Do Staged Homes Sell Faster?

For most home sellers, the goal is to sell their home for the highest possible price and in the shortest amount of time. Two ways to achieve this is with the right asking price, and by staging the property. So, do staged homes really sell faster, and for a higher price? The short answer is yes, and here’s why.

Do staged homes sell faster?

According to the Real Estate Staging Association, staged homes spend 73 per cent less time on the market than their un-staged counterparts. Truthfully speaking, even an un-staged home can sell under the right market conditions. A seller’s market, characterized by high demand and low inventory, generally means buyers are likely to scoop up what they can get. In a buyer’s market, there are more homes for sale than there are buyers, which means competition is greater among sellers and buyers have the upper hand. Under these circumstances, staging your property could tip the scales in your favour.

Do staged homes fetch a higher price?

The answer to this question isn’t as cut-and-dry, since the final selling price of a home depends on a number of factors. Is there buyer demand? Are there many other listings on the market competing against yours? And what about the home itself – is it well maintained, cared-for and clean? With all other things equal, a staged home is likely to leave buyers with a better impression than one that hasn’t been staged, with the potential to fetch a higher selling price.

What is home staging?

Home staging is the process of preparing a home for sale by increasing its appeal to a wide range of homebuyers. Home staging isn’t as involved as a renovation, and can involve decluttering, depersonalizing and deep-cleaning; painting the walls in a fresh, neutral hue; updating hardware and lighting; rearranging existing furniture or renting some new pieces to help show the home in the best possible light. When a buyer can see your home as their home, they are more likely to make a competitive offer.

Since the majority of homebuyers start their home hunt online, it’s important to make a good impression through your digital listing photos. Buyers will weed out the homes that don’t meet their criteria, and then proceed to an in-person or virtual showing of the homes that they are seriously considering.

Decluttering and depersonalizing the home of family photos and other personal items can help. Also consider that potential buyers need to think beyond what their eyes are showing them. Staging helps them to visualize themselves living in and using the space. Is the home an ideal place for a growing family, as a live-work space, for recreational pursuits or to enjoy retirement?

Virtual Home Staging

A new twist on home staging is “virtual” staging, which leverages technology to digitally enhance photos in order to demonstrate the possibilities. Virtual staging is ideal for vacant properties, which pose added challenges for sellers and the buyers who are trying to imagine it as their new home. Virtual home staging eliminates the need, effort and cost associated with renting or buying furniture and accessories.

Staging a home doesn’t have to be complicated. Evaluate every room and be critical, because prospective buyers will be. Viewing your own home objectively can be difficult, especially for those who have lived in their home for a long time. A professional home stager and your real estate agent can give you an honest opinion as to what works in your home, what doesn’t, and what the seller might consider changing in order to appeal to homebuyers.

 

 

Courtesy of REMAX.ca

How Do You Find a Real Estate Agent Virtually?

Buying or selling a home is one of the most complex transactions most of us will ever make, and Coronavirus hasn’t made the process any easier. While some agents are advising their clients to wait until the pandemic and social distancing orders are lifted before proceeding with non-essential transactions, some people still need to buy or sell a home, and they need help doing it. As a consumer, you have a choice in representation. When choosing to work with real estate agent, you should expect a professional with market experience and an intimate knowledge of your preferred neighbourhood and housing type. Throw a pandemic into the mix to quickly find out which agents are worth their salt. Indeed, current market conditions have many people asking, How do you find a real estate agent virtually?

What is Agency Representation?

Agency Representation (or fiduciary representation), simply means that the agent you hire is legally bound to represent your interests. This involves the highest standard of care and loyalty to you, the “client.” Some agents will work with you as a “customer,” which carries a different level of responsibility. Most real estate professionals require a client relationship because it allows them to provide the full range of services to homebuyers. Your agent will discuss representation with you and will request your commitment in writing in order to receive this level of service.

