How the banks calculate how much house you can affordThey use GDS and TDSGross Debt Service (GDS): The percentage of the borrower’s income that is needed to pay all required monthly housing costs (mortgage payments, property taxes, heat and 50% of condo fees). Total Debt Service (TDS): The percentage of the borrower’s income that is needed to cover housing costs (GDS) plus any other monthly obligations that an individual has, such as credit card payments and car payments. The acceptable ratios for both have generally been 32% and 40% respectively.For people with very high credit scores, GDS requirements are often waived and the TDS maximum is slightly higher (44% as of January 2011).GDS RATIO (Gross Debt Service Ratio):
The
percentage of gross annual income required to cover payments associated
with housing. Payments include mortgage principal, interest, property
taxes and sometimes include secondary financing, heating, condominium
fees or pad rent.
TDS RATIO (Total debt service ratio):
The
percentage of gross annual income required to cover payments associated
with housing and all other debts and obligations, such as car loans and
credit cards.
Example - GDS - Gross Debt Service Ratio
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Friday, May 6, 2016
Gross Debt Service Ratio and Total debt service ratio
Tuesday, May 3, 2016
Real Estate Bidding Process
In a bidding war, the terms of all
offers are kept confidential between the seller, their agent and each
individual buyer and their respective agent.
All offers are usually presented separately, but in one session, and normally in the same order as they were registered with the listing brokerage. The seller's agent should allow each buyer rep to present their client's offer. By doing so, the seller's agent can question the buyer agent about their client's offer and obtain valuable information to assist the seller to fairly compare and choose wisely between the multiple bids.
After an individual presentation, the buyer agent is asked to leave the presentation room, with the listing agent retaining a copy of the offer. Each buyer agent is permitted the same opportunity and this continues until all competing bids have been presented.
Then, with the guidance of the listing agent, with a copy of each of the competing bids spread before them, the seller makes a decision. Typically, but not always, the seller will be advised to return all offers to the respective agents with the instruction to ask their buyers to ...
All offers are usually presented separately, but in one session, and normally in the same order as they were registered with the listing brokerage. The seller's agent should allow each buyer rep to present their client's offer. By doing so, the seller's agent can question the buyer agent about their client's offer and obtain valuable information to assist the seller to fairly compare and choose wisely between the multiple bids.
After an individual presentation, the buyer agent is asked to leave the presentation room, with the listing agent retaining a copy of the offer. Each buyer agent is permitted the same opportunity and this continues until all competing bids have been presented.
Then, with the guidance of the listing agent, with a copy of each of the competing bids spread before them, the seller makes a decision. Typically, but not always, the seller will be advised to return all offers to the respective agents with the instruction to ask their buyers to ...
Improve Their Offers
Thus, everyone is given a second chance. And when all offers are re-registered, the entire process begins again. After consultation with the listing agent, the seller usually accepts what they perceive to be the best offer.
Aside from increasing the offer price, there are other Options Available to a Buyer
... to increase the attractiveness of their offer. If a buyer is comfortable with doing so, conditions may be removed from their offer, a closing date altered to comply with a seller's preference, chattels could be excluded, seller requirements eliminated or deposits increased. Usually, though, it comes down to ...Conditions and Price
Sometimes, the seller may simply reject what they perceive to be the worst offers and work with only the top few. A seller may retain some offers, provided the irrevocable dates allow it, and counter-offer to that buyer. If that buyer accepts that seller offer, the deal is done. If not, the seller may counter the next one, being wary of irrevocable dates and times to avoid the possibility of committing to more than one buyer. A seller will usually continue this process until one is accepted by a buyer.Monday, April 18, 2016
Tenants and Landlords at Selling a Condominium
When landlord wants to sell property, co-operation with tenant is necessary. Here are some rules
When a landlord puts a home or condo up for sale it can often lead to conflicts with tenants. The landlord, naturally wants to show as many people through the property as possible, while the tenants may be annoyed with the inconvenience. Each party has rights and it pays to know what they are.
