As of July 1st, electronic signatures are now legal on all agreements of purchase and sale and agreements to lease. There are already free apps for signing that lets anyone sign on the bottom line. So what’s the problem? Anyone can sign anywhere, and that is an issue that the Ontario Government has been wrestling with for the past 10 years. The solution is cloud based software. A secure site limits access. It identifies the time in which the signature is affixed. That’s critical on irrevocable dates on all agreements and you’re IP address is also tracked for added security. Plus clients don’t have to download an app they use only once. Professional agents dealing in half a million deals or more will go for the cloud based route. Part time agents will use the free app. While electronic signatures are convenient for everyone, people still need to protect ...
June 25, 2015
June-July 2015 Market Report
June 24, 2015
Number of Toronto's New Listings by Month This chart plots monthly MLS new listings for the current year and the previous three years. The recurring seasonal trend can be examined along with comparison to previous years for each month. Sales Summary The real estate market continued its unrelenting push to new price and sales levels. For May, the Toronto Real Estate Board reported sales of 11,700 units – up 6.3% over May of 2014. At the same time, ‘active listings’ declined by 10% over the same time last year. The end result is a continuous pressure on prices; and nowhere more evident than in the detached market house market in Toronto where sales actually declined 6% for the month while average house prices climbed 18% over last year to $1.1 million. While this new average price is attention grabbing, it is irrelevant in a market such as Toronto. Most major cities in the ...
Bill 55 and What it Means for Buyers
June 18, 2015
Bill 55 is coming to Ontario on July 1st, 2015. Bill 55 states that when a REALTOR® is representing a seller, they cannot indicate that they have received an offer unless they have actually received a valid, signed, written offer. What does that mean for Consumers? The Bill attempts to eliminate phantom offers. Phantom offers occur when the Listing Agent tells the Buyer’s Agent that they are up against one or several offers. The buyer, through his agent, then decides to bid more to get the property. When it’s all done you’re left wondering if there was really more than your offer on the table. How do you find out? You contact RECO, that’s the Real Estate Council of Ontario and they will tell you how many offers and from which Brokerages. If you find out you’ve been lied to, you can then sue the listing agent for the extra ...
The Value in Stackable Condo Townhomes
June 17, 2015
The pricing on the freehold housing market in Toronto continues to increase. Stand-alone homes in the city went for an average of $1,040,018 in February 2015, up 8.9 per cent from the same month a year earlier. We also see the construction of new single family detached homes continue to decrease. This year there will be 7,700 starts and it is predicted only 7000 in 2016 in the GTA. A decade ago we saw over 20,000 single family detached housing starts. This is due to the increasing cost for land, the lack of serviced lots, and other land policies like the "Green Belt" In contrast the average price of a condo is currently $448,760. The issue with condos for families is that they are often not large enough. There are a number of reasons for this: The typical high-rise takes 5 years to build from the start of sales to the ...
Toronto's Million Dollar Houses
June 8, 2015
Toronto's Million Dollar Homes (And What it Means) It's official, the average price of a detached house in the City of Toronto is now over One million dollars! Is this big news? For people who think we have a real estate bubble it is. However, for those who are in the real estate market every day, it's no big deal. The reality is there is a limited supply of detached housing in Toronto. The supply is shrinking everyday and everyone wants to live downtown. While 2015 will be a record year for sales in the GTA, house sales in Toronto will actually be lower than in the past. This is just because there is very little supply. Most cities around the world don't have detached housing downtown. The best you can find is row housing. In Manhattan, you can expect to pay over 5 million dollars for a brownstone. In London, that ...
The Mutual Release, What You Should Know
May 27, 2015
This week we wanted to take a look at the Mutual Release. A Mutual Release is the piece of paper you need to sign when a deal that has been agreed to will not be closing due to the buyer or the seller not satisfying a condition. Sometimes buyers think “I don’t need to sign a release because I never gave a deposit”. We can't stress enough how wrong this is. You need to read your agreement. If your agreement does not say that the failure to provide a deposit makes the offer null and void, then you are still liable for the agreement you signed. When you sign a Mutual Release it does two things; First, it says, who gets the deposit, If there is one. Usually, the deposit goes back to the buyer but it doesn’t have to. Secondly and more importantly, all parties, including the realtors agree that the agreement is ...
May-June 2015 Market Report
May 25, 2015
Condo Apartment Price by Bedroom Type (Downtown Core) This chart plots the average and median price of condo sales in Toronto's Downtown Core (C01, C08) from the First Quarter of 2015 Sales Summary Sales in April on the Toronto Real Estate Board were the biggest ever for an April. It felt like a May sales month. April started slowly and we were only slightly ahead of last year in the first two weeks, but sales exploded over the second half of the month and produced a 17% increase over last April. This increase was fairly consistent across all property types and areas. As we keep saying, the lack of listings is actually slowing the market in terms of sales. While ‘new’ listings were up by 5% for April, ‘active’ listings are 10% lower than for the same period last year. Currently we are only carrying 1.5 months of inventory at current sales levels. ...
How Much Do Realtors Really Make?
May 20, 2015
Everyone wants to be a Real Estate Agent today. Why? When people think Real Estate they think big commissions and easy work. Well, last year in the Toronto Real Estate Board they had 42,000 agents. Did you know that 25,000 of them did two sale ends or less in 2014? Now, each sale transaction has two sides, a Listing Agent and a Selling Agent and they split the commission on the property. Sometimes an agent will be on both sides, meaning they get the full commission. So yes, there are some agents who make some money, but most make no money after expenses. They are part timers or at best, a do-it-yourselfer. So what's the message for sellers and buyers? Your first question should not be "What is your commission fee?" but "How many properties have you sold last year" Who do you want working for you? So what's the message for ...
Price of Condos in Toronto by Neighbourhood
May 14, 2015
Where were the most expensive condos sold this past month? We took a look at the average price of condo sales for April and broke it down by area. See how much condos sold for in your area this ...
Buying Pre-Construction vs. Resale Condos-Part 2
May 13, 2015
Last week we talked about buying pre-construction vs. resale condos for Investors. The Key was to never pay more than 25 dollars per square foot as a premium for pre-construction over resale. Ideally you want to pay zero over market price. This week we want to discuss how much down payment you need. Our belief is to calculate a 20% down payment with today’s rents to create a break even cash flow position. Why break even? As an investor, you never want to feed the fire every month. If you do, the result is you’ll end up having to sell the property at the wrong time. Some might question why you should break even. Remember, with today’s low mortgage rates, more than half the mortgage payment is going to reduce the principal of the mortgage. If you also assume a 2% price appreciation on your property then you’re total returns on your equity ...