Toronto Real Estate and Neighbourhoods Blog | Move Smartly

Will kits can create recipe for disaster

Bob Aaron in Legal

Whatever money Pauline Rudling saved by using a will kit instead of a lawyer to prepare her last will and testament was spent hundreds of times over on legal fees so that a judge could figure out what she meant.

Shortly before she died in January 2003, Pauline Rudling made a will using a will kit. In it she left her two properties on Shaw St. in Toronto to her two sons, one house to each. Because of some ambiguous wording in the will, her sons wound up in a seven-day trial back in 2007, spending tens of thousands of dollars on lawyers to try to determine how the estate should be divided.

The blanks on the will kit document were filled in, in Pauline's presence, by her son Larrie. Pauline read it before she signed it.

The standard form pre-printed wording directed that all of Pauline's debts, estate expenses, inheritance and death taxes be paid by her executor following her death.

The will then provided that one of her houses on Shaw St. be left to her son Ron, "with all loans, liens, mortgages attached." The other house was left to Larrie, "free and clear of all debt."

Essentially, there were no other assets in the estate.

More Transparency Needed in The Real Estate Industry’s Multiple Offer Process

John Pasalis in Toronto Real Estate News, Home Buying Tips

The Real Estate Council of Ontario (RECO) recently published a brochure with some consumer focused information about competing in a Multiple Offer for a home in Ontario.  The publication offers some good tips on setting an offer price and understanding the risks involved when excluding conditions on financing and inspection.  The brochure unfortunately falls short by not recommending any new rules or guidelines on how the real estate industry should manage multiple offers and how to improve the transparency to consumers.

When more than one buyer competes for a home in Toronto, they have to put their best offer forward from the start because the seller typically accepts the best offer presented.  The best offer is usually the one with the highest price and fewest conditions.  Most buyers who win multiple offers often exclude a condition on financing and inspection in order to make their offer more attractive (See Realosophy's Home Buyer's Guide to learn more about the risks of removing conditions from your offer).

What makes multiple offers particularly stressful for many buyers is the lack of transparency.  Buyers are only told how many other buyers are competing for the same house.  They know nothing about the contents of the other offers, who the other agents are or even what brokerage they work for. 

Media Roundup November 27th, 2009

Media Roundup

Real Estate News

Toronto developer acquires Pontiac Silverdome (Globe and Mail)

Break out the bubbly. No, wait, don't (Globe and Mail)

Want to boost your home's value? (Globe and Mail)

Home buyers face a double whammy (Globe and Mail)

Housing affordability slides (Globe and Mail)

Looking at property? Be careful what you step in (Globe and Mail)

Scotiabank hints at housing bubble (CBC)

New home sales in Toronto spike in October (National Post)

Canadian home resale prices up for 5th month (Reuters)

Canadian homeowners feeling bigger pinch (Canada.com)

Hundreds play lottery for chance at Islands real estate (Toronto Star)

Agents duel over condo sale lines (Toronto Star)

Condo buyers fight over $475 per square foot 'bargain' (Post City)

Another day, another condo-line battle on Bloor Street (National Post)

River City Lottery Vs X2 Line: two approaches to selling hot condos in Toronto... (BuzzBuzzHome)

A Look at Case-Shiller, by Metro Area (November Update) (Wall Street Journal)

Underwater mortgages dog U.S. housing (Globe and Mail)

Neighbourhoods and Urban Planning

905's subway going nowhere (Toronto Sun)

Can Seaton House remake save George Street? (National Post)

Finally, ROM Crystal gets a little love (National Post)

Prize-winners rise from brownfields (Globe and Mail)

Court ruling rattles home inspectors

Bob Aaron in Legal

The home inspection industry in Canada may never be the same again following the decision of the British Columbia Supreme Court last week in the case of Salgado v. Toth*.

Back in September 2006, Manuel Salgado and Nora Calcaneo signed an agreement to buy a house in North Vancouver for $1,095,000. The contract was conditional on financing and a home inspection.

At the recommendation of their real estate agent, the buyers hired Imre Toth and his company HomePro Inspections to prepare a home inspection report for the property. Toth inspected the interior of the house, then spent another 30 minutes examining the roof and the rest of the exterior.

The contract Toth signed with the buyers stated that the inspection and report could not be used as a warranty of the condition of the house, and in the event the inspector was found liable for negligence or breach of contract, his liability would be limited to the $450 cost of the report.

Media Roundup November 20th 2009

Media Roundup

Real Estate News

Three views on a housing bubble (Globe and Mail)

Why the housing market is on fire even in a recession (Globe and Mail)

Canada's housing rebound sparks fear of bubble (Globe and Mail)

New home buyers take risks with low mortgage rate (Globe and Mail)

Why soaring home prices fail to budge inflation rate (Globe and Mail)

Recovery to strengthen house sales (Globe and Mail)

In Toronto, a battle for the 3-bedroom condo (Globe and Mail)

Family-size condos urged for downtown (Toronto Star)

Toronto existing home sales surge in early November (Toronto Star)

Real estate sales boomed in October (Toronto Star)

MLS rebellion has mellowed with age (Toronto Star)

New homes lead October spurt (Toronto Star)

Homes sales to beat 2009 forecast: CREA (CBC)

Canada's (Sub-Prime) Mortgage Market - Causing Concern for the Bank of Canada? (National Post)

Posted Rates Coming Down (Canadian Mortgage Trends)

Toronto Real Estate Sales up 84% First Half of November

John Pasalis in Toronto Real Estate News

From the Toronto Real Estaet Board:

In the first two weeks of November, Greater Toronto REALTORS® reported 3,666 sales – up 84 per cent compared to the first two weeks of November 2008. The average price for these transactions was up 10 per cent year-over-year to $415,066.