Virtual Real Estate: The New Normal

It goes without saying right now, but we’ll say it anyway: technology is everything. Tech has long loomed over the real estate industry, and agents who have already embraced it in their day-to-day business are now reaping the rewards – and so are their clients. Social distancing measures have disrupted traditional real estate practices like open houses, showings and face-to-face meetings of any kind, but technologically adept agents have found effective ways to complete real estate transactions virtually and from a safe distance. Your search for a real estate agent should include a virtual consultation and preliminary interview. Make this your first evaluation point. How did the agent handle his or her technology? Did your video meeting run smoothly? This may be a good precursor for what you can expect during the transaction itself.

More Tips for Choosing a Good Real Estate Agent

Do your due diligence. Research real estate agents online, read reviews, and solicit recommendations from family and friends. At RE/MAX, client and agent referrals account for 70 per cent of business.

Choose someone you trust. A home is a very intimate, very expensive purchase. It’s critical that your real estate agent makes you feel comfortable, listens to you and respects your views. Choose someone you trust.

Look for experience. Ask questions to ensure the agent is knowledgeable about current real estate market conditions and other factors affecting market activity, such as mortgage rates. An experienced, full-time real estate professional will likely have already experienced market ups and downs, and will know how to navigate current conditions to negotiate the best deal on your behalf.

Undivided attention. While you want an agent with lots of experience, ask how many other clients he or she is working with currently. Generally speaking, if it’s a high number of homebuyers or sellers, question whether you’ll get the attention required. RE/MAX agents who carry the ABR designation (Accredited Buyer Representative) are skilled in understanding and responding to the specific needs of buyers.

Regardless of the market conditions or the specific details of your purchase, the right real estate agent will ensure that your interests become their interests. Contact us for more information on how we can guide you through each step of the home-buying process.

 

 

Courtesy of REMAX.ca

5 Things To Do To Prep Your Backyard for Spring & Summer

As the days continue to get longer and the weather begins to get warmer, now is the perfect time to dive into working on yards and preparing them for the spring and summer months. With social distancing regulations being in place now as well, working on your yard is a great way to get outside and get some fresh air while still maintaining the appropriate distancing measures. Plus, sprucing your yard up may give you a great new outdoor space to spend time while in isolation.

We’ve put together a list of some things that you can do to begin to prep your yard for the sunny, warmer months ahead.

Clear Dead Growth from Flower Beds & Flower Pots

Some of the first new signs of life that will begin to appear in your backyard after the snow melts are the new growths popping up in your flower beds. Make sure you cut back and clear away any dead growth from last year to allow sunlight to reach the new plants beginning to grow! Clearing away the dead growth in your flower beds will also help to clean up your back yard and get a feel for what new plants and flowers you may want to plant this spring.

Cleaning out last year’s flower pots is also a great way to clean things up. While it may be too cold still in some provinces to be planting flowers just yet, clearing out the dead growth from last year can help you start to plan what flowers you need to pick up at the greenhouse once the weather is appropriate for planting!

Give Your Lawn Some Love

Giving your lawn some TLC is a great way to begin to spruce up your backyard. Tune up your lawnmower to ensure it is in good working order, sharpen the blades and aerate your lawn to help promote new grass growth. Give your lawn a good healthy haircut as soon as the weather permits and spread some fertilizer to help kick start the growing process. Patch any bare spots that may have appeared from underneath the snow, spread some fertilizer and if the weather permits, let your sprinkler run to help kick start the growing process.

Bring Out Outdoor Furniture & Prep your BBQ

If your furniture has been packed away in a storage shed for the colder months, now is the time to bring them out and clean them up. The warm weather is also a great opportunity to break out the barbecue and get it cleaned and ready for the summer months. Check the levels on your propane tanks, scrape down the grill so you have a fresh grilling surface and if your barbecue has been tucked away to stay out of the elements, bring it out into the light!

Clean Your Deck/Patio

After the winter months, your deck or patio is most likely covered in a good layer of dirt and grime. Before you begin enjoying happy hour on your deck, it is probably a good idea to give it a good wash before the spring and summer months. Move off all deck furniture and decorative pieces and hose your deck or patio down. Use an old broom and a pail of water with a cleaning solution to scrub the deck down and rid it of any stubborn grime. Hose down any outdoor furniture cushions and leave them out in the sun to dry.

