Real Estate Toronto Canada

If you are buying a home or refinancing your mortgage in Cook County, expect to pay some extra cash at closing to set up your tax escrows. Real estate tax bills come out twice a year. The first installment (which pays for the first 6 months of the previous year) was due in March and the second installment (for the second half of last year) was supposed to come out in September. But in Cook County these dates are suggestions, not real deadlines. I can’t remember the Cook County tax bills ever coming out when they were supposed to, and this year it looks like they will be out later than usual. Cook County Treasurer Maria Pappas says that she expects tax bills will be mailed out the week of November 22nd – almost Thanksgiving. The reason the bills are extra late this year may be political. Even though home prices are down, tax increases are expected (the increase is shown on the 2nd installment). If the tax bills came out before the election on November 2nd, this would be a big issue. Holding it back may make political sense, but it means that anyone transacting a mortgage and escrowing their taxes will have to cough up extra money at closing. Lenders all count on the tax bills coming out at the proper time, so when they aren’t the title companies build in a big reserve to insure they have collected enough, even if the tax bills are much higher than before. This is called TI, or Title Indemnity.

With TI, the title company holds back an amount over and above the previous tax bill to allow for tax increases, and guarantees the lender that they have collected enough to fully fund the new escrow account. Most title companies will collect one and a half times the current tax bill and they will charge a fee ($150-$200, usually) to hold onto the taxes and pay them once the bill comes out. Once the bills are out, any money left over will be returned to the borrower. So this isn’t an increased cost (except for the fee) but it is a real hit to cash flow, and for borrowers who are short on cash anyway, it is a real hardship.

Last year the Cook County tax bill came out in October. Delaying it for an extra month means a lot more cash needed at closing. If you are refinancing your mortgage and have an escrow set up now, this means you will have to fund the new account, and will then get paid back from your current lender after closing (this is usually done within 30 days). If you are buying a new home it isn’t quite as bad because you will get a credit for the unpaid taxes from the seller, and you will normally get more back in the credit than you need to set up the new escrows. Either way, it means more cash at closing than any other time of the year. I’ve worked with homeowners who needed to get gifts to come up with the extra cash. Again, this is a cash flow problem, not an extra cost, and you will get money back from the current lender (if it is a refinance) and the title company once the bill is out. Closings will be a little easier and more affordable once the bills do come out.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company

You may have noticed a change to your stat charts a couple of weeks ago. We ditched Flash in place of a more robust charting library called Flot. If you didn’t notice, go check it out because you can view all of the new charts with modern browsers including mobile devices such as iPhone and iPad. Sooo sexy! Today we updated the charts to use bars instead of points and lines. We’ve also made the stats page super sexy.

Each module can be opened and closed, moved, or hidden completely. If you don’t want to see a module, minimize it with one click or use the Screen Options to keep it out of sight. Customize everything and view stats the way you want to.

As you hover over each bar in the chart it changes color and displays a tooltip, giving you more information about the data. If the chart is showing data by day, Saturdays and Sundays have a light gray background to make it easier to see weekly patterns. Under the chart you’ll notice a new area, called “fortune cookies,” where we’ll highlight key stats.

During the redesign we went with bar charts because the end of one day and the beginning of another shouldn’t be connected. Each day starts at zero and we think bar charts work much better for this type of data. We hope you’ll agree once you get used to the change.

In this first phase of the stats redesign we’ve focused on the main page. This will allow us to collect feedback from you so we can tweak everything as we go. We’ve only mentioned a few of the highlights here, so take your stats for a drive around town to get used to the feel. Let us know what you like and what you might change. As we gather feedback we’ll apply a bit of sexy to the other stat pages.

Sites using our Stats plugin on a self-hosted blog will see an update after we iterate on the new design.

In contrast to yesterday’s post, “Losing Mentality“, I wanted to present to you some observations about the people who are successful condo investors. Those who buy (and sometimes sell) multiple condos over years and understand that condos as a great way to accumulate long term wealth.

1. They are entrepreneurial. Either they run their own businesses, or they can at least think like a business person. They treat buying and selling condos as running a micro-business. Money in + time + effort = Profit
2. They are risk takers. Buying a piece of paper and hoping it turns into a highly profitable asset is RISKY. Either embrace the risk, or put your money in the bank at 1%.
3. They don’t follow the flow. Simply put, if your mom/friend/uncle/blog-comments-section tells you shouldn’t be investing in condos because ‘there are too many condos downtown’, you are listening to the wrong advice.
4. They are focused. They decide what they want before they go looking for it. They don’t consider every development and project that appears just because it is the ‘flavour of the week’. They have a set of criteria and they stick to it.
5. They have money. Let’s face it, most people don’t have the typical 15-20% deposit required to buy most pre-construction condos. Those that do and have invested it in condos in Toronto, have done very well. The rich are in fact getting richer.

Some exhibit these characteristics on their first purchase, others learn them in time. Most of these can be acquired and practice makes perfect, but at the end of the day, you either have the stomach for condo investing or you don’t. I’d love to hear your comments and thoughts. If you are a seasoned condo investor, or want to learn how to become one, let’s talk.

