Michela Mantle | Sotheby's International Realty Canada

Real Estate Market Phases

17 January 2019

It’s important to understand the phases of the real estate market as a Buyer and Seller to prepare yourself and your property to get the best deal and maximize your earnings. The real estate market is cyclical and unless there are major disruptions you can almost predict how things are going to go.

It’s important to understand the phases of the real estate market as a Buyer and Seller to prepare yourself and your property to get the best deal and maximize your earnings. The real estate market is cyclical and unless there are major disruptions you can almost predict how things are going to go. 

To understand the phases of the market, you have to first look and understand the patterns of busy, working people. Those busy, working people, are the ones who are likely going to be buying and selling homes. Understanding the psychology of people is the key to understanding the market. This makes timing your property sale or purchase a crucial factor.

The Monthly Phases

Starting in January, we typically see a hangover effect from the holidays. People are enjoying their vacations and getting back into the swing of things for the first two weeks of the month. Often, kids are not back to school until the second week of January. It isn’t until the third week that we start to see more action and movement in the market. Although this action is subdued compared to the busier Spring months, we start to see new properties listed and more interest from Buyers. Buyers start to plan for the year ahead. For example, they meet with their financial advisors to strategize and Sellers do the same. Many of the properties that were listed prior to the new year tend to re-list or re-price and sell fairly quickly. Because this time isn’t characterized as a “busy” time, it is the ideal time for a Buyer. You can get a great deal on a property that has been listed over the holidays. You also limit your competition for purchasing in hot areas as there is less Buyer competition.

As we get into February and March, things start to heat up. Both Buyers and Sellers are getting into the mind set to make moves. I would characterize this as one of the most optimum times to purchase because Buyers are still getting in ahead of the Spring rush with greater choice of properties on the market.

Once April hits, we are in the active Spring market. This lasts until about mid-July. It’s the ideal time to Sell. The weather is great, the sun is shining and properties look fantastic. Buyers are ready and can easily look at properties. Many Buyers and Sellers want to sell to close in the summer months to make the transition easier on their families for moving so that they can get settled before school starts.

As of Mid-July we hit the Summer market. Although many people think the Summer is the best time to sell, I would respectfully disagree. Think about when you take your summer vacation. That’s the same as everyone else. Everyone goes into holiday mode and their interests shift from buying and selling to relaxing with family and enjoying the weather. Because of this, the market quiets while everyone is up in cottage country. This provides a great opportunity for Buyers.

Once we get into September and the kids are back at school, the market fires up again for the Fall Market. This time is very busy, much like the Spring with many Buyers and Sellers looking to transact. Many of properties are listed and there is an increase in competition. Buyers and Sellers alike want to purchase and close prior to the holidays. This is a great time for Sellers to list their properties.

The Fall market starts to slow down right after American Thanksgiving as most people switch gears for the holidays. Now Buyers and Sellers main focus is to save for the holidays, plan their vacations and finalize their work projects before year end. It’s a very busy time of year for most people, so real estate is not top of mind. This is another great time for Buyers to capitalize. The cycle starts back up again third week of January to kick off the year.

As the market ebbs and flows throughout the year, it’s important to time your home purchase or sale accordingly to get the best value or to attract the most Buyers.

Happy buying & selling!


Rent Control Removed in Ontario

29 November 2018

The government has removed rent control on new, previously unoccupied rental units in Ontario.

The government has removed rent control on new, previously unoccupied rental units in Ontario.

Toronto is currently experiencing historically low vacancy rates and record high rental prices. In order to curb this, the Liberal government had implemented rent control on all Ontario rentals that would prevent a Landlord's ability to raise rent outside of the regulated rate. As of November 15, 2018, the Progressive Conservative government has removed those rules.

Going forward, any rental agreement that is signed as of November 15th, 2018 will not be subject to any rent control rules. Landlords are free to raise the rent on their properties at whatever rate they desire.

Bad news for Tenants. Good news for Landlords.

If you are a Tenant or Landlord that has signed a rental agreement prior to November 15th, 2018, then Landlords may only legally raise rent within the regulated government rates.

With the rental rates we are seeing, it is advantageous to look into purchasing your next property versus renting one. Not only are the mortgage rates very similar to your rental rate, when you buy, you're giving yourself the security of a permanent home, building your wealth & making positive gains on your investment.


Cannabis & Your Property

17 October 2018

The New Cannabis Act is now in effect in Ontario. What does that mean for your property? I’ve answered the most common questions that I have been receiving.

The New Cannabis Act is now in effect in Ontario. What does that mean for your property? I’ve answered the most common questions that I have been receiving:

Should I grow cannabis on my property?