Once everything is clean and dry, you can put everything back together and if you’re feeling like a change from last year, move things around and rearrange!

Start Planning for Some Colour

While the temperature might not yet be cooperative for beginning to plant flower beds and fill flower pots, now is a perfect time to start planning what plants, shrubs and flowers you are going to want in your outdoor space. Do some research on what flowers are going to be the most tolerant to your outdoor conditions and plan accordingly. Begin to place your flower pots around your space to start planning which flowers will go where. If you are wanting to go with a certain colour scheme with your flowers, figure out what other shrubs and grasses will compliment and add some greenery to your backyard space.

 

 

Courtesy of REMAX.ca

Best Places to Live 2020: Toronto Real Estate

The Toronto housing market was on an upward trajectory at the start of 2020, picking up right where the fall market left off in 2019. Sales were on track to surpass 2018 and 2019 levels. While the impact of COVID-19 put a pause on the busy spring market, industry experts anticipate a return to an active state once social distancing measures are lifted.

Housing affordability and low inventory continue to be an area of concern for Toronto homebuyers, who range widely from households with and without kids, to luxury seekers and Baby Boomers / retirees.

So, what are the best neighbourhoods in Toronto to buy a house? RE/MAX explores more than 300 of Canada’s most liveable hot spots in the new 2020 Liveability Report. Here are our top picks in Toronto.

10 Most Liveable Neighbourhoods in Toronto

  1. Corktown
  2. Kensington Market
  3. West Don Lands
  4. Bay Street Corridor
  5. North Riverdale
  6. Chinatown
  7. Danforth
  8. Grange Park
  9. Summerhill
  10. Alexandra Park

Most Affordable Neighbourhoods in Toronto

The most affordable neighbourhoods in Toronto are Trinity Bellwoods, East York and The Junction. These neighbourhoods are also among of the most up-and-coming in the region. East York has been a sought-after neighbourhood for a number of years, thanks to its very family-friendly atmosphere and proximity to downtown, while Trinity-Bellwoods and The Junction have experienced recent gentrification and an improvement in proximity to bike lanes and walking paths, independently owned retail/gyms/bars and restaurants.

Toronto’s Future Liveability

Toronto liveability is expected to continue improving in the next three to five years, based on ongoing improvements in homes and local businesses. “It’s become increasingly common for homes purchased in Toronto neighbourhoods to undergo immediate renovations, which has a positive impact on its entire respective area. Toronto has so many incredible amenities as is, so these aesthetic improvements make a big difference on the look of its neighbourhoods.”

Toronto at a Glance

Toronto is both the most populous city in Canada and the provincial capital of Ontario. Located on the northwestern shore of Lake Ontario, Toronto features an urban downtown core and is surrounded by the region best known as the “Greater Toronto Area,” which features a breadth of suburban and urban city centres. Known as one of the most multicultural cities in the world, Toronto is a centre for business, finance, culture and arts.

Canada’s Most Liveable Neighbourhoods

REMAX best places to live table

Liveability is about quality of life at a local level. A neighbourhood’s dynamism, or lack thereof, involves a delicate convergence between independent small businesses, public institutions, arts and culture, green spaces and housing, to name a few. The COVID-19 tragedy will impact neighbourhood ecosystems differently across the country, just as the virus itself has. Yet, civic/local pride has been proliferating throughout this crisis in inspiring ways, giving Canadians hope that micro-economies, including real estate, have the resilience to be restored in the near and mid-term.

To learn more about liveability in Canada’s biggest housing markets, read the RE/MAX 2020 Liveability Report.

 

 

Courtesy of REMAX.ca

Four Things to Consider When Viewing Houses Online

As technology evolves and improves over time, online home listings get more sophisticated. With features such as 3D home tours now available, it is now possible to view a home and go through the entire home purchase online. This is especially pertinent now, given the current situation surrounding COVID-19 and the stress on social distancing. While many online listings are packed full of great photos and lots of information, going through the home buying process virtually and being unable to view a property in person may leave some things overlooked, as they are not as obvious through a screen.

