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Tuesday’s Federal budget included two notable changes to help first-time buyers to get into the market.

What’s new?

1. Allowing for an Increase in the maximum amount of RRSP funds first-time buyers can access under the Home Buyers’ Plan (HBP), from $25,000 to $35,000, or $70,000 between couples buying together.

2. Introducing the First Time Buyer Incentive, a $1.25-billion mortgage equity-sharing program that will help offset mortgage costs for those entering the market for the first time.

Here is how it works:

As of this fall (2019), the government will provide first-time buyers with interest-free mortgage loans, up to 10% for new builds and 5% for existing, through the Canada Mortgage and Housing Corporation (CMHC). The CMHC then retains the equity percentage in the home until the loan needs to be paid back, either when the house is sold, or the mortgage matures.

Who qualifies?
  • First-timers buyers
  • Must have a combined household income of $120,000 or less
  • Have a minimum down payment (at least 5%) for an insured mortgage
  • The mortgage value cannot exceed four times their household income,
  • capping at $480,000

  • Buyers still have to pass the stress test, but this lowers the bar by
  • reducing the amount of their mortgage

    The Global News posted this example:

    Say you’re hoping to buy a $400,000 home with the minimum required five per cent down payment, which works out to $20,000. With the new incentive, you could receive up to $40,000 through the CMHC. Now, instead of taking out a $380,000 mortgage, you’d need to borrow only $ 340,000. Lowering your monthly mortgage bill from over $1,970 to less than $1,750.

    Using this incentive means that the maximum house price is $500,000 ($480,000 max in insured mortgage and incentive, plus the down payment amount.)

    These initiatives will not go a long way in the Toronto market where the average house price in February was $780,397 (TREB); however, it can help buyers in other regions. As with all new government programs, this one is getting mixed reviews and details remain short. The detractor says it doesn't go far enough, or that it will keep first-time buyers out of the market until the fall, others say it is a generous gift and has real value. Let's revisit this in a few months.

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    Are you considering downsizing?

    Downsizing, rightsizing, upsizing, whatever you choose to call it, It seems to be the dominating Friday night conversation between my friends, my husband and myself. We all seem to be a little surprised to find ourselves at this stage. How did this happen?

    Why do we downsize?

    Today’s downsizer has more options than any previous generations. Many choose to stay and age in their home, moving only for health or financial reasons. For the first time, retirees are accommodating their young adult children ages 18-35 who are living at home in the largest numbers in history. Others want the freedom to travel and visit family without the worry of caring for their home. They move for savings, ease of lifestyle, many want smaller but more luxurious homes.

    Considerations?

    Are we talking? Before you consider doing anything make sure that you and your partner are on the same page. Is he looking forward to retiring at the cottage while you are looking at a King street loft and to travel around the world? Are you both planning on full-time retirement? Trust me, this discussion can lead to many heated debates and consumption of good bottles of wine.

    Downsizing and moving are difficult enough without you being on the same page. 
What are the numbers? What will this move cost you? In theory, a smaller house or condo should mean savings but it doesn’t always work out that way. Consider real estate agent fees, movers, land-transfer taxes and the cost to set up a new home. Will you require storage? Will you have more travel cost to visit family and friends?

    When it comes to retirement we tend to focus on savings and not spending requirements. 
Who has my back? Meet with your financial advisor to ensure you have the full picture. People have a tendency to over-evaluate their home, make sure that you get the opinion of a real estate professional to help you budget and plan. Have your real estate agent show you your options. Are you renting or buying? Spend a few days seeing what your budget will get you?

    Can I do this?

    Consider the emotional cost of moving? For some, this is an exciting new chapter that they embrace head-on. For others, the emotional attachment to the house runs deep. This was the central core for the family, the kids second home. Now, where will the family gatherings happen? Others suffer from the perceived loss of prestige. Their house is the result of hard work and is a statement of success. Is your ego ready to give that up?

