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Cherry Beach top spot to swim
Report reveals cleanest shores in Toronto.
City applies for international ranking.
Half of Toronto's public beaches today are taking the final steps to get the green light — or, in this case, a blue flag — as first-class summer playgrounds.
A report released today by Environmental Defence offers passing grades to seven beaches based on water quality, environmental management, beach safety and environmental education. In an attempt to change public perception about the safety of the city's shoreline, Toronto will be the first North American city to apply for Blue Flag certification: a rating system widespread in Europe and the Caribbean, which recognizes beaches that are safe for swimming.
If all goes well, blue flags will fly along the city's waterfront next summer.
Cherry, Hanlan's Point, Ward's Island, Woodbine, Balmy, Centre Island and Beaches park beaches made the cut.
The city has 42 kilometres of Lake Ontario shoreline and all the beaches were tested for 27 criteria including water quality, environmental management, safety and services, and environmental education programs.
The report, titled Making Waves: An evaluation of Toronto's Beaches For The Blue Flag Program, was produced by Environmental Defence and is also available on the Web site http://www.TorontoBeach.ca.
Cherry Beach was judged the best of the best, while the seven that did not earn a blue flag were Marie Curtis, Sunnyside, Sir Casimir Gzowski, Budapest, Kew, Bluffer's Park and Rouge beaches.
The Blue Flag program started in France 15 years ago and is administered by the Foundation for Environmental Education in Denmark. About 3,000 blue flags have been awarded around the world for beaches that set international standards.
June 30, 2004 in Location, Location ... | Permalink | Comments (0)
Homeowners enjoy big gains
Study says value of homes up sharply
Canadians saw the value of their homes shoot up sharply in the last five years, according to a survey by Century 21 Canada, and none cashed in more than those in Ottawa.
The survey of Canada’s 20 largest housing markets looked at the percentage increase in house prices over five- and 10-year intervals, and also looked at the return on a $20,000 down payment on an average-priced house.
Ottawa homeowners saw their investments appreciate the most over the last five years, the survey says. On an average home, purchased outright in 1999 and sold this year, value increased a total of 103 per cent. That was followed by Peterborough, Ont., with a 98 per cent return, then St. John’s, Nfld., with a 92 per cent increase, and then Montreal and Edmonton each with an 86 per cent return. Windsor-Essex, Ont., had the lowest rate, but was still up 46 per cent.
But it was Halifax-Dartmouth properties that were the best long-term investment, with value increasing almost 146 per cent over a 10-year period. That was followed again by Peterborough with a 143 per cent increase, and then by Regina and Saskatoon, Sask., each with a 137 per cent rate of return. Greater Vancouver had the lowest 10-year appreciation, up 60 per cent.
For comparison, the S&P/TSX composite index would have offered a 131 per cent return over the last 10 years.
The survey defined the price of an average home as the average price of all single-family residence, including condos and recreational properties, but excluding farms, vacant land, and commercial property.
“But that’s not how most people invest in real estate,” says Donald Lawby, Century 21 Canada’s president. “People gather as big a down payment as they can, and then they buy a house – leveraging their investment by borrowing money from the bank. So, when they sell their house, they don’t just earn a return on their down payment, they earn a return on the full sale price of the house.”
The survey cites as an example a $100,000 home bought with a 10 per cent down payment. The purchase would leave $10,000 of equity in the purchaser’s home. If the home was then sold for $110,000, and the $90,000 mortgage paid off, the net cash-in-hand would be $20,000, or a 100 per cent return on the initial investment.
Century 21 Canada took the example of a home purchased using a $20,000 down payment, then added the total of mortgage payments that would be paid on a typical 25-year mortgage. The average amount of rent paid monthly on a two-bedroom apartment in the area – which amounts to equivalent rental housing – was then subtracted from the total in order to get the complete return on the investment.
