Tanya DiNicolantonio, Author at Brandow Group

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You know how your math teacher always told you that you wouldn’t have a calculator when you need to do math in real life? That’s not at all true. We have SIX free calculators available to make your life a little easier. Sorry, Mrs. Jones.

LAND TRANSFER TAX CALCULATOR

Have you ever heard of welcome tax? It’s a one-time tax bill charged to home-buyers when they take possession of their house. I’ve always thought what a backhanded “welcome” it is to call it that. Seriously?

“Welcome to the neighbourhood. Pay up.” Sheesh.

As it turns out, the name of the tax is just a play on words: Jean Bienvenue was a Quebec politician who created a tax on the transfer of property in that province in 1976. “Bienvenue” means “welcome.” Ironic, right?

In April 1974, Ontario instituted a Land Transfer Tax that is paid by buyers (never sellers). In 2008, Toronto added its own municipal tax that effectively doubles the amount of tax a buyer can expect to pay.

The only situations that *may* offer exemptions from paying land transfer taxes are:

A purchase by a first time buyer (up to a capped maximum)
A transfer between spouses
A transfer between other family members
A sale or transfer involving related corporation, or employer/employee relationships

A first time buyer who qualifies for a refund can buy up to $368,000 without paying any of the LTT. This equates to $4000 refund.

You can figure out how much Land Transfer Tax you will pay, if you want to. Here are the rules:

On amounts up to $55,000 you pay 0.5%
On amounts over $55,000.01 up to $250,000 you pay 1.0%
On amounts between $250,000.01-400,000 you pay 1.5%
On amounts between $400,000.01-2,000,000 for a single-family residence you pay 2.0%
On amounts over $2,000,000.01 you pay 2.5%

*Only use the information above if Mrs. Jones is standing over you and not allowing you to use this Land Transfer Tax calculator!

MORTGAGE PAYMENT CALCULATOR

When you work with us at the Brandow Group, you will often hear us recommend that you talk to a skilled mortgage broker to explore your options for financing. Mortgages are not all created equal, and it’s important that you get as much information about what type of loans are available to you as possible before you agree to anything.

Interest rates, amortization schedules, mortgage type and terms, prepayment privileges, default insurance, and early payment penalties all factor into your total cost. Examining these details ahead of time will help you choose wisely and plan for your own financial success.

If you aren’t sure how much of your savings you want to use toward your downpayment, or how much difference the interest rates being offered will make – this calculator is for you. Try different combinations of numbers and you may be surprised where the biggest savings are to be had!

*This calculator is not a substitute for a consultation with a great mortgage broker – just a tool you can use to impress the broker with your knowledge when you meet him or her!

MORTGAGE AFFORDABILITY CALCULATOR

Banks love acronyms. Look around at the posters on the walls, and you’ll see a bunch of them: RSP, RRIF, GIC, CD, ATM, APR…and if someone is having a bad day, they may throw in a NSF.

Two acronyms you may not hear as often are GDS and TDS, which stand for Gross Debt Service and Total Debt Service. Even though we may not see them as often, these ones are a huge part of your home-buying qualification, since lenders use these two ratios to decide exactly how much money they will allow you to borrow.

Gross Debt Service calculates your housing costs in relation to your income this way:

Mortgage Payment + Property Taxes + Heating Costs + 50% of your Condo Fees

Annual Income

Total Debt Service adds in any other debt, like credit cards, car payments, and other loans to the calculation. (Ironic that the word “gross” is in the other ratio, isn’t it?)

So…

Housing Expenses (per GDS) + Credit Card Interest + Car Payments + Other Loan Expenses

Annual Income

When analyzing a file, the lender analyzes the “GDS/TDS ratios” and there are some benchmarks that they use to create an offer for you.

The standard, average numbers they look for are 32% for GDS, and 40% for TDS. (Meaning that your household expenses represent 32% or less of your total annual income, and your total debt load is no more than 40% of your income.) Lenders express this as 32/40.

Some applicants with excellent credit scores, good, stable income, and a higher down payment may be able to borrow based on calculations that show up to 39/44.

When CMHC is involved, though, the rules tighten up, and the maximum they will consider is 35/42. This was adjusted in July 2020 to prevent buyers from struggling if the interest rates go up on mortgages.

See what lenders will see when they work on your file by running your own numbers here.

*Check out some tips that could help improve your ratios before you’re ready to apply for a mortgage!

CMHC INSURANCE CALCULATOR

CMHC is one of three mortgage insurance providers in Canada that help buyers with lower down payments to get into their first home. They bridge the gap between the traditional 20% down payment that lenders require by insuring the difference for folks with 5-19% down.