    How do I do this? Talk, plan and get organized. Packing up a home of many years or decades is not fun or easy. We have all read the advice. Start small, go room by room. Decide if it is treasure or trash? Have a garage sale, donate, and recycle. Whatever approach you take, the most important thing is that you leave yourself time to do this. There is endless articles online offering sage advice to help every personality type to get through this herculean task. There are companies that specialize in this. In the end, there is no way around it. It is a big job.

    Whatever course you choose, to move or to age gracefully in your home, planning is required. The important thing is that it is your choice. As painful as the conversation is for some, it is necessary to have a plan and start thinking about it before someone else has to do it for you.

    Imagine that you have found the perfect house at an awesome price; however, it is rumoured to be haunted. What do you do?

    Buy it and set an extra plate at dinner? Or do you walk away from the offer?

    What happens if you find out about the purported ghost only after the deal closes? Then what?

    Generally, when it comes to house defects, how much a seller is obligated to disclose to you is largely dependent on the scope and nature of the defect. There are two categories of defects. Patent and latent.

    Patent defects are the types that are reasonably easy to discover while inspecting a property (a crack in a wall, water staining etc.). Typically these fall under buyer beware, you bought the house knowing about these issues so you probably don’t have much recourse against the vendor.

    Latent defects are a little trickier. Those are the kind of defects that are not obvious during a general inspection. It comes down to did the vendor know about the defect and choose not to disclose it? Was it a deliberate misrepresentation? Can you prove that? Depending on the nature of the defects a buyer may, under certain circumstances, have recourse against the vendor. (This is where your friendly lawyer comes in)

    Hauntings fall under a less common type of misrepresentation. This involves the psychological stigmatization of a property, which occurs when a property that has had an event prior to being sold, such as death, suicide, or haunting. Stigma is a non-physical, intangible attribute of a property that may elicit a negative psychological or emotional response on the part of a potential buyer.

    In the case of hauntings in may be difficult to prove. The burden is on the purchaser to bring clear and convincing evidence proving that there is a ghost. Good Luck! The purchaser would also have to bring evidence that the property cannot be used or is less valuable before they can succeed in a claim against the vendor.

    It might be easier to set an extra plate at the dinner table or call Ghostbusters.

    Happy Halloween

    *This article Is Bill Johnston approved. Bill is Bosley’s esteemed in-house

    lawyer and manager at the 276 Merton branch. With over 30 years of real estate experience in both sales and management and degrees in Psychology and Law, Bill provides legal counsel and real estate advice to all of Bosley’s sales representatives.

    I.E. Bill keeps us informed and out of trouble.

    Happy New Year

    I am a self-confessed logophile. I love words and their meanings. At the end of each year, I can’t wait to see what the various publications post as the word of the year. 2016 does not disappoint. Two words in particular jump out...

    According to Dictionary.com, the word looked up most in 2016 is Xenophobia. This is not too surprising. Consider what we saw in 2016: Brexit, Syria’s refugee crisis, police violence, debates over transsexual rights, horrific mass shootings and the Trump triumph.

    Surreal, the second word that strikes me as a good descriptor for 2016 is the Merriam Webster word choice of the year. What better word to describe the Toronto Real Estate market? Check out the stats below.

    If I had a crystal ball I would tell you exactly what would happen in 2017. Unfortunately, it is out being serviced. However, I do believe the market will remain strong. I don’t see the current percentagegrowth as being sustainable, however; barring any grand governmental change, economic downfall or catastrophic event, the market will continue to grow. Many homeowners will continue to choose renovation over selling as the more affordable option. The resulting shortage of inventory will continue to frustrate the first time buyers and, the 905, the condo and rental markets will see substantial growth.

    The question I was most asked in 2016? Do I sell now or wait? My answer remains the same. Sell only when you are ready to sell. Do not wait on the market or for perfect conditions.

    Happy New Year, I wish you health and happiness in 2017 and beyond!










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