Buying Toronto Real Estate for the first time: Don’t make these mistakes

Not budgeting for extra costs

Many people overlook or don’t understand what is included in the blanket phrase “closing costs”. These costs include taxes, legal fees, home inspector fees, moving costs, insurance and hooking up utilities. Even if you have your home buying transaction budgeted to the last dollar, don’t forget these costs. You should set aside between 1% and 3% of the purchase price for the closing costs.

Don't make these common mistakes when buying Toronto real estate for the first time.

Letting certain numbers dictate your home buying schedule

When buying a home, of course price and interest rates are an important factor. However, they are cyclical and it’s not always prudent to wait for low interest rates or low home prices (home prices are expected to increase 1.3% this year and then another 1.3% next year according to CREA’s latest forecast update), but trying to wait for the best circumstances might see you waiting a while. For more information on this issue, please read our Toronto Real Estate Blog posting here with special guest, TD mortgage specialist George Christopoulos on this very subject.

Being in the dark about your credit score

Having a good credit score increases your chances of getting a mortgage, and working out any kinks before applying is always a good idea. Your credit score and credit report are both things that should be checked on a frequent basis, not only to see how you’re doing, but to catch any mistakes.

To better your chances of having a successful first home buying experience, sign up for our Toronto Real Estate Team’s Home Buyer BootCamp here and learn the 22 things you need to know about Toronto home buying that you can’t find anywhere else.

Biggest Mistakes You Can Make As A First-Time Homebuyer In Toronto is a post from: Toronto Real Estate | Toronto MLS Listings | Toronto Homes For Sale

The National Post published an article today on grow-op houses in Toronto, and how they are on the increase. Unfortunately, it’s becoming a growing problem for home buyers and home sellers in the City of Toronto.

Grow-Op homes are becoming more and more of a problem in Toronto.

According to the article, being a former grow-op home can reduce the selling price by between 20% and 25%. While many of these grow-op homes are listed as such because of a legal obligation by sellers and real estate agents, there are unfortunately quite a few of these homes that were used as grow-ops then patched up and resold without being identified. If they were never raided by police, they have not been officially designated as grow-op homes in Toronto.

Grow-op homes aren’t the same as homes where horrific events like crimes or murders have left the home with an undeserved “stigma”. These properties are stigmatized for very different and very important reasons: they can be extremely dangerous to live in.

Often, alterations are made to the structure without any care about the safety of future residents. These can include holes cut in walls, altered ventilation or rewiring that can pose a fire hazard later. Also, the humidity in these grow-op homes can lead to the growth of Stachybotrys mold, or “toxic black mold”.

This increasing problem makes it especially important to undergo a home inspection in the city of Toronto. Your Toronto real estate agent can also provide you with more information on the history of the home and the neighbourhood.

Former Grow-op Homes: An Increasing Problem In Toronto? is a post from: Toronto Real Estate | Toronto MLS Listings | Toronto Homes For Sale

Toronto Real Estate

What is a bully offer?

It begins when sellers offer their listing and hold open houses, but won’t look at any bids until a set date. This can also be termed as sellers holding-back offers until a specified date. If a buyer cannot wait until this date because the property is just that perfect, they place what is called a preemptive or “bully” offer. This offer usually comes with the catch that it must be accepted right away and forgoes any waiting until the set date.

Should you entertain bully offers when it comes to Toronto real estate?

Bully offers for buyers:

A real estate agent will be able to let you know if the property is over or under priced, and help you come up with an offer the sellers can’t refuse. If the offer is accepted, the buyers who waited like they were supposed to are then told the property has been sold, leaving them understandably upset – but it’s all a part of the game.

Bully offers can also be used to test the waters. If a property seems underpriced, a bully offer can test what people will take or leave. If the sellers still don’t accept, these buyers can then have a better idea of what they will need to bring on the set offer night.

Bully offers for sellers:

Sellers can profit from holding out until a set date, but it can also cost them dearly. If they decline a high bully offer, they may find themselves with nothing but lower offers to choose from later on. Sellers could be coached by their agents to not entertain bully offers, and unintentionally be forced to pass up bully offers for a higher price than they will ever see when it comes time to review bids on offer night, which can lead to thousands in lost profits.

Fully consider each offer, whether you’ve set a specific bidding date or not. A bully offer may or may not be the highest offer you receive.

As a buyer or a seller, consult with your Toronto real estate agent to make sure you don’t overpay as a buyer, or lose out on money as a seller.

Bully Offers and Toronto Real Estate is a post from: Toronto Real Estate | Toronto MLS Listings | Toronto Homes For Sale

In his column, Aaron tells of an Edmonton family who purchased a plot of land with the intention of building a house there. However, everyone involved dropped the ball and the property that the family was initially shown was not the actual piece of land for sale. What they thought they were buying was a lot on the street for sale by private owners, and what they actually bought was a completely different lot on the same street that belonged to the City of Edmonton.

Buying land in the GTA? A land survey is a wise investment.

