November 2011 Market

According to the Toronto Real Estate Board’s Market Watch, the Fall market  continued to display vitality throughout the month of November.  GTA transactions were up 11-percent from November 2010, from 6,384 to 7,092.  As well, new listings were up 14% year over year.  The average price was $480,421, a 10-percent increase year over year.

It is expected that the New Year will bring with it a more balanced real estate market, with more listings entering the market hopefully stabilizing the fast growth pace of average prices experienced so far in 2011.

Year over Year Overview

2011 2012 % Change
Sales 7,092 6,384 11.1%
New Listings 9,786 8,586 14.0%
Active Listings 15,551 15,813 -1.7%
Average Price $480,421 $437,494 9.8%
Average DOM 29 34 -14.9%
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by suttonadmiral on December 17, 2011  •  Permalink
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Posted by suttonadmiral on December 17, 2011

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GTA Condo Sales in Q3 2011

Condominium sales in the GTA were responsible were about a quarter of all resale transactions in Q3 this year. This is expected to increase to even more in the upcoming year. Not surprising, considering there are new condo buildings going up on almost every other block!

GTA reported 5,770 condo apartment transactions in Q3 2011, a 24% increase compared to Q3 2010. The average selling price was $333,352 which represents a 9% increase from the same period last year. Condominium apartment completions have been high so far this year. Usually, by the time these projects are completed, investors’ and owners’ needs change causing them to sell or rent, which could account for a large number of the condo transactions.

According to Jason Mercer, TREB’s Senior Manager of Market Analysis, “The average annual rate of price growth remained strong in the third quarter, despite the upward trend in completions and active listings. This is because the pace of sales remained brisk, keeping sellers’ market conditions in place.”

           Condo Apartment Market Overview

2011

 2010

Sales

 Avg Price Sales Avg Price
Total TREB 5,770 $333,352 4,648

$306,134

Halton Region

 88 $296,067 62 $255,024

Peel Region

 875 $253,246 744

$229,831
City of Toronto 4,156 $356,182 3,298

$329,917

York Region

 539 $319,399 445 $287,337
Durham Region 101 $201,503 84

$201,978
Other Areas 11 $272,455 15

$213,703

Click Here for the Full TREB Condo Market Report

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by suttonadmiral on November 21, 2011  •  Permalink
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Posted by suttonadmiral on November 21, 2011

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Reviewing Home Inspection Reports with your Clients

As an agent, your responsibilities extend beyond showing properties.  You are in charge of the (probably) biggest purchase of someone’s life, and that is a heavy responsibility so it is extremely important to see it through to the end, not missing any details.

There was a court ruling in January 2011 regarding a 2006 purchase of a house, where the home inspector was found 50% liable, the agent 25% liable, and the purchaser 25% liable.  The plaintiff and purchaser, Glenda Halliwell, sued her agent and brokerage, her home inspector who was recommended by her agent, and the seller.  Here is her story.

One of the clauses in the agreement was a home inspection, which was waived after the home inspector found no major issues with the house.  Four months after the inspection, the house was showing signs of mould, rot, rust, drywall issues, and moisture.  The problem lies in that the agent did not thoroughly review (or even read) the inspection report with the client and simply approved that the clause can be waived, trusting the inspector.  The buyer was particularly concerned with mould due to her allergies, and was assured by the home inspector that there were no concerns in that house for moisture penetration.  The summary of major defects failed to include obvious damage to the parging on the exterior wall at the driveway and the driveway surface was missing an 18-inch strip of asphalt along the exterior wall of the house, both of which were highly relevant in assessing moisture penetration.

In short, there were no signs of moisture penetration but seeing as the purchaser made it clear that mould is her main concern because of her allergies, the inspector fell short in advising her of the potential of moisture penetration, and the agent simply assumed it was the inspector’s responsibility and so did not read the report.

To protect yourself from potential issues (and prevent getting sued), ensure you cover all the bases before, not after, this kind of thing happens to you.  The time and effort you put into it will not only protect you from long-term and costly damage, but result in a positive relationship with your clientele.

