Muskoka Cottage

Very well maintained and comfortable winterized cottage located two hours drive north of Toronto on Healey Lake  Safe, quiet, south facing bay near the west end of the lake. Main cottage has 3 bedrooms plus a separate "bunkie'. Two full bathrooms. Safe drinking water (UV water system). Large capacity septic system. Fully furnished, just move in and enjoy.  Safe swimming, boating and fishing. Single slip boathouse.  Large, well equipped workshop with a drive through bay for winter snowmobile mainteneance. Two main sitting/entertaining areas overlooking the lake. Screened in sunroom overlooking the lake. Large deck with BBQ.  Hi Def Sattelite TV. Click here for more information Offered at $299,000

May 2013 Toronto Market Update

Well, we are finally heading into summer and the "spring" market is in full force.  It's a good market in that there are a lot of buyers looking, but we still have a shortage of available homes in the more affordable price ranges. Sales activity was stronger in April than earlier in the year as you will see in the numbers below. Selling prices continued to be positive with the exception of detached homes in the 416 area code.  The price declines that we see reflect softer prices for homes above 1.5 million dollars.  Generally speaking, houses below a million dollars are selling very well and we are seeing a lot of multiple offers in the 600k tp 900k range. Many of these are selling for 50 to 150,000 above asking prices (hello lack of inventory!) Thiis can be an ideal time if you are thinking about trading up.  You can be in a beautiful new home and capitalize on an advantagious price spread. Preparing your home for showings can be a lot of work, especially if you have kids running around.  This month's article discusses strategies to help you prepare your home for show with kids in tow. We also share a few valuable debt management strategies as well as some tips on how to seasonally transform your home with a fresh spring theme. Thanks so much for checking out this month's newsletter.  Please get in touch if you have any questions or comments regarding the articles, or real estate in general -- it'd be great to hear from you! Sincerely, Armand

Toronto Real Estate Market Report Activity by Type of Home - April 2013 Georgian Bay/Muskoka Cottage 100 ft of Waterfront on Lake Simcoe Preparing a Home for Show with Kids in Tow Paying Off Debt Pays Off Spring Your Home Decor Into Action

Toronto Real Estate Market Report

Greater Toronto Area sales through the TorontoMLS system were 9,811 in April 2013.  This represented a dip of two per cent in comparison to 10,021 transactions in April 2012. Both new listings during the month and active listings at the end of April were up on a year-over-year basis. However, listings were still below the norm for this time of year. “Despite the headwinds we have experienced in the housing market this year, April sales came in quite strong in comparison to last year.  As we move through the spring and into the second half of 2013, the demand for home ownership should continue to firm-up relative to last year,” said Toronto Real Estate Board President Ann Hannah. “It has been almost a year since the federal government enacted stricter mortgage lending guidelines.  It is realistic to surmise that some households, who originally put their decision to purchase on hold, are once again looking to buy,” continued Ms. Hannah. The average selling price for April 2013 transactions was $526,335 – up by two per cent in comparison to April 2012.  The MLS® HPI Composite Benchmark Price was up by 2.9 per cent. “The condominium apartment segment in the City of Toronto was a key driver of price growth in April, with both the average selling price and the MLS HPI apartment index up on a year-over-year basis.  The improved condo sales picture, with Toronto sales down by only one per cent compared to last year, suggests that interest in condo ownership may be improving," said Jason Mercer, TREB's Senior Manager of Market Analysis.

Activity by Type of Home - April 2013

Below is  breakdown of sales and price activity by type of home and region for April 2013 vs. 2012. TorontoMLS Sales & Average Price Sales / Average Price                           416                         905                         Total  Detached            1,264                     3,675                     4,939 Yr./Yr. % Change  -11.8%                  2.5%                      -1.6%                            $852,090              588,784                 656,170                             2.5%                      2.2%                      1.1% Semi-Detached     415                         681                       1,096 Yr./Yr. % Change   -5.5%                    1.3%                      -1.4%                             $595,398              410,739                 480,660                               2.4%                      4.3%                      2.7% Townhouse          398                         1,123                     1,521 Yr./Yr. % Change   -3.6%                     -1.2%                    -1.9%                              $433,710              375,269                 390,562                               2.3%                      3.5%                      3.1% Condo Apartment 1,479                     582                         2,061 Yr./Yr. % Change   -1.3%                     -7.3%                     -3.1%                              $379,266              273,832                 349,493                              5.6%                      -5.9%                     3.1%

