From The Toronto Sun of Friday, November 16, 2012 on Page No. 42

Not all of you might like real estate agents. It’s easy for professions to get tarred with a wide brush of false perceptions. So you might buy directly from other Canadians or Sale as private as For Sale By Owner (FSBO). Don’t, there are plenty of websites and guides for FSBOs for sale by owner serving Toronto, Mississauga, Oakville Market. Certainly, they can give you an indication of what’s on the market and property values in particular areas. That’s information you can use. But the knowledge to properly pull off a deal, as a seller or buyer, is not the “one-click purchase” of the online world.

Real estate agents — the good ones, and the right one—are professionals and experts in the property world for that essential skill of using information to form knowledge to enable transactions.

For Sale By Owner: Consider these five factors

1. Real estate? Real experts.

Most people would struggle to write a proper, legally binding contract—there’s no shame in that. There’s also no shame in failing to consider every aspect and potential pitfall in buying and selling property. That’s what real estate agents are for. FSBOs are not real estate experts, and their lack of experience can be frustrating and costly. When you use the right real estate agent, they will know everything about the local market and neighbourhood. If you put their years of knowledge and experience to work, it will save you time and money.

2. Negotiating skills.

As I’ve said before, knowledge is power, especially in real estate negotiations. It isn’t just having numbers at your fingertips, but understanding them. When buyers and sellers meet, they talk too much, I find. The longer you talk, the more information you’ll have, but at some point you can have too much information, and not enough knowledge of how to get a good deal. Again, this is where a real estate agent can ensure a knowledge base that cuts through the information clutter.

3. Pricing.

FSBO properties are notoriously overpriced. Sellers are emotionally attached to their home, and thus tend to place a higher-than-market- value tag on the property. It’s understandable that they’re fond of their home, but that doesn’t help you as a buyer looking for the best deal. You might think you’re saving money by going direct to the seller. Some website will have you believe a deal is to be had because no one is paying the real estate agent commission. But this could not be further from the truth. FSBOs almost always over value their homes and this trend could actually cost you more.

4. Safety.

As a FSBO or private real estate investor, you meet with every potential buyer personally. You invite buyers — strangers — into your home without pre-qualifying them at all. This can be dangerous and in my opinion, is not worth the even small risk. Using a real estate agent places a firm buffer between you and unscrupulous buyers. Isn’t the safety of you and your family worth this caution?

5. Paperwork.

Buying and selling property doesn’t involve any less paperwork simply because you’re doing it yourself. If only anything did. The fact is, most real estate files are inches thick, filled with documents and contracts relating to the sale of the property. FSBOs are generally not familiar with the required Purchase & Sale contracts, and most never take the time to explain the contracts to potential buyers.

One mistake or omission could land you in court or cost you thousands of dollars

Suddenly, your attempt to “simplify” the process by buying or selling direct, gets a whole deal more complicated. Are there FSBO deals that work? Sure. As with anything in this world, some problems arise even with the most experienced real estate experts at your side, and conversely, complex FSBO deals can work smoothly against the odds. But my advice remains  firmly on the side of avoiding FSBOs.

There is simply too much risk, personally and financially, to try for a deal in a process most people would struggle to understand. Is your dislike for real estate agents really so strong that you would put your money in jeopardy to avoid them? We’re really not that bad, and the best of us out there will make you forget you ever considered an For Sale By Owner.

T.S. Eliot wrote: “Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?”
When it comes to property, there’s plenty of information out there. But it takes knowledge to do the deals properly— efficiently and effectively. And if you choose real estate agents over being a private real FSBOs, you’ll be demonstrating that you have the wisdom needed for the property game.

If talk about a housing correction or slowdown in Greater Toronto area Real Estate are keeping you out of the investment property game in Toronto, Canada here are seven top reasons to overcome those fears. As real estate veterans points out , your time to buy an income-producing property may be now.