The same applies to sellers’ agents.  Cover all the bases!  If you are representing a seller, ensure that everything that may potentially cause problems in the house is disclosed.  Note that the sellers were not found liable in the discussed case, but ONLY because they actually had no idea about the issues in the home.  If you or your client know of existing issues… disclose!

To view the actual ruling, click here or copy and paste the URL into your browser:  http://www.canlii.org/en/on/onsc/doc/2011/2011onsc390/2011onsc390.html

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by suttonadmiral on November 19, 2011  •  Permalink
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Posted by suttonadmiral on November 19, 2011

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The Right to Assign an Agreement of Purchase and Sale

Over the past few months I have seen several instances where a Purchaser enters into an Agreement of Purchase and Sale (the “Agreement”) and prior to closing seeks to assign the Agreement to a Third Party Assignee. Notwithstanding that the property was not purchased in trust, nor was there a specific provision included as a schedule to the Agreement allowing the Purchaser the contractual right to assign the Agreement, the Purchaser and Third Party Assignee, on the advice of their respective lawyers, proceeded to draft and execute an assignment agreement, without the consent of the Seller, which to their minds constituted a valid assignment.

What in effect was created between the Purchaser and the Third Party Assignee was a valid agreement between the two parties whereby the benefit, pursuant to section 53 of the Conveyancing and Law of Property Act, R.S.O. 1990, of the Agreement was assigned to the Third Party Assignee. However, as a result of the doctrine of privity, which in part dictates that the liabilities cannot be assigned absent the consent of the Seller or a clause in the Agreement permitting the assignment, the original Purchaser remains liable to the Seller for any default that may arise under the Agreement. Moreover, in the event the Third Party Purchaser is not able to complete transaction on the Closing Date, as defined in the Agreement, the Seller’s only recourse is against the original Purchaser as evidenced by the contract relationship between the Seller and the original Purchaser, as there is no direct contractual relationship between the Seller and the Third Party Assignee.

In support of this position Ontario courts have held that “a person who signs an agreement of purchase and sale can only avoid personal liability therefore, if, in the agreement, there are express and unequivocal words of qualification to this end.” The court added that caution must be taken when adding such language to an Agreement because having added
“without personal liability”, which will serve to exempt the Purchaser of liability, has the corresponding effect of denying the Purchaser any benefit
under the Agreement and the opportunity to sue. Accordingly, where a Purchaser intends to assign an Agreement, the parties should consider adding the below clause
to protect the Purchaser from liability under the Agreement, keeping in mind that in exercising their right to assign the Agreement they are similarly
contractually eliminating their right to claim any benefit under the Agreement:

The Seller acknowledges and agrees that the Purchaser shall have the absolute right and is permitted, prior to the closing of this transaction, to assign this Agreement and all the benefits contained herein or the rights under this Agreement with respect to the Property, to any person and upon such assignment, all of the respective obligations and liabilities of the Purchaser will cease and the Seller will deal with the Assignee as if it had been the original party to this agreement and the Purchaser thereafter shall have no personal liability hereunder.

The parties are however strongly advised to consult their respective lawyer prior to executing the Agreement as each transaction is unique and where an assignment clause is to be added, the clause should reflect the exact nature of the transaction contemplated therein.

ABOUT THE AUTHOR:  Jeremy Mandell is an associate with the law firm Garfinkle, Biderman LLP, a full service firm of 19 lawyers located downtown Toronto.  Jeremy’s areas of practice include all areas of commercial and residential real estate as well as aspects of corporate law.  He can be reached at (416) 869-1234 or by e-mail at jmandell@garfinkle.com.

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by suttonadmiral on October 29, 2011  •  Permalink
Posted in Real Estate Legal Matters

Posted by suttonadmiral on October 29, 2011

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September and October 2011: Strong Third Quarter!

Real Estate CartoonGTA Realtors reported 7,658 transactions through the Toronto MLS system in September 2011, representing a 25% increase compared to September 2010. In the first three quarters of 2011, we have seen 70,588 real estate transactions, a 2.6% increase compared to the first three quarters of 2010.

However, the shortage of listings experienced so far this year has improved only slightly. Competition continues between home buyers, leading to even higher home prices—by close to 10% year-over-year. October 2011 witnessed 3,477 transactions during the first two weeks, an increase of 20% compared to the same period last year. The average selling price for the first two weeks of October was $475,743, a 7.5% year-over-year increase. Thankfully, the interest rates are still at a record-low, helping to balance out the high prices.

