Article courtesy of Genworth Canada.
  1. Land transfer tax. When a home changes hands, many provinces and a few municipalities charge a property transfer tax or title transfer fee. Rates are usually on a scale of 0.5% to 2% of the home’s value and can add thousands to your purchase price. First-time homebuyers qualify for rebates or exemptions in some provinces.
  2. Appraisal fee. Your lender may ask you to have a home appraised to confirm its market value. Fees vary depending on a property’s value and complexity, but are typically around $400.
  3. Legal fees. A lawyer or notary will help protect your interests by reviewing your purchase agreement, searching the property title, and ensuring that all documents are completed properly. Basic legal fees start between $500 and $800, plus disbursements, with added services as needed.
  4. Home inspection. An inspection can help make you aware of issues related to a house’s structure and systems, such as plumbing and electrical, and recommended or necessary repairs. Fees range from about $350 to $450.
  5. Home/fire insurance. Your lender will require proof that the property is insured in case of fire and other damage. Insurance costs vary, depending on the coverage needed, but budget for at least $500 a year.
  6. Costs for newly constructed homes. If you’re buying a brand-new home, be prepared to settle any items not quoted in the original price, including upgrades or paving and landscaping fees. New homes are also subject to 5% GST or 13% HST, although this is often included in your purchase price. A federal rebate reduces the GST or the federal part of the HST to about 3.5% for homes valued at $350,000 or less.
  7. Prepaid costs. If the seller has paid property taxes, water bills, or utilities in advance, you’ll need to reimburse these at closing. This can add hundreds to your upfront costs, but means these bills will be paid for your first months in your new home.
  8. Tax on mortgage insurance. If you have less than a 20% down payment, your lender will require that you obtain mortgage default insurance. You can roll the cost into your mortgage payments, but the PST is due at closing. For example, if your mortgage insurance is $5,000 and the PST is 8%, you’ll pay $400.
  9. Title insurance. Title insurance can safeguard you against fraud and problems with your property title or survey. Fees range from $150 to $350.
  10. Moving-in costs. Before the big day, budget for all those last-minute things: $100 or more to rent a van or a few hundred for professional movers, $50 to $60 for a locksmith to rekey your locks, and cleaning supplies. Such incidentals can easily come to $500 or more.




There’s a difference between what you need and what you want. We all need a place to eat, sleep and call home, but

when the time comes to buy that place, there’s a lot to consider. In a dream world we could envision our perfect home

and magically make it happen. But this is reality, and in reality we all have budgets and other parameters we must

work within, which is why I encourage all of my clients to start with a wish-list. It helps you determine exactly what you

need, want, and must-have. It lays down a blueprint for your house hunt and it keeps you in check.


Here are some suggestions to help get you started building your wish-list:


• Make a list of all the things you love and don’t want to give up in the place you’re currently – a kitchen island, a

soaker tub, a fireplace – whatever gives you pleasure and makes your house feel like home.


• A wish-list can also be referred to as a “change-list” – meaning, these are all the things about my current living space

that must change. So take note of all the things in your current space that you are not happy with and highlight

anything that frustrates you to no end.


• Consider how long you’re going to be in this home and what you envision happening in your life during that period. If

you’re finally going to get that pet dog you’ve always wanted, then you’ll have to consider that when choosing the



• Identify which items you must have now, and which items can be added over time. Maybe you really want a deck in

your backyard and you’ve just seen a great house that has everything but.  A deck is something you can add on down

the road.


• Consider your wish-list a constantly changing thing. Trust me – once you start looking at properties, you’ll be adding

and dropping things from your list. That’s the best part about house hunting – every place you see gives you a better

sense of what you’re really looking for.




Tara-Nicholle's Real Estate Realist


Remember metal detectors? When I was a kid, they were all the rage, holding the emotional rush of a game with

the a potential real-life treasure chest at the end. Fast forward a couple of decades, and what seems to be our

constant craving for a treasure hunt has shifted to a different medium, fed most prominently by PBS’ Antiques

Roadshow. Loyal viewers like myself watched “The Roadshow” with anxious anticipation for those twin appraisers 

to come out, before they got their own show. When those guys showed up, it was usually a sign that someone’s

auntie’s hideous chest was about to be deemed worth six figures. 

But there’s a real estate version of this treasure hunting phenomenon, too - and it’s not recreational. Rather, the

search for a home with hidden potential is most often undertaken in the very serious effort to stretch every ounce of

home-buying power out of a savvy buyer’s real estate dollar. Some buyers’ lifestyles require them to focus on home

they can move right into, with no work to be done - and their budgets allow them to do so. But others know that the

gap between the home they eventually want and the home they can afford right now is so wide that the only way

they’ll get their dream home is to buy it while it’s still a diamond in the rough. (Very rough, in some cases.)

So, what’s the real estate equivalent of the metal detector or the Keno twins? You are! With your team (agent and

mortgage pro), your tools (Trulia among them) and a touch of good timing (your wants must ultimately align with

what’s on the market), you can become a hidden-home-treasure-finding machine. Here to help are a handful of

clues that there might be hidden potential lurking in a home.


1. Significant discount compared to other homes in the neighborhood. 


By definition, hidden potential is all about unrecognized and as-yet-untapped value - the gap between what you

pay for a home in its current state and what it can be, monetarily and otherwise, with your investment of time and

energy. If the discount is not significant, the potential is not hidden - it’s already being realized by the current owner

(i.e., not you)!


Don’t expect the homes with the most hidden potential to announce themselves and -  their discounts - as such.

The discount you must ultimately be concerned with is the discount that is reflected in the ultimate sale price (not

the list price) vis-a-vis the comps (recently sold homes in the neighborhood).  So, one way to manifest hidden

potential is to look for homes that are listed at only a slight discount (or no discount at all!) and have lagged on the

market a very long time compared with the average in their area, then negotiate a meaty discount from the seller.