1. Mortage Rates

Canadian bond yields continue to sit at historic lows, as a result it is not uncommon to secure multi-unit residential financing with interest rates as low as 3 – 4%. While Canada has enjoyed a prolonged period of historically low rates, the window of opportunity is finite as interest rates have no where to go but up. (Window of opportunity – up to 18 months)

2. Investment Property Vacancy Rates

CMHC has reported that vacancy rates have been trending downward across most major urban centres across Canada with rates sitting as low as 1 to 2% in many areas. In addition, recent changes to mortgage rules in Canada have made it more difficult to qualify and thus will force many to become renters instead of buyers, thus putting even more downward pressure on vacancy rates in the coming months.                                           (Window of opportunity – up to 36 months and beyond)

3. The Spread

This is the difference between your mortgage rate and your cap rate and determines the strength of your cash flow. Even with the market cap compression taking place in the larger urban centers like Toronto and Vancouver, smaller urban centers still offer healthy cap rates in the 7-8% range (you need to do your research or have a great JV partner). Thus, with mortgage rates as low as 3-4% you can achieve a very healthy spread of 3-4%. (Window of opportunity – up to 18 months)

4. Home Equity

With the Canadian real estate market on fire, home owners have enjoyed a significant increase of the equity in their homes. Equity can be unlocked through a mortgage re-finance or HELOC (Homeowner’s Equity Line of Credit) which can be used to purchase an income property. The added bonus is that the interest costs of the re-finance or HELOC can be written off on your taxes. (Window of Opportunity – up to 18 months)

5. CMHC Insurance

Placing CMHC insurance on a multi-unit property reduces the mortgage rate by between 1/2% to 1% over the life of the mortgage and represents significant savings. CMHC is approaching its $600 billion government-imposed limit on issuing mortgage default insurance. While the government may raise the limit, this is just another reason to buy now and take advantage of CMHC mortgage insurance while it is readily available. (Window of opportunity – up to 36 and beyond)

6. Time

In real estate investing, time is your best friend as it facilitates appreciation, mortgage pay down and cash flow. The longer you own an investment property, the greater the ROI. (Window of Opportunity – becomes smaller the longer you wait)

7. Alternatives

With interest rates at historic lows, bank accounts, savings bonds and any other interest bearing investment vehicle offer little return on your capital. The stock market has shown incredible volatility with negligible returns over the past decade and shows little signs of improving any time soon. REITs offer a respectable return on your investment, but investing directly into the asset itself (income property) offers an even greater return on your investment.

— Compiled by Gyanesh Paliwal of TEAM Paliwal at Toronto, ON Canada on November 1st, 2012

Deck Building In Your Backyard

Now that summer has finally arrived, many home owners may think about deck building in a backyard by themselves. Be careful; if it is not done correctly, you may run into problems later when you try and sell your home. Here are 7 things to remember:

1. Deck Building: Do you need a building permit?

Every City has its own rules, but typically, if your deck is higher than 2 feet above the ground and is larger than 108 square feet, you will need a building permit before starting your deck building. In some cities, if the deck is attached to your home, then you always need a building permit before you build. In my opinion, by getting a proper permit in advance, it is easier to answer any questions about your deck when you sell your home later. This is because the City will do a proper inspection when your deck is completed to make sure that everything was built correctly.

2. What material should I use when I build a deck?

David Power, President of www.thedeckbuilders.com in Toronto, tells me that while the foundation of most decks is usually pressure treated wood, the veneer and railings are usually cedar. David warns that if you decide to stain your cedar deck, you should pre-stain all six sides of the wood before you install it. In addition, make sure that there is at least a one-quarter inch gap between each piece of wood.

3. Will it matter how large I build a deck or whether it is close to the boundary line?

The answer is yes. As explained to me by Toronto planner Michael Goldberg of www.goldberggroup.ca, the square footage area of a deck may count when determining whether your home complies with the zoning by-laws regarding how close any structure can be to the lot lines and how much square feet is permitted to be built inside your entire lot. For example, if the deck is at least 48 inches off the ground or the foundation is extended for construction of the deck, then it will count towards how many total square feet you can build on your land. In addition, if the deck is built too close to the lot line, it could also violate the local zooming by-laws. If you make a mistake, you could be forced to remove all or part of your deck.

4. Should you do it yourself or use an expert?

In my opinion, you should always use an expert. If the deck is not properly secured to your home, it could lead to water in the basement later. In addition, improper design and construction could lead to the deck rotting out and collapsing under the weight of people on it. If it happens, you will be liable for any injuries caused to guests who may be injured while visiting your home. Experts will make sure that your deck has the proper footings in place for the foundation so that it meets all building code requirements and that it is properly secured to your home to prevent problems later.