By charging a premium to the buyer for their insurance policy, they create the opportunity for more Canadians to own real estate. There are limits and parameters, of course.

For example:

The value of the property cannot exceed $1,000,000.
A buyer may purchase up to $500,000 with only 5% down, but must have 10% of the remaining portion for amounts over that.
Funds must come from the buyer’s own resources or a gift from a family member.
Property being purchased can contain between 1-4 separate dwelling units.
GDS/TDS ratios must be within allowable limits.

To calculate the cost of mortgage default insurance, enter your purchase price and your downpayment amount here. It will give you an idea of whether investing now is worth the additional premium in order to take advantage of current market growth.

*Pro tip: If you must discuss your decision to go with a high-ratio mortgage with someone who is convinced you should have waited and saved more, here are some points of analysis to show that you’ve done your homework. This could be a real generation gap issue between Boomers/Millenials/Gen Z!

DOWN PAYMENT SAVINGS CALCULATOR

Have you ever seen the story of what happens if you start saving with a penny, doubled every day for a month? The point of the story is to demonstrate the power of compounding – and it is a very impressive chart.

Chances are pretty good that none of us will be able to put funds away that aggressively … but every one of us can benefit from momentum once we begin saving. The snowball effect is real, and watching your nest egg grow is immensely satisfying.

You will find many websites dedicated to helping you start a side hustle for extra cash, cut costs or even slash taxes to keep more of your own earnings.

However you choose to save for your down payment, you will doubtless benefit from an organized plan, including a written budget.

Create an official cash flow summary for yourself to help with motivation!

*The time-tested method of saving that advocates Paying Yourself First is a very effective strategy for reaching your financial goals.

DEBT REPAYMENT CALCULATOR

There is no doubt that debt, especially credit card debt, can be extremely stressful. High interest rates on outstanding balances can inflate the true cost of purchases to unreasonable heights, and make repayment difficult and exasperating.

For anyone who is considering buying a house, especially for the first time, it is wise to consider paying off all debt first, if at all possible. This will help you qualify for better mortgage rates and terms, and give you the wiggle room you may need, as you make your mortgage payments, to do repairs and improvements to your home.

As with saving toward a down payment, rapid debt repayment requires commitment to a plan, preferably one that is down in writing. The good thing is that, once you’ve paid off all debt, if you just continue putting the same amount into savings for a while, you will soon have a positive balance that is even larger than the outstanding amount owing was!

Here is a repayment calculator to help you plan for the day you get your ZERO statement from the credit card company!

*In conclusion, here are some wise words from Manoj Arora:

‘When you know the impact of little expenses, you will realize that there is nothing little in this world.’

It is our hope that these tools will help you make sound financial decisions along the way in your journey to home ownership. If you have questions or would like to discuss your circumstances with a view to buying your first home, we are here to help!

We wanted to share a couple of news items with you this week. Links to the full articles are below

Hamilton – Lead Pipe Upgrade Program is Being Accelerated

Hamilton’s Planning Committee (I know I said City Council in the video…forgive me that error!) met this week and reviewed the current Property Standards by-law about lead in Hamilton’s water supply pipes. If approved next week, an adjustment to the law could compel Hamilton homeowners to match any city upgrades to the private portion of their pipes. Although no one would argue against the benefits of this program, it could result in a cost that could be a hardship for some. It seems as though some exceptions may apply. If you live in an older home, most typically ones built before 1950, read the article in the Spectator to find out more about how this might affect you.

Caledonia – Land Claims Unrest Affects McKenzie Meadows Project

Caledonia holds appeal for many buyers who are looking to leave Hamilton or even Toronto. It’s got a small town “feel” and beautiful, tranquil surroundings, but is still accessible for commuters. As we have mentioned to our clients many times, though, anyone new to the area must be aware of ongoing disputes over Native Land claims.

This week, we have reports that there is an active occupation of a building site that is in its fifth week. Buyers who expected to move in this fall are growing more and more concerned.

Define Your Needs – and Your Worries

Your situation is unique to you, so it’s important to define where any personal financial danger might lie:

Do you anticipate being laid off or losing your job permanently?
Have you been planning to sell a property in the near future to free up cash for other projects or pursuits?
Are you worried about losing your accumulated equity?
Do you fear that an increase in interest rates will make your monthly payments unaffordable?

Setting up Finances

As with other financial investments outside of real estate, your own risk tolerance is a factor in your decision making process. Over the long term, real estate has proven itself to be a solid and profitable investment. For the staunch buy-and-hold investor, a dip in the market is nothing to be overly concerned with. The House Price Index shows a steady upward trend for at least the past 20 years. However, if you have plans to cash out of an investment property or a need to move from your own home, this may affect the way you handle the threat of a softer market.