The other critical discount to look for is a significant discount between what you can secure the home for and what

it will cost you, in total, after you put in the work necessary to manifest the property’s potential. Anyone can turn any

old hovel into a palatial estate if they’re willing and able to spend and spend and spend.  True hidden potential is

about latent possibilities that can be unveiled, not created from scratch and at great expense. The only way to truly

know what this discount will be is to educate yourself about what the various needed improvements will actually

cost, by obtaining estimates from contractors and/or pricing DIY projects out. 

2. Really, really bad cosmetics.  

First, let’s be clear - many homes with bad cosmetics don’t have great potential, or are insufficiently discounted for

the home to truly reflect much potential at all. However, there are two flavors of bad cosmetics that can signal great

hidden potential. The first are homes that were almost overly loved by their previous owners - they are in excellent

shape inside and out, but they have been so heavily customized with terrible cosmetic choices and unattractive

finish materials that other buyers are completely turned off. I speak from experience: when I bought it, my first home

had wallpaper featuring kittens (no joke) on more than one wall - and it turned out to be a fantastic home and


These otherwise-lovely homes with taxidermy covering every single surface - even the bedroom walls?  Same 

deal: there’s gold in them thar homes. Bad cosmetics like these are very easy to unwind, but these types of homes

often be had at a discount, because they are such a huge turnoff to other, less potential-focused buyers.

The other flavor of bad cosmetics that can hide a home’s true potential are now-outdated “upgrades” that were

awesome and cutting edge in their era. It’s sort of like my Dad’s clothes when I was growing up. As a Tween (we

were called pre-teens back then) I thought my Dad was SO fashion backwards. (He had many other strengths,

though, including real estate. Can’t be perfect at everything.)  Anyhoo, as a young adult, I realized that I’d been

totally wrong: my Dad’s ‘look,’ if you will, was not horrific for the 80’s - it was FANTASTIC for the 70’s. He simply

hadn’t moved on yet! 

When a home’s previous owner made a major investment in upgrading the home 20 or 30 years ago, chances are

good that the outdated cosmetics can be replaced over the home’s still-sound innards, without extreme expense.

Hidden potential alert!

3. An unfortunate backstory. 

Often, homes with hidden potential are those that have fundamental, structural integrity and well-functioning

systems (plumbing, heating, etc.), but have been less well-cared for on the surface. And in some cases, what

caused the surface neglect is an unfortunate set of circumstances affecting the previous owners/sellers. By no

means is spotting homes with this sign of hidden potential unethical or taking advantage of another’s misfortune, as

some might suggest. In fact, if that’s even a concern, rethink it: there’s not a single thing wrong with recognizing and

activating the potential the previous owners were unable to nurture due to their divorce, family dispute, age or

budget limitations.

4. No photos. 

To be completely fair, this one is more about finding hidden opportunity than hidden potential, per se. The vast

majority of home buyers start house hunting online and simply refuse to go homes whose listings lack photos.  

Sometimes homes are listed without photos because of bad cosmetics or deeper condition issues; other times,

because of technical difficulties that have zero to do with the house, its look or its condition. 

If your dream home has been elusive, consider taking the time to go check out a listing with the ‘just right’ specs, in

terms of square footage, beds, baths and neighborhood - even if it doesn’t have photos. If you’re house hunting in

an area or at a price point where there will undoubtedly be multiple offers on a great home, a home with no or only

one listing might offer you an opportunity for low or no competition on a great property - or one with great potential.

5. Great neighborhood, square footage and floor plan. 

It can be relatively simple and inexpensive to manifest a home’s potential when it can be converted into your

‘dream’ home without having to move or add any walls. It’s also much more likely that you’ll hang in there through

the discomforts and uncertainty of the seemingly endless process of remodeling (rather than selling it in despair,

before you’re done) if the home is of ample size and optimal layout to house your family and your activities as they

evolve over time.

Also, many folks find that a fantastic home in a not-so-great neighborhood is  less desirable than a not-so-great

home in an fantastic neighborhood; the latter can be easier to live in and stay committed to during the course of the

remodel as well. Accordingly, homes with the ‘just-right’ square footage and floor plan that also happen to be

located in the ‘just right’ neighborhood are the ultimate hidden potential triple threat.

All: What do you look for when you're scoping a house with hidden potential? In the past, what features have

drawn you to a particular home that others may have missed?




You decide to purchase your own home - wonderful! You have been paying $1400 a month in rent and your sick of it, time to get your own place! You have done your calculations, it is completely feasible based on your current income and you also have support from an uncle for the downpayment - great!


Now you spend multiple hours a week searching the MLS for you perfect dream home. You figure a $300,000 condo would leave you with mortgage payments around $1500/month.  2-3 hours a day are spent searching the internet, for 3 weeks straight - 63 hours of your life addicted to browsing MLS pictures!


Months go by, and you have been going on about 4-5 appointments a week to view the homes that you have narrowed down. Finally you have found the one - the perfect home listed at $315,000!


Now the negotiations begin. Back and forth, back and forth. They will not accept. You loose this option, back to the drawing board.


Another month goes by, more and more viewings of various condos, then once again - the perfect home! Negotiations begin again, and guess what? You get the place for $290,000!


You now spend the next 10 days making efforts to remove all the conditions of your accepted offer. You spend hours reviewing 300+ pages of strata documents, you spend $300 hiring a professional inspector to ensure the building is sound, and you go back and forth with your Bank, digging up all sorts of specific documents they require.


After months of viewings and multiple hours of your life spent searching homes - your bank now tells you that you are approved for a mortgage of $220,000. You only have $5,000 for a deposit - making your mortgage considerably high ratio, so on top of this amount you will have to pay about $5,000 more for CMHC insurance. You also learn that you do not qualify for a 30 year amortization, so your monthly payments are considerably more than you initially expected.