Buying Land In The Greater Toronto Area? Get A Land Survey is a post from: Toronto Real Estate | Toronto MLS Listings | Toronto Homes For Sale

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 | Toronto MLS Listings | Toronto Homes For Sale

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 | Toronto MLS Listings | Toronto Homes For Sale

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 | Toronto MLS Listings | Toronto Homes For Sale

In any Toronto real estate transaction, a land survey is sometimes overlooked. A recent story in the Toronto Star about two neighbours who shared a mutual driveway between them reiterates the importance of getting a land survey and understanding property boundaries before purchasing or selling a home.

The couple who recently moved in next door actually owns most of the two homes’ formerly-shared the driveway and is now forbidding the other couple from using the driveway they’ve used for the past 33 years, which also connects to their garage. According to a land survey from over 50 years ago, the shared space between the home is actually divided 25/75 and the neighbours with the larger share have since blocked the other homeowners’ access to the driveway.

In Ontario, land surveys used to be called a surveyor’s real property report, and these can be fairly outdated as the province slowly switches over to the newer provincial Land Title system. The older Land Registry laws would have allowed the neighbour who has used the driveway for so long to keep using it, however the Ontario Land Title system effectively takes this right away.

A similar case in Nova Scotia was also mentioned, where a driveway was amicably shared between two neighbours, even though one neighbour was only entitled to 3 feet and the other was entitled to 8 feet. Those with only 3 feet built a fence and prevented the other neighbours from using the driveway. This case led to expensive court proceedings and litigation, which can easily be avoided by conducting a land survey.

A land survey is very important as Toronto’s neighbourhoods are filled with homes that share driveways. Professional land surveys use historical records and research as well as measuring to accurately determine where someone’s property boundaries are. This will ensure that both the buyer and seller know exactly what is changing hands during any real estate transaction.

Land Survey: Toronto Homebuyers And Home Sellers Shouldn’t Overlook It is a post from: Toronto Real Estate | Toronto MLS Listings | Toronto Homes For Sale

In various Toronto real estate transactions, sellers may promise things nonchalantly to buyers or buyers may ask for promises the sellers can’t really keep. Buyers backing out of a deal can be one undesirable result of these promises, as can putting yourself in the position of being sued for damages.

If a Toronto real estate view is promised to be unspoiled, consequences could arise later on.

Promises fall into two categories in real estate lingo, warranties and representations. Warranties are essentially a promise that things will be in good working order. If this is found to not be the case, the seller can be sued for damages. The other type of promise is called a representation. A misrepresentation is an example of when things can be more serious, because it can allow buyers to walk out on a deal.

A good example of a warranty issue is promising the buyer that the washer and dryer that come with the house are new and in great working condition. If the buyer moves in and finds that’s not the case, they can sue for damages.

An example of a misrepresentation is relaying a message about the redevelopment of the area: a buyer falls in love with a property that faces a forest or meadow and is told that the owner of the land is not planning on developing that property and buys the home for that reason. The seller could have been passing on information he thought of as fact, or something he just heard in passing. Regardless, if a Wal-Mart is built in the area within a year and the buyer can prove they bought the home specifically for the naturalistic view, they can cancel. This only works however, if the buyer can prove that.

Representations and warranties are perfect models of how something said in passing or casually written on an agreement can be a bad idea later on.

These reasons also provide extra assurance that having a Toronto real estate agent by your side through the home buying or home selling process is an added advantage that can’t be replaced. Your real estate agent may also add an additional agreement to the transaction that gives buyers extra time to determine if everything is working properly, as warranties typically expire on the closing date.

A real estate lawyer can also assist in reviewing all of the transaction documents before they are signed, sealed and delivered.

Toronto Real Estate And Promises, Promises is a post from: Toronto Real Estate | Toronto MLS Listings | Toronto Homes For Sale

Toronto Homeowners Should Never Pay For Work Upfront

Some recent news out of the United States has shone light on two important and financially dangerous aspects of having work done around or on your home. One issue is that if a company is paid upfront for all of the work, there is little recourse for homeowners if the company goes out of business before the work is completed. The other is that contractors usually pick up materials on credit with companies and use your home as collateral. This way when they don’t pay their tab, the supplier can come after homeowners, and sometimes to the tune of thousands of dollars.

When working with contractors, Toronto homeowners should do their research.

One roofing company shut down in the middle of several projects after completing only half of the work but getting all of the pay, while a swimming pool installer did the same, but now homeowners are being targeted by subcontractors looking for payment for services rendered, even though the homeowners already paid the company in full. They’ve also received letters from concrete companies saying there’s a pending lien on their home for supplies, despite the fact that they also paid for those very same supplies already.

Never pay for a full contracting or renovation job completely up front. A deposit is usually necessary, but avoid any company or individual that requires a complete payment upfront. Do your research on companies before you hire them, and ask for references. Most importantly, follow up on those references and ask the company’s other clients how well the project went, what the workers were like and whether there were any unexpected problems or fees and how those issues were resolved.

How Can Toronto Homeowners Protect Themselves From Being Pulled Under With A Sinking Contracting Company? is a post from: Toronto Real Estate | Toronto MLS Listings | Toronto Homes For Sale