Since property values are climbing at the moment, there are some things you can do to take advantage of your own built-in equity. If you have savings and a good amount of disposable income, you could choose to pay down your mortgage at an accelerated rate while interest rates are low. This will help smooth the transition to a market with potentially higher interest rates, since it will reduce your mortgage balance. Check with your lender to see about pre-payment privileges. Most banks and other lenders allow up to a 20% pre-payment per year toward the principal amount of the mortgage (without penalty).

If you find yourself with little to no savings and you find it difficult to put money away on your current earnings, you might try a different strategy. To prepare for a possible job loss – whether temporary or permanent – financial experts are almost unanimous on the need for an emergency fund. Your home equity could be a source of cash to create an emergency fund. By refinancing at a time when you qualify for a new mortgage, you can pull out some cash to pay down high-interest debt and put some money into an accessible account for necessary things. Consider taking advantage of record-low interest rates while you are working.

One more word about mortgages: If you are getting to the end of your mortgage term, especially if you have a variable rate mortgage, consider locking in at a very attractive rate. Predictable and stable expenses can be a godsend when you’re feeling a little nervous about things.

Need to Downsize – or Move Up?

Life carries on regardless of whether the economy is booming or not, and you may find yourself needing to make changes to your living arrangements. Most home owners don’t move unless there is a need – a new baby, a new work-from-home arrangement that requires more space, or a newly empty nest. Even new physical or health challenges in the family can dictate a move.

In uncertain times, downsizing is the easier decision. Since the market is very active right now, you can expect to sell your larger home for a good price. You might find it challenging to find a smaller one, though – since demand is very high for all types of houses, including the one you will want. You’ll have to strategize to ensure that you plan your purchase and sale just right. Your realtor and your mortgage broker can help with that part.

What if the family is growing, though? Or you need more space and were considering moving up to a larger home … what then? You may feel afraid to take on a bigger mortgage, only to have prices drop shortly after you buy.

Depending on your current living arrangements, you might consider trying to re-work your space. Could you add a bedroom or office in an unfinished space? A basement or attic, if you have one, may offer a solution. Or is there a way to reconfigure furniture to carve out a nook for a work space?

If you are worried about the cost of renovating, take time to do the math. Figure out what your actual cost would be for the reno, whether DIY or hired out, and new furniture that you’ll likely need. Then compare that to the costs involved in moving, some of which you can find here. Once you have solid numbers to work with, you will be in a better position to decide whether you can afford to hold off on buying a bigger home. When the market feels more stable to you later on, you can revisit your decision.

What About Investment Properties

Investors and landlords have decisions to make when faced with a shifting economy, too.

There is often stability in rental properties since, even during a downturn, everyone needs a place to live. Rentals will always be needed.

Having said that, a change in mortgage rates will affect owners of rental properties who are heavily leveraged. It is wise to examine your portfolio and see where you can reduce some expenses, and perhaps increase the appeal of your investment home.

Are you the type of landlord who forgoes rent increases for good tenants? While we applaud the kindness and we understand the reasoning behind wanting to keep excellent people, we must point out the danger in this: You could be devaluing your property in the long run.

To sell a rental with tenants in place, you must be able to show an appealing rate of return on investment in the form of rental income. Increases are only allowed once a year and are capped to a small percentage. A landlord who skips increases for a few years could end up with rents that are way under market value. Buyers for properties collecting low rents often ask for vacant possession- leaving you to find a way to evict your cherished tenants.

During good economic periods, consider rewarding good tenants with improvements to the building or property that improve their living space instead: gardens, patios, fresh paint, new doors and windows, etc. This benefits tenants while it improves your property value. Then, if we do have a rough year and tenants are struggling, you can offer to skip the rent increase that one time as the anniversary rolls around. Imagine how much they will appreciate you!

If You Know You Will Need to Sell

There are always buyers and there are always sellers, despite the fact that the balance of power can shift between the two groups.

Not everyone can repurpose a small house to fit growing needs. Adult children of senior parents may have to sell the family home to help them find more appropriate living arrangements as their health deteriorates. Families sometimes have to uproot because of a job transfer.

If your circumstances are such that you inevitably have to sell in the near future, plan early. Get the information you need now so that you will be armed with that knowledge if you have to move quickly.

We are always happy to provide you with whatever guidance, information, or options that could be helpful if you are considering selling a property. There is never any pressure, and we can connect you with other professionals who may also be useful to you.

Give us a call and tell us what you’re planning! We would love to hear from you.

Sellers, this is your moment. You have almost all the leverage in the market these days.

