The spring market in Canada is starting to heat up with record low inventory. Buyers have started to come back, as for the first time in the last few months Bank of Canada has not increased interest rates.

In fact, Royal Lepage has adjusted their national aggregate home price forecast to increase 4.5% year-over-year in Q4 2023. This is an opportune time for home sellers waiting in the sidelines, to finally start getting their home ready for sale and look into renovations.

When selling the place you’ve called home for the past five, 10 or 30 years there is always one question that comes to mind: How do I get the most money back on my home?

How can homeowners increase the ROI, or return on their investment? There are a ton of tricks and tips to increase the ROI when selling a home, but the number one piece of advice is to look into hiring a Real Estate Agent.

The right Real Estate professional can assist in setting an appropriate asking price which is influenced by the season, annual trends, neighbourhood and amenities offered in the area. They can also help with other things like organizing showings, and offering invaluable advice about possible projects that can be completed to upgrade your home and also increase sale price.

Other ways to ensure you are increasing your investment in your home upon selling is by putting some money back into the house before the sale sign is even hung.

Who is buying?

Speaking with your hired professional and by taking note of the demographics in the area can help you determine your target audience. Who will be looking at purchasing your home? A young family? An expanding family? A couple looking to retire? Investors? Perhaps it is some people who are looking to flip the property?

Learning your target demographic can ultimately save you from investing money into big projects that will do nothing to return on your investment. “There are a lot of buyers who just want to buy a home that is turn-key. Updating rooms like the kitchen, will have the greatest impact for them. However, you need to know who your buyer is so the upgrades will align with their wants and needs.” says Terry Osti, award-winning, REALTOR® at StilHavn.

Web appeal is the new curb appeal

Forbes reports that it is just as important, or more so, to have a strong web presence when selling your home as it will bring interested buyers to the door. Senior director of PR at Realtor.com, Julie Renyolds told Forbes that ads featuring walk-through tours are clicked on 150% more than ads without them.

Curb appeal still a good investment

HGTV says that curb appeal is still just as important as ever. After all, you can only make a first impression once.

Ensuring cracks in sidewalks and driveways are patched, windows and doors are caulked and door knobs, locks and hardware are upgraded are low cost ways to boost the return on investment upon selling.

Taking that extra initiative and planting flowers and perennials in the garden can also have a lasting impression and increase the value of the home. Interior designer Brittany Farinas of House of One told Forbes.com that adding some greenery can give the outdoors a whole new look.

New siding, although a little more costly, is reported to rank high on the cost vs. value report according to HGTV. According to Forbes.com, homeowners can expect to pay between $1,000 to $16,000, depending on the size of the home and the type of siding material used, but it will not go unnoticed.

Sound structure is key

Interested buyers aren’t going to be as thrilled about an upgraded kitchen if the basement is flooding due to poor plumbing or cracks in the foundation.

HGTV says that investing that facelift money into ensuring the roof is in good repair, the foundation is sturdy, the furnace is functioning properly and all electric and plumbing is up to code will ensure the asking price won’t plummet in order to compensate for the necessary repairs.

Replacing windows can cost around $15,000 for a 2,000-sq-ft home with new vinyl windows, but RE/MAX predicts a return on investment of 75%.

Focus cash on bathrooms & kitchen

The kitchen and bathrooms are where a lot of time is spent in the home and architect Steve Straughan based out of Los Angeles’ KAA Design Group says they are the areas of the home that interested buyers can tell if money has been well spent.

According to RE/MAX, kitchen renovations such as countertops are one of the top three changes that lead to a high return on investment. Countertops can be expensive, but $3,000 stones such as granite or quartz can make a huge difference. To further elevate your kitchen, spend around $5-10,000 for stainless steel kitchen appliances. Kitchen renovations typically have a return on investment of 75-100%, usually the highest ROI.

Bathrooms can often always use a facelift — and, for certain, a deep clean. Every bathroom is different, but it is one of the main focuses that buyers look for in a home. Renovations can vary, but having a vanity with marble countertops or a frameless glass shower are elements that can draw buyers. A tip recommended by RE/MAX is to analyze your bathroom and figure out the strengths and weaknesses of it. A typical bathroom renovation is between $5-$15,000 and can have a return of 62%.

Updates and remodels should focus on creating open and inviting spaces and one of HGTV’s tips is to skip that soaker tub and put in a grandiose walk-in shower — or steam shower. After all, who really has the time anymore to take lengthy soaks often enough to justify the space the tub takes up.

Creating additional space

Does the home have an attic with dimensions that would allow the creation of an additional bedroom or office space? Can you extend the deck or create an outdoor living area or sunroom? Can the basement be finished and transformed into a cozy living space? Adding more functional spaces in your home can make it look larger and eliminate any unused spaces. Forbes predicts that the average cost to finish your basement is $22,850 in 2023.

HGTV says keep other homes for sale in the area and your target audience in mind because you don’t want to renovate your home to the extent that you price yourself out of your market.

Go Green

Concentrating on making the home energy efficient with better insulation, window and door replacements can not only increase your ROI when you sell the home, but you will also notice instant savings on your energy bills. By making such upgrades, AIC says the ROI is typically between 50-75%.

Plus, as of December 1, 2020, Canada has offered a number of grants for homeowners to make energy-saving upgrades.

At the end of the day, it isn’t always the fun and sexy renovations that add the most value to the home. Sometimes it’s the dirty work that goes the extra mile when selling. But, to make sure you are getting the best return on your investment, be sure to speak with a professional Real Estate Agent who can help answer any questions you may have along the way.

The post Renovating your Return on Investment for the Best Results first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Snelgrove

Crime rates: 26% lower than Brampton average
Real estate prices: 12% higher than Brampton average
School rating: 73.3/100
Overall Livability Score: 87/100

Snelgrove lies on the border of Brampton and Caledon. The neighbourhood has a variety of grocery stores and plazas that are highly accessible. There are numerous parks here such as the Conservation Drive Park and Heart Lake Conservation Park that are perfect for children to play outdoors. Snelgrove is also near Highway 410 which makes it convenient for families to travel outside the town. While the real estate prices are higher, there are mainly two-storey detached homes that are spacious and surrounded by nature.

