2024 Interest Rate Announcements

 

Bank of Canada

The Bank of Canada will make scheduled interest rate announcements on the following dates:

• January 24, 2024*
• March 6, 2024
• April 10, 2024* 
• June 5, 2024
• July 24, 2024* 
• September 4, 2024
• October 23, 2024*
• December 11, 2024

*Quarterly Monetary Report 

Home Inspections

 

Home Inspection

When buying a home, townhouse, loft, condo or commercial building, it is good to do a home inspection by a registered home inspector, so you can satisfy yourself of the condition of the house. 

A home inspection report will include information about the following components:

• the structure and foundation, where visible
• roof
• plumbing
• heating, ventilation and cooling systems (HVAC)
• hot water tank, boilers or other water heater systems
• electrical
• moisture (a good inspector will have a moisture reader available)
• windows
• materials used - flooring, piping etc
• if it's a house, the grading around the perimeter of the house 
• other items pertaining to the Ontario Building Code and Fire Code such as hand rails, fire and carbon monoxide detectors etc. 

Sometimes in a busy market where most properties sell in bidding wars, you would be wise to do a home inspection before the offer date, and consider whether or not you will have a Condition for a home inspection in your offer. 

If you choose to add a Condition for a home inspection, it would look similar to this:

THIS OFFER IS CONDITIONAL upon the inspection of the subject property by a registered home inspector at the Buyer’s own expense, and the obtaining of a report satisfactory to the Buyer in the Buyer’s sole and absolute discretion. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than 6:00 p.m. on the 5th business day following acceptance of this agreement (excluding Saturdays, Sundays and statutory holidays) that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. The Seller agrees to co-operate in providing access to the property for the purpose of this inspection. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller as aforesaid within the time period stated herein. The Seller acknowledges that the Buyer, his agent and/or the inspector may take photos and/or video during the inspection for the purpose of fixture and chattel identification and reporting purposes. 

Make sure that if you're planning on doing a home inspection before an offer date, that your buyer Agent speaks to the listing Agent to book enough time for the home inspection which could take several hours. 

The inspection reports typically take a day or two as well, so don't leave it to the last minute to do one. 

Buying A Tenanted Property

 

Duplex

Buying a tenanted property can be a good investment for many reasons. You might want to live in one unit and rent out another unit, offsetting your expenses with tenant income. You might want to own the property and have both (or more) units pay your mortgage and most of your expenses. You may want to have a property that earns excellent income in the future. 

Either way, you must do your due diligence before buying. 

Make sure you have your Realtor draft and include the following clauses and Conditions in the Offer:

• the Offer is Conditional on the buyer's solicitor's approval
• the Offer is Conditional on the seller providing current leases for all tenants living in the home
• the seller warrants and represents that there are no ongoing issues between tenants and the landlord 
• the seller agrees to submit proof of rent payment for all tenants from the beginning of each tenancy
• the seller warrants and represents the the tenants are paying for 'X' utilities and any other itemized expenses

Other considerations are the following:

• is there a property manager in place, and if so how much is the cost and what are the services and inclusions?
• include a Condition for a Home Inspection
• include a Condition for Financing and Home Insurance
• set up an appointment to meet the tenants 
• ask the City if the property conforms with appropriate zoning rental purposes (seems obvious but best to confirm with the Planning department)
• speak to the neighbours and see if they have any complaints 

If the right property comes along and requires minimal capital investment, and have reliable tenant income, then off you go towards including an additional income stream. 

Pre-Delivery Inspection (PDI) For Condominiums

 

Tarion 

When you purchase a pre-construction condominium, you typically do a Pre-Delivery Inspection around 30 days before you take possession and receive your keys from the builder. 

During the inspection, you will meet with the builder's rep to flag any damage inside the unit and the builder will fix these items before occupancy. 

You will be given information for items that need to be repaired under the Tarion New Home Warranty. The Warranty has a 1 year portion, 2 year portion and a 7 year portion. 