According to the Canadian Press, a Toronto-area couple is facing several different charges after pilfering through people’s belongings and taking what they wanted during real estate open houses.

Your open house is in good hands with Toronto real estate agents.

After a string of thefts in a series of open houses, police began keeping track and finally arrested the suspects last weekend. Jewelry and money were the primary targets of the alleged thieves.

Both individuals are in their fifties and traveled extensively throughout Ontario and the United States. Oakville Police are also asking that anyone who suspects they may have been a victim to contact them.

While media stories like this might make homeowners wary of holding their own open house in order to sell a home, they needn’t be worried.

Any real estate agent worth their salt won’t let people traipse through your home unsupervised. In most cases, agents will bring assistants or other agents along because they can’t be in two places at once. Some agents will also get guests to sign in to deter nosy neighbours or others who want to enter your home for less-than-honest reasons.

Open houses are unparalleled when it comes to getting your home exposed to the right kind of people: potential home buyers. Lock up any jewelry, prescription medication or other valuables beforehand, and let your Toronto real estate agent handle the rest.

Toronto-Area Couple Steals During Open Houses is a post from: Toronto Real Estate Updates

A new survey by Toronto-Dominion Bank has found that Canadians like moving. Approximately 20 per cent of Canadian real estate buyers have owned more than five homes in their lifetime, and nearly the same amount of Canadians are planning on moving within six years.

Just over half of Toronto homeowners are downsizing their real estate purchases.

Fewer than a third of those surveyed said that their next move will be their last intended move.

Surprisingly, more than half of the respondents are looking for a smaller home, but 49 per cent of respondents were upsizing during their next move. Almost one-third of those surveyed cited retirement as their number one reason for moving, but some people are just restless: approximately 16 per cent of the respondents said they were bored with their current home.

Most Canadians won’t be able to pay off their new home by selling their current home, as 51 per cent of those surveyed said they’d have to take out a new mortgage to be able to afford their new house. Those Canadians are being smarter about their debt loads as 83 per cent said they were saving up for the biggest down payment possible, and 61 per cent were going to choose a shorter amortization period to save on interest.

“It is encouraging that the majority of Canadians are taking steps to save money on their mortgage,” Farhaneh Haque, the regional sales manager of mobile mortgage specialists at TD Canada Trust told the Financial Post this week. “I recommend that home buyers buy the house that fits their budget, not just their lifestyle. After all, if you buy a house that is too big for you to afford, you could be giving up that lifestyle just to pay it off.”

Toronto Homeowners Like To Move: Survey is a post from: Toronto Real Estate Updates

Buying a pre-construction condo takes guts. It takes vision. It takes money. It’s not for everyone, but for those who understand the game and play it well, the rewards are huge. Those who are fearful, lack vision, and have no access to capital will continue to sit on the sidelines and wait. And wait…

Every month I meet people who are looking to buy their first investment unit on a pre-construction sale. Some of them end up buying a unit and in time will reap the rewards. But most get stuck and never actually buy anything. They are trapped in what I call a ‘Losing Mentality’ that prevents them from taking part in one of the most incredible investment vehicles ever.

These would-be buyers all suffer from a similar mindset/perspective that prohibits them from getting into the condo investment game:

1. They don’t think like an investor. Investors don’t worry about if a suite is facing the wrong direction, or if the neighbourhood is not one they would like to live in, or if the building only has 3 treadmills instead of 4. The condo is not for you to live in, it is a vehicle to accelerate the growth of your money!
2. They listen to bad advice. No offense to all the moms, uncles and internet trolls* out there reading this, but you don’t know anything about real estate, let alone the specific niche of pre-construction condo investment in downtown Toronto. Stop listening to people who have never bought a condo and start following those who own dozens of them.
3. They don’t know what they want. So many would-be investors I talk to can’t make up their mind – Do I want to buy new or resale? Am I buying an investment property or is this for me to live in? Up and coming area or established neighbourhood? If you don’t know what you are looking for, you’ll never find it.
4. They are risk-averse. Purchase agreements for new condos are downright scary (from the buyer’s perspective), just read one if you don’t believe me. The developers write them, so what else would you expect?! Developers are out to protect their own butts and in exchange they offer you the chance to make a ridiculous return on your investment. If you want safety and assurances that everything will be fine and your money is totally safe, put it in the bank at 1%.
5. They are looking for something that doesn’t exist. The proverbial 2 bedroom condo downtown, close to subway, with parking for $250K doesn’t exist. Get a grip on reality and stop dealing in fantasy. Understand the process and the capital investment involved. Understand where the market is today and where the market is going to be in 5, 10, 20 years.

Check back in tomorrow as I contrast this list with a list of common characteristics for what I call the “Investors Mentality”. Things that many of my most successful investor clients have in common. What do you think about this list? Leave a comment or contact me.

*Tongue-in-cheek representation of the types of people who tell you that buying a condo as investment is a bad idea. Many of my clients are actually moms and uncles, although I try not to associate myself with internet trolls!

We’re excited to announce that WordPress.com is now the default blogging platform for Windows Live Spaces users. We’ve worked with our partners at Microsoft to create a simple migration service for Spaces bloggers to easily bring all their posts, comments, and photos to WordPress.com.

