Harmonized Sales Tax (HST)

There is little doubt it will increase costs to consumers and there are some questions about its benefits.

The argument is that the province needs to find additional sources of revenue. As we proceed further into the new millennium there will be increased demands on government budgets to pay for services that we have come to take for granted, like healthcare and old age pensions.

In the past there were items that were subject to PST (provincial sales tax) only. There were other items that were subject to GST (goods and service tax, a federal tax). There were also items that were subject to both PST and GST. Typically, PST was charged against goods and GST was charged against most services and some goods. Insurance premiums were subject to PST. The impact this had on real estate was that if someone was to purchase a property and require fire insurance, that insurance would be charged PST. It also meant that if the buyer applied for a high ratio mortgage, there would be a high ratio insurance premium and the premium would be subject to provincial sales tax. Real estate commissions and legal fees were subject to GST. New homes would be charged GST but would, in certain instances, be subject to rebate.

Now everything that was charged one or the other or both in the past will be charged both: 8% + 5%= 13% total (in Ontario). Fortunately, where there were rebates before, there will be rebates now.

As far as real estate is concerned, the tax will apply to various aspects of the transaction including real estate commissions, home inspections, legal services, high ratio mortgage insurance premiums, fire insurance premiums, etc.

Dealing With A Wet Basement

The words “wet basement” are all too-familiar to many homeowners. It has been said that more than 98% of all houses have had or will have basement leakage at some point. I can’t say enough that poor surface drainage is one of the main causes of basement leaks.

The ground should slope away from the house at a rate of one inch per foot for at least the first six feet. The evestroughing and downspout systems must also perform properly. If a downspout is ever suspected of being disconnected, broken or clogged below ground level, they should be redirected to discharge above grade at least six feet away from the house. Evestroughs should be kept clear of debris.

In the majority of cases; basement leakage can be controlled relatively inexpensively however, the presence of foundation cracks, damaged perimeter drainage tiles and a high water table or underground streams may call for more extreme corrective measures.

Sealing foundation cracks can be performed in several ways with the cost of repairs varying pending the approach: from inside or outside of the house. Excavating, damp-proofing and installing drainage tiles should be used as a last resort since it is a very expensive option; $8,000 to $15,000. An alternative is an interior drainage system at one-third to one-quarter the cost of exterior work. Where underground streams and/or a high water table are present, sump pumps are usually required.

Do Your Homework!

Yesterday I wrote about how to make the most of your real estate investment with special consideration for appearance and curve appeal. Please note that these are not the only elements to consider when building home value.

Before you buy a home; check out the area, walk the neighbourhood, talk to the local residents and visit the planning department. What kinds of future developments are planned nearby? Find out the reputation of the local school district. The police department can tell you about the crime rate. Find out what future housing projects are on the drawing board in your chosen neighbourhood. A surge in the number of home building permits could foreshadow a future excess in housing which could push values down.

The time of the year when you decide to make your purchase can affect the price you will pay. Generally, homes are more expensive during the peak buying season; spring/summer. Buyers prefer to shop when many homes are for sale. This increases their options and improves their chances of finding a house that meets their needs. However, in the spring there is more competition and a greater chance of getting into bidding wars which drive prices up. If you shop over other seasons when selection is more limited, you may find a better deal but forgo some of the amenities you wanted. In the end it is all about tradeoffs and what you value most in a home.

Make The Most of Your Real Estate Investment

We all want to purchase a home at a fair price and watch its value grow over time. The value of a home depends on many variables such as location, amenities, condition, size, craftsmanship, age and design.

The neighbourhood you buy into may have more to do with your home’s value than the dwelling itself. If you move to an area with excellent schools it could make your home more valuable when you decide to sell.

Experienced real estate professionals know that a few well-chosen improvements can add value to your home however, if you spend too much, the overall character of your neighborhood may prevent you from reaping the full reward of your investment. Some improvements are unlikely to increase home value; like a swimming pool with its constant upkeep and increased utility bills.

Keep always in mind future owners; when you select exterior paint for your home, neutral colours tend to appeal to more buyers. Remember that first impressions are very important. Making sure your front yard is clean will make a significant difference.

Home Staging Benefits

Studies show that a ‘staged home’ appeals to a larger audience, assists with a quicker sale and gives you a better return on your investment.

The services provided by these professionals include; depersonalizing your home so that more buyers can picture themselves living there and neutralizing the space through colours and often times de-cluttering the rooms. From there, the home stager will add drama where needed with accessories to give your home a more professional finish.

How a professional would stage a home varies according to how much work is needed. You will receive a list of do’s and don’ts upon your initial consultation. Should you choose to fulfill the proposed plan from the stager bare in mind it may involve renting furniture and accessories including; carpets, lamps and the right pieces to create mass appeal. There is a budget to consider my readers. Everyone has one!

No matter if you are paying for the stager’s time, (initial consultation will be covered by me as part of my services) a staged home is a sold home making it appear like a model home.

Buy First Or Sell First????

To buy or sell first…is the question!

Not an easy decision.

In today’s market many homeowners that are contemplating a move have this decision to make.

In the “ideal world” we would like to have the time to look for our next home. However until we find it we must place our home in the market, sell it at the right price and get this done soon enough to accommodate both closings at the same time. Wishful thinking! Alternatively; we would like to place the house in the market and wait until the “right offer” comes and is accepted before looking for the perfect home of our dreams. Again making it all happen at the same closing. By matching the closings you don’t have to “bridge financing” nor do you have to find a short term accommodation in turn having to place the contents of your home into storage, etc, etc.

We don’t live in an ideal world!

We are quick to make risky decisions particularly when it comes to making a move in real estate. And so…what is the best way? There is no ‘best way’!

What you should do is your research. Know that what you are looking for in your next home is available. The same goes for your existing home. Have your home ready and priced at market value. You will go through both processes with knowledge and hopefully with as little stress as possible. Be realistic, have a serious and dedicated agent representing you, be calm and carry on.

The Status Certificate

The Status Certificate is a document that can be requested by all--realtors, appraisers, buyers and sellers—in the purchase of a condominium (apartment or townhouse). It is prepared by the Corporation/ Management Office. There is a fee of $100 and it will take 10 days to prepare. This certificate will accompany all the usual documents, including: the declaration, by-laws, budget, reserve fund, financial statements, rules, insurance certificate and now a statement with the report on the number of units in the complex that management is aware are leased units (as opposed to owner-occupied units). This information might be a new factor to consider for some buyers.

Sellers should become acquainted with the contents of the Status Certificate as understanding the product being sold is important. Please pay particular attention to “Special Assessments” that should be disclosed on the listing information or written down on the actual Agreement of Purchase and Sale.