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Hard Lofts vs. Soft Lofts: Which One is Right for You?

By Advice For Buyers, Lofts, Video Blog

Are you interested in living in a loft but confused about the differences between a hard loft and a soft loft? In this blog post, we will break down the distinctions between these two types of lofts to help you make an informed decision.

Hard Lofts: A Glimpse into History

A hard loft is a residential building that was originally industrial, commercial, or a warehouse but got converted into living spaces. These buildings often have a rich history, and moving into a hundred-year-old building can be a unique experience. The authenticity of hard lofts appeals to many people as they get to live in a space with exposed ceilings, floors, and brick, showcasing the building’s historical charm.

Moreover, hard lofts offer unique layouts that you won’t find in regular condo buildings. With high ceilings of 14 to 15 feet, these spaces provide a sense of grandeur and openness. The appreciation potential of hard lofts is also higher due to their scarcity and demand. Even during downswings in the real estate market, these buildings retain their value.

Despite their allure, hard lofts come with a few downsides. Firstly, they tend to be expensive. The uniqueness and sought-after nature of these buildings result in higher prices per square foot. Additionally, since these buildings are older, they often require higher maintenance fees. The absence of as many amenities as you would find in a soft loft is another factor to consider.

black flat screen tv mounted on white wall

Soft Lofts: A Balance between Modernity and Comfort

Soft lofts, on the other hand, were always intended to be residential spaces but were designed to mimic the aesthetic of hard lofts. One of the key advantages of soft lofts is the abundance of amenities. With new construction, developers plan for modern amenities like underground parking, which can be lacking in hard lofts. Additionally, balconies are more common in soft lofts, offering outdoor space that factories were not originally built to accommodate.

Maintenance fees in soft lofts are generally more affordable compared to hard lofts. These buildings often combine the best of new condominiums and hard lofts, resulting in lower fees while still providing attractive amenities. Soft lofts also offer a more modern and updated living experience, with newer building materials and designs.

Affordability is another advantage of soft lofts. While condos may come at a premium compared to soft lofts, opting for a soft loft can still provide a better price point. However, it’s important to note that soft lofts may not offer the same level of history and unique features as hard lofts. The spacious layouts and high ceilings commonly found in hard lofts may be sacrificed in favor of a more contemporary living space.

brown wooden table and chairs

Choosing the Right Loft for You

When deciding between a hard loft and a soft loft, consider your lifestyle preferences. If you appreciate the rich history of a building, unique finishes, and features, a hard loft might be the perfect choice. On the other hand, if modern amenities, balconies, lower maintenance costs, and a newer building appeal to you, a soft loft could be the better fit.

It’s crucial to assess your priorities and requirements before making a decision. If you’re still unsure, consult with a real estate professional who specializes in lofts to get personalized advice.

In conclusion, hard lofts offer a glimpse into the past and provide an authentic living experience, while soft lofts provide a balance between modernity and comfort. Understanding the differences between these two types of lofts will help you make an informed decision based on your preferences and lifestyle.

We hope this blog post has clarified the distinctions between hard lofts and soft lofts. If you’re looking to purchase a Loft in Toronto, reach out, we’d love to help!

Residential Hot Water Tank Closeup

Does It Make More Financial Sense to Buy or Rent a Water Tank In Your Home?

By Advice For Buyers, Video Blog

Today, let’s dive into the topic of hot water tanks. Are you in the market for one? Have you been wondering whether it’s better to buy it outright or rent it? In this blog post, I’ll break down the financial aspects to help you make an informed decision.

The Benefits of Renting a Hot Water Tank:
When it comes to renting a hot water tank, there are a few advantages worth considering:

1. No Upfront Cost: Renting a hot water tank means you don’t have to worry about a large initial investment.

2. Servicing and Repairs: If anything goes wrong with the rented hot water tank, you won’t have to deal with the hassle and expenses of repairs or replacements. The responsibility lies with the rental company to ensure everything works smoothly.

3. Monthly Payments: Rental contracts for hot water tanks usually come with reasonable monthly payments. This option allows you to budget your expenses effectively.

The Financial Side:
Let’s now take a closer look at the numbers. Purchasing a hot water tank outright can range from as low as $500 to $1,500 or even $1,800-$1,900 for top-of-the-line models.

On the other hand, rental contracts can range from $20 to $50 per month. Let’s consider a mid-range example: $35 per month. In one year, you would have spent $420 on the rental. Within one to three years, you’ve likely already surpassed the cost of buying the hot water tank outright.

Long-Term Considerations:
While renting may seem enticing due to the lack of repair and maintenance worries, it’s important to understand the long-term implications.

Hot water tanks typically have a life expectancy of around 15 years or more. If you were to continue renting for the entire 15 years, the total cost would be $6,300 (15 years x $35 per month).

On the other hand, if you purchase a hot water tank for $1,200, you’ll have ample room for repairs or even buying a new one if needed. This way, you save a significant amount of money in the long run.

Final Thoughts:
Unless you anticipate moving within the next year or two, buying a hot water tank outright is generally the smarter financial choice. It allows you to save money, especially over the span of 15 years or more.