What went wrong? Your calculations had been completely different! The bank informs you that you did not consider the closing costs involved in real estate transactions - extra costs include HST applicable, Property Transfer Tax, Lawyer Fees, any fees for appraisals or surveys that the bank may require etc. They also inform you that you need to be able to afford the annual property taxes, monthly strata fees, and utility payments - all costs on top of your basic mortgage payments.


Well you figured that you could rent out the second bedroom and get $700 a month towards your mortgage, easily making it affordable for you! Unfortunately the bank lets you know that they cannot use this as guaranteed income when approving you for a mortgage and that you alone have to be able to afford the home before they can give you a loan.


Not getting pre-approved for a mortgage first could mean that:


A) You loose the hours and hours that you invested in online MLS searches and viewing properties

B) You loose the home you had set your heart on, because you had no idea that you could not afford it

C) You wasted months browsing homes that were out of your price range, now you have to re-do the whole process and look at homes that, in comparison, look unlivable!

d) Your perfect home, which was completely in your price range, has been snapped up by someone else in the meantime!




I know if it an annpoying process and that it is much more exciting to search the MLS, but do not make this rookie mistake. The bank will assess all areas of your life and inform you of ALL possible costs in the real estate transaction in order to give you a solid and reliable budget to work with. And make sure to fully inform your REALTOR of where you are in the financing process. They are there to help you, and in order to help you they need to know these details.




By |


Considering selling your home? Buckle up — you're about to embark on a rollercoaster ride of emotions. What's

more, you're also likely to make a handful of rookie mistakes.


Whether this is your first sale or your fifth, be smart. Ask for advice from a real estate professional. Avoiding the

following mistakes will help improve your chances of landing the sale sooner rather than later.


  • Mistake #1 — Postponing preparation

Home hunters want to see a spotless, depersonalized home. So grab your mop and start scrubbing. Take care of

any repairs, clear the clutter, and spruce up the curb appeal to garner more attention.


Less is more in the world of home staging, so take a minimalist approach. Buyers are going to want to be able to

visualize their furniture in your space, so remove any oversized items in order to give a sense of spaciousness. This

goes for any closets, the garage, and basement. It takes buyers roughly 60 seconds to form an opinion about a

house, so make sure everything they see leads them to a positive outcome. Stash your stuff at a friend's house until

you're sure the deal has gone through.


  • Mistake #2 — Overpricing your pad

There's a right way and a wrong way to price a home. The right way factors in the market and the condition of the

property. If your price is based on the profit you hope to make, you're in for a rough ride.


It's important to note that, just because you've invested in some home improvements, this doesn't automatically

mean you're going to recoup the money you spent. You need to be realistic and understand the true value of your



  • Mistake #3 — Dishonesty


Even though laws concerning disclosure vary throughout the country, honesty is always the best policy. Lying by

omission is still lying. Work with your realtor to better understand what you're required to share with a potential

buyer. This could include the use of any lead-based paints or a death on the property.


  • Mistake #4 - Limiting showings

Bowing to the whims of buyers and their realtors can be a major pain. However, if you want to sell your home,

you're going to have to play the game — even when it's inconvenient. The first rule of real estate? Never turn a

prospective buyer away.


  • Mistake #5 - Getting personal around the bargaining table

Sellers often let their emotions colour negotiations. When it comes down to hashing out the details, it's crucial that

you look at the sale as a business transaction — nothing more.


When an offer comes in below your asking price, don't let it offend you. Try and remember back to when you bought

your home - didn't you try and get the best deal possible in order to make your mortgage more manageable?

Remember to be realistic about the current market of your area. What's more, price is just a small portion of the

package. Consider conditions, timelines, and financing requirements.


  • Mistake #6 — Arguing with inspection requests

You know your home isn't perfect, so don't be surprised when the home inspector comes back with a list of repairs

and recommendations. Again, it's important that you keep your emotions under control. Arguing about repairs or

refusing to concede to requests could delay or completely derail your deal.


  • Mistake #7 — Misplaced paperwork

If you live in a homeowners association or a condo community, make sure you have your ducks in a row prior to

putting your home on the market. This includes finding all of your association documents. If you fail to provide these

documents to the buyer within a certain period of time, they're permitted to break the contract.


  • Mistake #8 — Slacking prior to the appraisal

Here's hoping you didn't put that mop away. Don't let your housekeeping standards slide following an offer. When

the appraiser arrives, you want to make sure your home reflects the same condition as the day it entered into the



  • Mistake #9 — Relying solely on traditional marketing methods

A sign in your front yard is just the first step to marketing your home. The best real estate agents offer round the

clock advertising exposure and innovative lead generation. So why settle for less? Make sure you take the time to

find a realtor who's truly plugged into the scene.


  • Mistake #10 — Forgetting to test the market

Not entirely sure if you're ready to pick up and move to a new location? Then don't list. Never put your property on

the market unless you're serious about selling. Harbouring indecision could cause you to blow the sale wide open.


Remember that the Sales Representatives at the Presentation Centres work for the Builder/Developer, not YOU. They are being paid an hourly wage plus commision to sell units for the Seller. Make sure to bring your own Realtor to examine the contract and ensure that you are best protected in the transaction, it is at no extra cost to you!

Pre-sales have their place ... but watch what you are signing!


By Ozzie Jurock


1. In the fast rising real estate markets between 2004 and 2008 (and in some areas longer) brave speculators

made more money assigning (flipping) a pre-sale contract than the developer earned creating the building.


2. It was easy: Put a down payment on a suite to be built - or, if you had a lot of guts, buy two or more. By the time

the building was finished, soaring real estate prices helped you double and triple your down payment. If you

decided to assign the contract you made the cash - never even having moved in. That went fine for years.


