Monthly Archives: August 2017

The Toronto Real Estate Market

The Toronto real estate market continues its seemingly unstoppable pace. 8,200 house or condominium trades took place in September, making it the highest sales-volume-September on record. The Toronto Real Estate Board has predicted that a total of 100,000 sales to take place in 2015. If that number is achieved, it too will be a record.

We still do not have a balanced market. Sellers are few and Buyers are many. The City of Toronto has only 2.2 months of inventory currently listed. This supply represents about half the number of listings needed for a balanced market, and is down 7.3% from last year. Buyers still find themselves in competition for the homes they want

For detached houses in the Toronto Real Estate Board’s districts of Lawrence Park and Forest Hill North, September’s benchmark price was over $1.3 million. That represents an 11% gain year over year. Benchmark prices in the districts of North Toronto and Forest Hill South rose 7% to over $1.2 million. The districts of Casa Loma, Deer Park and The Annex gained slightly at 2% with a benchmark of close to $1.4 million. The district of Rosedale and Moore Park had a benchmark price of nearly $1.7 million – another 2% gain.

Every year, Toronto gains approximately 100,000 citizens, many of whom have chosen to make this city their home. Other new households are created by divorce, by young adults starting out on their own, or by couples becoming families. There is constant pressure for the city to create new places to live. However, Toronto’s size is limited by the Greenbelt and the lake. The demand for quality homes is greater than the supply.

As long as the demand for houses or condominiums is greater than supply, prices will be strong. As long as interest rates remain low, Buyers will be able to borrow money inexpensively. It is hard to imagine a savings program or financial instrument that will give a better rate of return than real estate

The Right Resale Value for Your Property

Hence, it is worthwhile to put in a little bit of effort that will make your property look a lot more attractive to potential buyers. Here are some expert tips that will help enhance the resale value of your home by tens of thousands if not few lakhs.

Pep up the exteriors

As soon as a home is bought, homeowners spend time, money and energy in designing the interiors to their whims and fancy. What they miss to see is that, the exteriors play a major role in creating an impression in the minds of a potential buyer than the interior. It is the exterior that is first seen before they take a walkthrough of the interiors. Hence, pay attention to pepping up your exteriors in equal measure to the interiors to get a better resale value.

Creating additional space

An extra room is fine, but what if it serves no purpose? Moreover, what if that extra room does not fit into the ergonomic layout of the home properly? Instead, think of ways to increase the space inside the home. There are plenty of architect firms with interior designers and vasthu consultants who help altering the physical dimensions of any home to make it appear spacious and airy. A spacious home will fetch a higher resale price than one which boasts about a tiny and ill-fitting extra room.

Setting right minor repairs

Like drops of water that collect together to form a messy puddle, a number of unattended minor repairs can wash away a significant portion of your property’s resale value. A prospective buyer will be more interested in knowing the present physical condition and the expected longevity of the house before making a final decision.

The scene of leaking walls, falling patches and plumbing problems can definitely take a hit on the property’s sale worthiness. Hence, make sure all minor repairs are attended to on a regular basis.

Keep a cushion for price negotiation

Indians are ruthless negotiators. We love to bargain for the best deal in every transaction. Especially when it is about buying a new home expect the negotiation process to be fiercer than what you can imagine. Hence, make sure you price your property with some cushion for reduction during the negotiation process.

Real Estate Collapse

The Next Real Estate Collapse?

Largely ignored in the holiday rush was the news that luxury home prices fell 2.2% during the third quarter – the first such decline in nearly four years.

According to the Redfin real estate brokerage, wealthy clients are stepping back out of fear from stock market volatility, and are worrying about tying up too much of their wealth in non-liquid assets, especially if another real estate collapse appears.

The decline is even more notable because luxury homes serve as something of a bellwether for the rest of the “non-lux” real estate market (which still rose just under 4% for the same period).

The original housing-bubble stocks of a decade ago might offer a clue on the timing. Shares of Toll Brothers (NYSE: TOL), the nation’s largest builder of luxury homes, peaked in July of 2005 before starting their precipitous decline. But the stock prices of builders focused on the low- and mid-priced ends of the market stayed strong – at least at first. For instance, the shares of Lennar Brothers (NYSE: LEN), one of the biggest homebuilders in the country, didn’t crack until April of 2006.

