Breaking News - More Changes To Mortgage Lending - 10/2016

Earlier today the government announced more changes to mortgage lending to ensure that buyers are not taking on bigger mortgages that they can afford. Let me break down the change and how it will affect buying a house or condo here in Ottawa. Keep in mind there were four major changes, but I am going to focus on the "Stress Test" change.

The "Stress Test" Change

If you (buyer) are using less than 20% downpayment, you will need to be approved using the posted rate (currently 4.64%) not the actual rate of the mortgage. This posted rate is typically going to be higher than what your rate will be, so it will lower the overall amount that you are approved for. This doesn't change the rate or the payment, just lowering the approved amount for borrowing. Before this change, you would have been pre-approved using the rate you were paying - allowing your budget to be much higher.

Who will this affect?

Unlike previous changes (for those borrowing over 1M), this affects anyone who was pushing the top end of their budget and had less than 20% downpayment. This change essentially lowers the amount you will be approved for by on average 20-25%, or less depending on the price point. It is said that this change should impact between 7% and 10% of buyers.

When?

You have until October 17th to get your purchase and sale agreement in writing and mortgage application in to get qualified under the old rules. 

Why is being changed?

Really it lowers the risk that our country is taking on with people that really shouldn't be buying. I can't count the number of times that a buyer here in Ottawa has told me that the amount they were approved for was way more than they could afford. If you were pushing that to the highest amount it is riskier and this looks to help reduce the risk. What if rates rise during your term and when you go to renew the rate is 1% or 3% higher? 

Examples

Before: Income of $100,000 with a downpayment of $40,000, five-year fixed rate of 2.17% would qualify to purchase an Ottawa home worth $665,435 (including tax of $400 and heating of $150 /month).
Now: You would be qualified at 4.64% (todays rate) not 2.17% interest rate, and it would drop your purchase price to $505,762 - a difference of 24% or $159,673. 

If you are thinking of buying or are looking to learn more about how these changes affect you specifically, let's chat!

CLICK TO CONTACT MATT RICHLING

Buying An Ottawa Property As A Non-Resident Buyer or Investor

With the recent shift in taxation for non-resident buyers in Vancouver, more foreign investors are looking to purchase Ottawa properties. While Canada has no restrictions on who can purchase, the type of real estate, or the amount of properties, the largest issue for the non-resident is typically finance related. Some banks have limits on the number of properties, the amount of money to lend, or won't lend to outside residents. This is typically why the conversation begins with getting the financing sorted. If you are looking to purchase a property without any financing, this will make the process much easier and faster. 

Financing and Mortgage Information for Non-Residents 

When working with banks and lenders as a non-resident each bank might have different rules that they set, and some will be more strict than others. Typically to purchase an Ottawa property, Canadian banks require that 35% of the purchase price of the home be paid for in cash (some require over 50%!), which is called the downpayment. This downpayment amount typically can't be from gifted funds and sourced back for minimum 30 days in a Canadian bank account. The majority of the banks will trace the source of the down payment 90 days back. The bank or lender will usually also require other supporting documents like an employment letter to verify your job income, bank statements, Canadian credit check, etc. The financing rates for non-residents are the same rates that Candian residents would have. Keep in mind there are "B" or secondary lenders who would charge a higher rate, but have different eligibility requirements.  

If you are not familiar with a mortgage broker in Ottawa to assist with your purchase, I can refer you to one who has helped numerous non-resident clients purchase an Ottawa property.

Ottawa Property Purchase Process For Non-Residents

The first step in finding a home or investment property in Ottawa is to contact us so we can get the process started. I have helped numerous non-resident clients purchase in Ottawa. Today we can get quite far with tools like Facetime and video calling, to talk and explain or even viewing properties. Once we have a good idea of what exactly you are looking for, we will make sure that you have the financing side ready. Once you have the green light from a bank or lender, then we start getting you familiar with the different areas or neighbourhoods, along with different styles of properties in Ottawa. We then start viewing things first hand If you have family member or friend already living in Canada, or send an assistant ahead to start looking and seeing properties directly. Since it can be quite costly to travel, we try to do as much ground work before you arrive to allow a much smoother and efficient time while you are here. While you do not need to be in Canada to purchase a property, if you are going to require a mortgage then most banks will require you to have a Canadian bank account which will have to be opened in person. 

Once we find a property that you love, we put together an offer to purchase called the "Agreement of Purchase and Sale" which has all of the specific details of the purchase. These details include the price, the closing date (when you get the keys), what is included in the property (chattels and fixtures), the deposit (explained below), and any clauses and conditions. The clauses and conditions are the extra details that would be specific to you and the property - such as a condition of financing which would give you seven days to secure the mortgage from the bank for that specific property. If for some reason you are not able to fulfill the conditions, you are able to be released from the agreement. 

