If you find yourself involved in a dual agency relationship, before receiving an offer both you and the other party will be asked to consent in writing to this new limited agency relationship.

This relationship involves the following limitations:

1. The Agent will deal with the Buyer and the Seller impartially.
2. The Agent will have a duty of disclosure to both the Buyer and the Seller except that;The Agent will not disclose that the Buyer is willing to pay a price or agree to terms other than those contained in the Offer, or that the Seller is willing to accept a price or terms other than those contained in the Listing;The Agent will not disclose the motivation of the Buyer or the Seller to sell unless authorized by the Buyer or the Seller;

   The Agent will not disclose personal information about either the Buyer or the Seller unless authorized in writing;

3. The Agent will disclose to the Buyer the defects about the physical condition of the Property known to the Agent.

For more information on dual agency see »

Listing Agent

The agent who represents the Seller.

This is the Agent you call when you see a ‘For Sale’ sign in a yard; or when you call about an ad in the newspaper; or when you walk into an open house on Sunday afternoon. This Agent is obligated to get the best price for the seller. This Agent becomes a “Dual Agent”, if he or she represents a buyer on the sale of one of his or her company’s listings.

Buyer’s Agent

The agent who represents the Buyer … and maybe the Seller too.

Every real estate agent now wants to call themselves a “Buyer’s Agent”. Buyer’s Agents that work in a traditional real estate office, which takes listings, can indeed represent a buyer. But if that buyer wants to see a home listed by the same company, then the buyer’s agent becomes a dual agent representing both the buyer and the seller. Can someone fully represent two parties, with opposing interests, at the same time? We think not.

Exclusive Buyer’s Agent

The agent who represents only the Buyer … and never the Seller.

This Agent works for a real estate company that never takes property listings, but rather, chooses to represent BUYERS ONLY – 100% of the time. This agent never risks becoming a dual agent. An Exclusive Buyer’s Agent represents the purchaser’s interest 100% of the time. This is the choice we prefer.

The maximum refund would be $2,000 and apply to Agreements of Purchase and Sale on resale home entered into after December 13, 2007.

See the government bulletin outlining details of the changes »

First-time home buyers who purchase a new home will receive a rebate of the Provincial Land Transfer Tax (LTT). All other buyers will continue to pay the full applicable tax. The maximum Provincial LTT rebate is $2,000.

Details

The 1996 Ontario Budget announced a special one-year provision to the Provincial LTT that was renewed every year and is now a permanent program.

FIRST-TIME BUYERS who purchase a new home will receive a rebate of the Provincial LTT. All other buyers will continue to pay the full applicable tax.

The maximum rebate is $2000. If an individual owns less than 100% interest in the newlybuilt home, the amount of the rebate would be reduced and calculated according to the amount of interest in the home.

A rebate of $2,000 is equivalent to the Provincial LTT payable on a purchase price of $227,500 (net of GST).

Only individuals who are at least 18 years of age, have not (or spouse) previously owned an interest in a home anywhere qualify for the rebate.

Individuals who have received an Ontario Home Ownership Savings Plan (OHOSP) based refund of the Provincial LTT do not qualify.

A real estate transfer tax is assessed on real property when ownership of the property is transferred from one party to another. The Provincial Land Transfer Tax is a percentage of the value of the property based on a graduated scale:

• 0.5% on amounts up to and including $55,000;
• +1.0% on the amount exceeding $55,000 up to and including $250,000;
• +1.5% on amounts above $250,000 up to and including $400,000 for residential
• +1.5% on the amount in excess of $250,000 for business properties;
• +2.0% of the amount in excess of $400,000. [Residential only]

For more information call the Ontario Finance Ministry at 1-800-263-7965.

Toronto Program (TLTT)

First-time home buyers who purchase a re-sale or newly constructed home will receive a rebate of the Toronto Land Transfer Tax (TLTT).

Details

The City of Toronto provides a rebate of the TLTT to first-time home buyers of re-sale or newly constructed homes.