Using those numbers, Ottawa homeowners saw a whopping 512 per cent return on their $20,000 down payment over the five year period from 1994-2001. Ottawa was followed by Peterborough, with a 357 per cent return, Edmonton, at 299 per cent, Halifax-Dartmouth at 292 per cent, and St. John’s with 255 per cent. Vancouver trailed behind the pack at 50 per cent.
Over the 10-year period from 1994-2004, Halifax-Dartmouth led the way, with a 436 per cent return on investment. The Nova Scotia capital region was followed by Peterborough, with 431 per cent, Saskatoon with 295 per cent, Windsor-Essex with 292 per cent and Ottawa at 287 per cent.
By contrast, the same investment would have lost 13 per cent in Greater Vancouver over the same time period.
According to the latest MLS® results for the month of May, home prices in Canada’s 25 major markets are up 12.9 per cent from May 2003 levels, the fifth-consecutive double-digit increase and the third consecutive month in which it set a new monthly record.
The survey notes that the large urban centres often showed a wider range on returns, driven by sudden increases in home values and larger costs required to service mortgages.
- from RealtorLink™
June 30, 2004 in Watching the Market | Permalink | Comments (0)
Agents' fees get an overhaul
Straight percentage-based commissions, the traditional way of rewarding real estate agents involved in commercial transactions, are increasingly under pressure from those who want change. In their place, the owners of office, retail and industrial buildings and the companies that manage those properties are pushing for a wider range of options.
Most often, they are demanding fees that reward performance and that reflect the degree of difficulty involved in making a sale or finding a tenant. In seller's markets such as today's, where many buyers are pursuing few properties, fees should be lower because an agent's job is easier, they argue.
On the other hand, property owners are willing to pay more for a speedy sale or for sales in which target prices are exceeded. In that scenario, a percentage of the sale price continues to be the basic tool for calculating financial rewards to agents. But that percentage can rise or fall according to preset conditions for speed and price.
Hitting the target price, for example, may result in a fee of anywhere from less than 1 per cent to about 3 per cent, depending on the size of the property.
Exceeding that price, however, may trigger a bonus, raising the fee by anywhere from a quarter percentage point to a full percentage point. In some cases, property owners are even willing to pay all or part of an agent's expenses.
This pressure for change from property owners and managers was felt first in leasing, especially office leasing, in the late 1990s. Instead of commissions, leasing agents now receive flat fees. That trend is now moving beyond leasing, to the sale of office, retail and industrial properties.
"We look on it as a success fee rather than a commission," says Gary Whitelaw, president and chief executive officer of Bentall Capital LP of Toronto. Bentall manages 45 million square feet of commercial office space on behalf of pension funds and institutions. Bentall decides when and what to buy or sell and negotiates with real estate agents on all commissions.
"We want to see an emphasis on performance. The commission structure for commercial properties is absolutely evolving," adds Paul Finkbeiner, president of Calgary-based GWL Realty Advisors Inc. His company, like Bentall, acts for institutional owners and manages 21.6 million square feet of office space.
"What we want today are a series of incentives to achieve maximum benefit," he explains. "Straight commissions don't do that. If an agent's reward is just one number then you have to settle for what [the selling price] you get. We want a fee structure that makes sure the agent's interests are aligned with ours."
In simple terms, performance bonuses have been proven to generate higher selling prices.
The first major step towards creating a new, industry-wide approach began in the late 1990s when office building owners started pressing for a flat fee as the basis for rewarding leasing agents. Previously agents and brokers who found a tenant were paid a commission based on rents for both the first year and subsequent years. The first year might pay 2 per cent, the second and third year 1 per cent, with the balance of a five-year lease paying one-half of 1 per cent.
Today the reward is a flat fee in the range of $4 to $6 a square foot for major downtown buildings, says Colum Bastable, president and CEO of Royal LePage Commercial Inc. of Toronto.
The reason is straightforward, explains Michael Emory, president of Allied Properties and Allied Properties REIT of Toronto.
"It made accounting easier. It allowed us to fix leasing costs and benefit from 100 per cent of future rent increases. There were no future payouts to agents," he says. "In our pro forma statements we can now isolate leasing costs accurately and easily and as rental rates rise, the benefits go straight to us. Agents are paid one time, when the lease is negotiated."