The deposit is an amount that accompanies an offer and must be delivered to the other agent usually within 24 hours of the offer being accepted. This deposit amount will vary depending on the property location and price, but is usually anywhere from one percent of the purchase price to five percent. This amount is held in trust by the listing brokerage and is taken into account for your down payment from the mortgage. Typically the funds can be paid by certified cheque, or by wire transfer.

A typical condition to the purchase is having a home inspector visit the property to find any defects or issues that are with the property or that you could expect in the future. The cost for this is between $350 to $550 depending on the property size and location. I can send you a list of highly qualified home inspectors to choose from to help you get a better idea of the property.

To sign the offer, you can choose to print, sign, scan, and send back the document or you can sign digitally. As of July 1st, 2015, electronic signatures are legal in Ontario and allowed to be used for purchasing property. I use digital signatures daily and the majority of clients prefer the ease, which allows them to quickly sign on their tablet or smartphone. 

To take ownership of the property, you do not need to be in Canada and can use a notary public in your current country. Keep in mind that a Canadian lawyer can provide you with the specific requirements depending on where you are located. 

Closing Costs for Ottawa Home or Condo

You will be subject to the same closing costs as a Canadian resident, which includes land transfer  taxes and legal fees. However as a non-resident you will not qualify for the first-time buyer program or land tax rebates. Legal fees will vary depending on the lawyer and purchase price, but you should budget about $1,800 which can include the disbursements. These disbursements are costs that the lawyer encounters such as Title Insurance ($200-$400), Land Transfer Tax, Property Tax adjustment (for the amount paid by the seller beyond the closing date), any adjustments for Utilities or Condo Fees, etc. The lawyer will give you an exact cost breakdown before closing. Keep in mind that many cities outside of Ottawa have additional Land Transfer Taxes or a "welcome tax", but this is not the case in Ottawa.

Ottawa Investment Property For Non-Residents

When looking at an Investment property in Ottawa the returns can vary widely. Some of our clients are focused on cash flow, while others are focused on building equity in the property from the mortgage being paid by the tenant, and others are focused on the appreciation in the property value. Generally speaking, investors in Ottawa are cash flow positive with a 20% downpayment (depending on the property) and yield 4-6% gross return.

If you are looking to move to Ottawa and have questions about the process, the area, or something that wasn't answered above, fill out the form below. 

Underground Condo Parking In Ottawa

As I write this, the weather channel is predicting almost 24 hours of straight snowfall with 25-35cm of snow. Last week we had the record 52 cm which fell in just over a 24 hour period. Yuck. This is that time of year when those who have underground heated parking are very happy - just jump into a warm car, with no snow to remove, or ice to scrape off.  

The Basics

Most apartment style condo buildings have at least one level of underground parking in Ottawa while typically town house or up/down split style condos, have outdoor surface parking spots. The number of spots each developer must build will mostly depend on the zoning. Most spots are a standard width, and can fit a standard car (but not all buildings are the same - more on this later).

The parking garage typically has access to the main elevators (older buildings might have a separate elevator), along with some of the storage locker rooms and bicycle rooms or area. They typically are heated and ventilated. 

The Cost

When looking at pre-construction the price of a parking spot will first depend on the type of condominium (townhouse or highrise). For example - Valecraft Homes is including one outdoor parking spot for free with the unit purchase at Woodroffe Lofts and a second spot can be purchased for $10,000. Compared to Claridge who is offering an underground parking spot at an additional cost of $35,000 per space at Claridge Icon. 

Next, the cost might rise depending on location within the parking garage. Some builders will offer the premium spaces on level 1 for $5-15,000 more per space - on top of the $35,000. Not every builder does this, some save the premium spots for the large or penthouse units.

Keep in mind, there is also a monthly cost in addition to the purchase price. Since your percentage of ownership goes up in the building, your condo fees will rise as well. Some pre-construction buildings will project an additional $35-45 per month, while parking spots in some re-sale buildings can add $60-90 per month to your condo fee.

While no developer will share the true cost to build a spot, we have always been told it was more than they typically charged, up to almost double to cost - depending on how many levels below ground they need to go. Obviously outdoor surface spots will be a fraction of the cost, since there is less involved in the construction. Zoning requires a certain amount of spots be built per unit. It can range from 0.5 to 0.7 parking spots per unit - or more further outside the downtown core.

Restrictions

Keep in mind that not every unit is able to purchase parking when buying pre-construction.  Since the builder will build as few spots as possible, they will restrict which units can or can not purchase a spot. Typically this restriction falls on the smallest units. Assuming that the smaller unit is less likely to have a vehicle, compared to the large units with multiple residents who might require two etc.  Most builders will have a list for when larger units opt out of the spot, to allow the smaller unit owners the chance to purchase. However, when the building is handed over to the owners, you are then able to purchase a spot from another owner. 