Over a six month period, beginning today, Windows Live Spaces users will have the option to move their blogs to WordPress.com. To make this possible, we’ve created a brand new importer for Windows Live Spaces to WordPress.com. New Windows Live users will also be offered a WordPress.com blog when they choose to create a new blog.

All current links to your Windows Live Spaces blog will automatically redirect to your new WordPress.com blog after you set it up. In addition, this redirect we’ve set up will maintain your current traffic levels from search engines, as it automatically notifies search engines that your content has a new home on WordPress.com (the technical background on the 301 redirect method we’re using, if you’re interested, is here).

As part of this project, we’ve added support for Messenger Connect as a Publicize option, which enables you to automatically share updates to your WordPress.com blog with your friends who use Windows Live Messenger.

For detailed information on how the migration will work, check out this post on the Windows Live blog.

We’re very happy that Microsoft chose WordPress.com as their preferred new blogging service for Windows Live users. It’s a sign of how strong WordPress.com has become, and credit for that goes to every one of you who’s been creating here.

Getting the most out of WordPress.com

For Windows Live Spaces bloggers who are new to WordPress.com, we wanted to share a few tips for getting up and running with your new WordPress.com blog.

Learn WordPress.com
Get started with WordPress.com with this fun 10-step guide to becoming a blogging hero. We cover everything from the basics like creating your first post, through advanced topics like working with social tools.

WordPress.tv
Check out “How To” videos on just about every feature of WordPress.com on the WordPress community video site.

Support
If you need a little more help, make sure to browse our extensive support knowledge base, and get in touch with the friendly WordPress.com support team, known around here as the Happiness Engineers. You can also get user-to-user help on our support forums. We’ve prepared a special FAQ for you that covers topics including Windows Live Photos and groups/friends support.

Mortgage rates are holding in the same low range we have been in over the last few months. The reports released this week showed some signs of improvement, mixed in with the more down beat news. The index of leading economic indicators — designed to forecast economic activity in the next three to six months — rose 0.3% in August after a 0.1% increase in July, a better than expected improvement. Orders for durable goods — items expected to last three or more years — fell 1.3% in August after increasing a revised 0.7% in July. Excluding volatile transportation-related goods, orders posted a monthly increase of 2%. New home sales were unchanged in August at a seasonally adjusted annual rate of 288,000 and existing home sales were slightly better than expected (though still very low). But the big news had nothing to do with any of the reports issued, it was all about reading the tea leaves in the statement from the Fed Open Market Committee meeting. 

The news here is that the Fed has served notice that they are concerned that deflation is a big enough threat and we actually need more inflation in our system. Over the last 2 years the Fed has used nearly every weapon in its arsenal to try and pump up the economy and get things moving again. But with short term rates near zero and unemployment high, they are losing ground. But they still have one big weapon left, quantitative easing. Quantitative easing is a way to flood more money into the system by buying up long term assets like treasury bonds and mortgage backed securities. The logic here is that this will force investors to reallocate their portfolios, and bring down the cost of credit, stimulating new business. The Fed tried this last year when they bought $1.25 trillion in mortgage backed securities. They are now on record as being locked in and ready to fire when needed. The next Fed meeting is in the beginning of November. Unless there are some surprisingly upbeat signs of an economic turnaround by then, expect that the Fed will unleash their buying power. How this will impact mortgage rates though, is still an open question. Mortgage rates dropped when the first round of QE was announced, but then fluctuated throughout the length of the program. After all the Fed money had dried up, when everyone was sure rates would rise again, rates this year have fallen to new lows. Last week at the release of the statement the mortgage bond market rallied, but by the end of the week it was near the worst part of the range. Mortgage rates are at historic lows. While it is possible they could dip lower, my guess is we can’t go much lower unless there is a big change in the economy for the worst. If you are still on the fence about buying a home or refinancing your mortgage, this may be as good as it gets.

Here are the current Chicago Illinois Home mortgage rates for an A+ (740 Fico or above), full doc single family home purchase or rate/term refinance on a 45 day rate lock, with 0 points, and no origination fee, best FHA rates assume a 660 Fico score, but loans are available with credit scores as low as 620. Mortgage rates in other states may be slightly different, give me a call and I will give you an accurate quote for your particular situation. The conventional and FHA rates are based on the highest conforming loan amounts, which give the best pricing. Again, there are many factors which affect mortgage rates and your ability to be approved for a loan. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, or to get pre-approved for a mortgage, give me a call or contact me (Illinois mortgage company) and I will take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

For Jumbo loans over $417,000

*(Another option is to break your Jumbo loan into 2 parts a conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

** 5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbos available.

FHA LOANS 3.5% down payment FHA Maximum varies by County

FHA APR reflects 3.5% down payment and the effect of mortgage insurance on the loan. Call for information on no-cost FHA streamlined Refinances

FHA 203K Rehab Loans – Call for Quote

VA Veterans Administration 0 Down Loans

Call for information on no-cost VA Streamlined Refinances

These are just a few of the mortgage programs and mortgage rates available. Which option is best for you depends on your own specific goals and needs. If you have any questions or want to go over your situation in depth, let me know how I can help.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company

Toronto building codes are changing, and by 2012 it’ll be mandatory for homes to be 35% more energy-efficient than they are today. New homes will probably be built with higher-end, costlier and more energy-efficient cooling and heating systems as a result. These systems may also be costlier to maintain and repair should there be a problem, straining homeowners’ wallets even further.

