In an effort to ease the burden on Toronto’s aging sewage system, the City of Toronto has approved a by-law making it mandatory for property owners, city wide, to disconnect their downspouts from the sewer system. The by-law will take effect in three phases in different areas of Toronto, starting later this year (2011).

When rainwater runs off a roof, it may flow through your eaves troughs into downspouts and directly into the sewer system. However, during heavy rainfall, the  system often becomes overloaded and untreated sewage can flow directly into our waterways, polluting them and local beaches. This is the biggest reason Toronto beaches get shut down in the summer time!!

At one time, the City would come and disconnect downspouts and replace old eaves at the City’s expense. Back in the year 2000, I lived in a bungalow in East York. The house had not been well maintained by the previous owner and the eaves were barely attached to the house. I applied to the City for the downspout disconnect program and they came and installed all new eaves and disconnected the downspouts for free…………..no wonder the City is always raising taxes.

Well finally the City of Toronto figured out that they could not sustain this kind of subsidy to property owners and you must pay for the expense on your own. There are some exceptions of course.

If disconnecting the downspouts is not technically feasible or would create a hazard, property owners can apply for an exemption.

The City may also provide financial assistance to low-income property owners.

For more information, you can call the City of Toronto at 311 or visit toronto.ca/water

Today, I am going to deal with the electrical component of home built before 1950.

Electrical

The type of wiring in homes built in this era is called Knob and Tube. By today’s standards, its not considered safe. The primary reason being is that this type of wiring is not grounded. This is an important consideration when buying a home as ungrounded wiring could damage the type of electronics we have in our homes these days.

And good luck getting insurance. Most companies won’t even bother. A few of them will – but – on the condition that the wiring be replaced by a certain date – usually 30 days from possession.

When it comes to a home inspection, walls cannot be ripped down to see the wiring! The best an inspector can do is have the right tools for the job. I have seen some homes where the wiring in the basement was visible and it looked like everything had been brought up to code – but looks can be deceiving. Once the inspector got upstairs, none of the wiring beyond the kitchend was grounded!

So a warning to buyers. If you’re considering buying a home in Toronto built before the mid 1950s – assume the wiring needs to be replaced. Unless of course, the seller has verifiable documentation to the contrary.

Part 4 – The Furnace coming on Wednesday

The Basement

Today, let’s go to the opposite end of the home – the basement! In areas like Leslieville and Riverdale in Toronto, homes were built 75 years ago and more. The foundations of these homes are rarely water tight. And often moisture problems in a basement can be solved with simple solutions like changing the grading of the ground surrounding the home.

One sign of moisture penetration in the basement is efflorescence - white powdery deposits on the walls. To determine if the moisture problem is still present, your home inspector should have a moisture meter to guage how much moisture is in the walls. A reading of 10-12% is typical for older homes. Anything above that needs further investigation.

Waterproofing a home is a very costly undertaking. Make sure a basement is carefully inspected.

Over the years, I have used several home inspection companies including one of the really well known ones in Toronto. All of their inspectors have degrees in engineering apparently.

But I am more confident with companies that have inspectors with building experience.

ROOF and ATTIC

Typically, the home inspector inspects the roof and the attic of a house on his own. He or she reports back to you what they discovered. You have no visual evidence of what they have seen unlike in other parts of the home where you can actually get to yourself and see with your own eyes what they are talking about.

The company that I typically use for my clients – Canspec Building Services - has all their inspectors use a video camera to take a movie of the roof, attic and other crawl spaces that you cannot access yourself. This is a very powerful presentation because now, you have seen with your own eyes the state of those parts of the home.

Apart from a fire, there is nothing worse than water penetration into your home. So when ordering a home inspection, shop around and see if your inspector will be giving you a video presentation of your roof!

The spring market in Toronto has been difficult to fathom. Apparently there is a recession but bidding wars are happening everywhere and not just in Toronto. Colleagues in Mississauga and Oakville tell me about similar events there too. Record low interest rates would be the likely culprit.

So what do you need to do to ensure that your offer stands out from the rest and that your offer is accepted?

5 Key Elements to Winning a Bidding War

Conditions in your offer

Typically a buyer would always have conditions in a offer – such as a condition for a satisfactory home inspection. Once an offer was accepted by a seller, then the buyer would proceed to have the property inspected. Assuming a satisfactory home inspection, then the transaction firms up and the deal is done.

In a competing situation, any conditions in an offer should be removed including a condition for financing as well. This could be problematic if the seller has not provided a pre-list home inspection of the property at the time the home was listed. Imagine in the scenario above, 8 competing offers. In theory, there could be 8 separate home inspections all taking place on a Monday afternoon if offers are to be reviewed that night. Crazy to be sure, but I have been in a home where several home inspections were going on at the same time.

• get your home inspection completed before the offer if one has not been provided
• speak to your mortgage consultant and explain the situation. There could be consequences when over-bidding in a multiple offer situation. That’s a different blog post altogether

Closing Date

Ideally, your closing date should be the one that is desired by the sellers if at all possible.  Often the listing says 60 or 90 days. Which is it? I would always contact the sellers’ agent and ask if there is a specific date preferred.

Deposit Cheque

A deposit cheque is given to the sellers broker and is held in trust by them until the closing date of the transaction.  A deposit is given to show your intention to close the deal. In a bidding war a bigger deposit cheque is always better! Remember that the deposit is part of your down payment and your lawyer will sort all that out on closing. And secondly, try to bring a certified cheque or a bank draft with the offer. 

• Make sure you bring a certified cheque or bank draft
• Larger deposits help make your offer more appealing

If you’re a first time buyer and your down payment is tied up in a RRSP account, getting access to the money quickly is a challenge. So to first time buyers, see if you can get the money withdrawn sooner rather than later!

