It’s been a few weeks since my last communication as the market has still been fairly brisk compared to summers past.
I will be away From Sunday August 11th – Thursday August 15th. My family and I are spending a few days at a cottage.
In the GTA MARKET – Best July Sales numbers since 2009! Download the report
Strong Sales and Price Growth in July
August 2, 2013 — Greater Toronto Area REALTORS® reported 8,544 residential sales through the TorontoMLS system in July 2013. Total sales were up by 16 per cent compared to July 2012. Over the same period, new listings added to TorontoMLS and active listings at the end of the month were up, but by a substantially smaller rate of increase compared to sales.
“Last month’s sales represented the best July result since 2009 and was the third best July result on record. Despite recent increases in average borrowing costs, home buyers are still finding affordable home ownership options in the GTA,” said Toronto Real Estate Board President Dianne Usher.
“We are a year removed from the onset of stricter mortgage lending guidelines and many households who put their decision to purchase a home on hold have reactivated their search. An increasing number of these households are getting deals done,” continued Ms. Usher.
Reflecting tighter market conditions, the average selling price for July sales was up on a year over-year basis by eight per cent to $513,246. The low-rise market segment continued to be the driver of overall price growth. It should be noted, however, that the average condominium apartment price was also up by more than the rate of inflation on an annual basis. The MLS® Home Price Index (HPI) was also up on a year-over-year basis for all major home types.
“We are forecasting continued average price growth for the remainder of 2013 and through 2014 as well. Months of inventory for low-rise homes remains near record lows, suggesting that sellers’ market conditions will remain in place in the second half of 2013. An increase in listings in 2014 would lead to more balanced market conditions and a slower pace of price growth next year, albeit still above the rate of inflation,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
What happens when there is a death and a property is being sold by the estate?
Alexandra Grigorescu, July 16, 2013 2:23:04 PM
What exactly happens to someone’s debt after they die? Do the spouse or children get saddled with it, or does it just dissipate, thanks to some well-wishing pact on the part of creditors? Wouldn’t that be nice.
The answer lies somewhere in the middle. Debt is non-transferrable without a signature—that is, unless you’ve co-signed on a loan or mortgage. Just as your spouse’s university debt doesn’t suddenly become yours upon marriage, a family member’s overloaded credit cards (if they’re under his or her name alone) aren’t your responsibility. On the other hand, if you’re a joint cardholder, the debt transfers to you, but not if you’re merely an authorized user, according to Yahoo! Finance.
So where do the creditors direct their attention after a death? To the deceased’s estate, otherwise known as the sum of their real estate, money, and all-around stuff left behind. If there’s money to be had in the estate, outstanding debts will be deducted from there, meaning that the inheritance you expected may shrink. On the other hand, if the debt exceeds the value of the estate, then the surplus doesn’t become your burden; the creditors must simply take the loss.
Probate is the term for how an estate is processed and transferred after a death. In the U.S., probate courts proceed based on state-by-state rules, and in Canada, each province has their own probate fees and the wills (or lack thereof) are gauged by each province’s laws. In Ontario, for instance, a probate court will determine if a will is legal and then decide how to handle the will’s probate requirements.
According to Estate Planning for Dummies, the estate gets distributed in a fairly standard order (with minor differences between states), beginning with legal fees and administration costs, followed by family allowances and funeral costs. Creditors are next in line, and must be notified of the person’s death by the estate trustee, usually by advertising in a local paper. Fortunately, they’re only permitted to file claims during a certain timeframe. Outstanding debts on a mortgage or car will take precedence over credit card debt—but all will take precedence over any inheritance.
According to MSN, “a loan collateralized by an asset usually stays with the asset,” meaning that assets such as cars or homes can be repossessed if the estate is insolvent and nobody steps up to settle the debt, and also that if a will bequeaths you a house with an outstanding mortgage, it becomes your responsibility. Interestingly, if you own property in one or more states in the U.S., you will have multiple probates, and each will be subject to that state’s laws.
Fortunately, not all assets qualify as probate estate. Assets that have a named beneficiary, such as life insurance policies, RRSPs, and pensions don’t count—unless your estate is the beneficiary. Likewise, joint property (as between spouses) can bypass probate, through a niftily named process known as right of survivorship.
However, there’s another option. According to a recent article in the Globe and Mail, children cannot be held liable for the debts of their parents after death, and they can even opt to bankrupt the estate by spending whatever money is tied up in it before the debt can be repaid. This is technically true, but only if creditors don’t pounce on the estate during the timeframe laid out in the newspaper notice, which is generally not shorter than 30 days, and could last up to 90 days. The trustee must also give the creditors fair notice. If an estate trustee doles out the estate to its beneficiaries without waiting on the creditors, they may become liable for paying the debts themselves.
Authorized users on cards belonging to the recently deceased should beware, though. Your credit score may be negatively affected, and continuing to rack up charges after the death of the primary cardholder is illegal, as is using a card knowing that the estate is bankrupt.