All in all, this year has thus far been the second best year for sales under the current TREB market area. As the market becomes “better supplied”, we should see a more balanced market in 2012. So far in October, we’re already seeing more listings—a 21% increase in new listings compared to the first two weeks of October 2010 beat the growth of sales for the same year-over-year comparison by 1%.

Based on reports from the Toronto Real Estate Board.

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by suttonadmiral on October 22, 2011  •  Permalink
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Posted by suttonadmiral on October 22, 2011

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First Time Home Buyers and Related Rebates

The rising cost of residential real estate in Ontario has made it increasingly difficult for first time home buyers to gain entry into the real estate market. This problem has been magnified in the GTA since the introduction of the Municipal Land Transfer Tax (“MLTT”) in 2007, passed under the City of Toronto Act which places an additional burden on purchasers in the GTA by essentially doubling the amount of land transfer tax due on closing. When coupled with escalating costs associated with owning a home it becomes crucial that agents, often acting as a buyer’s gateway into the market, make certain that their clients are aware of and understand the additional costs associated with purchasing and carrying a home.

In Toronto and Ontario, land transfer tax rates are calculated as follows:

Toronto
0.5% of the sale price up to and including $55,000
1% of the sale price between $55,000 up to and including $250,000
2% of the sale price exceeding $400,000

Ontario
0.5% of the sale price up to and including $55,000
1% of the sale price between $55,000 up to and including $250,000
1.5% of the sale price between $250,000 up to and including $400,000
2% of the sale price exceeding $400,000

In an attempt to assist first time buyers, both the Province and the City have implemented rebate programs for first time buyers. However, to classify as a first time home buyer, a purchaser or their spouse, if applicable, cannot have previously owned a home anywhere in the world, regardless of whether they personally occupied the home.

With respect to the provincial rebate, the maximum available amount is $2,000. Toronto by comparison offers a more generous rebate of up to $3,725. For example, if a qualified, first time buyer purchases a home in the GTA for $650,000 the provincial portion of the land transfer tax due on closing would be $9475 less $2,000 for a total of $7475. The Toronto, or municipal portion due on closing would be $8725 less $3725 for a total of $5000. Any unused portion of the provincial and municipal rebate cannot be carried forward.

Often situations arise where a married couple has purchased a property and only one of the two spouses qualifies for the rebate. In such circumstances, leaving aside issues of estate, tax and family law, the couple can be registered on title as tenants in common with the eligible spouse owning a 99% share of the property with the non-qualified spouse retaining a 1% interest. In this situation, the eligible spouse will be entitled to 99% of both the provincial and municipal land transfer tax where applicable.

ABOUT THE AUTHOR: Jeremy Mandell, LLB, is an associate with the law firm Garfinkle, Biderman LLP, a full service firm of 19 lawyers located in downtown Toronto with a satellite office at Yonge and Sheppard. Jeremy’s areas of practice include all areas of commercial and residential real estate.  Tel: (416) 869-7608 jmandell@garfinkle.com.

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by suttonadmiral on October 15, 2011  •  Permalink
Posted in Buying Real Estate, Real Estate Legal Matters

Posted by suttonadmiral on October 15, 2011

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QR CODES: What, Why, and How

Sutton Group Admiral vCard via QRWhat is a QR code?

QR originated in Japan and stands for “quick response”. As the name suggests, it is quick and efficient. It works in the same way a barcode would, carrying information, but with its functionality and purpose greatly amplified. QR codes work internationally, so there are virtually no limitations.

Features and benefits

QR codes hold a maximum of 4296 alphanumeric characters, versus traditional horizontal barcodes which contain approximately 20 digits. The type of data that a QR code can contain is certainly not limited to digits – it can be in the form of a phone number, a vCard, a URL, an SMS message, an e-mail address, or just plain text. Even if the QR code is partially destroyed or dirty, the data can be restored – so fret not for sign riders in Canadian winters.

How does it work?

