November 2009

November Update

Greetings, I hope you have  enjoyed  the bit of good November weather we have been having.

Looks like we are in for the rainy season now.

A quick Toronto Real Estate Update and some Important Info About the HST and How It Affects You.

Because Rates are still very low we are having a stronger than expected market with 5 year rates below 4% with prime just over 2%.

In fact in the first half of November the volume of sales is up 84% over the same time last year.  As you probably remember,

we were having a bit of market exhaustion and a cyclical slump.

If you are considering selling you will want to Click here to view “This Month in Real Estate”.

Our companies real estate update and insight into what makes for a very saleable property.

This is a robust sellers market so if you are buying, do your research, put in logical offers and be patient because the market will change.

Many folks feel that they cannot afford to buy in this type of market and that all homes sell for more than asking price.  This is just not true.

About 12 % go over asking that leaves about 98% that don’t.  For a little insight on how to buy in this market  Read this article  about Ugly Betty and Some Toronto Homes. You can also contact me Direct at (647)886-1550 or if you would like to talk about taking advantage of all this confusion because there are great opportunities available.

Or Click here  to have new listings sent to you daily.

Click Here   to see our November E-Newsletter with some tips on avoiding holiday risks,  and some great videos on Fire safety & appliance makeover.

And finally, something very important to us all Taxes

If you want to understand better the effect the HST will have on us.  Go to my blog at  HST and Your Taxes  and you will begin to get the picture.  Pretty soon taxes here in Canada will be much on the same scale as Great Britain, where people are loaded with debt and can barely pay their bills. Does that start to sound familiar.

In the next couple of months I will be conducting my 90 minute workshop on Four Steps to Debt Irradication.  I will keep you informed of the date.

The Canadian Real Estate Association has requested that I forward this to you and ask you to please take action.

Subject: Stop the HST – Cost of buying, owning and selling a home to go up by 8%

Earlier this week, the Government of Ontario formally launched its latest assault on homeowners, purchasers and sellers with the introduction of legislation to harmonize the provincial sales tax and goods and services tax.

Homebuyers and sellers will pay 8 per cent more on legal fees, appraisals, real estate commissions, home inspection fees, and moving costs, adding about $1,500 in new taxes to the average residential real estate transaction in Ontario.

For homeowners the HST will also add hundreds of dollars in additional tax on utility bills (gas, electricity and home heating fuel), on home renovation labour, the cost of lawn upkeep or landscaping and the cost of snow removal.

Please help Ontario REALTORS® fight this tax. In less than 30 seconds you can send an email to your MPP asking them to vote against sales tax harmonization legislation, by clicking here: http://bit.ly/stopthehst. 

When you get to this page after reading the letter just scroll down to the bottom of the page.

When you fill in the blanks it automatically generates your name and info into the letter.

You can send it by e-mail or by snail mail.

Or you could choose to do both.  I did.

 E-mail is expedient but snail mail is much more effective, just envision the pile of letters on your MPS table rather than you e-mail in his spam box.

Yes you have to care enough to get out an envelope and buy a stamp.

But given the amount of taxes we will be paying shortly that should be a minor issue.

Best Wishes until next month.

Keller Williams and Annie – Our Yearly Good Dead

At Keller Williams we have a charity called Keller Williams Cares. We do good deeds for our own charity and for others around Toronto. Last night we had a jam packed theatre at the Papermill at Todmorden Mills 67 Pottery Road. This year T3 productions put on a very professional production or the musical Annie. Although last night was our charity event with wine and cheese afterwards the musical was fantastic and runs to the 28th with matinees on both Sat and Sunday at 2 p.m. It would be well worth your investment of $25.00 per ticket to see it or to take the kids.

Here’s another little taste.

What Do Ugly Betty and Some Toronto Homes Have In Common.

Since we have been having a soaring market for about 10 years it has become increasingly challenging to buy a home without encountering multiple offers in the Toronto area.  So the impression has become that all homes sell for more than the asking price.  In reality only about 12% of homes whether house, condo or loft sell over asking price and that there are plenty of other well priced homes that sit for a few weeks to a month before an offer is accepted.

Ironically most of the first time buyers spend their time chasing that 12% and quite a large number of the second time buyers do the same. This is a phenomenon that i have watched for years.

I explain to clients what they are doing. I share with them it is a bit like when they were back in school and they lusted after the hottest girl or guy in the class hoping and praying to be the one to make the catch.

