Canadian Real Estate Association predicts a strong year in 2014
Canada’s largest real estate association says this year is turning out better than expected and 2014 will be even stronger.
DAVID COOPER / TORONTO STAR
“Canada’s largest real estate association says 2013 is turning out better than expected and 2014 will be even stronger.”
OTTAWA—Sales of previously owned Canadian homes are turning out slightly than expected overall, and 2014 will be even stronger, according to a new projection from the country’s largest real estate association.
The Canadian Real Estate Association’s 2013 sales projections have been increased slightly upward in Ontario and the four western provinces and that prices have been generally firmer than expected.
“Most housing markets are well balanced, including many large urban centres,” said Gregory Klump, CREA’s chief economist.
“Housing price gains are always stronger in places where supply is tight relative to demand, such as we’re seeing in Calgary and in parts of southern Ontario including the low rise market in Toronto.
“Prospects for price appreciation will be limited in parts of Quebec and some areas in the Maritimes, where competition among sellers has increased.”
Nationally, CREA is projecting 458,200 homes will be sold through its members this year — eight-tenths of a per cent more than in 2012.
CREA also anticipates next year will be even stronger, with 475,000 homes nationally.
The updated numbers are slightly ahead of a forecast in September by the association that predicted 449,900 homes sold this year and 465,600 in 2014.
CREA said Monday the 2013 projected national average price is $382,200, a 5.2 per cent increase from last year. The projected national average price for 2014 is $391,100, a 2.5 per cent increase from this year.
Alberta is forecast to post the biggest increase in average price in 2014 with a gain of 3.4 per cent, with gains in Saskatchewan, Manitoba, and Newfoundland and Labrador running just ahead of overall inflation, and the average price increase in Ontario running just below it.
CREA says November’s home sales dipped slightly from October but were up substantially from the same month last year, when the industry was going through a soft patch attributed to changes in federal rules for mortgage lenders and borrowers.
Home sales edged 0.1 per cent lower from October on a seasonally adjusted basis. Actual activity was 5.9 per cent above November 2012 levels.
The national average sale price rose 9.8 per cent on a year-over-year basis in November while the MLS Home Price Index, which CREA says is a better indicator, rose 4.1 per cent year-over-year in November.
Be sure to make sure that any requests to ensure things like a home’s oil tank is in good working order are in writing before you buy or sell a house.
By Mark Weisleder @ Moneyville.ca
As part of a home sale, many buyers ask for repairs to be done before the deal closes. But if the details are not set out clearly, there can be serious consequences.
Here’s why. In August, 2003 Janet Morrow agreed to buy a house in Kawartha Lakes for $174,000, with a closing date of October 31. The contract was later amended, with the seller agreeing to ensure the oil tank was working properly, certain pipes were properly installed and repairs were made to the roof, garage and drainage system. They were to be done by Oct. 1.
Morrow visited the house with her inspector on October 14 and the inspector concluded that some of the repairs weren’t done. Morrow said if the outstanding items weren’t fixed, she would not close the deal.
The seller offered her $1,000 off the purchase price to close, which she refused and the deal fell apart. The seller ended up selling to someone else for $128,000, some $46,000 less than Morrow’s offer. He sued her for that amount.
Two years later, in October 2005, Judge Brown of the Ontario Superior Court of Justice decided that Morrow had no right to refuse to close, because the seller had made most of the repairs she had requested and offered cash for those outstanding. She was ordered to pay the $46,000.
Morrow had claimed it would be expensive to complete the work, but offered no proof of those costs. The seller argued the house was for the most part what she agreed to buy. The Judge agreed with the seller.
Here are some things you can conclude from this case: When a deal is conditional on the buyer being satisfied with something like a home inspection, if the buyer is not satisfied, they can usually get out of the deal. But if a seller undertakes to do something like minor repairs and they are not done, the buyer is entitled to reasonable compensation to complete the work, but cannot refuse to close.
Frequently, buyers find problems during a home inspection and negotiate with the seller to have the defects fixed before closing. I get nervous when I see these clauses because it can come down to who decides whether something was completed in a professional manner or not? Or who is going to decide how much it will cost to fix the problem if it is not completed?
My advice is to try and figure out what it should cost to fix using estimates from contractors and then reduce the price by that amount. Let the buyer deal with it after closing. If you are going to insist on the seller fixing it, then also make it clear in advance that if the buyer is not satisfied with the work, then a preset amount will be held back on closing, until the problem is solved.
