October, 04, 2022
What is a reserve fund?A reserve fund is possession in form of cash, kept for meeting future expected and unexpected obligations by the condo corporation. It is usually kept or set aside to meet emergencies, pay for repairs, replacements, possible litigation, etc. A percentage or proportion of money is deducted from the operational funds to contribute to the reserve funds. How does a reserve fund work for condominiums?A reserve fund assists in meeting the future damages incurred by the condominiums. This allows for repairs to the building. The amounts of funds may vary according to the assessment of the Homeowners Association (HOA) but a basic idea of maintaining a reserve fund for condos is to deposit monies in an account with compound interest so that over time, buildings can meet the expenses for repairs, replacements, and updating.What is a condo reserve fund study?A study or analysis is carried out under the supervision of the board of directors or the HOA of the condominium every three years, by experts which determine the amount required to keep in the reserve funds to be able to meet upcoming forecasted expenses for maintaining the condo building. The HOA later uses those funds when required for renovation and maintenance.This amount can vary from year to year and there is no fixed approximation to predict the number. The monies collected in the reserve fund are usually just a suggestion by experts to keep due to uncertainty and unpredictability of future circumstances and weather conditions. Once the analysis of the future proportion of condo fund reserve is completed, the changes should be implemented within 4 months, by the condo board. The owners have the time of 15 days to review the study and within a month, all necessary changes must take place.Expenditures are carried out under the reserve fund and maintenance of the account.Old premises may require more funds for maintenance as compared to a newly constructed building. Premises built recently may require expenses of landscaping, pathway improvements, maintenance of the roof, repair of fences, playground equipment such as slides, etc, which can be covered by the finance acquired through reserve funds.A relatively older condominium building may have expenses such as; replacements and installations of lifts, equipment such as generators, reconstruction, and maintenance of garages, terraces, pipelines, etc. If the reserve funds do not possess a sufficient amount of monies, the condo board can charge a “special assessment” from the owners to carry out those particular repairs or construction. To avoid special assessments, owners and the board needs to ensure that there are enough monies available in the reserve to meet the expenses of the premises. An incompetently managed reserve would end up in more of these assessments, fines, and dues to be cleared by the owners.Importance of reserve funds’ studyAn efficiently accounted study of maintaining the reserve funds would not only provide the board with sufficient funds but would also help avoid special assessments and arrears for the owners. With the depreciation of premises, there would certainly be more need for cash in form of reserves to carry out repairs and reconstructions to maintain a similar standard of living as before. Moreover, the proportion devoted to the reserve fund from the operational funds can be incremented, such from 5% to 15%, etc. to acquire sufficient cash for the future.
September, 20, 2022
Buying a dream home or investing your savings in a property is an exciting journey for many of us. Not to forget the anxiety that comes along with it, especially when faced with the technicalities of securing a mortgage and lending options. The process becomes a bit more complex for self-employed. Self-employed borrowers face some drawbacks when applying for a mortgage. Unlike traditional mortgages, self-employed mortgages are tricky as the borrowers have inconsistent earnings, tax deductions, and sometimes excessive claimed expenses on their records. All of this could make the process of securing a mortgage a bit of a hassle. Proving your financial stability along with providing years of various business documentation can be daunting for some.Types of Lenders in CanadaIn Canada, there are three categories of lenders A, B, and Private Lenders. Not all banks, especially A lenders, offer self-employed mortgages that suit the borrowers’ requirements. These A lenders are the six banks of Canada. They have stringent criteria, but if you qualify for a mortgage from one of these six major banks, you'll likely get yourself the best deals in terms of interest rates. Lenders don’t always work for self-employed borrowers, so you may have to look to a B lender. They have less strict criteria, but they have a high-interest rate. The last option is the private lenders. They are independent financial institutions; their criteria are relatively simple, but they offer the highest interest rates of about 7-18%. With a variety of options available and different requirements to please each category of lenders. Canadians who are self-employed, most often manage to acquire mortgages and can provide enough proof. Proof of IncomeThe main challenge is gathering enough information to present proof of income. The self-employed borrowers have a couple of options. One of those is stated income, so if you have a high enough stated income and secure insurance through the CHMC program, you can get a mortgage. By using this method, you may find a lender who accepts stated income, and in this way, you can secure a higher mortgage amount with the added benefit of saving time instead of waiting for weeks. Additional DocumentsYou must also know about the documents that may come in handy as you need to prove yourself financially capable of paying your mortgage. Most lenders ask for personal tax Notices of Assessments from the past 2-3 years, but if you cannot provide those, you need to make a minimum 10% down payment and maintain a good credit history. You will also need to provide your business registration number registration, your business financial statement, and the business bank statement. Proof of fully paid HST/GST and evidence that your down payment is not a gift. The proof of the principal owner of the business is also required. If you can provide the previous and potential business contracts for the next couple of years, you can strengthen your case.Mortgage BrokersIf you find all the technicalities mind-boggling, collecting, and filing the paperwork a bit of a nuisance, then you can consult a mortgage broker. They specialize in finding you the mortgage tailored to your needs. They make it hassle-free, get the paperwork done relatively quickly, arrange everything you need to apply for a self-employed mortgage and get you the best deal possible.