5. Is deck design important before you start?

It is very important. Figure out in advance where your barbecue is going to go, and any furniture you may want to include. If you are going to install a hot tub as part of your deck, make sure you leave enough space for this as well. Some owners prefer the hot tub close to their home so they can use it in the winter. Others prefer it in another area of the yard, so that they can have more room to entertain on the deck.

6. Will I need guard rails?

If the deck is higher than 24 inches off the ground, you will likely need a guard rail that is at least 36 inches high. Once the deck is higher than 6 feet off the ground, it will require a 42 inch high guard rail. In all cases, the openings in the guard rails cannot be larger than 4 inches so that no one falls through.

7. Should a deck be inspected as part of any home inspection when buying a resale home?

The answer is yes. After finishing your deck building, professional home inspectors should be able to tell you whether the deck is deficient in any way and whether it may have to be replaced as a result of poor workmanship.

When you are looking for a deck contractor, get references and look at examples of the work they have done elsewhere. Properly constructed decks should last for at least 20 years.

Credit for this article goes to Toronto Real Estate Lawyer : Mark Weisleder, http://www.markweisleder.com

1. When must real estate deposits be paid under the standard Ontario real estate contract?

In Ontario, the standard real estate contract gives the buyer two choices; you can pay the deposit immediately when you present your offer to the seller, or you can agree to pay it within twenty four hours after the seller accepts it. Most buyers prefer the second option. If you are in a bidding war, you will be encouraged to come up with the deposit immediately, to show additional good faith to the seller.

2. Can the buyer just cancel the deal by refusing to pay the deposit after the deal is accepted?

The answer is no. Once the deal is accepted, you can’t change your mind. If you do, the seller can sell the property again and if they obtain less money than you were going to pay them, the seller can sue you for the difference, plus legal fees.

3. What happens if the deposit is paid late?

If you are late with the deposit, the seller has the right to cancel the deal. This is because all time limits matter in real estate contract sand if you are late, even by a few minutes, the seller can try and cancel. I have seen this happen many times, especially when the seller knows that there is another buyer out there who will pay more money. If you need more time to come up with your deposit, say so in your offer.

4. How much should a buyer pay as a deposit so the seller will feel secure that the deal will close?

This is a tough question, and will largely depend on where your home is located. In the City of Toronto, deposits are now usually up to 5 per cent of the sale price. In Brampton, it is closer to 2 per cent. In some areas of Ontario, deposits can be as little as a few hundred dollars.

5. Why can’t the deposit be paid to the seller instead of the seller’s agent?

If the seller goes bankrupt or disappears with the deposit, the buyer is not protected. When the deposit is held by the real estate brokerage, it is in trust and is also protected by insurance so even if the brokerage goes bankrupt, the buyer can get their money back.

6. If the buyer is not satisfied with their home inspection, how can a seller refuse to release the deposit back to the buyer?

This happens more than you think. Real estate deposits cannot be released unless both the buyer and seller agree. If a seller believes that the buyer did not act in good faith in trying to satisfy their condition, whether it is a home inspection, financing or a condominium status certificate review, they can refuse to release the deposit. This means it stays in the broker’s trust account until a judge decides who gets it, which can take years. As a precaution, buyers should consider making two deposits in their offer, a small one of say one per cent when the offer is accepted, and a second larger deposit once the condition is satisfied.

Be serious and understand the rules about deposits before you sign any real estate contract. It is expensive to change your mind later.

— Credits for this article go to MARK WEISLEDER Real Estate Lawyer, Author, Speaker

1. Check references  before a home renovation

Before your home renovation, ask any contractor how long they have been in business and for a list of prior customers and then call each one to make sure that the work was completed on time and on budget. Go out and take a look at the work that was done so you can judge the workmanship yourself. You may also consider doing a credit check on the contractor as well. Also make sure that the contractor is licensed and that they carry insurance should any accident occur, causing injury to any worker or damage to your property or any neighbour’s property.

2. Will the contractor be obtaining a building permit?

In most renovations, at least one permit is needed, whether electrical or building  so be extremely wary of anyone who tells you that they do not need any permits. By applying for and obtaining a proper permit in advance, you can be sure that the City will do a proper inspection when the work is completed to make sure that everything was built correctly. This will be important for any potential buyer if you are planning to sell after the renovations are complete. In my experience, title insurance companies will always question when purchase prices dramatically increase and if they hear that there was a home renovation, they will immediately ask for proof of permits. If these are not produced, then it is unlikely that any future buyer would be insured if the work turned out to be faulty and the City later required major repairs.