Here are the basic rules:
•Landlords can sell their home at any time.
•If the tenant has a lease, they cannot be evicted before the end of their term.
•If the lease is over, it automatically becomes a monthly tenancy. The tenant must be given 60 days’ notice to vacate, provided that a buyer has already unconditionally agreed to buy the home.
•Tenants must allow buyers to look at the unit, as long as there is 24 hours’ advance written notice and the showing takes place between 8 a.m. to 8 p.m. Pets have to be kept out of the way and while tenants can be there during showings, they don’t have to be.
Some tenants believe the landlord cannot show the home if they still have a lease. Wrong.
On the other hand, a buyer must still respect the terms of the lease. But when the lease expires, the new owner can provide a 60 days’ notice based on the fact they need the home for themselves or their family.
If a tenant refuses to let buyers in to see the unit after being given proper notice, the landlord can start eviction proceedings. The landlord could also potentially claim damages if the tenant’s actions prevent the landlord from selling the home in a timely manner.
If you are planning to sell your home, my advice is to approach your tenant first and work out a plan that accommodates everyone. That way the tenant can protect their valuables and keep pets out of the way and the landlord can let buyers see the home on a timely basis. As an example, only agree to showings from 4 to 6 pm each day.
Some landlords help their tenants find another place to live before putting the home up for sale. This is also an excellent solution. It takes away the stress of eviction and the landlord then gets to later fix up their home and make it more presentable to a wider range of potential buyers.
When landlords and tenants understand the rules and co-operate when a home is being sold, everyone wins.
When a landlord puts a home or condo up for sale it can often lead to conflicts with tenants. The landlord, naturally wants to show as many people through the property as possible, while the tenants may be annoyed with the inconvenience. Each party has rights and it pays to know what they are.
Here are the basic rules:
•Landlords can sell their home at any time.
•If the tenant has a lease, they cannot be evicted before the end of their term.
•If the lease is over, it automatically becomes a monthly tenancy. The tenant must be given 60 days’ notice to vacate, provided that a buyer has already unconditionally agreed to buy the home.
•Tenants must allow buyers to look at the unit, as long as there is 24 hours’ advance written notice and the showing takes place between 8 a.m. to 8 p.m. Pets have to be kept out of the way and while tenants can be there during showings, they don’t have to be.
Some tenants believe the landlord cannot show the home if they still have a lease. Wrong.
On the other hand, a buyer must still respect the terms of the lease. But when the lease expires, the new owner can provide a 60 days’ notice based on the fact they need the home for themselves or their family.
If a tenant refuses to let buyers in to see the unit after being given proper notice, the landlord can start eviction proceedings. The landlord could also potentially claim damages if the tenant’s actions prevent the landlord from selling the home in a timely manner.
If you are planning to sell your home, my advice is to approach your tenant first and work out a plan that accommodates everyone. That way the tenant can protect their valuables and keep pets out of the way and the landlord can let buyers see the home on a timely basis. As an example, only agree to showings from 4 to 6 pm each day.
Some landlords help their tenants find another place to live before putting the home up for sale. This is also an excellent solution. It takes away the stress of eviction and the landlord then gets to later fix up their home and make it more presentable to a wider range of potential buyers.
When landlords and tenants understand the rules and co-operate when a home is being sold, everyone wins.
Thursday, February 18, 2016
MPAC and Teranet
MPAC
MPAC (mpac.ca, AboutMyProperty.ca™, propertyline.ca) is a not‐for‐profit corporation funded by all Ontario municipalities.
MPAC is responsible for administering a uniform, province‐wide property assessment system based on current values. MPAC assesses nearly five million properties with a total value of $2.2 trillion.
MPAC provides a range of services, including the preparation of annual assessment rolls for use by municipalities and the Province of Ontario to calculate property taxes and education taxes.