Toronto homes in 2012 will have to be 35% more energy-efficient than they are today.

But a two-year-old program created by a local heating and air conditioning company offers a solution for new home builders, lowering their costs and giving their homebuyers a valuable option when choosing home comfort systems.

Think of just about the only perk of renting that becomes a drawback once you become a homeowner: repairs. When owning, if something breaks you’ve got to pay to have it fixed. When renting, it’s someone else’s responsibility and shouldn’t cost a thing.

Multiple award-winning Reliance Home Comfort, a Greater Toronto Area-based furnace, air conditioning and water heater service, has a Comfort Value Bundle Program, which allows homeowners to rent these appliances. There are pre-set appliance bundles, or homeowners can decide on a custom package. The most energy-efficient appliances can save homeowners up to 35% on their energy costs.

The majority of homeowners in Ontario already rent their hot water heaters, so renting large appliances isn’t a new concept. But these bundles take it to another level, allowing homeowners to rent multiple appliances that are either EnergyStar or energy-efficient, high end home comfort products. Service is also available at all times and if the home is sold the new homeowner can assume the rental.

This is a great idea for both homeowners and home builders in the Greater Toronto Area to consider looking into further. Builders can reduce their overhead costs while complying with the new Ontario building codes by 2012, and homeowners can have peace of mind when it comes to their appliances saving energy and not breaking down.

Toronto Home Appliance Program Can Lower Energy Bills is a post from: Toronto Real Estate Updates

I know. This is supposed to be a real estate blog so why am I talking about politics? Well, your mayor and city councillors have plenty to say about the city or town you live and work in. They daily deal with issues that affect traffic and businesses which directly affects you. Every decision they make can be positive or negative on your pocketbook. If an incinerator comes to town, like they are discussing in Clarington, more people may move into your neighbourhood and the more buyers there are, the better it is for those who are selling. If the incinerator can be seen from your house, will your house value go down? Or will it increase because an employee of the incinerator will want to live close to work?

Oshawa is revitalizing their downtown core. Buildings are being renovated and students attending Trent University will flood the streets. There is so much money going into Oshawa and we are really seeing a positive change there. Houses are being renovated to accomodate the students and staff of the University.

All this is affected by your local politicians. So get out there, learn the issues, question those running so you can really understand their motives and their abilities to make your city the best it can be! Durham Region is a great place to live. Claim your little area as your own, hold your elected officials accountable on the issues they have promised you. Our neighbourhoods and our pocketbooks will be better for it!

Sometimes, homes that are listed for sale don’t sell right away. In most cases, this may not be the fault of the real estate agent. However, homeowners place their trust in the agents to work on their behalf in order to actively do everything they can to sell their home. The market is not always perfect, so there must be other ways to determine if the agent is the right one for you.

They don’t just represent your home, they sell it. Instead of allowing buyers’ agents to bring your property to their clients, a good real estate agent will be more likely to be proactive when selling your home, listing it in multiple places to get it as much attention as they can.

They follow up. After a home is finally bought or sold, the agent’s job is not yet complete. In the best cases, they will call and find out if you’re happy with the decisions you’ve made in order to keep a client for life.

They communicate. Real estate agents don’t just list and represent properties. They’re doing market research on a daily basis and learning as much as they can about other homes in the neighbourhood in order to understand the local housing market the best they can. If nothing’s happening with the sale of your home, the real estate agents are pounding the pavement looking for reasons why, and will be relaying this information to you on a regular basis.

These are just some of the reasons to utilize a real estate agent’s services and expertise – and ways how to gauge how they’re doing.

Is Your Toronto Real Estate Agent Working For You? is a post from: Toronto Real Estate Updates

When the Fed talks, people listen. The FOMC (Federal Reserve Open market Committee) met yesterday, and announced that they will continue to keep the rates they offer to their best clients (the big banks) at or close to zero and will keep rates low for an extended period of time. This part was expected. The Fed has kept similar wording in their statement for over a year now. What was new was the wording suggesting that the economy has softened over the last several months and the pace of recovery is likely to be “modest” in the near term. They go on to say that the measure of inflation is at levels below what is needed for price stability. In plain English, this means that the Fed is more concerned about deflation (prices spiraling downward), than a return of inflation (prices moving higher). The Fed will continue to reinvest principal from securities (Treasury and mortgage bonds) back into new securities to maintain the same level of support. They also said they were “prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.” This is another way of saying they may be ready to do another round of quantitative easing. The markets were choppy after the release, but the net result was mortgage bonds ended the day with a big gain, meaning mortgage rates are trending down again (we are in the middle of a range right now).