Northgate

Crime rates: 13% higher than Brampton average
Real estate prices: 25% lower than Brampton average
School rating: 67.8/100
Overall Livability Score: 85/100

Northgate is located in east central Brampton and is considered an older neighbourhood in the city. However, it has a diverse combination of stores, services, and amenities that make it easy to run errands. The average real estate price here is cheaper than the Brampton average because it consists of housing such as detached, semi-detached, and townhouses. This allows families to choose whichever housing option they feel is the perfect fit for them in terms of size and budget. Northgate also contains 10 outdoor parks and recreation centres that are all ideal for families with children.

Westgate

Crime rates: 1% higher than Brampton average
Real estate prices: 12% lower than Brampton average
School rating: 68.3/100
Overall Livability Score: 85/100

The average price of a single detached house in Westgate is $1.06 million, 13% lower than the GTA average. Single detached homes make up most of the housing in Westgate with some townhouses as well. This neighbourhood is quiet and family-friendly with lots of nature and open spaces. There is also the Bramalea City Centre shopping mall that is under 10 minutes away by car and is one of the largest shopping malls in Canada with over 300 outlets.

Heart Lake East

Crime rates: Equal to Brampton average
Real estate prices: 11% lower than Brampton average
School rating: 65.8/100
Overall Livability Score: 85/100

Although the school rating is lower than the previous neighbourhoods, Heart Lake East consists of 7 public schools and 6 Catholic schools that give families a variety of options to choose from. The highest ranked school is St Agnes Separate School with an 87% proficiency. Heart Lake East is also near the Heart Lake Town Centre and the Trinity Common Mall. The 9 parks in this neighbourhood provide families with children an open area with lots of green space.

Brampton West

Crime rates: 100% lower than Brampton average
Real estate prices: 20% lower than Brampton average
School rating: 58/100
Overall Livability Score: 84/100

Brampton West is right next to downtown Brampton, making it accessible to many businesses and ancient buildings. There is also a nearby GO train that can take residents to Downtown Toronto in about 40 minutes. A single detached home is typically priced at $945,000, 23% lower than the average price in GTA. The diverse population makes Brampton West have a high livability score with a mix of restaurants and shops.

Madoc

Crime rates: 18% higher than Brampton average
Real estate prices: 28% lower than Brampton average
School rating: 57/100
Overall Livability Score: 84/100

Madoc is an older neighbourhood that is west of Highway 410, allowing residents to reach Downtown Toronto in 35 minutes by car. The housing contains older detached and semi-detached homes compared to other parts of Brampton, but it still has a mix with townhouses and apartments as well. Restaurants in Madoc are also known to be very diverse with ethnic cuisine. The area has 12 parks scattered throughout, including one that can accommodate ice-skating.

Fletcher’s Meadow

Crime rates: 11% higher than Brampton average
Real estate prices: 3% lower than Brampton average
School rating: 64.3/100
Overall Livability Score: 84/100

This neighbourhood is north-west of Brampton with a 40,000 population. Rose Theatre is a popular venue for shows that are scheduled throughout the year. Outside the Rose Theatre is Garden Square where there are daily shows including concerts and movie nights. Housing styles available include detached, semi-detached, and townhouses. The average school rating may not be the highest, but Ray Lawson is the highest ranked school in the neighbourhood with an 83% proficiency.

Southgate

Crime rates: 23% higher than Brampton average
Real estate prices: 33% lower than Brampton average
School rating: 66.6/100
Overall Livability Score: 83/100

Southgate is in southeast Brampton and is one of the older neighbourhoods. However, it is a convenient location due to its closeness to Bramalea GO and Bramalea City Centre. There is a large variety of housing options here that are all below the average price of homes in the GTA. Single detached homes are $965,000 and semi detached homes are $850,000. The downside to this neighbourhood is that the streets become extremely busy during rush hour with a lot of traffic.

Brampton East

Crime rates: 14% higher than Brampton average
Real estate prices: 15% lower than Brampton average
School rating: 58.6/100
Overall Livability Score: 83/100

The main advantage of Brampton East is that it is a quiet neighbourhood while also close to several amenities. It has single detached homes that are $1 million with decent sized lots. Housing styles include a mix of detached, semi-detached, townhouses, low-rise, and high-rise apartments. The West Humber River Valley is a recreation trail that is a popular destination for residents to enjoy some time in nature. Meadowland Park and Peel Village Park are also open green spaces that have sports fields and playgrounds for children.

Northwest Sandalwood Parkway

Crime rates: 5% lower than Brampton average
Real estate prices: 4% lower than Brampton average
School rating: 67.2/100
Overall Livability Score: 83/100

This neighbourhood is relatively newer with higher real estate prices compared to Brampton East and is located near Snelgrove. A single detached home is priced at $1.13 million, 7% lower than the average price in the GTA. Although this is a newer community and it is still evolving, there are restaurants that feature diverse cuisines. This neighbourhood is perfect for families who prefer newer homes, but also a quiet area with well established neighbouring regions such as Snelgrove and Fletcher’s Meadow.

The post Best 10 Neighbourhoods in Brampton for Families first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Why is that?

Simply put, selling a home takes a lot of time and effort. Although FSBO is not an impossible path by any means, there are a number of key points to keep in mind before choosing to oversee the sale of your home.

Not only are you responsible for all aspects of putting your home on the market, including, but not limited to, setting the listing price, advertising the property and setting up as well as being in attendance for showings for potential buyers, you’ll also have to negotiate in terms of the sale, including price, closing date and more. In other words, instead of having multiple specialists to help you with the sale of your home, you will be the all-rounded expert in all fields.

