Monthly Archives: February 2009

Wet Basements

By Carson & Dunlop Associates

The words are all-too-familiar to many homeowners. It is said that more than ninety-eight percent of all houses have had, or will have, basement leakage at some point.

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Identifying the Problem:

The presence of efflorescence, a whitish mineral deposit on the interior of foundation walls, indicates moisture penetration. It should be noted that the severity of the problem, or whether the problem is active, is not indicated by the amount of efflorescence. Other clues are rusty nails in baseboards, rotted wood near floor level, rusted metal feet on appliances, mould and mildew, lifted floor tiles, storage on skids, peeling paint and the presence of dehumidifiers.

Corrective Action:

Poor surface drainage is one of the main causes of basement leaks. The ground should slope away from the house a rate of one inch per foot for at least the first six feet. As a preventative measure, seal where the driveway and sidewalk meet the foundation walls. The eavestroughing and downspout systems must also perform properly. If downspouts are ever suspected of being disconnected, broken or clogged below ground level, they should be redirected to discharge above grade at least six feet away from the house. Also, eavestroughs should be kept clear of debris. Redirect downspout discharge.

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Localized low areas including basement stairwells, window wells, et cetera, may allow water to collect. Drains should be provided in the bottom of these. Where there are no drains, plastic dome covers over the window wells allow light into the basement while minimizing water and snow accumulation.

More Extreme Measures:

In the vast majority of cases, basement leakage is not significant from a structural point of view and can be controlled relatively inexpensively, as discussed above. However, the presence of foundation cracks, damaged perimeter drainage tiles, a high water table or underground streams may call for more extreme corrective measures. These measures are used when chronic flooding occurs. Damp-proofing

Sealing foundation cracks can be performed several ways with the cost of repairs varying. The approach taken depends on the specific crack; however, the most successful approach is sealing from the outside (Cost $500 – $900). Urethane or epoxy injection repairs can be done from the interior on poured concrete walls only (cost $400 – $600).

Excavating, dampproofing and installing drainage tiles should be used as a last resort. Dampproofing on the exterior typically involves parging a masonry foundation wall with a one-quarter inch layer of mortar covered with a bituminous or plastic membrane which extends down to the footings.

The drainage tile laid beside the footing is covered with gravel and filter paper.These tiles can often be damaged or clogged by roots and some localized repairs may be required.

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Because excavating on the exterior is expensive ($8,000 – $15,000 typically), an alternative is an interior drainage system. The cost of this approach is one-third to one-quarter the cost of exterior work. There are many cases where this proves satisfactory, although this must be judged on a case by case basis.

Where underground streams and/or a high water table are present, sump pumps are usually required.

Carson & Dunlop Associates is a consulting engineering firm which has been devoted exclusively to building inspections since 1978.  Their website is located www.carsondunlop.com and they can be reached at (416) 964-9415.

Understanding Mortgage Options

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By Gareth R. Jones

I wish to thank everyone who read my previously posted article entitled “All You Need to Know about Mortgages”.  The responses have been overwhelmingly positive for which, I am very grateful for the opportunity to provide some insight. At the close of the article, I mentioned that in purchasing real estate there is a popular expression, “location, location, location” and in mortgage financing there is a different one, “amortization, amortization, amortization” and I have been asked to expand on this. Let’s take the following example:

Mr. and Mrs. New Purchaser are interested in purchasing a home for the first time and are completely unsure and intimidated by all of the mortgage options available and the decisions that must be made in order to join the majority club of home ownership. It had been determined through a suitability, questioning conversation that based on their income, down payment, expenses and future plans that a $300,000 mortgage is within their affordability and comfort zone. Much to their surprise, there are further choices to be made on how this money is repaid to the Lender. They assumed that they would just pay a set amount each month for the term of the mortgage (5 years), then renew it down the road and continue to pay based on the outstanding balance. It did not occur to them that how and when this money was repaid would determine the outstanding balance at the end of the 5 year term and would impact the principle amount on renewal.

In mortgage financing there are a multitude of options to consider, such as: amortization, term, fixed or variable rate, Mortgage Life Insurance, property tax payments, early discharge penalties, refinances, double-ups, payment frequencies, pre-payment priveleges and numerous items.