The maximum Toronto rebate is $3,725 (equivalent to the TLTT payable on a $400,000 home).

According to the City of Toronto, eligibility rules for the TLTT first-time buyer rebate will mirror provincial rules, as follows: The purchaser must be at least 18 years of age.

The purchaser must occupy the home as his or her principal residence no later than nine months after the date of the conveyance or disposition.

The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.

If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world while he or she was the purchaser’s spouse. If this is the case, NO refund is available to either spouse. Note: If a purchaser’s spouse owned an interest in a home BEFORE becoming the purchaser’s spouse, but not while the purchaser’s spouse, the purchaser may be eligible for some rebate.

The tax is a percentage of value of the property based on a graduated scale:

• 0.5% of the amount of the purchase price up to and including $55,000, plus
• 1% of the amount of the purchase price between $55,000 and $400,000, plus
• 2% of the amount of the purchase price above $400,000

For additional information, contact the City of Toronto at 416-338-0338

Although we believe the above information is accurate it is not intended to be legal or financial advice. We accept no responsibility for any loss arising from any use or reliance on the information contained herein.

But what’s acceptable in the aisles of the local Loblaws oe Sobeys is not such a good idea when you’re spending a hundred thousand dollars or more on a house. That’s why savvy home buyers make lists before they begin looking at specific houses. It’s a great tool for determining what you want, what you need, and what compromises you’re willing to make.

Your list can take many forms. Some buyers jot down the amenities they need (e.g., type of construction, number of bedrooms, a garage or fenced yard) and the amenities they want (e.g., a large kitchen or master bathroom with jetted tub). Others rank specific amenities along a continuum of desirability. Either way, such lists can go a long way in helping you determine just how important various features really are.

If you’re buying with a spouse or partner, have them make their own list — and be prepared to compromise on the differences. And if you’re working with a real estate agent, be sure to share your list(s) with them; they can search thousands of listings based on dozens of criteria. Either way, carry your criteria with you and compare how the houses you look at stack up.

But when everything else is right, it’s funny how you can forget all about something that you thought you absolutely needed.

If there’s one thing to remember about your list, it’s this: Don’t let your wants blind you to your needs. It’s all too easy to be dazzled by a big deck or master bathroom, for example, and completely miss the dimly lit bedrooms or lack of closet space.

Focus on what you want and you may overlook a home that fits your needs perfectly; focus on what you need and you may be able to add what you want down the road. (It’s a lot easier to add a deck than relocate a bedroom.)

Likewise, once you start looking at homes, don’t be surprised if you start looking at your list differently, too. Simply put, no home will meet all your criteria, and compromises are inevitable. Needs turn out to be wants, wants suddenly become needs, and no one but you can determine which is which. Update your list as you go along and you’ll eventually zero in on the amenities that really matter. Yes, it will be a compromise, but it will be one you can live with.

Other People’s Needs

Even when you’re buying a home, it’s a good idea to think like a seller. (You probably will be at some point.) To maximize your home’s appeal for future buyers, look for the amenities most other homebuyers say they want or need:

• An open floor plan
• Two or three bedrooms
• Two or more bathrooms
• Large kitchen
• Walk-in closets
• Energy efficiency
• Air conditioning (where appropriate)
• First floor laundry room
• Fireplace
• Covered front porch
• Level yard

Now let’s get to work on that list …

“January or February is when we’ll really see the effects of the taxes,” she said. “After Feb. 1, everyone will have to pay the tax … [and] the months leading up to that is when we’ll see a real bump in people trying to get in before that deadline.”

The real estate board’s figures showed a 15% increase in sales across the Greater Toronto Area over last October, bettering the previous record for the traditionally mediocre sales month set in 2003 by 10%.

The board said there were a total of 7,915 single family homes sold last month, driving the overall figures for the year to 12% above those of last year and setting up 2007 as a potentially “banner year,” said Ms. O’Neill.