3. But in 2008, worldwide financial markets tanked and with it condo markets in Vancouver. By December 2008,

some 200 pre sale unit owners were offering their contracts on Craigslist - often at a loss. (On March 20, 2012 there

were just 39.) When that did not work, many simply did not complete the deal and lost their deposit. Some lost not

only their deposit, but where the price of the unit had fallen they were sued by the developer for the difference

(developers won in many cases).


4. Needless to say, developers once burned have now tightened up the contracts. Buyers must realize that

developers get their financing on the basis of pre-sales and rightfully expect and deserve all pre-sales in their

development to complete.))))


So, the pre-sale game changed. But probably for the better.


If you are a genuine buyer wanting a new home, there are a dozen reasons why you should still consider a pre-



You buy today, you have one to two years to complete.


That gives you time to sell your house and you can pick colours and finishings. And if the market rises during

construction, you benefit from that price increase, too.


But there are some things to watch out for:


Buy the builder/developer's reputation. Ask for references from buyers in previous projects. What is your

builder's rating for after-sales service? How solid is the developer? What recourse do you have if the developer

does not complete? Call the Better Business Bureau.


Get on the pre-sellers' list - the high quality pre-sale experts like Rennie Realty Marketing Systems, Mac Realty

Marketing Solutions, etc. Get invited to pre-sale launches. Learn the latest prices, features - or at least get free

shrimp at the opening.


Ask these questions:


What amenities are offered? What warranties? Who guarantees the quality of things like materials, flooring?

What will the monthly maintenance/common area fees be? Will this amount change after the last unit is sold? How

much are taxes?


What is included? Do I own my parking spot or is it leased? Is the balcony square footage included in my

apartment measurements? Where is the suite located? Will the suite be beside an outdoor vent? Exhaust! Over an

entrance? Noise! Over a garage? Ditto!


Note that many developers no longer let you assign the pre-sale before closing. Some may charge an

assignment fee that is refundable if the assignment does not close. Examine the conditions. Have your lawyer read

over any pre-sale agreement.


Has the developer filed a rental disclosure statement? What are the terms? How many years can you rent it?


Take a picture of the show suite. Take a picture of all counters, sinks, baseboard and flooring used in the show



A look at the Canadian real estate market through the eyes of an investor


By Vin Maru

Bank of Canada may be ahead of all its peers in ensuring its banks meet the Basel capital requirements. And it may have done a

better job in regulating the banking sector, but they are not innocent of allowing bubbles in Canada to form. Even Mark Carney feels

that the housing market is overheated. Carney made recent comments about the health of Canadian banks.

As for Canada's banksCarney said they may have some exposure to record householddebt levels and the overheated housing 

marketbut he noted that high-risk mortgages areinsured by the federal government.

The Canadian real estate housing bubble still seems to get inflated in some major citieslike Toronto.

I recently heard a story of someone who bought a house pre-construction for $701K about 18 months ago. The house is now selling

for $850K by the builder. Let’s say the buyer put down 25% or about $180K. Their $180K investment in the house provided a $149K

return, or 82.78% profit on paper already in less than a year and a half. Annualized, this is a 55.19% return on the initial investment

thanks to buying pre-construction, which is something you still don’t get in the regular real estate market by trying to buy and flip

already built homes.

But even the homes that are already built and occupied are keeping up with real inflation. It still seems the average house is rising by

5% a year. Let’s say you own a modest $400k starter house in the suburbs, and have 25% down, or $100K. The house value is going

up 5% a year or $20K/year on a $400K home, this would mean your equity portion of $100K is now worth $120K after one year and

on paper, you just made 20% ROI on your house. The cost to carry a $300K mortgage at a 4% interest rate is about $12k if you’re

paying just on a straight home equity line of credit (interest only). Even if you add $3000 for taxes, the cost of living in that house is

only $15k a year. Yet your investment appreciates by $20K. So essentially, putting $100K down to buy a house, the Canadian market

is paying you on paper $5K net (which is almost the same as the inflation rate) to live in a house for free.

Under this scenario, your initial investment in the house earns you the same rate as inflation, so your purchasing power of that

investment remains constant. But because the value of the house is rising by 5%, the house price at $400k is rising by $20K a year of

which $5k or 25% can be attributed to your investment ($100K down payment) and $15k or 75% is the bank’s mortgage. However, the

banks portion of $15K appreciation does not go to them directly. It’s attributed to the market value of your house “on paper” and you

are just making payments to them by way of $12K/year interest payments. So you pay the bank’s interest payments of $12K/year on

real money you must first earn from hard labour and in return the inflation of the housing price pays you $20K a year on paper. Under

this system, the paper inflation of the housing bubble is allowing a homeowner to live for free in that house and still make about 5% on

your initial investment. What a great system we have in Canada, where the ongoing housing bubble is allowing the homeowner to live

for free and pays him a return on his initial investment, which keeps up with inflation!

This scenario is a win-win for all parties involved. The homeowner lives for free (on paper) and earns a 5% return on their initial

investment. The banks get paid 4% a year by issuing a mortgage almost out of thin air under fractional reserve and fiat banking. The

government earns property taxes, income taxes, VAT and whatever other tax scams they create to steal wealth from the citizens. The

only person who doesn’t win under this scenario is a person who doesn’t have enough down to pay for the deposit of an inflated

house. But then there is a cure for that too.

The Canadian gov’t also has a program for insuring mortgages for people who can’t put enough down for a house. It’s called the

Canada Mortgage and Housing Corporation (CMHC), similar to Freddy and Fanny down in the United States. So we don’t have to

worry about these people not being able to afford a house. Their high-risk mortgages are insured by the federal government, which

means the Canadian taxpayers are on the hook if the housing bubble ever burst (see Mark Carney’s statements above). Of course,

Mark Carney is totally encouraging this privatization of benefits and socialization of costs. He is guaranteeing this boom will continue by

leaving interest rates low in order to keep interest payments low on Canada's growing debt and help the export economy by preventing

a stronger Canadian dollar.