For many home sellers, these tasks are worth their time and effort in lieu of paying out commission to a REALTOR®.

But to backtrack just for a moment, let’s look at setting the listing price a little more closely:

One of the biggest risks associated with selling your home on your own is not hitting the “sweet spot” of home prices. Market changes can cause housing prices to fluctuate. If your house is overpriced, you might find it sitting on the market for longer than what you might have expected. Additionally, prospective buyers may shy away from a home that has been sitting on the market for an extended period of time because they might think negatively about the house or the neighbourhood.

On the other side of the coin, selling the house for too little benefits no one except the buyer. If trying to avoid paying commission is the primary motivation behind selling your home on your own, but you undervalue the price of the property, the cost-savings benefit of FSBO might not be fully realized.

This is one of many areas that working with a REALTOR® can come in handy. Real Estate professionals have access to data on actual selling prices  – not listing prices – and would be familiar with relevant market demands and changes in your neighbourhood helping to provide analysis of current trends.

Some Risks when you decide to sell on your own:

• Leaving money on the table as FSBO don’t get as much exposure without the help of a REALTOR who is well connected to buyer agents
• Will have to pay for legal, marketing costs yourself
• Risk that home defects have not been documented, running into legal issues down the line
• Time spent trying to list, market and negotiate your own transaction
• Safety concerns when showing your own home
• Wasting time and efforts by staging and showing your home to potentially unqualified buyers
• First time home buyers may be apprehensive to seal a deal without the help of a professional

Statistics show that selling your home with the assistance of a professional REALTOR® will garner you a bigger profit. According to the National Association of REALTOR®’s 2022 Profile of Home Buyers and Sellers, the average FSBO home price was $225,000, while the average home price sold by an agent was $330,000.

That report also showed that only 10% of home sales in the U.S. were FSBO. It also stated that 86% of buyers purchased their home through a real estate agent or broker, a share that has steadily increased from 69% in 2001.

Only 28% of FSBO home sellers decided to market their homes on websites including social networking websites and FSBO websites. However, it is evidently a useful platform to use because 51% of buyers found their home on the Internet. Other FSBO sellers marketed their homes through friends, relatives, or neighbours (28%) or yard signs (20%).

The most difficult tasks for FSBO sellers cited in the report include getting the right price (16%), understanding and performing paperwork (13%), selling within the planned length of time (10%), preparing home for sale (6%) and having enough time to dedicate to all aspects of the sale (1%).

Although you may think there is no one better qualified to show off your house than yourself, a REALTOR® can ensure the presentation of your home goes as smoothly as possible.

Not only can a REALTOR® offer expert tips on staging your home to look its best, they are also able to highlight certain features or aspects of the home that the homeowner may unintentionally overlook during the presentation process. REALTOR®s also know the current trends as to which designs or furniture arrangement can attract buyers. For those pressed for time and find themselves juggling a career and family, working with a REALTOR® can be a wise investment.

The ultimate goal in any home sale process is to get as many eyes on, and as many people passing through, the property as possible. A REALTOR® can not only have your property listed on the Multiple Listing Service (MLS), they can help promote the property via flyers, pamphlets and postcards with eye-catching photos and major selling points to help drum up interest.

These are costs that FSBO sellers would otherwise be responsible for absorbing.

Another benefit of using a REALTOR® is the exposure they can provide to other agents who might have the perfect buyer for the property already in mind. An agent tour of the home early in the sales process allows other agents to ask questions and gather information about the property that cannot be discovered through pictures and MLS information alone.

Most importantly, a REALTOR® is there to represent your best interests as a seller.

Your REALTOR® can help you objectively evaluate each offer without compromising your marketing position. With a REALTOR® in your corner, they serve as a bit of a buffer between you and the seller. REALTOR®s can solicit honest and open feedback from prospective buyers, who may not be as candid when dealing with a homeowner on a one-on-one basis.

And when you’re lucky enough to reach the offer stage, they will not only help you devise a win-win agreement that will appease both parties, they can also help walk you through the process of appraisals, inspections and financing – tasks that you may not be as familiar with as a FSBO.

Keep in mind that several different variables can arise between the sales agreement and the final closing of the property, as both buyers and sellers have various legal responsibilities that need to be fulfilled.

REALTOR®s carry Errors & Omissions insurance, which serves to protect parties from potentially financially-crippling liability should they be brought to court for negligence, errors, failure to disclose, or other possible reasons.

Your home is among the most valuable assets you’ll ever own. When it comes to selling your home, trust a professional REALTOR® to ensure you get the job done right without undervaluing your home.

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In 2022, the real estate market continued to have hiking home prices with a decrease in home sales, especially towards the end of the year as interest increased. According to The Canadian Real Estate Association, starting in November 2022, there was a 3.3% month-over-month decline in national home sales. Compared to 2022’s peak in February with an average of $816,720, the national average home price in November 2022 was $632,802 which is a 22.5% decrease. The amount of newly listed properties have also declined by an average of 1.3% month-over-month in November, with larger declines in the B.C. Lower Mainland and Okanagan regions. November 2022 marked the lowest number of new listings in a month in 17 years.

With the current inflation rates in Canada, it has forced interest rates to increase as well. The Bank of Canada kept raising rates aggressively in 2022, with a 100-basis point hike in July. This month’s hike marks the 8th time the Bank raised rates since March 2022. As of Jan 25, 2023, the overnight rate stands at 4.5%.

Will home prices drop in 2023 and bottom out?

While Canadians will still likely continue to struggle with inflation in 2023, RE/MAX anticipates that 60% of housing markets will see more balanced conditions, meaning the supply and demand for housing will be more even compared to 2022. This is expected to be more apparent during the third and fourth quarters of 2023, especially in the Greater Toronto Area (GTA), Mississauga, Greater Vancouver Area (GVA), Calgary, Regina, and Winnipeg. The largest price declines are forecasted to be in Ontario and Western Canada where several cities can see a 10-15% decline. However, Atlantic regions such as Halifax and St. John’s are expected to see an 8% and 4% increase in home prices respectively.  TD bank predicts that Canadian home sales will bottom in early 2023.

