New Mortgage Rules announced October 2016

If you are thinking of buying a home and have less than 20% down payment, this is CRITICAL information for you to know! Effective October 17th, 2016, the Government of Canada is now requiring that any insured mortgage (less than 20% down payment) MUST qualify using the Bank of Canada Benchmark Rate, which is always higher than posted.

What does this really mean to you? Anyone that is currently pre-approved with less than 20% down, NO LONGER qualifies for the same purchase price after October 17th. After this date, they MUST qualify at the benchmark rate of 4.74% interest, vs. a 5 year fixed at 2.44% (or lower). Now what does that really look like? Let’s say your household income is $95,000 and you carry approx $1200/month in debt payment (2 car payments and a small credit card). If you have a purchase offer approved BEFORE Oct 17th, you would qualify for a $365,000 mortgage. However, if you wait UNTIL Oct 17th or later to send in an offer and get a full approval, your max purchase price would be $286,000 This is a difference of $76,000! That is a HUGE difference in home size, quality and area where you can purchase! It might mean having to get a townhouse instead of a single family home, or need to buy further from the GTA and possibly commute.

Stacey Robinson, Broker

Royal LePage Realty Plus

Phone 905-464-7653

http://www.staceyrobinson.com

 

The Impact of the 15% Tax for foreign buyers that BC Implemented August 2016

The BC government implemented the Foreign Buyers’ 15% Tax which has resulted in a reduced number of sales in the Vancouver area for the first month it came into effect.  This tax may encourage these buyers who are keen on buying in this part of Canada to buy properties in the Great Vancouver area and in suburban cities, as it does not apply to home purchases outside Vancouver City.

How does this impact the rest of Canada, or more specifically the GTA?  The Toronto hot real estate market and the golden horseshoe will continue to be hot. The foreign buyers’ decision to buy a property in Greater Toronto area will be fueled by the Vancouver Tax.

Will Toronto or the GTA follow Vancouver’s example….in my opinion, no.  Toronto has a land transfer tax already in place, in addition to the Provincial land transfer tax that the rest of Ontario has been paying now for several years.

August traditionally is a vacation month and may see the number of sales drop slightly, and this has happened in Vancouver when the new tax came into effect.  However, I believe its too early to tell if this tax will truly hurt the Vancouver real estate market in the long run.  Time will tell.

Stacey Robinson, Broker

Royal LePage Realty Plus

Phone 905-464-7653

http://www.staceyrobinson.com

 

 

 

 

 

 

What is a Bully Offer? — Stacey Robinson’s Real Estate Blog

If you are a buyer looking to buy your first or next home in this busy real estate market, then you may have heard of a “Bully” offer. The proper terminology is “Pre-emptive” offer. What this means is this … a property is put on the market and the sellers and the listing agent decide […]

via What is a Bully Offer? — Stacey Robinson’s Real Estate Blog

What is a Bully Offer?

If you are a buyer looking to buy your first or next home in this busy real estate market, then you may have heard of a “Bully” offer.  The proper terminology is “Pre-emptive” offer.  What this means is this … a property is put on the market and the sellers and the listing agent decide on a future date and time to review offer(s).  During the days of showing prior to the offer date, a buyer instructs his/her buyer agent to present their offer to the seller prior to the offer date.  The listing agent then informs the seller that there is an offer signed and registered that would like this offer presented now and not on the offer date.  At this point, the seller has the option to review the offer now and decide to entertain this offer as well as inform all of those agents and buyers who have seen the property up until that point, that a pre-emptive offer has been communicated.  In all fairness to the other prospective buyers, the seller should give everyone a chance to present their offer as well if they wish to.  Usually when a pre-emptive offer presents itself, the buyer only gives the seller a few hours to decide, rather than a full day.

There are disadvantages to reviewing offers prior to the offer date that was originally set and published on the listing:

  1.  It does not give all prospective buyers enough time to view the home and think it through before deciding whether to make an offer or not
  2. It may influence an impulsive decision for the buyer and they may regret making their offer the next day
  3. The seller may have not had the opportunity to get full market value for their property by not following through with the original offer date
  4. The seller is limited to the number of offers by shortage of time
  5. The advantages usually are for the buyer to compete with less offers and may put pressure on the seller to accept earlier than the offer date.

The Seller in all cases, if represented professionally, can refuse offers and are not obligated to sign any offers that they do not feel comfortable with.

