HOMEOWNERSHIP The Key to Your Future Joanne Lozinski sales representative The Realty Connection Inc Brokerage Office: 905.567.1411 Direct: 416.562.8334 jlozinski7751@rogers.com www.joannelozinski.com not intended to solicit sellers or buyers under contract with a real estate broker

FINTRAC It is important to be aware of the new federal law regarding selling/buying property in Canada. On June 23, 2008, new federal money laundering and anti-terrorist financing regulations came into effect that require real estate agents and brokers to collect personal identification information from buyers and sellers.

Real Estate is Unlike Any Other Commodity And here’s why… Real Estate Principal residence Tax Free Practical (everyone requires shelter) Offers security(can be income generating)   Other commodities Taxable You can’t raise a family living in a mutual fund Less Secure

5% Down-Payment Plan 30 Year Amortization Available Why NOW is the Time to Buy First Time Buyer Land Transfer Tax Rebate RRSP & Home Buyers Plan (First Time Buyer) Low Interest Rates First Time Buyer Tax Credit

Market Trends and Prices 1980- $ 75,694 1985 - $109,094 1986 - $138,925 1987 - $189,105 1988 - $229,636 1989 - $273,698 1990 - $255,020 1991 - $234,313 1999 - $228,372 2000 - $343,255 2001 - $251,508 2002 - $275,331 2003 - $293,067 2004 – $314,661 2005 - $335,907 2006- $351,941 2007 - $376,236 2008- $379,347 2009-$395,460 2010-$431,436 1992 - $214,971 1993 - $206,496 1994 - $208,921 1995 - $203,028 1996 - $198,150 1997 - $211,307 1998 - $216,815 Average Price of Single Family Dwellings in the GTA 1980-2011 500% increase (GTA) Mid- December 2011- $460,967

Toronto Real Estate Board Historical Stats 1980 $75,694 2005 $335,907 1986 $138,925 1996 $198,150 1976 $61,389 Mid- Dec 2011 $460,967

Benefits Of Home Ownership It is a hedge against inflation. It can provide excellent collateral. It is easy to liquidate. It provides an avenue for forced savings. It’s value increases over time. Your principal residence is a tax free gain.

Historically Real Estate Has Proven To Be An Excellent Investment     1986 - $139,900 2011 - $624,000 tax free gain of $484,100

Renting vs. Owning With rents increasing Mortgage rates decreasing Property values increasing  There is absolutely NO benefit to renting. At a rental rate of $1,500.00 per month it will cost you $90,000.00 in rental payments over a 5 year term!! A Current Variable Rate Mortgage of $330,000/ 30 Year Amortization Will Cost You $1387.00/Mo (Principal & Interest) If You Make These Payments Bi-Weekly at the End of 5 Years You Will Have Paid $45,000 Off The Principal Amount

Most existing two-unit houses (built before Nov. 16, 1995) will be "grandfathered“. Two unit houses should have met Fire Code requirements by July 14, 1996. In general, new apartments must comply with the Building Code, and existing apartments must comply with the Fire Code. Both new and existing apartments must comply with certain property and municipal zoning (planning) standards. Should obtain a certificate of compliance from the local fire department for any property that might fall under the jurisdiction of the Fire Code, Section 9.8 Should obtain a building permit before starting any new construction. If you don’t obtain a permit, or a certificate of compliance, the dwelling unit could possibly be non-conforming, and therefore considered illegal. Units installed after November 16, 1995 without a permit are unprotected (even if they meet fire, safety & electrical standards) and the municipality could require removal of the unit. Retrofit

TREB District Map

Housing Types and Styles – Condo Apartments Low Rise Mid Rise High Rise 2 Storey Loft Loft Conversion Each owner receives a deed for their unit. Property owned in common with others - recreation areas, lawns, basement, garage. Maintenance fees usually include common elements, building insurances & sometimes utilities.