How much do I pay?

This is always the most challenging aspect of any bidding war. How much over the asking price should you pay?  This is challenging because suddenly any comparable listings I use as a reference have no bearing.

It is important to know how many competing offers there are and the sellers’ agent by-law has to provide you with that information. And if at all possible, it would be good to know who the other agents are. This is not required but my own Brokerage – REMAX Hallmark - has set a policy so that everyone knows who is involved in any bidding war.

Some agents suggest that for every offer that is in play- add $10,000 to the purchase price. In the situation above where there were 8 offers, that means $80,000 over the asking on a home listed at $379,900! That would be nuts! Every situation is different and there are no hard and fast rules to deal with this aspect of a bidding war. Experience matters

So in a bidding war, you need to know:

• how many other offers are in play
• and who are the other agents involved.

Intangibles

Most homes in Toronto are sold with the appliances and light fixtures included in the purchase price. Sometimes not! In a bidding war situation, if the seller wants to keep a dining room chandelier for instance, then you’re best off to make sure that this chattel excluded.

Sometimes, sellers are selling before they have bought and therefore don’t know their next address and don’t know when they will be moving. In this case, I would add a clause allowing for the closing date to be moved if necessary.

Some of these intangibles can only be determined if I stay in constant contact with the sellers’ agent as they would have some insight into what would make the sellers happy thus making your offer the one that stands out from the crowd!

Good luck and call me if you need help with your offer – be it in a bidding war or otherwise.

Sam Soukas   416-462-1888

46 Denvale Rd in Parkview Hills - East York - Toronto

This property is a bungalow situated on a corner lot (39×110) and is ideal for someone looking to add a second storey. Parkview Hills is a quiet part of East York with great elementary schools!

For more detailed information – visit my website

Leslieville Home

This is the final instalmment on my home inspection series for buyers in the Toronto real estate market. Previous topics included the roof and attic, the basement,  the wiring (electrical) and the furnace.

 Today, I want to deal with a very scary part of your home inspection. A human home inspector can’t really help you with this part of your inspection. This is a part of home buying in the Toronto Real Estate Market that we talk about but its a challenge to deal with.

Termites

Last year, I had a listing in Leslieville. It was a unique one of a kind home – built at the beginning of the 20th century. For the most part, the home inspection that the buyers did uncovered some deficiencies but nothing out of the ordinary.

However, the termite inspection was a different story. The termite inspector in this case was a German Shepherd. We know that dogs are now being used to sniff out drugs at airport terminals and some apparently can even sniff out cancer cells. This particular canine can sniff out evidence of termites past and present.

He discovered that there was evidence of termites (usu: waste) behind one wall – an outside wall – that was covered in drywall. A human termite inspector would never have found this! And, your property would have been deemed termite free. Yikes!

So I would highly recommend calling on the canine inspector – Kody to handle this part of the inspection as he has the best tools for the job! The company is called Purity Pest Control and they can be reached at 1-877-507-0642. Make sure you have a long home inspection condition as Kody is very busy!

After the winter we just had, you are going to want to ensure that the house you buy has a furnace in good working order and preferably one that’s not too old!

The Furnace

Furnaces and their heating systems come in all shapes and sizes.

1. forced air gas
2. forced air oil
3. boilers connected to radiators
4. electric baseboard heating
5. in floor heating

By far, the most popular choice is the forced air system that uses natural gas. My personal favourite is the boiler connected to radiators as the heated air is not as dry as a forced air system.

Typically a forced air gas system has a life expectancy of 15 years. And I have seen many much older than that. And certainly, the furnace’s shelf life can be extended with regular and proper maintenance.

All furnaces have serial numbers. So during your home inspection, make sure your home inspector has his book which will give him the serial number and date your furnace was built! This is really important information and your insurance company is going to want to know about it as well.

Now if the furnace is ancient and needs replacing, the federal and provincial governements offer great rebates to replace clunkers with new hi-efficient models.

I moved in Novemeber 2007 and not only was the furnace a relic but it was the wrong size for the house! My home inspector Dave advised me that I really needed something smaller. It was the first thing we did when we moved in.

You will have to have an energy audit first in order to qualify for the rebates and its a bit of a process. In the end, I saved about $1,000 on a new furnace. Plus a hi-efficiency model will pay for itself within 3 years!

Final instalment – coming on Friday – TERMITES!

A property came up for sale on Westwood Ave on Monday (Pape and Mortimer) and I had booked an appointment for them to see it on Thursday. Last night, I received a page from the listing agent saying that there was an offer registered on the property and that she would be reviewing at 10 pm. No bidding war this time but if I had been able to get my clients in sooner, there could have been one.

So I am a little frustrated that my clients won’t be able to see this home as no doubt it sold last night, but its a good indication that the real estate market in Toronto, especially in this part of the city, is turning over rather quickly.

The only negotiations I got to do were with my buyer clients.

“How badly do you want this house? With 3 other offers, you’re going to have to pay some $30,000 over the asking. No conditions. Do you really want this house?”

That was what it was like to work with buyers for those years before the “Miller Tax”.

Clearly, the world’s economy is not out of the woods yet, but in Toronto, people are addicted to real estate.

With interest rates this low, lower than in the autumn of 2005, will I be negotiating with my buyers or for my buyers?

Remember, I work in Leslieville, Riverdale and East York in Toronto – and for Toronto, the homes offered represent great value. Sales of homes in these neighbourhoods have not really slowed down as much as others and mostly recently, properties are NOT sitting as I wrote about earlier today.

So stay tuned!