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All posts for the month December, 2015

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To some of you  homeowners thinking of getting in the real estate market next year one of the most important decisions you’ll make when selling your home is setting the listing price. That can be tricky. After all, if you price your property too low, you leave money on the table — perhaps thousands of dollars. On the other hand, if you price your home too high, many buyers won’t even bother to see it, believing it is too expensive.

Even with that reality, there are some sellers who contemplate setting a high listing price in the hopes of a windfall. They want some unsuspecting buyer to fall in love with the home and buy it — even though it’s overpriced.

That rarely, if ever, happens.

Instead, the listing often languishes on the market because its listing price is conspicuously much higher than its market value.

Think about it. If two similar homes, side-by-side, are for sale, and one is priced $40,000 higher than the other, wouldn’t you wonder what was going on? That’s exactly what the market thinks. “Why is that home priced so high?”

Of course, many buyers, who might otherwise be interested in the property, won’t even consider seeing it, simply because it’s outside their price range.

It gets worse. When an overpriced home sits on the market with no offers for several weeks, the price will often need to be adjusted down. That helps the situation a little. However, you’ve lost the excitement created by a “new listing.” Yours is now an old listing struggling to get attention.

There’s a better way…

Setting your list price at or near the market value is much more likely to generate interest from qualified buyers and maximize how much you make on your home.

That market value may even be higher than you think!

Interested in finding out how much? Call me today and I’ll show you how to capitalize the upswing 2016 spring market.

Happy Holidays!

Alex Macale www.alexmacale.ca

New Constructions Homes

What is a Tarion warranty? Tarion, formerly known as the Ontario New Home Warranty Program, was created by the Government of Ontario in 1976 to administer the Ontario New Home Warranties Plan Act.[1] Its primary purpose is to protect consumers of new homes by ensuring that builders abide the provincial legislation. It is financed entirely by builder registration, renewal and home enrollment fees.

TARIONS One, Two and Seven Year Warranties

One Year Warranty

  • Requires a home is constructed in a workman-like manner and free from defects in material;
  • Protects against unauthorized substitutions
  • Requires the home to be fit for habitation;
  • Protects against Ontario Building Code violations; and
  • Applies for one year, beginning on the home’s date of possession even if the home is sold.

Two Year Warranty

  • Protects against water penetration through the basement or foundation walls;
  • Protects against defects in materials that affect windows, doors and caulking and defects in work that results in water penetration
    into the building envelope;
  • Covers defects in work or materials in the electrical, plumbing and heating delivery and distribution systems;
  • Covers defects in work or materials that result in the detachment, displacement or deterioration of exterior cladding (such as
    brickwork, aluminum or vinyl siding);
  • Protects against violations of the Ontario Building Code that affect health and safety; and
  • Applies for two years, beginning on the home’s date of possession.

Seven Year Warranty

Your home’s seven year warranty covers major structural defects (MSD) and begins on the date you take possession of the home and ends on the day before the seventh anniversary of that date.

For example, if your home’s date of possession is October 23, 2005, the seven year MSD warranty begins on October 23, 2005 and remains in effect until and including October 22, 2012.

A major structural defect is defined in the The Ontario New Home Warranties Plan Act as:

In respect of a post June 30, 2012 home, any defect in work or materials in respect of a building, including a crack, distortion or displacement of a structural load-bearing element of the building, if it,

  • (i) results in failure of a structural load-bearing element of the building,
  • (ii) materially and adversely affects the ability of a structural load-bearing element of the building to carry, bear and resist applicable structural loads for the usual and ordinary service life of the element, or
  • (iii) materially and adversely affects the use of a significant portion of the building for usual and ordinary purposes of a residential dwelling and having regard to any specific use provisions set out in the purchase agreement for the home

The seven year MSD warranty includes significant damage due to soil movement*, major cracks in basement walls, collapse or serious distortion of joints or roof structure and chemical failure of materials.

In addition to the general exclusions, the seven year MSD warranty specifically excludes: dampness not arising from failure of a load-bearing portion of the building; damage to drains or services; and damage to finishes.

Common Elements

For most condominium projects, warranty coverage also includes the shared areas of the building, referred to as Common Elements.

Limitations and Exclusions

Please consult Tarion’s Construction Performance Guidelines if you are in doubt about whether an item is covered. Click Here to see the exclusions.

Pre Constructions

So you are a first time home buyer and confuse about whether you should buy a brand new home straight from the builder or buy a resale home but you ask yourself a question where you can save and which one is more economical for your situation.

The answer is it depends on your present and current situations. A sales person working for a builder will obviously will lean towards a new constructions homes whereas a real estate agent will defend a resale homes. Either way they are correct depending on your needs and wants. So here are the pros and cons the advantages and disadvantages.