Here are four things to take into consideration when viewing a house virtually.

3D & Virtual Tours

If doing a physical walk-through of a property isn’t an option, 3D and 360 tours can be a great alternative to give you a feeling of what it would be like to walk through a home. Many realtors now offer 3D tours or virtual walk-throughs for their listings, so now is a great time to take advantage of those! 3D tours are great for allowing you to view a property from the comfort of your own home, while also giving you the freedom to virtually navigate your way through the property. This will give you a chance to get a feel for the floorplan and layout of a home without having to actually set foot on the property.

With the current situation, many realtors are also offering virtual video walk-throughs of their properties that are currently on the market. Many realtors have asked the seller to film a walk-through of their home that they are then able to share with prospective buyers. Utilizing these virtual tours are a great way to get a feel for the property you are looking at and can be useful for helping potential buyers narrow down the different properties they may be interested in.

Analyze the Photos

Many realtors work with professional real estate photographers to take photos of their listings. This is a great asset to potential buyers as the photographers know the best ways to show off the different rooms in a home. Make sure you take a look at all of the photos and spend some time noting where windows are and what rooms look like they will get the best natural light. Another good thing to consider when looking through the photos is how your own furniture will look in the space. If the photos of the home are furniture free, allow yourself to mentally place furniture where you think it may look best. If the property is staged, take into consideration where different furniture pieces are placed and how you could change the furniture layout to work for you and your style.

Take Note of Potential Fixes/Renos

While buying a new construction or newly renovated home is great, some people look for fixer upper’s that they can make their own. If you’re looking at a property online that may not be quite your style or that needs some upgrades, take note of those. See what elements of the home work for you and which areas you would consider renovating or giving some TLC in the future.

Remember that your realtor is going to be the expert, so don’t be afraid to give your realtor a call to chat about a listing you are interested in and get their thoughts. And remember, paint colour is an easy, relatively inexpensive change that make a huge different in a home!

Consider the Outdoor Space

One thing that many people forget to take into consideration when viewing a home online is the outdoor space. Whether this be a small balcony or a large backyard, outdoor space is definitely something to try to get a feel for when viewing a home virtually. Take account of what furniture you may need to fit into the space or invest in, what sort of maintenance will be involved in the upkeep of the outdoor space. Many realtors ask their sellers to try to have two photos of the exterior of the home, one from the summer and one from the winter. This allows potential buyers to get a feel for what the exterior of the home will look like in every season.

When it comes to house hunting online, there are lots of things a potential buyer can do to get a feel for a property by simply utilizing the tools that are available online. Realtors are also a great resource to lean on, as they often have lots of information on the property that may not be included in the MLS. 

If you are looking for a new place to call home or an investment property, contact us to further discuss.

 

 

Courtesy of REMAX.ca

What is Happening in the Toronto Real Estate Market?

As the coronavirus pandemic unfolds, it continues to change the way people work and live. The outcomes of the situation have affected Toronto real estate and surrounding areas. Due to the market lag effect we likely won’t know how much the market will be affected until further down the line.

The real estate industry is considered an essential service by the Canadian government. Therefore, agents continue to guide buyers and sellers through their real estate journey, limiting and even eliminating in-person meetings. Here’s what we know is happening in the Toronto real estate market currently:

Market activity during coronavirus pandemic

February and early March showed signs that the Toronto housing market would continue to see growth and typical spring home-buying activity.

Population growth and low unemployment rates at the time were contributing to an active market. It seemed buyers were still drawn to single-family homes in the GTA, with year-over-year sales growth and listings on the incline.

However, unprecedented circumstances mid-way through March due to coronavirus are expected to cause a shift in trajectory.

According to the Toronto Regional Real Estate Board (TRREB) sales reached 8,012 home sales through March 2020 which is up 12.3 per cent compared to 7,132 sales in March 2019.

