Condo Fees Explained

Condo Fees Explained

When you purchase a condominium, there is a monthly fee payable to the condo corporation.  This fee is made to cover the operating costs of the building.  It is non-negotiable and is usually calculated depending of the size of your unit and sometimes number of parking spaces you own.  Smaller unit owners in a building would pay a lesser amount than owners with larger units.  Not every condominium is the same and they all differ as to what the condo fees include.  It is important to ask your Realtor or lawyer what fees are associated with the unit you wish to purchase, so you won’t have any surprises.  Every unit owner contributes common expenses in proportions that is outlined in the declaration.  This fee can include water, hydro, gas, common elements, insurance costs.  Cable and Internet costs are almost never included in the condo fees.  Any default in payment can result in a lien against the unit’s owner (including legal costs and other expenses), which can be enforced in the same manner as a mortgage.    

Condo corporations are non-profit organizations, so they don’t pocket any of the remaining condo fees that they receive.  There is however a reserve fund that holds extra money in case of an unexpected large expense that might arise, such as a major repair and renovation.  These funds are collected from common expenses and must be held in trust.  Its important to do your due diligence and find out exactly how much the reserve fund holds.  If it doesn’t have much money in the reserve fund, if a major repair or renovation needs to be done, every unit owner in the building will have to cover the bill.  This is called a special assignment, when the repair cost exceeds the amount in the reserve fund, and the remaining balance is billed to all unit owners.    

Its always wise to get a copy of the status certificate.  This provides a lot of information for the buyer, it is a document containing information regarding the operational, legal and financial dimensions of the condominium corporation.  Anyone can request a copy and it must be delivered within 10 days.  The corporation can also charge up to $100 for the certificate. 

Here is a list of what is included in a status certificate:

  • Corporations address, directors and officers names
  • Statement of common expenses
  • Amount payable for the unit for common expenses
  • Particulars of any increase in common expenses for the unit since the date of the current year budget
  • Statement concerning any assessments relating to the reserve fund since the date of the budget for the current year
  • Information concerning any applications regarding amendments to the declaration
  • Current budget
  • Copy of current declaration, by-laws and rules
  • A listing of various current agreements
  • Owner compliance with current agreements regarding modifications that relate to the unit
  • Particulars concerning the most recent reserve fund study and the amount of the fund
  • Number of units leased
  • Certificate of current insurance policies
  • Any planned or proposed additions, alterations or improvements to the common elements

Before making a firm offer on a unit, I would strongly suggest reviewing the status certificate incase there are any major problems with the condo corporation, such as if they are getting sued by someone or have financial problems.  As I stated before in order to find out exactly what the condo fees cover and how much you will have to pay, all that information will be showed in the status certificate.

 If you have any additional questions, I would be happy to help you.  You can contact me here     

Land Transfer Tax In Ontario

Land Transfer Tax In Ontario

When any property in Ontario is changed hands there is a Land Transfer Tax payable.  This might come to a surprise to many people as they are not aware of it.  This tax is payable by the BUYER of the home or property, never the seller.  This tax is payable on the closing day, the day which the transfer of title is completed by your lawyer.  If the property is located in Toronto, there is an additional Toronto Land Transfer Tax to be paid (I know it sucks).  Most of the time, this tax can be added to your mortgage and will be payable in monthly installments.

Ontario Land Transfer Tax Rates

Purchase price of home Land title transfer fee First-time homebuyer rebate
Up to and including $55,000 0.5% Full tax rebate
$55,000.01 to $250,000.00 1.0% Full tax rebate
$250,000.01 to $368,333 1.5% Full tax rebate
$368,334 to $400,000.00 1.5% $4,000 tax rebate
$400,000.00 to $2,000,000.00 2.0% $4,000 tax rebate
Over $2,000,000.00 2.5% $4,000 tax rebate

Toronto Land Transfer Tax Rates

Purchase price of home Land title transfer fee First-time homebuyer rebate
Up to and including $55,000 0.5% Full tax rebate
$55,000.01 to $250,000.00 1.0% Full tax rebate
$250,000.01 up to and including $400,000.00 1.5% Full tax rebate
$400,000.01 up to and including $2,000,000.00 2.0% $4,475 maximum tax rebate
Over $2,000,000 2.5% $4,475 maximum tax rebate

To calculate your land transfer tax use my calculator here.

First Time Homebuyer Rebate

There is great news however, if you are a first-time homebuyer you can qualify for up to a $4000 credit.  The government sets out the requirements for this rebate.  You can find all the information here.

Keep in mind when deciding to purchase a home, you will need to budget for the land transfer taxes.

