OOPS - Don’t Forget Pre-closing Expenses!

Lee Lander

Congratulations - buying a home is a rewarding accomplishment. But sometimes in all of the busy excitement, new buyers forget that the actual purchase price is not the only amount of money involved in the equation.                        

Once a Buyer’s offer to purchase is accepted there are a series of costs they are likely to incur before they even get to the point of visiting their lawyer for the closing day transaction settlement meeting. For the most part, these are costs that arise as a direct result of the terms and conditions of the agreement with the seller and/or the mortgage commitment from the lender. 


So here is a brief overview of some of the extra money a buyer will spend prior to moving into their home. 


Deposit: this amount is paid to the seller’s brokerage when the deal is agreed to. It’s essentially a sign of good faith or your genuine intention to buy the home. Legally this money has to change hands ASAP after the deal is accepted by everyone (typically 24 hours) so buyers need to have immediate access to this amount. 


Note the Deposit often gets confused with Down Payment. The Down Payment is how much of a buyer’s own money is put towards the total purchase price once the deal is completed. Regardless of the amounts involved, there is usually no direct correlation between them. 


Home Inspection: buyers who choose to hire a qualified Home Inspector to give them a report on the condition of the home should expect to pay $400-$500* up front for the Inspector’s time and expertise. 


Status Certificate: when buying a strata unit or condominium, buyers should ask their lawyer to review the provincially mandated condo documentation and advise if there are any maintenance cost increases or special assessments expected in the near future. The cost of getting the Certificate for the specific unit being purchased varies by property/management company but is typically in the $150* range. 


Water and Septic Tests: homes that are not on municipal services usually require testing to verify an adequate supply of potable water and the normal operation of the septic system. This is common in EG given the high number of properties served by wells and/or septic systems. York  


Region performs basic water tests free of charge but a licensed Septic Service company will pump out and inspect private systems for $500.* Both of these costs are paid at the time of service. 


Lending Fees: in some instances, the mortgage broker or lender may charge fees to lend money to the buyer. These are normally either a flat fee, a percentage of the borrowed amount, or a combination thereof, and can vary greatly depending on the circumstances. Often lenders require these fees to be paid up front before they agree to the mortgage. 


Appraisal: mortgage lenders may want an independent third-party opinion of the home’s value in order to establish how much they are willing to lend. These costs vary based on the specific details of the property. Again, since EG has a high number of rural properties, the cost of appraisals could be $600* or more, although in-town subdivision homes would normally be a little less. Most times buyers are asked to pay the appraisal company before the report is submitted to the lender. 


Property Insurance: Mortgage lenders require buyers to have home insurance coverage in place before closing in order to protect everyone in the event of damage or disaster. The cost of this insurance varies depending on the property’s value and physical characteristics and policy limits and features. It’s not uncommon for annual premiums to be $2,000 or more but at least most providers typically offer some type of payment plan so buyers don’t have to pay the full amount up front. 


Utility Set Up: Buyers, especially first timers, may be subject to deposits charged by utility companies (hydro, water/sewer, natural gas, etc...) until the buyers demonstrate a pattern of responsible bill-paying. Different companies have different policies surrounding these deposits but typically they are charged on the first bill. After a period of time these companies will usually return the deposit in the form of an invoice credit that can be applied to future invoices. 


While of course the actual purchase price is a much more significant amount, it’s crucial that a buyer recognize the importance of having money available for these items well in advance of their planned moving day. In fact, their ability to live up to their legal obligations in the transaction depends on it. 


Note the amounts listed are a general guide for information purposes only and are based on normal circumstances for a typical home being purchased by a regular buyer in the EG market. Actual costs incurred are based on individual circumstances and should be confirmed in advance.                        

Lee Lander is the Owner & Broker of Record of Lander Realty Inc. and has lived in East Gwillimbury for over 25 years. She’s become the go-to local market expert: nobody knows EG Real Estate like Lee because nobody does as much business in EG as Lee does. Lee@LeeLander.com. 



Read More

Listing in July or August - Good or Bad?

Lee Lander

When it comes to selling your home, timing can be crucial. We’re not talking about split second micro-measurements like in the stock market, for example, where even a few minutes can make or break fortunes. But rather, when we consider the historical statistical results along with the actual activity we’ve personally experienced day in and day out for almost 2 decades, there are some patterns that seem to be repeated time and time again, that can impact the level of success you achieve in your sale. 