Differences

Obviously not every building is the same, and often these differences can be found underground. Some buildings include visitor parking - The East Market (180 York, 383 Cumberland, 179 George) shares 23 overnight or long term visitor parking spots and 12 short term spots. Builders started including spots for car share services such as VRTUCAR which allows the owner to have 24 hour access to a shared vehicle - without the cost of gas, insurance, and maintenance. Great if you walk to work and never use your car. If you are willing to spend extra, you can even find Valet parking! Windmill's The Eddy features "puzzle parking" system which mechanically parks your car for you. This allows the developer to have more spaces and lower the overall cost. 

No parking space is the same, some have posts or walls on each side, some have plumbing or ventilation equipmenthanging down. This is why it is important to choose your spot carefully, or atleast see it in person if possible. Many owners with larger vehicles (pickup truck or large SUV's) need to make sure they can even enter the garage! Always check it out!

Buying and Selling Parking

While not every building is the same (consult your lawyer), typically each unit (condo, locker, and parking) are all separate. Each one has a separate Property Information Number or PIN which allows you to buy and sell them / they are not fixed to that certain condo. We regularly will list parking spots and even lockers apart from the condo unit on the MLS. Depending on the building, the unit, and the selling strategy. Since it is re-sale, the price is negotiable - however remember that you can't just add the cost on your mortgage, you would need to pay cash. Typically we see spots selling for $24-35,000 depending on the building, location of the spot, and demand for parking. Lockers will typically sell anywhere from $4-7,000 per. 

That small square painted on the ground - Its never just as simple as it might seem. 

Questions about parking? Thinking of buying pre-construction or a condo in Ottawa? I would love to help you out. 

What's in my condo's concrete floor?

Construction Photo from Richcraft of the 16th Floor of The Bowery on January 28th!

Often it is easy to forget how much work is involved in the construction of a building, and how exactly the buildings are built. Here is a quick example of the construction process for the concrete slabs (or floor) of a concrete highrise condominium. These are all from The Bowery and give you a great sense of what could be in your floor and ceiling.

The main "squares" or woven material is the steel rebar or rod's which provide the strength and woven together throughout every area. Once that is complete all of the tubing and conduits are run for each unit. The red is hot water, blue is cold water, and the grey is electrical along with "other" cables such as fire, audio/visual etc. Some builders run extra to different rooms since it is nearly impossible after the concrete is set.

The rebar (steel rod's) sticking up are to connect vertical concrete walls and columns that support the floor above. The photo below, shows a finished slab that is curing (drying). It gives you a better idea of a more finished product - you can see the vertical rebar for support columns/walls, and the plumbing and other conduits.

Fact - Most concrete subfloors are between 7-10 inches thick, which doesn't include any flooring or subflooring - just the concrete! 

Breaking News - Change to Minimum Downpayments In Ottawa

Earlier today the Finance Minister announced a big change to CMHC-backed mortgages over $500,000. Starting February 15th, 2016, purchasing an Ottawa properties over $500,000 will require a minimum downpayment of 10% instead of the current 5%. However, this only applies to the portion above $500,000. 

This change will not affect
- those who are purchasing under $500,000.
- those who are renewing regardless of being over $500,000

This change was put into place to ensure security in riskier transactions, specifically in markets such as Toronto and Vancouver. The government claims that this should only impact about 1% of Canadians.

Looking for more information about buying or selling, or just want to talk about how these changes could affect you? Fill out the form below.

Do I Need A Concierge In My Condo Building?

One of the first impressions that you will have as a buyer is often when you enter the lobby and are greeted by the concierge. Big smile and a friendly "hello" go a long way. However not all condo buildings in Ottawa have someone sitting in the lobby. In fact there are only a couple buildings in Ottawa that have a true concierge. Those buildings that have someone in the lobby, typically employ security guards who also handle resident requests (move-in's, packages, etc.).

Up until recently, having someone at the front lobby was a big bonus for a number of reasons: 
- Ensure security, and are able to see who is coming and going, plus keep an eye on the common area's.
- Handle move-ins and elevator/loading areas.
- Pass keys or assist with entry for cleaners or repair persons. 
- Booking or reserving common area's.
- Receive packages and oversized mail/deliveries. 

The biggest one for me aside from providing the extra bit of security, was helping receive packages and deliveries. Online shopping is on the rise and having to track down a parcel after it has been "attempted" to be delivered is a huge pain. 

Enter Canada Post!

The photo on the right is in the lobby for 205 Bolton (Sussex Square) which is one of the downtown buildings that you will find the Canada Post Parcel Box. This now allows them to securely leave oversized boxes and packages, without making you head to the nearest pickup location! 

The mail person leaves a notice in your mailbox along with the key for the specific box that contains your package. Then once retrieved just drop the key back in the slot, and voila!

Obviously, the parcel box does not say Hi, or it wont hold the door when you have your hands full, but it's a start! You can find the boxes in a number of buildings across Ottawa, typically next to the mail room.