February, 17, 2022
Selling Your Condo? Here Are A Few Steps To FollowNo need to worry! We’ve broken down the condo-selling process into easy steps for you to follow. The process may seem daunting at first but taking it one step at a time eases things up. Here are five steps to selling your condoFinding an agentThe first step to selling a condo is to find an agent. An agent can help you out in several ways and ultimately make the entire process much easier for you. Agents have first-hand information about the prices of condos, especially those similar to yours or in the same neighborhood as yours, so they can give you invaluable advice in setting a reasonable price for the condo. There’s also a lot of paperwork involved in the process of selling your condo, and the agent will handle most of it for you. A condo agent can also guide you with the marketing and staging process. But possibly the most important of all, your agent will carry out the negotiations with the seller for you.Preparing The CondoMake sure your condo is ready for its new owner well in advance of the handover. Air the rooms to ensure that no smells linger inside. You may also want to paint the condo; it will not only get rid of any long-lasting odors but also give a clean, fresh look to the place. Also, start packing any of your belongings that aren't essential everyday-use items so that the rooms and closets look spacious should anyone visit to check the condo out for themselves. Remember: a clean condo with spacious rooms is a major plus point.Read more: Steps to Follow While Buying a CondoMaking RenovationsMake no mistake about it: it’s all of the little things that come together to make a big impression. Just make sure that it's a good impression. Don't forget to fix any broken switches and replace lights that have gone out. Also, check the doors and windows for any creaking or damage. If there are any plumbing problems, deal with them before anyone comes to check out the condo. A condo is a living space, and small repairs and replacements are an ongoing process to keep the place clean and usable.Reviewing the DocumentsThe condo’s documents include the financial statements, the condo floor plan, and documentation of the association’s meetings (minutes of the meetings, etc.) It's a good idea to sit with your agent and go through the documents once; it'll help you set the price according to the condition of the condo and the features it offers. This would also be an excellent time to start making notes on any impressive features that can be useful in marketing the condo when the time comes around. Anyone buying the condo will ask to review the documents as well, so keep them ready.Marketing and StagingStaging is when you prepare the property for showing to others. It typically involves modeling the condo and presenting it as a liveable space. The staging team will place furniture and decorations to dress rooms for their intended purpose so that any visitors will envision themselves living in the condo. Staging is a beneficial technique to exhibit the condo for its best value, and well-done staging can not only significantly drive up the price of your condo but also get it sold quicker and more quickly. It's also advisable to let a professional photographer take photos and videos of the condo for marketing instead of taking them yourself. Once you get an offer, your agent will negotiate the conditions, price, and closing date on your behalf. The critical thing to remember is that the final decision is yours to make. On closing day, both parties sign the final agreement and seal the deal. Congratulations, you have successfully sold your condo!
January, 26, 2022
Buying a Condo? Here are the main steps to rememberBuying a condo can be a confusing task, especially if this is your first time. But fear not, we've made this list of steps to make things easier for you. This list is by no means exhaustive, but these are some essential steps you ought to keep in mind if you're buying a condo.Getting An AgentIf you want to make it easier to get a condo, you may want to get a buyer’s agent. A buyer’s agent assists the buyer and the seller in smoothly making the sale of the condo. Getting an agent helps negotiate a better deal, helping you find the condo you want for less money. If you choose to go with the listing agent for the condo you like, remember that the listing agent’s job is to sell that condo, preferably getting the owner the best deal. So they may not necessarily have your best interests at the top of their priority list.Finding The Right CondoCondos come in such a wide variety, and there is something for everyone, so it’s important to know what you need. You may want lots of amenities like tennis or swimming pools, or it might not be a priority. You may be looking for ample space for friends and family or a compact size with the basics. You may also be looking for a certain kind of neighborhood. What layout will suit you the best? These are questions you will have to ask yourself before you seal the deal. You'll also need to balance your needs with your budget to come to the best conclusion.Read more: Negotiating a Condo Deal: Buyers EditionMaking An OfferOnce you’ve decided on the condo you would like to have; it’s time to make an offer. Ask your agent to write it up, including:- Terms and conditions- Earnest payment- Closing DateAny other details of the purchase might be a negotiation on the price with the seller. The critical thing to remember is that you make the earnest payment once both parties are in agreement regarding the terms of the sale.Setting Up A Home InspectionNow that you've come to a mutual agreement with the seller over the terms of the sale, it would be a nice idea to set up a home inspection. A home inspection is a crucial step because it ensures that the condo is in good condition. The home inspection team will typically check for details like the walls, roofs, attic, etc., and report on their findings. Once you get the report, you may accept it or ask for the necessary repairs or replacements.Pending And ClosingThe transaction enters the pending stage after the home inspection report comes through. Now the final steps will be taken to seal the deal. This stage involves the finalization of documents and carrying out any paperwork. If you have requested any repairs or replacements, the seller will carry them out. Typically, the seller signs theagreement first, followed by the buyer. After the property transaction has been recorded at the county level, the keys are transferred to the buyer. Congratulations, you’ve just bought a new condo! Time to celebrate. You’ve earned it!
January, 04, 2022
After the recent lockdown in Toronto, the real estate market is going to slow down a bit. If you were considering buying a condo in Toronto, you must be sure if it is the right time to go with the deal or should you wait.There are arguments both in favor and against buying a property in these times and we are here to help you decide. We have researched the market and we will try to share the pros and cons of buying a condo during this time.The demand is highCondos were least liked by many. Small homes, with intruders in the hallway, and some more restrictions. But times like these have reversed the preference for many.You also would be feeling the same and have realized that this is the time to think of what you need, not what you want. This has led them to think to prefer buying a condo rather than buying a detached home.As the demand for condos is increasing, so is their price. According to research, the prices of condos have gone up by almost 12% in the past few months (according to July figures).Though the prices of condos are increasing, the rental prices are relatively decreasing. This could be a sign of worry if the intention is to generate income from renting out the condo. Having said that, it is all a matter of time, in the long run, things would start getting back to normal. And so would the rental from condos.However, the disadvantage here is that you may not be able to physically inspect the property. You could only pay for a virtual tour.Decide for the long-runWhen you think of buying a condo, you must always think of buying something unique – not for you, but for others. This is best suitable when the key purpose of your buying decision is to rent out the property.Look for areas suitable for all, paying a good income in terms of rents. Though, people are moving to open areas where they could interact with nature. Large cities might not sound like a good place to invest but in the longer run, people would start coming back and more immigrants would fill the gap. This would then result in higher rental prices.This is a favor for you – people moving out of the city making homes abundant. This makes the market favorable for the buyers. The prices of the condos might not be as fast as in the suburbs. You could make your bid and buy a condo for less.Read more: Buying Your First Condo, What to Consider?Prices are lowWhile people are moving out of the city, there are relatively fewer buyers in the market. The owners would either have to rent out the condos at a low price or sell at your offer. This makes you the king.While some say that there are few condo options in the bigger cities, there are even fewer buyers. Which makes it a buyer’s market.Above all, the interest rates are low, increasing the buying power of citizens. This has another benefit for the buyers – they could get a condo at a lower mortgage rate.And when the market gets flooded with the COVID-19 vaccine, people would return to cities and the prices of condos would start peaking up.Summarizing the effects of the lockdownPros of buying a condo during the lockdownFewer buyers, more sellers (buyer’s market)Condo prices will boom as seen previously this yearLow-interest ratesCons of buying a condo during the lockdownCannot physically inspect the propertyLow rentals (but only for a little)The decision to buy a condo in TorontoBeing the largest city in the country, people cannot turn their faces away from this city for long. They would have to return to their city. And so will the new immigrants. This would result in the hype in the real estate sector, including the rental properties.And once everything starts turning back to normality, the interest rates might also go up, reducing the buying power of citizens. This means that it could get tough for people to buy a condo later. While those who consider buying a condo in Toronto during the lockdown might enjoy some benefits in the long term.