Housing Types and Styles - Townhouses 2-Storey Townhouse Freehold Townhouse 3-Storey Townhouse Freehold Condo Garden Townhouse Detached Condo Condominium Townhouses Monthly maintenance fees often includes exterior maintenance & building insurance. Freehold Condo Townhouse Monthly maintenance fee usually includes general landscaping & road maintenance. Freehold Townhouse No Maintenance fee. You own the land. Detached Condo: Usually includes a small fee for road maintenance.

Housing Types and Styles - Semi-Detached Attached by Common Wall or Garage Typical Semi-Detached Bungalow Multi-Level 5 Level Backsplit 4 Level Backsplit 2-Storey 3 Level Backsplit Raised Bungalow 3-Storey

Housing Types and Styles - Link Attached by footings or garage Typical Link Link by Garage Link by Footing Link by Garage Link by Garage Link by Garage Link by Footing Link by Footing Link by Footing

Housing Types and Styles – Detached 3 Level Sidesplit Raised Bungalow 2-Storey 2 ½ Storey 4 Level Sidesplit 4 Level Backsplit 5 Level Backsplit Bungalow 1 ½ Storey Typical Detached

The Home Buying Process   10 Steps Pre-approval Agency 3. Price determination 4. Buying profile 5. Product availability 6. Viewing & Feedback 7. Offer 8. Negotiations 9. Waivers 10. Closing

Mortgage Pre-Approval Before we even begin to investigate the marketplace you must have a pre-approved mortgage in place. We can arrange for you to meet with our mortgage consultant at a mutually agreed upon time. Most of the preliminary information can be done over the phone. Our mortgage consultant will shop for the absolute best rate and terms possible to suit your needs.

What You Need To Apply For A Mortgage Credit Check (done with your initial pre-qualifier)   Salary letter from employer (and/or T4 slips for the past two years)   If self-employed, financial statements & income tax returns/assessments for the past two years   List of assets and liabilities (including account numbers)   Verification that the down payment came from your own resources (ie. Bank account, gift letter)   Copy of agreement of purchase and sale   Copy of the listing   Survey

Mortgage Financing CMHC/Genworth Less than 20% down payment Under Canadian Law all high ratio mortgages (less than 20%) down must be insured through CMHC. This fee ranges anywhere from 0.5% to 2.75% of the mortgage amount which varies according to your down-payment. This mortgage insurance is only for the protection of the lender should there be a default in the loan. Two Types of Loans Conventional Mortgage 20% or more down payment Under Canadian Law lending institutions cannot provide first mortgages in excess of 80% of the value of the property. karen.hewitt@migroup.ca Karen Hewitt Mortgage Intelligence 905-466-6582 Fisco #MO800I380 FSCO Lic# M08001380 FSCO Lic# M08001380 FSCO Lic# M08001380 FSCO Lic# M08001380

CMHC and Genworth have a variety of duties, including insuring mortgages for properties. In most cases the premium is added onto the mortgage amount & paid monthly with the mortgage. A mortgage loan insurance is insurance that is put on a mortgage where there is less than 20% down payment - this only applies to owner occupied properties. For rental purchases or refinancing on a rental property, CMHC or Genworth would have to insure the mortgage if there is less than 25% down payment/equity. It is a Federal Law in Canada that the lender must protect themselves when there is less than 20% down payment (the financial institution lending money) from mortgage default, which is when the borrower stops making timely and sufficient payments to their mortgage. CMHC / GENWORTH

Insurance Premiums CMHC WEBSITE CMHC for Consumers Insurance premiums are subject to PST

RRSP Home Buyers Plan FIRST TIME HOMEBUYER   The Home Buyers' Plan (HBP) is a program under which you can, generally, withdraw up to $25,000 from your registered retirement savings plan (RRSP's) to buy or build a qualifying home.   If you buy the qualifying home together with your spouse or another individual, each of you can withdraw up to $25,000. You cannot withdraw an amount from your RRSP under the HBP if you or your spouse owned the home more than 30 days before the date of your withdrawal. Program.  Up to $25,000 per person could be withdrawn tax-free from RRSP's to buy or build a principal residence. Couples, including common law will be able to withdrawal up to $50,000.     Home buyers withdrawing funds do not have to pay income tax on the amount withdrawn as long as the funds are repaid into an RRSP within 15-years.. (a minimum of 1/15 / year of the original amount withdrawn)   CLICK HERE FOR FURTHER INFORMATION ON Home Buyer’s Plan