Quantitative easing means the Fed would pump more money into the system. They did this last year by buying Treasury bonds and 1.25 trillion dollars of mortgage backed securities. The danger in this move is that when more money floods the system, it can trigger inflation, and once inflation takes hold it is hard to stop. By saying that the level of inflation is too low, they are saying that this a battle for later, and they are willing to risk some inflation to get the economy moving again. One Fed member voted against this (an inflation hawk) but all the other members were in agreement. So it probably won’t come right away, but the next time we get a new round of bad economic news, don’t be surprised if the Fed steps in and announces a new round of buying mortgages and treasuries. The bottom line is that fear is still in the air, and the consumer is still strapped. Mortgage rates are likely to remain low for quite some time.

Here is the Fed statement in its entirety:

Information received since the Federal Open Market Committee met in August indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts are at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months. The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be modest in the near term.

Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to remain subdued for some time before rising to levels the Committee considers consistent with its mandate.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.

The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh.

Voting against the policy was Thomas M. Hoenig, who judged that the economy continues to recover at a moderate pace. Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and will lead to future imbalances that undermine stable long-run growth. In addition, given economic and financial conditions, Mr. Hoenig did not believe that continuing to reinvest principal payments from its securities holdings was required to support the Committee’s policy objectives.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company           Chicago FHA mortgages

I’m proud to introduce you to Fusion, our newest theme. The versatility of this theme makes it great for a variety of uses including technical blogs, long-form writing, posting code samples, and displaying large images. You can use Fusion just like any other WordPress.com theme or, if you prefer a wide layout, this theme is ready to accommodate.

Example of Fusion’s out-of-the-box layout and design.

Fusion comes with a widget-ready footer, support for custom header image and custom menu, and options for you to customize the layout. Layout options in Appearance→Themes include fixed or flexible layout, choice of left, right, or two right sidebars, or a full-width main column with no sidebars. You can also choose to display full posts or excerpts only on archive pages.

Theme Options screen for Fusion.

It’s easy to personalize this theme by adding a custom header image and custom menu and using the various layout options to change the look. Here is an example of a wide design using the one-column, no sidebar layout option, flexible width main column, and custom header image.

Example of Fusion customized to display a full-width main column with no sidebar.

Designed by digitalnature, Fusion is now available for WordPress.com and, for self-hosted WordPress.org sites, from the WordPress.org Themes Directory.

There are a lot of ways Toronto real estate owners can prepare for winter. While it’s not quite winter yet, anyone who’s ever swore they’d get around to minor necessary household repairs and maintenance before the snow began to fall has often found themselves in -30 weather in the middle of January wondering why they hadn’t gotten around to it sooner.

Is your Toronto home ready for winter?

Start early, and recognize that just a bit of preventative maintenance can help lower repair costs, make getting your home ready to sell a quicker process and generally just keep life easier. All of the following winterizing tips can be applied to cottages and other recreational properties as well:

Have your fireplace cleaned. You’re more likely to begin using your fireplace soon, so annual fireplace cleaning and maintenance is key for winter fire safety. In addition, check the outside of the chimney for cracks if it’s made of brick.

Have the roof professionally inspected or do it yourself if you can (look for loose or peeling shingles and obvious damage). Wintertime is when ice builds up and causes the most problems. If the gutters are cleaned out before the temperature drops, it can prevent this ice buildup.

Seal the driveway and patio. Wooden patios and asphalt driveways are susceptible to cracking and sagging due to continued freezing and thawing throughout the winter and spring unless they are properly sealed.

Have your furnace serviced. The last thing you want is to have furnace problems in the middle of the winter. Have your furnace checked for potential wear and tear or other problems and replace the filter if necessary.

Caulk windows from the outside, and add weatherstripping to exterior doors. Door sweeps on the exterior doors as well as interior doors can prevent the loss of heated air and help seal off parts of the home that aren’t as frequently used during the winter, preventing higher heating bills.

Winterizing Your Toronto Home is a post from: Toronto Real Estate Updates

The recent slump in the Toronto Real Estate market was a sign of summer, and now that the weather is cooling Toronto-area homebuyers and sellers can relax.

Reports by at least three separate major media organizations in mid-September as well as reports by financial institutions and the Conference Board of Canada should dissuade everyone’s fears that a housing market crash is inevitable.

The Royal Bank of Canada says, “While we agree that housing prices are currently historically elevated, we do not believe that any major slump will necessarily ensue. The further expected modest erosion of affordability in the period ahead is seen to cool housing demand, not deep-freeze it.”

The Conference Board of Canada, a not-for-profit research organization, also released a report that said, “The Canadian housing market has generally been booming for about a decade now, and the Conference Board… has long claimed that at one point in time, the market would have to come back to more normal levels of activity. This is what’s happening right now.”

The report also said Canadians should not be worried about a United States-style housing free fall. “This county will not experience home-price declines to the tune of what we have witnessed in the United States over the past few years.”

The issues seen in the United States are related to the way that mortgage lending and mortgage laws work in that country, which differ immensely from how things are done in Canada.

While Toronto real estate sales in the early spring were booming only to later decline, they were just showing signs of a typical slower summer in recent months, causing panic. However, now that it’s fall things might just begin to pick up again.