Agents were willing to trade off a small amount of extra income, paid over the term of the lease, in favour of a larger immediate payment when a lease was signed or a tenant occupied the space.
The move to flat fees also reflected the changing nature of the Canadian commercial property industry, adds GWL's Mr. Finkbeiner. Before the real estate meltdown of the early 1990s, commercial property was widely held by entrepreneurs. Today it is concentrated in a handful of very large property management companies acting for pension funds and institutions.
Management is by committee and those committees must be able to muster hard facts to justify their decisions, says Bentall's Mr. Whitelaw.
"We have our own staff doing analyses [for both leasing and sales] for all properties we manage. In the past you would go to brokers for much of that information -- if they had it. The role of the agent has become downplayed, as a result," he says.
At the same time, management companies like Bentall and GWL have taken lessons from other industries, especially investment banking. The fee structures they now demand from real estate agents reward speed and maximize the sale price for properties put on the market.
As a result, today's sales transactions will often be based on a percentage commission for achieving a sale at a fixed price within a defined period of time plus various levels of bonuses.
There are no hard-and-fast rules about the percentage of a sales price that the commission is based on. It is all a matter of negotiation, says Blake Hutcheson, Canadian president of CB Richard Ellis Ltd.
In today's seller's market, an owner offering a commercial property for sale can negotiate lower commissions, perhaps less than 1 per cent for a major property.
The changes in the way owners pay brokers is now reflected in the way brokers pay their own staff. Traditionally, agents would split commissions with the brokers that employed them. Now, for example, an agent at Royal LePage Commercial receives 50 per cent of commissions until his or her total sales reach a specific threshold, usually in the low hundreds of thousands, Mr. Bastable says. The agent's share then rises to 60 per cent.
To satisfy client demand, brokers now offer services such as research and property management, for which they charge either an hourly rate or a flat fee for a project. That demands finding new ways to reward key staff.
"We have to have a wide range of options when it comes to paying our people, from straight commission to salary to fees like you would pay an accountant or a lawyer," Mr. Hutcheson says.
But commissions will always be a core element in calculations, suggests Royal LePage's Mr. Bastable.
"We are not likely to radically change the system as long as both parties are getting value," he says."
June 30, 2004 in Agency Matters | Permalink | Comments (0)
Pickering Village ~ A History
A historical plaque commemorating the founding of Pickering was erected on October 3, 1976 at the intersection of Kingston Road and St. George Street in the former village of Pickering. The ceremony was sponsored by the Ajax Historical Board, and the plaque was unveiled by Mr. C.A. Mason, Mayor of the Town of Ajax. The inscription reads:
The Founding of Pickering
Between 1801 and 1807 a settlement developed here in Pickering Township where the Danforth Road crossed Duffin's Creek. Among the early settlers was Timothy Rogers, a prominent Quaker and colonizer who built a saw and grist-mill in 1809. A post-office was established in 1829 but the hamlet of Duffin's Creek developed slowly. The construction of the Grand Trunk Railway, completed in 1856, and growing agricultural prosperity stimulated the community's development as an important grist-milling and local commercial centre. Known as Pickering from the late 1870's, it became a police village in 1900 with about 1,000 inhabitants. In 1953 it was made an incorporated Village and in 1974 amalgamated with the Town of Ajax.
Historical Background
East of Toronto, one finds between Lake Ontario and the rolling till plain slightly to the north, an off-shore terrace. This terrace varies from two to eight miles in width, and its clay and silt soil beds-end level surface are earmarks of a fertile lake plain. Hence, early in the history of Upper Canada, pioneers were attracted to this easily accessible area, and settlements soon clustered along the streams - Cobourg Brook, Ganaraska River, Bowmanville Creek, Oshawa Creek, Duffin's Creek, Rouge River - whose valleys led northward dissecting the till plain. Later, with the completion of the Kingston Road about 1805, villages such as Cobourg, Port Hope, Bowmanville, Oshawa, Whitby and, of special interest here, Pickering, gained further impetus for growth.