Despite the 2023 housing market predictions, Vancouver is still anticipated to be the most expensive region, averaging a home price of $1.2 million. On the other hand, Regina will have the most affordable prices with an average of $361,495 by the end of 2023. Royal Lepage notes home prices have declined from the highs earlier last year, but are still higher than pre-pandemic. The projected average home price in Canada for Q4 2023 is estimated to be 15% higher than Q4 2020 and 18.4% higher than Q4 2019.

Although house prices will fall, rents are projected to rise as there was a lack of rental listings. In 2022, the average price of a single bedroom apartment in Toronto is now $2481 a month which has increased 20% year-over-year. The hike in rental prices is mainly because listings have gone down 25.6%, causing there to be a lack of supply. However, due to such high prices, most Canadians cannot afford to buy a house and hence, there are more renters than homeowners. This is prominent in cities such as Montreal, Quebec City, and Halifax as more than 50% of the buildings built since 2016 are rented. From a survey conducted by RE/MAX, 15% of Canadians are debating about moving to a different province for better housing availability and livability.

Will there be New Regulations in 2023?

The Government of Canada can see how inflation has caused houses to be less affordable for Canadians so they have taken new measures to counteract the problem.

To make homes more affordable to Canadians, the Government of Canada has passed the Prohibition on the Purchase of Residential Property by Non-Canadians Act which came into effect on January 1, 2023. This Act prevents non-Canadians or corporations that are not incorporated in Canada, from buying residential property for 2 years beginning on January 1, 2023. According to the Government of Canada, residential property is defined as a building with 3 homes or less and parts of buildings such as a semi-detached house or a condominium unit. If this law is violated, the non-Canadian or anyone who intentionally assists a non-Canadian, will receive a $10,000 fine and the court may request the sale of the house. This new regulation can help make sure that homes are being used by Canadians to live in and not as assets for foreign investors.

For foreigners who already own a house in Canada, they will need to pay a 1% vacant home tax annually if the home is underused. This measure is to ensure that non-Canadians pay their fair share of Canadian tax and in hopes that this will free up more homes for Canadians.

The last measure is to add Goods and Services Tax/Harmonized Sales Tax (GST/HST) on all houses that are resold before it has been built or lived in. This was effective as of May 7, 2022 and can help reduce homes being sold for high prices.

All three regulations are made for the same purpose – to make homes more affordable and increase the number of Canadian homeowners.

Housing Market 2023 Predictions

As 2022 was still a year of hiking home prices, the Government of Canada is taking measures to help Canadians become homeowners at more affordable prices. Although interest rates are expected to remain the same, house prices are forecasted to decrease in many regions. Based on the trends, 2023 is predicted to be a year with a more balanced market.

The post What to Expect from the Real Estate Market in 2023 first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

An economic downturn could stress you out if you’re selling your home. A contracting and uncertain economy doesn’t usually yield top dollar for home sales.

At RankMyAgent, we aim to make the home selling process more manageable. So this article explains what a recession entails and tips to sell your home for the best price during a recessionary environment.

What is a Recession?

The traditional definition of a recession refers to two consecutive quarters (three-month periods — so two consecutive quarters equal six consecutive months) of declining Gross Domestic Product (GDP). But this definition comes with numerous asterisks.

Even if Canada faces two declining quarters, we may not be in a recession. We continue to face record-low unemployment rates, and in a recession, unemployment peaks.

A recession depends on numerous factors like employment, consumer spending, and GDP. An “official” recession usually occurs once a group of leading economists looks at these factors and determines we’re in a recession.

What Can We Expect During a Recession?

A recession’s outcomes and contributing factors are a “Catch-22” — i.e., the presence of the factors indicates a recession, but the same circumstances also result from an economic downturn.

We usually see the following during a decline:

• Layoffs: Businesses fear the unknown and want to reduce spending when the economy begins to tumble. You can expect layoffs in business departments that aren’t critical or where companies previously overhired.
• Less consumer spending: People are also fearful when we hit a recession. We’re scared of losing our jobs or taking a loss in the stock market. As a result, we might spend less and save more of our income for a rainy day.
• Depressed stock market: Investors may sell their stocks and choose safer investments. So, you can expect stock prices to decline. Some corporations also don’t fare well during a recession, and their stock price reflects that.
• Higher interest rates: This isn’t true for all recessions. But in our case, a recession may be caused due to the Bank of Canada increasing borrowing rates to tamp down inflation. This would make buying a home and making mortgage payments more expensive.

These factors can turn the residential home market in favour of the buyer. We’re more cautious about making significant financial decisions in a recession. We’re also unsure whether we can hold our job or afford increasing interest rates.

As a result, there are fewer buyers on the market. We might wait until economic conditions are more positive and confident before applying for a mortgage and making the largest purchase of our life.

But the number of sellers remains the same or even increases during this time. Some Canadians may need to sell their second home to cover costs or downsize to afford their mortgage in a poor economic environment.

Tips for Selling Your Home During a Recession in Canada

1. Rethink if You Need to Sell

Housing prices tend to peak before an economic decline and slide once a recession becomes a reality.

Selling in the middle of the downturn might not bring you the best price. Downturns tend to be buyer markets, where homebuyers have more leverage. You won’t likely have the same bidding wars or unconditional offers we saw a year ago.

Sometimes, you might not need to sell an investment property or move into a larger home right now. It’s best to consider whether entering the real estate market is required.

2. Sell Sooner Rather than Later

Past recessions show a history of dipping home prices. If you plan to sell in the near future, it’s better to do it as soon as possible. You’re only going to face tougher selling conditions.

Otherwise, you should wait until the economy is more positive before you sell. Home prices tend to fare better when there’s financial prosperity among Canadians.