For now, I would just like to demonstrate the difference made by choosing a “payment frequency” correctly, and one that suits your needs and goals. Notice the outstanding balance at the end of these very similar scenarios:

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Note:  Scenario #2 paid down $10,018.35 more than Scenario #1, using the same interest rate and over the same period of time. The difference being that there were 26 bi-weekly versus 12 monthly payments.

As you can see, changing the payment frequency to bi-weekly from monthly is a very simple, rewarding option. Most people are paid bi-weekly and mortgages can usually be coordinated with your pay periods. This change also has the least noticeable impact on your cash flow.

As indicated earlier, there are many opportunities in customizing your mortgage to suit your lifestyle needs now and later. The key is to know what to ask for and whom to ask.

Gareth R. Jones A.M.P.(FSCO Licence #M08009150) is a Mortgage Agent with Home Loans Canada- (the Brokerage arm of CIBC Mortgages, Lending and Insurance). FSCO Licence #10423. Gareth can be reached at Gareth.Jones@HLCmortgages.com.

Points to Remember When Selecting a Renovator

By Lina Risi

Looking for a renovator? Planning is crucial.

If you are contemplating a renovation, don’t expect to pick up the phone today and have a renovator on the job the next week.

  1. Always suggest that you visit with the renovator the previous client’s home.
  2. Referrals, contact them, don’t just view them on paper.
  3. Make sure they have a grasp of the look that you are going after.
  4. This is probably one of the most overlooked tasks for you the client….check to see whether their GST number is valid.  Phone your lawyer to do a company check, it’s like checking their credit.

Count on at least two to four months of planning.

Lina Risi is a Sales Representative with Royal LePage R.E.S.Ltd./Johnston & Daniel Division.  Lina is also a regular contributor to the Muddy York Blog.  Lina’s website is located www.postcardhomes.com.

AGENCY EXPLAINED (IN SIMPLE ENGLISH)

By: Martin K. I. Rumack, Barrister and Solicitor

Few people realize that the concept of “agency” is actually a well-defined legal concept. In fact, there are several different types of agency, and each with its own characteristics. In the plainest terms, an ‘agent’ is someone who has the authority to act on behalf of someone else as their representative.

As a very simple example: “A” has been authorized by “P” to purchase a sports car. A will go to the dealership, will negotiate the deal, and will sign the contract on P’s behalf. In the end, the sports car belongs to P, and P has the obligation to pay for it. A was merely exercising the authority she had been given by P, to conclude P’s deal with the car dealership for him.

In this scenario, A is known as the “agent’, while P is the ‘principal”. A relationship of “agency” has been established. Moreover, from the legal standpoint, the contract for the sale of the car will be between P and the dealership, rather than between A and the dealership. A merely acted as P’s representative.

The authority that A has to negotiate and conclude P’s deal can come in many different forms, and the law recognizes different nuances between them. Whether or not an agent has the authority from his or her principal can be a very important issue – it can determine whether the contract made on the principal’s behalf is a valid one.

“RATIFICATION” & “UNDISCLOSED PRINCIPAL”

It’s important to point out that even if A bought P a motorcycle (instead of a sports car) without his permission, there is a concept known as “ratification” that might save the day. Despite the fact that A failed to adhere to the scope of her authority (i.e. the purchase of a sports tor), P may decide that the motorcycle actually suits him better, and may decide to confirm the contract A entered into with the dealership, after-the-fact. In this situation, P’s ratification makes the contract with the dealership as good as if A had been authorized to buy a motorcycle in the first place.

The concept of ‘undisclosed principal’ can also be important particularly in real estate transactions where the identity of the parties to the deal might matter. Let’s say that C owns two condominium units side-by-side, and lives in one of them but decides to put the other one up for sale. Whoever purchases the unit from C will also become his neighbour, so C is Roping to-find someone who shares his fondness for peace and quiet. D, who looks like the quiet type, approaches C with an offer. D leads C to believe that he is interested in the condominium personally, i.e. that D is the potential buyer.

Unbeknownst to C however, the offer put forth by D is actually from H, who is a determined (but hopelessly untalented) novice trombone player. In this situation, D is H’s agent, and H is what is known as an “undisclosed principal”.

If C accepts the offer to purchase, mistakenly believing that it comes from D, is C out of luck.  Generally speaking, there is nothing to prevent an agent from entering into a valid contract on behalf of on undisclosed principal. There is an exception, though, if the true identity of the buyer of the condominium is important to C as seller, or if D the agent exceeded his authority from H somehow. In these instances, there will be no valid contract between C and H at all.