A few get it immediately,  some figure it out after a few weeks, others take a couple of months  until they are completely frustrated with their inability to buy a home unless they overpay entirely for the property. There is the small group that continue to pursue only the hotties until finally they land one paying more than anyone else would.

So what is the difference between the Hotty and the Ugly Betty.  There are plenty of homes out there that don’t have great street appeal or need some elbow grease inside or maybe a new kitchen or bath.  Maybe they need both.  Sure, everyone wants to own the perfect home with the perfect kitchen and bath and the right color of paint on the wall so they can just put down their furniture and live.  However, only about 15% of the homes actually look like that.

Sellers are getting smarter and more and more of them are employing stagers, clearing out a bin full of stuff or putting their belongings in storage while they sell. Some even move out of their home.

So, this tells you a little secret right there. Many of these homes were Ugly Betty’s when the agent first walked in the door and recommended to the seller that they would get thousands more if they turned that home into a Hotty before putting up the for sale sign.

If the seller can do that to their home then it makes sense that you can just buy the home of a seller that couldn’t be bothered going to the trouble and do the same work.  You will save tens of thousands of dollars if you do.

Your home may start out as an Ugly Betty a not so great looking gal with fantastic skills and great utility, but with a little effort and perhaps some professional design help you can re-do the front and upgrade the interior and bring out that homes beauty.

I never had a name for these type of homes until recently.
I have explained this concept to clients for years.  Many have seen the light and stopped chasing the Hotty just as they did years ago in school. Today they are settled in fairly priced homes and made their beauty shine.

How Will The HST Affect Your Life?

My asociate Rob Roland wrote this article.  It is excellent and brings us right up to speed on the gov’t plans to tax us to death.  Thought you might find it useful.

Ontario’s New 13% Harmonized Sales Tax – How It Impacts Real Estate

Next summer (2010) the Ontario Government is set to put into force its new harmonized GST/PST sales tax which will apply a 13% sales tax to everything we purchase. some things that were not subject to the present 8% PST will now be taxed and this tax blended with the 5% GST. Ouch!

Called the Harmonized Sales Tax (HST), this new tax will apply to things like your electric bill, your gas bill, your water bill, condominium fees, insurance premiums, haircuts and every other good and service you purchase. There are almost no exemptions.

The current Ontario PST tax does not apply to services, nor does it apply to the purchase of certain goods. The new 13% tax will therefore extend the old 8% PST tax rate to the purchase of all goods and all services.

The New 13% Tax Will Apply To The Purchase of All New Homes
If a person were to purchase a new $1 million dollar home in Toronto, they would have to pay roughly $200,000 in taxes as a result of the Ontario Land Transfer Tax, the City of Toronto Land Transfer Tax  and the new harmonized  HST at 13%.

We have always had two things that we have always been able to count on as being tax free – things that they could use to save money and accumulate wealth- our primary residence and our RRSP. That’s it.

This tax is irresponsible and regressive and, like Toronto’s, simply a tax grab that we should all oppose now, by conversation and petition and at election time with your vote.

The New 13% Tax Will Effectively Raise Your Income Taxes
Currently, the combined Federal/Ontario income tax rates are roughly 25% on the first $20,000 of taxable income, 42% on the next $40,000 of taxable income, and 46.5% on each dollar of taxable income over $60,000. On top of that you have to add the “Fair Share Health Tax” of up to $1,000 each of us has to pay.

If the Ontario Government gets away with implementing their new harmonized GST/PST sales tax of 13%, the top effective income tax rates in Ontario will be as follows (since you can’t spend any of your tax paid dollars without paying the new harmonized 13% GST/PST tax):

38% on the first $20,000
53% on the next $40,000
59.5% on every dollar over $60,000

On top of that, you have to pay your Ontario Fair Share Health Tax, your city realty taxes, your city garbage fees, your city water fees, your city street parking permit fees, your annual Ontario and the new Toronto vehicle license plate fees, your Ontario land transfer tax, your new Toronto land transfer tax, your gasoline taxes, your liquor taxes, your air departure taxes, your entertainment taxes, and lots more.

If you are tired of being taken for granted and having government with their hand in your pockets again and again,  SIGN THE PETITION AT www.unfairtaxgrab.com

and  SEND THIS E-MAIL ON TO OTHERS THAT YOU KNOW so they can be part of this conversation.