CMHC Insured Mortgage Purchase Price $350,000.00 Down-Payment $ 17,500.00 Mortgage Amount $332,500.00 Insurance Fee (2.75%) $ 9,143.75 Actual Mortgage $341,643.75   The insured portion of the mortgage is subject to PST In the above example the PST would be: $9143.75 X 8% =$731.50 Example BASED ON A 25 YEAR AMORTIZATION

Associated Costs Deposit - The standard deposit that is submitted with an offer is usually about 2.5- 5% of the purchase price. This can be adjusted if necessary according to your specific financial situation. This deposit is credited toward the purchase price of the home.  CMHC Insurance Fee - CMHC fee is subject to PST.   Appraisal Fee - CMHC appraisal fee is $235.00, Conventional loans the fee will vary anywhere from about $75.00 – 150.00.  Land Transfer Tax – Refer to the table on the following page BUYERS GET A TAX CREDIT For 2009 and subsequent years, the budget also introduced a new non-refundable tax credit to help first-time home buyers with some of their closing costs. This Home Buyer Tax Credit (HBTC)will provide up to $750 in tax relief on the purchase of a first home. The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009,the credit will be $750.

Land transfer tax is a provincial tax payable on the purchase of a residential home. As of February 1, 2008, The City of Toronto(only) introduced an additional Land Transfer Tax. Land Transfer tax is paid by the Buyer and is calculated as follows: Land Transfer Tax Calculations TORONTO LAND TRANSFER TAX (applies only to properties purchased in the City of Toronto) Up to & Including $55,000….price x 0.005% Exceeding $55,000 & up to $400,000….price x 0.001 MINUS $275.00 Exceeding $400,000…price x 2% MINUS $4275.00 Maximum Toronto LLT rebate for first time homebuyers is $3725.00 $55,000 - $250,000 … price x 1 % MINUS $ 275 $250,001 - $400,000 …price x 1.5% MINUS $1,525 Over $400,000 ……… price x 2 % MINUS $3,525 Maximum Provincial LTT rebate for first time homebuyers is $2,000.00 ONTARIO LAND TRANSFER TAX For LTT rebate a first time homebuyer refers to anyone who has never owned a home at any time anywhere in the world

Associated Costs (continued..) Building Inspection – ESTIMATE $400.00-450.00 Legal Fees (Estimated) Lawyer $450.00 Mortgage $350.00 Disbursements Title Search $100.00 Sheriff’s Certificate $100.00 Tax, Building & Hydro Certificates $150.00 – $200.00 Adjustments Vary Land Transfer Tax (as per schedule) Title Insurance: Estimate 1% of purchase price. House Insurance $ 400.00 + Service Fees are Subject to HST

Typical Closing Costs Typical Closing Costs on a purchase of $350,000.00 5% Down Payment   Legal Fees (including disbursements) $1,200.00 +HST Land Transfer Tax (Ontario) not a first time buyer 3,725.00 Land Transfer Tax not a first time Buyer (City of Toronto) 3,225.00 Appraisal (CMHC) 235.00 PST on insured portion of mortgage 731.50 Building Inspection 400.00 + HST Title Insurance 350.00 + HST

Typical Closing Costs It is usually safe to assume that on a $350,000.00 purchase $7,000.00 should adequately cover all of your closing fees, (except if you are purchasing in the City of Toronto in which case the additional LTT would be factored in.) Closing fees: May be higher in the case of a property tax adjustment. For example: If you purchase a home closing in February and the Seller had pre-paid the taxes until June, he would be credited the amount pre-paid. Will be lower if you are eligible for the LTT rebate(s) as a first time homebuyer.   *The building inspection fee is due at the time of inspection. *The CMHC fee is due at the time of the application.

