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Archive for June, 2010

I have just received a booklet in the mail titled “What changes – and what doesn’t change – under HST”.
Under the heading of “Home Purchases” it states that for “New Homes up to $400,000” prior to July 1, 2010 there was a 5% GST charge and No PST. But after July 1, 2010 “there is No Change to the amount of tax payable under HST”.
But the fine print reads “The new housing rebate will be 75 per cent of the Ontario component of the HST, up to a maximum of $24,000”. I ask myself, if there’s No Change to the tax structure why would a new home buyer get a 75% rebate? The 8% Ontario tax portion of the HST for a $400,000 home equals $32,000 but a new home buyer will get a maximum rebate of $24,000 leaving the buyer with an $8,000 hole in their pocket. Where does the “No Change” come into effect?
I visited MPP Steve Peters office and was also told that in most cases there was no change to the tax structure but that I should read the fine print regarding the 75% rebate.
I called the 1-800 number in the pamphlet and they admitted that the booklet is misleading and that yes a new home buyer would be paying more tax for their new home. Plus labour, materials and land will all attract a new 8% tax.
On the bright side, a buyer of a resale home pays no tax on the purchase price of their home. Which would you rather have?

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Step 11. Move In!

Moving day will come sooner than you think, so get planning now.

‘Closing date’ often means moving date
Unless you have major repairs or renovations planned, you probably want to move in the day you take possession. If you intend to move at the end of the month, contact a moving company or truck rental company now before they’re all booked. If you can move mid-week or mid-month, a moving company might cut you a deal.

Go with a reputable moving company
We’ve all heard moving horror stories. Go with an established, insured mover, so your items are protected.

Pack it yourself, and pack early
Nobody will take the same care you will. Start early and spread it out over many days. Label all your boxes by room so the movers know where to put them, and label anything that’s fragile.

Do you really need to take that with you?
A new home is a new lease on life, and a chance to liberate yourself from stuff you simply don’t need. If you haven’t used it or worn it in the last year, you probably don’t need it. Have a garage sale, or give it to Goodwill or United Way.

Once you move in
The boxes are mostly unpacked and you’re settling in nicely. You will now feel a strange urge to begin making changes and improvements right away. That old carpet has to go, a bigger deck would be great for entertaining… slow down! Take time to get a feel for your new home, and more importantly, your new budget. Take a deep breath and enjoy what you have, your new home.
Canadian Real Estate Association

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Step 10. Close The Deal

Your offer has been accepted and you can’t wait to move in. But don’t break out the bubbly just yet. You have to close the deal. Your REALTOR® and lawyer will do most of the closing work, but here’s your checklist.

Closing checklist

Immediately begin satisfying any conditions of the agreement that require action on your part. Your REALTOR® can fill out the documents stating that the conditions have been satisfied.

Have your lawyer begin searching title to the property. This can take a while, so make sure you allow ample time.

Well before closing, get your homeowner’s insurance. Your insurance broker will give you a ‘binder’ letter certifying that you’re covered. You can’t get a mortgage without this letter!

Contact your lender and have them finalize your mortgage documents. Have your lawyer review them before you sign.

You must transfer essential utilities like hydro and water into your name and you’ll have to make sure telephone and cable companies switch their services to your name as well.

If you rent, give notice to your landlord or sublease your apartment.

Begin planning your big move! Where are those cardboard boxes?

Send out your change of address information and fill out a card at the post office.
Contact the Ministry of Transport about changing your driver’s licenses.

Walk through your new home one more time with your REALTOR®.