Buyers should never assume they have a right to refuse to close any deal just because there are some damages to the property or repairs that were not done properly. Both buyers and sellers should get professional and legal advice, preferably before signing any contract or amendment, dealing with any repair obligations or issues.
For your home buying and selling needs, be sure to consult an experienced GTA Realtor. Contact me today at 647-287-8744 or info@kylebouchard.ca
3 Interior Design Ideas That Add Value To Your Home
Everyone dreams of having a place to call home, a place where you can feel relaxed, and get away from the daily stresses of life. Since a home adds value to your life, you must find ways to add value to your home.
Here are three interior design ideas that add value to your home:
1- The bedroom: from small to trendy
Small spaces are often a burden when it comes to decorating any room. Luckily, modern interior designs now focus on space optimization, while also keeping things trendy with the help of odd shapes as decorative pieces, different color combinations and comfortable beds.
The first rule in redecorating a bedroom is the color palette: a great color scheme is usually achieved by combining white and strong colors such as red, blue, green, black and even purple. The background, in this case the walls and ceiling, should be painted entirely white.
White gives a small room the impression of space, vastness and cleanliness. However, entirely white rooms lack personality, so spots of colors such as oddly-shaped red decorative pieces or dark blue curtains matching small blue lights on the ceiling or walls can add value and identity to your room.
Not only that, but futuristic colors and objects are in demand and extremely trendy. You can also buy modern furniture online such as square-looking beds, colorful materials, blankets and pillows. Each piece adds a bit more personality to your bedroom.
2- The living room: keep it simple, keep it modern
Some people overdo it by adding too much color or too many decorative objects in the living room. Living room décor, however, should be as simple as possible. Of course, you can always have your small corner of DIY objects, paintings and decorative pieces, but if you want to add a sense of spaciousness, give modern design a chance.
Get unique and experimental. Embrace geometric pieces as decorative objects. Try to maximize the amount of natural light by reworking the window treatments. And don’t forget to play around with paint colors and furniture.
3- Library: A taste of vintage that adds home value
Of course, not everyone loves modern, trendy designs. Some like to stick to the old style. However, not any room is vintage-suited: vintage bedrooms might give off a heavy aura, while vintage living rooms would seem a bit stiff and cold.
The taste of vintage, however, goes incredibly well with books and used pianos. You can always opt to create a library within another room: all you need is a place where you can retire to read a book or listen to your kids play.
If you plan on buying or selling a home, contact me today: 647-287-8744 or info@kylebouchard.ca
A New Year’s Resolution for Homeowners: Maximize Natural Gas Savings with Energy Efficiency
While natural gas continues to be an affordable fuel source, customers can act on this resolution and increase their savings by committing to energy efficiency. Below are some tips for customers using natural gas to heat their homes and water.
Heat your Home Efficiently:
Set your thermostat 3°C lower while you’re asleep or away from home
Use a programmable thermostat to adjust temperatures according to your schedule
Keep curtains and furniture from blocking your heating vents
Vacuum dust and pet hair out of your warm air registers and cold air returns and make sure that the dampers are open
Open blinds and curtains during the day to let the sun warm your home and close them at night to keep heat inside
Heat your Water Efficiently:
Fix dripping hot water faucets right away
Avoid running your water continuously while washing dishes by hand
Wait until your dishwasher is full, and use the energy-saving cycle
Take a short shower instead of a bath
Check the manual for your water heater model, many of them suggest that you drain about four litres of water from the valve at the bottom of your tank to remove any sediment that can gradually build up and reduce efficiency
RCMP Royal Canadian Mounted Police launch grow-op website
RCMP Royal Canadian Mounted Police launches National Grow Initiative
RCMP’s strategy to combat illegal marijuana grow operations
The RCMP Royal Canadian Mounted Police has launched a website listing the addresses of where marijuana grow-ops were found.
The National Grow Initiative is an RCMP Royal Canadian Mounted Police-led project launched on September 21st, 2011 in Ottawa that will focus on enforcement, deterrence and awareness as part of the National Anti-Drug Strategy to combat illegal marijuana grow operations
The addresses will remain on the RCMP Royal Canadian Mounted Police website for a period of one year.
The website’s address is:
British Columbia leads the list with the most grow-ops discovered, with several dozen locations listed, mainly in the Surrey area. A property in Hope, B.C., displayed on the website, was said to have had 6,496 marijuana plants found on it in June, 2011.
Categorized by provinces, the RCMO Royal Canadian Mounted Police website lists the addresses of homes, outbuildings and businesses where search warrants were executed. It also lists when the busts were made and how many marijuana plants were found. Clandestine drug labs are also included in the database.