As a buyer, do you feel that you need a concierge? 

Truth about Barbecues on Condo Balconies in Ottawa

The one thing I can count on when showing units, is being asked if the building allows owners/renters to operate a barbecue on the balcony. Usually here in Ottawa, the answer is no. With about 90% of the high rise buildings across the city having a rule, bylaw, or ban, on non electric BBQ's.

Most clients, owners in the building, and believe it or not, even other professionals, believe that it is the city or the builder that has created a by-law against it. People have suggested to me that it is because of the smoke from the barbecue, and how it would draft into another unit, or that the architect didn't follow local building code. I have heard many different "ideas" as to why, but the true reason is actually quite simple. And no, there is not a municipal bylaw that restricts the use of barbeques on balconies here in the city of Ottawa.

Here is an example from 200 Besserer Rules and Regulations (note this would only permit electric barbecues on PH unit terraces and balconies):

5. (d) No barbecues may be operated on any part of the common elements, including any part designated to be for exclusive use of a unit owner, including balconies, terraces and patios except for electric barbecues on the balconies attached to each dwelling unit on the upper penthouse floor in the building.

Here is an example from the 234 Rideau "Welcome Book":

- Barbecues on balconies must be electric.
- Charcoal and Propane BBQ's are prohibited.

Typically they are not allowed, because the TSSA or Technical Standards and Safety Authority has set rules in place that the condo corporation cant properly enforce. This means that for the condo board, its easier to lay a blanket rule than risk having the rule broken and being fined. 

Which rule?

• propane cylinders are to be transported in a service elevator or, when there are no service elevators, the person must use the passenger elevator alone to transport the cylinder

How to get around it?

A few builders have listened, and have made BBQ's available on the balconies. To get around the by-laws, they install natural gas lines to the stoves and to the balconies. Some charge a few thousand extra for the upgrade, but something I would gladly pay. Other options are having an electric BBQ or by having a shared natural BBQ in a common area.

At the end of the day, if having a barbecue on your balcony is important to you, tell your lawyer to look into the status certificate and find out if they are allowed. Looking for a condo and want to make sure it has a BBQ? Lets chat, I would love to help out.

The Deposit - What, When, and How Much?

Question: What is the deposit? How much do I need for a deposit when buying a condo in Ottawa? When do I need to provide it?

Keep in mind, this is for a resale condominium in Ottawa. If you are looking for pre-construction deposit information - CLICK HERE. Also, this is not referring to your downpayment - sometimes first time buyers will get these two terms mixed up.

What is the deposit? The deposit is an amount negotiated in the Agreement of Purchase and Sale that binds the buyer to the contract, and acts as consideration for the deal. (Consideration is the legal term for the deposit, and without consideration the contract is non-binding in common law). The deposit is thought of to be as "a sign of good faith", which keeps the buyer from walking away from the deal at any time, and provide the rest of the funds to close on closing day. It can show a seller who is considering an offer, that the buyer has cash on hand, and is willing to tie it up until close.

How much do I need? The deposit amount varies per property/deal/market. Here in Ottawa, you can expect anywhere from one percent of the sale price and up. Typically there is not much weight behind having a larger deposit for the buyer, however during multiple offer scenarios the higher deposit amount can help. Often for properties in the downtown core, you will see $3,000 to $5,000 for a deposit amount on a $250,000 to $350,000 purchase. Keep in mind, outside of the city it is typical to see deposit amounts of $1,000 or even $500 on the same purchase price. Head over to Toronto, and you can expect FIVE percent of the purchase price! 

When do I need to provide the deposit? When the Agreement of Purchase and Sale is written, typically we use the "upon acceptance" wording in regards to time to provide the deposit cheque to the other agent. This means the buyer has to provide a cheque (can be personal, certified, or bank draft, wire transfer, etc) for the funds within 24 hours of acceptance. This is standard, however it can be written differently depending on the scenario.

What happens to the deposit funds? Once we provide the cheque to the other side, it gets deposited in the seller's real estate brokerages trust account (unless otherwise specified) and is held until closing when the seller's lawyer will direct the brokerage with use of the funds (typically to pay commissions).

What happens to the deposit if the deal does not come together? Many people seem to think that if the seller walks away from a deal, then the seller automatically gets to keep the deposit money. This is far from the truth! Under section 27 of the Real Estate Business Brokers Act, a real estate brokerage is not allowed to release any deposit from their trust account without either a Mutual release signed by both the buyer AND seller, or a court order. So if the buyer walks away, the money remains in trust and litigation will commence until an agreement is made.

Thinking of buying your first property? I would love to chat and answer any questions that you have about real estate here in Ottawa. Fill out the form below!

Electronic Signatures Starting July 1st!

