Everything You Need to Know About Ontario Closing Costs and First Time

You have probably represented many first time homebuyers. First time homebuyers are in a unique position because, depending on where they buy, they could have the opportunity to benefit from significant tax breaks. 

Closing costs can be challenging because there are so many of them - but fortunately for you, if you are representing a first time homebuyer, their closing costs won’t reach the level of someone who has already owned a home in Ontario.

Here is a little summary of closing costs in Ontario and first time homebuyer tax credits and rebates.

1. Legal fees and disbursements: if there is a mortgage to be registered the legal fee and disbursements will be greater.
2. Insurance: your client will need fire insurance, and if there is a mortgage, they should look at mortgage insurance and possibly life insurance too.
3. Property tax: if there is an overpayment on the tax bill at the time you buy, you will have to repay the amount on closing. Also, if your client is getting a mortgage and the mortgage will be collecting their tax payment monthly, there may be a property tax holdback of 3-6 months that will also have to be paid on closing.
4. Appraisal: if the lender has requested an appraisal, your client can expect to pay $300-$400 if the lender has not agreed to pay for it.
5. Home inspection: this could range anywhere from $400 and upward depending on the company.
6. Interest adjustment: there will be an interest adjustment applied from the date of closing to the date of first payment date, this will have to be paid on closing.
7. Land transfer taxes: these can get complicated with all the rebates and exemptions available.

In Ontario your client will have to pay land transfer tax equal to:

• 0.5% of the value of consideration for the transfer up to and including $55,000.
• 1% of the value of the consideration which exceeds $55,000 up to and including $250,000.
• 1.5% of the value of the consideration which exceeds $250,000.
• 2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.
• Check here for more details: http://www.fin.gov.on.ca/en/tax/ltt/rates.html.
• If the buyer lives in Toronto:

 o 0.5% of the value of consideration for the transfer up to and including $55,000.

 o 1% of the value of consideration from $55,000.01 to $400,000.00.

 o 2% of the value of consideration over $400,000.00.

Now here is where first time homebuyers get a break:

• In Ontario, first time homebuyers are entitled to a rebate on their land transfer tax up to a maximum of $2,000.00:

 o http://www.fin.gov.on.ca/en/refund/newhome/ 

 o http://www.fin.gov.on.ca/en/bulletins/ltt/1_2008.html 

• In Toronto, first time homebuyers, in addition to the Ontario tax rebate are entitled to a rebate on their Toronto land transfer tax of up to $3,725.00:

     o http://www.landtransfertax.com/first-time-homebuyers-rebates. 

     o The above 2 tax rebates total big bucks for your client!

In addition to these rebates, and aside from first time homebuyers, you have some other clients who stand to benefit from land transfer exemptions as well. According to this publication by Schwartz Law, these exemptions include:

• Transfers between spouses
• Transfers where there is no consideration (this has many conditions) 
• Transfers of land between affiliated corporations
• Transfers of land to a family business corporation

• Of course, all of the above have some conditions so you are best to speak with a real estate          lawyer to find out if your client qualifies

Ok, so back to first time homebuyers - in addition to all the first time homebuyer rebates that exist, there are also first time homebuyer tax credits. There is a tax credit for certain first time homebuyers that acquired a qualifying home after Jan 2009. You can find complete details here to see if your client qualifies: http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html. 

We have to remember that clients, especially first time homebuyers do not know as much as you about real estate. Many times people simply miscalculate their closing costs, and when this happens the result in closing could surprise - but this is usually not the best scenario. The best way to avoid any kind of a surprise on your closings is to make the effort to know more, learn more about LTT rebates and credits. Also investing in tools that you can use to investigate applicants and properties like GeoWarehouse can be very useful.

For more about how to help your clients save big bucks on closing, or to get the most information available, please visit www.geowarehouse.ca. 

Making Predictions for the 2015 Spring Housing Market in Canada

It’s interesting that we are in March of 2015 and while some Canadian economists have predicted an upcoming slowdown in the 2015 Canadian housing market, as of right now there haven’t been any predictions released about how spring 2015 is going to look – at least not from real estate industry professionals.    

By this time last year, Royal Lepage had released a prediction that the Canadian housing market was headed for a spring boom. The Globe and Mail reported on a press release by Phil Soper, CEO of Royal LePage where he was quoted: “We predict continued upward pressure on home prices as we move towards the all-important spring market…This is the most optimistic view of the housing market since the recession, that’s in half a decade.”