“Grow-ops can be major headache for Canadian Real Estate investors”says Navtaj Chandhoke, founder of Professional Real Estate Investors Group (PREIG) Canada, Canadian REI Club”this information will empower Canadian home buyers as well As Real Estate Investors since there is no database known to Canadians of former grow-ups”.
So far, the only way for a Canadian home buyer to know if a home was a grow-op is for the property seller to disclose that information. RCMP Royal Canadian Mounted Police can help for Canadian home buyers and Canadian real estate investors to bring more awareness about grow up houses.
purchasing (or selling). Other than the mortgage and property taxes, these are the six major costs related to owning a house: the Roof, Foundation, Windows, Furnace, Electrical, and Plumbing. Your home is most likely the biggest investment you own (or soon will own). If you are planning to invest in some property, pay attention to these components in order to avoid costly repairs later on.
1. Roof: A properly installed roof will last 15-25 years, depending on the type of shingle. I recommend a good 25 year shingle since the return on investment is much greater considering the cost of replacing the roof. For a 1500-1800 square foot, two-storey home, a good rule of thumb is to allocate $5,000 towards a roof replacement, if needed. I show my clients how to tell if the roof needs replacing just by looking at it from the road. Upon closer inspection we can determine when the roof was installed and how many years are left in it’s life.
2. Foundation: There are two kinds of foundations, poured concrete (modern) and block foundation. The biggest and most common problems with the foundation of a house is basement leaks. The best way to avoid this problem from ever occurring is to maintain the grade of the land on an angle away from the house, so water will run away from the foundation. If water is able to pool near the house it will eventually soak into the ground and find its way into the basement, as the concrete foundation is very porous even though it may look solid. 90% of water leak problems are caused from the eaves-troughs not doing their job properly. A heavy snowfall in the winter or leaves that have not been cleared can bend or clog the eaves-troughs, letting water drip down beside the house instead of draining properly as they were designed. There are a few easy ways to tell if a basement has ever been flooded. Efflorescence is a big clue. Horizontal cracks in the foundation could be signs of a structural problem and in that case, avoid that house. If the crack is vertical it is not a big problem. It can be fixed by digging on the exterior of the foundation to the weeping tile (Weeping tile is like an underground eaves-trough and sends water out to the sewer system), installing a water proof seal, and re-filling with limestone. The average price of this repair is $125 per linear foot, along the base of the foundation. With a poured concrete foundation, cracks can be sealed by injection from the interior of the basement walls. This is a much cheaper alternative, costing about $450-500.
3. Furnace: There are three types of furnaces available today. Older low efficiency models, more modern mid efficiency models, and the high efficiency models that get a lot of attention. The common misconception with homeowners and property investors is that a high efficiency furnace is the best choice because it is “high efficiency”. Here are the facts, (and I will go into further detail when we inspect the house together on our property tour). A mid efficiency furnace will last 20-25 years and costs an average of $3,000. A high efficiency furnace only lasts 12-17 years and costs an average of $5,000. In most situations, the lower heating price of a high efficiency furnace still does not justify the shorter life-span and higher initial price. My recommendation, as always, is to get the best return on your hard-earned money, which is in most cases the mid efficiency furnace.
4. Windows: This can be a very expensive repair to any house, especially houses with many windows or very large windows. An average replacement price of the windows of a house larger than 1800 square feet is around $10,000-15,000 including installation. For a home under 1800 square feet the average price will be closer to $8,000-10,000 including installation. When showing houses with my buyer clients I show tricks to find out exactly how old the windows are and if they will need replacement or not.
5. Electrical System: The most expensive repair to an electrical system in a house is the replacement of an outdated system called knob and tube. Many older homes in Toronto contain knob and tube wiring, but it is rarely seen in homes built after 1940. Another bad wiring system to watch out for is aluminum wiring, which was popular for about 6 years in the 1970’s. 99% of insurance companies won’t even insure a house with knob and tube or aluminum wiring, but some insurance companies, including State Farm and ING, will allow 60 days grace period for their replacement. Now on to electrical panels: panels are either on a breaker or fuse system. Breakers are more modern and thought to be safer, but this is a controversial issue. Insurance companies prefer the more modern breaker system and replacing a fused electrical panel with a breaker system is on average about $1,000-2,000 dollars depending on the condition of existing wiring. It is wise to take a quick look at the electrical panel when house shopping and to take note of the panel. 90% of houses will have a 100 amp electrical service, which is sufficient. Anything less will need an upgrade to a 100 or 200 amp service. Your appliances, a/c, furnace, etc. uses a certain number of amps (amount of electricity) and older 50 amp services will not provide enough electricity for modern appliances. This may require the Hydro company to replace wires from the street to the house and would be coordinated by any licensed master electrician. A service upgrade is, on average, between $5,000-7,000 and takes a day or two to complete.