Good Intentions Create Bad Behaviours

While the concept of owning a house sounds good, especially given the housing inflation scenario above, is it really sustainable? The

record debt levels by Canadians are on average just as high as all other western nations. The average salary or wage earnings are not

rising and in a world of global competition the westerns salaries should continue to deteriorate with economic slowdown.

The artificial affordability of houses despite inflated prices makes it more difficult to enter the real estate market as a first time home

buyer. Why? Everyone is now a real estate investor because it keeps rising in certain markets, thus pushing the prices higher and

fuelling the boom. Given the scenario above, why not become a real estate investor? On paper, you get paid to own a house and the

prices keep rising as more and more investors continue to bid up real estate. The average Canadian real estate investor now owns

multiple properties which were acquired with very little down and they’ve made out a like bandits while prices keep rising. And then

there’s the fact they can collect rent from people who can’t afford to buy inflated houses.

How Long Can The Real Estate Boom In Canada Last?

The real estate boom will last as long as we have the same environment that created and maintains this boom lasts. We still have low 

interest rates, a stable and strong economy and buyers believing that real estate prices will continue to rise. This real estate boom in

Canada has gone on much longer than we would have thought, but here we are and the prices are still trending higher. The boom will

last until there is triggering event that will turn it into a bust. All booms and busts are usually created by a triggering event which is

mostly a result of central bank actions such as the increase or decrease of the money supply or interest rate manipulation.

The housing boom in the US came after the tech bust and a drop in interest rates and a loosening of lending policies. The US real

estate bust came with the subprime scandal. The US bankers’ fraud in bundling mortgages came to light and blew up in their faces.

Who paid for that bust? Everyone in the world paid for it with the financial meltdown we saw in 2008. Since then most real estate

markets around the world have gone bust. In fact I can’t think of many countries around the world that haven’t had a decent correction

in real estate. Most have corrected or are in the process of correcting. Yet certain markets in Canada seems to defy economic gravity.

These Canadian real estate markets haven’t gotten sucked down like the rest of the world.

Why? Because no one is willing to prick this bubble. After all it’s a win-win for everyone. The investor wins with appreciation on their

investment and gets to live for free. The banks win with continued interest revenues. Government win with continuous tax revenues.

The central bank looks like a hero for maintaining a stable banking system and everyone working in the industry wins with continuous

record incomes and commission. Why would anyone want such a wonderful party to end?

While there have been some recent efforts to contain the bubble, such as higher deposit requirements and shortening of the

amortization period of mortgages, that doesn’t seem to be enough of a deterrent to cool down the real estate bubble. For the most

part, having the low interest rate policy still makes being a real estate investor a profitable endeavor, especially if the properties can

continue to provide cash flow. The investor in real estate still wins because he makes good cash flow from a renter who cannot afford

to buy at these prices and so must pay rent, which goes to paying off the investor’s mortgage. If a first time homeowner is able to

scrape up the 10% deposit and get the CMHC, he will most likely buy even at these inflated prices because he has very little choice...

either he is paying inflated rental prices or inflated home prices. His income has not risen significantly, but he is still forced to pony up a

higher percentage of his income just to live in Canada because of the inflated real estate prices.

This turns out be a vicious cycle that benefits only the investor/owners/bankers/government and everyone else who is involved in

gaming the system with ever increasing real estate prices. As a result of this inflationary real estate policy the percentage of income

that goes toward rent or homeownership keeps rising for new entrants to the market. If you purchased a home a while ago, you are

fine. But good luck to a young couple or a new immigrant who is looking to be a first time home buyer. They have been priced out of

the market by everyone that has an interest in keeping the real estate inflation game alive and well. Frankly, they should have gotten

into the real estate racket earlier on in the cycle.



Canada’s Ponzi Real Estate Market

Like most bubbles or ponzi schemes, the real estate bubble will continue as long as new entrants/buyers are willing to buy from the

people who got in earlier. When it comes to investing, asset prices will continue to rise as long as there are new entrants to the market

and the belief holds that the asset class will continue to reward everyone involved. Real Estate is probably the most heavily invested

asset class there is in Canada so everyone involved would love to see the status quo maintained. As long as you are involved in the

ponzi scheme and it continues to pay you, you have no motivation in wanting to see it collapse.

For someone who is new to the RE market as an investor, my suggestion is to look at other markets or countries which have already

corrected. You will find much more value than in Canada’s over inflated RE market. The ponzi scheme here still continues and you

don’t want to be the investor stuck at the bottom of the pyramid with an over inflated investment hoping to sell it to some other sucker

later on down the road. What happens if that sucker wises up and realizes he is being played for a fool in a market that continues to

get inflated because it’s rigged to benefit only the people already involved?

The other real estate ponzi schemes around the world have already busted, but Canada’s real estate market continues to inflate

because no one is willing to burst it. When it comes to a world of ponzi investing with fiat paper, you want to be at the top of the next

great ponzi scheme. You want to be rent/income collector and not the payer. It’s tough entering today’s RE market in Canada as in

investor. You would be at the bottom of the ponzi pyramid, so your chances of success get limited. In fact there is a lot of evidence

that the ponzi real estate market in Canada is already popping. It seems like a few pockets of RE such as Vancouver and in Alberta

are already cooling off, more so because they got way more over inflated than the average real estate market during the commodities

boom and influx of money from China. Yet many areas in southern Ontario and especially GTA Toronto are still seeing price rises

similar to the scenario mentioned above. Still, these markets are probably closer to busting than continuing down this ponzi path.

