I'm going to throw out a bunch of random facts/ideas that may be of use to you if you're looking into the real estate market this spring: pt 4 in list below is a little out of context (just saying)
1. Bully offers are back.
There's been little supply in many areas and pent up demand. An urgency by some buyers to beat the March 18th deadline and keep their preapproved low rates is causing some buyers to do whatever it takes to get a leg up before the offer date.
2. Taxes-
there are 2 forms as a buyer. The first is the landing tax or the land transfer tax. A toronto portion and a provincial portion are paid by the buyer on closing. Note, there are rebates on both at source when you're a first time buyer
The second tax is property tax. Propety tax is little understood. In Jan 2008 the city did their appraisals from which to base a tax billing for the next 4 yr cycle. The increase of the 2008 amount over the prior period is then divided in 4 payments and each yr the value of the house increases and hence the taxes paid as a percentage of the house increase as well. Until we get to the 2012 cycle.
3. Order of Payments in an Offer-
If you successfuly bid on a home and win then you have 245 hrs to supply a certified cheque. It holds the house while you preform your due diligence. This deposit money is often approx 5% of the purchase price of the house. If you're taking this money from an RSP, make sure you order the funds out 90 days in advance or they won't be ready. The deposit forms part of the ultimate downpayment you will pay in addition to any adjustments plus land transfer plus moving costs plus borrowed funds on close.
4. I'm up to 2 afternoon delight showings now. I walk in with clients and find a couple of lovers showing the utility offered in the bedroom. Always fun!
5. A home inspection is limited and needs to be treated as such. Note obvious restrictions include in winter months-inability to study the foundation where it meets the earth, limited roof access, inability to check if a/c works and always limited ability to determine just how much knob and tube wiring is active. Really it's guess work. You're taking the house in similar condition to how it read the date of the inspection.
6. When you get a new mortgage on a property and take posession, theres typically a interest adjustment date for your first payment. you are paying an interest payment pro rated for that month. this may provide some breathing room.
7. if you're a commercial buyer right now---banks are tough to squeeze money out of and cap rates aren't very aggressive. but still a good investment if you can find the right one.
8. though we're seeing some positive numbers from the US, labor and housing markets are still not looking good. Most recently Canadian inflation looked tame and with the strong loonie, it doesn't look like there's imminent pressure to raise rates. Though the Middle east conflicts are certainly raising oil and gold prices and ultimately that could lead to globabl inflation. something to watch.
9. work out the scenario with your individual lender in terms of how bridge financing would work in the event you needed funds short term as you're taking posession before your current residence closes. don't leave this for last minute.
10. ask a lot of questions! there's so much more to know, including how to valuate properties in a market that should soon see prices all over the map!
Thanks,
Michael Gruenstein MBA CSC
http://www.TheSmithBuyAHouse.com
mgruenstein@trebnet.com
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