The North York neighbourhood of Willowdale saw a 67% bump in sales over the same period last year, while condominium sales in Etobicoke’s south Humber area pushed its overall sales to 60% above last October’s.

Bijan Baniasadi, a realtor with ReMax Metro Inc., has been selling homes in the Willowdale area for 11 years and said yesterday that he has not seen a market this overheated in a long time. “People are buying as fast as they can put the bricks one on top of the other,” he said. “A real rush is being created and the prices just keep jacking up.”

According to the real estate board, prices rose in October across the GTA to an average of $394,646, a 4% increase over the previous month. Mr. Baniasadi said in his area, bidding wars are becoming commonplace and prices are increasing because there are far more buyers than there are properties for sale. “Houses are selling for $700,000 that three years ago you could’ve gotten for $300,000,” he said.

But he has not heard buyers express concern about Toronto’s land transfer tax, passed by city council on Oct. 22 — at least not yet. “The tax is too new … it only happened a couple of weeks ago,” he said. “But it’s going to settle the market in the coming year, I think.”
Ms. O’Neill agreed. “I think it was a marginal effect on the October figures,” she said. “If I had to put a number on it I’d say maybe 5%.”

But she said the new tax, which includes an exemption for first-time homebuyers purchasing properties up to $400,000, ranges from 0.5% to 2%, depending on the price of the residential property, will eventually act as a major drag on Toronto home sales.

“I think it’s going to be a disaster for the city,” said Ms. O’Neill. “If buyers move just outside the Toronto boundaries, that will save them thousands of dollars and people buying homes watch those costs: they watch them very closely.”

The tax will add $3,725 to the price of a $400,000 home. The real estate board was one of the most vocal critics of the tax, which Mayor David Miller has said is necessary to cover a looming shortfall in the city’s budget next year.

Pickering had the strongest overall showing of GTA communities last month with a 34% increase in overall sales, including a doubling of the number of condominium sales.

The formula used to be simple. For decades, the thinking was that your monthly mortgage payment, including taxes and insurance, should not exceed 28 percent of your gross pay, and that all your loans, mortgage included, should not exceed 36 percent. Lenders used that formula to qualify people for loans, and people relied on lenders to tell them what they could afford.

Today, lenders rarely use this cookie-cutter method. Some focus more on how much of a person’s monthly income goes toward paying off debt. Some do not use ratios at all. But whatever method lenders use, borrowers should play it safe and stick to the old formula, even if it means scaling back expectations.

You may need to start with a condominium or a small house, look at your purchase as the first investment, and then move up. Do not assume that because a lender is willing to loan you a certain amount of money, you should take all of it. Instead, assess your financial situation, make a budget and decide how much you can afford to sink into a mortgage each month.

Start by figuring out how much you now pay for housing. Do you have to pay the same amount on a home loan? Can you afford to pay more? If so, how much?

Below is some of the Mortgage options currently available in the Canadian Market:

Fixed Rate vs. Variable Rate Mortgages

With a fixed rate mortgage, the interest rate stays the same throughout the term of the loan, providing a measure of stability that some prefer. A variable rate mortgage can allow the borrower to take advantage of low rates as it typically has an interest rate that is calculated on an ongoing basis at the Bank of Canada prime lending rate minus a set percentage.

An Open or Closed Mortgage?

Open mortgages allow the borrower to pre-pay, renew or refinance at any time before maturity without penalties. A “closed” mortgage, on the other hand, usually allows for a set percentage of the principal to be prepaid without penalty. A “closed” mortgage may also be renegotiated or refinanced in most cases with the payment of a penalty which varies from lender to lender.

High-Ratio Mortgages

While a conventional mortgage is a loan for up to 80% of the purchase price of a property, a high-ratio mortgage allows you to borrow up to 95–100% of the purchase price. This type of mortgage must be insured.