Sellers have actually been in control of the market for years now, and there is no sign of it letting up.

Short periods of uncertainty have given buyers tiny windows of opportunity here and there. For example, Ontario introduced the “Non-Resident Speculation Tax” for the Golden Horseshoe in spring of 2017, and everyone wondered if balance would return. By the time the stats came out in 2018, though, it was obvious that values were still climbing and demand for real estate was still very strong.

Then, of course, 2020 roared in with its own version of insanity. Surely, the March 24th order to close down all non-essential work places in Ontario would cool off the crazy, overheated market? Maybe for a minute. This snapshot from the Realtors’ Association of Hamilton-Burlington shows how quickly buyer demand became pent-up and, by June 2020, Sellers were again in full control.

Bidding Wars Are Good for Sellers, Right?

Some frustrated buyers are convinced that they are being priced out of the market by greedy sellers and greedier realtors. We empathize with them, especially when they are first-time buyers just trying to break into the market. Prices have risen so sharply, and so quickly, that it has left most of us breathless, to be honest! When we represent buyers who need to include conditions in their offers, and who lose out in competition time after time, we often share their irritation and resentment of the process.

It may be hard to believe, but it can also be stressful to be on the seller side of the table when there are multiple offers. Since a seller is most often also a buyer, it is very important that they choose the best offer for them. They will shortly have to put their best foot forward to compete on a purchase of their own, if they have not already done that.

Deciding How to Handle Multiples – You Have Options

As the seller, you will be asked to provide direction on how to handle multiple offers during a bidding war, if one is expected. You may choose to allow buyers to make offers anytime, ask for a day or two to consider offers that come in (24-or-48-hour irrevocable), or set a date and time to look at offers.

Regardless of what you decide, you may find yourself faced with a pre-emptive, or “Bully” offer. This is an offer that is set to expire before your requested or set offer date. The goal of the bully is to prevent other buyers from having time to make competing offers, or to force you to make a decision quickly. Bully offers can be very attractive – over asking and without conditions.

The Real Estate Council of Ontario (RECO) provides direction to agents and brokers for helping seller clients to navigate the process. Assuming you would like to set an offer date, the following questions can be helpful in deciding which strategy you want to use:

If a pre-emptive offer came in and you were not told about it, how would you feel?

How much information do you want about any pre-emptive offers that come in? Do you want to:

- be notified of a pre-emptive offer, without seeing the details?
- see the details, but not formally consider the offer until your offer presentation date?
- consider all offers received before the offer presentation date?
- only consider offers that are above a certain price or contain a certain condition (for example, no inspection)?
- not be informed about any pre-emptive offers at all?

Remax Hamilton agents will ask you to put your instructions in writing. You have every right to change your mind partway through the process, but the adjustment to your direction also needs to be in writing, and all agents who have expressed interest in the property must be notified of the new instructions. (You can’t just suddenly accept a high [or high pressure] offer and call it a day. We are ethically bound to treat each potential buyer fairly, and that includes providing notice if the opportunity to bid on your property is changing.)

Here are a few things for a seller to keep in mind during the selection process:

The best offer is not always the highest offer. When considering the offers that come in, each seller will have a set of priorities, and the most common primary factor to be considered is price. Sellers often, and understandably, give most of the weight to the dollar value of the offer. However, there are other factors that can weaken a high offer and these should factor into the final decision. For example, can you be sure that the buyer can come up with all the money he or she is offering? Have they been pre-approved for financing? If the lender does an appraisal and it comes up short of the agreed-upon final price, will the buyer have enough to make up the difference? A lower offer from a qualified buyer may be better than a high-risk offer from someone with questionable finances.
Conditions create deal breakers. Common conditions in offers may include a week for the buyer to secure a mortgage and obtain a home inspection. Once in a while, they will ask for time to get an acceptable insurance policy or seek their lawyer’s approval on the paperwork. Less often, in a seller’s market, there may be a condition on selling a property that the buyer already owns. Faced with two offers for the same amount, how can a seller decide which one is the “better” offer? The fewer conditions there are, the fewer loopholes the buyer has to walk away from the deal. It gets more complicated when you have to compare a higher, conditional offer to a lower, firm one. Most realtors would advise accepting a firm offer over a conditional one, even if it is slightly lower. (Within reason, of course.) This is especially true if the seller has already made a firm offer on their next property.
Deposits contain clues. A strong deposit is a sign that a buyer is not only serious, but also able to afford the property. Since this is money that is held in trust until closing, it represents what they have to lose if they fail to hold up their end of the contract.
Closing date could be a big deal. Depending on your circumstances, the closing date could be a deal breaker – regardless of the offer price. A buyer may offer top dollar, but insist on a quick closing. For a seller with young children and nowhere to live until their new home is ready, this may not be the best offer, even it if is the highest dollar amount.
Inclusions or exclusions. Read these over carefully. Is the buyer asking for things you didn’t mean to include? Typical inclusions are things like curtains, appliances, and maybe patio furniture. If a buyer wants you to throw in the leather couch, your new OLED TV, the vintage T-Bird in the garage, or the family dog…it may be time to do some math and see whether they are truly the highest offer compared to others who only want to buy the house with the things you were offering. If you have a rental contract on a furnace and air conditioning, pay attention to whether the buyers are asking you to pay that out or offering to take it over. This contract alone can be worth over $10,000 in some cases.

