The Ad Game

I work with Buyers in all price ranges and am always faced with unique challenges.  Every range has its own.  The Ad Game is designed to make me look bad to my Buyers and make it seem like I am hiding something, which, trust me, I am not.  I really and truly want to find you that property in that lower budget as much as you do and with your specifications it can be a challenge but one I willingly accept, so trust me when I tell you to ignore the Ads. It’s a game.

Scenario:

Buyer, lower budget, needs may include 2 washrooms, parking, not a Condo or Townhouse and no maintenance (condo/HOA) fee’s.  Preference is a Detached but Semi – Detached better.  In a housing market like the Greater Toronto Area where the average is about $400 000.00 on the really lower end, this is truly difficult but not unattainable.  Again, challenge accepted.

The Ad Game

“Hot New Listing $320 000.00 Amazing 3 Bedroom home, renovated call: 416-555-1212”

“Great Townhome $279 000.00, 3 Bedrooms with walkout to yard, call: 416-555-1212”

My client’s see these ad’s, immediately call me and demand why I haven’t showed them the property – it’s exactly what they are looking for and in their price range!

The Truth

Ad # 1 Truth… while it appears to be local (the agent has a local area code consistent with the GTA) it’s not.  I call the Agent who’s not excited by my call because I am not a potential client but just another ‘agent’ and find that the property is actually located an hour outside of the GTA.  An hour. That’s a huge commute. Huge.  I provide the info back to my client and they are disappointed.  I go so far as to send them the actual MLS listing so they see I am not trying to keep them from this great property and they realize that I am telling the truth and no, they are not willing to commute an hour, in low traffic.

Ad # 2 Truth... again, it seems right up their alley.  A townhome, okay, we can settle for a townhome, it’s under budget, why haven’t you showed it to me?  So again, I call.  Get the MLS number and send it over so my clients can read the fine print – specifically where it states that there are maintenance fee’s over 300-400 dollars a month – something they specifically do not or will not pay for.

I am not suggesting that real estate advertising is wrong or that the agents are doing anything unseemly.  In fact as real estate agents, we are held to Federal Laws on all advertising and could face both criminal and punitive penalties should we mislead the public.  What I am stating is this.  If you see an ad that doesn’t provide all the information and the price does seem too good to be true, it probably is.

A good advertisement wanting to sell the actual property instead of wanting to provide potential clients for the agent will tell you where the property is: what area and probably what street.  It will let you know that if it’s a Townhome, there’s maintenance fees.  If it’s intercity, there’s a mutual drive.  It will in a few short words provide the pertinent information and provide an MLS number or website info so that you can get more information instead of the agent trying to get information out of you, when you call.

When I sit down with a potential Buyer I have a check list of info that I use to begin my search on the MLS system.  It includes price, area, bedrooms, driveways, maintenance fee’s, washrooms, square footage and any other relevant information that can help me search accurately.  Sure I will search outside the ‘box’.  If your price range is so low that there are no listings, I may increase the range search by 10-20 thousand because maybe there is a listing in there that has been so long on the market that it may be negotiable.  I may see a listing that only has 2 bedrooms, when you need 3 but there is a potential 3^rd bedroom in the basement.  I may decrease the number of washrooms you require because sometimes the search is about compromise but if you tell me you’d like to live in say, Mississauga – I am not looking in Whitby.  If you tell me that you require a home with its own driveway because you own a large Ford F150, I know that a mutual drive won’t work so I don’t include those in those I show you.

A responsible agent who cares about what their clients’ needs are will show them the properties as close to a match to their wish list as possible. 

Obviously there will always be compromises but our goal is to make you the most satisfied Buyer we possibly can.  I have access to all the MLS listings in the GTA long before you do and believe me, if a home comes up with your needs – you will know about it, that’s how the MLS is designed when used properly.

Don’t let the ads fool you, many are a game designed to bring the advertising agents new clients – and there’s nothing wrong with that, but trust in your own agent, they really are working diligently to find you the one that you want.

If you have any questions regarding real estate, are interested in interviewing me as your potential agent or would like some neighborhood info on prices, please contact me at your convenience.  Always here to help and always happy to meet new clients!

Nicole Kreutzberg

Realtor

Sutton West Realty Inc., Brokerage

(416) 388-7384

nicole@gtalisted.com

www.gtalisted.com

This blog is not intended to solicit those under agency agreement and has been written as the agents own opinion not to be used as legal advice or otherwise

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The Right Real Estate Agent: How Do You Choose?