While some consider the summer months a prime time to sell, there are several compelling reasons why listing your home for sale in July and August may not be the wisest choice. Much of this can be summed up in just two words: 

“School’s Out!” 

Many people, which of course includes potential home buyers, turn their attention to enjoying recreation, leisure, and travel with friends and family during this time. In fact, it’s generally accepted that the last week of July and first week of August are among the busiest vacation weeks of the year, with only March Break and the couple of weeks around Christmas coming anywhere close in popularity. 

Consequently, listing your property in July and August may result in reduced buyer interest and less effective exposure in the market. With fewer potential buyers actively searching for homes, the competition between you and other sellers intensifies, making it harder (and likely more costly) to attract qualified buyers and successfully negotiate an offer. 

But there are other practical considerations that come into play and make the sale of your home more challenging. Potential buyers may be away on holiday which limits their availability for property viewings and negotiations. So while they may be genuinely interested in your home it’s hard to postpone, delay, or otherwise change summer vacation plans regardless of how great your home is. 

As a seller, it’s actually a good thing when you’re on vacation and away from the house as it’s much easier for potential buyers to schedule showings. However this benefit is usually offset by the inconvenience of trying to schedule showings just before or after your vacation. In the days leading up to your departure the packing and organizing tends to detract from the “show- readiness” condition of your home. The same goes for the few days after returning as piles of laundry are at various stages of progress and suitcases and other vacation equipment has yet to be put back where it goes. 

There is also the ongoing daily challenge of keeping the kids entertained during these months, especially since not all kids are in some sort of organized camp/program away from the home during the day. 

For potential buyers this presents a couple of challenges: their kids accompany them to a showing on your home, meaning their attention will not likely be completely on your home, or they have to arrange for a babysitter for when they are viewing your home. Either makes booking a showing on your home less than desirable. And as a seller, you’d prefer potential buyers are not distracted and are free to completely absorb how awesome your home is. 

Similarly, with kids around all day during the summer, you might find it extra challenging to keep your home in a state of cleanliness that helps showcase how wonderful your home is. Also, studies suggest that potential buyers are more comfortable, spend more time, and develop more interest, in homes where the seller is not home during their viewing. Accordingly then, while it is beneficial for you to leave your home for showings, you not only have to get yourself out of the home but you also have to herd the kids away too. 

Also somewhat counterintuitively the weather can actually work against you as a seller during the summer. Southern Ontario generally experiences relatively hot, humid summers, which may not be ideal for showcasing your home's best features. These high temperatures and humidity, along with frequent heavy thunderstorms, can deter potential buyers from spending time outdoors, which is less than ideal since you typically want them to get a really warm feeling about how your home’s great outdoor spaces can provide them with years of summer fun. Additionally, the lush foliage and blooming gardens common in East Gwillimbury during other seasons may not be as vibrant during the summer months, potentially diminishing the visual appeal of your home and surrounding neighbourhood. 

Now of course maybe much of the above does not matter to you, or there may be other more dominant factors that may make it necessary for you to choose to list in July or August. 

To be clear: that’s not wrong! 

Despite the headlines regarding the market in general, EG real estate continues to be a relatively healthy, in-demand, and increasingly active market. So if you choose to list your home for sale during the next couple of months, you’ll likely still achieve a successful outcome. 

However if you can delay putting your home on the market until the fall, you’ll no doubt reap the rewards of your patience. Either way, you now hopefully have a little more information on which to base your decision. 

Read More

Spring Time = Selling Time

Lee Lander

One of the most common questions in real estate is “when is the best time to sell?” The correct answer is, or at least should be “it depends.”

The point being that on a case by case basis the correct answer can be quite different; a seller’s individual circumstances, motivation, and objectives all impact what the best outcome looks like for them. Therefore a properly designed selling strategy includes a review of how timing can help accomplish that outcome.                   

That said, at a macro level there are some very interesting and time honoured patterns to the market that can provide a fairly reliable starting point for this timing discussion.           

Conventional wisdom suggests that the best time to sell is when nobody else is selling. This suggests then that November and December are the best months to list your home for sale. Over the past 10 years, these months averaged less than half the number of new listings than what the rest of the year averaged, meaning there is less competition. A good thing, right?                  

Well while this might work if you’re the only coffee shop in a town full of early morning commuters, it doesn’t necessarily translate to real estate.               