We Are Here to Help

We have seen bidding wars with two competing offers, and we have seen cases where it took more than all our fingers and toes to keep track of all the offers on the table. After a sale, we often hear from our seller clients that they are pleasantly surprised at how smoothly the process went.

We work hard to maintain a good reputation for treating everyone ethically so as to encourage our colleagues to continue to bring offers to our listings. With the help of the amazing administrative team at our Remax Hamilton (Escarpment) office, we have developed a system for tracking interest, notifying interested parties, and keeping careful records to ensure that your experience with a bidding war is a positive one.

If you have any questions about this process – we are just a phone call away!

Way back in the mid-eighties, when there were still dinosaurs roaming the earth, Tom Hanks and Shelley Long starred in a movie called The Money Pit. They played a young couple who couldn’t resist the “opportunity” to buy a run-down house for a song, in hopes of restoring it and making both a home and a profit.

Needless to say, the house needed more than a little work, the budget went WAY over (as budgets do), and the couple nearly broke up over the stress. Fortunately for movie-goers, everything worked out. The couple got their fairy tale and their dream home.

In real life, this sometimes happens when people buy a house that’s falling down, too. The same way that in real life, some people win the lottery.

A Money Pit is a Real Thing

A comedy about the allure of making money (gone wrong) by renovating a distressed property could have been made in any decade. More recent years have seen an explosion in the popularity of shows about flippers – not comedies – that has made this concept go completely mainstream. It seems as though everyone has thought about, even if they haven’t tried, buying a fixer-upper to restore.

As exciting as a project house can be, it’s very important to stop and think things through. Profit is not guaranteed, and older homes can be full of surprises.

It’s not all doom and gloom and caution tape, though. With the right amount of due diligence and self-education, you can enjoy a successful flip project.

What Kind of Due Diligence to Do

When buying a house to flip, the first thing you’ll need to do is to clarify your goals. Do you want to get in and out quickly? Restore and resell? Or do you intend to hold the property for a while after you fix it up?

In either scenario, you will need to research the market and find out what comparable properties are selling for, both renovated and unrenovated. This will help you to estimate not only the current value, but also the after repair value (ARV).

Many advisors consider a short term flip to be riskier than a buy-and-hold strategy, since you are relying on the market to hold steady. Especially in a super-heated market like Hamilton’s, where even distressed properties sell in competition, there is a danger of overpaying for a property. Be sure to do your math carefully, and to account for closing costs, taxes, and carrying costs for the duration of your renovation.

If you intend to hold on to the property for a few years and rent it out, there may be more room to allow for appreciation. Take some time to learn what the market trends have been, and research some forecasts for the near future from experts who can offer a reason for their predictions.

Deal Breakers?

In the movie, everything that could go wrong with the house went wrong. Plumbing exploded, electrical wires caught fire, doors fell of their hinges. An inspection might have been a wise idea!

When you buy a fixer-upper, the entire point is to find something that needs work. However, it’s important that you know which items are budget-breakers before go in headlong, especially if you are in a high-pressure or multiple offer situation where you are tempted to forgo an inspection condition.

We have compiled a list of some common updates that houses often need, depending on their age. You can read that here.

Besides cosmetic and maintenance-type updates, though, there could be problems with a property that you should consider as potential deal-breakers. If your goal is to make a profit, the numbers have to work. Some repairs have the potential to cost more than you can recuperate in the short term. These include:

Foundation or structural problems. If the house leans to one side, or if you notice bulging floors, buckled foundation blocks or step-cracks, doors that don’t close, etc. – know that this is not normal, no matter the age of the building. And be aware that this is not easy or cheap to fix, if it can be fixed at all. There could be drainage issues or poor soil conditions that make it a major challenge to stabilize a house with these issues.
Mould. Follow your nose on this one. If a leaky house is neglected long enough, it can develop a mould problem that is very costly to remediate. Cleaning is not enough. Often, walls must be torn out and wood replaced to get rid of the problem. It’s next to impossible to know the full extent of the problem until you start tearing things up, and you may have to be prepared to completely gut the place and start over.
Poor electrical wiring. Not only is this a fire hazard, it can be a very expensive project. Especially if the attic and basement are all finished will you want to have a thorough inspection of the electrical wiring. Some wiring problems will prevent you from getting insurance, which means you may not get a mortgage. And even if you can obtain insurance and financing, any re-wiring you have to do will result in damage to walls, ceilings, and floors that will add to your expenses.
Septic Systems. If you are looking at a country property, be aware that replacing the septic system can be a hefty expense. It is not unusual for this to cost $20-30,000. Always insist on an inspection of this crucial component – or assume that you will have to spend some money on it. Remember, too, that just because there was a septic bed on the property when it was built, that doesn’t guarantee that you’ll be allowed to put a new one in. By-laws may have changed, and some areas now require a holding tank where a septic bed once was. This is particularly true on Conservation controlled land, and near rivers and lakes.
Stigmas. Every once in a while, you may see a property with a disclosure attached to let you know that it is a former grow-op. A stigma like this can reduce the market value of a property substantially, even on resale after a renovation. Many buyers also avoid buying a property that has been the scene of a murder or suicide, or even a natural death. Laws about what must be disclosed are fuzzy, so ask lots of questions and find out as much as you can about the history of a property to avoid taking a financial hit.

Here’s the Good News

Once you have done your research and gained an idea of what your investment options are, you will be armed to choose your project wisely. Real estate can be a very solid investment when done carefully.

Take advantage of the expertise that is available to you: Read everything you can. Speak to mortgage professionals and lenders about your financing options. Work with a tax accountant who knows real estate investing to ensure that you keep proper records, and consult with an experienced realtor in the area where you would like to work.

With a team of experts on your side, you increase your chances of creating the cash flow and profits that every flipper dreams of!

You love your neighbourhood so much that you want to OWN the whole thing. Or maybe just a little more of it…

If you’re looking to expand your holdings to include the neighbour’s house, there is a somewhat strange law on Ontario’s books that you need to know about.

Have you ever considered owning two properties next to each other? Perhaps you would like to have your parents or your grown children live next door. Maybe you want an income property that you can keep an eye on. Or are you in line to inherit some real estate that is adjacent to something you already own?

If you are thinking of purchasing or otherwise taking title to two or more properties that share a property line, you should be aware of a quirk in Ontario’s Planning Act: If you take title in exactly the same way to two abutting properties, they will likely merge in title. This means they become a single property for assessment purposes. A merger can cause issues down the road when you want to sell one or both properties, since you would need to apply to have them severed unless they are sold together.

When properties merge, they no longer qualify for separate mortgage financing, either. Any lien placed on one property will cover both of the [formerly separate] parcels of land.

How to Avoid a Merger

There is a simple way to prevent properties from merging, and most real estate lawyers will explain this to their clients. Take title to side-by-side properties in different names.

We aren’t suggesting using an alias. The solution is to have different legal owners for each property. For example, a husband and wife can each take title to one property, if that’s acceptable to both of them. On paper, John Doe can own 123 Elm St, and Jane Doe can own 125 Elm St, and they won’t merge. Or John and Jane can own 123 Elm, and Jane alone can own 125 Elm. As long as John and Jane do not own both properties together, they will remain separate.

In the case of personal or family property, a third owner (parent, child, relative, friend – doesn’t matter!) could be added to one of the title deeds with a very minor share. Even assigning 1% of the value, as a tenant in common, creates a different ownership type for the second parcel of land.

“Solutions” That Don’t Work

Remember that there are few actual loopholes. Taking title using a different version of the same person’s name does not fix the problem. John Doe cannot take title to the house next door as John Henry Doe to avoid merging properties.

Changing the order of the names on the deed or the percentage of the property that belongs to each owner does not prevent merging. The manner of holding title doesn’t solve the issue, either. It doesn’t matter if John and Jane own 123 Elm as joint tenants and 125 Elm as tenants in common. The properties will merge because the owners are the same two individuals.

Things to Discuss With Your Lawyer

When there are multiple owners who need to be on title to properties like this, a potential solution could be to create a corporation to hold one of the properties. Since a corporation is a separate legal entity, the properties may not merge. However, it’s important to discuss with your lawyer whether this will work in your situation.

Real estate can also be owned by a trust. Depending on circumstances, this can get complicated, and it is definitely something to work out with a lawyer if separate trusts for the same beneficiary are involved.