Pre-Constructions Homes:

Advantages (Pros)

  • It’s brand new and has that brand new aroma smell
  • It’s a turnkey move in Home where you don’t need to do anything
  • You have the ability to choose and decide your own finishes and layouts
  • It comes with Tarion warranty in Ontario

Disadvantages (Cons)

  • You are purchasing unfinished products that you cannot see
  • Usually the contracts are in favor of the builder. As an example there are usually a clause that states that a builder can augment or deviate from the original floor plan or design in order to preserved the structural integrity of a building
  • Builder sometimes can get delayed on turning over your property
  • You pay HST to the builder on top of the purchase price
  • There are usually hidden costs associated to the closing such as installation of driveway, fence, grass, electrical or hydro lines etc. depending on the builders
  • Usually builders will entice you with lower price but anything upgrades such as the ones you see in a model homes will come in a premium price
  • When a building is newly erected and depending on the soil and developer, it is very hard to predict when the soil will settled and when the cracks on the wall will come. Also, it is hard to gauge or see the elevation of the soil when there are construction happening around you.
  • New development sometimes are located far from everything from school, transportation, grocery etc. unless it is one of those pockets located within the city
  • Nowadays, a developer price a pre-construction home based on future market anticipated value which is a lot higher or is in line with the rates of a developed neighborhood so the cost savings is almost non existent
  • There are no historical re-sales figures to compare with

Re-Sale Homes:

Advantages (Pros)

  • When you purchase a resale home you are usually being accompanied and represented by a real estate agent that is trained and familiar with contracts working on your side who will represent your best interest in the transaction
  • You can negotiate your own terms and condition compare to just taking what comes in the package
  • The closing cost are define, lawyers fee and home inspector are the common ones
  • Usually older homes such as bungalow in Toronto comes with far bigger lots than the new homes and they built to last
  • If you are a first time home buyer and tight on the budget you can come in with 5% down payment for the first $500K and 10% on the remaining. Compare to builder you may need to automatically put down upfront a 10% – 20% down payment right of the bat
  • If you are first time home buyer you can save on rent by closing early as you are be able to choose your closing date suitable to you from 30, 60 or 90 days; you don’t need to wait for the construction to finished saving you on rent
  • There are no HST for resale homes and no other additional hidden cost everything is being handled by a lawyer on closing
  • You pay for what you see and get
  • There are usually historical sales figures as a comparable to compare from apples to apples and most of the time re-sale homes comes with a lot of upgrades already done by previous owner compare to what you can get from the new builders
  • Usually in a new development areas they are prone to high re-sale turnover because most people that buy pre-constructions homes are investors looking to flip, somebody in financial or family distress looking to get out but already paid all the closing cost associated with the builder – that’s an extra huge savings right there
  • Re-sale homes has a far more appreciation in value. Why? Because in real estate the land or the location are the ones that appreciates in value compare to building that depreciates in value. In Toronto a developed land (location) appreciates in value faster than buildings which translates to lower property tax. This is why an older existing 35 year old home in Toronto is 2 – 3 times higher in value compare to neighboring city that has more new development like Ajax

Disadvantages (Cons)

  • Older homes may require tender loving care from time to time and may need to be maintained and improve from time to time depending on the property
  • You buy an existing upgrades from the previous owner that may not be suitable to your own taste

Other related story published by The Globe and Mail Click Here

Simple Ways To Decrease Your Utility Cost

Many homeowners think there’s not much they can do about telephone, heating, water and other utility expenses. Sure, you may grumble about a high heating bill one month, but what can you do about it?

Turns out, you can do plenty. There are several ways to reduce monthly utility costs that can save you tens or even hundreds of dollars. For example:

  • Shop around for a better phone plan. Then contact your phone company. They might match the rates.
  • Turn down the thermostat on your water heater. You likely don’t need tap water to be that hot.
  • Clean the screen on your outside air conditioning unit regularly. (Gently with the water hose.) Dirt and leaves can build up on it, reducing the unit’s efficiency.
  • Leverage the sun. Open curtains in the winter to gain heat. Block direct sunlight in summer to keep the cool air inside.
  • Scrutinize your bill. There may be extras you’re paying for that you don’t need.
  • Play with the thermostat. Experiment with setting the temperature a couple of degrees lower. You might not notice any difference.

It’s worth paying attention to your utility costs. Just a few smart moves can save you some serious money during the holidays.

Home

First time home Buyers. Here are the recap of a new mortgage rules to take effect next year Feb. 15, 2016.

Example:

Effective February 15, 2016, the minimum down payment for new insured mortgages will increase from 5 per cent to 10 per cent for the portion of the house price above $500,000. The 5 per cent minimum down payment for properties up to $500,000 remains unchanged.

For Example: A $600,000 home now require $35,000 down payment

5% for the first $500,000 = $25,000
10% for remaining $100,000 = $10,000

For more information about this new rules you can read it on The Glob and Mail. Click Here