Price Determination Price range will be established based on the results of your meeting the mortgage consultant.   Although you may qualify for a loan amount higher than what you anticipated, you may choose not to purchase up to your maximum qualification level.   Staying within your comfort zone may be more suitable to you.

Product Availability Our main frame database will source available listings in the price range, area and with the features you have requested.   Our data is revised frequently throughout the day.   We will keep you fully updated on all new properties as they become available.  

Selections Our job is to assist you in selecting those properties that suit your needs.   Through the process of elimination, homes that represent the best value will be chosen for viewing.   At any give time there will be only a handful of homes that you will even consider.

Viewing & Feedback Appointments will be made to view the most appropriate homes. Asking questions and taking notes will prove to be very beneficial. Feedback is critical in order to ensure that we are on the right track. Express your thoughts!

Usually an owner will ask between 2 – 4% above market value for the home, therefore there is usually some flexibility in the asking price. Sometimes an owner will price his home very close to or even slightly under what comparable homes have sold for, therefore there is usually very little if any flexibility. Usually these properties attract all the attention and in many cases generate more than one offer. Depending on condition, location, upgrades, etc. some homes will sell for more or less than comparable homes.   A CMA will be prepared for you advising you of recent market activity in the area. How Much Do We Offer?

Multiple Offers Due to the lack of inventory in the GTA many buyers have found themselves in “multiple offer situations” This can definitely be an emotional time for many home buyers. *Have your financing pre-approved*.  *Try to meet the wishes of the Seller to the best of your ability (example : price, closing date, exclusions)* * Price & terms should fall within your comfort zone. If the situation goes beyond that it may be prudent to bow out and move onto another property*.

Power of Sales Owner defaults on loan Lender takes property back   Scenarios There is more mortgage owing on the property than what the property is worth. There is equity in the property that must be returned to the Seller.   The lender must try to obtain the best price for the home.

Negotiations Who is representing you?   Under Buyer-Agency it is our duty and obligation to represent you – OUR CLIENT.   Our Goals and Objectives are to get you the best possible home at the best possible price with the least amount of hassle.  

What is an Agency Relationship? It is the relationship an agent has with his/her client/customer. Sub-Agent works with the Buyer but for the Seller.   Buyer-Agent works with the Buyer and for the Buyer.   Dual-Agent works for neither the Seller nor the Buyer. This situation would arise when the Buyer and Seller Agent are the same real estate firm.   All prospective Buyers have the right to representation.   Agency Relationships must be disclosed to all parties involved.

Waivers & Follow-Up Once your conditions have been fulfilled they are waived in writing and the deal becomes firm and binding. Typical conditions include, financing, home inspection and if the property is a condominium the status certificate. We look after forwarding all of the paper work to your solicitor and mortgage consultant.

Meet with mortgage consultant Choose a lawyer Arrange for moving company Arrange for utility transfer/hookup + house insurance Arrange for keys Arrange for school enrollment Change of address at post office Checklist

Buying a Condominium

Cooperative (co-op) A type of multiple ownership in which the residents of a multi-unit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit. Condominium A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have title. Often mistakenly referred to as a type of construction or development, it actually refers to the type of ownership. Buying a Condominium

When you buy a Condominium you are actually buying two things: your individual unit and a share in the condominium corporation that owns and maintains the land and all of the common elements such as elevators, outside grounds, security, parking etc. It is just as important that your condominium corporation is in good condition as your individual unit. To find out the status of the corporation, you should request a 'Status Certificate' as part of your offer. When looking at condominiums, you must also consider the building itself. The choice of the building has a big impact on your 'lifestyle'. The 'building lifestyle' is determined by three factors: Amenities Location Mix of Owners

Why do they differ so much between buildings/corporations? In reality operating costs are virtually the same between buildings. What creates the difference is that some buildings include some or all utilities in the maintenance fees while other buildings have the individual owners pay the utilities directly. Secondly each building pays for different amenities such as 24 hr. security guard or none; valet parking; free shuttle bus; swimming pools etc. Finally each corporation is required to set aside a portion of the condo fees for a reserve fund to pay for major repairs in the future. Some corporations may not charge sufficiently for their reserve fund. To compare expenses between buildings, you must add your condo maintenance fees plus utilities you pay direct to get an accurate comparison. Information on the status of the corporation including current condo maintenance fees is contained in a 'Status Certificate' for that corporation/building. Remember again that you should always request a Status Certificate as a condition of making an offer on a resale condominium property. Condo Maintenance Fee