One final note of caution about joint tenancy, since this is the most common way for life partners to own the family home:

Even if John and Jane Doe take title carefully when they buy the house next door to their family home, having only Jane’s name on the second property, they could have a problem later on. Assuming they own 123 Elm as joint tenants, rights of survivorship mean that when John dies, Jane becomes the sole owner of the matrimonial home. Since she is also alone on title to 125 Elm, she now holds title to both in exactly the same way. In a case like this, having a third owner of even a very minor share can prevent the properties from merging.

For the Record…

We offer you this information as a matter of fact. There must be a reason for this law, but we would like to see it changed. Every so often, we hear rumours that change is coming, and we get a little excited. For now, though – we are available to help you navigate the idiosyncrasies of the system. We will do our best to help you find the right professionals to guide you through your real estate purchases and sales!

Our recommendation to all buyers, regardless of their goals, is to only consider properties that will increase in value and be easy to resell if the need arises.

Statistics show that Canadians tend to move fairly often – perhaps more often than they plan to!

Still, there is a certain type of buyer who believes they will find the perfect house, settle down, make roots, and never have to be part of another real estate transaction for as long as they live.

Some property owners are so emotionally attached to their homes that they will straightforwardly say: “When they take me out of here, it will be in a box!” A little morbid, maybe, but decisive, that’s for sure!

Do you identify with this thinking? Reasons for wanting a house purchase to be a one-and-done experience vary:

Moving can be a colossal pain in the neck – and it’s expensive.
Stability, especially for a family, is very appealing.
Creating a home is an emotional project that can be hard to leave behind.
If there is no practical reason to uproot, why do it?

For the record, we agree with all of the statements above. And we know there are other reasons, too – including a buy-and-hold real estate portfolio strategy – that could have a buyer fully convinced that they will never need to worry about resale (or even resale value).

Most real estate is a rock solid investment. However, some properties are unique to the point of being problematic. If you find yourself drawn to something like this, please read on before buying.

Property That is Hard to Resell

How can you know what type of property might be difficult to sell? A good rule of thumb is to consider the things that cannot be changed, or that would be very expensive to remedy. Here are a few challenges that could make a property hard to sell quickly:

Poor location. A single-family residential home that is surrounded by industrial or commercial buildings, highway noise, or other undesirable influences tends to sit on the market longer than average and sells for less. [We are not talking about investing on speculation of future development, as that is something completely different.]
Poor floor plan. A home with an odd structural layout may be difficult to sell. People don’t mind removing walls, even structural ones, in some cases. But they may be less inclined to move staircases or dig out low basements. Try to avoid awkward layouts that would not work for the average buyer.
Lack of parking. In older parts of the city, a number of properties were built without driveways, carports, or garages before parking was a huge concern. Some have no parking at all. These properties still sell, but it’s important to know the neighbourhood before you buy one. Be sure to understand whether this is a deal-breaker for a majority of buyers in the area.
Mutual driveways. When two properties are very close together, they may share all or part of a driveway that leads to a rear parking space or garage. When neighbours are agreeable, this usually doesn’t cause much trouble. If there are disputes, though, they can get ugly – and some buyers will not even look at a house with a mutual drive. Again, know your neighbourhood and be sure that this will not make it difficult to sell if you ever need to.
Stigmatized properties. In Ontario, there is no law that requires disclosure of things like murder, suicide, or ghosts in the property. Even a history as a former grow-op may not be mentioned. Sellers must answer truthfully when asked, though – so we highly recommend that you ask lots of questions to ensure that no stigma is attached to the property that might make it unappealing to a future buyer.

Even if You Never Plan to Move…

A study done by Canadian Association of Accredited Mortgage Professionals found that the average Canadian homeowner moves, on average, every 7 years or so. We would venture to say that not many of us actually plan to move that often – but circumstances sometimes force the decision.

New relationships, growing families, job relocations, health or financial issues could result in a need to sell – sometimes quickly. It’s wise to allow room for the possibility of unexpected circumstances. As Robert Burns said, “the best laid plans…”

Financially speaking, saleable properties also offer the best investment, even if you do succeed in staying as long as you intend to. Lenders will easily fund a loan against your home’s equity if the property is saleable. If you ever need to access the cash that is tied up in your house, you’ll be glad you chose wisely.

Your final purchasing decision is always, of course, yours to make. If your desire is to buy a home that is yours forever, then we would love to help you find that place! We will just gently advise that you be cautious and have a plan “B,” just in case life has a surprise or two in store for you.

The dog days are over, and the season is winding down as August comes to a close. Talk of back to school and even (gasp!) pumpkin spice is starting to surface into daily chit-chat.