3. No cash deals

Contractors or owners may offer to do the work for cash in order to obtain a discount. Besides this being against the law, you will have no proof of payment if the work is poorly done and problems arise later. You will also likely not have a written contract that you can point to for assistance.

4. Tie payments to work milestones

Do not pay more than 10% as a down payment, and then make sure that you do not pay out more than the work completed at different intervals. As explained to me by construction project manager and home inspector Brian Edwards of Westbrook Building Inspection Services, make sure that the contractor also provides you with proof at every stage that any sub-trade that is being used has also been paid for the work done.

5. Make sure everything is clear and in writing

It goes without saying that you must have a written contract setting out clearly the work that is being done, everything that is to be included and the stages of payment. If you expect a certain type of handle for your cabinets, get it in writing so that there is no confusion. If there any appliances, include the brand name, model number and colour. The contractor should restore any damage to the driveway or landscaping as a result of the work completed. If you are getting a warranty, how long will it be for and what will it cover. If there are any warranties being supplied by sub-trades, these should also be transferred to you upon completion of the work. Consider an arbitration clause to solve any disputes, to avoid costly legal proceedings.

If you are properly prepared before you hire anyone to do a home renovation, you can get it done with reduced stress for you and your family.

— Credits for this article go to MARK WEISLEDER Real Estate Lawyer, Author, Speaker

First time real estate investors are often very confused with the process. Here are some helpful tips to guide your buying decision.

1. Real estate investors usually do not purchase the property without a loan. First Visit with a mortgage broker or your bank to determine how much money you can afford to borrow responsibly for your investment.

2. Look for properties that generate a positive cash flow. What this means is that the rent that you receive from tenants should be enough to pay your mortgage payment, property taxes, utilities and insurance bills. Budget an additional ten percent on your overall payments to pay for minor repairs that will invariably arise. Currently this is very difficult to find in the Toronto area. Do not be afraid to expand your search to smaller communities, where you will be able to find more properties that match your search criteria.

3. Use an experienced local real estate agent who also invests in real estate themselves. Investors learn about the pitfalls only through first-hand experience, both good and bad, and you want that experience working for you as well.

4. Have any property inspected by a professional home inspector. In addition, find a contractor who you can trust to give you the right advice for any minor repairs or renovations that may be required, especially for older properties, in order to add the most value to your investment.

5. Consult with your accountant and lawyer as to how you will take ownership of the property. There are some benefits in taking title in the name of a limited company, in order to protect yourself against personal liability should someone get hurt on the property and for other tax planning purposes. However, on the other hand, you will also have to pay about $1,000 in incorporation fees and have to file a separate tax return each year for your company.

6. Keep proper records of income and expenses for your investment property. Do not mingle these with your personal bank account as it will become difficult to properly trace this when you have to file a tax return at the end of the year, regardless whether you own the investment in your personal name or in a company name.

7. If you are buying with a partner, make sure you have a proper partnership or joint venture agreement to protect both of you should things not work out as planned. As real estate investors, provisions should be made if one of the partners wants to sell and the other one doesn’t, one partner is not paying their share of expenses or what happens if one of the partners dies.

8. Hire an experienced property manager to assist you in finding suitable tenants and dealing with any ongoing maintenance, repairs or other complaints by tenants. You do not wish to be woken up in the middle of the night to handle emergency repairs. Budget an additional $100 per month for this service.

9. Be careful not to buy and sell properties quickly. The Canada Revenue Agency may view this activity as business income. This means that you will have to pay tax on any profit you make on your investment. It is preferable to buy properties for the long term, rent them out and use your positive cash flow to reduce the amount of your mortgage owing, building equity in your property. If you then sell years later for a profit, it will likely be classified as a capital gain and thus one half of your gain will be tax free.

10. Don’t be afraid to walk away if the deal does not work for you, no matter how much time you may have invested in the property.

Be prepared before buying any real estate investment.

— Credits for this article go to MARK WEISLEDER Real Estate Lawyer, Author, Speaker

Billions spent in new construction, renovation, and infill over the past decade have contributed to a serious upswing in the calibre of the Canadian housing stock, propping up residential average price in the country’s major centres, according to a report released today by RE/MAX.

