Lately I’ve been getting a lot of questions about things to look out for when buying a home. In this post, I’ll talk about condominiums, since I have been hearing some horror stories of how people aren’t made aware of the financial health of the building when they purchase, or their needs aren’t properly understood by their Realtor to find a building that is a good fit.
Let me get something straight – not all buildings are the same. Every building is very much unique, even if it may have the same builder or have the same property management company as another building. There are a lot of considerations when searching for your perfect home, not only within each individual unit, but also when deciding if a building is right for you. Knowing what is expected of a building’s residents ahead of time can help eliminate surprises and disappointments down the road.
Luckily, there is a document called a Status Certificate which outlines the financial health of a building, one measure being the Reserve Fund. It also includes a copy of the condominium bylaws, where condo owners and renters are expected to abide by. These rules can dictate what, if any, pets are allowed in the building or what items residents are allowed to place on their balconies, such as barbecues.
Make sure you speak with a prudent Realtor and trustworthy experts before making a purchase. Contact me today for further information and advice.
Ashley Lo | Real Estate Advice, Real Estate Solutions
E Condos – Yonge/Eglinton VIP Access to prices & floorplans
E Condos is located in one of Toronto’s most sought after locations – Yonge & Eglinton. This mid-town condominium project will have direct access to subway and with the expansion of the much-anticipated Eglinton Crosstown below grade LRT, there will soon be another added convenience to the east-west transit link. This project is just steps to the Yonge / Eglinton Centre, an energetic entertainment/shopping complex with movie theatres, bookstore, supermarket and shops.
Contact me today for VIP access to prices & floorplans of this highly anticipated project!
Development Name: E Condos
Developers: Bazis Inc., Metropia and RioCan
Address: 8 Eglinton Ave E, Toronto, M4R 2H1
Estimated Completion: 2017
Number of Buildings: 2
Storeys: 64, 44
Architect: R. Varacalli Architect
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Buying Pre-Construction Condos
When looking to purchase a condominium, there are essentially two choices – resale or pre-construction. There are advantages and disadvantages to both, however when buying new, there are some details you should be aware of that differ from a typical resale.
Deposit Structure:
Unlike When buying resale where you could have a down payment as low as 5%, buying directly from the builder requires a minimum down payment of typically 20-25%. This may seem like a lot, especially for first time buyers, but this may be an advantage as there will not be additional CMHC loan premium insurance costs and this will reduce your monthly mortgage payment. In addition, the deposit is paid in installments, so it does allow for some time to save. A payment schedule could look like this:
TIP: Your Realtor may be able to negotiate a better deposit structure for you.
10-day Cooling Period
By-law in Ontario, anyone who buys a new property from a builder has a 10-day cooling off period, during which they can rescind their offer with no penalty. This also allows time to do 2 things: 1) have your Agreement of Purchase and Sale reviewed by a real estate lawyer, and 2) obtain a mortgage approval for your purchase to satisfy the builder’s requirements.
TIP: Sometimes lenders work with specific builders to offer special rates and incentives.
Closing Costs
When you buy pre-construction, there are some additional closing costs that you do not incur when buying resale. Estimates are hard to make because they vary by developer, but averages are outlined below:
TIP: some of these closing costs can be capped at a maximum figure so it’s important to have Realtor and a lawyer who are experienced in pre-construction condos on your side to help you negotiate these terms with the builder.
Occupancy Period
When buying new, there is usually a short period of time between when occupy the condo and when you actually receive title to your condo, known as the occupancy period. During this time, you must pay the developer for the right to occupy the suite. The amount of the occupancy fees is more or less equivalent to interest on the amount outstanding on the purchase price + monthly property taxes + condo fees. You will only pay occupancy fees until your final closing, where you begin paying for your mortgage, but you will never have to pay both at the same time.
Learn more about Occupancy & Interim Closing
TIP: to minimize your occupancy fees, buy as high up into the building as possible. Buildings take occupancy from the ground up, therefore the higher your suite is in the building, the shorter your occupancy period will be.
Final Closing
Final closing when the building is finally registered and your occupancy period is over. This is when your mortgage payments begin and you officially own your unit. You can choose to put down additional funds on your condo if you want to have more than the typical 20-25% that most builders require.
TIP: remember that you can shop around for the best mortgage rate right up until final closing, so even if you obtained an approval during your 10-day cooling off period. You can even choose a different lender if you like. That is, your initial pre-approval will satisfy your credit worthiness to the builder, but you can always get another pre-approval from an alternative lender up until you close.