In a world where central banks create booms and busts, you are better off finding another ponzi scheme they are creating and get in

early. The real estate market in Canada may continue to rise, but in our opinion you are already too late to this party and more than

likely it is ready to burst. If you are heavily invested in real estate, you may want to take profits while they are still available or create a


The central banks and governments around the world have created another massive bubble in the government bond market which

continues to grow. This will most likely be the next bubble that will pop in the next few years. Once it starts bursting, easy profits will be

made shorting the bond market, something we will keep readers aware of when the time looks right. Once this bond market starts to

burst, we expect the gold market will start rising significantly. While many media outlets claim that gold is in a bubble, it has not even

come close to bubble territory. The average investor hasn’t even considered gold as an investible asset class. He doesn’t own any and

probably hasn’t even considered owning any. This will all change and everyone will rush into gold over the coming years once the

government debt bubble bursts. While one bubble bursts (bonds), money rushes into another asset class and the only bubble that

hasn’t been fully inflated is precious metals.


A CLOSER LOOK: Lighter coloured shingles can save you money because they last longer

Asphalt shingles rated to last 25 years show signs of deterioration after 12 years. Homeowners are sometimes surprised to find out the manufacturer’s warranty only covers the cost of shingles and doesn’t include labour.

Asphalt shingles rated to last 25 years show signs of deterioration after 12 years. Homeowners are sometimes surprised to find out the manufacturer’s warranty only covers the cost of shingles and doesn’t include labour.


Roofs protect you and the interior of your home from outside weather conditions.


Most roofs last many years if properly installed and maintained; however, no matter how well maintained, at some

point your roof will need to be replaced.


Maintenance includes cleaning leaves and debris from the roof's valleys and gutters. Whatever the roofing material,

debris in the valleys can cause water to wick under the shingles and cause damage.


Clogged rain gutters can cause water to flow back under the shingles on the eaves and cause damage. Though

seasonal changes in the weather are considered one of the most destructive forces, the best way to preserve your

roof is to make sure the attic is properly insulated, vented and to stay off it.


When choosing a colour for shingles, it's worth mentioning that a lighter colour is best as heat from the sun breaks

down materials in darker colours faster.


Here is a list of some of the pros and cons of some of the more popular roofing materials:


Wood shakes offer a natural look with a lot of character. Wood offers some energy benefits. It helps to insulate the

attic, and it allows the house to breathe, circulating air through the small openings under the felt rows on which

wooden shingles are laid; however, a wood shake roof demands proper maintenance and repair, or it will not last

as long as other products. Mould, rot, and insects can also be a problem.


The life cycle cost of a shake roof may be high, and old shakes can't be recycled. Installing wood shakes is more

complicated than roofing with composite shingles, and the quality of the finished roof depends on the experience of

the contractor as well as the calibre of the shakes you use.


Metal roofing products consist mainly of steel or aluminum. Steel is invariably galvanized by the application of a

zinc or zinc/aluminum coating that greatly reduces the rate of corrosion.


Metal roofing is available as traditional seam and batten, tiles, shingles and shakes. Products also come in a

variety of styles and colours. Metal roofs with solid sheathing control noise from rain, hail and bad weather just as

well as any other roofing material.


Metal roofing can also help eliminate ice damming at the eves. And in wildfire-prone areas, metal roofing helps

protect buildings from fire should burning embers land on the roof. Metal roofing costs more than asphalt, but it

typically lasts two to three times longer than asphalt or wood shingles.


Asphalt shingles are the most commonly used roofing materials. Asphalt products include shingles, roll-roofing,

built-up roofing and modified bitumen membranes.


Asphalt shingles are typically the most common and economical choice for residential roofing, but because of their

organic based materials they have tendency to break down faster.


The cost will vary depending on the quality of shingles used. For example, 25-year shingles will be much less

expensive than 40-year shingles; however, actual life of the roof will depend on whether the roof was installed

correctly by following the manufacturer's installation instructions printed on every package of shingles, and how

well the roof has been maintained.


There have been recent cases where homeowners have challenged shingle manufacturers on their warranties

because they have shingles that were supposed to last 25 years, deteriorating to the point where part or all of the

roof needs to be replaced as early as 10 years.


The manufacturer will try to determine whether the shingles were installed properly, that sufficient

ventilation/insulation was present and regular maintenance was performed, before honouring any warranty claim.


Homeowners are sometimes surprised to find out that the manufacturer's warranty often only covers the cost of the

shingles and not the labour that in most cases is greater than the cost of materials. Another common fact about

many roof warranties is that they decrease in value as the years go by; meaning, you will receive less toward

replacement for 25-year shingles that have deteriorated after 15 years than you would if the deterioration had

occurred after 10 years.


When choosing a roofing contractor get at least three quotes and determine what warranty they offer on their work.


Make sure the contractor you choose follows the manufacturer's installation guidelines and is also willing to install

the required roof and soffit ventilation as needed.


Also make sure to read and understand the manufacturer's warranty before deciding on what type of shingles to





Canada Mortgage and Housing Corporation is forecasting a stable housing market for British Columbia with light

upticks in sales numbers, average prices and housing starts in 2013.


“Factors in 2013 driving the housing market are expected to be a little bit stronger,” Carol Frketich, B.C. regional

economist for CMHC said. “There is expected to be a bit of a pick up in job growth next year, economic growth and

demographic growth as well.”


Housing starts will increase to 28,500 homes for this year in B.C., from 26,400 starts in 2011, and then rise to

30,100 homes in 2013, CMHC said.


Most of the growth in housing starts for 2012 has been in multiple-family housing, but in 2013, multiple-family

housing starts will level off, while single-detached homes start to rise, Frketich said.


