Everyone is talking about the new changes and this is how it will affect you: 

In order to qualify for a mortgage, borrowers will have to meet the standards for a five-year fixed-rate mortgage — up from the current standard of three years:  This means is that a consumer must be able to afford the payments and interest of a 5 year mortgage product, in order to qualify for the lower Payment and Interest typically associated with a shorter term or variable rate.  This does not mean that a consumer will no longer be able to receive a variable rate mortgage or a term less than 5 years. 

If prospective home buyers want to purchase a property where they will not be living, they will have to come up with a 20 per cent down payment: The 20% down-payment is aimed at the real estate speculation market.  It will help prevent people from buying 5 or 6 condo apartments in the hopes that they will sell quickly once the unit is completed.  This should not affect the first time home buyer or the person buying a second home or cottage.  It specially targets the investor who will not be living in the property, and has no intention of living in the property. As consumers, they can still expect the standard 5% (residential dwelling) down payment. 

Instead of being able to borrow 95% of a property’s value, the limit will now be 90 %: This rule means that consumers will need a borrowing strategy that goes beyond just getting a chunk of money.

All real estate buyers should be using a knowledgeable, professional agent to help them with their investment purchase. 

Here is one reason that most do not consider. Did you know that the buyer doesn’t pay for their agent’s services?  The way that real estate transactions are most often structured in organized real estate trading is such that the seller pays both the commission of the listing (seller) agent and the buyer agent.  This does not mean that the buyer’s agent is then working for the seller. The buyer agent owes their loyalty to the buyer alone, and therefore can negotiate on the buyer’s behalf without restriction or conflict.

Another major reason is the nature of the real estate deal itself.  An effective salesperson protects the interest for the investor during the deal structuring process. The buyer is much more at risk in this type of transaction.  When the deal is completed, the seller has money and the buyer has property. The buyer needs to be sure they are winding up with the property they had bargained for, and not one with significant defects or shortcomings. 

There are many other reasons for using an agent, including obviously their experience, knowledge, advice, and for the cynics out there, their Errors and Omissions Insurance, which protects deal integrity in the event of a mistake, but hopefully the above has shed some light on some of the less obvious points of note.  Every buyer and investor should have the counsel of a professional.

At a press conference this morning, the Minister of Finance Jim Flaherty announced 3 new lending rules that will affect government-backed insured mortgages. These are steps that will support the long-term stability of Canada’s housing market and help encourage home ownership for Canadians.

The rules have been adjusted as follows:

1.         Borrowers must meet the standardsfor a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term.

2.      Change the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes.

3.      A 20% minimum down payment will now be required for non-owner occupied properties.

As per the Department of Finance these new rules will take effect April 19, 2010.

To read the government news release, click on http://news.gc.ca

Now that the 2010 Olympics are only 5 days away, it got me thinking . . .do cities that win experience a boom or bust in the real estate prices? After reading various articles and studies apparently it definetely will have an impact on the market.

According to a well-known Vancouver Realtor responsible for the sales and marketing of the Olympic Village, Vancouver properties should rise by 4 to 4,5 per cent in 2010.

The 2010 Winter Olympics will contribute to increased sales for Vancouver Real Estate as people from all over the world will want to know more about Vancouver and even consider buying there.

I would not be surprised if other parts of Canada will get positive exposure as well. When these same International passengers connect through Toronto and see what this city has to offer, we should expect some Real Estate clients that appreciate even more what a great City Toronto is and what our Toronto Real Estate and Condo Market has to offer.

Bring it on

According to a recent report, nearly two-thirds of potential buyers use the Internet to refine their home search. Broker Web sites let buyers browse by house size, style, area, and price.

Because many buyers look only at those homes within their price range, it’s important to accurately price your home for the market. The higher a home’s price above market, the fewer the number of interested buyers, and the longer it will take to sell.

The key to selling your home quickly at the greatest return is to price it at market value right from the start. A fairly priced home will capitalize on the flurry of buyer interest a home enjoys during its first few weeks on the market.