January 2013 Newsletter

Happy New Year and Best Wishes for Good Health and Prosperity in 2013! This past year in the GTA has been a very up and down year for resale real estate. The first half posted strong unit sales increases and the second half showed a much softer trend developing. The year ended with total sales at 85,731 units which was -4% vs. 2011. This number is right on the average for the past 8 years as you will see in the article on sales trends later in this newsletter. Prices, on the other hand, continued to post solid gains throughout the whole year and were up 7% on average. These price increases were fueled by continuing demand in the GTA and a lack of inventory as listings were lower than usual during the last half of the year. This lack of listings was one factor that contributed to reduced sales numbers. Another major factor was low consumer confidence that was the result of a number of issues. World wide financial turmoil, the slow US financial recovery, the US election, the US 'fiscal cliff' drama and our own home grown mayoralty soap opera. Even though Canada continues to enjoy a realtively stable economy and a positive outlook, these factors have had an impact on our consumer confidence and have negatively affected our real estate market in the GTA. Stronger lending guidelines have also had a negative effect on our local market, particularly for 1st time buyers and buyers of properties where the mortgage would be over one million dollars, which are now not insured by CMHC. Many buyers may have moved their purchase up to avoid these changes that came into effect mid year. So with most of this in the past, I'm going to dust off my crystal ball and make a few comments on what we might expect in 2013. Firstly, we have been seeing an increase in good news from both Europe and the US. In the US, the housing market is starting to show increases in sales and prices in many regions across the country - even some of those worst hit by their economic meltdown. We're also finished with the uncertainty about the US elections which should help to take away that distraction. Although, I'm sure, we will continue to see a lot of onging drama as the GOP attempts to rescue itself from self destructing. In the GTA we are approaching the beginning of the tradtionally strong 'spring' market and all signs that I am seeing right now are very positive. New listings are already increasing every day and we are seeing an increase in buyers back out in the market in just the past week. Now, if we can just get the media to run a few positive stories....... Prices will likey show modest growth at best. Houses that are priced below $800,000 should see good price growth, but as you rise in the price scale we will likely see a contining price correction. For example, homes over $2,000,000 have already seen price declines of between 5 and 15%, depending on the location. Unit sales growth for the first few months of 2013 may be somewhat soft as we will be comparing against very strong growth last spring. The condo market is another story. Condos located south of Bloor St. will likely see a continuing decline in sales and also a softening in the selling price. Condos in the Yonge/Sheppard/Finch area will also likely see downward pressure on prices. There is a lot of inventory for sale and this is expected to continue. Condos in midtown (St. Clair to Eglinton) along the Yonge subway are very much in demand and should continue so. Selling prices for these will remain relatively stronger. All things considered, it is shaping up to be a good market and I look forward to your calls about selling or buying. We have a number of interesting articles in this issue including one about choosing an older or newer home. One of the biggest decisions house hunters often face is the choice between older and newer. This month's article helps clear up the confusion by outlining the advantages of both options. There are also some great ideas on how to creatively decorate your children's bedroom in a way that won't break the bank as well as a few popular text abbreviations you need to be up on. Thanks so much for checking out this month's newsletter. Please get in touch if you have any questions or comments regarding the articles, or real estate in general -- it'd be great to hear from you! You can reach me at 416.561.2710 begin_of_the_skype_highlighting 416.561.2710 FREE end_of_the_skype_highlighting or armand@armandgilks.com Sincerely, Armand

Toronto Real Estate Board Market Report Trend of GTA Sales Informaton Rent or Buy? What's Best for You? Old or New: What's Best for You? Child's Play Guide to Decorating A Text Message Tutorial 4 U!!

Toronto Real Estate Board Market Report

Greater Toronto Area REALTORS® reported 3,690 sales through the TorontoMLS system in December 2012 – down from 4,585 sales in December 2011. Total sales for 2012 amounted to 85,731 – down from 89,096 transactions in 2011. “The number of transactions in 2012 was quite strong from a historic perspective. We saw strong year-over-year growth in sales in the first half of the year, but this growth was more than offset by sales declines in the second half. In the City of Toronto, the dip in sales was at least partially affected by the additional Land Transfer Tax, which buyers must pay upfront,” said Toronto Real Estate Board (TREB) President Ann Hannah. The average selling price in December 2012 was up by 6.5 per cent year-over-year to $478,739. The average selling price for 2012 as a whole was up by almost seven per cent to $497,298. “Robust annual rates of price growth were reported through most months of 2012. Price growth was strongest for low-rise homes, including singles, semis and townhouses. Despite a dip in sales, market conditions remained tight for these home types with substantial competition between buyers,” said TREB’s Senior Manager of Market Analysis Jason Mercer.