A day or two before closing, you’ll meet with your lawyer to sign the closing documents. Your lawyer will tell you in advance what certified cheques you’ll need to seal the deal.
Canadian Real Estate Association

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Buyers and Sellers must understand that there is no HST on the price of a resale residential home.
But the HST that applies to New Homes will be 13% after July 1, 2010!
Yes the builders will be adding, or hiding, this price into the published price of a new home and most buyers will never realize this fact. Even the materials, land and labour used to build that home will also attract 13% HST. The cost increase of a new home will be huge.
So… doesn’t that make resale homes look more attractive? Why would a buyer even consider the purchase of a new home?
If you want to save hundred or even thousands of dollars on your next purchase you must consider a resale home. Contact me today for help!
Earl Taylor – Broker 519-670-9223

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When you’re buying a new home, you’ll want to scrutinize every last detail. Home inspections rarely cost more than a few hundred dollars, and can save you from unpleasant surprises. Your REALTOR® can help recommend several home inspection companies to choose from.

Make a conditional offer based upon a satisfactory home inspection
This is an increasingly standard condition on any resale home. If the seller doesn’t want you closely examining the home before you take possession, you have to wonder why.

Go with a qualified professional
Sometimes its best to bring in a professional licensed electrician and plumber instead of an actual home inspector.
If you opt for a home ispector, make sure your inspector is a member of the Canadian Association of Home & Property Inspectors (CAHPI). It’s your guarantee they have the training and experience for the job.

What will they check during the inspection?
Lots of stuff. Plumbing and electrical systems, the roof, visible insulation, walls, ceilings, floors, windows and the integrity of the foundation. They also check for lead paint, asbestos, mould, outdated and dangerous wiring, and evidence of pests like mice or termites.

Join the inspection
Get up close and familiar with your new home with this three-hour checkup. If any problems are detected, you’ll see them firsthand, and learn some maintenance tips from a pro. You’ll get it in writing
Their report will summarize the condition of your home. If there’s anything that needs work, the home inspector will provide an estimated cost for the repairs.

Home inspection for a new home?
New does not equal perfect, and construction quality can vary greatly from builder to builder. In some provinces, repairs and corrections in new homes may be covered by a government or industry-sponsored warranty program. Bad news doesn’t necessarily mean it will have to
cost you.

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Money makes the world go round, and a mortgage gives you the power to buy a home. This isn’t the most fun step in buying a home, but it’s vital.

Who do you talk to?

Call the bank
There are hundreds of banks, credit unions and other lenders out there who would love your monthly mortgage payments. So talk to everybody and don’t be money-shy! Talk to your banker, other banks and people you know. REALTORS® can be very knowledgeable about mortgages and have lots of good advice.

Call a mortgage broker
Many mortgage brokers do this for a living but many don’t. Why take the chance. Put your trust in a bank – that way if you want to talk to an actual person after closing they’ll be there. Most banks have mobile mortgage specialists who do this for a living. Need help finding an great specialist – call me!

Mortgage terminology

Mortgage term: refers to how long the bank has agreed to lend you the money – typically from six months to five years. At the end of the term, you usually renegotiate a new term.

Amortization: the length of time it will take to pay off the whole mortgage, often as long as 25 years. The longer your amortization, the lower your monthly payments, but the more you pay in interest over time.

Interest rates: Interest is the cost of borrowing money, and the interest rate tells you exactly how much. Using this mortgage calculator, check the difference between borrowing $100 000 at 6% and at 9% at the same amortization. Surprising, no?
That interest rate not only affects how much you pay, it also affects how much you can borrow. So keep searching for the best rate!

How big a down payment?
You want as small a mortgage as possible, which means making the biggest down payment possible. Just remember to set money aside for all the fees associated with buying a home. Not to mention moving, repairs, renovations, new furniture… think ahead.

THE HOME BUYERS’ PLAN – A little sweet relief
If you’re a first-time homebuyer with money in an RRSP, you can withdraw up to $25,000 without paying any income tax. If your spouse is also eligible, that’s $40,000. Ask your REALTOR® how to best take advantage of this plan.

Lock into an interest rate? For how long?
It’s a tough question. What if you ‘lock in’ for five years and the rate goes into a period of decline? That could mean you’re stuck paying more than you had to for a long time. But if rates were to steadily climb over the next five years, locking in for five years now would be a great move. Your REALTOR® may have a lot of good advice.