“We tend to see more single-detached home starts when resale market conditions are stronger, so that’s why

we’ve got that stable level of single-detached this year,” Frketich said. People who are looking to buy can find

homes on the resale market.”


She said CMHC expects 9,900 single-detached housing starts in 2013, up from 8,900 this year. That compares to

11,500 in 2010.


Average prices, which are down about five per cent in Vancouver this year from last year, are expected to climb

about 2.6 per cent by 2013, both in Vancouver and across B.C., Frketich said.


The average MLS price in B.C. is forecast to be $522,200 for 2012, down 7 per cent from 2011, but should

increase to $537,700 as resale activity picks up next year, CMHC forecast. The resale market in B.C. will maintain

balanced supply and demand conditions through 2013, CMHC said. The number of sales will continue to

moderate through 2012, but should also pick up in 2013, Frketich said.


Vancouver renters will be looking at lower vacancy rates and higher rents for the fall, Frketich said. The vacancy

rate is projected to fall to 1.1 per cent in October from 1.4 per cent in October 2011, while the average rent for a

one-bedroom apartment will climb to $1,005 from $964 in the same time period.


Nationally, the CMHC is forecasting a moderate slowdown in new-home construction starts as well as sales of

existing houses.


The CMHC national forecast suggests next year will be somewhat softer than estimates the federal agency

issued in June, while 2012 may be somewhat stronger nationally than previously expected.


Nationally, CMHC estimates there will be between 196,800 and 217,000 units of housing started in 2012. In 2013,

CMHC now estimates national housing starts will be in the range of 173,000 to 207,400 units.


The national average price for property sales through CREA members is forecast to be between $351,300 and

$378,400 in 2012 and between $358,000 and $395,800 in 2013, CMHC said Tuesday.




By Tracey Porpora/Staten Island Advance 


Although summer is more than half-way over, it’s not too late to host that outdoor gathering you’ve been dreaming

about all season. If you don’t want to invest too much in your soiree, there are ways to make cheap equal chic.


Many indoor items can be recycled to create an elegant outdoor entertaining space that’s just as cozy as your

family room.


“Your patio or deck should be thought of as another room of your house,” says Sonny Golden, interior designer

and president of Golden Key Interiors in New Springville. “Manufacturers are making many products that have both

indoor and outdoor uses,” she continues. “There are wonderful fabrics, drapes, accessories and rugs that can be

used outdoors.”


To start designing your outdoor room without spending a lot, apply these tips from the experts:


Recycle indoor items in unique ways. 


Don’t restrict the use of a furniture piece outdoors to the same way it’s utilized inside your home. For example, a

bench can be used as a table by adding a table runner, says interior designer Susan Huckvale Arann, owner and

principal designer of the Bloomfield-based American & International Designs, Inc. “Just about everything you find

in your home can be used outside in some way,” she comments.


Looking to create a bar area? Recycle a storage cart as a “rolling bar,” suggests interior designer Milena

Marguenski, owner of the Grasmere-based MNM Design Studio, Inc.


Or, how about some new serving trays? Take the wooden box in the family room that’s housing the TV remote and

line it with two colorful napkins to serve rolls or crackers, suggests Orlando, Fla.-based interior designer Marc

Thee, founder of Marc-Michaels Interior Design, who lends his expertise to, an online

destination for design advice and inspiration.


Other ordinary items also can be used. “Look around the house for unexpected display pieces.” Thee says. For

example, “A big ceramic bowl can be filled with ice to chill a glass dish of fresh seafood.”


Add elegance. Items like china and decorative serving trays can be used to create an upscale ambiance.


“A dressy tiered server, normally used to display fancy desserts, looks just as great outside with a s’mores display

of marshmallows, chocolate bars and graham crackers,” Thee says.


“And don’t hesitate to stack your grandma’s best dessert dishes right next to this elegant presentation,” he adds.

“Cloth napkins and real plates also are a dressy touch, and reinforce the ‘outdoor dining room’ mood.”


Create seating areas.


 Gone are the days of painted redwood picnic tables. Instead, create a conversational setting that is cozy, warm

and elegant. An old throw rug taking up space in your basement or attic can be used to “anchor” your seating area,

Thee suggests.


Or, “For a picnic flavor, provide plenty of floor pillows borrowed from the family room sofa, and add two or three

garden stools in a vignette to serve as de facto tables while seated on the ground,” he says.


Another option is to seat your guests in chairs from the kitchen or breakfast room. Place them around the rug in a

semi-circle to encourage conversation. Utilize garden stools between the chairs to hold drinks while eating, Thee



Develop a theme with color.


 From a nautical to rustic theme, you can use color to create a certain ambiance for your backyard room.


“Color makes a statement,” Ms. Arann says, pointing out you can “use drapery in blues, such as aqua with a pop

of yellow and white, as your backdrop to create a nautical theme.”


You can add to this theme by filling clear glass jars with seashells and coral for table centerpieces.


Add decorative touches. Vases, floral arrangements, picture frames and bowls of fruit add extra detail and

interest to your outdoor room.


“Flowers are a must. They bring life to an outdoor space,” Ms. Golden says.


To get even more creative, pot flowers in an umbrella stand, Ms. Arann suggests, adding that mirrors placed on

picture frame stands also can create points of interest. Additionally, bowls of fruit — particularly a mix of lemons

and limes — help create an organic feel, Ms. Golden says.


Also think outside the box when it comes to placing decor.


“Instead of using centerpieces for decor, use your house walls, fence or anything vertical to hang thin bottles with

flowers or planted bags,” Ms. Marguenski suggests.


Light your room. Hang petite votive lanterns from tree branches to create an intimate setting for your backyard

gathering. Choose mosquito-repelling citronella candles to keep the bugs away.


If you want to add an extra special touch, buy an inexpensive vintage chandelier at a local thrift store to hang above

your seating area.