Your home or your purchase is possibly going to be the single greatest purchase or sale you make.  Trusting that kind of money to someone is a big deal and should be treated as such. It’s that simple.

First: Talk to a few Agents, there’s many of us and like with any purchase you want to compare.  See who’s right for you. Who’s listening to YOUR needs and who understands what YOU want to do, where you want to go and how much you want to spend.  The Agent must respect YOUR money.

Second: Ask to see the numbers. As agents we all have access to the same figures.  The same Data, the same Sold statistics and when pricing your home, ask to see what has sold in your area and ask to see the homes in your area that are comparable to yours.  Comparing a bungalow to a 2 story is not accurate and not the same.

Third: Don’t be swayed by the Agent who gives you the highest price they can sell your home for.  They may be telling you what you want to hear and it may not be what the actual reality is.  Ask the Agent who tells you that your Detached can be sold for $500 000.00 when 2 others have stated $475 000.00, where or how they arrived at that number.  The biggest disappointment doesn’t happen when the For Sale sign goes up, hit happens 2 weeks later when they tell you that you need to reduce the price and then 2 weeks later they tell you the same thing again.  Next thing you know, you’ve arrived at the $475 000.00 price you were quoted by 2 other agents and it feels like you were mislead. 

Fourth: When you see the numbers, accept them.  You may think that your home is worth so much more but the reality is the numbers.  If Bungalows are selling for $500 000.00 on your street or neighborhood, chances are you will not be selling your bungalow for $600 000.00.  It’s all about the numbers and they don’t lie.  I’m not stating that you won’t make more, that you shouldn’t list it higher as every home has a unique and special quality to it that can translate in to higher sales figures but trust that the data you’ve asked to see is correct.

Please keep in mind that timing is also everything.  Will you generate higher offers in November verses April? Which months are the best to sell or buy?  Seasons are important and can impact the sales figures.  Homes sold in the spring typically generate higher sales figures than those sold in the late fall.  Selling in December is more difficult than choosing February or March.  There’s a Buyer and a Seller in every season, the question is, how many of them are there?

Fifth: Yep, Commissions are negotiable.  That’s the truth. Some agents won’t drop theirs and others do so without blinking an eye.  If you don’t ask and they don’t offer, you’ll be charged, as a seller, the “standard” rate. 

The reality is this, most agents will reduce their sales commissions when the Seller is also buying, what we don’t want to reduce is the commissions paid out to the Buyer of your property.  When a home is listed on MLS, what the Agents see and what you see are generally 2 different sets of information.   As agents we see what the commission rate being paid out to the Buyers agent is and if it’s less than industry standard, then many agents won’t show the home when there’s a comparable listing whose commissions being paid to the Buyers agent are full.  That’s the truth.  Is it right? No it’s not.  But the reality is, you want to expose your home to the maximum amount of agents and buyers possible and that may not happen if the Buyers commissions are reduced.  So when you see that sign or hear from an Agent that they will sell your home for 1% - what they mean is this: They will charge YOU 1% to sell but still will pay out the 2.5% to the Buyer for a total of 3.5%. 

Sixth: Finally, how do you feel with the person across from you? Did they listen to you? Did they show the figures? Will they be there for the Open Houses personally or will they send someone else? Did they explain the contracts to you so that you understand them? It’s about trust and about how you feel with that agent.  Instincts are important.

I’ve often been told I am an amazing Buyer’s agent because I listen, I follow through and provide all of the information.  I take the time to explain all of the contracts and I get answers when I am asked questions.  I typically don’t show my Buyer’s properties well over their budgeted price because I respect that it’s their money and when heading into a multiple offer situation, I have a game plan that prevents my Buyers from overspending.  I treat all of my clients with respect, I negotiate fiercely and finally I treat all of my clients as clients for life, not just one sale.  I put 100 percent into everything I do and if my Buyer is looking for a property that is worth $200 000 or $1 500 000, of if my Seller’s property is worth $175 000 or $2 000 000, everyone gets treated with the same amount of dignity, honesty and respect because that's just who I am and that’s what everyone deserves.

NicoleKreutzberg

Sales Rep.

Sutton West Realty Inc.

(416) 388-7384

www.gtalisted.com

nicole@gtalisted.com

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GTA Real Estate: Bubble, Bust or Buy?

With the amount of information circulating it's hard to predict just what our Real Estate market here in the GTA is going to do or how we're going to end up.  Many of my clients say that it feels like a scary time in real estate.  Do I sell? Do I rent? Do I buy? Can I even get a mortgage with the new rules in place?  

