Angelika Rosato

Real estate in the capital remains in fine form

BY ROBERT BOSTELAAR, THE OTTAWA CITIZEN; WITH FILES FROM FINANCIAL POST MARCH 16, 2010

For real estate shoppers and sellers, Ottawa could be the city of two tales -- both of them good.

Continued strong market activity makes the capital a fine spot for sellers, yet a slight increase in resale home

affordability, as charted by price-watcher RBC, spells positive news for buyers.

"The Ottawa market seems to be enjoying the best of both worlds lately," concludes a report from RBC, which

takes in the Royal Bank of Canada and its subsidiaries.

The modest improvement for buyers, however, wasn't enough to dislodge Ottawa as the third least-affordable

city in Canada, based on the bank's measure of the proportion of pre-tax household income needed to service

the costs of owning a home.

The higher the measure, the more difficult it is to afford a home. For example, an affordability reading of 50 per

cent means home ownership costs, including mortgage, utilities and property taxes, take up 50 per cent of a

household's monthly pre-tax income.

In the last quarter of 2009, the measure for a detached bungalow stood at 40.4 per cent -- down 0.3 per cent

from the previous quarter.

That was eclipsed by Vancouver's sell-the-silverware score of 69 per cent (up 1.4 percentage points) and

Toronto's 49.1 per cent (up 0.1 percentage points).

Ottawa resales have reached near-record levels in recent months, fuelled by buyers taking advantage of

exceptionally low mortgage rates, the report says.

At the same time, a "generally restrained pace of price appreciation" has helped to nudge up affordability.

In February, the average sale price for residential resale properties of all types was $317,000, the Ottawa Real

Estate Board reported. The average condominium was $265,900, while the average across all other categories --

bungalows, two-storeys, etc. -- was $337,800.

For new construction, the average in December 2009 was $339,000 for all new homes and $$410,000 for

singles, according to the Greater Ottawa Home Builders' Association.

Of six cities surveyed by RBC, only Ottawa showed an improvement in affordability for all housing types.

The RBC report arrived even as the Canadian Real Estate Association was reporting a slight decline in resales

across the country for a second straight month, prompting predictions that Canada was returning to a more

balanced market for buyers and sellers. The largest decline was in British Columbia, where sales in February

were down 13.3 per cent from a month earlier. Strong sales in Ontario, however, brought the average decline to

just 1.5 per cent, based on seasonally adjusted figures.

While seasonally adjusted numbers for Ottawa were unavailable, unadjusted sales figures showed a big increase

in Ottawa, to 1,118 sales through the Multiple Listing Service in February from 713 the month before.

The RBC report projects that the cost of owning a home will continue to rise across Canada on strong demand

and limited supply.

"The anticipated and gradual rise in interest rates indicates that affordability is likely to gradually get worse as

rates return to normal levels," said Hogue.

Markets in B.C. and Ontario have the added pressure of the new harmonized sales tax starting July 1, which will

raise the cost of new homes in higher price-brackets. The HST will also apply to fees for real estate agents,

lawyers and others.

As well, the federal government's recent announcement of changes to the mortgage market could reduce

demand when the new rules take effect in April, the report notes. However, the precise market effect is

unknown at this point.

© Copyright (c) The Ottawa Citizen

 

13 Extra Costs to be Aware of Before Buying a Home "The last thing you need are unbudgeted financial obligations cropping up hours before you take possession of your new home." Whether you're looking to buy your first home, or trading up to a larger one, there are many costs - on top of the purchase price - that you must figure into your calculation of affordability. These extra fees, such as taxes and other additional costs, could surprise you with an unwanted financial nightmare on closing day if you're not informed and prepared. Some of these costs are one-time fixed payments, while others represent an ongoing monthly or yearly commitment. Not all of these costs will apply in every situation, however it's better to know about them ahead of time so you can budget properly. Remember, buying a home is a major milestone. Whether it's your first, second or tenth home, there are many important details to address, during the process. The last thing you need are unbudgeted financial obligations cropping up hours before you take possession of your new home. Read through the following checklist to make sure you're budgeting properly for your next move. 1. Appraisal Fee Your lending institution may request an appraisal of the property which would be your responsibility to pay for. Appraisals can vary in price from approximately $175 -$ 300. 2. Property Taxes Depending on your down payment, your lending institution may decide to include your property taxes in your monthly mortgage payments. If your property taxes are not added to your monthly payments, your lending institution may require annual proof that your taxes have been paid. 3. Survey Fee When the home you purchase is a resale (vs. a new home), your lending institution may ask for an updated property survey. The cost for this survey can vary between $700- $1,000. 4. Property Insurance Home insurance covers the replacement value of your home (structure and contents). Your lending institution will request proof that you are insured as it protects their investment on the loan. 5. Service Charges Any new utility that services your hook up, such as telephone or cable, may require an installation fee. 6. Legal Fees Even the simplest of home purchases should have a lawyer involved to review all paperwork. Shop around, as rates vary greatly depending on the complexity of the issues and the experience of the lawyer. 7. Mortgage Loan Insurance Fee Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type of insurance will cost you between 0.5% -3.5% of the total amount of the mortgage. Usually payments are made monthly in addition to your mortgage and tax payment. 8. Mortgage Brokers Fee A mortgage broker is entitled to charge you a fee in order to source a lender and organize the financing. However, it pays to shop around because many mortgage brokers will provide their services free to you by having the lending institution absorb the cost. 9. Moving Costs The cost for a professional mover can cost you in the range of:   $50-$100/hour for a van and 3 movers, and 10-20% higher during peak demand seasons. 10. Maintenance Fees Condos charge monthly fees for common area maintenance such as grounds keeping and carpet cleaning in hallways. Costs will vary depending on the building. 11. Water Quality and Quantity Certification If the home you purchased is serviced by a well, you should consider having your water checked by your local experts. Depending upon where you live, determines whether or not a fee is charged, to certify the quantity and quality of the water. 12. Local Improvements If the town you live in has made local improvements (such as the addition of sewers or sidewalks), this could impact a property’s taxes by thousands of dollars. 13. Land Transfer Tax This tax is applied whenever property changes hands and the amount that is applied can vary.

