How the HST Will Affect Home Buyers in Ontario

It seems that most Ontarians aren’t too concerned about the implementation of HST in Ontario this coming summer (the new tax goes into effect July 1st, 2010). On the surface it really doesn’t seem to be too impactful; we go from paying 5% GST and 8% PST, to paying 13% HST.

Perhaps the only people that should be concerned are some bureaucrats that collect taxes – it seems like we can now eliminate one of the old GST or PST collection offices. There is certainly going to be some efficiency realized through the harmonization, but there will undoubtedly also be some cash-flow negative results for Ontarians too.

HST now applies to areas that were previously PST exempt, which will now, among other things, increase the amount it costs to buy a home. Some fees which were previously PST exempt for home buyers include:

• Legal Fees
  
• Mortgage Insurance Premiums
  
• Home Inspection Fees
  
• Real Estate Fees
  
• Moving Fees
  
• Title Insurance

What does this all mean to the average home buyer? A report by the Ontario Real Estate Association has estimated that someone buying a home for $360,000, will now pay an extra $1749 to $2325 (the variance comes from the variance in professional fees in the marketplace).
It remains to be seen if the effects of the HST will make a significant impact on home sales, but my feeling is that it will. The effect of the HST, coupled with changes proposed in CDN mortgages (see my blog from a couple weeks back), will almost certainly slow the real estate market down – in particular for first time home buyers.
It has been said that there are only two things certain in life: Death and Taxes. Well, this tax will not be the death of us, but it will slow us down a bit. My advice to you, if you are planning to buy a home this year: Buy soon and complete the purchase before July 1st. By buying this spring you will not only save on the increased HST fees, but you will lower your risk of getting a higher interest rate on your mortgage (rates seem to have nowhere to go buy up).
If you are thinking about buying or selling your home, call Derek Dunphy, Sales Representative at Johnson Associates Real Estate Ltd., Brokerage. Phone (905)877-5165, email Derek@CallDerek.ca, or contact through the website: http://callderek.ca/.

Is it a good time to Sell?

People often ask me: How is the market doing?



What they really want to know is "Is it a good time for me to buy?", and/or "Is it a good time for me to sell?", or more specifically "Will I make lots of money if I act now, or should I wait?"


In my opinion, the answer to these questions really depend on the person asking the questions. If you're a real estate investor, beyond your principal residence, than the questions are applicable - for the rest of you, the state of the real estate market at any given time, usually doesn't matter.


The time to buy and sell, usually doesn't depend on the market at all. Most times people are buying and selling at a time of change in their life; the family is growing, the nest is emptying, you've been transferred in your employment...


Now, don't get me wrong - the ups and downs of the market can certainly effect the amount of money we receive when we're selling our home; but they also effect the price we pay when we are buying. For most, if they are buying in an up market, then they are selling in an up market. You get a little more than you thought you could for your home - but you usually pay a little bit more too. The same goes for a down market; you get less than you thought you would, but you score a deal somewhere too... One however should be very careful when the market is changing rapidly - like it has been over the past year.

A rapidly changing market is an example of a time when a good REALTOR® can help you (this is a shameless plug, I am talking about me)... A good REALTOR® will read the market carefully and help his client buy and sell intelligently; based on current market conditions, with an eye to which direction the market is going. Many real estate professionals misread the changes in the market over the last year, and many more didn't study the market at all - they simply list the home for the price everyone else is selling for, and hope for the best. Having the wrong REALTOR® can cost you thousands and thousands of dollars. Many homes are sold for less than they are worth, while others sit and sit and sit.

For most people, their home is their most valuable asset; and selling your home is an important decision that should be handled with the help of a professional.
 
Contact Derek Dunphy, Sales Representative, Johnson Associates Real Estate Ltd., Brokerage:
CallDerek.ca Georgetown Real Estate Website

Home Sellers' Checklist

Have you ever heard the expression "You only have one chance to make a first impression"? This certainly applies to selling your home!


Check out my Home Seller's Checklist to make sure your house is ready to sell:
Home Sellers' Checklist from CallDerek.ca

When our thinking about moving?  Call me, I can help.

Changes to the Canadian mortgage market are coming in 2010

2009 is nearly behind us, and like the rest of the world the real estate industry continues to change and evolve. A good REALTOR® needs to stay on top of current events, economic conditions, and changes to our industry.

With many economists concerned about the sharp rise in house prices over the last year (in spite of a soft economy), the federal government is now looking to pressure banks to tighten up their lending parameters.

Keep an eye out for:
-Banks shortening the amortization terms of new mortgages (cutting back from a maximum of 35 years to 25 years)
-Banks increasing mortgage rates (from their current record low levels)
-Insurers like CMHC increasing the amount of money required for a down-payment (from 5% to 10%)


All of these things are being considered to avoid a repeat of the subprime mortgage crash of August 2008; but any of these changes will also slow the amount of first-time buyers entering the market—which in turn will slow the entire real estate industry.

If you’re planning on moving in 2010, use a REALTOR® that understands the evolving market; call me, I can help.  Contact Derek Dunphy, Sales Representative, Johnson Associates Real Estate Ltd., Brokerage; through my website:
Derek Dunphy's Georgetown Real Estate Website

First Time Home Buyers' Guide

In order to help first time home buyers through the process of buying their first home, I've put together a concise First Time Buyers' Guide. Please check it out, and pass the information along to anyone you know who is thinking about buying their first home.

You can find the guide in the "Home Buyers' Section" section of my website!  Just follow the quick link below!  Please let me know if this guide was helpful.
 
First Time Home Buyers' Guide from CallDerek.ca

Home Buyers' Checklist

I can hear my visitors asking... "OK Derek, I ready to start shopping for a house, but don't you have a convenient form that will help me take notes about each house?"

The answer of course is YES I DO! Just look in the Buyers' Section of my website.  Follow the quick link below!
 
Home Buyers' Checklist from CallDerek.ca

December Market Statistics - Greater Toronto Area

Well 2009 is now behind us - and it is certainly worth noting that December of 09 was a great month for real estate!

The Market Watch Report (which is available each month on my website, in the "Latest Market Statistics" section) shows that December sales were resilient...

In our office here in Georgetown, sales were more than "resilient" - they were stellar. December transactions and sales were up almost 300% over last year - we set a record in our brokerage for December sales.

The first half of 2010 also promises to be busy (according to most economists' predictions). With HST being implemented in Ontario starting July 1, 2010, and interest rates almost certainly set to increase around the same time (according to the Bank of Canada); there are a lot of folks looking to buy before buying a house gets a lot more expensive!

Thinking about moving? Call me, I can help.



Derek Dunphy, REALTOR®

Johnson Associates Real Estate Ltd., Brokerage
December 2009 Market Watch Report from CallDerek.ca