June Real Estate Newsletter

Century 21 News

Happy Father’s Day

Volume 9, Issue 6

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In This Issue




Discount Mortgage Rates


Cash in Multiple Offer Situations


4 Incentives for First-Time Buyers


Market Update on Home Sales


Thinking of Buying or Selling?


Discount Mortgage Rates
As of May 31, 2013

Based on 13 Financial Institutions:

  • The 5-yr fixed mortgage is 2.74% to 3.19%
  • The 3-year fixed mortgage rate is between 2.59% to 3.19%
  • The 5-year variable mortgage rate is between 2.74% and 3.04%
  • 7 and 10 year rates: available as low as 3.49% and 3.69% respectively
  • The Prime Rate is 3%;
  • The Qualifying Rate is 5.14%; applies to variable rates and mortgage terms of less than 5 years.

Rates are Based On Approved Credit
(Source: Centum Financial Group Inc.)

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4 Incentives for
First-Time Buyers
in Niagara

  1. Welcome Home Niagara Home Ownership Program

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.

  1. Land Transfer Tax Refund for First Time Buyers

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.

  1. The home buyers' tax credit (HBTC)

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.

  1. The RRSP Home Buyers Plan

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.





Cash in a
Multiple Offer Situation


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.

  • A cooperative buyer will be more than willing to disclose specific information on the source of funding. For example, the buyer may have sold his current home and has the equity or has obtained approval for bridge financing. This creates credibility and gives the seller a level of comfort.  
  • A buyer’s vague response or unwillingness to disclose information can be a red flag and should be considered before the seller decides whether to accept the offer over another.
  • What if the money is coming from a foreign country or from an insurance claim that has not been settled? This can potentially cause delays, requests for one or more extensions of the completion date and can even result in no closing at all. Some confirmation that the money will be there on closing is a reasonable seller request.
  • A buyer may fail to recognize that the mortgage approval is subject to an appraisal, yet no condition addresses this.    

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.

12-Month Median Sale Price

To May 30, 2013

Pr 2013

Median Pr 2012

% Change

Fort Erie








Niagara Falls








Port Colb/Wainfleet




St. Catharines












West Lincoln








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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John Palumbo

John Palumbo

Sales Representative
CENTURY 21 Today Realty Ltd., Brokerage*
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