The best time to make a decision is when you are informed, prepared and have a plan.  Here's some information...

Take a look at this as reported CBC:

The Organization for Economic Co-operation and Development ranks Canadian real estate the third most overvalued of the 34 developed countries assessed by the group, based on two metrics tracking what homes cost compared to incomes and rents.The Paris-based OECD, which monitors and compares wealthy nations, recently released a report that ranks its 34 member countries based on two broad housing measures:

• The price of the average home compared to what it could be rented for.

• What the home costs compared to the average salary.

• Check out our interactive map tracking house prices across Canada  http://www.cbc.ca/news/interactives/housing-canada/

According to that analysis, Canada has the third most overvalued real estate in the developed world, just behind Belgium and Norway, which are deemed to have the frothiest real estate market under the OECD's terms.

Based on rents, Canadian real estate is overvalued by as much as 60 per cent, the OECD says. In terms of prices to incomes, Canada fares a little bit better, but the OECD suggests the country's real estate is still as much as 30 per cent overvalued.On the opposite end of the spectrum, the OECD says real estate in Japan, Germany, South Korea, Ireland and Portugal is undervalued. In almost all those cases, home prices should be higher than they are, considering rents and income levels.Based on the numbers, the OECD places Canada in the fifth of five baskets — one where real estate seems overvalued but prices continue to increase.

"This is the case in Canada, Norway, New Zealand and, to a lesser extent, Sweden," the OECD says. "Economies in this category are most vulnerable to the risk of a price correction – especially if borrowing costs were to rise or income growth were to slow."The latest data from the Canadian Real Estate Association indicates the average Canadian home was worth $380,588 in April — 1.3 per cent higher than it was in the same month a year earlier.

As reported by the Financial Post:

TORONTO — It’s looking like an unsettling spring in Canadian housing, a market that has proven far more even-keeled and less scary for investors in recent years than in the United States.In what is traditionally the best season of the year for real estate agents, Toronto agent Ecko Jay says the industry is seeing far fewer buyers, a result of tighter lending rules, high prices and fear of a bubble. In Toronto alone, sales dropped 40% in the first quarter from a year earlier, making homeowners and investors jumpy.

“Some people want to cash in and pull out now,” said Jay, a 26-year veteran of the Toronto housing market, noting some are spooked by worst-case predictions of a 20 percent drop in prices from current levels.

“They say, ‘Before it gets low, let’s sell,’” Jay added. “And some of my clients want to sell and rent, hoping that when it goes down they will pick up something at a better price. Nobody has a crystal ball.”But then there are Canadian policymakers, economists and market watchers who have the next best thing to a crystal ball. Their data and analysis point not to a bursting of the bubble like in the United States in 2007-08, when prices from peak to trough dropped 35$, but rather a gentle easing in Canadian housing prices, or perhaps just a momentary pause.

Naysayers believe Canada may be too optimistic and relying heavily on that old saw that Canada is not nearly as reckless as the United States. After all, the debt-to-income ratio of Canadians is at a record high, close to the levels experienced in the United States before its market crashed, and home ownership is at nearly 70$, also a record and five points more than its neighbours to the south.

But Canada does have some things going for it, most notably a move by the government to tighten mortgage lending rules four times in five years, most recently in July 2012, which has taken some buyers out of the market, dampening demand.“If you look at the developments over the last year in Canada and compare them to the situation in the U.S. before the crisis, there is a clear difference,” said Julien Reynaud, an economist at the International Monetary Fund who follows Canada.“It is not just a question of housing supply and demand; it is rather a difference in the system of mortgage finance.”Canadians have more equity in their homes than Americans did, the default rate is lower, the sub-prime market is tiny, and mortgage interest is not tax-deductible, so there’s no incentive to build up debt.

Finally, mortgages are structured as recourse loans in which assets other than the house are held as collateral. That makes Canadian homeowners less likely to walk away than their American cousins.

“What makes Canadian housing different makes it stronger,” says Tom Lewandowski, who analyses Canadian banks for Edward Jones in St. Louis.