3. Don’t Overprice Your Home

You might be used to seeing bidding wars and homes selling for hundreds of thousands of dollars over asking. But the market right now might not have the same prospects. You should temper your expectations to something reasonable.

Working with a real estate agent can help you set a reasonable selling price. Additionally, a realtor can guide you towards getting the best dollar for your property. They might suggest minor renovations or staging to bedazzle the prospects.

4. Give Your Home Some Minor Renovation

Minor renovations, deep cleanings, and restoring curb appeal can help move your home on the market. These changes make your home shine in photos and showings.

You don’t need to overhaul your entire kitchen. It may not be worth it in the current environment since labour is in short supply — contractors aren’t as open to negotiations or discounts. At the same time, home prices are going down.

Contributing your own labour by refreshing walls with a coat of paint or deep cleaning your carpets may be what you need to increase your chances of selling. A clean and refreshed home can help potential homebuyers envision themselves living there.

5. Consider Renting your Property Out Instead

Cities like Toronto and Vancouver are seeing record-high rent prices because surging interest rates have left prospective buyers unable to purchase a home — therefore, many Canadians continue to rent.

Some sellers who aren’t getting the offers they hoped for have turned to the rental market because the sky-high rent prices make being a landlord much more appealing.

If you aren’t in a rush to sell, renting out your property until better economic conditions might be an option to get the best return on investment from your property.

Recessions don’t have to be scary. Yes, there’s a fear of layoffs and depressed stock prices, but things rebound eventually. If you’re planning to sell your home during a recession, it’s vital to temper expectations. You can’t expect your home to sell for the same amount that homes sold for during a growing economy.

The post How to Navigate a Recession as a Canadian Home Seller first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Whatever the case, numerous tax and legal considerations exist when you leave Canada — especially in the home selling process.

In this article, we talk about the many aspects of selling your home as you leave Canada and what you should consider.

Non-Resident Status

When you leave Canada to live in another country, you sever residential ties in Canada. This could mean selling your home, revoking your driver’s licence, or leaving clubs and organizations. As a result, you usually become a non-resident of Canada.

You become a non-resident for income tax purposes at the latest of:

• The date you leave
• The date your spouse or common-law partners and dependents leave Canada
• The date you become a resident of the country you settle in.

As a result, you aren’t obliged to pay all the same Canadian taxes as before. When you leave Canada, it’s best to speak with a tax professional to understand your obligations.

Departure Tax

One implication of becoming a non-resident is departure taxes — various taxes you must pay due to your departure.

When you leave Canada, the Canada Revenue Agency (CRA) deems you to dispose of certain types of assets at fair market value and reacquire them at the same price. This creates a capital gains tax that you need to pay. Accountants generally refer to this as a deemed disposition.

This deemed disposition on departure applies to properties like jewellery, paintings, and company shares (excluding TFSA or RRSP shares). So, your home is not deemed to be sold when you leave the country.

How to Notify CRA that You’re Leaving Canada for Good and File Your Canada Departure Tax Return

When you leave Canada, you need to file a departure tax return to notify CRA that you’re leaving. You generally need to file this tax return by April 30th of the year following your departure. The purpose of this tax return is to

• Record the date you leave Canada and change your residency
• Report the properties you own in Canada
• Prepare various tax forms
• Report and pay any departure taxes.

Leaving Canada and Your Principal Property

Capital gains are only taxable if you sell your home — suggesting it’s your principal property — when you’re no longer a resident. While, if you’re a resident, capital gains tax is generally exempt because your home is your principal residence.

When you depart from Canada, you usually have two options to deal with your principal property:

• Sell your property while you’re still a resident of Canada and have capital gains exempted through the principal residence exemption.
• Wait until you’re a non-resident to sell. In this case, the principal residence exemption is still generally available for the years in which you owned the property as a Canadian resident and fulfilled the other criteria for the principal residence exemption.

Selling Your Home as a Non-Resident

As a non-resident selling your home, you are liable to capital gains taxes because non-residents cannot access a principal residence exemption. In this process, you must notify CRA and complete Form T2062.

You’re generally liable to capital gains taxes in the years you’re a non-resident. For example, suppose you owned a home from 2003 to 2022.

• The home was your principal residence between 2003 and 2018.
• In 2018, you became a non-resident and moved out of the country.
• In 2022 you sold your Canadian home as a non-resident.

In this case, you’re likely liable to capital gains tax between 2018 and 2022 because the property was no longer your principal residence in these years.

Once the home is sold, you need to inform CRA of the sale within ten days after the sale closes. You make this notification through Form T2062. If you don’t, there’s usually a penalty of up to $2,500. The form requires you to estimate your capital gain or loss on the sale.

The property buyer may also assist in the tax collection process by withholding taxes from the due proceeds. This amount could be 25% of the purchase price being held up for months. So it’s best to be prepared for such a situation from a cash flow perspective.

When you sell your home as a non-resident, speak with a tax professional to understand your tax obligations. It will prevent surprises from hitting you in the face when you least expect them — like a 25% withholding tax on the sale of your Canadian property.

Repay Your Home Buyers’ Plan (HBP)

The Home Buyers’ Plan (HBP) lets Canadians withdraw from their registered retirement savings plan (RRSP) to buy or build their home.

Currently, the withdrawal is limited to $35,000, and you must repay the amount within 15 years. If you don’t repay the amount, it’s included into your RRSP income on your tax return, which could have significant income tax consequences.

If you choose to leave Canada, you need to repay your HBP or face an income inclusion for the amount. The balance of your HBP is payable on the earlier of:

• Before the date you file income tax for the year you become a non-resident;
• Sixty days after leaving Canada.

So if you’re planning to emigrate from Canada, it’s essential to ensure you have the funds ready to return whatever you borrowed from your RRSP to purchase your home. Otherwise, you’ll be on the hook for a lot of taxes!