 

Contact Leo and Angelika Rosato 613-720-4888

 Follow us on

www.Twitter.com/RosatoTeam

www.tinyurl.com/RosatoTeam

Buying Real Estate

 

 

Beat Other Buyers to HOT NEW LISTINGS  www.IdealPropertySearch.com

11 Things You Must Know When Finding a Home

Once you've decided to buy a home, there's a number of issues that need to be considered.  Because buying a home will be one of the biggest purchases you make in your life, learning the "11 Things You Must Know When Finding a Home" can make the process easier.

 

In this report, we outline 11 Questions and Answers to help you make informed choices when purchasing a home.

  

1. What Should I Look For When Deciding On A Community?

Select a community that will allow you to best live your daily life. Many people choose communities based on schools. Do you want access to shopping and public transportation? Is access to local facilities like libraries and museums important to you? Or do you prefer the peace and quiet of a rural community? When you find places that you like, talk to people that live there. They know the most about the area and will be your future neighbors. More than anything, you want a neighborhood where you feel comfortable in.

 

 

2. How Can I Find Out About Local Schools?

You can get information about school systems by contacting the city or local school board or the local schools. Your real estate agent may also be knowledgeable about schools in the area.

 

 

3. How Can I Find Out About Community Resources?

Contact the local chamber of commerce for promotional literature or talk to your real estate agent about welcome kits, maps, and other information. You may also want to visit the local library. It can be an excellent source for information on local events and resources, and the librarians will probably be able to answer many of the questions you have.

 

 4. How Can I Find Out How Much Homes Are Selling For In Certain Communities and Neighborhoods?

Your real estate agent can give you a ballpark figure by showing you comparable listings. If you are working with a REALTOR®, they may have access to comparable sales maintained on a database.

 

 5. How Can I Find Information On The Property Tax Liability?

The total amount of the previous year's property taxes is usually included in the listing information. If it's not, ask the seller for a tax receipt or contact the local assessor's office. Tax rates can change from year to year, so these figures maybe approximate.

  

6. What Other Tax Issues Should I Take Into Consideration?

Keep in mind that your mortgage interest and real estate taxes will be deductible (USA residents). A qualified real estate professional can give you more details on other tax benefits and liabilities.

 

 7. Is An Older Home A Better Value Than A New One?

There isn't a definitive answer to this question. You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer more ambiance, and have lower property tax rates. People who buy older homes, however, shouldn't mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don't want to worry initially about upkeep and repairs.

  

8. What Should I Look For When Walking Through A Home?

In addition to comparing the home to your minimum requirement and wish lists, consider the following:

 

·       Is there enough room for both the present and the future?

·       Are there enough bedrooms and bathrooms?

·       Is the house structurally sound?

·       Do the mechanical systems and appliances work?

·       Is the yard big enough?

·       Do you like the floor plan?

·       Will your furniture fit in the space? Is there enough storage space? (Bring a tape measure to better answer these questions)

·       Does anything need to be repaired or replaced? Will the seller repair or replace the items?

·       Imagine the house in good weather and bad, and in each season. Will you be happy with it year 'round?

Take your time and think carefully about each house you see. Ask your real estate agent to point out the pros and cons of each home from a professional standpoint.

 

 

9. What Questions Should I Ask When Looking At Homes?

Many of your questions should focus on potential problems and maintenance issues. Does anything need to be replaced? What things require ongoing maintenance (e.g., paint, roof, HVAC, appliances, carpet)? Also ask about the house and neighborhood, focusing on quality of life issues. Be sure the seller's or real estate agent's answers are clear and complete. Ask questions until you understand all of the information they've given. Making a list of questions ahead of time will help you organize your thoughts and arrange all of the information you receive.

 

 

10. How Can I Keep Track Of All The Homes I See?

If possible, take photographs of each house: the outside, the major rooms, the yard, and extra features that you like or ones you see as potential problems. And don't hesitate to return for a second look. You may also wish to find out if the home is available online. Photos of the property may already be up on a website for you to review.

  

11. How Many Homes Should I Consider Before Choosing One?

There isn't a set number of houses you should see before you decide. Visit as many as it takes to find the one you want. On average, homebuyers see 15 houses before choosing one. Just be sure to communicate often with your real estate agent about everything you're looking for. It will help avoid wasting your time.

Beat Other Buyers to Hot New Listings  www.IdealPropertySearch.com

Sell Your Home Fast and For Top Dollar  www.27TipsOnline.com