If you have any further questions or would like to add to the conversation, please feel free to reach out!

Happy young couple moving in new home first time

Discover the First Time Home Savings Account: A Powerful Tool for First-Time Homebuyers

By Advice For Buyers, Video Blog

Are you diligently saving up to purchase your very first home? Are you looking for a new tool that can help you achieve your goal more quickly? Well, look no further. In this blog post, we’ll discuss the First Time Home Savings Account (FHSA) recently introduced by the Government of Canada.

The FHSA is a tax-sheltered account specifically designed to assist first-time homebuyers in saving for their down payment. It combines the best features of the Registered Retirement Savings Plan (RRSP) and the Tax-Free Savings Account (TFSA) into one powerful tool.

Learn How the FHSA Can Help You Save for Your First Home in Video

https://www.youtube.com/watch?v=wKoexrSwrn0

Contributions and Limits of the First Time Home Savings Account

The lifetime contribution limit for the FHSA is $40,000. However, you cannot deposit the entire amount at once. You are allowed to contribute up to $8,000 per year until you reach the maximum limit. So, if you open the account tomorrow with $40,000 saved up, you can contribute $8,000 in the first year.

The First Time Home Savings Account is Income Tax Deductible

One of the key benefits of the FHSA is that it is income tax deductible, similar to the RRSP. Let’s say you make $68,000 in a year and you contribute the maximum $8,000 to your FHSA. When you file your taxes, you can deduct your income as if you only made $60,000. This deduction can result in a lower tax liability or a larger tax return.

Tax-Free Investments

Like the TFSA, any investments made within the FHSA are tax-free. If you invest the $8,000 in stocks, bonds, or GICs, any returns or interest earned on that investment will remain tax-sheltered. Additionally, any profits you make on your investments will not affect your contribution room. You can continue to contribute $8,000 per year until you reach the maximum limit of $40,000.

No Tax on Withdrawals

The FHSA offers a unique advantage when it comes to using the funds for your first home purchase. Unlike the RRSP, which requires you to repay the withdrawn amount over a 15-year period, the FHSA does not require repayment. Once you have used the funds for your down payment, you will not be taxed on it or have to pay it back.

Restrictions and Eligibility of the First Time Home Savings Account

To open an FHSA, you must be a Canadian citizen and at least 18 years old. The home you are purchasing must be your first home or be more than four years since you last owned a home. Additionally, the home must be your primary residence. You cannot use the FHSA for an investment property.

In conclusion, the FHSA is a valuable tool provided by the Government of Canada to assist first-time homebuyers in saving for their dream home. With its income tax deductibility, tax-free investments, and no repayment requirements, the FHSA offers unique benefits that make it a worthwhile option to explore. Take advantage of this opportunity and start building your path to homeownership today!

If you have any further questions or would like to discuss the FHSA in more detail, feel free to reach out in the form below.

What is a Status Certificate and WHY are they important to review before buying a condo?

By Advice For Buyers, Video Blog

One of the most important parts of the condo buying process, is reviewing the corporations Status Certificate! 

What is A Status Certificate?

A status certificate is a collection of documents, issued by a condominiums property manager that contains info on:

  • Contact information – lists out the legal name of the Condo Corporation, Property Management, and Board of Directors.
  • Maintenance fee amount (Expenses) – both at time of issue and if there are any plans to increase in the near future.
  • Budget – what the building is spending its monthly maintenance fees on.
  • Reserve Fund – how much they have saved for the repair and replacement of components in a condo (ie. savings for roof repairs, parking garages, upgrades, etc)
  • Legal Proceedings/Claims – if any lawsuits are levied against the corporation, or if the corp has levied any against others.
  • Leasing of Units – how many units are currently tenanted in the building
  • Notices – announcements of maintenance fee increases, any planned repairs, or other factors that may impact maintenance fees
  • Bylaws and Rules – The bylaws and rules list what you can or can’t do in a building…Some buildings in the city have outright bans on pets or restrictions on certain breeds and weights.
  • Insurance Requirements – policies the corp has in place, and requirements for new purchasers to have.

How Order a Status Certificate

A seller can request a status certificate by contacting the buildings property manager.  The management company will have 10 business days to prepare and can deliver it in either hard copy or in digital via email. 

How Much is a Status Certificate

The certificate will cost $100 + HST and can be paid by either the buyer or seller, depending on how a deal is structured.

Why You Must Request a Status Certificate

Sellers – I often suggest ordering one before you even go to market with your property.  As a seller, you have a duty and responsibility to disclose any and all details that could impact the sale of your condo.  By ordering a status in advance, you’ll be made well aware any potential pitfalls and can disclose these issues to potential purchasers ahead of time to avoid any issues with closing.

Buyers – In a condo, values are closely tied to how well the building is run (second to location of course).  If fees skyrocket, you may find that the buildings value will appreciate much slower (or actually depreciate) than a building with lower maintenance fees.  A building with known problems can also have an impact on financing and insurance resulting in higher monthly costs – knowing this in advance can allow you to negotiate a better price, or walk away from the deal all together!