And finally this from TREB (Toronto Real Estate Board):

June 18, 2013 -- Greater Toronto Area REALTORS® reported 4,620 sales through the TorontoMLS system during the first two weeks of June 2013.  This result was up by 4.7 per cent compared to the first two weeks of June 2012.  Year-over-year sales growth was driven by the regions/counties surrounding the City of Toronto.  Home sales in the City were basically flat in comparison to last year.
 “The expectation was for an improvement in home sales in the second half of 2013.  Early June results are in line with this outlook.  Many households have adapted to stricter lending guidelines and have renewed their search for ownership housing,” said Toronto Real Estate Board President Ann Hannah. “It is also important to note that new listings were down over the same period.  With sales up and new listings down, market conditions became tighter.  This supports the moderate to strong rates of price growth reported for most major home types, including condominium apartments,” added Ms. Hannah. The average selling price for the first fourteen days of June was $536,141 – up by 3.8 per cent compared to June 2012. “While price growth has been driven by low-rise home types this year, condominium apartment price growth has improved since March.  Despite higher inventory levels, there have been enough buyers relative to available listings to support condo price appreciation,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

What's my opinion?  I think we are in the midst of a very cautious market where both Buyers and Sellers are nervous.  Nervous to Buy, Nervous to Sell.  Sellers obviously want the maximum dollar for their homes while Buyers want the best deal possible.  That statement will remain true no matter what the market does and as a Realtor, I will always adhere to getting the best value, best dollar and best deal to the best of my abilities no matter where we are in the cycle.

Do I trust the Condo market? Not so much.  It's the one area, based on my expertise that here in the GTA I can honestly say I see as a tinderbox just waiting for ignition.  I believe it will ignite and drop.  But in the same breath - if you own a Condo doesn't mean you need to sell it, it just means that if you plan on selling it, my opinion is to make that happen sooner rather than later.  

I personally believe it's time for a correction.  With values soaring almost out of reach of most pocketbooks, at some point, something is going to give and over the course of the past year we've seen a slowing.  What I sold in 2 days with multiple bids last year is taking much longer with less interest.  

In the long run, there will always be buying and selling.  There will always be people in need of homes and people with reason to sell them.  As your Realtors, its up to us to make sure that we use every tool we've got to serve our clients to the best of our abilities.  

If you ever have any questions regarding real estate buying, selling, home preparation or any type of real estate concern, please, as always, email nicole@gtalisted.com or visit the website at www.gtalisted.com

Nicole Kreutzberg
Realtor
Sutton-West Realty Inc.

Scrap the Toronto LTT not Cap the Toronto LTT

TORONTO, March 20, 2013 -- In light of a proposal to cap the Toronto Land Transfer Tax, being considered by the City of Toronto’s Executive Committee today, the Toronto Real Estate Board (TREB) is restating its strong belief that this tax should be phased-out.

“The Toronto Land Transfer Tax should be scrapped, not capped.  We are encouraged that the Executive Committee is considering action on the Land Transfer Tax, but, not only is capping not enough to correct the problems that this tax is creating for our City, it could make this bad tax even worse,” said Ann Hannah, President of the Toronto Real Estate Board.

In a letter to the Executive Committee, TREB has pointed out that, based on reported details, the proposed capping scheme could create considerable uncertainty for home buyers, if, as proposed, surpluses in Land Transfer Tax revenue are dedicated for reducing the tax in the subsequent year.  Under this scenario, home buyers could be artificially encouraged to delay home purchases, thus interfering with the natural operation of the real estate market.  This concern has also been articulated by renowned municipal finance expert, Enid Slack of the University of Toronto, who was recently quoted by the media as saying “If you want to reduce the land transfer tax, why would you not just reduce the tax rate, and say the tax rates are going down, so there is some certainty for taxpayers going forward? With this method (capping), they’re not going to know what the tax rate is next year.”

“The best approach is a phased elimination of this tax.  The only way to truly solve the problems that this tax is creating for our City is to get rid of it; and with a predictable phase-out strategy, home buyers could make informed decisions and City Council could set a reasonable schedule, which would make market distortions unlikely, ” said Von Palmer, TREB’s Chief Government and Public Affairs Officer.

Research has proven that municipal land transfer taxes have a negative impact on home sales. The C.D. Howe Institute recently released an analysis of the Toronto Land Transfer Tax, which shows that this tax has hurt Toronto’s economy by dampening home sales by 16 per cent.  This is supported by a recent poll conducted by Ipsos Reid, which found that 77 per cent of GTA residents planning to purchase a home in the next two years are more likely to purchase outside Toronto specifically to avoid paying the Toronto Land Transfer Tax.  This poll also found that nearly seven in ten Torontonians, 68 per cent, support plans to eliminate the Toronto Land Transfer Tax.  