Average home prices are high in this city, sitting at $987,787 for Toronto property in March. Yet, average selling price in March remains above last year’s average, which indicates demand for homeownership is persistent.

This data suggests that there is market activity, but it is also evident that the number of sales in the second half of March was impacted by coronavirus.

With measures such as social distancing and non-essential business closures, home searching may slow down to a degree as more people take precautions and follow social distancing bylaws.

This does not mean that the market will come to a complete halt. Despite these challenges, there will always be a need to purchase or sell a home, such as those experiencing divorce, are in the middle of an estate sale, and other circumstances. There are important reasons why the real estate industry will continue to operate and support the Toronto market.

The Canadian government is taking steps to help businesses reduce layoffs and keep employees on the payroll. For those with job security and a down payment ready, the effects of the virus won’t be an obstacle to entering the market.

A potential slowdown of bidding wars

New immigrants and family formations have contributed to rising housing demand in Toronto. Supply and demand play an important role in the state of real estate markets. Low inventories and a shortage of listings in the city often spur bidding wars between homebuyers. This can make it more difficult for buyers to enter the market, as competing offers are a common occurrence due to tight market conditions.

Yet, recent shifts could discourage people from listing their homes in the short-term, with fear of not getting the best price under current conditions. While homebuyers may take a wait-and-see approach for when the market recovers. If sellers hang in there, less competition could make this a prime time to purchase a home.

However, buyers and sellers may be surprised at how easily consumers are embracing technology to continue activity in this market. Having open houses may not be necessary, since agents can leverage online 360-degree virtual listings, panoramic images and floor plans to give the buyer the experience of an open house without being there in person.

To stay connected to your real estate agent, apps and video calling services help maintain open lines of communication.

Leverage low interest rates

As a result of the coronavirus pandemic, the Bank of Canada has reduced its benchmark interest rate to 0.25 per cent from 1.25 per cent. This is the lowest the rate has ever been.

A recent announcement to ease the mortgage stress test to give buyers more purchasing power was put on hold due to the pandemic. However, assuming the change eventually comes into play, the new stress test would factor in actual mortgage rates rather than the current posted rate system.

The good news is that this could be the perfect time to enter the market and purchase a home. Now that mortgage rates are lower, buyers can borrow more money at a decreased interest rate making their mortgage payments more affordable.

Another benefit is that homebuyers will have more housing options to choose from. Since they can qualify for more financing, it can be used to purchase a home with more of the features they desire.

First-time buyers also have the advantage of not having to sell a property in order to access the equity required to purchase a new home.

With interest rates at an all-time low, this can be considered a good time to purchase a home. Yet, the challenge will be for real estate agents to facilitate home-buying activity during this time. Here are some strategic ways the Canadian real estate market can continue during coronavirus.

Toronto real estate continues to experience housing market activity. While the coronavirus pandemic may affect the market in the short-term, we expect it to rebound when social distancing measures loosen, and we return to some normalcy. For now, it is important to take necessary precautions while participating in the market during your home-buying or selling journey to maintain health and safety.

 

 

Courtesy of REMAX.ca

Why is Real Estate an Essential Service?

With social distancing advisories and non-essential business closures in place, many people – some realtors included – are scrutinizing whether real estate is an essential service as it has been classified in many regions across Canada and the US. Those who argue against the essential classification are coming from a good place, with hopes that more-stringent lockdowns will stop the spread of COVID-19. On the surface, shutting down such real estate services as those provided by agents, lenders, lawyers and land registry offices may seem like the sensible thing to do given the current climate. However, the unintended consequences would be detrimental to many people and for many reasons.

Real Estate as an Essential Service

The fact is, real estate is an essential service. This is something that RE/MAX leadership has lobbied hard for, for the right reasons. Alongside food, water and clothing, shelter is one of life’s basic necessities. While agents are advising their clients to “hold off” on selling their homes right now if they can avoid it, it’s important to recognize that under certain circumstances, waiting is not an option.

When Moving is a Must

Someone has already sold their home, and must now find a new place to live. Many of Canada’s housing markets were in seller’s territory in early 2020, prompted by low housing supply and growing demand. This motivated many homeowners to list.