Who Reviews the Status Certificate

It is crucial, you take it to a Real Estate Lawyer who has experience in condo dealings.  They are trained in knowing what to look for and the right questions to ask. DO NOT take it to general law firm, or rely solely on a realtors review of it!

How Long Do you Have to Review a Status Certificate 

Most clauses generally allow 2-3 days for lawyer review.  It’s a small window of time, so it’s best have a candid conversation with your lawyer in advance and tell them exactly how you plan on using the property. 

A common misstep is with buyers who spends months out of country.  If their plan is to rent it on AirBnB while away, it’s best to make sure there aren’t any rules or bylaws preventing you from doing so!

Remember, a Status Certificate is generally valid for only 90 days – so if a seller produces a Status dated older than 90 days, ensure you request a new one.

When Should You Walk Away From Purchasing a Condo

No matter how in love you’ve fallen with your new purchase – there are a number of reasons you may want to walk once the status certificate is reviewed: 

  • If the corporation has a low reserve fund – with no plans of replenishing
  • Lawsuits that could result in a loss to the building
  • Indications of an increase to monthly fees or large repairs
  • Being blacklisted from lenders or insurance companies

Accompanying Documents That Also Come With a Status Certificate

Other important documents that accompany the status include:
  • The Declaration
  • Bylaws
  • Rules and Regulations,
  • Certificate of Insurance
  • Current Budget
  • Reserve Fund Study
  • Management Agreements
  • Financial Statements
  • New Owner Information
  • Move-in and Out forms
  • Other Building forms

 

Modern house with garden swimming pool and wooden deck

There Needs To Be More Transparency with Real Estate Bidding Wars

By Advice For Buyers, Advice For Sellers, Video Blog

We need to change the bidding war process in Toronto! If you’ve tried to buy a home in recent years, you know how backwards the current process is…If you haven’t, let me explain.

The Current System

A seller will list their property below market values to create a frenzy amongst buyers.  After roughly 7 days of market exposure, they’ll review and all offers that come to the table.  The problem is that each buyer is going in “blind” not knowing anything about the other offers.

Current rules, as set by the Real Estate and Business Broker Act, say we can not disclose the motivation, offer, or price of a competing offer. Thus creating a blind bidding system full of suspicion and mistrust.

The winning buyer always feels like they paid too much, the losing buyers feel like they could have paid a bit more and the sellers could regret the highest bid if the winning buyer can’t secure the financing. Plus it artificially increases values as going in blind can create an over inflated offer.

How We Can Fix It

Simple – get rid of the blind bid system and open up the process. Let each party know the Price, Deposit and Closing date of the other offers. This levels the playing field. There still will only be one winner and several losers, but atlas both parties would fairly know what they were up against, in a more transparent system and enjoyable process.

Good News

OREA is seeking feedback on whether it should push the provincial government into modernizing the real estate industry to make it more transparent. Australia is already doing this – and even opening up their MLS to sold prices (more on that in another video). In Melbourne, they littering gather infront of the house on a offer day and each party bids infront of each other. This is the most transparent way to know what you’re up against.

How Will the B-20 Mortgage Guidelines Impact Your Purchase?

By Advice For Buyers, Video Blog

For the second time this year, new guidelines are being introduced that will impact how Canadians get approved for a mortgage… and for the second time this year, a lot of people are confused by what these changes mean! I’ve put together a short video to better explain who IS and ISN’T affected by it, and what it all means.


 

10 Ways The New Changes May Impact You

  1. The new guidelines would introduce “STRESS TESTS” for all purchasers taking out a mortgage with MORE than 20% of a downpayment.
  2. If you’re putting LESS than 20% down, taking a VARIABLE mortgage, or a term of less than 5 years – you’re already subject to qualifying under a stress test. No change to this segment of the market.
  3. If you’re putting down MORE than 20% – you too will also be subject to the test.
  4. The guidelines will require purchasers with more than 20% down to qualify at the Bank of Canada Rate OR the Contract Rate + 2% (which ever is higher)
  5. For Example: Say the banks are offering you a 3% fixed rate for 5 years.  In order to be approved for it, you must actually qualify at 5% (3%+2%).  
  6. Because purchasers are qualifying at a higher rate, many will see their max budget amount reduced by roughly 15-20%
  7. The new guideline ONLY apply to those lenders that are deemed a Federally Regulated Financial Institution (currently 85 in Canada).
  8. Those that don’t fall under Federal Regulations are not subject to the new guidelines.  The most popular alternative is CREDIT UNIONS like Duca or Meridian… although there is some discussion that they may adopt similar measures to the B-20 Guidelines. 
  9. Although many will see their MAX budget reduced – it’s important to remember that NOT EVERYONE wants to spend the max a lender can make available for them.  I know of many clients who chooser to only spend 60, 70 or even 80% of their max budget on a purchase.
  10. Like all changes in the market, there will be an adjustment period of probably 4-6 months for people to adjust to the changes.

More Reading:

Final Revised Guideline B-20: Residential Mortgage Underwriting Practices and Procedures

Canada’s banking watchdog sets tougher rules for mortgage lending

New mortgage stress test to hit ‘move-up’ home buyers