Toronto Housing Market Crash Fears Overblown: RBC, Conference Board of Canada, Everybody Else is a post from: Toronto Real Estate Updates

Ever consider renting out your Toronto real estate? Maybe you have a spare bedroom, basement or whole home that was bought as an investment property and some extra income would certainly help with paying off the mortgage.

There are more laws in place in Ontario to protect tenants than landlords. In the case of a renter having problems with large property management corporations that may be a good thing, but in the case of a homeowner with an unruly tenant, it can lead to huge headaches. You might think you’ll have more control as an independent landlord and that you’ll have ample opportunity to effectively “screen” the people who may eventually be renting your home. However, this is not usually the case.

For example, you may be surprised to learn you can’t prevent someone with a bunch of teenagers from renting your space. You also can’t kick someone out once you find out that despite your “no pets” rule, they’re living with a big, smelly dog.

It can take several months to evict someone, even if they are causing damage or disturbing the neighbours. Further, there’s the problem of difficult tenants who actually know their rights and know the law, who can work the system and make eviction take even longer. If you find your basement apartment is illegal because of a lack or permits or improper construction, you still can’t kick them out. Need the apartment for yourself and have proof? The tenant can claim they cannot find another suitable apartment and stick around for as long as it takes them to find one.

A potential tenant cannot be asked about their marital status, sexual preference, religion or whether they have children, but they can be asked how many people will be living in the apartment. These are all of course great rules for preventing discrimination in our wonderful country but they can work against you. If, for example, you prefer not to have small children living in the space and the tenant who has children gets wind of this and realizes they’re not getting the apartment for that reason, you can be sued. The same would go for female homeowners actively looking for female tenants and preferring not to have male tenants for any reason.

The potential damage and  legal costs can completely negate any profit made from renting property out unless the tenant is a great one. Luckily, most tenants will be well-behaved and respectful and there are a couple ways to ensure you’re matched up with those tenants.

Researching the tenant can save a lot of frustrations and money down the road, and this research comes in the form of credit and background checks. Do not hesitate to ask for references from prior landlords because they’ll be the first ones to tell you what the tenant was like and whether they paid rent on time. You can also ask the potential tenant for a pay stub from their current job to check on their income and employment status.

Toronto Real Estate Income Properties Require Research On Potential Tenants is a post from: Toronto Real Estate Updates

If you use the new Internet Explorer 9 beta (IE9) on Windows 7 and have a blog on WordPress.com, you should definitely check out some cool new features.

First, not only do the charts on your stats page load faster — thanks to new canvas element support in IE9 — but each WordPress.com site also includes a high-res icon for your browser, taskbar, or shortcuts. Once you start using IE9, you’ll find this icon comes in handy when you want to “pin” a blog.

Pinning? Yes, Pinning!

Wait, just what is pinning, you may be asking? It’s actually quite simple and a lot like bookmarking but on your computer instead of in the browser. Once pinned, you can launch your blog right from your Windows taskbar. A handy context menu lets you access some of your most common tasks such as adding a new post or moderating comments, with a single click. You also can pin a friend’s blog to stay up-to-date on their latest posts.

To get started, the first thing you need to do is download Internet Explorer 9 while using Windows 7. Let’s take a look at how things unfold from there:

Pinning Your Blog

When you sign in to your blog, you can pin your own site and get extra tasks that make blogging easier and faster. A logged-in user can quickly access links to their dashboard to write a new post, moderate comments, upload a new file, or view blog statistics. (Each task only appears if the user has that task’s capability, such as site administrator’s.) A custom list also displays up to 5 latest posts for the current blog context.

You can pin someone else’s blog, too. When you do, an icon appears that lets you subscribe to the blog feed, signup for a free blog, read Freshly Pressed, and access WordPress.com Support and forums.

How to Pin

This is simple:  Just visit a blog in a IE9 tab, grab the tab, and drop it onto the taskbar at the bottom of your desktop. When you pin a site it will either show up as a large WordPress logo or as your own Blavatar if you’ve uploaded one.

P.S.: You can learn more about IE9 on Microsoft’s Internet Explorer blog (hosted on WordPress.com!).

The real estate market is a mess. Almost every day I talk with people fighting to save their homes. I have daily conversations with homeowners who want to refinance their mortgages, but can’t because their home values are too low. I know too many good Realtors who are looking for full time jobs, because they can’t support themselves and their families doing what they are so well suited for. I get it. The economy is in a recession, but the real estate market is in a depression.

Time magazine gets it too. Their recent cover story, Rethinking Homeownership, talks about all the problems in the real estate market. It notes the problems of foreclosures and short sales and how trillions of dollars of home equity have evaporated over the last few years. But Time takes this a step further. The point of the article is that with things so tough in the real estate market, it no longer makes sense to own your own home. This is a real head shaker, and a common flaw in logic. They are taking a current trend and projecting it on into the foreseeable future. If things are bad now, they will always bad and will probably get worse (or the flipside, things are good and they will only get better). Time is famous for these types of stories. They have called for new highs in the stock market right before the markets dived, and I am sure that president Gullianni and President Hillary Clinton had to feel a bit queasy when they got their cover stories early in the last presidential primary season.