Leaving Canada has many tax implications. Selling your home after you’ve left the country complicates this situation. If you’re leaving Canada or selling your home as a non-resident, it’s vital to speak with a tax professional and experience realtor to understand the implications of your decision.

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The metaverse isn’t just another Bitcoin. It’s not even a recent concept! The metaverse simply describes integrated 3D virtual worlds — imagine games like Roblox or World of Warcraft. These games have been around for decades!

But as technology advances, companies are finding new ways to put the metaverse to use. McKinsey believes that the metaverse could drive physical product sales, reduce the need for physical stores, and enhance in-store experiences. The consulting firm further found that 64% of consumers surveyed were excited about shopping in the metaverse.

This article discusses the metaverse and how it may affect the real estate industry.

What is the metaverse?

The metaverse is any online 3D world where you can interact with others via an avatar. We’re used to metaverses through video games. But companies now want to apply the technology to industries beyond gaming.

For example, instead of using a video conference to meet with someone halfway across the world, you could meet in a metaverse and engage in new ways. Integrate this experience with virtual and/or augmented reality and create a much more immersive experience than just a ZOOM call.

You could also create better digital shopping experiences. Instead of flipping from webpage to webpage, consumers may someday visit virtual malls from the comfort of their homes. Here, people could purchase real-world items in a more mesmerizing shopping experience, and this better user experience could translate to more sales.

The possibilities for the metaverse are endless. And the industry is only beginning. That’s why everyone has high hopes.

Many people are already investing in the metaverse by purchasing land in specific digital universes, hoping that the value of these digital properties will appreciate.

How does buying metaverse land work?

Some metaverses let you purchase unique digital land and other properties. Big names like Snoop Dogg and Steve Aoki already own properties in a metaverse called Sandbox. Decentraland is another popular network where people can purchase unique parcels of land.

Metaverses usually have their own cryptocurrency used as a medium of exchange. Decentraland’s currency is called MANA, for example. To purchase real estate on Decentraland, you ultimately need MANA.

After obtaining the necessary currency, the land purchase process depends on the specific metaverse. Each has its own procedures.

Many assign you an ownership ID to the digital land parcel, similar to an actual deed. Buyers may need to show proof of their real-life ID and address too. Your virtual deed could also come as an NFT.

Like the real world, these properties can be anything from houses to apartments to commercial storefronts. It can also be a plot that you develop into a customized residential or commercial space.

Unlike reality, land in metaverses is infinite. There’s also usually no travel time between two points in a metaverse. In the real world, land scarcity and a property’s location determine a building or land parcel’s value and cause it to appreciate.

A particular area of a metaverse might appreciate for other reasons, however. If you own the digital parcel beside Snoop Dogg, you could expect that that land could fetch a nice premium. High-traffic areas are generally the ones that sell for big dollars.

For example, one parcel of Decentraland land sold for $2.4 million worth of MANA in late 2021. This piece of land was located in the “Fashion Street” area of Decetraland, making it highly valuable. The purchaser, tokens.com, hopes to one day build a virtual shopping centre to sell virtual clothing for digital avatars.

In addition to infinite land, there’s also the potential for infinite metaverses. If Google, Meta, and other large tech companies all started a consumer-targeted metaverse, this could reduce the popularity of Decentraland or Sandbox and then reduce the value of all land there as investors rush to invest in a new metaverse.

Just think of the rise and fall of other websites and networks! You don’t know if your metaverse will be the next MySpace or Tumblr.

How Could the Metaverse Affect Tangible Real Estate?

While the potential for a new way to “invest” in real estate might become viable someday, how can the metaverse affect the real estate we know? One way is through more immersive showings and the ability to meet online in the metaverse.

Realtors currently use many ways to display a property. Photos are the most common. But videos, 3D renderings, and 360-degree cameras are increasing in popularity too.

But imagine a metaverse where potential buyers can walk through online replicas of houses on the market. Suddenly, buyers in foreign locations can view a listing as if they’re there. This could help increase the draw and attraction of a house and encourage more buyers.

Simultaneously, a realtor can take buyers through the property and interact with them in the metaverse as if it was a real-world showing.

The metaverse could also change home buying by giving buyers, sellers, and brokers a place to meet. As a buyer or seller, you may someday have an initial consultation with a realtor in the metaverse when an in-person meeting isn’t viable. Or, suppose you meet your mortgage broker in the metaverse. The ability to show and view facial expressions and body language could help you explain your needs and allow realtors or brokers to reveal how they can help.

The metaverse is not a new technology. But many companies are now trying to apply it to new industries. Buying and selling real estate in the metaverse has significant actual dollar values, though it comes with numerous risks.

For real-world homebuyers and sellers, the metaverse has numerous applications in how we’ll someday view a home or meet with the people who help us in the home purchase or sale process.

The post Real Estate and The Metaverse: Unique Potential for the Industry first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

To fund these developments, prospective condo owners have the option to pre-purchase units before they’re even built. These units are commonly referred to as a pre-construction. If played right, a pre-construction can be a fantastic investment.

This post is all about pre-constructions. It discusses the benefits and cons of purchasing one, how the buying process works, and what questions to ask before signing the purchase agreement.

The Pros and Cons of Buying a Pre-Construction

The value of pre-construction condos is hotly debated due to the various pros and cons. Because pre-constructions are not built yet, it’s an opportunity to purchase a condo in the future at today’s prices. Although you need to pay a deposit and downpayment now, these costs are more manageable than the downpayment and mortgage of a resale property.

Another advantage of a pre-construction is the ability to customize your unit, meaning you can choose the countertops and appliances in the unit. Speaking of appliances, purchasing a brand new unit means that appliances, cable wiring, alarm systems, and other fixtures are all brand new. The need to replace these fixtures likely won’t appear for the next decade.

Although these units may look like the greatest purchase ever in the showroom, there are a lot of downsides to them. First, what you see in the showrooms and in the sales brochures are often not the reality of what you get. These marketing materials are made to give you the best impression of the product. It’s common that maintenance fees are skewed towards the low-end and that completion dates are optimistic. So, if this is an investment property, it’s hard to tell what your expenses will be or when you can expect to start renting the unit out.