Increased interest in ownership housing has been widespread throughout the GTA and across all housing types,” said Toronto Real Estate Board President Tom Lebour.  “However, it is important to point out that we are now making comparisons to the fall of 2008 when we experienced a marked decline in sales and average price”

Year-to-date sales, at 78,233 are up 11 per cent compared to 2008. Average price, at $393,180, is up by three per cent.

“Sales and average price in the GTA this winter will be well above levels reported
throughout the fourth quarter of 2008 and the first quarter of 2009," according to Jason Mercer, TREB's Senior Manager of Market Analysis.

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Realosophy Realty focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions.

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Putting property in children's names is risky

Bob Aaron in Legal

There's a common misconception that the best way to avoid Ontario's 1.5 per cent probate fees on the value of an estate is to place the family home and other assets into joint ownership with a child or children, so that the property will automatically transfer to the survivor after death of the parents.

Unfortunately, making transfers like this doesn't always work out as intended, and the consequences can be disastrous.

That's what happened in the case of Bergen v. Bergen*, heard this summer in British Columbia Supreme Court.

Charlotte Bergen is 79 years old. She and her late husband, Walter, were married for 52 years. After they retired in 1995, they bought a 23.9-acre (9.6 hectares) parcel of land near Paterson, B.C. with the intention of building a house there and moving out to the West Coast. Paterson is in the B.C. interior, near the U.S. border.

Three years after buying the property, the couple decided to put their son Robert on title jointly as to a one-third interest. Their intention was that Robert would eventually inherit the property and this would ensure that it bypassed probate and the accompanying expense.

Probate fees in B.C. for estates of more than $50,000 approach 1.4 per cent of the value of the assets.

Media Roundup November 13th 2009

Media Roundup

Real Estate News

Realtors edge toward MLS alternative (National Post)

Canada Real Estate May Be Good Investment, Watsa Says (Bloomberg)

Canada new home prices jump most since Jan 2008 (Reuters)

Sept. new home prices down 2.7% on the year (CBC)

Mortgage lender warns of housing bubble (Toronto Star)

HST has builders sprinting (Toronto Star)

Real estate recovery will be weak in Canada due to limp demand, report shows (Canadian Press)

Caution helped Canadian real estate markets dodge U.S. collapse (National Post)

Neighbourhoods and Urban Planning

Feeling cranky? Blame the architect (Toronto Star)

Queen West failure shows city's faults (Toronto Star)

Toronto moves to slow Ossington expansion (Globe and Mail)

Store owners divided over a BIA to decide direction of Kensington Market (National Post)

Empty Danforth plot undergoes redevelopment plans (Spacing)

Toronto congestion costs Canada $3.3-billion: OECD (Globe and Mail)

Buyers hit with big bills for surprise adjustments

Bob Aaron in Legal

As many as 244 purchasers received a nasty surprise at the end of September when they got hit with thousands of dollars in "fictitious" charges on final closing of their new condominium units.

The development in question is a 244-unit medium-rise building near Warden Ave. and Enterprise Dr. in Markham.

The builder's agreement of purchase and sale contains an escalation clause typical of those used by local builders.

The clause contemplates that prior to final closing, there may be increases in the municipal levies or development charges, which were in place prior to construction.

The agreement states that in the event there is an increase in any of these existing levies after the day the document has been signed, "the purchaser shall pay the increase to the existing levy ... as an adjustment" to the builder on closing.

This means that the purchasers have to pay the builder the amount of increases in any government charges, which come into effect between signing and closing. Of critical importance, the clause is silent on whether the purchasers must reimburse the builder only for increases actually paid by the builder, or as well for increases imposed by the Town but from which the builder is exempt because the levies were prepaid.

Toronto lawyer Stephen Shub represented a number of purchasers in the Markham project. He told me that on closing, all of his clients were shocked to see that they were being charged between $7,680 and $11,283 for increases in existing levies.

Media Roundup November 6th 2009

Media Roundup

Real Estate News

Is a condo a good investment? (Globe and Mail)

Condo research can keep you from a 'time bomb' (Globe and Mail)  

They don't pay off their houses like they used to (Globe and Mail)

Easy credit, soaring prices raise new housing fears (Globe and Mail)  

Housing market hot, but will it last? (Toronto Star)

Toronto home prices to keep rising (Toronto Star)

Sales of GTA luxury homes inch higher amid recession (Toronto Star)

Pricey homes ride out recession (Toronto Star)

Permits suggest rebound (Toronto Star)

Expert talks of Toronto condo-sale ‘miracle’ (National Post)

GTA home sales up 64%, prices up 20% (National Post)

Toronto existing home prices up 20 per cent (Toronto Star)

GTA house sales up 64% in October (Globe and Mail)

Peter Foster: Break the CREA cartel (National Post)

Real-Estate Shakeup (National Post)

Real estate fees could be slashed (Toronto Star)

Tough lawyer hails real estate fee victory (Toronto Star)

Real estate industry weighs outsider listings access (Globe and Mail)

Real estate agents keep lock on MLS - for now (Globe and Mail)

Second homes: In a global downturn, Toronto's a bubble (USA Today)