September, 27, 2021
For the past few years, condos have been selling like hot cake. They offer almost everything you could think of; in-building pools, conference rooms, cafes, nearby bus/subway stations, shopping centers, and more. They’re perfect for young professionals, couples, and even small families.Last year, when the COVID-19 pandemic shook the entire world, we witnessed a decline in the number of condo sales. People turned their direction towards spacious homes, away from the friendly communities, usually found in condominiums. For almost the entire year, there was a slump in demand for condos. But the tide is again shifting its direction towards condos. People are again buying condos.Interestingly, every type of home has its benefit and purpose. You’ll widely see condos in busy areas, such as downtowns. People like to remain close to their workplaces and other amenities, avoiding long hours of traveling. On the other hand, you’ll mostly find single-family homes away from busy areas, such as in the suburbs. These types of homes are suitable when you are frustrated with the hustle of big cities or want to raise a family (although there is no such rule for that).So in this post, I planned to share four pros and four cons of buying condos. The pros will boost your morale to invest in condos. And the cons will help you mitigate the risk of making a bad investment.What Will You Learn Here?Do condos appreciate it?Benefits of investing in condos.Drawbacks of investing in condos.Decide if you should invest or not.Estimate your return on investment (ROI).Do Condos Appreciate?Like any other real estate, condos certainly go up in price. The growth, however, is usually not as high as it is for single-family homes. For example, according to several housing reports, the closing price of a 2-bedroom condo for sale in Mississauga reached $624,000 from Aug 13 - Sep 10, which was nearly $556,000 a year ago. The price growth is more than 12% in a year.On the other hand, the prices for a 2-bed detached home went up from $1 million to $1.1 million in a year, witnessing a price increase of 10%.You may compare that condos did well in a year, even when they witnessed a tough year. Keep in mind that the price increase is directly related to:LocationCommunity amenitiesTransportation facilitiesPopulation densityCondition of the propertyFor more details, you contact our real estate professionals. They will help you track the exact figures.More to read: Steps to Follow While Buying a CondoBenefits of Investing in CondosInvesting in condos brings several advantages. We have outlined some of them here.Low Cost Compared to Freehold HomesCondos generally come for a low price compared to single-family homes. Due to several reasons unlike freehold homes, condos do not come with the land it remains under the builder’s name. Then the size of a condo is usually smaller than a single-family house.Community Living with Nearby AmenitiesOne of the major factors people buy condos is their proximity to an array of amenities and a friendly community. Most condominiums stand tall in the city’s heart (downtown areas), where everything is easy to access. That’s why you will find most condo buildings close to bus stations, malls, groceries, schools, parks, etc.With such nearby amenities, you don’t worry about traveling from the corners of the city, and everything is steps away from you.For those looking to have a vibrant community, condos, again, take the lead. You will find friendly neighbors, community centers, parks, and play areas where you and your children could go out in the evening and have a good time.Although, after the COVID-19 pandemic, things have been changing. Buyers are more interested in single-family homes than condos. That’s due to the size of these single-family houses and their distance from the community. Despite that, many still prefer condos over freehold homes.No External Maintenance RequiredMaintenance and repairing cost is relatively low since you are not entitled to the whole premises. You pay only for what you keep.On the other hand, a single-family home would bring a plethora of repair and maintenance costs, such as the maintenance cost of your roof, patio, gutters, paint, and every other part of your house.The association charges you a fixed amount for condos and takes care of the external repairs, including snow removal, yard work, and other exterior maintenance.Appreciate in ValueAs said earlier, condos are also appreciated. So what you buy now would be sold for a higher price in the future. And if you rent it out, you would earn more in terms of monthly rentals.Single-family homes also follow the same trend. Their rentals are comparatively higher and receive higher price appreciation over the period.Drawbacks of Investing in CondosWith every good, there’s something terrible. And so is the matter of investing in condos. So here, we have shared some very common drawbacks of investing in condos.Association FeesIt is a fixed fee, which means you would have to pay it even if you don’t live in it. Then the fees are set by the condo association and vastly depend on the locality. These charges could range from a few hundred dollars to thousands.Rental RestrictionsUnlike renting out a single-family house, renting a condo is complicated. Even when you own a condo, you still have to follow some restrictions set by the association.So if you were to rent out your condo on a short-term rental basis, like what Airbnb offers, the association would come in your way and wouldn’t allow renting out the condo on a short-term basis. So when you are planning to rent out your property, make sure you understand the limitations set by your local association.Association RestrictionsBesides rental restrictions, you would also face restrictions from the association. For instance, the association would limit the modifications you can make to the unit or the number of pets you can own.Difficult to FinanceIt is strange to say, but financing a condo is indeed more expensive than a single-family house. That’s because of higher mortgage rates.More to read: 5 Home Buying Tips for First-time HomebuyersShould You Invest in Condos or Not?After going through the cons, you might feel that condo investment is not a very good idea. But that isn’t the case. Investing in a single-family house could also have some drawbacks. To help you decide if you should invest in condos or not, here’s your quick overview of what we just learned above:ProsConsMore affordableAssociation feesAmenitiesRental restrictionsFewer maintenance responsibilitiesAssociation restrictionsAppreciationComplex financingWhen you’re buying a condo, make sure you choose the best option. Selecting the best option is usually based on factors like:LocationBuilder’s reputationNearby amenitiesCompletion dateMoreover, when you invest in condos or any other property, talk to experts. And keep discussing until you’re satisfied, as you don’t want to lose a tiny bit of your hard-earned wealth.Image credits: Flickr