The proof was in the pudding because, in April of 2014, Royal Lepage went on to release the company’s latest House Price Survey which found that most regions showed healthy year-over-year price growth, with the average price of a home in Canada rising between 2.5 per cent and 5.4 per cent: http://www.cbc.ca/m/touch/news/story/1.2602082.

The average price of:

·         A two-story home increased 5.4% to $428,943.

·         Detached bungalows rose to 4.4% year-over-year to $380,765.

·         Standard condominiums increased by 2.5% to $252,174.

This year over last, Canadians enjoyed an interest rate drop in the first quarter. This means that many will head into spring with mortgage pre-approvals committed through to summer – this could signify a boom despite economists’ predictions.

You can pay attention to trends and predictions to try to gauge where the housing market will go, but working on the frontlines you also have to be in-touch with the real estate market at the micro level - after all, you are charged with the task of working with clients to understand the value of their homes in a listing scenario where you are representing sellers and reasonable offers in purchases in the case of buyers.

Supply and demand shifts seasonally and accordingly the market value of real estate does too. This can make helping your client price their listing more challenging.

Some clients may have a list price in mind, while others will have no idea. The easiest way to help your client figure out what they want to list their house for is through sales comparables in the area. Reviewing these sales comparables with your client will help them see what other houses close at in the area - ones that are similar to their own.

When representing buyers, when you have showings scheduled with a potential buyer, you will have addresses you want to show in mind. Before your appointment you can generate a property details report on each property that includes the sales history information on each property and some sales comps. This way, if your client wants to make an offer you are positioned to review sales comps with the client against the asking price to come up with a fair offer.

For more information about how you can value a property or values in an entire area – visit www.geowarehouse.ca. 

The Real Estate Sales Professional Brand – Does What You Know Really Matter?

From time to time we hear about real estate sales professionals who feel that technology is impacting personal relationships in real estate and that personal relationships are what makes real estate sales professionals thrive. While online technology, social media and mobile apps have changed the way that we market, communicate and work, these things are also changing the landscape in terms of a real estate sales professional’s ability to expand their business, targeting more areas.

In the past, and even now, some real estate sales professionals would focus on a small specific area and become an expert in that area. That is because, before, to become an expert in an area, you would need to know the community to be able to knowledgeably discuss its demographics and also the types of properties in the neighbourhood.

The question is, does a real estate sales professional still need to have boots on the ground to know enough about a particular area to discuss it with a client? We would like to challenge this thinking.

What does a client want to know about a neighbourhood? Who lives there, age of families, religions, ethnicity, types of homeowners (renters vs owners), where schools are, transportation, churches, community centres, etc…  They will also want to see things like locations of rail roads, factories, golf courses, ravines and other things that could improve or reduce the value of the property.

What does the client want to know about the property? What is the sales history, is it worth the list value, what chances does it have to increase in value?

All of this information can be discovered through the use of different applications that can, at the click of a mouse, answer all of the above questions and more. So how does this change the real estate landscape? While you may want to be integrated into a particular neighbourhood because of the value in establishing recognition and marketing yourself – you don’t necessarily have to be to be an expert in that particular community.

Well now you can cast a wider net (how wide is up to you) and deal with larger regions, which in the end will mean more business!!! This is a big world and if you want to be more competitive being able to offer more matters.

It seems as though, with the numerous changes on the real estate landscape, it isn’t so much about what you know anymore as much as it is about what you CAN know, and how quickly.

For more about the tools that can make obtaining this information easy, quickly, please visit www.geowarehouse.ca today. 

What is a Property Title Search?

We often blog on this topic because it is a constant source of confusion for many involved in a real estate transaction – mortgage brokers and real estate sales professionals respectively. When many think of a Parcel Register* they reference it as a title search.

A title search is something that real estate lawyers perform. It is a series of searches and documents that are reviewed by the lawyer to certify that title is clear. That said, even a comprehensive title search can miss things, which is why title insurance has become so popular.

However, title insurance can’t prevent your deal from blowing up in your face because something comes up on closing. The Parcel Register* is the aspect of the title search that looks at the history on the property title – making those issues apparent before any real problems arise. A loose example would be kind of like a credit report – but for real property.

Here is what you can learn from the Parcel Register*:

• The legal description of the property and PIN (Property Identification Number)
• Who owns a home at the exact time you perform the search
• The type of ownership
• The history of title transfers, from/to information and names of sellers and purchasers
• Registered mortgages – when they were registered, who registered them and the amount registered
• Registered liens – when they were registered, who registered them and the amount registered and more….

