This issue's article is not filled with gems of legal wisdom, rather I thought I would give my view on what seems to be going on in the real estate marketplace.
First of all everyone thought there was a huge boom in the market. Statistics as produced by the Greater Toronto Home Builders' Association seem to indicate that it is not a boom but rather a nice consistent market. I think it has been fed by people looking to get in to the market, that waited through the horrible first half of this decade. The combination of this, plus the low interest rates kick-started a dormant housing market. What seems to now be the case is that there is tremendous inventory available.
Many of the large well-financed builders that come through the early part of this
decade, in reasonable shape, expanded to meet the market demand together with all the new
builders aching to cut out their part of the demand. This created a little craziness for a
while, which still continues in the condominium market as the quality projects are selling
quickly to those that want that lifestyle. Then there are the investors who see
condominiums as a means of obtaining capital appreciation, while having rental income to
pay off the mortgage. BEWARE! This can backfire. As the buyers of the late '80s who
watched their condos drop by 50 per cent in value and couldn1t rent them. A lot of people
went bankrupt because of this. My father always taught me that if you can1t afford to
lose you cannot afford to win.
What to do? The strikes should not be stopping that decision to buy, rather you should be doing so as quickly as possible. If the settlements escalate the costs significantly, what choice will the builder have but to pass on their cost increases to the consumer. In addition the builders are a little nervous about the current cough in sales and will probably be easier to deal with in terms of negotiating extras, etc.
There you have it, if you had decided to go ahead and became worried because of the
strikes, GO FOR IT!
A few additional things.
1. Keep the questions coming, I need help with topics.
2. Don't forget to check the web at www.newhomesandcondos.com
- look under Legally Speaking.
3. Have fun! Buying a home should be an enjoyable experience.
4. Get a lawyer to review your offer before it is firm as only a lawyer can provide legal
advice.
5. Make sure your lawyer explains the documents to you so you really understand.
6. Know all the closing costs as close as you can, including your lawyer's fees and
estimated disbursements.
For more informative articles, click on Legally Speaking on the left.
Jayson Schwarz is a senior partner with the firm Schwarz Gillen Barristers and Solicitors.
He can be reached at (416) 486-2040.
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