WHY YOU NEED TO KNOW

Buyers and sellers of condominiums should become aware of the concept of agency, as a means of protecting themselves from potentially costly legal misunderstandings. True, in most typical real estate transactions there is no confusion as to who a particular real estate agent acts for, usually because the agency arises through the signing of a contract (i.e., the seller signs an agreement with the listing agent).

But an agency relationship can arise without a written contract being signed – either through the consent between the agent and the seller, or by their mere conduct. This means that two people might be in a principal-agent relationship without necessarily being fully aware of it – or of its potential consequences!

Martin K. I. Rumack is a Toronto based Barrister and Solicitor and is a regular contributor to the Muddy York Blog. Contact Information:  202 – 2 St. Clair Avenue East, Toronto, Ontario, M4T 2T5, Tel:  (416) 961-3441 (Ext. 26)

WHERE IN T.O. WILL THE NEXT CONDOS GO?

toronto-building-skyline

By Anna Betel

Ever wonder if there are plans in the works to turn that prime downtown parking lot into condos? Or if there are plans to do anything with those run down rowhouses?

In an effort to keep Torontonians informed, The City of Toronto has recently launched a new website aimed at answering that very question. The Development Application Status website allows the public to view detailed information on all of the city’s development projects dating back to January 1, 2006.

The lack of any photos or satellite maps might make it seem a little bland right now. But don’t worry. This is the first of 2 phases, with plans to launch an interactive, ‘dynamic’ map to help users search for current developments (launch date TBD).

Chief Planner Gary Wright says “the Development Application Status website is a service initiative that makes the planning process more accountable to the public through greater accessibility and transparency. This will be a useful tool for residents and the development industry.”

The new Development Application Status website is located at: http://www.toronto.ca/planning/developmentapplications.

Anna Betel is a Sales Representative with Royal LePage R.E.S./Johnston & Daniel Division.  Anna is a regular contributor to the Muddy York Real Estate Blog.  Anna’s website is located at www.annabetel.com

Muddy York Quick Tip: How Does a Real Estate Transaction Benefit the Canadian Economy

According to a Canadian Real Estate Association (CREA) study conducted by Altus Clayton, each residential MLS transaction generates an average of $32,200 in additional consumer spending.  These expenditures include such items as the purchase of furniture and appliances, moving costs, renovations, services and taxes (with Mayor David Miller still in office in Toronto, this number may be higher).  Real Estate transactions stimulate employment, spur consumer spending and have additional benefical impacts on the general economy – real estate is very good for the economic health of any city or region.

Source:  Altus Clayton Study for CREA. 2007

The Value of Working With A Realtor in this Market

By David Dunkelman

I find it incredulous that in this day and age there is still a segment of the population that feel Realtors are overpaid and at best a necessary evil in a real estate transaction. This way of thinking is really flawed and is born out of ignorance and a lack of understanding. A good Realtor will not only earn their commission, they will quite likely net you much more than you would be able to achieve on your own. How will they be able to do this ? Through a myriad of ways including strong negotiation skills that are learned both in real estate courses and most importantly out in the field where negotiations are part of a Realtors daily life.

What are some other ways a Realtor can bring value to a real estate transaction?

Lets start with pricing: A good agent will price your home to maximize its value on the market while at the same time providing a realistic list price that can result in an expedient sale. Studies have shown that for the most part listings that are sold quickly get better prices than those that languish on the market and get stale, thereby inviting low ball bids. Realtors visit hundreds if not thousands of houses each year and can tell you first hand what your home is worth rather than you having to decipher a bunch of old MLS listings and trying to compare your house to another house based on a photograph and an advertising description.

Now consider the marketing of your home: Sure in the good old days when the market was booming you could make a real estate sign, put it on your front lawn and maybe find a buyer – but times have changed. This is once again a more balanced market and a real estate sign by itself is simply not good enough. A top Realtor will utilize a variety of marketing tools embracing both old and new media in an effort to sell your home. Some of these practices may include: MLS listing, newspaper ads, internet advertising, blogging, social network sites, virtual tours, colour photos for professional feature sheets, floor plans, open houses and just listed flyers. All these efforts on the part of your Realtor save you time and money. Do you really think that after spending all this time and money on the aforementioned tasks that you are not getting good value for your money ? If so please read on.