“Capping equals keeping. That’s not good enough for our City and it’s not what Torontonians want. The public has repeatedly made it clear that they want the Land Transfer Tax scrapped,” said Palmer.

(News Release originally posted by Toronto Real Estate Board) 

If you have any questions regarding this or any real estate questions, please contact me directly at nicole@gtalisted or visit our web page at www.gtalisted.com.

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Slow and Steady... There Will Be No Surprises this Spring!

I've been calling this for a while now folks, despite some interesting yet skewed TREB statistics reporting increases in sales over the Christmas period.

Flaherty has achieved his wish and that was to slow the market.  Sounds bad, but really, overall, it's a good thing.  His goal, which really has major economic impact, is to keep Canadians from over extending themselves and buying homes they cannot afford by tightening the lending rules.  By tightening the rules he is aiming to keep people out of homes they cannot not afford long term.  Overall, the impact is to bring down the over priced home and improve the qualified buyer and to keep Canada from digging the same debt ridden hole the Americans had.

As reported by T.Perkins of the Globe and Mail:

"Sales of existing homes in the greater Toronto area were 15-per-cent lower in February than a year ago, the local real estate board said Tuesday.

There were 5,759 sales during the month, down from 6,809 in the same month during 2012. However, the Toronto Real Estate Board, which represents the city’s realtors, noted that 2012 was a leap year and had one extra day in February. Adjusting to compare a 28-day-period last year to a 28-day-period this year results in a sales decline of 10.5 per cent, it said.

Either way it’s clear that the market has not rebounded from the steep slowdown in sales that occurred during the second half of last year. Finance Minister Jim Flaherty tightened the mortgage insurance rules nationwide last summer in a bid to stem the growth of consumer debt levels and house prices, amid fears the market was growing too hot.
The real estate board’s MLS Home Price Index Composite Benchmark price, which seeks to compare apples to apples by accounting for any changes in the size or types of homes that are selling, has risen by more than 3 per cent in the past year, the board said.

It added that fewer luxury homes sold this month. The average, unadjusted, selling price in February was $510,580, up two per cent from a year ago.

“Stricter mortgage lending guidelines that precluded government backed mortgages on homes sold for over one million dollars and the City of Toronto’s additional upfront land transfer tax arguably played a role in the slower pace of luxury detached home sales,” stated Toronto Real Estate Board president Ann Hannah, who has been speaking out about both Mr. Flaherty’s tighter rules and the land transfer tax as sales have sunk.

Sales over the MLS of existing condos in the downtown area covered by the 416 area code dropped 20 per cent this month. And the sharp decrease in sales in recent months is now catching up to prices, which were 4.7 per cent lower in February than a year ago downtown. Condo sales in the 905 area code that covers the suburbs surrounding the city were also down about 20 per cent, but their prices continued to rise.
When he made the rule changes to tighten the market in July, Mr. Flaherty cited Toronto’s condo market as one of the areas in the country he was most concerned about.

Detached home sales were down 16.9 per cent in the 416 area and 15.8 per cent in the 905 area, with prices still up by 0.1 per cent and 3.4 per cent respectively.

New listings in the Greater Toronto area came in at 11,052 this month, down from 12,592 last February." Globe & Mail, 3/4/2013

Any questions, comments or concerns regarding this blog or anything real estate related, please email nicole@gtalisted.com or visit our website at www.gtalisted.com  

Nicole Kreutzberg is a Realtor for Sutton West Realty Inc. a Proudly Canadian Real Estate Brokerage!

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MPAC - The Official Property Valuation

Municipal Property Assessment Corporation (Photo credit: Wikipedia)

As a homeowner you've probably received and looked over the official Municipal Property Assessment Corporation's valuation of your home.  In short, they value all municipal properties to arrive at a figure, or an assessed value, for which the individual municipalities calculate the property taxes for each individual property in their jurisdiction.

It comes down to what they say your home is worth and how much you will be paying in property taxes based on that value.

With many property values skyrocketing over the past few years, intuitively, you would think that the various municipalities would be readjusting their tax rates and increasing the amounts all across the board.  But not so, the increased trend in property values is phased in over time, with all properties being reassessed every 4 years as opposed to every time the real estate market gets hot. And rightfully so otherwise our assessments would be all over the place!

MPAC, as they are known, adheres to what is called the 'Phase In Program' whereby in order to provide levels of property tax stability and predictability, where markets increase in assessed value between January 1, 2008 and January 1, 2012, that increase will be phased in slowly over a four year period, from 2013 to 2016.  Whereas a decrease in value is applied immediately.