Ashley Lo | Real Estate Advice, Real Estate Solutions
Why it’s still a good time to buy
A couple of weeks ago, I did a home buyer seminar. I got a lot of good feedback so I decided, why not share some of the key points?
There’s no time like the present! If you have any questions, feel free to Contact me.
Ashley Lo | Real Estate Advice, Real Estate Solutions
The Canadian banking system is unlike the States
A lot of people come to me and talk about how they’re worried about the subprime issue in the States and the same thing will happen to us South of the border. However, the fact is that Canada has weathered through the storm extremely well and none of the banks failed or required any sort of bailout, while in the US, about 200 banks have failed since the beginning of the recession in 2008.
The Canadian banking system is actually much more prudent and resiliant compared to the States. Some differences include:
Other significant differences are illustrated below is an infographic from RateHub.
PRIORITY VIP ACCESS TO CARNABY
NEW LOFT STYLE CONDO COMING TO QUEEN WEST – PRE REGISTER NOW AND SAVE
THE CARNABY AT QUEEN ST W & GLADSTONE
Streetcar Developments is proud to present their latest real estate offering on Queen St. W, on the corner of Gladstone and Queen St. The Carnaby’s eclectic, high-energy lifestyle perfectly exemplifies Streetcar’s motto: Rethinking. Urban Living. The loft residence will comprise 20 storeys of one bedroom, one bedroom plus den and two bedroom suites starting in the low $200’s.
THE CARNABY: WHERE MODERN LIFE MEETS VINTAGE INSPIRATION
Contact me to gain priority access.
VIP PRICING FOR THE MASSEY TOWER
Contact Me for VIP PRCING AND INCENTIVES!!!
Cash back for Clients
$2,000 for Jr. 1 bdrm
$3,000 for 1 bdrm
$4,000 for 1+den and Jr. 2 bdrm
$5,000 for 2 bdrm and 3 bdrm
Assignment fees reduced to $500 (regular $4,500!!)
Superb deposit structure allows 20% in 18 months!
$5,000 on signing with balance of 5% in 30 days
5% in 90 days
5% in 180 270 days
5% in 365 540 days
5% on Occupancy
PARKING reduced to $60,000 (regular $69,000) only available for suites 800 sqft+
Occupancy anticipted November 2016
FEATURES, FINISHES and AMENITIES
The features and finishes are what youexpect for a building of this calibre and luxury. They include:
Fitness and Weight rooms on 9th– 10th flrs
Steam Room
Piano Bar / Cocktail Lounge
Party Room with catering kitchen and diningroom
10th Flr roof garden
24-hour concierge
Guest Suites
SUITE finishes include:
~9’ smooth ceilings
Engineered Laminate flooring throughout
Euro-style appliances with 4-burner glasscook-top, integrated fridge, dishwasher and free-standing microwave oven,stacked washer/dryer
Granite/composite stone countertops
Understanding Condo Occupancy and Registration
When buying a pre-construction condo, it can be quite confusing as it is more complicated than a regular resale condominium. There are a couple of different phases that the building must go through before final closing. A ‘condominium’ is not technically formed until it completes and passes all approvals with the Land Registry Office. Only when the building is finally ‘registered’ that the title of your unit will be transferred you.
Once the interior of the building is complete, a number of inspections and approvals also occur at this time by firstly the municipal council, then the regional planning department, and on to the Minister of Consumer and Commercial Affairs. These checks and balances are in place to ensure that the building upholds what is stipulated in the draft plan and Condominium Declaration. Once all parties agree that all the requirements have been met, the registration is complete.
When approvals are complete on a municipal level, an ‘occupancy certificate’ is issued. Owners will have a chance to do a PDI (Pre-Delivery Inspection) in the unit and report any deficiencies. Residents will begin occupying the units in phases and depending on your floor, this could take anywhere from 3 months to a year. This is known as ‘interim occupancy’, the period between the occupancy date and when the condominium is registered.
Since the vendor still owns suites during the occupancy period, you will be required to start paying ‘occupancy fees’ which is the interest on the balance owed to the builder (based on a one-year Bank of Canada mortgage rate), your estimated share of maintenance, as well as annual taxes.
There are also interim closing costs to consider including outstanding deposit amounts plus adjustments, occupancy fees, any upgrades, and enrollment of your suite to with TARION Warranty. You must have your homeowner’s insurance in place and arrange for your utility hook-ups at this time as well. Since you cannot obtain a mortgage until you receive title and it is difficult to predict the length of the occupancy period, you must ensure that you have enough savings preceeding the ‘final closing’.