Since 2000, the value of a Canadian home has doubled, rising from $163,951 to $339,030 in 2010. Nowhere has the upswing been better captured than in both the value of residential building permits issued nationally between 2000 and 2010—at $340 billion—and the estimated $450 billion spent in renovation. The impact of these two forces alone has fuelled the Canadian residential real estate market – as well as the construction industry—for more than 10 years.

As a result, investment in the Canadian housing stock is at an all-time high in the 16 Canadian residential real estate markets examined in the RE/MAX Housing Evolution Report. Higher quality Canadian housing translated into extraordinary price appreciation across the country—with 62 per cent (10 markets) experiencing increases in excess of 100 per cent since 2000.

“While a number of external variables were also behind the exceptional gains, revitalization—amid an aging housing stock—and newer construction are largely underestimated factors supporting Canadian housing values,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “The trend is expected to continue for years to come as investment in residential real estate through renovation, infill, and redevelopment ramps up across the country. City planners, builders, developers, and homeowners have only just begun.”

The report found that the unprecedented sum funneled into housing has effectively changed the landscape of Canada’s major centres. New home construction has advanced suburban sprawl, giving rise to new sought-after pockets in virtually every centre across the board.

Infill continues to redefine neighbourhoods, particularly in areas where the value of existing structures have not kept pace with escalating land values. The trend was evident in all centres, but had the greatest impact in large metropolitan cities such as Toronto and Vancouver. Bungalows on large lots are prime targets, making way for custom builds that transform working-class subdivisions of yesteryear into up-and-coming upper-end pockets. Infill is also maximizing land potential, often replacing one, two or several tired structures with a block of town homes or mixed-use residential, even high-rise apartments.

“Renovation has also had a tremendous impact on housing throughout the decade, so much so that it’s emerged as, arguably, Canada’s next national past time,” says Polzler. “Residential renovation spending has been gaining momentum year-over-year since the early part of the decade and now exceeds $60 billion annually.”

The trend has not been limited to single-family homes—although that activity has been nothing short of remarkable. Canada’s cities have also mounted ambitious renewal of their own, particularly in the heart of most major centres—the urban core. Strategic smart growth plans are altering cityscapes, challenging our concepts and perceptions—including our purchasing patterns—and creating partnerships that are working to escalate our markets to world-class status. Non-residential construction, including infrastructure spending has had a positive secondary impact, in turn boosting spending on the residential side.

“The past decade has also marked the rise of the condominium—moreover, its undeniable acceptance as an attractive option as opposed to a secondary compromise,” says Polzler. “Toronto, for example, has become the largest condominium market in North America. Yet, it isn’t just gaining traction in large centres like Toronto, Ottawa and Vancouver, but also in smaller cities such as Kelowna, London and Halifax—to name a few. Running the gamut from entry-level units to upscale, luxury suites, condominiums have gained widespread appeal with aging boomers, looking for lifestyle and low maintenance; young professionals, attracted to trendy locales; and first-time buyers, looking to get their foot in the door to homeownership.”

Condominiums have changed the urban landscape, driving residential neighbourhoods up, instead of out, and bringing to market a bevy of new options from mixed-use residential, live-work studios, lofts, town homes, and condo bungalows. Town homes, in particular, have experienced a serious rise in popularity, bridging the gap for empty-nesters and retirees not yet ready for apartment-style living.

With construction of rental product few and far between in many Canadian centres, it’s no surprise that investors have also been particularly active in the condominium market, especially in college/university towns or where vacancy rates remain tight.

Redevelopment holds the greatest potential for cities on the cusp of exciting rejuvenation. While former brown fields can present challenges, many have opened up and revitalized entire areas. The Barrel Yards Development in Kitchener-Waterloo, for example, is expected to change stagnant industrial land into a bustling residential, commercial and retail hub. Past successful transformations include Garrison Woods in Calgary, the Hamilton Beaches in Hamilton and Bishop’s Landing in Halifax, with countless projects planned nationwide in the years to come. Conversions also continue to breathe new life into existing structures with good bones, while supporting the move to higher-density and the introduction of affordable options.

“Greater sustainability overall, keeping the urban lifestyle attainable, livable and attractive at all price points, depends on redevelopment,” explains Polzler.

Lastly, population growth has been a key factor making housing evolution possible. Since 2000, Canada’s population has experienced double-digit growth of 11 per cent. By 2031, over 42 million people are expected to call Canada home.

“There’s no question that population growth will continue to support investment, propping revitalization and new construction in the years ahead, and by extension raising the bar and prices in real estate markets even further,” says Polzler.