August, 09, 2021
Previously sales and prices for detached homes, condos, and apartments were suspected of going down due to the pandemic outbreak. But it proved otherwise.The year 2020 witnessed a massive surge in single-family homes compared to condos. The prices skyrocketed, and the supply was low. However, the real estate board numbers didn’t show new or presale condo sales. There were buyers buying contracts for condos, and developers built them.Recently, Michael Ferreira of Urban Analytics said that the real estate market didn’t see much from condo homes, though, “it’s pretty remarkable that we finished with as many sales as we did.”Ferreira also marked a relatively promising hype in Q4 of 2020 when there were 3,800 presale condo sales. That’s an increase of around 53.33% compared to the same period last year, while a decrease of 7.31% compared with Q4 of 2018.We’re just 300 less (sales) than what we saw in 2018,Read more: 5 Home Buying Tips for First-time Homebuyers.According to Ferreira, investors were sitting back and observing the real estate market:Took their time to gauge what was going to happen as far as what they kept hearing. You know the predictions of prices dropping, the infamous (call by the Canada Mortgage and Housing Corp.) that there would be a nine-to-18 per cent drop in real estate values.We are going to see the investor (buyer) come back into the market, but it’s a much more longer-view investor. It’s not the speculator that we were seeing in 2016 and 2017,According to his research, the condo market expects an uplift in 2021, when there would be new condos with no increase in prices. That would be the time for real investors to show up and invest for longer periods.The time would turn in investors’ favor when the travel restrictions are lifted, and immigration resumes, he added.
July, 28, 2021
How do strategize your offer for a condo, especially if you’re not the only bidder?Anyone who has bought a condo in the past probably understands that the bargaining portion of the buying process can be tricky. It gets even more complicated if you're in a bidding war with other potential buyers. There are a few things, however, which can help out significantly if you know them.MONEY MATTERSIt's no secret that the most important thing to most sellers is the price. But how much should you be willing to offer? How much is too much? There are several things to consider when making these decisions. Apart from the obvious stuff like space and amenities on offer, your agent will look at similar properties up for sale to see how they compare with the seller's price. These properties may even be in the same building or nearby ones. This helps create an accurate estimate of the condo's worth, which you can then compare with the seller's asking price.If, say, the seller's asking price is much higher than comparable properties, what do you do? If you're in a bidding war with other potential buyers, remember that the seller can afford to ask for a higher price because they know that the demand for the condo is high. At this point, the important thing is to ask yourself how badly you want this condo in particular. Are you willing to pay more for this condo, or would you rather take your condo hunt elsewhere? If you are ready to pay more, then how much is too much?KEEP IN MIND THE BANK’S APPRAISALKnowing how much you're willing to pay for a condo is essential because you probably get a mortgage from a bank for it. The bank will carry out an independent appraisal of the condo to figure out its worth so that they can determine if you are genuinely paying what the property is worth or more.The bank will only lend you the money they have appraised the condo at, and if they think that you are overpaying for the condo, they will ask you to take on any additional price (over the appraised rate) on your own. An experienced real estate agent will help you out with this process to ensure that it's easy for you and unnecessary complications don't arise.BIDDING WARS GIVE THE SELLER AN ADVANTAGETypically, if you're the only one making an offer for the condo and the offer is accepted, you will need to make an initial deposit within a day. However, if you are in a bidding war and there are other bidders, it's advisable to have your deposit ready as you make the offer. Also, if you really want to seal the deal on a condo that has multiple bidders, you'll need to meet the seller's expectations on the closing date. If you truly want a different closing date, keep in mind that you may have to offer more money to make your offer worthwhile for the seller.In summary, keep these points in mind:Know how much you’re willing to pay for a condo and where you draw the line.When deciding, don't forget the bank will carry out an appraisal of its property.If you're in a bidding war, you'll need to meet the seller's expectations to seal the deal truly.Photo by Andrea Piacquadio from Pexels
July, 20, 2021
Ever since the pandemic started, the country’s housing market has shown astonishing results. The number of buyers is rising; home sales are pacing up, and so is the average home price. The national statistics from the Canadian Real Estate Association (CREA) also depict the same. The authority started off its recent publication for January 2021 with a factual statement:... national home sales set another all-time record in January 2021.This release from CondoPoint is the shorter version of CREA’s recent statistics update. We have sorted the data into portions to make it easier to read and understand.National Statistics from CREASales Activity in January 2021It was a fantastic start when the actual sales activity (not seasonally adjusted) went up by 35.2% compared to January 2020. The month’s sales gain was a trendsetter where the activity boosted significantly all around the country.Based on historical data, CREA predicted a sales activity of 583,635 for January 2021. In contrast, the actual (seasonally adjusted) activity was much higher than this prediction. According to the association, 736,452 units were sold in the month.The increase in sales between December and January was due to a blend of factors, including low-interest rates.However, it is suspected that this rise in sales activity might decline if the supply remains low.Are you selling your condo? Here are some tips, only for you: Steps to selling your condo.According to CREA, some markets around the country witnessed a dip in sales due to a lack of available houses. Nine of these markets were in Ontario.Comparing the two years back to back, Costa Poulopoulos, Chair of CREA, said:2021 started off just like 2020 ended, with a number of key housing market indicators continuing to set records. The two big challenges facing housing markets this year are the same ones we were