The above-mentioned options are just a starting point – there are numerous other mortgage features to be explored, a specialized Mortgage Consultant will work with you to determine which mortgage best meets your individual needs and objectives.

The first question obviously has everything to do with how much money financial institutions are willing to lend you. And that, in turn, depends on your income and how much debt you already owe.

In loose terms, the amount of mortgage you can afford will be equal to about four times your gross income. It’s more of a rule of thumb because obviously everyone is different. But an average person with a middle income and $2,000 in outstanding credit card debt will be at the four times mark.

More specifically, mortgage lenders such as the big banks will tally up your potential home ownership costs, like principle and interest payments on your mortgage, property taxes, utilities and any condo fees. Most lenders want to see those costs add up to no more than 32 per cent of your gross monthly income. Next they will add on how much other debt you owe each month, such as credit cards and car payments. Taken all together, your total debt service ratio (TDR) must not be more than 40 per cent of your income. So, for instance, if your gross household monthly income is $5,000, then the amount you owe for your house and other debt must not exceed $2,000. If your TDR comes in high, then you have to either cough up a larger down payment, or consider buying a cheaper house.

But even if you do have enough money to borrow the maximum, that doesn’t necessarily mean you should. A lot depends, of course, on where you are in life. A couple with no kids and few debts will be fine taking out the maximum mortgage. The problem is, lenders don’t always factor in costs associated with raising children. That’s an issue that isn’t looked at by the banks. A couple with children might want to ease back on how much they borrow. That could mean aiming for a total debt ratio in the low 30 per cent range instead.

Before signing your life (savings) away for a roof full of shingles, some bricks and drywall, you may want to plug the pertinent numbers into a mortgage calculator (all the Big Banks have them on their web sites), like this one. At least now you’ll know, when all the paper work is done, if you’ll be able to afford mini-blinds.

Having figured out how much you can borrow, the next big decision is whether to lock in interest rates with a fixed-rate mortgage or opt for one with rates that float. There is no magic answer. Financial advisers will tell you that over the long run variable mortgage rates, which swing over time according to cuts and hikes made by the Bank of Canada, tend to be the cheaper way to go.

But it really depends on how comfortable you are with risk. Say inflation jumps in the coming years, which, with Canada’s overheated economy, is a very real possibility. The central bank will be forced to hike short-term interest rates and that will trigger a rise in variable mortgage rates, meaning it will take you even longer to own your house outright. Are you going to be on the edge of your seat every time the Bank of Canada has a new announcement? That will keep some people up at night. In that case, especially for first-time homebuyers, it makes more sense to lock in mortgage rates for the first five years, and then switch to a variable mortgage later on.

The tough decisions don’t end once you’ve moved into your new home, though. Over the years, you’re likely to add to your brood, and those four walls may start to feel a bit constricting. This brings up a whole new question. Do you renovate or just move into a bigger home? It used to be families spent decades in one house unless they had to move for a job. Now young people think nothing of trading up after barely five years. So what works best for a growing family?

The first thing you have to ask yourself is how much more house you need. Let’s say you’re planning to have a third child and need to upsize. So you get quotes from contractors to see how much it would cost to renovate your home as you would like. Once you know that, you can look around to see if you can get a house that will be as good, or better, for the same price. If your $300,000 house needs $220,000 in work you may be able find a house for half a million that you like much better.

But on top of the sale price new house there are other costs to consider, such as real estate commissions, legal fees, land transfer taxes and possible penalties if you break your existing mortgage. Those can easily add up to more than $20,000. As an added reason to go the reno route, the government offers a GST credit on fees paid to a contractor for a major home renovation.

Having said all that, there are some important things to consider before embarking on that renovation project. Where will your family live while the house is being ripped to pieces, and how much will that accommodation cost? What’s more, can you even find a contractor you trust to do the work? Some of the better contractors in the Toronto area now have a three-year waiting list.

At least that will give you plenty of time to catch up on all those home reno reality TV shows.

[tax tips]