I would strongly advise against the growth of cannabis on the premises as it could likely lead to damage to the property. Most of this damage could be hidden behind the walls and in areas unseen by the eye. Home owners who grow marijuana risk stigmatizing the property and as a result, lowering the value of the home. 

How much cannabis can I legally grow in a residence? 

4 cannabis plants can be grown in each residence. This includes condo and apartment units. The growth of cannabis also includes an outside garden as part of the home. 

Are there any standards for safe growing of cannabis? 

Right now there are no regulation in place. Professional electricians and contractors will be required to provide proper ventilation from the plants to help the air flow to the outside in order to stop mold and other harmful issues from being created inside the property.

I’ve purchased a home that was used for the growth of cannabis, will this have an effect on my property value? 

It likely will. A stigmatized property is always harder to sell to a potential Buyer. There could be defects to the property that you were unaware of when you purchased the property and could be currently causing damage to the property or could cause issues in the future. 

When I decide to sell, do I have to disclose that cannabis has been grown on the premises? 

When you decide to sell your property, Ontario's Courts have determined that Sellers don't have to proactively disclose the history of their home during their ownership of it, even if the property carries a stigma. However, there's nothing to stop a Buyer from trying to sue the Seller for failing to disclose the stigma. Even if the lawsuit is unlikely to succeed, the Seller could still face a long, costly legal proceeding. 

A Buyer's Sales Representative may also specifically ask whether the home has ever been used to grow marijuana. The Sales Representative can choose to answer truthfully or decline to answer and direct the Buyer to conduct their own research. A Sales Representative has to follow and respect the Seller’s disclosure strategy. A Representative cannot choose to disclose the stigma without the Seller’s consent. 

This will be a major issue going forward after October 17th, 2018 to see how the Real Estate Council of Ontario & the Ontario Realtors Association will deal with the new rules and regulations pertaining to the legal growth of marijuana. It is still undecided if the growth of marijuana will be considered a material or latent defect to the property. This is due to the fact that the growth of marijuana could create issues that are not seen. Latent defects are not apparent and may not be easily discoverable, even by a home inspector or other expert. If the latent defect poses a serious risk to the health and safety for those who live in the home, it must be disclosed by the Seller. For example, there could be mold behind the walls that the Seller does not know about. This could lead to litigation when problems are uncovered after closing. 

As of right now, any growth of marijuana has to be disclosed within the Agreement of Purchase & Sale.

How can you avoid buying a property that was used for the growth of cannabis?

The Buyers Sales Representative should ask the Sellers Representative if the property has ever been used for the growth of marijuana. It is advisable to conduct independent research into the property’s past. Many municipalities or police services maintain registries of residences that have been used to grow marijuana illegally. However, it is likely this research will uncover only major grow-ops, not the small-scale growing of a few marijuana plants. 

It is highly advisable that within your Agreement of Purchase & Sale, you include a Seller's warranty that the premises has never been used for the growth of marijuana. With the right clause, you can protect yourself. If anything comes up after closing, you have the right clauses in place to make a lawful case against the Seller.

Can you stop a Tenant from smoking or growing cannabis in your property?

You can include a clause within the Agreement to Lease to prohibit your Tenant from smoking or growing cannabis on or within the premises. A proper clause should be included in every Lease Agreement as it will be easier to evict a Tenant if they do not comply with the lawful rules within the lease. 

If your Tenant is a medical cannabis user and smokes or grows marijuana on the premises than legally they can raise a human right issue. It is better to find out if your Tenant is a medical cannabis user at the beginning of the lease and include any provisions within the agreement to protect you and your property.

How will cannabis effect condos?

Some condos are already passing rules and regulations to stop any type of smoking or growth of marijuana plants within the condo building. Condo’s may decide to set aside a part of the building that can be used for growing or smoking cannabis. If there are medical users of cannabis, than they may be required to make necessary changes to their unit in order to make sure that the smoke is properly ventilated and it will not inhibit someone else’s common enjoyment within the premises.

Currently there is a rule in place, in Condominium Law that says that a neighbor cannot commit a nuisance to another neighbor. If the cannabis smoking or growing becomes a problem, the condo can bring an action to the resident who is causing problems.

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Now that cannabis is legal in Ontario, there will be many upcoming changes that will effect houses & condos. I will continue to keep my community updated on any updates to policies and how they will effect home ownership.


Offer Presentation Explained

25 September 2018

The housing market is very misleading to the general public and unless you are “in the know” you will unknowingly fall for the marketing tactics. Take a minute to educate yourself on Offer Presentation to understand how it works and feel confident in your home buying search going forward.