facing last year – COVID and a lack of supply. It’s looking like our collective efforts to bring those COVID cases down over the last month and a half are working. With luck, some potential sellers who baulked at wading into the market last year will feel more comfortable listing this year. As lockdowns are once again easing and the spring market begins to ramp up, we will remain vigilant in adhering to all the latest government and health officials’ directives to keep our clients safe.Now as always, REALTORS® remain the best source for information and guidance when negotiating the sale or purchase of a home,Average Home Prices in January 2021During Jan’21, the Aggregate Composite MLS® Home Price Index (MLS® HPI) witnessed a surge of 1.9% month-over-month. Of the total 40-indexed markets, home prices in 36 markets went up during the month.Whereas year-over-year growth in the Aggregate Composite MLS® HPI (non-seasonally adjusted) was 13.5%.In addition, CREA also shared the average home price in the country, where it recorded an increase of 22.8%, reaching $621,525 in the month.It is further said that Greater Vancouver and the GTA are two of the most active markets contributing immensely to uplifting average home prices in the country. Excluding these two markets will cut down the average home price by $1259,000, as said by CREA.Low Inventory in January 2021On the other side, the housing market witnessed a drop in inventory of 13.3% in January 2021 compared to the previous month. Most of the decline in inventory was seen in the GTA, Hamilton-Burlington, London and St. Thomas, Ottawa, Montreal, Quebec, and Halifax Dartmouth.This drop-in listing resulted in an unfavourable outcome in the national sales-to-new listings ratio by 90.7% - the highest sales-to-new listings ratio in the past five years. Previously, it was 81.5%.Only about 20% of the national housing market remained balanced in January 2021. This supply shortfall is one of the many reasons causing a hike in home prices after the pandemic outbreak.Hoping for a better supply of houses, Shaun Cathcart, CREA’s Senior Economist, said:The problem with this time of year is that the buyers and sellers that will, in time, define the Canadian housing story of 2021 are mostly all still waiting in the wings. It’s the dead of winter and we’re only just starting to get the second wave of COVID under control.We’re unlikely to see a rush of listings until the weather and public health situations improve, and we won’t see buyers until those homes come up for sale. The best-case scenario would be if we see a lot of sellers who were gun-shy to engage in the market last year making a move this year.A big surge in supply is what so many markets really need this year to get people into the homes they want and to keep prices from accelerating any more than they already are.Regarding the supply, according to CREA, the housing market in January 2021 had only 1.9 months of inventory left. This is termed as the lowest level of inventory period compared.Read these guidelines if you are buying your first home: tips for first-time homebuyers.Summary of the Housing MarketThe actual sales activity (not seasonally adjusted) surges by 35.2% year-over-year.The MLS® Home Price Index (HPI) rose 1.9% m-o-m and was up 13.5% y-o-y.The actual national average sale price (not seasonally adjusted) increased by 22.8% year-over-year.
July, 02, 2021
Here are a few things to remember if this is your first time buying a condominium.So it’s your first time buying a condo, and you’re wondering where to start. Before you even begin, the most important thing is understanding how buying a condo differs from buying a house. While several aspects of the process may seem very familiar, living in a condominium differs in several ways. And if you haven’t done this before, we’re here to help prepare you for what to expect.The primary distinction that sets condominiums apart from single-family houses is in ownership. Whereas if you own a single-family house, the entire property is yours to live in and alter, condos are partially shared spaces. Several condo units exist in one building, and while you will have exclusive ownership of the interior space of your dwelling unit, you will be sharing the rest of the building with other condo owners. This space includes common facilities like the central lobby, outer areas, and even the walls, fences, or other building parts.More to read: Steps to follow while selling your condoWhile some people may have mixed feelings about this shared experience, it has several advantages. The Association caters to any repairs required in the shared building or the grounds. It means that the Association handles expenses you would typically have to bear yourself if you were in a single-family house on behalf of the condo owners.This shared experience also provides a sense of community and neighbourhood within the building that many people prefer over house living. While you can remodel a single-family house at will, condo owners must abide by what is known as the “Covenants, Conditions and Restrictions” (CCRs). The CCRs spell out the extent to which condo owners have control and the restrictions they must abide by.This is not to say that single-family houses or the neighbourhoods within which they exist do not have any Covenants, Conditions, and Restrictions, but those tend to be much more lenient. For this reason, it is essential to carefully review the CCRs and any other bylaws and rules when buying the condo. Apart from this, make sure to check the minutes of the last few meetings regarding the condo so you’re aware of any issues that may be under discussion. Also, double-check to ensure that the Association is not involved in any litigation or legal battle, as this can put things into perspective and give you a better view of the conditions of the building and the Association. Your agent will help you get all these documents for review if you request them. Remember that these documents often tend to be quite complicated, so if need be, ask your real estate attorney or a board member of the Association to help you understand.More to read: Steps to follow while buying a condoIn a condo complex, the maintenance of the building is also shared by the owners of the condos. Buying a new condo gives you membership of the Association, and you are required to pay a fee for maintenance, management, and any insurance that may be in place. Some complexes include utilities like hydro, water, heating, cooling, and garbage disposal in your monthly fee, but the specifics of these payments typically vary in each complex. In contrast, the maintenance of a single-family house is solely up to the owner.While buying a condo for the first time may be a new and unusual experience for some, condo living has much to offer. The shared space makes many aspects of busy urban life much easier and more manageable.