Word starting circulating late last night amongst the realtor crowd across Ontario that the wait for electronic signatures is finally over! After years of being told that electronic signatures were "coming soon" by different levels of government, starting July 1st we will be able to sign The Agreement Of Purchase And Sale (the main document to sell a property) digitally. No more scanning, no more driving around at a late hour or rushing for a last minute signature, no more faxing (well that was a given), no impossible to read documents from sending back and forth. 

I have been using electronic signatures for other documents (listing agreements, price reductions, etc) but now the full transaction could be signed digitally. Almost every client who has used this, prefers it. Saving the client time, and ensures no missed signatures or initials. As the client, you can read, review, and sign the document at your pace.

Real Estate 2.0 is here!

Why should I use an agent to help buy my Ottawa Home or Condo?

Anyone can purchase a home, but buying the wrong home, without proper research, knowledge and information, can be immeasurable.

With a surge of online resources and increasing for-sale-by-owner market, it is not surprising that some buyers consider a DIY attitude when looking at Ottawa condos or homes. 

For most people, a real estate professional is an indispensable partner in the home-buying process. While buyers today are more educated and have more tools, all the research in the worlds can't match an experienced agent's understanding of the market. When the market, buildings, and trends are changing on a day to day basis, you should go to someone that is kept up to date on this information. Simple information that is not going to be found online, like building issues, or past/upcoming special assessments, stigmatized properties, the list goes on.

The real estate agent is completely objective and professional when discussing their opinion of the property being considered for purchase unlike a parent, spouse or best friend. A good agent should be able to walk you through both, pro's and con's of every property.

The buyer's agent fee is typically compensated by the seller, which means that as a buyer you have nothing to loose and everything to gain by tapping the expertise of an agent. 

Are you looking for more information about using the services of Matt Richling as your buyer's agent?

Pets In Ottawa Condos

A renovated condo at 324 Laurier Ave by Kariouk Associates featuring dog bowl (repurposed urinal).

When working with a client, one of the common questions I receive about a building or a property is regarding pets, and are they allowed in the building. While most buildings in Ottawa allow pets, there are a few condo buildings that have pet restrictions. If you are looking to buy and have a four legged friend, there are a few things to note before you sign on the dotted line.

Tell your agent. Before you head out looking, make sure to express to your agent that you have a pet, and that you will be taking the pet with you. While most buildings will be okay with pets, some are not, and it would be best to know before falling in love with a unit. Your agent will know, or be able to find out what the stance of the building is on pets. 

Tell your lawyer. While the lawyer is reviewing the status certificate, they will review the bylaws of the building. This is when they would be able to tell you that there are certain bylaws that restrict pets, certain pets, or not at all. Even if your agent has given the go ahead, a second set of eyes that can ensure the building is okay with pets, never hurts. 

Matt and his partner with their Weim "Ella"

Keep in mind - you might see an owner with a dog in the lobby, but that doesn't mean pets are allowed. Rules are constantly changing, and it is always best to consult the building bylaws for the correct and up to date rules. EXAMPLE: 199 Kent Street or Kent Towers, has recently changed the ruling for dogs in the building. However a number of owners had pets already, so they were "grandfathered" which would allow them to stay even though the building has a pet restriction.

Other restrictions might be size or weight of the pet ( no pets over 50lbs, or some even 25.5lbs!). Some buildings restrict amount of pets (no more than one pet), height restriction (20 inches or less), and even type of pet. 

Are you a pet owner looking to make a move, and not sure if the condo life will work? We lived in our condo when we had Ella as a puppy. I would love to answer any questions!

Click Here to Contact Matt

Need A Parking Spot? What To Expect!

If you purchased a condo in Ottawa with only one parking spot (or without any spot), and now need a second spot, there are a number of different ways to go about it.

Many developers place a limit on which units are able to purchase parking, and many buildings have much fewer parking to condo units. For those who need parking, it can add an additional and difficult check box to tick off when looking to buy. Often it can be easier to focus on which unit you want first, and then acquire parking after you close. For those who need parking, there are a number of different ways to get a parking spot. depending on if you need a shorter solution, or a more permanent one, you are able to rent or even buy a spot.

Renting

For many, renting a parking spot is the easiest way to acquire parking in the building. Renting makes it affordable, and less of a financial commitment. A parking spot can range from $80 to over $200 per month, per spot. There are many factors that can determine the cost of a spot in Ottawa such as the location of the building, which floor the spot is located on, distance to elevator, and if their are any fans or pipes that block part of the space. Supply and demand can also influence the price (more spots = lower price). Usually parking spots for rent can be found on notice boards, by asking security or concierge, or even  found in the building's facebook group. 

TIP: Often if you are able to pay up front for a longer period of time, you can get additional savings.

Buying

While not easy for many to do, the other option to acquire a parking spot is to purchase one. In order to do this, the building must have each unit, parking, and locker, registered under separate PINS. This allows each unit, parking, or locker to be sold separately. Typically cost is between $30,000 to $35,000 but depending on the building and location of the spot, the price does range. Keep in mind that it is open to negotiation, so if the seller really needs to sell, then you might get a good deal.