Here's what's covered: 

1 Year: 

• defects in workmanship and materials
• defects that cause the building to be unfit for habitation
• Ontario Building Code violations
• Major structural defects
• Unauthorized substitutions 

2 Year: 

• water penetration through the basement or foundation 
• water penetration through the building envelope
• defects in the electrical, plumbing and heating delivery and distribution systems
• detachment, displacement or deterioration of the exterior cladding
• violations of the Ontario Building Code that affect health and safety
• major structural defects

7 Year: 

• the seven year warranty provides coverage for major structural defects, and is outlined in Tarion's 'Bulletin 24"
• defects that result in failure of a load-bearing portion of the building or materially and adversely affects it's load-bearing function
• defects that materially and adversely affect the use of the building for the purpose of which it was intended

December 6 - Bank Of Canada Interest Rate Announcement

 

Bank of Canada

The Bank Of Canada holds it's overnight rate at 5%, with the Bank Rate at 5% and the Deposit Rate at 5%. Per the BOC website, the bank is continuing it's policy of quantitative tightening. 

This is the third rate hold in a row. 

It will be interesting to see what sort of market response happens going into the Spring market. 

Many people are waiting until rates go down before buying/selling, and many are looking for the theoretical 'bottom' of the market to buy. 

Click here to read the Bank of Canada Press Release. 

 

TRESA - DAY 1

 

And so it begins. 

The new regulatory framework called the "Trust In Real Estate Services Act" takes effect today, replacing the "Real Estate and Business Brokers Act". 

So what does this mean? Here are 6 key points: 

• Brokerages are now permitted to enter designated representation agreements with clients,

• Customer relationships have been eliminated,

• Sharing contents of offers is now permitted with the seller’s written direction,

• Enhancements have been made to information and disclosure obligations to promote clarity in communication,

• The Code of Ethics has been revamped that will focus on ethical obligations including provisions around conflicts of interest and confidentiality, and

• Revisions have been made to RECO’s Discipline Committee, authority, composition and procedures.

Updates in practice to follow. 

Buying Pre-Construction - BRING AN AGENT

Bring a licensed agent

Sometimes buying a pre-construction condo can be a good idea. Many times, it's risky and it's a bad idea. 

How can anyone know what will happen 3-5 years into the future?

How do you make a good decision and what should you look for in your purchase? Ask a licensed agent. 

BEFORE you go to the builder sales centre, speak to a licensed agent, and make sure to go together on the first visit.* 

So why is that though? Here are 6 reasons: 

1) your agent SHOULD BE LICENSED, and therefore working for your best interest, not for the builder. 

2) repeat - a builder sales rep is working for the builder, not for you. They will give you a booklet, show you a nice building model, and will give you a price list and inventory sheet. These are units they release periodically. 

3) a builder sales rep is typically not licensed. They sell you units that are released at that moment in time. Sometimes better units come up later (for more money). They might want to sell you the one that is the hardest to sell. You know, the one above the garage or garbage entrance, or has low light or a weird layout, maybe with a column or two. 

4) a licensed agent will ask the builder reps about closing costs (and making sure they are capped at a fixed amount on closing), development charges, assignment privileges (ability to sell your contract to a new buyer if your situation changes), will try to negotiate upgrades if available, and any other questions you need to know. 

5) a builder rep will take you through the process to buy, but may not get specific on the consequences if things change in the future.. for example, interest rate increases, builder delays, mortgage challenges, builder extortion fees before closing, and proper referral to lawyers. 

6) CHOOSE A REPUTABLE BUILDER WITH A TRACK RECORD OF SUCCESS OVER A LONG PERIOD OF TIME. Your licensed agent should know who they are, and if they don't, choose an agent with experience in pre-construction sales. 

*if you don't bring your licensed agent on the first visit, the builder typically won't pay a commission and subsequently your licensed agent will not be able work for you in the transaction, for your best interest.