There is obviously lots going on during the late part of the year that doesn’t involve shopping for homes. This is why traditionally the number of homes getting listed during these months is significantly lower - why bother if buyers aren’t buying. All that happens is you sit on the market getting stale. Plus with seasonal celebrations and gatherings it’s way harder to keep your home in a state of show-readiness (people and clutter-free) on the off-chance that a buyer wants to take a look. 

However after a couple of months of winter hibernation (and Christmas shopping bill payments) there is a very distinct uptick in the real estate market. People return to being buyers and sellers in greater numbers than any other time of the year. Historically in EG, the period of March, April, and May has a significantly higher average monthly sales than the other 9 months of the year. (The only recent exception being 2020 when “something else” was monopolizing everybody’s attention in the early part of the year.)                            

So why do the Spring months attract so much activity compared to the rest of the year? It’s a combination of factors, some related to real estate and some not.                        

The changing of the seasons (and weather) may have something to do with it. With the snow melting, the flowers blooming, and the days feeling a little longer, people generally feel more excited to get out of the house, enjoy the sunshine, and become more active doing whatever it is they want or need to do. In a lot of cases this includes house shopping.                     

This weather change also makes it easier for both buyers and sellers. While a nice soft blanket of fresh powdery snow may be pretty, it actually just makes it more difficult for sellers and buyers: sellers have to spend more time and effort keeping driveways and pathways cleared and the area inside doors clean from the stuff dragged in on boots.                      

Furthermore, in our climate properties are much more aesthetically pleasing after the snow melts and the trees and plants return to their vibrant lush states. Not only that but it’s much easier for homeowners to repair or replace exterior elements of their homes so everything is at it’s shiny best for prospective buyers. And it’s amazing how much bigger driveways look once the snow piles disappear.                       

For sellers it’s all about curb appeal and first impressions, and they obviously benefit from being able to put their best foot forward.                       

Also, buyers benefit too. Snow covers outdoor areas and features making it difficult for buyers to truly get a feel for the home and property. Is the deck or patio in good repair? Are the roof shingles in good shape? And particularly relevant in rural areas like a lot of EG: getting access to things like wells and septic tank clean outs is hugely important. And obviously it’s preferable for buyers to see a pool actually up and running properly, instead of simply relying on the seller’s assurances.                        

For buyers, it’s all about purchasing with much more confidence because there’s far less chance of hidden surprises.                        

Another common, perhaps even significant, consideration for both buyers and sellers is their kids and the school year. A lot of families do not want to disrupt the school year by relocating part of the way through. Therefore the summer months become the most desirable time to move; kids can finish up the current year as is and then be settled in time to begin the new school year in September.                        

These families will therefore want to buy and/or sell during the March-April-May time frame since typically there is 2-3 months between when the deal is signed and moving day.                        

In short, there are a bunch of reasons for why both buyers and sellers are attracted to the Spring market. The historical EG sales results demonstrate that more competition, ie. more choice for buyers, does not necessarily translate to a disadvantage for sellers. If anything it shows that Spring is a good time for everybody who is active in the market meaning, in general, good outcomes can be achieved for all.

Read More

A Real Estate Year in Review - 2022

Lee Lander

Well here we are again: yet another year has passed and the Real Estate Market continues to give headline writers and news broadcasters plenty to work with. But in contrast to previous years where the theme was largely up and up and how much more up will it go, 2022 provided the opportunity to shift gears to down and down and how far down will it go. 

Unfortunately, it's easy to get caught up in the hysteria and sensationalism of it all; remember after all this commentary is created by people whose primary job is to grab your attention, and they are very, very good at it. But just because you hear something over and over does it make it true?

Rather than drawing conclusions solely from these 10 second sound bites, perhaps it would be a good idea to take a deeper look at the actual 2022 market results now that they're available and see what really happened.

Given the significant market correction that occurred in early April, it's interesting to consider the 2022 market in 2 distinct parts because the results might be surprising. According to the Toronto Regional Real Estate Board's MLS Data for East Gwillimbury, the still very hot January, February, and March produced average monthly sales of 64 units while the rest of the year averaged only 35 per month. In the end there were 511 transactions recorded, down 42.7% from the previous year. 

But volume of activity is only part of the story. Are EG homeowners more concerned with how many houses are selling in the area or what the value of their home is?

Despite the drop in volume, the average price in 2022 rose to $1.422M, up a whopping 11.6% from 2021's $1.274M.

Obviously the frenzy-fuelled values early in the year strongly impacted this result. But removing Q1 from the equation the average sale price for the last 9 months, after the market correction, was $1.32M, still up by 3.6%. 