Offer Presentation Explained

If you haven’t bought or sold a house in Toronto recently, your mind is probably blown away when you read the headlines “sold $200,000 over asking”, which is completely understandable because that sounds ludicrous. When you start to educate yourself on the current market, you’ll come to understand that the house that sold $200,000 over asking is actually in-line with true market value. The housing market is very misleading to the general public and unless you are “in the know” you will unknowingly fall for the marketing tactics. These tactics are designed  to draw you into a property that is priced within a budget you are excited and comfortable with. In reality, the price does not legitimately reflect the proper value of the home. I am here to help you gain the insight and knowledge so you are properly educated on the current state of the market.


When there is offer presentation, the price that a home is listed for is what I call a “fake price”. This is because a home is listed well below market (typically 20% under what the home should sell for). This tactic is used in order to draw in more interest due to a very enticing list price. And it works! What is frustrating about this tactic is that the general public never know if the house is listed with an offer presentation date or if the list price is the true price of the home, with offers accepted anytime. It is only a Realtor who can tell you for certain what the selling plan for the property is. I know it may come as a shock but there are still houses listed with offers accepted anytime and so you can see where the confusion begins.


Now you know about the listing price strategy to successfully draw in interested Buyers for an offer presentation, so now let’s look at how the offer process works on offer night:

 

The Sellers Real Estate Agent will set out an offer date and time. Sometimes, the presentation is conducted in person but due to the frequency and ability to sign electronically, most offer presentations are hosted remotely via email. The Listing Brokerage will ask that all offers be registered with their office that day, providing a signed document called the Form 801 that outlines the details of the offer (excluding price and terms). As offers are registered, Agents will be notified with the number of competing offers. When it comes time for presentation, the Listing Agent will present the offers to the Seller in the order in which they are received. In most cases, there are two outcomes that can transpire. One is that the Seller will accept the highest and best offer. The second is that there are multiple contending top offers that are very close. In this case the Seller can give the top offers another chance to improve. Throughout the entire process, you’ll never know what you are competing against. You will only know you have competition via the Form 801. It is up to the Buyer to decide if they want to amend their original offer or not. Once the offer is accepted, all parties will be notified that they have lost or won. The sale price will be disclosed once the deposit and any conditions have been met.

 

You may have heard the term “bully offer” and wonder what that means. A bully offer refers to a Buyer submitting an offer ahead of the offer presentation date. The correct terminology is a pre-emptive offer. The Seller has the right to accept or refuse looking at the offer. Once a pre-emptive offer is registered, all interested parties will be notified. From there, the bully offer could either start an early offer presentation, be accepted or rejected by the Seller.

 

I hope by now you are feeling like you have a handle on offer presentation. But now you are wondering, how do I buy the house of my dreams??? To put it simply, you have to be aggressive. Nine times out of ten you have to put your best offer forward to win. That means: a competitive purchase price based on comparable properties and sales, providing your deposit up front with the offer, setting a closing date preferred by the Sellers, including the exclusions and inclusions provided by the Seller and being condition free. You want to put together an enticing and clean deal that will be accepted by the Seller without hesitation.

 

Remove the conditions, are you crazy??? Removing the conditions sounds scary but these conditions can easily be satisfied by the Buyer prior to submitting your offer. Most Sellers will include a pre-list home inspection report that you can review. You can also conduct your own inspection. Your Mortgage Broker should have you pre-approved before you buy a home and as long as you send them the listing, the property details and your max purchase price, your Broker should be able to approve the terms of the agreement prior to submitting your offer. Your Lawyer can easily review your offer and property details ahead of your offer submission. This making it entirely possible to submit a deal condition free to help your chances of purchasing your dream home.

 

I hope by now you are feeling more comfortable and confident in regards to Offer Presentation. Although the process is little known, my goal is to help you become more aware and educated. It’s now a normal business practice and I use my experience and expertise to help my clients purchase their forever home.

 

For more information on finding out the real prices of homes and to start the process to find your dream home, please don’t hesitate to reach out. I am here to help make the home buying process quick, easy and enjoyable.

                                                                                      


Buying A Home For The First Time

06 July 2018

So you're thinking of buying your first home but have no idea where to start or what's involved. I'm here to walk you through the buying process

 

So you’re thinking of buying a home for the first time….what an exciting decision to make! Most first time home buyers I work with are excited to purchase their first home but are also nervous about the process. It is normal to feel this way. When you hire the right real estate agent, it is our job to help guide, educate and be with you every step of the way to help make the process smooth & easy. Once you’ve gone through it the first time, you’ll be a pro the next time around. Working with a first time home buyer recently inspired me to write this blog post. If you are a first time buyer and are unsure where to start, I hope this will calm your nerves and help you feel more prepared to start your house hunt.

Find A Realtor

The first step in the process is to find a real estate agent who is a good fit for you. Find someone who you feel comfortable spending time with, who listens and understands what you are looking for and can help you reach your housing goals.