June, 26, 2021
Buying a condo is one of the most important decisions of your life. You need to be available both emotionally and financially when making this decision.For this, you must be sure that you are ready to buy a condo, where you want to buy it, and what involves in managing the finances. Where these three concerns sound easy to answer, they often are not.To help you here, we have answered these concerns to help you take the step swiftly.Are you ready to buy a condo?Before you invest in anything that costly, it is imperative to make sure if you are ready to buy a condo or not. Buying a home is a commitment.You will be obliged to pay the mortgage as per the agreement with the lender. And this could only be done if you are receiving an income from a reliable source covering all your household expenses, mortgage bills, and the cost of maintaining the unit as per the local authority’s guidelines.The best outcome of this decision is that you will have your own house.Considering the pros and cons mentioned below to make it easy for you to decide on buying a condo.ProsThey are comparatively cheaperThe interest rates are relatively lowThey offer a friendly communityThere is a big list of condos available, giving you a wide range of options to choose the best oneThere are more condo sellers than buyers, which makes this a buyer’s market – you get extra room to negotiate the priceConsYou need permission from the building's management to renovate your home, andYou may have to pay parking and maintenance chargesCondos have ever been popular in the country. If there is a dip in the market, it is all due to this year’s pandemic.Sooner or later, it would get back to normality. And then it might get costly to pay the mortgages and afford a condo.Where should you buy it?That is rather tricky to answer. You might get tempted by the new projects. Or want to stick to the ones already standing on the ground.While considering where you should buy the condo, ask yourself a few questions:Are you buying to reside in or rent it out?Do you prefer buying near your workplace or a peaceful area?How much could it pay you off when you plan to sell it?You need to be quite sure and objective when choosing the location and neighbourhood. Buying a home does not happen every other day. It requires some wise measures.Once you have answers to your queries, you must also ask an expert’s opinion to make an even better decision.For this, a local condo realtor could help you better than anyone. They will help you not only in choosing the best locality but would also help in more related steps.What are the financial requirements to buy a condo?It is the stage where you need to show your financial stability. Once you know that you are ready to buy a house (emotionally and financially), you are required to start the practical work.To buy a condo, you need to win a mortgage. Mortgage lenders are crucial to handle. They will not let you have their hard-earned money that easily. They will require some monetary proof that you can pay off the debts.For this, they will be seeking information related to your income, credits, and the initial amount of deposit (down payment). Let us dive deep and understand how these three areas are so important.IncomeThe lenders will only pay you if you have a reliable source(s) of income. The income should be more than enough to cover your current expenses in addition to the amount related to buying a house.Here the lenders will use several ratios to decide if your income level meets the minimum requirements to have a mortgage.While the lenders are not concerned with what you do (employed by a company or a businessperson), they are only interested to know that you are eligible to work, pay the taxes, and have a continuous source of income.There is a general rule of thumb that requires you to have a gross household income five times more than the expense involved in buying a house.CreditHere the lenders will review your credit history. Have you been paying off your debts on time under the present terms? This sort of question is more relevant here.The best way to tackle this is to maintain a good credit history. For this, you can consider the below key points:Monitor your credit scorePay the dues (any kind) on time and as per the agreementHave multiple sources of credit to distribute your expenditures over different sourcesKeep the credit balance between 0-50% to enjoy the maximum benefitsKeeping a good credit history will ensure winning a mortgage.Down PaymentIt is the part that requires your investment. Lenders require you to pay the down payment. If, for instance, you do not have that kind of money, you still could score the mortgage by first getting a personal loan to pay the down payment.You could also arrange this amount if your family is willing to pay you the sum along with the proof that it comes from a valid source of income.The down payment is dependent on several factors, including:Purpose of buying the condo (residential or investment)The source(s) of your incomeOther transaction costs (lawyer’s fee, inspection charges, etc.)For a quick overview and a comparison, you could use online mortgage payment calculators. These will help you a lot in your decision-making stage.Ask for an Expert’s OpinionOnce you have the answers related to these three elements, you also need to consult an expert’s opinion. For this, you can always reach a local condo real estate agent. They have spent years in the field and would be able to assist you further.
May, 20, 2021
Real estate investments are booming in Canada, especially in the major cities of Toronto and Mississauga. This boom has led to foreign investment becoming an increasingly important topic. More and more people want to buy homes in Canada but are not Canadian citizens or permanent residents. Whether you are looking to purchase property in Canada as an investment or want to know the requirements if you are planning to move there, this guide can help you learn about the ins and outs of investing in real estate in Canada as a foreigner.Is buying a house in Canada as a foreigner a good investment?Canada is a good place to invest in real estate because it has a strong economy and is ranked as Forbes’s top country for business. Another reason why Canada is a good place to invest in real estate is its stable housing market. There is less risk involved when buying property here than elsewhere. Prices are going up every day, and you can get a great deal if you do your research wisely. Second, different properties are available, so it will be very easy to find something that perfectly meets your needs. You do not have to worry about being locked into one kind of property because there are condos for sale, apartments, and single-family homes available in all price ranges, so there will be something for you no matter what your budget. Check out MLS listings and condos for sale in Mississauga here at condopoint.ca.How much tax does a foreigner need to pay to buy a house in Canada?It depends on your current financial condition and the area you are looking into. If you buy a house in Canada as an investor, you will have to pay capital gains tax on your sale profit. It also applies if you are buying a house as an employee—you will still have to pay capital gains tax on the profit of your sale, but it is considered income and not capital gains.In addition, you will also have to pay income tax on any rental income earned from the property. If you own more than one property, these rules apply separately to each property. Foreigners who want to buy property in Canada should contact their financial advisor before making any purchases to determine how much money they will need for down payments and closing costs (which include insurance). Foreigners should also make sure that they have enough funds available for maintenance fees, which can add up quickly depending on where they live.Is a mortgage different for foreign buyers?Foreign homebuyers must obtain mortgage financing from a Canadian bank or credit union in Canada. If you are a foreign home buyer in Canada, you will have access to mortgage financing from those sources. However, foreign homebuyers have some additional considerations when applying for Canadian mortgages. These considerations include whether or not you have a Canadian bank account and if you have any credit history outside of Canada. Suppose you have an existing Canadian bank account with sufficient funds available for deposit and proof of employment income outside of Canada. In that case, this can help establish a good credit history with Canadian banks and lenders who may otherwise be hesitant about lending money to someone without any previous credit history.Most lenders will look at your credit history and income before determining whether they approve your application. Suppose you are applying for an insured mortgage with Canadian mortgage rates. In that case, lenders will also look at any physical assets like vehicles or boats that you could use as collateral if necessary. Canadian banks will also charge a higher down payment to foreign citizens.The first step is to look for houses or condos within your price range at condopoint.ca and contact an agent that specializes in that area. Read this article about what you should consider when buying your first condo.What are the other costs of buying a house for foreigners?You have to pay income tax on any earnings from employment or investments in Canada, and capital gains tax on any profits made by selling shares or other assets while living abroad. Other expenses that may come with buying a house as a foreigner in Canada include:Paying brokerage fees (if you use an agent).Every year, you must register for taxes and file returns.There are different laws regarding foreigners buying properties in different provinces. Therefore, you will need to hire a real estate lawyer to help you with all the paperwork and transactions.