A QR code contains data both vertically and horizontally which increases its data capacity, versus a barcode which only contains data horizontally. The orientation of the code does not affect its performance, nor does the texture of the surface that it is situated on (for example, if it is on a curved surface). To be able to read a QR code, a QR reader is required which is absolutely free and available for download on a smartphone (or any device with camera functionality). Once the data is decoded by the device, it pulls up the appropriate program required to make use of that information – for example, if it is an e-mail, your phone will give you options of sending an e-mail to that address, saving it to a contact, etcetera; if it is a phone number, you will be prompted to either call that number, create a new contact, and so on.

It is quite easy to create a QR code. They are free to create (to an extent), but of course printing them in different formats (i.e. stickers for sign riders, business card printing, and so on) would cost fees.

Examples of usage

So, a QR code sounds fascinating – but how can it help your real estate business? Here are a few examples of how you can take advantage of this invaluable tool:

Lawn sign riders: The perfect opportunity to put up a QR code about that property! It can be a URL to that listing on your website, your contact information, or some extra textual information. Passers-by can easily store that information on their phone without having to manually input it into their phone.

QR Code Business CardBusiness cards: Although your business card has all your contact information on it, it would be much more valuable to have the option to electronically add you as a con-tact without manually entering the information.

Feature sheets and property flyers: Feature sheets offer the summary of a property, but in some cases do not offer everything that a potential client would like to know. You could insert a QR code which links back to the direct listing page on your website for additional details, or perhaps have upcoming open house dates, or even just some additional text describing the prop-erty.

Direct mail and brochures: If you are sending mail to your farm areas advertising your services and contact information, you should include a QR with your contact infor-mation as well, including your website and e-mail. If someone has the option to very quickly add you into their phone, chances are that when they have a real estate question they will find you in their phone and give you a call (rather than look for past mail which has most likely already been recycled or thrown out). You can even get creative and use a QR code sticker to seal the envelope.

Sample E-mail SignatureE-mail signature: Having a QR code, with your contact information or vCard, in your e-mail signature will help your recipient have you as a contact not only in their e-mail contact database, but provide them the capability to conveniently add you into their phone as well.

Essentially, anywhere that you have your contact information should have a QR code, including stickers on your car and so on. Anywhere you are advertising a listing should include a QR directing to the listing page on your website or provide another form of additional information. The convenience, functionality, and versatility of a QR code will increase the mobility of your contact information and help it travel as far as possible.

NOT CONVINCED? Try it for yourself. Download a free QR reader/decoder to your phone and scan the QR code below. It contains our e-mail address and will prompt you to either e-mail us, create a contact, add the e-mail to an existing contact, or copy it to your clipboard. To download the company vCard, scan the red barcode in the beginning of the post.

Scan QR Code

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by suttonadmiral on October 9, 2011  •  Permalink
Posted in Tips & Tricks for Real Estate Professionals

Posted by suttonadmiral on October 9, 2011

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The ASA Designation and How You Can Earn Yours!

Between the years of 1947 to 1966, Canada (among many other post World War II countries) experienced a baby boom.   Canadian census data on age and sex showed that as of May 15, 2001, the median age of Canada’s population reached an all-time high of 37.6 years.  It is estimated that, in late 2007, about 96% of the Canadian Baby Boomers were still alive – a population of about 8.5 million individuals (source: http://www.babyboomers-life.com/baby-boomers-in-canada.html).

It is safe to say that the nation’s population is aging.  What I am trying to get at is that as the population ages, many issues come up – health care, community, retirement, declining workforce, just to name a few.  Seniors and elderly are often neglected and shoved aside, but with a population that high – it’s time to stand up for them.

As a REALTOR®, you have the opportunity to achieve the ASA (Accredited Senior Agent) designation and be a trusted representative of the senior population in your community. Copied verbatim from the website is a description of an ASA’s role: “Given the growth in the demographics for baby boomers and their parents, a specialized niche of Realtor is needed to work within this highly specialized market. The  ASA (Accredited Senior Agent) designation shows that your real estate professional is dedicated to serving the mature/senior market. They have skills uniquely committed to serving this market due to their work expertise and dedication to advanced real estate education. They have taken a prescribed course and written an examination to enable them to work in this growing niche market… Accredited Senior Agents must
be of good character, have many years of experience and not only take a prescribed course but pass an examination in order to achieve this prestigious professional designation.”