Keep in mind that for most people, residential real estate is not a short term consideration. Therefore taking a longer term look at the numbers, EG's property values continue to show strong growth averaging about 15% per year since 2018, when the average sale price was just under $806K. Even without 2022 Q1, property value growth in EG averaged well over 12% over the same time period. 

And remember back in the so called overheated market of early 2017 when buyers were chastised for paying outrageous prices and told they were going to lose money? Even compared to the 2022's downturned market (Q2-Q4) those early 2017 buyers were up over 38% based on average sale prices. 

Beyond the math, what does this truly mean for East Gwillimbury homeowners? Why do property values continue to grow at such a steady rate?

It's a growing community with a lot to offer its residents. The Town itself is largely debt free which not only helps keep property taxes relatively low, but also allows the Town to continually improve its cultural, recreational, and lifestyle-enhancing facilities and programs. There are great schools for the kids and continuously developing commercial and employment possibilities. 

Also, EG's close proximity to several large urban markets and major provincial highways provides even more opportunities for residents to easily work, shop, eat, and have fun all within a relatively short commute.

Quality of life means different things to different people depending on their individual circumstances. But what isn't different is that life evolves and major events and milestones happen all the time. And since East Gwillimbury has so much going for it, these changing housing needs lead to a certain amount of strength and demand for EG housing. 

Read More

Take A Breath - It's Not That Bad

Lee Lander

It seems everyone is doing their best Chicken Little routine these days when commenting on the real estate market: “the sky is falling.” It doesn’t matter whether it’s the traditional news outlets, the online bulletin boards or chat rooms, or simply around the office water cooler, the consensus is that the market is crumbling into a disastrous pile of rubble.

Considering only the last 18 months or so then perhaps this analysis is not too far off. According to the Toronto Regional Real Estate Board’s MLS data, in July of this year the $1.160M average sale price in East Gwillimbury was the lowest it's been since January 2021, and a significant drop from the January 2022 record high point of $1.662M. Transaction activity has followed a similar path: 26 sales in July versus an all time EG record high of 130 sales in March of 2021.

The big problem with this relatively short term view is that real estate, for most people, is not a short term game. Data from the Canadian Association of Movers says that Canadians on average move 5-6 times over the course of their lifetime, that 28% of homeowners get the urge to move every 5 years, and that only 14% of homeowners look to move every year.

For the benefit of the above noted 28%, let’s consider how the current EG market might impact them based on when they bought 5 years ago...

In July of 2017 we had coincidently just come out of another period of crazy strong pricing and sales activity. Looking at the last half of 2017 there was an average of 24.5 sales per month between July and December. Pretty close to the same volume as in July this year. So the market activity seems to be pretty close to when they purchased.

Of course more importantly they would be concerned with how much their current home is worth when selling now. The average sale price in EG from July to December 2017 was just over $819K. Based on the recorded historical value of Canadian homes since the 1950’s we typically expect the annual increase to be about 5%. Therefore the homes our would-be sellers bought 5 years ago would be expected to have a value of $1.046M, over $100K under the actual average price for EG sales in July 2022.

So are these sellers going to realize the maximum pricing they could have at any time over the 5 years they owned? No. A few months ago would have netted them much bigger gains. But the math above suggests they can still sell in today’s market for more than we would have reasonably predicted 5 years ago.

Hardly a disastrous pile of rubble.

Of course, the volatility of the past 18 months is likely to have caused bigger problems for the 14% of homeowners who like to buy and sell frequently. But the vast majority of Canadian homeowners, the ones who do not make a habit out of buying and selling often, have not lost any real money from their pockets due to the changing market conditions.

What does this mean if you are in, or considering getting in, the market right now? Well first and foremost, the opportunity for bags of extra cash seems to have gone away for the time being. So if your motivation is nothing more than to take the money and run (some would say greed) then you’ve missed the boat and maybe want to wait a bit longer.

But if you’re considering a move for one of the more likely non-real estate related life events - family size increase or decrease, job relocation, or retirement, chances are you’re going to make out just fine.

For sure it’s easy to get caught up in the rhetoric, especially these days when social media seems to have created so many more experts on every topic imaginable, real estate included. But buying or selling your home is likely not a decision you’re taking lightly, so don’t simply rely on what you see, hear, or read in the headlines or other sources of noise.

Take some time to cut through the clutter and find out how things apply to your circumstances. You may find that the sky isn’t actually falling.

And maybe, just maybe, the Chicken Littles aren’t necessarily right.

Read More