MPAC also delivers products and value‐added services to a number of sectors including banks, mortgage firms and other assessment jurisdictions across Canada. propertyline™ is a secure e‐commerce solution for obtaining accurate, real‐time property information quickly and easily.
With propertyline™, customers can purchase assessment, site, structural, and sales data on all types of properties across Ontario. Information is refreshed weekly to ensure customers have access to the most current property information.
Teranet
Founded in 1991, Teranet owns and operates Ontario’s Electronic Land Registration System, one of the world’s most advanced land registration systems, enabling users to conduct electronic registrations as well as title and writ searches relating to real property.
Teranet also owns and operates The Property Registry in Manitoba, providing advanced land and personal property security registration and search services. Teranet’s comprehensive suite of related data products have fundamentally increased the real estate industry’s ability to provide efficient and secure services to the public.
Teranet has built a well‐established customer base and strong brand confidence, providing electronic services to over 81,000 end users including lawyers, paralegals, real estate brokers and agents, search houses, title insurers, financial institutions, governments, police services, utilities, surveyors, credit unions, investigators and appraisers.
Teranet is managed by Borealis Infrastructure, a leader in direct infrastructure investing with well over a decade of investment experience.
With offices in Toronto, London, New York and Sydney, Borealis is the infrastructure investment arm of OMERS, one of Canada's largest pension funds with net assets of more than $65 billion and an AAA credit rating.
As at December 31, 2013, Borealis manages net assets of approximately $11.6 billion on behalf of OMERS through investments in a diversified portfolio of large‐scale infrastructure assets exhibiting stability and strong cash flows, in sectors including energy, transportation and social infrastructure. For more information about Teranet, visit www.teranet.ca.
MPAC (mpac.ca, AboutMyProperty.ca™, propertyline.ca) is a not‐for‐profit corporation funded by all Ontario municipalities.
MPAC is responsible for administering a uniform, province‐wide property assessment system based on current values. MPAC assesses nearly five million properties with a total value of $2.2 trillion.
MPAC provides a range of services, including the preparation of annual assessment rolls for use by municipalities and the Province of Ontario to calculate property taxes and education taxes.
MPAC also delivers products and value‐added services to a number of sectors including banks, mortgage firms and other assessment jurisdictions across Canada. propertyline™ is a secure e‐commerce solution for obtaining accurate, real‐time property information quickly and easily.
With propertyline™, customers can purchase assessment, site, structural, and sales data on all types of properties across Ontario. Information is refreshed weekly to ensure customers have access to the most current property information.
Teranet
Founded in 1991, Teranet owns and operates Ontario’s Electronic Land Registration System, one of the world’s most advanced land registration systems, enabling users to conduct electronic registrations as well as title and writ searches relating to real property.
Teranet also owns and operates The Property Registry in Manitoba, providing advanced land and personal property security registration and search services. Teranet’s comprehensive suite of related data products have fundamentally increased the real estate industry’s ability to provide efficient and secure services to the public.
Teranet has built a well‐established customer base and strong brand confidence, providing electronic services to over 81,000 end users including lawyers, paralegals, real estate brokers and agents, search houses, title insurers, financial institutions, governments, police services, utilities, surveyors, credit unions, investigators and appraisers.
Teranet is managed by Borealis Infrastructure, a leader in direct infrastructure investing with well over a decade of investment experience.
With offices in Toronto, London, New York and Sydney, Borealis is the infrastructure investment arm of OMERS, one of Canada's largest pension funds with net assets of more than $65 billion and an AAA credit rating.
As at December 31, 2013, Borealis manages net assets of approximately $11.6 billion on behalf of OMERS through investments in a diversified portfolio of large‐scale infrastructure assets exhibiting stability and strong cash flows, in sectors including energy, transportation and social infrastructure. For more information about Teranet, visit www.teranet.ca.
Friday, January 29, 2016
Toronto Real Estate sales for 2015
Residential
Toronto home sales were the second-best on record in December of 2015, with the Toronto Real Estate Board posting 4,945 sales. The year’s total sales were 101,299, which is a 9.2 increase over 2014.
