MortgageRate Watch

The above rates are accurate at the specified date and have been supplied by a major bank. There may be variations in rates between different financial lending institutions, and rates are negotiable with individual lenders. To obtain up-to-date posted rates for all financial institutions, please consult www.cannex.com.

Market ViewsPREFERRED CLIENT NEWSLETTER

Magda Mo’s

Magda MoSales Representative

416-483-8000

AUGUST 2009

Posted Rates – Aug 8/09

Closed Mortgages

1 year 3.90% 2 year 4.05% 3 year 4.55% 4 year 5.24% 5 year 5.79%

Open Mortgages

6 month 6.55% 1 year 6.55%

Record setting July resale marketGTA resale sales volume for the month of July was a record-setting 9,967 units sold. This level was up by a whopping 28% versus July 2008 and also eclipsed the best previous July in history by a full 12% (July 2007 - 8,912 units sold). This is the third consecutive month of renewed volume growth and is indicative of reinvigorated buyer enthusiasm as a result of improved housing affordability. The turnaround in volume over the past three months has resulted in year-to-date numbers virtually on par with 2008 levels and, with five months remaining in 2009, it is highly probable that full year sales will be at or above last year’s figures.

The average price for July resale transactions was $395,414 which was up by 6% versus the July 2008 average price of $371,427. Tighter market conditions in terms of inventory have helped propel resale prices recently. For example, the number of active listings on the market declined by 36% between the end of July 2009 and the end of July 2008 (16,915 vs. 26,543). Further evidence of the strengthening market can be found in the rapidly plunging number of days required to sell a property - which stood at just 31 days in July. This is the lowest monthly “days on market” number since May 2008 and one of the lowest ever for the resale market.

Avg Price $342,034 $366,012 $371,427 $395,414

12,000

10,000

4,000

6,000

8,000

2,000

GTA Resale Home Sales - JulyUnits Sold

2006 2007 2008 2009

Personal Finance

Understanding your credit history

Regardless of what stage you are in life, you are almost certain to be a user of credit in one fashion or another. Along with the use of credit comes a credit history that individual consumers need to really understand.

If you own a credit card, have a line of credit or a car loan, you have a credit history and it is being recorded in a credit report by credit reporting agencies, Equifax, Trans Union or Northern Credit Bureaus. These credit reporting agencies collect information on your ongoing use of credit and your repayment of that debt. As you continue to utilize your credit cards, pay your car loan or your line of credit, you will be assigned something called a “credit score”. A credit score is a numerical scoring measurement of an individual’s use of credit, specifically repayment of debt. A higher score would indicate a borrower has better management of their consumer debt while a lower score would indicate poor management of consumer debt. There are several factors that can affect your credit score, for example, whether you pay your debts on time, the total amounts that you owe, delinquent payments, collections that may have been filed against you or limits that have been exceeded or “maxed out”.

If you currently have a mortgage or will be applying for mortgage financing, you may know that mortgage lenders will want to see your credit report. You will need to provide permission to the bank or mortgage broker to retrieve your consumer credit report for review, at the time of your application for a mortgage. Once the credit report is retrieved, it will be carefully reviewed by the lender to determine what mortgage rates you are eligible to receive.

Many applicants are surprised to learn that lenders establish very specific guidelines on what mortgage rates they will offer and it is usually based on an applicant’s credit score.

Take the time to understand how you can achieve and maintain the best credit score. When it is time for you to renew your mortgage financing in the future, you will be able to qualify for the best mortgage rates.

Here are some quick tips to help you:

1. Be sure to pay your bills on time.

2. Avoid exceeding your credit limits.

3. Avoid having too much available credit.

4. You should always know, validate and protect your credit rating as much as your SIN number and credit cards.

5. You can check your credit rating for accuracy once a year free of charge. Just call Equifax at 1-800-465-7166 or go on-line at www.equifax.ca and fill out the form at www.equifax.com/EFX_Canada/consumer_information_centre/docs/request_report_form_e.pdf or you can purchase a copy of your credit report online.

6. If you find any information on your credit report that is not accurate, you should contact the Credit Reporting Agency to have it corrected.

7. Be sure to download a copy of the document entitled “Understanding Your Credit Report and Credit Score” published by the Financial Consumer Agency of Canada by going to www.fcac-acfc.gc.ca

CondoProvision One: Under the new Condominium Act, buyers of brand new units have 10 days to cancel their contract after receiving the accepted offer from the builder. That 10-day “cooling-off” period allows purchasers to carefully examine the offer and disclosure statement, and discuss their content with a real estate lawyer. Though disclosure statements are foreign to new home transactions, contracts for both new homes and condos are lengthy and complex, liberally sprinkled with hefty charges and unusual clauses.