The main issue with buying the spot, is how you will have to pay for it. Essentially you need to pay cash for the parking spot, and most people do not have an extra $35,000 just laying around. If you are like most and do not have a large hidden supply of cash, or if your dream condo does not have a parking spot, you might still be in luck. PPPI Mortgages, or Purchase Price Plus Improvements is a product that will allow the bank to finance the purchase the parking spot into the mortgage, since it will improve the overall value of the unit. Keep in mind there are a number of regulations and rules, so speak to a mortgage broker if this interests you.

Things To Remember

While for many that work downtown, it might seem like a perfect solution to the parking problem to rent one of the available spots from a near by condo building. However, many (if not all) condo corporations have by-laws in place that restrict someone from owning, renting, or purchasing, if they do not reside in the building. So if you have a spot to rent or sell, remember that you will need to sell it so someone who lives in the building.

If you have any questions about parking, or Ottawa condos in general, I would love to chat. Click Here.

Dear Matt: Looking at buying my first place.... Lawsuits?!

Have a question about real estate that you would like answered? Email Matt directly Matt@MattRichling.com.

Dear Matt,

I'm looking at buying my first condo in Ottawa and my search keeps bringing me to a particular building. I love the central location and the prices aren't as high as the new builds I've seen. I have been told that it has a lawsuit against the builder, any idea on that?

I'm wondering if you have any more information about situations like this and weather it is a bad idea to bad in a building that has a lawsuit or other issues.

Thanks,
Taylor

---

Hi Taylor:

Right off the bat, talk to your lawyer. If/when you decide to move forward, you will include a condition in the Agreement of Purchase and Sale (APS) that allows your lawyer time to review the status certificate and documents. During this period, you will be able to find out much more detailed information about the condo corporation, building by-laws, financial history, and any projected increases in fees, among other things. 

HOWEVER. Lawyers are hired by you, to save you from any trouble. Think guardian angel sorta domain. So when it comes time to choose your lawyer, be very picky on who you have standing in your corner. Ideally you want someone who is local, who is not afraid to tell you the issues, but is able to remove judgement from the issues and not scare you. Great example is also the building inspector, who is also working for you to find issues and give you information. A good building inspector can tell you all the issues without saying personal judgement - "Don't buy this", "I love this builder", These renovations look horrible",  "I would live here" etc. You want facts. Not emotion. A good lawyer will tell you the facts without trying to scare you. 

That being said, purchasing a unit while knowing that there are issues in the building is a risk. Lawsuits are not "cut and dry" and it can go either way. It can be resolved and the building/condo corporation gets what it wants, or the builder can win and certain costs could be picked up by the owners in a special assessment or increase in condo fees.

You need to fully understand the issues, get the facts, listen to the professionals who you hire to look out for you, and know if you are comfortable taking a risk like this or not. 

---

Looking Ahead to 2015 in Ottawa

As the snow starts falling, and the days pass... we realize that 2015 is almost here. Lets take a quick look ahead and what some of the major players are predicting and what it means for someone looking to make a move in the new year.

The Canada Mortgage and Housing Corporation is predicting:
- Increase of 1.4 per cent for sales price of new construction single detached homes.
- Decrease of 2 percent for new home starts
- Increase of 0.8 per cent for sales price of resale properties (both residential and condo)
- Increase of 1.8 per cent for average rent of two bedrooms
- An increase of 0.2 per cent for rental vacancy
- Decrease of 0.7 per cent of MLS sales (both residential and condo)

RE/MAX Ontario Atlantic is predicting:
- Increase of 1.6 per cent for average residential price
- Lots of inventory or "excellent selection" in the condominium market
- In 2014 sellers were optimistic and overpriced properties, which pushed days on market. This will impact 2015 with continued increased DOM and more selection for buyers, but will balance out with fewer housing starts.
- Nationwide residential sale price to increase by two to three per cent in 2015 

Overall, while we will not see any crazy gains in price, we will see a slow and easy gain through 2015. More properties are and will be on the market, so sellers need to be more accurate with pricing (NOT OVERPRICED), and buyers will be able to have more selection. Again... Note that CMHC says there will be more listings, and fewer sales - it is more important than ever to have your property priced right, and marketed to its full potential!

Click here for the full CMHC 2015 Ottawa Prediction report.

Click here for the full RE/MAX 2015 Housing Market Outlook Report.

If you have any questions about buying, selling, or the market in general - I would love to chat!

Which Ottawa Condos have Pools?

Indoor pool for the owners at 200 Rideau St and 234 Rideau St, built by Claridge

While it might seem like the amenities rarely get used in a building, for those that take advantage of them, its like adding extra rooms onto your condo for free! (Well... yeah you pay for them, but still)

Lets look at which condo buildings around Ottawa have pools!

