Century 21 News
Happy Father’s Day
Volume 9, Issue 6
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The Niagara Region is again offering a 5% forgivable loan, to a maximum of $10,763, to qualified buyers with low to moderate incomes. Among other requirements, a buyer must not own an interest in other residential properties, and must currently be renting and looking to buy a principal residence. For more information, go to: http://www.nrh.ca; download the Welcome Home Niagara Fact Sheet.
A first-time buyer can claim up to $2,000 in Ontario Land Transfer Tax, either by offsetting the tax when registering the home purchase or by claiming a refund later.
To qualify, a first-time buyer must be at least 18 year old, must occupy the home as a principal residence, and (this includes a spouse) cannot have owned a home or an interest in a home anywhere in the world.
If one or more of the buyers are not a first-time home purchaser, the refund will be reduced and apportioned to the interest acquired by the person who qualifies for the refund. For more information, visit: http://www.fin.gov.on.ca; search Land Transfer Tax Refund.
The Home Buyers Tax Credit is non-refundable and calculated by multiplying the lowest income tax rate of 15% by a tax return claim of $5,000. The credit on $5,000 works out to $750. First time buyer conditions apply. That is, a buyer can not live in another home owned by the buyer, spouse or common-law partner in the year of acquisition or in any of the previous four years.
A qualifying home includes a wide variety of existing homes and new construction--single family, condo, mobile and even income property, such as a duplex, triplex or apartment building.
The buyer must occupy the home, and when two people buy jointly, the tax claim can be split but cannot exceed $5,000 and the credit cannot exceed $750. A person with a disability can also qualify for and claim the Home Buyer Tax Credit. For more information, visit: http://www.cra-arc.gc.ca and search Home Buyers Tax Credit.
With the Home Buyers Plan a buyer can withdraw up to $25,000 from their RRSP to buy or build a qualifying home. The amount has to be repaid into the RRSP annually over the first 15 years. The home purchased has to be occupied as a buyer’s principal residence within one year of buying.
First-time buyer conditions apply. That is, he or she cannot have owned a home for 5 years prior to using RRSP’s for a home purchase. People with disability are exempt from the first-time buyer requirement. For more information go to: http://www.cra-arc.gc.ca and search Home Buyers Plan.
In the Heat of Moment
With multiple offers, a buyer can get so emotionally drawn into the desire to win that they may take a damn the torpedoes approach. A seller too can get caught up in the moment and get fixated on price without comparing the terms as well as attempt to determine the strengths and weakness of each offer.
A Seller Should Consider Mitigating the Risks of a Cash Offer
A buyer may make an unconditional cash offer to “seal the deal”, making the agreement firm and binding once the seller signs. A cash offer may be genuine, yet most purchases do require financing of some kind. So it’s prudent for the seller to inquire as to whether the buyer actually has the cash to buy and where the money is coming from.
As part of his due diligence, the seller and his agent’s job is to minimize risk, in an effort to improve the likelihood that the sale will close successfully and on time. After all, the seller may need the equity out of the home to purchase another.
Acting Hastily Can Lead to Regret
It’s not uncommon for an offer to come in and the property has one or two more showings within the next day. Understandably, the seller wants to see whether more offers are forthcoming before dealing with the offer in hand. This can cause a buyer to rush into a competing offer.
Acting hastily can result in buyer’s remorse after the offer is accepted. One approach might be to increase the deposit amount, testing the buyer’s sincerity and resolve to buy. It also slows the process down somewhat, giving the buyer time for a little sober reflection. Rushed decisions can carry the seed of regret.
Market Update on Home Sales
12-Month Median Sale Price to May 2013 compared to 2012
The Median vs. the Average Sale Price
The median sale price is the mid point, meaning that half of the homes sold below and half sold above that number. The average is the sum of the sale prices divided by the number of sales. The medium is less affected by very large or small sales in a group.
Source: Niagara Association of REALTORS® FUSION Software-- though deemed reliable cannot be guaranteed.
Four markets indicate a decrease: Niagara-on-the-Lake, Port Colborne/Wainfleet, Lincoln and West Lincoln.
Fort Erie and Niagara Falls prices remain stable.
Fonthill, St. Catharines and Welland point to increases of 3.7%, 4.2% and 4.7% respectively.
At $216,000, Thorold had the highest increase at 10.8%. It’s also the only market in which the median of $216,000 is higher than the average sale price of $214,556. This would suggest that more sales took place in the lower end of the average sale price.
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