RE/MAX is a leader real estate organization and Canadian housing with over 18,500 sales associates situated throughout its more than 700 independently-owned and operated offices in Canada. The RE/MAX network, now in its 38th year, is a global real estate system operating in 80 countries, with over 6,200 independently-owned offices and over 89,000 member sales associates. RE/MAX realtors lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, and asset management. For more information, visit: www.remax.ca.

Insurance

Title insurance is growing in popularity in Canada. But what is it exactly? Should you get it? Do you need it? Whether title insurance is right for you is something you should discuss with your lawyer, as it depends on the circumstances of your transaction. This article will provide you with some background information about title insurance to help you make an informed decision.

Title to Property

Title is the legal term for ownership of property. Buyers want “good and marketable” title to a property – good title means title appropriate for the buyer’s purposes; marketable title means title the buyer can convey to someone else. Prior to closing, public records are “searched” to determine the previous ownership of the property, as well as prior dealings related to it.

The search might reveal, for example, existing mortgages, liens for outstanding taxes, utility charges, etc., registered against the property. At closing the buyer expects property that is free of such claims, so normally they must be cleared up before closing. For example, the seller’s mortgage will be discharged and outstanding monetary expenses (such as taxes and utility charges) will be paid for (or adjusted for) at closing.

Sometimes problems (or defects) regarding title are not discovered before closing, or are not remedied before closing. Such defects can make the property less marketable when the buyer subsequently sells and, depending on the nature of the problem, can also cost money to remedy. For example, the survey might have failed to show that a dock and boathouse built on a river adjoining a vacation property was built without permission.

The buyer of the property could be out-of-pocket if he is later forced to remove the dock and boathouse. Or, the property might have been conveyed to a previous owner fraudulently, in which case there is the risk that the real owner may come forward at some point and demand their rights with respect to the property.

Who is Protected With Title Insurance?

Title insurance policies can be issued in favor of a purchaser (on new/resale homes, condos and vacation properties), a lender, or both the purchaser and lender. Lenders will sometimes require title insurance as a condition of making the loan. Title insurance protects purchasers and/or lenders against loss or damage sustained if a claim that is covered under the terms of the policy is made.

Types of risks that are usually covered under a title insurance policy include: survey irregularities; forced removal of existing structures; claims due to fraud, forgery or duress; unregistered easements and rights of-way; lack of pedestrian or vehicular access to the property; work orders; zoning and set back non-compliance or deficiencies; etc. For a risk to be covered, generally it has to have existed as of the date of the policy. As with any type of insurance policy, certain types of risks might not be covered, for example, native land claims and environmental hazards are normally excluded. Be sure to discuss with your lawyer what risks are covered and what are excluded.

The insured purchaser is indemnified for actual loss of damage sustained up to the amount of the policy, which is based on the purchase price. As well, some policies have inflation coverage, which means that if the fair market value of the property increases, the policy amount will also increase (up to a set maximum).

How Long is the Insurance Coverage?

In the case of title insurance covering the purchaser, title insurance remains in effect as long as the insured purchaser has title to the land. Some policies also protect those who received title as a result of the purchaser’s death, or certain family members (e.g., a spouse or children) to whom the property may have been transferred for a nominal consideration.

In the case of title insurance covering a lender, the policy remains in effect as long as the mortgage remains on title. A lender covered under a title insurance policy is insured in the event the lender realizes on its security and suffers actual loss or damage with respect to a risk covered under the policy. Lenders are usually covered up to the principal amount of the mortgage.

The premium for title insurance is paid once (at the time of purchase). Generally speaking, in Canada the purchaser of the property pays for the title insurance, though there can be situations where the seller pays for it. Some policies automatically cover both the purchaser and lender; others will cover both for a small additional fee.

Protection and Peace of Mind

Title insurance can help ensure that a closing is not delayed due to defects in title. And, if an issue relating to title arises with respect to a risk covered under the policy, the title insurance covers the legal fees and expenses associated with defending the insured’s title and pays in the event of loss

Grant from Government of Ontario, Canada to First time home buyers

I am a first time home buyer in Ontario Canada BUT this is not a NEW home, this is Resale/used or old home , will I still get some Grant from Government ?
YES !!

Land Transfer Tax Refund for First-Time Home Buyers in Ontario, Canada

First-time homebuyers may be eligible for a refund of all or part of the tax.