Pickering Township was surveyed in 1791 by Augustus Jones, Deputy Provincial Land Surveyor. The site of the later village of Pickering on Duffin's Creek was part of the 4,800-acre block in Pickering granted in 1793 to Major John Smith, an officer in the 5th Regiment during the Revolutionary War and later commanding officer at Detroit (1790-92) and Niagara (1792-95). On Major Smith's death, the land passed to his son, David W. Smith, Surveyor-General of Upper Canada (1792-1804). In 1797 Smith planned to erect a saw and grist-mill in the township. Although these mills were never begun, an order was sent by Smith to the Commissary-General's department for the issue of millstones and necessary hardware. Smith still had this equipment in 1799, and it was possibly sold along with a portion of his land in 1807.
The area around Duffin's Creek was unsettled prior to 1801, with the exception of local traders. An Irish trader, Duffin, was active in the area around 1788-90, and by the time of Jones' 1791 survey, Duffin's name was connected with the creek that flows into Lake Ontario. Another trader, William Peak, reputedly located at the mouth of Duffin's Creek as well. Between 1801 and 1807 a small group of houses formed the initial Duffin's Creek settlement near the Kingston Road bridge. Among the earliest settlers was Samuel Hunger, a farmer who leased the crown reserve Lot 16, Concession 2, in 1801 and lived there for some years. After 1805 Noadiah Woodruff, a Quaker, also had a house on Lot 16.
In July 1807, Smith sold an 850-acre block around the Creek to Timothy Rogers (1756-1827), a native of Connecticut and prominent member of the Yonge Street Quaker settlement. Rogers intended to build a grist-mill and sawmill on Duffin's Creek, and began erecting the mills and other buildings in 1809 near his house on Lot 14, Concession 1, and southeast of the Kingston Road bridge. In 1813, in order to repay several debts before attending the annual Quaker meeting in New York State, Rogers sold the mills and some property to Alexander Wood, who thereafter operated the mills sporadically. In Rogers estimation, Pickering Township was the centre of Quaker settlement in Upper Canada and he fully expected that a Yearly Meeting would be established near Duffin's Creek. The Quaker population of Pickering did increase, but in 1813 the small Duffin's Creek village still only consisted of a few houses, including a tavern operated by Noadiah Woodruff since 1808. Settlement progressed very gradually.
Before 1820, attempts to establish commercial stores in the county failed, largely because of the scant population and the lack of sufficient cash crops that farmers could trade for manufactured goods. The first attempt had been made at Duffin's Creek when a Mr. Smith operated a store near the former Rogers mill in 1817- 18. This enterprise, however, exhibited the same instability as did milling operations. The real state of commercial activity and milling in Pickering was revealed in 1820 by one Whitby township settler:
The County north of that (was) one unbroken wilderness ... With no grist mill in the Township of (Whitby), the nearest being situated at Duffin's Creek, which was of the rudest character, and hence out of repair, the family was obliged for weeks at a time to go without bread. Meat of any kind was only a rarity which few could afford. The nearest store was at Little York, where the journey, for years, had to be made on foot.
Four years later a store was again opened at Duffin's Creek, this time by Francie Leys, a Scot from Aberdeen. Although he did not have a licensed inn, Leys accommodated travellers in his house at the west end of the settlement. A post-office, subsequently established in 1829 with Leys as postmaster, was officially known as Pickering, yet the village continued to be called Duffin's Creek.
Though the centre of a large agrarian community, Duffin's Creek continued to grow slowly after 1830. The village's lack of a good road north and the vigorous growth of Markham and Stouffville prevented it from achieving the status and prosperity of its lakeshore rivals, Whitby and Oshawa. These factors and the later post-Rebellion depression contributed to the village's slow development, and attempts to accelerate the natural growth rate met with failure. After 1831, for example, Charles Fothergill, the noted naturalist, author, and politician, planned on an elaborate scale the foundation of a community to be called Monodelphia. Churches, a tavern, printing office, mills and distillery were all part of Fothergill's ambitious plan. Although this plan failed to materialize, Fothergill did encourage the construction of a few houses at Duffin's Creek, and resided there himself between about 1831 and 1837.