A homeowner has to sell their existing home to finance the new home they’ve already agreed to purchase. Precluding homeowners from selling would have a detrimental domino effect.

A family is living in a precarious place, with no choice but to move. Factors such as neighbourhood crime or unsafe conditions inside the home itself may have forced a decision to move.

A homeowner has to liquidate their home equity in order to finance their business or their life. Social distancing measures mean many businesses are suffering huge losses. Furthermore, Canada’s unemployment rate in March 2020 rose to 7.8 per cent, up from 5.6 per cent in February 2020. Incomes are down. Meanwhile, the monthly bills continue to roll in.

READ: COVID-19 Relief Measures To Help Canadians

Those who were already in the thick of the re-homing process as the pandemic set in are now finding themselves stuck between a rock and a hard place – and homelessness is not an option. With that said, this spring real estate market is anything but “business as usual.” RE/MAX, along with other real estate brands and association, has strongly advised against open houses and in-person showings. The real estate industry has responded in an incredibly responsible way, limiting face-to-face contact and facilitating real estate transactions virtually.

Agents Are Doing Business Differently

Recognizing the need to proceed with real estate transactions, agents have adapted their business practices to meet social distancing measures. This include digital listing presentations, virtual open houses and showings, video conferences, e-signatures and e-transfers, among other things. RE/MAX agents are increasingly completing 100-per-cent digital transactions, and their clients are open to this new approach.

READ: Ontario Real Estate Pushes Forward with Virtual Deals

It’s understandable that people are on edge, as they come to terms with the shaky ground beneath us and the uncertain road ahead. Together, we will get through this and as always, RE/MAX professionals are here to provide guidance to homebuyers and sellers, to help them meet this most basic of human needs.

 

 

Courtesy of REMAX.ca

How to Be a Good Neighbour While Social Distancing

As Covid-19 sweeps its way through our cities and neighbourhoods, we’ve also seen acts of kindness emerge in its wake. From cities and countries pulling together to weather the economic storms ahead, to online communities offering support for individuals, families, students, homeowners, renters, business owners, employees, those looking for work, and those trying to manage their day to day in this new environment. Staying connected to your community while respecting the rules of social distancing is totally possible. Here are some ideas for being a good neighbour while social distancing.

Check in. This could be especially impactful for your elderly or otherwise vulnerable neighbours. They may not be able to run important errands such as getting groceries and medications, or they may be emotionally fragile and might benefit from a friendly check-in from time to time. Reach out to your soon-to-be “next-ies” by leaving a note that includes your phone number, email address and an offer to drop some groceries off on their porch steps.

Join an online group. Apps like Facebook, Slack, WhatsApp and Zoom are simple to use and can help fill the void left by social distancing. Join an online community of neighbours, a local parents’ group, or like-minded hobbyists. Meet at regularly scheduled days/times, much like you might in person, to connect and “chat” with folks who are facing similar worries and wins.

Don’t hoard. Social distancing dictates that people should only leave home for essential errands. While out on your limited outings, stock up on enough groceries that you won’t have to go shopping again in a couple of days, but be mindful of other people’s needs. Canada is not currently experiencing a shortage of toilet paper, canned good or anti-bacterial hand soap – aside from the scarcities caused by hoarders.

Shop online, shop local. Many small businesses are struggling to stay afloat. When ordering your groceries, food delivery or other items online, consider buying from a local business.

Give what you can. Many local homeless shelters, food banks, animal shelters and other non-profits are still operating, so consider donating extra supplies or money if you can spare it. If you’ve already paid in advance for piano lessons, dance classes or a child’s school excursion, rather than requesting a refund, consider leaving that money with the organization/service provider as a donation instead.

Stay informed. Don’t get swallowed up by all the doom and gloom, and ensure you’re getting your news from credible sources.