What you need to apply for a mortgage
– Letter of employment confirmation (include your position, your pay and how many years you’ve been with the company)
– List your assets (your car, stocks, bonds, GICs, etc)
– List your liabilities (car payments, student loans, credit card debt, etc)
– Social Insurance Number
– Your chequing account number
– Your lawyer’s contact information
– Information about the house you want to buy
– Don’t forget these extra costs
– Application fee: Some mortgage lenders charge a fee to process your application. But ask to see if you can get it waived.
– Appraisal fee: Your mortgage lender may need to have your new home appraised by a professional, and they often pass the bill on to you. Sometimes your lender will also waive this fee.
– Mortgage broker’s fee: Here’s another reason to avoid the mortgage broker – Your mortgage broker may charge a fee that’s payable on your closing date. Ask your broker to avoid surprises.
– Land survey fee: Lenders may require a survey of your property, even if it’s an existing survey. Get your lawyer on the case.
– Home inspection fee: A home inspection is so important, we devoted an entire step. Avoid surprises and protect yourself… this is money well spent. However, let’s consider bringing in actual professionals like an electrician and a plumber instead.
– Home Insurance: Mortgage lenders require you to carry fire and extended-coverage insurance because your home is the security deposit on the mortgage. Often you can have these payments added to your monthly mortgage payments. Shop around.
– Title insurance: It’s not mandatory, but protects you from all sorts of fraud and potential errors surrounding the title to your land. Ask your lawyer for details.
– Legal fees: You’ll pay your lawyer for their invaluable time and “disbursements” which are the costs involved in title searches, drawing up the title deed, and preparing your mortgage.
– Adjustments: The previous owner may have paid property tax or utilities in advance, and they want to be credited for those payments. Ask your REALTOR® and lawyer what might come up on the closing date.
– Maintenance and utility costs: Remember, you’ll now have more regular monthly payments in the form of property tax and utilities.
– Land Transfer Tax: This Ontario tax varies between .5% and 2%. Ask your REALTOR® or lawyer to calculate the payment.
– The GST and new homes: Resale homes don’t involve GST, but new homes do. If you intend to live in your new home (instead of renting it out) there is some relief. Homes costing $350,000 or less get a 36% rebate. Homes over $450,000 do not qualify for this rebate.
– And applicable GST? (HST applicable as of July 1, 2010).

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Step 7: Making An Offer

You’ve found a home? Congratulations! Now, if you actually want to make it yours, you have to make a successful offer that the seller will accept.

Preparing the offer
REALTORS® can prepare the offer for you. Here are some terms you’ll see in the offer.

Buyer or Purchaser: That’s you.
Seller or Vendor: The present owners.

Purchase Price:
The most important number. Let’s hope the seller goes for it!

Deposit: A cheque you write to the seller’s broker, who deposits in a trust account. This is your way saying ‘my offer is serious’. The size of the deposit is up to you.
Chattels included and fixtures excluded: Be sure you know what is included with the house! The washer and dryer, the microwave, draperies, light fixtures. Don’t leave anything to ‘chance’.

Irrevocability of the offer: The length of time you give the seller to consider your offer. Usually less than 48 hours.

Completion date: The glorious day you take possession! Often 30 or 60 days after signing.

Clauses particular to this agreement: Every transaction is unique, and you may want to add conditions that are important to you, such as a proper Home Inspection.

Your REALTOR® can help ensure no details are overlooked in your offer.

Submitting the offer
You’ve signed on the dotted line and your REALTOR® has provided your offer to the seller’s REALTOR®. This process works best when you don’t meet the seller in person.

The seller can accept your offer
Fantastic, when do you move in?

The seller can reject your offer
It’s not common for an offer to be completely rejected. If it was, your REALTOR® can investigate why and see if there was some misunderstanding.

The seller can ‘sign back’ or counter your offer
The seller wants to alter some part of your offer – most likely the price. The seller will cross out the price on your offer and write a higher number. Now it’s your turn to sign back, and see if you can bring that number down. Good luck!
Canadian Real Estate Association

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