Claridge (especially lately) has been a big believer in amenities and nice big pool areas. Take a look at  Claridge Plaza (phase 1-4), La Tiffany (phase 1 and 2), Lebreton Flats (250 Lett),  Tribeca (pool under construction), and eventually Claridge ICON (est 2018), etc.

Urban Capital has started including resort styled pools with The Mondrian (324 Laurier) and the Hideaway (on Mcleod). 

Mastercraft Starwood, known for high quality amenities includes pools at SOHO Lisgar (300 Lisgar) and soon SOHO Champange. SOHO Parkway only gets a rooftop hottub with some of the best views of the city... (sarcasm...). 

Richcraft has built a few pools including, The Galleria (200 Besserer), The Galleria Phase 2 (238 Besserer), The Laurier (570 Laurier), and soon to be built The Bowery.

Other central buildings with pools include 90 George St, 160 George Street, 199 Kent, 500/530 Laurier Ave, 470 Laurier Ave, 556 Laurier Ave, 151 Bay, 20 The Driveway.... etc. The list goes on.

Currently we have a few units available with pools including, Claridge Plaza (234 Rideau Unit 1005, Mondrian (324 Laurier Ave Unit 2209) and two units at Tribeca (179 Metcalfe)! 

If you enjoy taking a dip and are looking for a condo with a pool in Ottawa, lets chat! I would love to help you out!

Click To Contact Matt Richling

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Banks Unsure of Micro Condos?

With the recent launch of Smart House Ottawa, and as more micro condo units are being built, buyers are excited for moving into these new spaces... However, if they can move in will be another storey. We are hearing rumours that banks and other lenders are not approving financing for these micro-condos. 

Representatives from the Big Five banks have all said they have rules on their financing policies that restrict approving mortgages that are under 500sqft. Up until the last few years, micro condos or bachalor studios were few and rare. With the shift in size, the lenders are being cautious and want to make sure they "understand" them. 

While this policy for minimum size is a requirement, every application is reviewed on a case per case basis. I have sold multiple units over the past few years that are under 500sqft and a few dozen that were under 600sqft, all without size issues by the lender. While we have heard rumours here in Ottawa, we have not seen any first hand accounts where the mortgage was declined due to size.

So What Do I Do?

Before you sign the Agreement of Purchase and Sale, ensure you have a financing clause, and have consulted a mortgage broker. Make sure they have the green light before moving ahead with the purchase and that they have the correct sqftage. Last thing you want is an issue on closing day.

Examples of Small Units in Ottawa?

There are two units per floor inside Mondrian (324 Laurier Ave at Bank, 2009) that are under 500sqft and another three units that are under 600sqft. The East Market (180 York, 383 Cumberland, 179 George, 2001-2007) has six units per floor that are under 500sqft, and another eleven per floor that are or under 600sqft. 

Are you looking to buy or finance a micro condo and want some help? I would love to chat...

Written by Matt Richling

Matt is a licensed salesperson at RE/MAX Metro City Realty in Ottawa, Canada. Matt loves helping sellers and buyers find the perfect home that fits their lifestyle. 

Ottawa Citizen Article - Condo Roundup - Take Aways

The Ottawa Citizen published an article today about the condo market in Ottawa, along with some insider forecasts on the current and future market. You can read the full article here. I have summarized the important take aways, then going to run through exactly what it means for buyers, sellers, and everyone else. 

Coles Notes:
- CMHC reports lowest condo construction starts this year since 2009.
- CMHC says the unsold inventory is to blame
- CMHC forecasts another smaller decline in 2015, then rallying back in 2016
- An industry analyst (from PMA Brethour Realty Group) predicts condos will represent ~18% of sales in 2014, compared to 25% in 2013, 29% in 2012.
- PMA blames poorer job prospects, and more cautious first time buyers, and investors are buying less than previous years, are maxed out, or scared by still-increasing prices.
- PMA sees condo sales increasing over the next year when first time buyers return to market. 

What exactly does this mean for those looking to buy in Ottawa?

Donald Trump is famous for saying you make money in the buy, not the sell. During the meltdown in the USA, Warren Buffett was advising to buy residential real estate before prices went back up. Over the next year or so, CMHC along with other analysts, are expecting the market to continue to soften, and then start to rise again. If you are in the market to buy, there is no better feeling then knowing the prices are going to lower (allowing you to buy low), and then rise. Obviously, you want to take your time and find the perfect place, at the best price, that suits you and your future. *NOTE* Plan on holding your property for at least three years, (preferably five), other wise the costs will outweigh your benefits. So think hard and long about your future or if uncertain, at least look at units that can cover the costs by renting it out. This also means the style of property. Are you dating? Chances are that 500sqft unit wont work for the future couple. Want a dog or kid? same thing. Think ahead and save yourself down the road.