The average price for a home in Toronto in 2015 was $622,217, which is up by 9.8 per cent compared to 2014, when the average price was $566,624.
Commercial
According to the Toronto Real Estate Board’s Commercial Network Members, there was a 6.1 million square foot increase in leased office, commercial and industrial space during the fourth quarter of 2015 compared to the same time in 2014, a 19.6 per cent increase.
The number of sales of commercial, office, industrial spaces decreased by 27 per cent in the fourth quarter of 2015 compared to the same time in 2014, for a total of 235 sales.
Toronto home sales were the second-best on record in December of 2015, with the Toronto Real Estate Board posting 4,945 sales. The year’s total sales were 101,299, which is a 9.2 increase over 2014.
The average price for a home in Toronto in 2015 was $622,217, which is up by 9.8 per cent compared to 2014, when the average price was $566,624.
Commercial
According to the Toronto Real Estate Board’s Commercial Network Members, there was a 6.1 million square foot increase in leased office, commercial and industrial space during the fourth quarter of 2015 compared to the same time in 2014, a 19.6 per cent increase.
The number of sales of commercial, office, industrial spaces decreased by 27 per cent in the fourth quarter of 2015 compared to the same time in 2014, for a total of 235 sales.
In mid-December, the government of Canada announced that it was increasing the required down payment amount for some home purchases beginning in February 2016
Homes priced above $500,000 will now require a down payment of 10 per cent instead of the previous 5 per cent. Homes priced below this amount still only need a 5 per cent down payment.
CMCH Fee Changing
The Canada Mortgage and Housing Corporation has announced it is changing the guarantee fees being charged to issuers and adjusting the annual limits for new guarantees. Both National Housing Act Mortgage-Backed Securities and Canada Mortgage Bonds are affected.
Monday, October 19, 2015
Real Estate Investment Trusts
Real Estate Investment Trusts (REITs) purchase real estate properties and pass the rental incomes through to investors.
Defined as a type of asset-backed security, they are also referred to as equitized income products or high-yield securities. The disparity in names highlights the controversy as to whether these securities are equities or fixed-income. They are most often compared to bonds because of the income they generate, but they do not have guaranteed payouts.
Income trusts react to changing interest rates, similar to fixed-income securities, but trade on an exchange, like equities.
Because they are backed by the specific revenue-generating properties or assets held in the trust, they face the same risks as common equities.
For income trust investors, the tax treatment will
be more like that of corporations – investors will be taxed on their distributions as though the distributions were dividends.
For investors, distributions from an income trust will now be taxed in the same way as dividends received from taxable Canadian corporations.
Real Estate Investment Trusts (REITs) consolidate the capital of a large number of investors to invest in and manage a diversified real estate portfolio. Investors participate by buying “units” in
the trust. REITs allow small investors to invest in commercial real estate previously available only to corporate or more affluent and sophisticated investors.
Canadian tax laws offer REITs significant tax deductions. For this reason, REITs pay out a high percentage of their income, typically 95%, to their unitholders.
REITs may be structured as either open-end or closed-end funds. If they meet the stringent standards set out under the Income Tax Act, REITs may qualify as registered investments for RRSPs and RRIFs.
REITs face many of the risks typical of real estate investments related to the quality of properties, rental markets, tenant leases, debt financing, natural disasters and liquidity.
REIT managers generally minimize risk by avoiding real estate development and investing primarily in established income producing properties.
To reduce the danger of incurring too much debt, most REITs limit the extent of leverage to 50% to 60%. Leverage ratios tend to be significantly higher in the real estate industry.
Liquidity is a major benefit of REIT ownership. REIT units are much more liquid than real estate. However, investors should determine the liquidity of any particular REIT before investing,
since some, especially the more specialized REITs, have thin trading volumes, despite being exchange traded.
As publicly traded instruments, REITs are also subject to full disclosure rules giving the investor access to more complete information for decision-making purposes.