Thee advises to remove the wiring and electrical sockets, spray paint it a bright color to match the theme of the

evening and hang it from a tree with candles placed where the bulbs used to be.


And use candleholders found inside your home with some type of covering to protect the wind from extinguishing

the flame.


“Candlelight is always one of the best ways to create an incredible atmosphere,” Ms. Golden says, noting,

“Everything and everyone looks good by candlelight.”


Use drapery to designate your space. Drapes can close off a tented or covered porch area. “If there is inclement

weather or too much sunlight, you can close the space off with drapes,” Ms. Golden says, pointing out, “Treated

fabrics work well outdoors.”


Plus, drapery can be used as backdrop. Ms Arann notes, “Fabric adds texture to any space.”


So, you have decided to hire a contractor to undertake your home improvement project right? That is a wise

decision. Too many homeowners suffer unnecessary damage through their do-it-yourself antics. However, you

will need to make another wise decision if you want to have the best possible outcome from your home

improvement project - choose the right contractor.


This is someone you are going to have in your home, tearing down things and rebuilding. There may be times

when the contractor will be alone in the house, or it will be just the two of you. You want someone you can trust

and you want someone qualified. Here are a few simple tips that will help you tell the good eggs from the bad



Relevant qualifications

If you wanted an amateur to do your repairs then you would have done it yourself and save the extra money. Hiring

a contractor means, you want someone with the relevant knowledge in how to carry out the project exactly. Having

the relevant license is usually a good way to tell. The city must have specific levels of competency they expect and

if they have licensed the contractor then it means they found those competencies in them, that is a good thing.


Always ask your contractor for the relevant documentation and if possible set aside some time to watch them

work. It is pretty easy to tell a professional from an amateur. If he takes the same amount of time that you would to

figure out what is causing a particular problem in your house, then he is probably an amateur.



A good contractor will be able to give you a list of references of people he has worked for before because he is

sure their report about him will be good. Dubious contractors who use poor materials and do a terrible job would

not be so confident. You should make a point of contacting one or two of them just to make sure though, some

contractors know that the homeowner would probably not take the time to check with the references. 



While it is true that there are a couple of newbies out there who may be highly qualified and trustworthy, you might

not want to spend a whole load of your money experimenting with them. A contractor with many years of

experience under his belt will probably be able to get the job done better, and the fact that he has been around for

so long says something about his work ethic.


If you want to take your chances with a new contractor, then start small. Give them the less important tasks first

and test them before you can proceed to giving them the whole project. Most new contractors are wise enough to

work as apprentices under more established ones before they step out on their own. 



You will need a committed contractor if you are going to have a successful home improvement project. You need

one who can understand exactly what you want done and gets passionate and excited about the project.

Contractors who will not come round to your house to do their own survey before agreeing to do the job are clearly

not committed from the onset. There is some information that is impossible to get over the phone.


A contractor who is always late for appointments or misses them altogether is also uncommitted. While it is

understandable that we all experience emergencies at one point or the other and have to cancel important

appointments, it does not happen every day.  You can get such information from the references if you ask the right




Always go with your gut feeling in such matters. Your contractor as we have previously seen is someone you will

allow into your home, someone you will be in close contact with the whole duration of the project. Even if

everything about them appears perfect, if something within you does not click with them, then do not force it. Find a

contractor you can relate to easily, one you can ask all the questions you may have, and who will answer you

appropriately while considering your specific needs.



August 2012


August 2012

"There are 3 kinds of lies: Lies, Damned Lies, and Statistics"

- Mark Twain


There's no doubt that real estate is an interesting topic of conversation for the public. The media, in an attempt to feed

this appetite for real estate news, often publishes interesting pieces of real estate information that help sell papers.

Due to this heavy dose of constant real estate news, it's important to understand how the data is collected and how to

interpret the information.


Below are the 3 most commonly misunderstood real estate statistics in the media:


Canadian Housing Starts Fall


This shouldn't really matter to buyers or sellers out there. While this is related to the real estate market, it is more

relevant for the construction industry than it is to the resale housing market.


Remember, these are new home construction figures: not sales or pricing numbers. Unless you're a construction

worker or materials' supplier, this type of information is largely irrelevant to your real estate decision-making process.


Home sales drop 27%


This kind of information is important for buyers and sellers to know and also helpful for realtors to use. A drop in home

sales is sometimes a precursor to lower prices down the road. That said, there are a multitude of reasons that home

sales could slow that wouldn't also result in a corresponding drop in prices.


It is therefore important to remember that these are unit sale figures, not price figures. These statistics also generally

need to be seasonally adjusted to reflect the fact that sales tend to be slower in the winter and summer as opposed to

the spring and fall. You should talk to a professional to see whether a drop in sales velocity is because of a slowing

market or because of some other extraneous event.


Average House Prices Expected to drop by 15%


This is the most misunderstood of the media reports that come out because averages are a terrible metric to measure

house prices.


This is because the type of home that is sold in a given month strongly influences the outcome. For instance, if a lot

of luxury homes are sold one month, then the average price of homes will go up, even if the typical home price doesn't

change. This is exactly what has already happened in Vancouver, where the average price has dropped by 13.3%

year over year, but the typical home price is actually higher (see graph below).


% change in home prices year-over-year
(June 2011 to June 2012)
City Average price MLS Home Price Index Teranet-National Bank HPI (May data)
Vancouver -13.3% +1.7% +4.4%
Calgary +2.5% +5.6% +3.5%
Toronto +7.3% +7.9% +9.9%
Montreal +3.7% +2.7% +4.5%

Remember to always read real estate statistics with an eye to these issues and you'll become a more accurate

analyst of the market.

For a more complete analysis of these statistics, please feel free to contact me

at the email address or phone number above

Reciprocity Logo The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.