What exactly does this mean for those looking to sell in Ottawa?

Certainly not great if you purchased your condo since 2009 and are looking to sell in the next year or two. You have more competition, and harder pricing. You will need to make your property stand out among the rest, and be willing to work with a buyer for a sale. ***Chances are, you have/will never heard/hear an agent say this but....*** if you can hold out, do it. Wait it out. This is the opposite of what we are "supposed" to say, but this is your largest investment - treat it as such. While you wait, the mortgage is getting paid down, and you will have more room later on. THE FLIP SIDE of this, if you need to sell, take the hit now (hopefully as small as possible), and find a great deal that will have a better return. 

What does this mean for those who are just checking in, with no immediate plans to buy or sell?

Don't panic. Everything goes up and down, and while we have seen a slow but constant increase, corrections are due to happen. Re-evaluate your life plan and see how your living situation will fit in the property over the next four or five years. Then try and plan accordingly. 

Do you want to chat about planing to buy? Or make a plan to reduce the hit you will take when selling? I would love to help you out, click the button below.

Click Here to Contact Matt Richling

Written by Matt Richling

Matt is a licensed salesperson at RE/MAX Metro City Realty in Ottawa, Canada. Matt loves helping sellers and buyers find the perfect home that fits their lifestyle. 

Bought our Ottawa home, When do we get the keys?

Papers are signed, deal is done, inspector has gone through.... Congrats!

As the days get closer, you will start to plan the move, and life at your new home. Things like moving company, internet, and any renovations, will all need to be co-ordinated in advance. Most of this planing will revolve around the house and having access to the house - aka needing the keys. When exactly will you get the keys in Ottawa?

The biggest mistake that first time buyers make, is booking things for closing day. 90 percent of the time, you wont receive the keys till the afternoon, or most likely 3pm till 5pm. That is if the deal closes when it is supposed to (keep in mind that there are many reasons why it might not close on time). This means do not book Rogers to hook up the internet on the afternoon of closing, because if you don't have the keys, chances are the next open appointment wont be for a week (at least that would be my luck).

Moving companies are a little different, and are used to the process. Make sure to be clear and let them know when you should expect the keys and best to book them for after 5pm, depending on traffic etc. I would always prefer to have a little time before the movers get there to look over the house and enjoy it.

If you can, try and take the day off work. There will be enough stress, that the last thing you need is a work deadline, or annoying co-worker.

Good luck!

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Written by Matt Richling

Matt is a licensed salesperson at RE/MAX Metro City Realty in Ottawa, Canada. Matt loves helping sellers and buyers find the perfect home that fits their lifestyle. 

What to expect on closing day in Ottawa for a first time buyer!?

First of all, congratulations on getting this far.

If you are like me, you are probably reading this the night or so before closing day, and are trying to figure what your upcoming day will be like. Well the good news is that most of the possible issues or problems have most likely already happened, or out of your control.  What that means is, you shouldn't find out on closing day, that you didn't get financing (that was the week leading up to closing!). So... GO TO SLEEP. No point in being tired and cranky!

Most likely you have either signed the paperwork already (a day or two earlier) with the lawyer, or will be doing it all on closing day. They would have set up a time for you to come in, and would have told you the amount that you will need in a certified cheque or bank draft. This amount is always more than you think it is going to be (closing costs, lawyer fee's, etc), so do NOT guess it. They will tell you exactly what it will be. If there is a difference in the amount, the lawyer will send you a cheque after closing with all the closing documents. Make sure to bring ID, and anything else that they have requested from you. While going through all the paperwork with the lawyer, don't feel rushed. Make sure to ask for clarification, or to have the lawyer run through it with you. Everyone makes mistakes and better to catch them now, then find out later. Also helps you better when you understand what you are signing and why.

Once the paperwork is signed, the lawyers need to send the funds, register the sale, etc. Legally the lawyer is not able to release the keys until everything is completed. Usually this is sometime in the late afternoon, 3pm-5pm. Since the registry office (yes... it is all online now) closes at 5pm, they will rush to do it last minute or have to wait till next day. What this also means, is don't plan on moving in, mid-day. Many people will book the internet to be installed, and then find out they don't have the keys yet. Best to schedule everything the next day, when you are more likely to have the keys.

If you are closing on a work day and won't be able to sign or grab the keys, let everyone know this. Let your agent and your lawyer know, so they can make alternate arrangements. Most law offices close at 5pm, so would suck not to be able to get the keys!

While it can be stressful, try and enjoy the experience. It is all part of the process of home ownership!

Questions about what to expect? Click on the button below to contact me, I would love to help!

Click To Contact Matt Richling

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Written by Matt Richling

Matt is a licensed salesperson at RE/MAX Metro City Realty in Ottawa, Canada. Matt loves helping sellers and buyers find the perfect home that fits their lifestyle.