How To Stage Your Home To Sell It Quicker

How To Stage Your Home To Sell It Quicker

Before putting your home on the market, there are many things to do in order to make your home stand out from the competition.  If you want your home to sell in a short period of time, its important to make it look good to the potential buyers.  If your home is messy or cluttered or has some sort of damage it will detract from the overall appearance.  Here are the most important things to do:

Landscaping

Its important to maintain the appearance of your home from the outside perspective, such as the lawn needs to be cut, leaves raked up, overgrown bushes trimmed and grass growing from the driveway needs to be taken away.  It can also help to do some gardening and add flowers or bushes in certain parts on the property.  The outside of the home is the first thing a buyer sees, if it looks unkept and overgrown this will detract from the appeal of the home.  These are inexpensive things to do, as you can even do it yourself without hiring a landscaper.

Cleaning

Even before the professional photographer comes to take pictures of your home, it’s extremely important to clean your home.  Your floors and carpets need to be cleaned, windows in the home, corners with cobwebs need to be cleaned, kitchen stove, fridge and sinks need to be cleaned, any dirty paint and walls should be cleaned.  When a buyer walks into your home it should give an appearance that the house has been maintained.  If things are dirty or smell bad, chances are that buyers would prefer to buy the house that is cleaner.  Its important to de-clutter your home, moving things out of the way that don’t have to be there would be idea.  Your large shoe collection can go in a closed out of view, personal and family photos should also be removed as this will make the photos of your home look more professional.  As a rule the less clutter there is the better your home will show.    Cleaning your home is very inexpensive and you can do it yourself.

Pets

Let’s face it, your pets make a mess of the home and stink it up.  Before anyone comes to view your home its important to clean up the animal hair, kitty litter, dog/bird cages.  Many people are allergic to animals so its very important to try and make sure as much as possible is cleaned up.  If you have a basement it would be ideal to keep the animal’s things down there and not in the main parts of the house.  Last thing you would want is someone having an allergic reaction while inside your home.

Lighting

When a potential buyer walks into your home, lighting is a very important factor.  If you have any burnt-out light bulbs or broken light fixtures, it’s important to get them changed or replaced.  Most people don’t want to buy a house that is dark and gloomy inside or if they see any light fixtures broken, they will automatically think there is something wrong with the house.  This could put up a red flag in the buyers mind which you don’t want to happen.  New LED lights are ideal as they last almost a lifetime and are very efficient which can bring down your hyrdro bill every month, its also a great selling feature.

Repairs And Renovations

When there are major issues with your home it would be ideal to fix those things before selling your home.  The basic things as your appliances, furnace, air-conditioning unit should all be in working order.  Majority of buyers want a turn-key home to move into without having to fix or renovate anything.  If you have a leak in the roof you should fix it before mold or other problems arise.  A fresh coat of paint goes a long way in the appearance of your home aswell.  If a buyer walks into your home that has obvious damage it might make them think that there are other serious problems with the home aswell.  Again, you don’t want this to happen when selling your home.

As a general rule you want your home to show at its best, a spotless home will appeal to everyone and can give you the competitive edge over the other homes for sale in your neighbourhood.  If you need additional guidance contact me here

Closing Costs When Purchasing a Home

Closing Costs When Purchasing a Home

Before you can get your keys to your new home there are many costs associated with the purchase.  When you see an ad for a home which shows the asking price, that is not the total amount you will be expected to pay.  When thinking of purchasing a home you will have to take these costs into consideration.  Here is a breakdown of all the closing costs you will be expected to pay, most are one-time fees.

Property Survey

A property survey basically outlines property boundaries and setbacks.  It will show any easements on the property, it will show if there are any shared driveways or any structures that are overhanging on the particular property.  Some lenders will require you to provide an up to date survey.  You can ask the homeowner if they have a copy of a survey, if they don’t you will have to pay as a buyer to get a survey for the property. Approximate cost for a land survey depends on the size and type of property which can vary.  $200-$800

Home Inspection

When making an offer to purchase a home its always a good idea to get a reputable home inspector to assess the home.  A home inspection will determine if there are any minor or major issues with the home that need to be fixed.  If you find problems with the home, you will be able to walk away from the deal.  It is not mandatory to get a home inspection; the costs will be subject to the buyer of a home.  Approximate cost of a home inspection is $300-$650+depending on the type and size of the home.

Title Insurance

In some cases, your lawyer will recommend you acquire title insurance on your property.  This insurance is optional and will protect you from any problems in the title of your home in the future.  This means if there ever is a dispute over any part of your property such as title fraud, municipal work orders and zoning violations. Approximate cost for title insurance is $250-$400.