What’s worse than a delay is the potential that a pre-construction is cancelled entirely. This occurs when developers can’t secure financing, have zoning issues, or can’t secure enough pre-construction buyers, among other reasons. Though with variation province to province, you would get your deposits back in this case, of course.

Lastly, there are various fees, aside from the purchase price and condo fees, that you need to account for. There are not only closing costs, but also fees unique to new developments such as development and education charges. Even items such as the installation of water and gas metres may be part of your bill. This ultimately depends builder to builder.

The Purchase Process

How to Pay for a Pre-Construction

One of the biggest drawing factors to purchasing a pre-construction is that you don’t need to pay the downpayment all at once. It’s made in staggered payments, which vary builder to builder. One example could be

• 5% of the purchase price with offer
• 5% of the purchase price after 30 days
• 5% of the purchase price after 90 days
• 5% of the purchase price after 180 days

When paying a 20% downpayment, it’s much easier to pay the amount over half a year than all at once. This gives you the opportunity to secure the unit with only 5% of the purchase price.

Cooling Off Period

To make sure you’re not forced to make a decision due to the limited supply of units, some provinces regulate a “cooling off” period after you pay your deposit for a pre-construction. In Ontario, this is 10 days while British Columbia allows for 7 days. During this time, you can renege the purchase agreement without consequences.

The cooling off period is also an opportunity to do your due diligence on the pre-construction. This means bringing the paperwork to your lawyer to check for any red flags. The period also allows you to find financing for the rest of the purchase price.  

The Questions You Need to Ask before Buying

Who’s the builder? A condo developer’s reputation is one of the most important factors in buying a pre-construction. Due to the demand for condos in major Canadian cities over the past few years, many new builders have joined the game. These builders have plenty of capital and leverage but often lack experience, which results in a poor end product. It’s best to find someone with a good reputation who has had past projects with satisfied tenants. Researching the builder can also provide insight on how long their past developments were delayed for and if they delivered on the promises made in sales brochures and showroom floors.

Who are you buying this unit for? Are you buying the condo for yourself, for a long-term rental, or for a short-term rental? Make sure to check the condominium by-laws to see if short-term rentals are even allowed. If you’re purchasing for yourself, could you tolerate potential delays or not knowing who your neighbours will be?

Location: Of course, location is important. But keep in mind whether the area is somewhere renters want to live if you’re purchasing as an investment. It’s also good to look into whether the surrounding areas have been approved for development. It would be horrible to purchase a pre-construction only to discover a chemical plant is being built right beside it. Lastly, what’s the location prospected to be like by the time the development is done? Is the area going through gentrification or heading downhill?

A pre-construction condo can be a great investment. But make sure to keep in mind the benefits and downfalls of purchasing one. The payment structure and cooling off period are handy tools in the buying process, though you must make sure to ask who the builder is, who you’re buying the unit for, and about the location you’re buying into.

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Of course, the best-case scenario is to wait out the storm and to move once we return to normalcy. However, this isn’t always possible. Maybe a deal is too good to pass up on. Perhaps you need to relocate due to a purchase-and-sales agreement. Or perhaps it’s for work. Whatever the case, it’s evident that moving from an old home to a new one during the Coronavirus era is not a choice for some people. At the same time, there is a way to make the move safely. In this article, we look at what moving companies and truck rental services are doing to help you during this time. We also provide some tips to reduce the chance of contracting COVID-19 in the process of your move. 

How Moving Services and Rental Businesses are Ensuring Your Safety

Moving Services

If you’re hiring a moving company for your journey, it’s still possible. Most provinces have deemed moving companies an essential service. Further, as the number of new cases comes down, we’re starting to see a lot of businesses open again. With that said, moving companies are not just going on business as usual. 

One of the most significant changes is a move from in-person tours to virtual tours for pricing estimates. In a usual moving scenario, the movers would come to your home and take note of all the furniture and fixtures that they need to move to your new home. This provides the proper information to know what size truck to bring in, how many movers they’ll need, and what you can expect as a cost. But due to minimizing physical interaction in a COVID-19 world, mover now asks you to aid them in a virtual tour of your home as an alternative way to make their pricing estimate. 

Movers are also taking precautions during the actual move. However, they are limited in what protections they can use. While it’s ideal that movers wear masks and gloves, this protective equipment can interfere with their work. Gloves can ultimately reduce a mover’s grip and increase the chances that they drop something. This can not only damage your item but also injure the movers. Masks can also reduce the mover’s ability to breathe. And when they’re moving heavy furniture, a good airway is critical to safely maintain enough strength to hold heavy fixtures. 

Movers are requesting that you leave a washbasin open to them. As we know, washing our hands is more important now than ever before. Informing movers which sink is available to them and leaving some soap and hand sanitizer can help protect the movers, your family, and others. 

To prevent spread among different movers, companies are staggering when their employees come into your old and new home to reduce the amount of contact. Moving companies may also limit each truck to two people. 

Truck and Container Rentals

Opting to move without a moving company can be a safer option because it involves fewer people you don’t know. However, you’ll likely still need to rent a truck or container. Companies such as U-Haul are taking strict measures to sanitize their vehicles. They disinfect everything from steering wheels, seats, and seat belts. Additionally, many have implemented six-feet distancing guidelines when individuals come to their stores. Online check-ins for some companies are also available to further reduce contact with any truck rental company staff. 