There are advantages as well, the seller may be happy with the offer and wish to end the stampede of showings through their home of prospective buyers and open houses.  I had a case recently where I had a listing for $950,000 and 24 hours after listing it on the MLS, a pre-emptive offer came in $100,000 over asking.  The sellers and I reviewed the offer, contemplated the decision, and refused to entertain the offer.  On the offer date, 4 offers were presented and this property sold $210,000 over the asking price!  The buyer with the pre-emptive offer did not comeback to compete with the other offers and cooled off.  My sellers were happy with their decision and the selling price was record breaking for the street.

Should you have further questions regarding pre-emptive offers, feel free to contact me at anytime via email or my direct number.

Stacey Robinson, Real Estate Broker

Royal LePage Realty Plus

Email:  stacey@staceyrobinson.com

Direct 905-464-7653

http://www.staceyrobinson.com

 

 

Good News!  There will be no additional Land  Transfer Tax in Ontario

Following months of discussion regarding municipalities following Toronto’s municipal land transfer tax, Queen’s Park has voted against additional cities in Ontario following suit.  This is great news for Mississauga real estate properties owners and industry professionals! This will help lower and middle income home owners to not be priced out of the real estate market should they decide to buy their first or next home.  The real estate professionals voiced their concern representing all residents which may have helped this final decision.  Please refer to this article just published by the National Post!

http://www.nationalpost.com/m/wp/blog.html?b=news.nationalpost.com%2F%2Fnews%2Fcanada%2Fontario-wont-expand-the-municipal-land-transfer-tax-beyond-torontos-borders

Stacey Robinson, Real Estate Broker
 Royal LePage Realty Plus, Brokerage
 Direct 905-464-7653

#realestate #mississauga #mississaugarealestateagent #realtor #realestatemarket

Spring Market Update 2015

I’m sure you have heard by now about how fast properties are selling around the Great Toronto Area.  The activity started early this year with January having mild weather kick starting the 2015 housing sales.  The inventory has remained low in most of the neighbourhoods which has resulted in bidding wars once again.  When buyers are faced with competition, they must have all their finances in order and present to the seller that they are strong in their qualifications for buying their home.  Some buyers chose to forego their financing condition all together in order to give the seller ease that approval from the bank has already been given.  This makes home buying a little more difficult for others facing competition who prefer to have those conditions in the offer protecting them incase they are not fully satisfied with their banks commitment and terms of that mortgage.

When spring market favours the sellers and the inventory remains low, this drives up the average selling price.  With interest rates being historically low again this year, it is also a contributor to the increase in the average home value.  Toronto has recently reached the one million dollar mark for the average sale price!

There will be a correction at some point down the road when the interest rates are not this low.  I do not believe there is a bubble about the burst because the factors in todays economy are not like they were in the late 1980’s.  For example, in that hot late 80’s market, the interest rates kept increasing to slow down the rate of inflation but the housing market still increased at a rapid rate even though the cost of borrowing couldn’t slow it down.  That eventually came crashing down.

Stay tuned for more insight into today’s real estate market.

Stacey Robinson, Real Estate Broker
 Royal LePage Realty Plus, Brokerage
 Direct 905-464-7653

#realestate #mississauga #mississaugarealestateagent #realtor #realestatemarket

Canada’s Housing Overvalued?

According to CMHC (Canada Housing and Mortgage Corp) published today November 24th, 2014, there is an overvaluation in the housing market across Canada.  The good news is that the risk factors that most home owners are worried about are not present.  These factors are prices overheating, price acceleration and overbuilding of homes.

Today’s market place, more specifically in Mississauga, is healthy but there has been a shortage of inventory for buyers.  Properties priced at market value are selling in a matter of days which does not give buyers a lot of choice while searching and not a lot of time to decide on their purchase.  This combined with the low interest rates, healthy employment and immigration keeps the market healthy and consistent.  The benefit has been for the seller than it has been for buyers.

I’ve noticed in the last couple of years that the number of listings is highest at spring and into the summer.  There are more buyers and more sellers.  By the summer is usually the time of year that you will see the increase in the average and median prices when compared to the year before.

Personally, my prediction of the real estate market is that this will continue to be strong throughout 2015 and into 2016.  The interest rates will remain low and may increase steadily in 2016.  Slow rate increases shouldn’t shake the real estate market.  The hopes are that a slow rate increase will help stabilize the prices.

Stacey Robinson, Real Estate Broker
 Royal LePage Real Estate Services Ltd., Brokerage
 Direct 905-464-7653
#realestate #mississauga #marketvalue #realtor #realestateblog