Time had another cover story on real estate back in 2005, but the point of that one was that with real estate prices heading higher, you could use your home as an ATM and everyone would have a McMansion soon. In this article they took the current trend and used that to say that the real estate market would continue to boom on into the future. At the time, the market was building up to its peak and they turned out to be spectacularly wrong. I expect that in another five years we will look back and their new article will look just as ridiculous.  I’m not saying that the market is about to boom. There are real structural problems to the economy. With unemployment high and a huge inventory of distressed properties to deal with, home prices are likely to remain low for a long time. But those who are buying now at prices a fraction of where they were a few years back and at interest rates in the 4s are miles ahead of those who bought when Time last called for a boom.

Having a home of your own has always been part of the American dream. Homeownership gives you control and there are a lot of personal and emotional reasons to own. But let’s look at the meat of the article, is it true that it no longer make financial sense to buy a home?

There are 4 major financial benefits to home ownership. Let’s see if these still apply:

Equity build up – Assuming you are buying a home with a traditional mortgage, part of your payment each month goes to pay down the loan. The mortgage payment is split between principal and interest, and in the early years you are paying mostly interest. But with every payment you pay a little less interest an a little more principal. Most people don’t stay in a house to pay off the mortgage, but if you did, at the end of the term you would own your home free and clear. If you continued to rent, you would still be renting at the end. This is still a strong advantage of home ownership.

Price appreciation – Back when Time wrote the article in 2005, this was the big attraction to real estate. The thinking then was that if you bought today, the home was sure to be worth more tomorrow. Historically home prices do rise over time, at least keeping up with inflation. But the early years of this decade the real estate market was part of a bubble, and with cheap money flooding the system underwriting standards went out the window. So nearly anyone could qualify for a mortgage. This in turn brought on a building boom, and we are now dealing with an over supply of housing at the same time that demand is low. So does this mean appreciation is a relic of the past? Maybe, but I doubt it. New home building has ground to a halt. Eventually the economy will improve and all of a sudden all the potential buyers sitting on the sidelines will be in the market again. This is all about supply and demand, and right now with supply high and demand low, the buyers who are out there are getting screaming good deals. That is what happens in a buyer’s market. So my guess is that if you buy low, when others are afraid to, there will be appreciation down the line.

Leverage – This goes along with appreciation. Mortgages are available with low down payments (FHA offers loans with just 3.5% down) so you don’t need a lot of money up front in order to own your own home. This not only makes homeownership affordable, but it means that if prices do rise, your return is magnified. If you buy a home for $100,000 without a mortgage and it goes up $10,000 in value over time, you have gotten a 10% return($100,000 invested divided by the $10,000 increase). If you took on a mortgage for 90% of that and used a down payment of $10,000, that same $10,000 increase in value is now a 100% return on your cash invested ($10,000 invested divided by the $10,000 increase). Again, appreciation isn’t automatic, but when it happens leverage means you build equity faster.

Tax advantages – Uncle Sam loves real estate. Home owners are given tax exemptions for the interest part of the mortgage, the real estate taxes and in many cases mortgage insurance. This makes sense because home owners have deeper roots to the community and this helps build a stronger society, but the bottom line is that the government helps you pay for the cost of owning your home. Every now and then you hear cries for eliminating these exemptions, but the chances of this happening are about as close to zero as you can get. This is still a strong financial benefit of owning real estate.

The financial benefits of owning a home are as strong now as they have ever been. If history is a guide, Time’s bold stand against home ownership is a good sign that we have hit the bottom of the cycle and the turn around is starting. I don’t think this will be a quick change in the market. Home prices could still drop a little further and we are likely to bump along at the bottom for a while before the market improves. But for those who are willing to look to the long term this could be a great time to buy.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company           Chicago FHA mortgages

FHA is now the big dog in the mortgage market. FHA allows a low 3.5% down payment, and with conventional guidelines ratcheting consistently tighter, more and more home buyers are choosing FHA as the way to buy. But over the last few years, as FHA has increased their market share, a chorus of doubters have been crying about how FHA is the next subprime, and with the low down payment the program is a ticking time bomb waiting to explode. I’ve pointed out before that though it is a government program, FHA has been self supportive since it started way back in the 1930s. While Fannie Mae and Freddie Mac and all the big banks have required bailouts to stay in business, FHA has kept on chugging along. FHA doesn’t make loans directly. It acts more like a mortgage insurance company guaranteeing loans made to their guidelines and covering losses with the mortgage insurance premiums it collects. Up until now the insurance has been enough to cover all losses and so far they still have about two billion dollars in a reserve fund. But because FHA has increased its market share so much and the housing market and economy are still so stressed, FHA is now making changes to make sure the program stays financially sound. Over the last year FHA has tinkered around with their structure and come up with a variety of plans to shore up the reserve fund. Starting on October 4^th, FHA will be changing the way they charge the insurance, and this will mean some home buyers will have a harder time qualifying, but it may work out better for others.