Interestingly, Toll Brothers’ shares today are down nearly 25% from their post-recovery highs (to the lowest price in 13 months), while Lennar shares are just starting to break down.

California Dreamin’?

Chinese buyers have been key players in the run-up of America’s luxury home prices. And their influence is felt most strongly in California and the San Francisco Bay area, the hottest of America’s real estate markets this go-round.

Not coincidentally, it appears Chinese buyers may now be pulling back there as well, possibly ushering in the next real estate collapse. Home sales in California fell 20.5% in November – more than twice the monthly average (it’s traditionally a weak month prior to the end of year holidays). October’s home sales also fell a little over 5%, while dropping 1.5% in September.

For now, the real estate community appears to be dismissing the collapse of sales as the result of changes in new loan disclosure rules by the Consumer Financial Protection Bureau, and what is usually a softer seasonal period for home sales anyway.

I don’t blame them. As a media consultant once told me back in my reporting days, “Never let too many facts get in the way of a good story.”

But the “Chinese buyers” real estate gravy train is grinding to a halt fast. Last summer’s 40% decline in the Shanghai Composite Index should have been the first clue. The second was the relentlessly positive “it’s just temporary” narrative spun by so many brokers and property developers who don’t want the ride to end. The third clue may be upon us here at the start of 2016 as the Shanghai index lurches lower yet again.


Home Appraisals

A home appraisal is an opinion on value by a qualified, unbiased third party. Mortgage lenders require an appraisal to be completed when you are refinancing your mortgage. An appraisal is also completed in a transaction when someone is buying a home to make sure they have not over paid for it.

Mortgage Lenders require appraisal to ensure that homeowners are not over paying for a property because if the borrower stops paying for the mortgage the lender will take action to remove the borrower from the home and sell it to recoup their money, this is why it is important for the home to be worth more than the money loaned. In essence, a home appraisal is a lawyer of protection for the mortgage lender.

The Appraisal Process and How Appraisal Values Are Determined

These are the main factors that influence your home’s appraisal value: current market trends which are reflected in the comparable properties the appraiser selects, the house’s features,, square footage, number rooms/bedrooms & bathrooms, condition, is the property considered up to date, landscaping and exterior condition and parking (garage). The appraiser will do an interior and exterior inspection for the above noted factors and will also make note of any deferred maintenance which will be included in the report for the lender.

The appraiser will complete his report on a standard report form that is required by their appraisal jurisdiction. The information that has to be included in an appraisal report will not vary much from Canada to the United States.

A standard report includes the following: comparable sales, a street map, building sketch, square footage, photos of the front, back and street scene of the home, photographs of each comparable property used; a map showing the location of the comparables in relation to the subject property, plot map, description of intended users of the appraisal report, photo and description of each room in the house.

The cost of a residential appraisal report ranges from $250-$500 and the homeowner is typically responsible for paying the appraiser..

What Homebuyers Need to Know

When you’re buying a home an appraisal could potentially sink your deal. If you make an offer to purchase a house, towards the end of the home buying process your mortgage lender will require that the home being purchased be appraised. If the home appraises for less than your offer to purchase the lender will not provide the loan, however, this could be good for a buyer as well because you may be able to negotiate to lower purchase price but very often at the point of the home appraisal in the buying process an agreement of purchase and sale is already in place.. If a bad appraisal is standing between you and your home purchase, look into getting a second opinion via a second appraisal. Appraisers are not perfect and it is possible for them to make mistakes.

What Home Sellers Need to Know

As a seller, a low appraisal means that you may have to lower your home’s price to get it sold. Lenders won’t approve loans for more than a home is worth, and holding out for an all-cash buyer who doesn’t require an appraisal as a condition of completing the transaction is unlikely to net you a higher sales price. No one wants to overpay for a home but more importantly a mortgage lender will not over lend on the value of a property, therefor if the appraisal comes in lower than what your buyer is offering this will likely sink your deal unless you lower the price.

What Refinancing Homeowners Need to Know

If you’re refinancing your mortgage and looking to access some of the equity in the home the appraised value is very important. Mortgage lenders will have maximum loan to value ratio that they will go up to so the larger the difference between what you owe on your current mortgage and what the home is appraised at obviously the better. Having a better loan to value ratio will also make obtaining the lowest possible mortgage rates possible. Lenders put a lot of emphasis on this ratio so a high appraisal value is very important.