What You Can Do to Ensure a Safer Move During COVID-19

As mentioned before, if you’re using a moving service, one of the best things you can do is provide the movers with a washbasin and soap. But there are additional steps you can take to secure yourself and your family further:

• If you want to monitor your home as movers come in and out, limit it to yourself or to one family member. Ultimately, limit the number of people present. 
• If your movers are comfortable using protective equipment on the job, a poncho is an additional step to ensure that there’s even less contact between them and your items/home.
• Pack whatever you can yourself. This can limit how many people touch your possessions. 
• Ask your moving company what health measures they have in place. Ensure that they’re sanitizing their trucks and equipment and staggering their staff as they enter and exit your home. 
• Disinfect any hard surfaces. 
• Provide movers with precise instructions on the layout of furniture in the new house. This can prevent the amount of time they need to spend at the property. 
• Prepare separate bags with clothes that you can use for the first week at the new property. This can help prevent the need to open your other clothing boxes. 

Additionally, it’s common that you’ll want to declutter the number of possessions you have during a move. Although it’s commonly a great time to bring some no longer used items to a donation bin, the Coronavirus pandemic has resulted in the closure of donation bins. Friends and family may also be wary of accepting any second-hand items as a precaution. Therefore, many of your no longer used possessions may end up in a recycling bin or landfill. Although this is unfortunate, it’s part of limiting the spread of COVID-19. 

There’s no doubt we’ve entered a new normal. In an ideal world, try your best to delay moving until the situation gets better. But for some, there’s no choice but to move to a new location. If you’re in that situation, know that moving companies and rental businesses are taking measures to make your move as safe as possible. Additionally, your own precautions, such as preparing clothing and home layouts, can help reduce the chance of COVID-19 spreading. 

The post What You Should Know If You’re Moving During COVID-19 first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

So, is the real estate bubble finally popping? Well… not necessarily. There may be headlines claiming a real estate armageddon, but everyone has their own thesis. In this article, we reflect on what some of the top experts forecast for the future of the Canadian real estate market. We also review the factors steering us away from the idea that the real estate market is about to burst.

What is Everyone Saying About the Future of Canadian Real Estate?

There has been no shortage of predictions and research reports on what to expect in the near- and long-term of Canada’s residential real estate market. The CEO of Canada Mortgage and Housing Corporation (CMHC) provided a gloomy outlook on what’s to come. In a testimony to the House of Commons, he predicted that home prices could fall between 9-18% over the next year. One of the major fears that Siddall had was a “debt deferral cliff”, where mortgage deferral programs would come to an end and Canadians would need to start making payments again — whether they have the income to or not.

Not all experts agreed with Siddall. RBC forecasted that housing prices may decline 5% compared to last year; CIBC forecasted a 5-10% decline; and Moody’s, a financial services and research firm, estimated an 8% decline in Canadian real estate prices. And, in a surprising turn, TD predicted that home prices may increase by as much as 13.8% in some provinces by the end of 2020. While a 5-10% decline in housing prices is still significant, it’s nowhere near the possible 18% that Siddal had in mind.

Currently, CREA and other real estate boards have not reported significant declines in real estate prices, despite sales activity plummeting across the country. Not only has the pandemic resulted in fewer Canadians looking to purchase a property, but it has also delayed those looking to sell. Once restrictions of social gatherings and the threat of Coronavirus lifts, we may see momentum return to the real estate market on both the buyer and seller side.

Why We Likely Won’t See the Real Estate Bubble Pop

There are plenty of uncertain factors. For example, we don’t know how long social distancing measures will last in each province. We’re also unsure of how long it’ll take before we find a vaccine for Coronavirus. The longer social distancing is required and the longer a vaccine takes, the more negative effects we’ll see in the real estate market.

However, many factors point towards a healthy market once the COVID-19-era passes. This includes pent-up demand and supply, low-interest rates, and delayed housing inventory.

Pent-Up Demand and Supply

Many individuals hoping to buy or sell their home are waiting until Coronavirus ends. With the pandemic in place, it’s much harder to go through the whole process of hosting open houses and finding a home/buyer. This is one of the reasons why the price of residential units sold did not drop significantly or at all — because supply and demand for real estate declined in equal parts. As a result, it’s reasonable that sales activity will skyrocket once social distancing measures loosen up.

Further, the high cost of properties in cities such as Toronto and Vancouver is the result of a limited housing supply and high demand. The COVID-19 situation is neither reducing the demand nor increasing the supply — the ingredients required to pop the bubble. Instead, COVID-19 is reducing both demand and supply.

Low-Interest Rates Mean More Demand

When interest rates are low, demand for property goes up as it’s now cheaper to borrow money and purchase a property. Due to the Coronavirus pandemic, the Bank of Canada in March cut interest rates significantly and is currently holding it at 0.25%. This results in less costly mortgages (for the most part). Although we continue to see more uncertainty, these low-interest rates could drive even more demand in a post-COVID-19 world, meaning prices will only go higher if supply remains the same.

COVID-19 Has Also Stalled the Supply of New Homes

The construction of new homes is one way that the market can increase its supply of residential homes.  Although most construction is still permitted, the requirement for construction workers to socially distance themselves onsite has ultimately reduced productivity. In the prior mentioned report from CIBC, it estimates that social distancing regulations and the lag in overseas shipments have reduced construction productivity by 40%. This will ultimately result in a reduced supply of new housing.

What Factors Could Lead to Weaker Real Estate Prices?

Coronavirus has also birthed factors that could reduce demand to the point that prices may fall in the future. Due to the mass unemployment and rustles in the stock market, Canadians might prefer to delay their purchase of significant investments such as a home. Further, buyers who think that real estate prices will crash could be holding off until prices come down. Both of these factors could result in less demand. Although the unemployment numbers may point to a weaker economy, many of these jobs are layoffs. Companies that did lay off employees will likely rehire them once society recovers from the pandemic.

Many of the large Canadian banks predict that real estate prices will decline a few percentage points. This decline is possibly a market correction but not the bursting of a real estate bubble. Pent up demand, low-interest rates, and delayed new constructions could even result in higher real estate prices — not lower. There’s likely still time before a Coronavirus vaccine is found, but when it is, both buyers and sellers will be back in action!

The post What the Canadian Real Estate Market Could Look Like After COVID-19 first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.