FHA breaks their mortgage insurance into two parts. One is an up-front mortgage insurance that is a percentage of the mortgage amount and added back into and financed over the life of the loan. The other part is an annual insurance paid each month (like private mortgage insurance). Currently, this breaks down to an up-front payment of 2.25% of the mortgage financed into the loan, and an annual payment of .55% per year, divided by 12 and paid monthly. The new changes will give with one hand, while taking away with the other. The good news is that the up-front increase will drop in a big way, down to 1% of the loan amount. The bad news is that the annual factor increases up to .90% (again, divided by 12) for those making the minimum down payment.

To see how this will affect new buyers, let’s compare the new version with the old (we won’t count taxes or insurance to keep this simple).

To compare, we will base this on -

• Purchase price $200,000
• 30 year fixed rate at 4.5%
• 3.5% minimum down payment of $7,000
• Base mortgage amount of $193,000

Under the current program it will look like this:

Up-Front mortgage insurance – $4,342 – Total mortgage amount of $197,342 – This gives a payment of just under $1,000. The monthly mortgage insurance premium (.55% divided by 12) adds $90 per month for a total payment of $1,090.

This is how it will work with the new plan:

Up-Front mortgage insurance – $1,930 – Total mortgage amount of $194,930 – This gives a payment of $988. The monthly mortgage insurance premium (.90% divided by 12) will add $146 per month for a total payment of $1,134.

With the new plan you will save $2,412 in the up-front charges, which mean more initial equity since this won’t be added on to your mortgage. But the flip side is that your monthly payment increases by $44 per month. For most home buyers $44 isn’t going to make or break a deal, though it will tip the scales for some. This is still the most affordable loan available. One thing to keep in mind is that the mortgage insurance decreases slightly every month because it is based on the current balance of the loan. So as you pay down the loan balance the monthly insurance will decrease. Another thing to keep in mind is that FHA mortgage insurance is tax deductable (as is conventional mortgage insurance, at least through the end of 2010). If you are in the 30% tax bracket, this means an additional $15 per month after tax savings with the above examples (the current break down spreads the benefit over a much longer time).

For many, even though the monthly payment will increase, this will turn out to be a better structure in the long run:

• For those who don’t plan on being in the home long term, the lower up-front MIP is more important than a slightly higher monthly payment. Most home buyers won’t stay in their home for ever, 7 years is the average.
• If you are buying a home that is undervalued (maybe a foreclosure that needs work and you are doing it with an FHA 203k rehab loan) you may be able to refinance it later and get rid of the mortgage insurance entirely. 
• I am also advising buyers I work with to ask the seller to pay the 1% Up-Front MIP. Seller concessions are common now, and this will cut the payment down a little further.
• This will also work out better for many home buyers who could qualify for a conventional mortgage, but would be subject to Loan Level price Adjustments (price hits, for everything from credit scores to property type).

The bottom line is that this will hurt some borrowers and those will be the ones who are already stretching to get into a home. But by lowering the cost of getting into an FHA mortgage, the unintended consequence may be that it pulls in more borrowers who could go conventional if they wanted to. This may not be the result they were looking for, but my guess is that this change will bring in new buyers to FHA will add to the market share. If this change makes the program more stable, it will be worth it.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company           Chicago FHA mortgages

Radon is the lesser-known, ugly cousin of mold and asbestos. It’s a homeowner issue that is not discussed or widely publicized like mold and asbestos, because there’s little recourse for litigation. When radon occurs, it’s not really anyone’s fault.

A map of Canada's radon-heavy areas.

Radon is a radioactive gas that is invisible and has no odour. It naturally exists all around us in the environment, seeping out of the soil as natural uranium breaks down. When a home is built over an area where radon is present in large amounts, the radon will instead creep into the home, building up into unsafe levels as it becomes trapped. There is an established link between the inhalation of radon gas and the development of lung cancer, and radon is the leading cause of lung cancer after smoking.

Ontario and Nova Scotia are home to the highest percentage of households that have unsafe levels of radon, and it’s considered a major contributer to poor indoor air quality.

Only 1.7 per cent of homes in Toronto have high levels of radon according to Health Canada. In 2001, there were about 1 million homes in the city of Toronto. While 1.7 per cent is a very small number, it works out to 17,000 homes. That is more than the total number of households in Hamilton, Woodstock or Timmins as reported by the 2006 Canadian census.

Radon is more likely to get into a home through the basement through foundation cracks, water well piping and sump pumps that aren’t sealed. Most radon reduction work is based on sealing up these items as well as any utility pipes in the lower level of the home.

It’s easy to find out how much radon may be present in your home. Do-it-yourself home radon testing kits consist of small containers that measure radon’s presence using activated charcoal over a period of days, weeks or months. Epoxy paints can also be used to seal up basement walls, while increasing the ventilation in areas where radon may accumulate can help reduce the levels.

In Canada, there is no set acceptable level for radon exposure because it’s all around us in the environment, and the levels those concentrations depend on nearby nuclear facilities and the soil content. Radon levels are measures in Becquerels, and Health Canada recommends action be taken if the levels are higher than 200 Becquerels per cubic meter.

Radon Risks For Toronto Real Estate Owners is a post from: Toronto Real Estate Updates