• For agreements of purchase and sale entered into before December 14, 2007, the refund only applies on the purchase of a newly constructed home.
• For agreements of purchase and sale entered into after December 13, 2007, the refund applies to all homes, whether newly constructed or resale.

How much is the Refund?

The maximum amount of the refund is $2,000. If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Revenue. No interest is paid on this refund.

Who Qualifies?

To claim a refund, you:

• must be at least 18 years of age;
• must occupy the home as your principal residence within 9 months of after the date of transfer; and
• cannot have owned a home, or an interest in a home, anywhere in the world.

In addition:

• your spouse cannot have owned a home, or an interest in a home, anywhere in the world while being your spouse; and in the case of a newly constructed home, you must be entitled to a Tarion New Home Warranty.

How Do I Apply?

Qualifying taxpayers may claim an immediate refund at time of registration in one of two ways:

• If registering electronically, by completing the required statements under the “explanation” tab of the electronic affidavit.
• If registering on paper, by filing an Ontario Land Transfer Tax Refund Affidavit For First-Time Purchasers of Eligible Homes at the Land Registry Office.

What is the application deadline?

• Applications for a refund must be made within 18 months after the date of the transfer.

If application was not made at registration and the tax was paid, qualified purchasers may apply for a refund by completing an Ontario Land Transfer Tax Refund Affidavit For First-Time Purchasers of Eligible Homes and send it to the ministry.

For full details on the refund program, please see Ontario Tax Bulletin LTT 1-2008 Land Transfer Tax Refunds for First-Time Homebuyers.

HST real estate laws on newly constructed properties can be misleading. Inevitably, an offer to purchase an assignment property by a buyer’s sales representative will state that, if applicable, HST is included in the purchase price (as we typically see in any offer to buy resale residential properties).  According to the Canada Revenue Agency (CRA) , there are sometimes situations where HST will, in fact, be applicable and payable by the assignor/seller who is assigning a contract to buy a newly constructed unit/residence.

HST real estate laws state that when applicable, HST will be payable by the Assignor (buyer #1 from the builder) on the portion of the assignment sale price related to the return of deposits (paid to the builder by the assignor/seller) PLUS the gross profit (the difference between the builder price and the assignment price).

Believe it or not, whether or not HST is applicable to an assignment depends on the original intention/the plan (in the mind of the assignor/seller) when the offer to purchase was made with the builder.  If the PRIMARY PURPOSE by the assignor/seller in buying from the builder was to profit by assigning/flipping the deal, THEN HST IS APPLICABLE to the assignment/sale.
On the other hand, if an individual originally signed an offer to purchase a condo apartment (to be newly constructed by a builder) with the primary intention that the unit bought would be used (for example) by:

(1) a son or daughter when attending University/College, or
(2) a parent who wanted or needed a place to reside, or
(3) a spouse who planned to separate from the family, or
(4) the buyer(s) who intended to downsize, or
(5) the buyer(s) who intended to use the apartment when working downtown or when visiting Toronto
(6) a son or daughter who was engaged to be married, or
(7) buyer wanted to move closer to a workplace OR to relocate a place of work

THEN the Canada Revenue Agency would typically conclude that HST is not applicable on the assignment/sale if (at a later date) a reasonable change in circumstance resulted in an assignment/sale of the unit if, for example,

(1) such son/daughter chose not to go to University/College, or
(2) the buyer’s mom or dad no longer could use or wanted to use such apartment as a residence
(due to their death or needs a retirement home), or
(3) intention to separate from family changed, or
(4) decision was made later not to downsize, or
(5) the buyer(s) reasonably changed his/their minds about such intended use, or
(6) the engaged son or daughter decided not to marry or decided to live elsewhere, or
(7) the workplace location changed or the intended relocation of workplace changed

The question is whether the facts or circumstances would indicate to the Canada Revenue Agency that the condo was originally being acquired from the builder for the primary purpose of personal use versus buying the unit for only a potential profit with the intention of assigning or flipping the deal.  If a buyer purchases two or more new condo units or has a corporation purchase a residential unit, it is more difficult (perhaps impossible) to try to explain to the Canada Revenue Agency that the primary purpose in buying from the builder was to acquire the unit for personal use as a residence for an immediate family member.

For a more clear and specific advise on HST real estate laws in Canada, readers are advised to seek legal advice from a seasoned Real Estate or Tax Lawyer.