A couple of months before the closing, you will be notified to secure your mortgage as rules and rates may have changed. When the building finally registers, it will take a couple of weeks for a final closing date, in which the balance of your purchase price will be due (where your mortgage kicks in!). Additional closing costs will also include but are not limited to, the land transfer tax, development charges, and legal fees.
Purchasing a new condominium is very exciting and has many benefits including increased value of your unit even before you take possession! However, it is important to understand the entire process very clearly to ensure a smooth transaction. Make sure you obtain a knowledgeable and trustworthy real estate agent to help guide your through this process.
Contact me if you have questions regarding real estate!
Ashley Lo | Real Estate Advice, Real Estate Solutions
Why you should be a homeowner or landlord
Are you currently renting? We’ll show you how feasible it is to buy your own home, and why you may be better off purchasing instead!
Do you currently have some money saved and are looking to invest? We’ll show you why you should become a landlord!
Real estate is a scary investment! But we’re here to ease your fears. Whether you’re currently looking to purchase your first home or looking to invest, we will be there every step of the way to guide you and answer all of your questions!
Stay tuned for seminar details!! Contact me for more information or to be notified of upcoming events.
17 Things to Know About Closing Your House Deal
Source: http://www.moneyville.ca/article/1041152–17-things-to-know-about-closing-your-house-dea
Closing day in a house deal is a milestone for both the seller and the buyer. To make it go smoothly, it is very important that both buyer and the seller are properly prepared.
Here’s a checklist if you are selling:
- Make sure you have given your lawyer a copy of any deed, mortgage, survey and current property tax bills. You should have received these from your lawyer when you bought the house.
- Do not cancel your household insurance policy until you have heard that the deal has closed. Also, if you are moving out more than 30 days before closing, you need to notify your insurer that the home will be vacant. This way, you will still be covered if anything happens in the home up to the closing date.
- You will visit your lawyer a few days before closing to sign the papers. Make sure you give one set of keys to give to your lawyer, which will be passed on to buyer’s lawyer at closing.
- If you are a non-resident of Canada, you must obtain a certificate from Canada Revenue Agency regarding any income tax payable, or else the buyer will be holding back 25 per cent of the sale price until you do get it. Non-resident means you have not lived in Canada at least 183 total days in the past year before the closing day. This can take up to two months so let your lawyer know right away so that the proper application can be filed.
- Have all your utility meters read on the day of closing. That way you will only be responsible for your share of utilities. Also notify your cable and telephone provider so that your service can be disconnected. If your house is heated with an oil tank, you need to make arrangements to fill the tank on the closing day.
- Cancel any pre-authorized or postdated cheques at your bank, to make sure you don’t pay for anything after closing.
- As you have to be out of the property when it closes, arrange to move out before 5 p.m.
Here’s a checklist if you are buying:
- Schedule your pre-closing visit shortly before closing, so that you can conduct your final inspection to make sure that the home is in the same condition as when you signed the offer.
- Arrange moving time late in the afternoon, as that is likely when the seller will have moved out. If it is a condominium, and you need use of the elevator, contact the management company well in advance of closing to reserve the elevator.
- Fire insurance must be arranged for the full replacement cost of the home. If it is a condominium, you need a policy to protect your contents and liability. Do not leave this to the last minute.
- If you are arranging a mortgage for less than 20 per cent down, the bank will be deducting certain costs, such as mortgage insurance, appraisal fees and HST. Find out early what all these deductions will be, as you will have to come up with any difference needed to close your deal. Make sure you have provided the lender with all required proof of income, or down payment well in advance so that it does not delay the money.
- Your lawyer will be receiving a statement of adjustments just before closing. This could add to your closing costs if the seller has prepaid some expenses, especially property taxes. Find out exactly what this is as it can add up to 0.5 per cent more to what you may owe.
- You will need to deliver, at least 2 days before closing, the balance of money needed for your lawyer to close the deal, by certified cheque, money order or bank draft.
- Let the lawyer know how you will be taking title to the property. If you take as joint tenants and one of you passes away, the other party immediately becomes the owner. If you take as tenants in common, you can transfer your interest to a beneficiary under your will.
- Tell your lawyer to order title insurance for you. This will protect your property against title defects, survey issues, work orders and frauds while you own the property.
- Arrange for your cable and telephone providers to install service on the day of closing or immediately after closing.
- Contact the utility companies, to make sure they read the meters on closing, so that you are only responsible for charges after you move in.
Being prepared in advance will ease the stress of closing day and hopefully begin the creation of happy memories for you and your family.