Practice good hygiene. Wash your hands with soap and water for 20 seconds. Use hand sanitizer. Cough and sneeze into your sleeve. Tissues are a single-use item. And for the love of Pete, don’t touch your face! This is all fairly basic stuff that we’ve all heard from Mom every time cold and flu season rolls around. Furthermore, clean frequently touches surfaces and of course, maintain a safe distance if you must be in contact with anyone.

And last but certainly not least…

Stay home! In order to flatten the curve, government and public health agencies are strongly urging the public to stay home. Have a hankering to go shoot some hoops at the park? Stay home. Feel like stopping by a friend’s place, just to say “hi”? Stay home. Need to quickly drop off a gift for Grandma’s birthday? Stay home. Not feeling well or have you recently travelled? Stay home. Have you been in close contact with someone who has recently travelled or isn’t feeling well? Stay home. The longer we ignore the rules of social distancing, the longer we’ll have to do it.

It’s possible to be a good neighbour while social distancing. In fact, staying away from your neighbours is the best thing you can do right now. Technology has come a long way, allowing us to stay connected with those near and far without ever leaving the safety of home.

 

 

Courtesy of REMAX.ca

What is a Mortgage Deferral?

The mortgage deferral is among a number of recently announced relief measures geared to assist Canadians who are feeling the financial impact of COVID-19. With many industries and businesses suffering a serious slow-down, if not a complete dead stop, Canada’s big banks released an announcement two weeks ago offering mortgage payment deferrals of up to six months, to help carry homeowners through this difficult time. The program has certainly appealed to many Canadians.

What are the banks saying?

“Bank of Montreal, CIBC, National Bank of Canada, RBC Royal Bank, Scotiabank and TD Bank have made a commitment to work with personal and small business banking customers on a case‑by‑case basis to provide flexible solutions to help them manage through challenges such as pay disruption due to COVID‑19; childcare disruption due to school closures; or those facing illness from COVID‑19,” the Canadian Bankers’ Association said in a release two weeks ago. Since that time, the CBA has reported almost 500,000 mortgage payment deferrals or “skip-a-payment” passes have already been approved or are in the process of approval. Furthermore, the six big banks have seen deferrals on more than 10 per cent of the mortgages in their portfolio.

Despite the popularity of the program, there are still many questions swirling around about what it is, if there are any loop holes, and how it may affect your credit rating. RE/MAX Canada has connected with Canada Mortgage and Housing Corp. to share some insight on.

What is a mortgage deferral?

A mortgage deferral is intended to help people experiencing financial hardship, such as unemployment or the current COVID-19 crisis. Since the mortgage agreement is between you and your lender, so too are the terms of the mortgage deferral. CMHC says that typically, the agreement states that you and your mortgage lender have agreed to pause your payments for a specified amount of time. Once the mortgage deferral period ends, your payments return to normal and the missed payments — including principal and accumulated interest – repaid.

What happens to your missed mortgage payments?

CMHC says points out that a mortgage deferral does not “erase” or reduce your mortgage amount. At the end of the mortgage deferral period, you will have to resume payment according to your regular payment schedule. “The interest that hasn’t been paid during the deferral period continues to be added to the outstanding principal of your mortgage. This can affect the total amount you owe in accordance with the original payment schedule,” CMHC says.

Am I eligible?

Connect with your bank or mortgage professional to discuss the options available to you. CMHC says the COVID-19 Mortgage Payment Deferral program will be ongoing, and homeowners can apply at any time during the crisis.

How are the deferred funds repaid?

The details of your repayment depend on the lender and your specific situation. CMHC says the interest on your mortgage that hasn’t been paid during the deferral period will continue to accrue. When your payments resume, the amount could be based on the total amount owing at that time, in accordance with the original payment schedule.

If you think you won’t be able to make your regular mortgage payment, contact your lender immediately before you miss a payment.

Source: CMHC, COVID-19: Understanding Mortgage Payment Deferral

 

 

Courtesy of REMAX.ca

COVID-19 Relief Measures To Help Canadians

Buying or selling a house is a big undertaking under normal circumstances, let alone in the midst of a pandemic. With economic impacts and the uncertainty that accompanies day-to-day life, Canada’s federal, provincial and municipal governments and companies have implemented a number of COVID-19 relief measures to help soften the financial blow.