Provision Two: Developers under the new Condominium Act must pay interest on deposits “calculated from the day the person pays the money received until the day the proposed unit is available for possession.”

According to the regulations, the interest rate is a set formula (the Bank of Canada bank rate less 2%, reset March 31st and September 30th for the next six months). That obligation exists “despite any agreement to the contrary.” Until the new act became law, few condo developers paid interest on deposits before interim closing.

Provision Three: Unlike the old legislation, condo builders can’t receive and hold deposits anymore. Instead, deposits must be paid to the builder’s lawyer or an escrow agent in trust. Few resale home sellers receive and retain deposits either. Generally they are paid to the listing broker or the seller’s lawyer in trust.

Provision Four: Excess deposit insurance has long been available to protect condo deposits that exceed $20,000,

when the builder wants to apply those funds towards construction costs. For years it was unclear at whose expense. According to the new act’s regulations, condo builders must pay the fee for excess deposit insurance, “and shall not directly or indirectly transfer the cost of the premiums” to consumers.

Provision Five: Reservation agreements are quite common in both new condo and new home projects. Builders may test the market before making any final decision to proceed. Or builders can “hold” a unit or lot once sales are underway, until the purchaser is ready to submit a formal offer. Either way, no rules previously governed reservation fees.

Traditionally they were paid directly to builders. Sometimes they were non-refundable, even when a buyer proceeded with the purchase. The new Condominium Act equates reservation fees with deposits. Besides being payable to the builder’s lawyer or an escrow agent in trust, buyers who purchase the unit must be credited with the amount paid.

Provision Six: Under the new Condominium Act, if there is a “material change” to the information in a disclosure statement, buyers get a fresh 10-day cooling-off period to opt out of the deal. “Material change” is defined as a change or series of changes that a reasonable purchaser, acting objectively, would regard as sufficiently important “that it is likely that the purchaser would not have entered into an agreement of purchase and sale for the unit.”

Condo Act provisions to be aware of

Corner

To My Valued Clients

In accordance with PIPEDA, to be removed from this mailing list please email or phone this request to the Realtor ®.Not intended to solicit buyers or sellers currently under contract with a brokerage. The information and opinions contained in this newsletter are obtained from sources believed to be reliable, but their accuracy can-not be guaranteed. The publishers assume no responsibility for errors and omissions or for damages resulting from using the published information. This newsletter is provided with the understanding that it does not render legal, accounting or other professional advice. Statistics are courtesy of the Toronto Real Estate Board. Copyright © 2008 Mission Response Inc. (416) 236-0543 All Rights Reserved. D114

“Pearls of Wisdom”

Magda MoSales Representative

416-483-8000magda@magdamo.comwww.magdamo.com

Sutton Group Bayview Realty Inc., Brokerage1820 Bayview Avenue, Toronto, ON M4G 4G7

Your referrals are sincerely appreciated!

If you look like your passport picture, you probably need the trip.

Dogs have owners. Cats have staff.

A balanced diet is a cookie in each hand.

If the shoe fits, buy a pair in every colour.

Men are from earth. Women are from earth. Deal with it.

As most of you are already aware, the Government of Ontario has announced its intention to introduce a Harmonized Sales Tax (HST), effective on July 1, 2010. This tax will combine the existing 5% GST with the 8% PST on most goods and services. While existing homes will be exempt from the HST, it will apply to services such as moving costs, legal fees, home inspection fees and REALTOR® commissions. It will also apply to the purchase price of newly constructed homes.

However, the government has now quietly announced some significant changes in how this new tax will apply to newly constructed homes versus what they announced originally. The revised plan is to apply the additional 8% (the portion on top of the existing 5% GST) across all price ranges of new homes subject to a 75% rebate up to a maximum of $24,000. The net effect of this revised approach will be to

add a 2% tax on the first $400,000 of the purchase price of a new home and 8% on the portion above $400,000. For example, a new home selling for $500,000 after July 1, 2010 would attract $16,000 in additional tax. Since the tax will not apply to resale homes at all, it will also likely have the effect of making resale homes more valuable by a couple of percentage points depending upon the specific price range of the home.

For more information on these proposed HST changes, please visit the following Web page: http://www.rev.gov.on.ca/english/notices/str/02.html

Until next time, take care and please remember that all of your real estate referrals are both highly valued and greatly appreciated.