Let’s talk about safety; your own and that of your money: All Realtors are insured and strict controls and guidelines are put in place in order to keep track of who is viewing your house. Realtors can offer you advice on how to protect your valuables during public open houses and Realtors only show your home to qualified prospects thereby saving you time and money running around trying to keep the house clean and worrying about the motivation of the people who are coming to view your house. You cannot put a price tag on safety. While Realtors will take steps to make sure that your personal safety is protected they will also make sure the safety of your money is protected. All real estate deposits are handled within strict government guidelines to make sure your deposit is protected. Your Realtor is trained to provide a paper trail for FINTRAC ensuring that the deposit from the buyer of your home is legal and from a reputable source. Realtors are trained  to spot red flags in an offer and during a negotiation that may come back to bite you after the sale.

By now hopefully you have developed a new appreciation for your Realtor and the how they earn their commission selling your home, but what about buying a home. Do you really need a Realtor to help you find you a home with all the information available on the internet. The answer is yes, absolutely. Not only can a good buyers agent save you money through a skilled negotiation but they can also save you a ton of money and heartache by steering you away from a “money pit” or a home that has a “stigma”. Realtors are trained to find out the facts about a home’s history and to disclose these facts to you. Was the house ever used as a “grow house” or did it ever contain uffi insulation. Is there a seller property information sheet available, is there evidence of knob and tube wiring. What about the oil tank ? Does it meet TSSA standards. These are just a few of the land mines that your buyers agent is trained to look for on your behalf that can save you  thousands of dollars after the closing. The best part about Buyer Agency is that the commission is normally paid by the Seller. You do have to commit to being loyal to one Realtor but that loyalty is a two way street and should be worth its wait in gold. Provisions can be arranged in advance to deal with private sales and new home construction.

So there you have it. Yes, a Realtor does bring value to a real estate transaction and yes they more than earn their commission. Choose wisely and your Realtor will be someone you will want to stay in contact with for life and who can be an important resource for you now and in the future.

David Dunkelman is a Broker and ABR* with Royal Lepage R.E.S.Ltd/Johnston and Daniel Division.  David is also the Author of “Your Guide to Toronto Neighbourhoods”. *ABR* The Accredited Buyer Representative (ABR®) designation is the benchmark of excellence in buyer representation. This coveted designation is awarded to real estate practitioners by the Real Estate BUYER’S AGENT Council (REBAC) of the National Association of REALTORS® who meet the specified educational and practical experience criteria.

CMHC reports January Housing Start Decline

The Canadian Mortgage and Housing Corporation (CMHC) reported that the seasonally adjusted annual rate1 of housing starts declined to 153,500 units in January from 172,200 units in December of 2008, according to Canada Mortgage and Housing Corporation (CMHC).

For more information, visit http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2009/2009-02-09-0815.cfm

Rathnelly: One of Toronto’s Friendliest Neighbourhoods

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By Anne Levenston

The Rathnelly area is one of the friendliest of midtown neighbourhoods. West off Avenue Road just north of Dupont this leafy quiet residential pocket is best known for its bi-annual Rathnelly Day street celebration. Personally I have been helping run the festival for almost 20 years and it has give me much enjoyment. “This is an event that is planned for and anticipated by all the family.” The streets are closed off and the day begins with a pancake breakfast in the park, children’s games all morning, garden tours, treasure hunt, pet show, and cocktail parties leading up to the much anticipated street dinner and dance. Tables are laid all the way up Rathnelly Avenue. Barbeques are hauled out of back yards and the DJ starts the music.

Rathnelly has been home to such luminaries as filmaker David Cronenburg and  artist Michael Snow – those folk who need a peaceful retreat in the midst of the action. Once settled in this neighbourhood residents find it hard to leave, often moving around the corner or across the street as their need for a larger or smaller house arises.

Located in the area, Brown School with both French Immersion and English programs is one of the top elementary public schools in the city. Graduates often go on to nearby Upper Canada College, Bishop Strachan or York School among others.

Yorkville and Bloor St. are close by with all the best in shopping and dining out. Leading off to the west is the Nordheimer ravine a beautiful country in the city place to walk your dog or cross country ski on a snowy day.

Anne Levenston is a Sales Representative with Royal LePage R.E.S.Ltd/Johnston & Daniel Division. Anne is a regular blogger with Muddy York. Anne’s website is located www.annelevenston.com