We’ve compiled a list of some pre-existing and newly announced programs and incentives intended to assist current homeowners, buyers and sellers, along with some links to further inform anyone seeking some COVID-19 relief.

The situation is changing hourly, so we will continue to update this list as things develop.

COVID-19 Relief Measures

Federal Government Pledges Up To $52 Billion in Direct Support to Canadian Workers and Businesses

On March 18, 2020, the Prime Minister announced $27 billion in direct support to Canadian workers and businesses during this challenging time. On March 25, an emergency federal bill received royal assent to increase that amount to $52 billion, including support for workers unable to do their job due to Coronavirus. For more information, click here.

Mortgage Payment Deferral Programs

Many homeowners who’s employment and income have been interrupted due to COVID-19 are struggling to make their mortgage payments. In response to this, Canada Mortgage and Housing Corporation (CMHC) and other mortgage insurers offer tools that can assist homeowners experiencing financial hardship at this time.

In addition to this, a number of Canadian’s large banks will be allowing mortgage payment deferrals for up to six months as part of their measures to help customers who may be struggling with the financial impacts of the COVID-19 pandemic. According to a Tweet from the president of the Canadian Bankers Association, RBC, TD, BMO, Scotiabank, CIBC and National Bank are the banks that are offering these deferrals. We encourage you to talk to your bank if you are under any sort of financial strain.

Bank of Canada Lowering Rates

The Bank of Canada’s benchmark interest rate has been on a downward trend recently. In its latest scheduled interest rate announcement on March 4, the Bank cut its rate from 1.75 to 1.25 per cent. The Bank followed up with an unscheduled announcement on March 16, announcing a further reduction in its key interest rate by a further 50 basis points to 0.75 per cent. On March 27, the Bank again cut its rate by another 50 basis points, to 0.25 per cent, with a goal of bolstering economic activity and keeping inflation low and stable. For more information on what the Bank of Canada is doing, click here.

First Time Home Buyer Incentives

The First Time Home Buyer Incentive was implemented in September 2019 to help qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens. The incentive is a shared-equity mortgage with the Government of Canada and offers a number of different options for first-time homebuyers. You can read more about the First Time Home Buyer Incentive here.

Insured Mortgage Purchase Program (IMPP)

The Government of Canada implemented measures intended to bolster the financial system through the launch of its Insured Mortgage Purchase Program (IMPP). The government is prepared to purchase up to $150 billion of insured mortgage pools through CMHC, increased from the original $50 billion announced on March 16 as part of the Emergency Response Act. This will allow stable funding to banks and mortgage lenders that will help ensure lending to continue to Canadian consumers and businesses. For more information on the Insured Mortgage Purchase Program, click here.

Property Tax Deferrals

Some Canadian cities are allowing property tax deferrals, such as Toronto, Ottawa, Grand Prairie and more, while other cities are considering similar action. These decisions are being made at the municipal level and things are changing daily. We recommend visiting your municipality online to determine if your upcoming payment can be put on hold without repercussion.

Hydro Pricing Reductions

Ontario is eliminating mid-peak and on-peak electricity rates giving residents who have been forced to stay home due to COVID-19 the lowest rate available (off-peak) all day for 45 days. The lowest electricity rate is also being extended to small businesses and farms. For more information on the Ontario hydro rates, click here.

Internet Usage Rules Relaxed by Major Telecommunication Companies

Some major telecommunication companies, such as Telus and Shaw, are changing their phone and internet plans and adapting amidst the COVID-19 pandemic. The Shaw website notes that they do not have data caps on their internet plans, allowing you to keep kids entertained and work from home without having to worry about data caps on your internet.

CRA Sets New Deadline to File your 2019 Income Taxes

The CRA has announced that there are new tax filing and payment due dates. The new due date for filing individual tax returns has been extended to June 1st, 2020. Taxpayers will have until September 1st, 2020 to pay any 2019 income tax amounts owed. 

 

Courtesy of REMAX.ca

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