May, 19, 2021
Buying a home for the first time is quite challenging and thrilling at the same time. You’re excited because you’re making a critical decision in your life. And you’re frightened because of a significant investment you’re about to make.Worry not! I will share some tips for first-time homebuyers to make the entire buying process smooth and easy so you’d plan wisely.Before we go into details, I’ll share some necessary information about the incentives offered to first-time homebuyers:Incentives for First-time HomebuyersLet’s start learning the tips to buy your first home!Tip#1 – Why do You Need to Buy?You may laugh at this tip, but it is a question you must answer before buying your first-ever home.Do you plan to buy a condo for living, rent or sell?All three buying decisions follow a similar process (almost) but have different outcomes.So, if you plan to buy and occupy, you need to answer the below:Affordability - Condos are relatively inexpensive than single-family homes. And they’re usually the first option for first-time buyers.Area - Do you prefer living in the city or town?Location - In downtown areas, you have more access to public transportation, restaurants, malls, etc. But you are surrounded by the hustle and bustle of big cities. Whereas, in the suburbs, you got peace.Type of house - There are many options, including condos, single-family homes, townhouses, etc. Choose the one you could afford and love the most.Type of neighbourhood - For a friendly community, condos are better. And if you prefer staying away from the masses, bungalows suit you.And if you plan to buy and rent, your questionnaire would look like this:How much access amount do you have? Depending on your investment, you need to consider how much you’d afford as of now? Do you have a hefty amount to invest in a single-family home or just enough to buy a condo?Which one is high in demand? Before COVID-19, condos were trendy. But the trend has shifted towards single-family houses. However, experts say that this trend will soon return to its norm.Who would be your potential tenants? Individuals, couples, or immigrants usually occupy condos, whereas families prefer single-family homes.If you plan to buy and sell, you must consider the following:The real estate trends – Understand what the real estate market has to stay for the year (and beyond). What is the country’s average home price and expected yearly increase?Buy one or two? Single-family homes are more expensive than condos. Suppose you could afford to buy one single-family home (let’s assume) in Toronto. In that case, you could alternatively buy two condos and sell them one by one as and when required.Find the best location – The best place is usually larger cities. However, the current trend shows a preference for suburbs over downtown areas.Tip#2 – Managing FinancesLet’s assume that you plan to buy and occupy.So, now that you have decided to buy a principal home instead of investing, you need to start managing your finances:Set a monthly budgetBased on your current monthly income, prepare a monthly budget with a hefty portion set aside as your savings.Your budget will also help you decide if you can afford a condo or a single-family home.Save more for the down payment.The down payment is your significant contribution in the beginning. The law says you need at least 5% of the total house price as a down payment. But 20% is the optimal value. With 20%, you secure yourself from taking mortgage loan insurance.Improve credit scoreThe simple rules to maintaining good credit scores include:Pay bills early.Keep credit balances low.Close unused credit cards.Read more if you plan to buy a condo: 3 Key Elements to Consider When Buying a CondoTip# 3 – Mortgage SelectionTypes of mortgagesThe most common types of mortgage are:Fixed: the interest rates remain the same throughout the mortgage term period.Variable: the interest rates vary over the period.Hybrid: they incorporate the effects of fixed and variable interest rates and keep you safe in case the interest rates go up.Get pre-approved mortgageA pre-approved mortgage doesn’t mean the lender will approve your mortgage, but it helps refine your search for the right one.It helps you in:Deciding what you could afford.Estimating your expected interest rates.How much would you be paying?Tip# 4 – Home ShoppingOne challenging part is down, the other to go – selecting your dream home.Home shopping is best done when you initiate your search on the internet. Technology is taking over, and we can’t deny its importance.Start your research by visiting several realtors’ websites. For instance, if you plan to buy a condo in Toronto, you need to search for condos for sale in Toronto. Refine your search by applying filters based on requirements and budget.You could also read different blogs from these professional real estate agents and learn about the country’s housing market.Once you have a good knowledge of the real estate market, you now need to call the real estate agent near you. These professionals would further advise you on the best option you need to consider.Tip#5 – Home InspectionDon’t miss this tip to save a few hundred (or less) dollars. The professional home inspectors would help you identify the house’s problems and may guide you if you should fix them or look for another home.You might need some renovations or fixes for build-to-occupy homes (or condos). However, for ongoing (pre-construction) projects, you’d rest assured that no renovations or fixes would be required.SummaryThese tips are essential when you plan on buying your first home. So, review all the central elements, and revise the content if something is missing:Why do you need to buy a home? Is it an investment, or you’re purchasing a principal home?Manage your finance - this is always crucial. You should permanently save something from your income so you don’t have to look here and there to make the purchase.Selecting mortgage - I’d highly recommend consulting a professional broker for in-depth knowledge.Home shopping would give you a good idea about the real estate market, the right home option for you, and the future expectations.Home inspection - spend a few dollars to save for more considerable expenses later.
April, 06, 2021
This year, property owners would have to pay a little more tax as the Toronto City Council increased property taxes by 0.7%. It is estimated that the additional tax would amount to $69 for an average home price of $698,801. Toronto City Council votes to increase property taxes by 0.7% for this year. Add in the City Building Levy of 1.5%, and that works out to the average Toronto homeowner paying an additional $69 dollars this year. Momin Qureshi of 680NewsBuying a home for the first time? Read more about the tips for first-time homebuyers.It is said that this is the least increment witnessed during Mayor John Tory's administration. The Mayor marked the year as crucial to the budget because of the pandemic. However, he does not aim to burden businesses and individuals. The Mayor further stated:"This is the most challenging budget year in the city's history due to the impact of the pandemic. We're working hard to find savings while recognizing that individuals and businesses can't afford significant tax increases and should not be asked to absorb them."It is further said that the budget shortfall for the year was around $2.2 billion. The shortfall was covered by a savings of $573 million, which comprised taxes and fees from different resources.According to the City Council, this new rise in property taxes is expected to generate $4,621,345,185 for the city.