When interest rates rise, REIT trading values may fall. On the other hand, REITs represent a good hedge against inflation since, in an inflationary environment; the value of the underlying real estate owned by REITs may appreciate.
Because rental income is fairly stable, REITs generally yield high levels of income but usually lack the potential for large capital gains or losses possible with equities. As with any investment, it may be necessary to accept lower yields to ensure a high-quality portfolio underlying the yield.
Buying REITs gives investors access to professional management. REITs, however, are just as susceptible to ineptitude on the part of management as any other company. The keys to minimizing risk lie in sound research before purchase and in diversification.
Defined as a type of asset-backed security, they are also referred to as equitized income products or high-yield securities. The disparity in names highlights the controversy as to whether these securities are equities or fixed-income. They are most often compared to bonds because of the income they generate, but they do not have guaranteed payouts.
Income trusts react to changing interest rates, similar to fixed-income securities, but trade on an exchange, like equities.
Because they are backed by the specific revenue-generating properties or assets held in the trust, they face the same risks as common equities.
For income trust investors, the tax treatment will
be more like that of corporations – investors will be taxed on their distributions as though the distributions were dividends.
For investors, distributions from an income trust will now be taxed in the same way as dividends received from taxable Canadian corporations.
Real Estate Investment Trusts (REITs) consolidate the capital of a large number of investors to invest in and manage a diversified real estate portfolio. Investors participate by buying “units” in
the trust. REITs allow small investors to invest in commercial real estate previously available only to corporate or more affluent and sophisticated investors.
Canadian tax laws offer REITs significant tax deductions. For this reason, REITs pay out a high percentage of their income, typically 95%, to their unitholders.
REITs may be structured as either open-end or closed-end funds. If they meet the stringent standards set out under the Income Tax Act, REITs may qualify as registered investments for RRSPs and RRIFs.
REITs face many of the risks typical of real estate investments related to the quality of properties, rental markets, tenant leases, debt financing, natural disasters and liquidity.
REIT managers generally minimize risk by avoiding real estate development and investing primarily in established income producing properties.
To reduce the danger of incurring too much debt, most REITs limit the extent of leverage to 50% to 60%. Leverage ratios tend to be significantly higher in the real estate industry.
Liquidity is a major benefit of REIT ownership. REIT units are much more liquid than real estate. However, investors should determine the liquidity of any particular REIT before investing,
since some, especially the more specialized REITs, have thin trading volumes, despite being exchange traded.
As publicly traded instruments, REITs are also subject to full disclosure rules giving the investor access to more complete information for decision-making purposes.
When interest rates rise, REIT trading values may fall. On the other hand, REITs represent a good hedge against inflation since, in an inflationary environment; the value of the underlying real estate owned by REITs may appreciate.
Because rental income is fairly stable, REITs generally yield high levels of income but usually lack the potential for large capital gains or losses possible with equities. As with any investment, it may be necessary to accept lower yields to ensure a high-quality portfolio underlying the yield.
Buying REITs gives investors access to professional management. REITs, however, are just as susceptible to ineptitude on the part of management as any other company. The keys to minimizing risk lie in sound research before purchase and in diversification.
Wednesday, September 30, 2015
How to Feng Shui for Your Workspace
What to Use:
1. A Plant
2. A desktop fountain or fishbowl
3. Blue Purple and red desk accessories
4. Black briefcase or laptop bag.
5. Photos
6. Desk Lamp
What to do:
- Declutter your desk and work space
- Repair and anything that is broken
- Have a plant on your desk avoid cactus
- Position the chair to see the door ( Meaning business and opportunity)
- Position your chair so a solid wall is behind it.( further protect your back - chair have proper support)
- Place a fishbowl or a desktop fountain on your desk ( activate flow of money and calm you down)
- Blue Purple and red desk accessories on your desk ( creativity)
- Pictures on upper left corner of your desk
- Keep your desk basket away from the desk or at the bottom left corner of the desk
- Use good lighting
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