What are the advantages of buying a condominium? Original condominiums were developed as a cheaper form of housing. Instead of having to buy the land and the building, people could own their building/unit and share the land cost. It then makes private ownership possible in areas where land values would ordinarily make this too expensive i.e. living downtown. Today people buy condominiums as much for ‘Lifestyle’ as they do for price. Downtown you can buy condos for over one million dollars quite easily. Condo ownership also eliminates some of the problems of upkeep and maintenance often associated with home ownership, since the cost of maintenance is shared and is usually the responsibility of the Condominium Corporation through its property management.

Status Certificate When purchasing a resale condominium unit, you should ensure that your offer is conditional on receiving and reviewing a Status Certificate and the accompanying documents, as required by the Act. The certificate is the resale equivalent of a disclosure statement and you must review all the material that comes with the certificate to ensure that you are satisfied that both the condominium unit and the condominium corporation are suitable for you. This certificate, for which there is a fee of $100 inclusive of GST, must be delivered within 10 days of the request for it. It discloses whether the owner of the unit you are buying is current in the payment of common expenses as well as a picture of the condominium corporation's financial affairs. It is to be delivered with the documents, which govern the condominium corporation but are not attached. Once the list of agreements is reviewed, you or your lawyer may also wish copies of some or all of them for review. There can be an extra charge for these documents.

Is there any warranty on my property? Yes, the Ontario New Home Warranty Program (ONHWP) provides protection for condominium buyers of newly constructed residential units. However, ONHWP does not apply currently to properties, which are renovated or built on existing foundations. There are two ways in which the ONHWP provides protection. It guarantees the buyer that any deposit or down payment made by the purchaser of a new condominium unit up to a maximum of $20,000 will be returned if the developer is unable to complete the transaction. It warranties construction of the units from the date of occupancy, and the common elements from the date of registration, for one year against most defects . . . for two years for the mechanical and electrical systems the building envelope and water penetration . . . and for seven years against major structural defects. In addition, there is a warranty for substitutions of key elements in the unit made by the developer without the consent of the purchaser. For further information on what rights you have under the Warranty Program you can contact them at (416) 229-9200 or www.newhome.on.ca

How are common expenses determined? The developer is responsible for allocating the contributions to common expenses to each unit. Usually the developer bases the allocation on the size of the unit; the larger the unit the greater the amount of payable towards common expenses. A developer however is not required to use this basis for common expense allocation. A portion of the common expenses paid by the owners is transferred monthly to a reserve fund account. The reserve fund is the unit owners' savings for the major repair and replacement costs of the common elements which occur as a building gets older.

Who manages the property? Usually, a property management firm, under the direction of the Board of Directors, runs the day-to-day affairs of a condominium corporation. Some condominium corporations are self-managed. The board is responsible for carrying out the obligations of the Corporation as set out in the Act, the condominium documents (declaration, by-law and rules) and any agreements to which the corporation is a party. Do I have a say in what happens in the condominium? Yes - You have the right to participate in the affairs of the condominium corporation. Can I lease or rent the condominium unit I own? Yes - An owner who leases his or her unit must give the corporation the name of his or her tenant(s) and a summary of the lease or a copy of the lease. The owner and the tenant are both responsible to the corporation. The tenant is bound by all the same documents as the owners.

Helpful Resources FIRST TIME HOMEBUYER PROGRAMS Canada Mortgage and Housing Corporation MORTGAGE CALCULATOR Title Insurance LAND TRANSFER TAX CALCULATOR MLS

Thank You Joanne Lozinski Sales Representative The Realty Connection Inc. Brokerage 905-567-1411 416-562-8334 jlozinski7751@rogers.com www.joannelozinski.com Serving My Clients Since 1980