Trend of GTA Sales Informaton

Below is the sales and price trend for the past 8 years. As you can see, despite the slower last half of the year in 2012, the overall year was on a par with the average for previous years. UNIT AVERAGE YEAR SALES %chge PRICE %chge 2005 84,135 +1% $335,907 +7% 2006 83,084 -1% $351,941 +5% 2007 93,193 +12% $376,236 +7% 2008 74,552 -10% $379,347 +1% 2009 87,308 +7% $395,460 +4% 2010 85,535 -2% $431,276 +9% 2011 89,096 +4% $465,014 +8% 2012 85,731 -4% $497,298 +7%

Rent or Buy? What's Best for You?

I often get this question from buyers and there is never an easy answer. One of the best calculators that I have seen that helps to answer it is provided by The Globe and Mail. Their site also provides a complet selection of calculators for everything from recovering from a bear market to is it worth the extra drive to save money with cheaper gas. Click here to acces their selection of 33 different financial calculators.

Old or New: What's Best for You?

Home buyers face countless decisions when purchasing a home. One of the first things to establish is whether you prefer a newer or older home. Comparing newer and older homes can be like comparing apples and oranges. It really depends on your individual preferences and family priorities. Here are a few advantages each type of home offers: Pros of Older Homes Old World Charm - Older homes usually boast unique architectural features such as stained glass windows and crown moulding. Location - Older homes are often located in well established communities with mature trees and developed landscaping. They're also usually close to popular downtown amenities. Solid as a Rock - The craftsmanship that went into building homes years ago was usually second to none which means they're built to last. Outdoor Space - Older homes usually have larger lots which is an important consideration if you value your privacy or wish to extend your home in the future. Pros of Newer Homes Customizable - A brand new home allows you to customize to your own tastes with options such as heated floors, granite countertops or even simple items like fixtures. Low Maintenance - You're not likely to encounter any serious problems as everything's brand new. The home's exterior will also be much easier to maintain. Functional - Newer homes are laid out with functional features such as open concept rooms, attached garages, larger storage areas and ensuite bathrooms. Energy Efficient - Better windows, insulation and appliances mean newer homes are more energy efficient which translates into lower monthly bills for homeowners. Newer homes are usually more functional but existing homes offer a level of character that new homes can't match. You may have a fixed idea of what you prefer but keep an open mind and make sure you're familiar with the pros and cons of each. This is one of the biggest investments you'll ever make so do your research before signing on the dotted line.

Child's Play Guide to Decorating

Designing a room with your child is a great way to spend quality time together. It's also a great opportunity for them to express their thoughts and opinions with you. One way to keep things fun is to incorporate a theme into the room's interior design. Remember that a child's interests change rapidly so keep the project simple and flexible. Wall stickers are a great choice as they're inexpensive, come in a variety of themes, cover large areas and are easy to put up and take down. This flexibility gives your child the freedom to shape the look and feel themselves. Stickers are also a great way to create boundaries if your kids share a room. Display tables and shelves are an excellent way to showcase decorative items. Framing family photos or your child's artwork in bright or homemade frames is another nice personal touch. Finally, attractive storage baskets are great accessories and make tidying up a cinch! A child's vision of a perfect room isn't usually as complex or as costly as you'd expect. With just enthusiasm alone, you can make your child's day by decorating their room with a few simple items rather than investing weeks of time and lots of money.

A Text Message Tutorial 4 U!!

The language of texting is constantly evolving. You're probably up on many of the standard texting abbreviations but here are a few that you may not be aware of: YOLO = you only live once KK = kewl kewl (aka: ok) JK = just kidding NBD = no big deal ILBL8 = I’ll be late SMH = shaking my head BFN = bye for now If you want to check out a complete text dictionary just click on this link. It’s important to familiarize yourself with this new language, especially if you have kids or office colleagues who are communicating in short form. TTYL :-)