Property Insurance

All lenders will require you to get fire insurance for the home you wish to purchase.  Before they send any funds, they will require proof that the home will be insured on closing day.  Approximate insurance rates per month range around $50-$200 per month depending of the value and size of the home.

Mortgage life, critical illness, disability or job loss insurance (optional)

When setting up your mortgage you can consider getting insurance if for any reason you are injured somehow and are not able to work and produce an income.  This will protect you to cover the costs of your mortgage while you are ill or disabled. 

Land Transfer Tax

When any property in Ontario is bought and sold, when the title of that property is transferred there is a Land Transfer Tax payable to the government (certain situations don’t require a tax).  If you live in Toronto, you will be subject to an extra municipal tax.  If you are a first-time home buyer, you can qualify for a rebate from the government after paying this tax.  To find out how to apply for the rebate go here.  Approximate cost for this tax vary on the purchase price of your home, you can use a land transfer tax calculator here.

GST or HST

Newly constructed and substantially renovated homes may be subject to GST or HST. If you pay GST and HST, you may qualify for a new housing rebate.  For more information about the rebate go here.

Canadian Mortgage and Housing Corporation Insurance

In Ontario if you have less than a 20% down payment, you will be subject to mortgage insurance.  This is to protect the lender in case you default on your mortgage.  This premium is added to your monthly mortgage payment.  This premium depend son many factors which you can see here.

Utility payments, Property Taxes and Condo Fees

Sometimes the owner that you are buying the house from has prepaid their property taxes or condo fees for the whole year.  When you purchase the home, you will have to reimburse the seller for the amount that they had prepaid already. 

Legal Fees

When buying or selling a home the buyer and the seller must obtain a lawyer to handle the closing process. They handle title searches, utility searches and any problems that may arise through the process of buying or selling a home.  The lawyer’s legal fees and disbursements are subject to GST or HST and range from $600-$2000depending on how complex the transaction may be.

Before starting your home search, it is very important to be aware of all the closing costs involved when buying or selling a home.  Contact me for further guidance. 

Should I Get The Home I Want To Purchase Get Inspected Before Buying?

Should I Get The Home I Want To Purchase Get Inspected Before Buying?

Buying a home is usually the biggest financial decision anyone is going to ever make in their lifetime.  When you buy almost anything from a store or online you would expect that there will be a warranty that comes with that product.  When making a large purchase such as a home, it only makes sense to have peace of mind that there won’t be any major problems with it after you move in.  Therefore, it’s extremely important to get a home inspection before deciding to put an offer for that house you are wanting to purchase (or having your real estate agent put in a clause on an offer, which would not make the offer binding unless you are satisfied with the results of the inspection)  This will protect you incase there are any issues with the house, and you do not want to put money into fixing them.  As of the day this article was written there is not much regulation in the industry.  And beware that some problems may not be detected in a home inspection that may arise in the future.

How To Choose A Credible Home Inspector?

There are many home inspectors out there to choose from.  They all offer slightly different services and vary in how thorough they are in their inspections.  As a rule you get what you pay for, if a certain company or individual is charging ½ the price as compared to everyone else I would be skeptical in the quality of their work.  After all this will most likely be your biggest purchase in your life, major problems that an inspector might miss can possibly cost you tens of thousands of dollars in the future.  Unfortunately, at this time Ontario requires no licensed for inspectors, however the government is currently working on implementing regulations.  However there is an organization called the Ontario Association of Home Inspectors, this organization is dedicated to enhancing professional practice and technical skills of home inspectors.  Members of this organization are held to high standards of practice and must obey a code of ethics.  These members have a designation as a “Registered Home Inspector” It is recommended to get a building inspector that is a member of this organization.        

What Is Inspected In A Home Inspection?

Home Inspections include almost all areas in a home or condominium.  The inspector will do a thorough walk through of your home and check for any problems that could be present.  The inspection will include:

Plumbing – Plumbing pipes, fixtures, hot water tanks, shutoff valves, drains and vent pipes

HVAC – Air Ducts, A/C, Furnace, heat exchangers, humidifier, venting, filter and registers

Electrical – Panels, wiring, outlets, fixtures, electical service, some detectors and grounding

Roofing – Gutters, downspouts, chimneys, flashings, skylights and leaks

Attic – Insulation, ventilation, roof frame, moisture levels, pipes, flashings and leaks

Exterior and Structure – Exterior receptacles, gas meter/piping, windows, doors, foundation, exterior wall coverings and columns

Site Grounds and Grading – Fences and gates, patios, decks, window wells, sidewalks, driveways, retaining walls, grading, and trees

Interior – Stairs, floors, walls, leaks, ceilings, fireplaces, skylights, windows, and doors.