6. Plumbing System: Lastly, the plumbing system is a very important part of any house. Basically when it comes to plumbing, plastic and copper pipes are definitely okay, but older galvanized pipes are not so great. Once again, insurance companies prefer plastic and copper pipes over galvanized and would most likely charge a premium for coverage on houses with galvanized piping. The most common plumbing problems are in the shower stalls and under the bathroom and kitchen sinks. A quick look under the sink with the taps on will show bad leaks immediately, as well as taking a look at the basement ceilings for water stains revealing possible plumbing or roof leaks.
Those are the 6 major components of a house and a description of their function and costs for repair. Everything else is cosmetic. Please feel free to contact me if you have any questions or concerns on this or anything else real estate related. My job is to get you the best return on your real estate investment.
Kyle Bouchard
Sales Representative
Century 21 Percy Fulton Ltd.
Throughout the ages and even now in modern times, most of the world’s wealthiest people have either created their fortunes or held their fortunes in real estate. Historically, Real estate law was originated in the 11th century when feudalism (a system based on personal ownership of resources) was introduced to England by the French-speaking Normans. The words “real estate” are derived from the term, “Royal Estate” (“real” originating from the French term “Royale”) since all property was initially owned by the King. In modern times, Wal-Mart (the biggest privately owned retail chain in the world), has recently opened up it’s own real estate division. Wal-Mart Stores Inc. owns all of the real estate it’s stores occupy. The corporation was once owned by one man named Sam Walton. If he was still alive today he would be the richest man on the planet.
You may be asking yourself, “why is investing in real estate is so profitable compared to other investment vehicles?” Let us look at some of the many advantages. The fact that real estate can be easily leveraged is a MAJOR advantage over other popular investments like stocks and mutual funds. Stocks typically cannot be leveraged much, if at all. If you don’t believe me, try to ask your banker to give you a loan to buy mutual funds! Even with the conservative nature of the banking system, any bank will not have a problem lending on a good piece of real estate. Here is an example: a $40,000 stock purchase means you own $40,000 worth of that stock. If you put that $40k down payment on a $400k house in Toronto, let’s say it increases at a conservative 4% per year. In the first year you own this house, you would not only gain that 4% appreciation on your down payment… you would gain the appreciation on the entire purchase price, the whole $400,000! This equals a capital gain of $16,000 in one year. You have now created a 40% ROI or Return On Investment, which is a great return on your money ($16k divided by the your $40k down payment). This is only one of the ways real estate will increase your wealth. The other two ways are positive cash flow (from rental income) and equity buildup through mortgage paydown.
The great thing about equity buildup is while the income comes in from your properties, paying your mortgage down, you will build equity. Not to mention you can pull that equity back out of the property and use it to buy more properties! This is called subordinate financing, a tool Ray Kroc, the founder of McDonald’s, used to create his empire. Did you know McDonald’s owns more real estate than the Catholic Church? Just something to think about…
Positive cash flow is a combination of selecting the right property in the right area and competent property management. You must select a property where the tenant profile and rents are high, and still have a low enough purchase price to keep the mortgage costs down. This, in turn, will lead to the rental income from that particular piece of real estate to exceed the mortgage, taxes, utilities and insurance. These will be your main expenses for the property. If the positive cash flow is high enough, you will not only benefit from extra spending money, but also easily cover the costs of minor maintenance repairs that need to be done from time to time.
Of course to realize all of these enormous benefits of investing in real estate you must, of course, take action! Whether it is a single family home or a 20 unit apartment building, use the help of an expert who specializes in this field of real estate to keep you on the right track. The cost of a good Realtor’s expertise is well worth the gains he or she will help you achieve through proper real estate acquisition, and all of the world’s wealthiest people know how great an investment real estate is. It’s time for everyone to start taking advantage of this same strategy. If you are reading this from the Greater Toronto Area or surrounding cities/towns, I am more than happy to sit down with you for a free consultation in a coffee shop of your choice, to show you the plan for achieving your goals in real estate and show you the path to financial freedom. Whether it is your first or your 20th property, call or email now so we can get you onto the fast track!
Be sure to make sure that any requests to ensure things like a home’s 
KYLE BOUCHARD REAL ESTATE GROUP 