March, 16, 2021
For the Greater Toronto Area (GTA), the housing market in February 2021 was rather promising for buyers since their employment remained in safer hands, and they took advantage of low-interest costs.According to GTA REALTORS®, there were 10,970 sales through TRREB’s MLS® System in February 2021, showing a hike of 52.5% compared to 7,193 sales reported in February 2020. Condos proved to be the most prominent type of house, witnessing a sales hike of around 64% compared to the same month of 2020.Although it’s worth mentioning that after COVID-19 hit the country, condos were the least to witness sales activity growth. Single-family homes were the most common types of homes for the rest of the year (Q3 and Q4).The rise in transactions condos have seen in the previous month could signify a stabilizing housing market.Read more: National Housing Market Statistics for January 2021Housing Market - Sales Activity - February 2021”As evident from the image, townhouses saw maximum growth in sales prices of 29% compared to Feb ’20. According to the Canada Mortgage and Housing Corporation (CMHC), “for a purchase price of $500,000 or less, the minimum down payment is 5%. When the purchase price is above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion.” This means the average mortgage on townhouses remained around 7.5%.On the other hand, the condo prices didn’t increase at all. Instead, they fell by around 4% compared to Feb ’20. This is because there has been a low demand for condos compared to other houses.We have a detailed list of properties sold according to the type of home and price range. We’ll be looking into the four major types only.Toronto Housing Market - February 2021Explaining the rising trend in demand from homebuyers, TRREB President Lisa Patel said:It’s clear that the historic demand for housing experienced in the second half of last year has carried forward into the first quarter of this year with some similar themes, including the continued popularity of suburban low-rise properties. It’s also evident that the supply of listings is not keeping up with demand, which could present an even larger problem once population growth picks up following widespread vaccinations later this year and into 2022,Read more: Toronto Housing Market Witnessing a Major Dip in Rental RatesWhat to do When Inventory is Low?We all know that the necessary supply of houses remains low in the market, but not for condos. Condos are abundantly available for buyers. But since we have seen such a massive surge in sales activity in the previous month, it’s more likely that the demand will continue to pace. And there could be a time that the market for condos turns its sides, i.e., from a buyer’s market to the seller’s market.We at Condo Point will love to work with you if you are also looking for a condo. We keep our listings up-to-date. And also, work on pre-construction projects to help you find new inventories with the latest design trends.Data Source: TRREB
February, 10, 2021
Now that you’re free from the hassle of buying your first home, it’s better to dive into the next chapter - property tax. The sooner you learn about it, the wiser your decisions will be. So without further ado, let’s dive in.Learning OutcomesIn this quick guide, you’ll learn:What is Property Tax?How to Calculate Property Tax?What is a Property Assessment?Why is Property Assessment Necessary?Who Assesses Properties?What to do if in Disagreement with the Assessment Consultant?Who is Eligible for Property Tax Exemption?Have you Calculated Your Property Tax?>What is Property Tax?Simply put, property tax is a tax paid on a property.Talking exclusively about residential properties, you’re obliged by law to pay annual property tax on all your houses. In Canada, the property tax is collected by the municipality or regional municipality. This tax is highly based on the market value of a home.For the local governments, it’s a source of income (revenue) to pay for various public services, such as the police department, schools, fire protection, roads, and sewers.Note: property tax rates rely on the type of house you own, the city you live in, and the purpose of the property (for example, principal property, rental property, etc.).How to Calculate Property Tax on Your House?Property tax is calculated by multiplying the current market value of a house (of any type) with the property tax rate of the region or municipality.Property Tax = Market Value of House (MV) x Applicable Property Tax Rate (R)For a house with a net value of $1,000,000 and a property tax rate of 0.6%, the property tax will be: $6,000 ($1,000,000 (MV) x 0.6% (R)).An independent body assesses your home's market value, termed a property assessment (discussed in the next section). At the same time, the taxing authority determines the property tax rates. The rates are widely dependent on the type of property and its purpose.The local municipality will send you a detailed tax statement detailing how your property tax would be distributed between services, like emergency services, library services, roads, traffic, etc.Read more: Property Taxes Surged by 0.7% as the Toronto City Council Approved the Increase.What is a Property Assessment?Property assessment is the process of calculating the current market value of your house. An independent body will assess the market value of your home based on factors including the location (neighbourhood), size of the lot, building type, age, the building materials used, and any updates or additions to the property. Based on this fair value, you will then calculate your property tax at the preset rate.Keep in mind that a property assessment is different from a home inspection. The latter is the process of examining the physical structure and systems of a house.Why do we Need Property Assessment?Every home has a different value. Even the house next to yours would have another value. Your neighbours might have the same structure, lot size, and age, but their homes may have different values. It could be because of some renovations they had done which you don’t require. These little things (as already mentioned above) matter. And so, it is essential to determine the current price of every property when paying property taxes.Who Assesses Properties?Property assessment is carried out by the municipalities, the provincial government, or independent organizations commissioned by provinces or municipalities.What to do if in Disagreement with the Assessment Consultant?Sometimes you might disagree with the assessment report. The consultant could have assessed it as higher or lower than its original market value. If that happens, you can appeal for a re-assessment. Appealing for a re-assessment could give a differing market value, which would reduce or increase your property tax for the year.Who is Eligible for Property Tax Exemption?Some properties get an exemption from annual property taxes. The properties may include religious buildings, low-income households, or federal/provincial properties.Moreover, there could be different rules for principal residence exemption and secondary property. Local authorities set rules for property taxes. It’s best practice to regularly review the recent updates by the relevant authorities.Have you Calculated Your Property Tax?I hope you now have a good understanding of property taxes in Canada. And it would be easy for you to calculate and understand property taxes payable on your house. If you have concerns about property tax in your area, you may reach out to us. You can also use this property tax calculator to calculate property taxes for the year.Image credits: Nattanan Kanchanaprat