Basement – Foundation, floor joists, sub flooring, leaks, sump pumps, moisture/mildew, mold, ventilation, foundation, columns and insulation

Garage – Flooring, walls, roof, windows, door opener, door, moisture/mildew and recepticles

Thermal Imaging/Infra-Red – Windows, doors and interior walls and ceilings

Costs for Home Inspections

Cost will vary depending on the company you decide to hire and the type and size of your home.  A condo apartment will usually have the least cost to inspect as it is usually the smallest type of home and will only need an indoor inspection.  Generally the higher the square footage of your home the higher cost it is to inspect.  Prices vary $350-$600+ depending on the thoroughness of the inspections.

What an Inspector Might Miss

Certain issues with your home are hidden and won’t be able to get detected.  The inspector might not do a thorough inspection and might have lacking detailed information in the report.  Some inspectors won’t go on top of your roof to inspect the roof as this requires some risk and extra effort to get on top.  Some will not get into very tight locations such as attics or crawl spaces.  There could be hidden electrical issues, structural issues, failing HVAC equipment, leaks and partially blocked sewer lines which most likely won’t be able to get detected.   Some inspectors lack any training whatsoever, so this would mean they are not knowledgeable as to what problems to look for and to diagnose.  Before hiring a home inspector before buying or selling your home, do your research to see what type of credentials they have, and look for reviews online to see what kind of experiences other people had with them.

How an Inspection Can Hurt You

If a seller gets multiple offers for their home, usually they would prefer to accept the offer with the least amount of conditions.  This means that if you want the property inspected and the other competing buyer does not, then the seller will most likely accept the other buyers offer because this will make their life easier by not having to have you, your real estate agent and inspector come into their home for a few hours. 

Remember before hiring or thinking about hiring a home inspector do your due diligence.

Should I Sell My Home Before Buying A New One?  Or should I Buy A Home Before Selling?

Should I Sell My Home Before Buying A New One? Or should I Buy A Home Before Selling?

If you are in the market to sell your home and want to relocate, you might be thinking if putting your home on the market first or buying a home first will be the right choice.  This will depend on everyone’s financial situation and risk tolerance.  There are many ways to go about selling and buying your home.

First you will need to be aware of what will happen if you buy a house before you sell your existing one.

Getting approved for a second mortgage

Most people might have a hard time carrying two mortgages at the same time.  This would mean applying to a lender for a second mortgage, lenders will take your income, your debts, your assets, any car payments and other factors into consideration before lending you money.  Having equity in your existing home will not automatically get you approved for a second mortgage.  Getting a second mortgage usually requires you to produce a much higher down payment compared to a first mortgage, this could mean having to come up with a 20% down payment.  Your income is usually the largest overall factor mortgage lenders look at.  They will determine if you are able to afford the extra monthly payments.  If you don’t meet their guidelines for a second mortgage, you will be out of luck.

Making an offer on a home with conditions

Depending on the current market, some sellers might accept an offer for purchase and sale with a condition that your home must be sold before the offer for the second home will be binding.  This would mean that there won’t be any risk as the offer for purchase won’t happen unless your existing home gets sold.  This is very a common condition that will be accepted in a down market, as there usually won’t be any competing offers for the home you are trying to buy.  But keep in mind if the seller gets multiple offers for their home, they will accept the offer with the least conditions because they would have no reason to care for your conditions in the offer.

Selling your home before buying a new one

This is usually the best and most practical choice for most people.  The vast majority of people don’t have hundreds of thousands of dollars in the bank or investments to pull out and purchase a new home.  However, there are a few things to keep in mind before selling your home first.  It is possible that your home will sell before you are able to purchase a new home.  This could mean that you could be homeless for a little while, you will need to find a temporary place to stay.  If you don’t have a friends or family members house to stay at, hotels can be really expensive to stay in.  This could mean having to store all your belongings in a storage facility, which will require you to rent or hire a moving company twice instead of once.

Selling your house before buying a new one will reduce your stress level as you won’t have to think about what if your current home doesn’t sell in time and that you might have to juggle two mortgages.  Buying a home first means that time will be on your side, you will be able to find that perfect home in the right location with all the features you want without having to rush through the process and settling for a home that may not be ideal for you.  Purchasing a home will be most peoples biggest financial decisions in their lives, its better to not rush going through this process.

I will recommend talking to your real estate agent and mortgage lender before making any decision yourself.  As a real estate agent I will be able to advise you on how the current real estate market is doing and how long it would be expected to sell your current home as well with any possible risks you would face in the process.