They say that nothing’s certain except for death and taxes, and as it turns out, taxes after death. While creditors might sometimes get shortchanged, the tax man is not so lenient. The Canada Revenue Agency says you should notify them with the deceased’s date of death as soon as possible, and then make arrangements to stop or redirect payments of HST, working income tax benefit, and/or Canada child tax benefit.
Then comes the tricky part. If you’re named as the executor of the deceased’s will, you have some responsibilities thanks to the Income Tax Act. These include filing the morbidly dubbed “final tax return,” ensuring that all outstanding taxes are settled, informing beneficiaries which amounts from the estate are taxable, and getting a clearance certificate to indicate that the deceased’s business with the CRA is officially completed. Don’t expect a break due to grief—as with any other return, the CRA is firm, stating that “If you file the final return late and there is a balance owing, we will charge a late-filing penalty.”
Any way you look at the situation, it’s a sticky one. Needless to say you should consult with a legal representative immediately after a loved one’s death on how to proceed, and regarding whether you need probate or not.
How are Canadians doing financially? July 25th 2013
OTTAWA – Canadians are richer than ever, even if they also have near-record debt.
A new report by Environics Analytics puts Canadian household net worth at the start of the year at over $400,000 for the first time in history — although it only rose above the mark by $151.
The average household’s net worth grew by 5.8 per cent at the end of last year from $378,093 at the end of 2011 thanks to a 5.4 per cent gain in liquid assets and a 5.1 per cent increase in real estate values, the report says. Meanwhile, debt rose by a relatively modest 3.3 per cent. The new calculation keeps Canadian households ahead of their U.S. counterparts in terms of net worth for the sixth straight year — C$400,151 compared with US$381,086. At the time, the two dollars were worth about the same but Canada’s loonie has since lost ground to the U.S. greenback. At current rates, the U.S. net worth would be equivalent to C$391,871. The gap has also narrowed since the end of 2011 — in part because Canadian households continued to borrow and American household debt actually declined 2.4 per cent. Most measures of Canadian household finances have tended to focus on the all-high levels of debt, which in the past year has topped 160 per cent of disposable income, one of the highest ratios in the world.
Analysts note, however, that along with a lot of debt, Canadians hold real assets, particularly the highest level of home ownership in history. Home prices in most parts of Canada have steadily risen despite a weak economy, and equity markets have recovered most of the losses sustained during the 2008-09 recession.
There is risk, economists say. If there is a sharp housing correction in Canada, household net worth will plummet along with home values. Bank of Montreal chief economist Doug Porter says about half of household net worth is attributed to real estate values. “At various stages last year, Canadian home prices were about 60 per cent above those of average U.S. home prices, which is off the charts. That accounts for the difference in net worth,” he said. The Bank of Canada, which has long warned about high debt levels, noted last week that Canadian households are becoming more cautious both in retail spending and in real estate purchases, the latter in part due to stricter mortgage rules that came into effect last July. “In the first quarter of 2013 … consumption rose only modestly and residential investment declined for the third consecutive quarter,” the bank reported in its quarterly economic outlook. “This extends a recent trend toward slower growth in household spending, which, combined with a the downward revisions to the debt-to-income ratio and upward revisions in the savings rate points to increased household prudence.”
The household wealth calculation does not take into account government debt, which is far higher in the United States than in Canada. The data shows households in Regina had the biggest jump in net worth last year, rising 11.2 per cent to $391,826. That was fuelled by the strongest growth in real estate holdings among cities and the second fastest rise in liquid assets, behind Saskatoon, Environics Analytics said.
Hamilton experienced the second fastest growth in net worth among major cities, up 9.5 per cent to $420,515. Vancouver, Calgary and Toronto remain Canada’s wealthiest cities.
Provincially, the report singles out Saskatchewan households as the big gainers in 2012 in terms of net worth, an increase of 7.6 per cent to $351,865, as liquid assets grew by 7.4 per cent and real estate holdings by 7.7 per cent. The improvement was achieved despite a 7.4 per cent uptick in average household debt to $100,437.
In my own dealings
Over the last 3 weeks since my last communication I have been involved in 6 multiple offer situations! Representing 2 separate buyers. Inventory is still low and decent properties are attracting bidding wars. In some neighbourhoods there is not one single home available on market.
Buyers are still finding it difficult, however if they are able to wait and be patient, they will ultimately be successful. With the fall market around the corner I expect sales to be robust and lively. Inventory should improve but keep in mind the amount of purchasers will increase as well.
Sneak Peek! In September I will launching for sale a very charming 3 bedroom semi-detached home priced at around the $550,000 mark in the west-end (about 3 minutes west of the junction neighbourhood).
Please let me know if you would like more info. and I can fill you in on some details.
Have a wonderful shortened work week!