To obtain the ASA designation, an agent must meet the following 6 requirements:

1) Completion of the two day course

2) Successful passing of the exam (75% minimum)

3) Payment of prescribed fees (includes first year’s membership in the Senior Housing Council)

4) Having a minimum of 3 years of real estate experience (can be in various disciplines in real estate)

5) Having listed or sold to at least 3 clients who are 55+

6) Having no formal complaints at your provincial body, either current or pending and not being an undischarged bankrupt.

The two day course will be available in Toronto on November 16th, 2011. To register, please visit http://thesenioragent.com/agent/index.html.

Here are some informative FAQ from the ASA website:

What Special Training Do They Get in the Designation Courses?

They learn about tax law, estate law, capital gains problems, wills and trusts and all of the aspects of the special needs for many families
(see Transition). The Accredited Senior Agent understands that for this major life changing event, the selling of the long established family home, it takes someone who has patience, can offer multiple services and the advice of other professionals. Our member have learned to counsel, to ask questions, to deal with special needs and at all times to put the client’s needs before theirs.

What are the annual dues?

$99 plus GST and dues commence one year after the passing of the examination. We include the first year’s dues in all course fees.

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by suttonadmiral on October 1, 2011  •  Permalink
Posted in Real Estate Legal Matters, Real Estate Training

Posted by suttonadmiral on October 1, 2011

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Toronto Housing Affordability

Income Growth (or lack thereof) versus Home Price Appreciation

The Ontario Real Estate Association (OREA) and the Toronto Real Estate Board (TREB) Home Ownership Matters campaign released statistics from a survey they conducted in relation to home ownership.  As a quick recap, 54% of renters cited affordability as a key reason for not owning a home, 81% believed that it is more difficult to own a home than it was for their parents, and 89% were concerned that it will become even more difficult in the future.

TORONTO HOUSING AFFORDABILITY CHARTWell, given the statistics, I don’t blame those eighty-nine-percent for feeling that way.  See for yourself!  On the left is a side-by-side comparison of the average Toronto home prices, average Toronto female full-time earnings, average Toronto male full-time earnings, and average mortgage rates from 1977 to 2009.

Notice that the average price of a Toronto home showed an increase of 512% in 2009 from 1997, whereas average Toronto male income increased by 21% and average Toronto female income by 67% (however, make note that the average Toronto female income is still significantly lower than average male income despite a stronger growth rate).  Due to a lack of available income data for 2010 and 2011, I was not able to compare the two most recent years.  I will take a wild guess though, that despite an average Toronto home price inflation of 18% from 2009 to today, average incomes have remained relatively the same.  In addition to increasing prices, there are now municipal land transfer taxes and regularly inflating property taxes involved, among other things, making home affordability that much more unattainable for a typical single person or couple.

There is no doubt that the Toronto real estate market is overheated.  According to Capital Economics, housing in Canada is probably overvalued by about 25%.  Considering that the average price of a Canadian home is $346,950, a 25% cut would result in $86,000 off the price (although, such a drop is highly unlikely).  More realistically, home values could drop by about 12% within the next two years as the housing market heads for a correction, says TD Bank.  Another possibility, according to Benjamin Tal, deputy chief economist at CIBC, is house prices stagnating for years before displaying some price appreciation.  Either way, the depreciation of home values is expected to be a slow and gradual process rather than a sudden one.  “The likelihood is that prices in the Canadian market and its sub-segments are higher than what can be explained by factors such as income growth, rent, and household formation,” said Tal.  No kidding.

Despite a warning issued by the Bank of Canada about Canadians taking on record levels of debt, first-time buyers continue to jump into the real estate market thanks to low and promising interest rates.  There is undoubtedly a fear that if this continues, Canadians won’t be able to afford their mortgages once rates inevitably rise and the market cools off.  According to the Bank of Canada, the amount of debt taken on by Canadians is a record-breaking 142% greater than income.

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by suttonadmiral on August 4, 2011  •  Permalink
Posted in Real Estate News

Posted by suttonadmiral on August 4, 2011

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