If you've received what you think is an unfair MPAC assessment you can challenge that valuation by going to www.mpac.on.ca and logging into "Request for Reconsideration" which will help guide you through the process.

If you'd like to know more about how and why you were assessed the way you were and would like to know more about the local assessments of your direct community, you can go to www.aboutmyproperty.ca

If you'd like to see how your home value stacks up to our valuation, please feel free to contact me at any time and I can get started on a free no obligation market valuation of your property.  Email nicole@gtalisted.com any time and we can see how our figures compare to MPAC's.

As always, if you have any questions regarding this or any other real estate matter, it's better to know than to wonder so please feel free to ask or visit our website at www.gtalisted.com

Nicole Kreutzberg, Realtor
GTA Listed Team
Sutton Group West

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Key Interest Rate Likely to Stay Unchanged for 2013

National Bank of Canada (Photo credit: Wikipedia)

And here's some good news for those looking to renew or apply for new mortgages this year:

The Bank of Canada lowered its growth forecast for 2013 today, keeping its benchmark interest rate steady at one per cent for the 19th consecutive time...."The slowdown in the second half of 2012 was more pronounced than the Bank had anticipated," the bank said in a statement posted on its website today.

In layman's terms, that's the bank's way of saying it is less likely to raise rates than it used to be.

"At a minimum that removes talk of 2013 hike risk and should cause a change in consensus forecasts," Scotiabank economist Derek Holt noted.

While now there are no hikes expected for 2013, it doesn't change the new legislation that took place last summer which was fully implicated by December 2012.

It's tougher to get a mortgage now than it was two years ago. Those 0 down mortgages are a thing of the past.

To recap the new mortgage regulations, here's what's changed:

Until the summer of 2008, it was possible to buy a home in Canada with a zero down payment (in other words, the entire cost of the home was borrowed), and to amortize repayment of that cost over a period of up to 40 years. Successive changes implemented by the federal government have whittled away at those practices. Borrowers are now required to have at least a 5% down payment on a residential home purchase. And, under the new rules announced recently, the maximum amortization period on a residential mortgage will be reduced from the current 30-year maximum to 25 years.

When a would-be home purchaser applies for mortgage financing, there are two ratios commonly used to measure the risk associated with the borrower’s potential debt. The first of those, the gross debt ratio (GDS), is the percentage of the borrower’s gross (i.e., before tax) income needed to pay housing-related expenses, including mortgage payments, property taxes, and the cost of heating the home. The second ratio, the total debt service (TDS) ratio, is the percentage of the borrower’s gross income needed to pay all current debt obligations, including housing related expenses. The latest set of changes announced by the federal government will require, for CMHC-insured mortgages, that the borrower’s GDS not exceed 39% and that his or her TDS does not exceed 44%. 

Put another way, where a borrower seeks to buy a home and obtain a mortgage with less than a 20% down payment, he or she must be able to show that paying for housing related expenses will consume less than 39% of annual gross income and that all current debt obligations can be met with less than 44% of annual gross income. A borrower who cannot satisfy those requirements will not be eligible for a CMHC-insured loan.

Many Canadians have taken advantage of recent increases in real estate values by borrowing against the equity they have in their homes, either by refinancing the mortgage or by taking out a home equity line of credit. Their ability to do so will be somewhat curtailed after July 9, as the maximum mortgage (or home equity line of credit) amount which can be borrowed on a refinancing will be limited to 80% of the value of the property. The current limit of 85% was set in March 2011; prior to that date, the limit was 90%.

Finally, the federal government will no longer be providing CMHC insurance on homes which are purchased for more than $1 million. Consequently, purchasers of homes costing more than $1 million will be required to have at least a 20% down payment.

It's all about planning ahead now. If you are considering a purchase, call your lender or contact your Realtor who can put you in touch with a lender and begin that process before you begin the search for a home. Nothing would be more disappointing than to begin your new home search, finding that perfect property and finding out you do not qualify for the funds necessary to close.

While some of the lending criteria now seems strict, its really the Federal Governments way of keeping Canadians from overspending and over buying homes they cannot afford while managing the debt that they do have. Nobody wants to be house poor.

As always, if you have any questions regarding real estate in any regard, it's better to have an answer than to wonder, so email me any time at nicole@gtalisted.com

Thanks!

Nicole Kreutzberg, Realtor

Sutton West

www.gtalisted.com

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