Should something turn up on a Parcel Register*, you can then request an Instrument Image of a particular transaction and view pertinent details, such as the contact information for the registrant to resolve issues that can be resolved.

Sometimes a mortgage can show up on title which is in fact paid off but has not been discharged. When discovered, this type of issue can delay a closing, but if discovered early on can be resolved. Something like uncovering other people on title can enable you to obtain signatures from all legal homeowners. Reviewing registered mortgages may show you that your client doesn’t have enough equity in their home to pay your fees.

The benefits of the Parcel Register* for real estate sales professionals are vast. Here is a sample parcel register that you can review to see the formatting and how easy it is to review.

To find out how to order a Parcel Register* and avoid issues early, before they become major problems, please visit www.geowarehouse.ca today.

*An official product of the Ontario government pursuant to provincial land registration statutes.

Make ViMO Your Valentine

Valentine’s Day is here! If you don’t have your Valentine yet – make ViMO your Valentine. ViMO enables you to get connected to prospects, clients, and colleagues and promote your best attributes… including your listings. 

Create more effective, stronger, long term relationships that benefit all involved, with ViMO. Visit www.myvimo.ca today for more information.

The Paperless Condo Certificate Request! Yes You Can

Obama is not the only one who can say ‘Yes You Can!’ Wait, did he trademark that? Ok well, even so, if you have requested a Condo Status Certificate in the past then you know it is a behemoth of a document! More than 100 pages in many cases. Why? Because it covers absolutely everything you need to know about a condo and the condo corporation that manages it.

Never mind being huge, the Condo Status Certificate has always been seen as a huge pain in the butt. In the past, you would have to write and render payment to the condo corporation, which in itself could take a few days, but you also would have to wait 10 days and then arrange to have the monster Status Certificate picked up.

Well, the alliance between Teranet and DTech has changed all that.

GeoWarehouse customers can simply run a search on a property and if a Condo Status Certificate is available, you can simply render payment online and receive the condo status certificate digitally!

If you would like to learn more about how you can request Condo Status Certificates online from within GeoWarehouse please visit www.geowarehouse.ca or call us today at 1-866-237-5937.   

The Digital Open House

Smart phones, tablets and mobile apps have been a real game changer in real estate! The internet and web brought us online listings, MLS systems, online applications to perform due diligence and investigate properties, virtual tours and more…

Mobile technology however has brought us that much more capability. Selling real estate is a profession that has you on the road all the time. Lugging around a clunky laptop can be uncomfortable, never mind a portable printer. Mobile technology can cut down on trips to the office and make you extremely efficient.

As we watch the paper disappear, it becomes more and more prudent for real estate sales professionals to learn and share ideas about how they can do more digitally. The digital open house is a great example and really only requires a tablet and access to the ViMO app.

• When you run an open house you can use your tablet to not only show highlights with respect to the property and neighbourhood, but as real estate sales professionals representing buyers and buyers themselves come through your client’s property, you can create a profile for them in your ViMO app and electronically transmit all pertinent details on the property.

• If a buyer comes through your client’s property and is not interested, you can show them other properties in the area on your ViMO app and schedule a date to take them out to see those properties (assuming they are unrepresented).

You can literally answer any and all questions a buyer may have at the swipe of your tablet!

Be ready to get digitally connected! After adding a real estate sales professional on ViMO, ask them if they would like to connect on LinkedIn, or if a buyer, connect on Facebook.

Getting prepared for a digital open house:

• You will want to ensure that you have an iPad with your app loaded up.
• Practice the different criteria you will enter to generate information about the property – this way you appear confident when with the client.
• Ensure that there is Wi-Fi at the property. If there is not, have a contingency plan like setting up your smart phone as a mobile hotspot.

As of today, you may not be able to do away with paper entirely – not because you can’t but because the late adopters of the world may still want something to take with them, like a feature sheet. It is a good idea to print a few from GeoWarehouse to have out on the table. With that said, when running a digital open house, keep a tally of how many people want the information transmitted to them electronically versus in hardcopy format.

Moving towards running your open houses digitally will inevitably make you more competitive because you are capable of doing more, faster!

Stay connected with GeoWarehouse and ViMO. Find out more by visiting www.geowarehouse.ca or www.myvimo.ca today.