Get Approved For A Mortgage

This is such an important step in the process and it is the key to formulating your home search plan. Without knowing what your budget is, there are no guidelines in place to help you find the perfect home. If you don’t have a mortgage broker, ask friends, family or your real estate agent to guide you in the right direction.

Get A Lawyer

If you are in the same situation as with a mortgage broker, getting a referral is the best way to find a lawyer to represent you for your purchase.

Budget For Closing Costs

On your closing date there will be various costs associated with closing your property These can include land transfer tax, statement of adjustments and lawyers fees.

If you are first time home buyer, you can take advantage of the First Time Home Buyer Tax Rebate which is a huge savings. In Ontario, you can receive a rebate up to $4,000. If you are buying in Toronto, you can receive a total rebate of $8,000.

A statement of adjustments will include any items pertaining to the home that have already been prepaid by the Seller. These can include rental items, property taxes, utilities, etc. On closing, you will pay the Seller for any items prepaid after you close on the property.

Lawyers will charge a fee to review and close your property and that  fee typically ranges between $850-$1,500.

Decide Where You Want To Live

After discussing what your goals and budget are for your new home with your Realtor, figure out which area best aligns with what you’d like to achieve. Narrowing down the area can be a real time saver for you and also keep you focused on certain neighborhoods and housing options.

Go See Homes

Your Realtor will provide you with available properties for you to peruse and possibly visit in person. This is when the real estate adventure begins as you check out different neighborhoods and housing options. You can look at houses online for hours but to see them in person is a totally different experience and very educational.

Narrow Down Your Needs & Wants

After going on your “real estate adventure” it’s important to get real with your needs & wants for your new home. This is very important because as much as we want it all, sometimes it’s not possible. It’s important to decide which qualities of a home are absolute needs and which qualities would be nice to have but aren’t a necessity.

Making An Offer

At this point, you’ve seen your options and it’s time to place an offer. In a typical market (without offer presentation) your Realtor will prepare the paperwork using standard Ontario Real Estate Association (OREA) forms.

The Agreement of Purchase & Sale Explained:

  • Property Address Information: the address, lot size and/or unit number & legal description.
  • Sale Price: agreed price by both the Buyer & Seller
  • Deposit: amount given to the Seller within 24 hours of a firm deal, held in trust by the brokerage. Typically this amount is 5% of the purchase price.
  • Irrevocable Date: when you make an offer, you will give the Sellers a date & time for which they need to respond by, if they do not respond by the irrevocable period, the deal is dead.
  • Completion Date: the closing date of the sale. When you will officially own the property.
  • Chattels & Fixtures Included/Excluded: chattels include anything that is not affixed to the property that is included in the sale. For example, these would include fridge, stove, dishwasher, washer & dryer. Fixtures are anything that is fixed to the property. For example, a chandelier. The agreement will designate what is included & excluded from the sale.
  • Rental Items: any items within the property that are under contract must be disclosed. For example, a hot water tank rental is very common in a house.
  • Title Search: your lawyer will conduct a title search on the property to make sure that there are no liens or encumbrances that you would be liable for after closing.
  • Confirmation of Acceptance: the time & date in which the offer is agreed and firm and binding. The last party to sign will accept the deal and sign the confirmation.
  • Conditions: these will be included for the benefit of the buyer/seller and will make the sale sold conditional until the conditions included in the agreement are satisfied. An example of these conditions could be financing or home inspection. If the conditions are satisfied, the property is sold firm. If the conditions are not satisfied, the buyer & seller will release themselves from the deal via a Mutual Release.
  • Clauses: these are included for the benefit of both the Buyer & Seller to ensure that all parties are protected in the sale of the property.
  • Notice of Fulfillment & Amendments: once conditions are meant, a Notice of Fulfillment document will be signed to confirm you have satisfied the condition. If any changes are to be made to the agreement, they must be done through an Amendment and signed and confirmed by the accepting party.

You’ve Purchase The House, Now What?

Within 24 hours of the accepted offer, you will provide your deposit cheque made out to the selling brokerage where it will be held in trust and released to the lawyers for closing. You will work with your Realtor to make sure that all paperwork and necessary documents are sent to your Lawyer & Mortgage Broker. From there your Lawyer & Mortgage broker will prepare the documents for closing.

Closing

A couple days before your closing date, your Mortgage Broker & Lawyer will have you sign the documents and provide the funds for the transaction. On closing, your keys will be released to you by your Lawyer.

I hope this blog post has helped you understand the home buying process and has calmed your nerves to feel more prepared and ready to start your new home search. I have worked with many first time home buyers and am here to help make the process easy and enjoyable. For more information about buying a home, please contact me at michela@michelamantle.com and we can chat more about your housing needs. Be sure to follow my real estate journey on Instagram @realtormichela.