For those of us who live for heat and sunshine, the abundance of delicious fresh produce that is available at this time of year relieves some of the sadness at the end of summer.

The farmers’ markets in and around Hamilton offer the best of nature’s in-season bounty, so we thought we would offer suggestions for all seven corners of the city. (Did you know Hamilton had seven corners?)

Hamilton Farmers’ Market – 35 York Blvd

The Hamilton Farmer’s Market downtown is open year round. First open in 1837, it now boasts 50-60 vendors and is a much cherished part of Hamilton’s history. Offering fresh produce, grocery items, seafood, specialty foods, wine, coffee, fresh flowers, and more – the variety at this farmer’s market is second to none. Open Tuesday, Thursday, Friday, and Saturday, the hours are the most flexible of all the markets. Access by different forms of transportation and parking are described here to help you plan your visit.

Ottawa St Market – Lot 2C (Next to 3 Britannia Ave)

In many ways, Ottawa St represents the best of Hamilton’s personality: energy, variety, resilience, and grit. It is in Southern Ontario, so it is appropriate that the area include a farmers’ market to show off the best of what our growers have to offer.

Open every Saturday all year round, this farmers’ market only works with vendors within a 100 km radius. This means that the offerings are truly farm fresh! Read through the list of produce and mouthwatering baked treats before you go, and plan your visit carefully!

Ancaster Farmers’ Market – 630 Trinity Rd S, Jerseyville, ON (Ancaster Fairgrounds)

If you’re craving farm-freshness mid-week, this will be one of your go-to’s, since it is open on Wednesdays from 3:00-6:00 pm.

Ancaster has a proud history as a vibrant agricultural community, and the farmer’s market represents that heritage right in the heart of town at the Ancaster Village. Local growers and other assorted vendors offer their wares and provide a space to gather with friends and neighbours.

Many prefer to shop in person, but there also is an option to order online. Orders placed between Thursday and Monday can be picked up, curbside, on Wednesdays.

Dundas Farmers’ Market – Hatt Street and Miller’s Lane

This seasonal market in Dundas is a small, not-for-profit coalition of growers and producers who offer a direct link between farmers and the community. It runs from June to October, and is a weekly tradition, open on Thursdays from 3:00-7:00 pm.

Some of the vendors accept online orders and will arrange for pickup at their vendor tents on Thursdays as well.

Locke St Farmers’ Market – Corner of Locke and Herkimer (260 Locke St S)

The best place to find information about this west-end market is on their Facebook page. Locke Street Farmers’ Market aims to offer fresh, local, sustainably grown and produced food for the benefit of the community, local farmers and businesses.

Saturday mornings from 9:00-noon, from spring to fall, you will find the assortment of vendors set up for business in the parking lot of Locke St Tire and Automotive.

There is an open call for volunteers at this community market, too – so if this is your neighbourhood, you might consider lending a hand for a very delicious, worthy cause!

Hamilton Mountain Farmers’ Market – 19 Viewpoint Ave

The local growers who run the Hamilton Mountain Farmers’ Market have adjusted their hours to Fridays between 3:30-7:30.

This is a small, solid community effort that offers fresh local produce, floral products, spices, eggs, and more – and that has been in operation for 13 seasons.

Special Mention: Binbrook Farmer’s Market – 2600 Hwy #56

The Binbrook Agricultural Society, for several years, operated the Binbrook Farmer’s Market to encourage Binbrook residents to think, shop, and eat locally. As the world changes, the organizers have decided to take a year to re-imagine and re-design their community projects, as described in this Hamilton Spectator article from July, 2020.

There is some talk of a fall festival or market that gives us hope of something to look forward to as the leaves begin to turn, and the fruit harvest gives way to gourds and other hardy vegetables!

All photo credit: @hamontmarket

If you have discovered any other markets in the City, we’d love to hear about them!

Farmers market Hamilton

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Our recommendation to all buyers, regardless of their goals, is to only consider properties that will increase in value and be easy to resell if the need arises.

Statistics show that Canadians tend to move fairly often – perhaps more often than they plan to!

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Even if You Never Plan to Move…

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Hamilton Farmers’ Market – 35 York Blvd

Ottawa St Market – Lot 2C (Next to 3 Britannia Ave)

Ancaster Farmers’ Market – 630 Trinity Rd S, Jerseyville, ON (Ancaster Fairgrounds)

Dundas Farmers’ Market – Hatt Street and Miller’s Lane

Locke St Farmers’ Market – Corner of Locke and Herkimer (260 Locke St S)

Hamilton Mountain Farmers’ Market – 19 Viewpoint Ave

Special Mention: Binbrook Farmer’s Market – 2600 Hwy #56

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