In late December 1830, Fothergill had purchased the mill owned by Alexander Wood since 1813. He intended to rebuild Wood's old mill, then inoperative, but was prevented from doing so until 1833, when he acquired the necessary rights for forming a mill-pond nearby. The completed mills temporarily gave the community the name of Pickering Mills, in addition to Duffin's Creek and Pickering, and the village was again served by ships which came up the creek to Fothergill's mills. Plagued by misfortune, principally the destruction of his dam and a mill, Fothergill abandoned the village projects and mills in 1837.
Despite the failure of Fothergill's projects, Duffin's Creek remained as a small village with many of the typical trades then found in other rural communities throughout the province. Milling operations were continued by Christopher Elliot, who had built a grist-mill on the Creek, north of the bridge, by 1837. In that year, there were about ten houses at Duffin's Creek, most of them located near the bridge on the Kingston Road. The population of Duffin's Creek, or Canton, as it was also called, was conservatively estimated in 1846 at 130. By that time, there were four churches (Presbyterian, Roman Catholic, British Wesleyan and Quaker), a grist-mill, brewery, tannery, taverns, and the shops of shoemakers, tailors, a blacksmith and a wagon-maker. Following the now common pattern of rapid transfer of milling lots, the Elliot grist-mill was subsequently owned by Peter Head, an innkeeper who purchased it in 1846. By 1851 several more trade shops had opened, and throughout the 1850s at least three saw and grist-mills were in operation simultaneously at Duffin's Creek.
The village, known as Pickering from the late 1860s, obtained rail connections when the Grand Trunk Railway opened between Oshawa and Toronto in August 1856. The line reduced road traffic, but benefited milling operations, certainly the settlement's main industry. Head's mill remained operative until 1869 or 1870. After 1867, Moses Smith built a grist-mill at the former Rogers mill site. John R. Hoover purchased this mill about 1877, named it the Elm Dale Mill and, after a fire, rebuilt it between 1885 and 1887. Perhaps the largest grist-mill complex in Pickering was that built in 1875 by William and John L. Spink, near the old Head mill site.
Both the Spinks, experienced millers who supplied commercial firms in Toronto and Welland with flour, and Hoover incorporated the latest advances in milling technology. In addition, each mill was served by a spur line of the Grand Trunk. The Spinks and Elm Dale mills remained in operation under various owners until 1934 and 1956 respectively.
In 1881 the Pickering News proudly described the village as a growing, important town and drew particular attention to the flour-mills, the large Pickering Woodworks and other local industries and institutions. Among the latter was the Pickering College, a residential secondary school built by the Quakers in 1878 near their Yearly Meeting House at Pickering. Sectarian difficulties within the Society of Friends in Canada forced the closure of this Quaker-run school in 1885. Reopened in 1892, the College remained at Pickering until its destruction by fire in early 1906. The College was later rebuilt at Newmarket after having achieved a high reputation for its business department and preparatory courses for university and normal school.
Evident from various other newspaper accounts between 1880 and 1900 was Pickering's position as a commercial and professional centre for a prosperous rural community. Through the Grand Trunk, Pickering also functioned as a shipping centre for area produce: livestock, grain, and flour ground at the village mills. In 1900 the community's population was estimated at about 1,000. Village promoters supported the municipal elevation of Pickering, and on June 2, 1900, the Ontario County Council passed a by-law making Pickering a Police Village. Pickering became an incorporated village in March 1953 and on January 1, 1974, it was amalgamated with the Town of Ajax.
June 29, 2004 in Location, Location ... | Permalink | Comments (0)
Inspections, Defects & Disclosure
No home is perfect.
Realizing this, buyers today are encouraged to have a home inspection done by a qualified professional prior to finalizing the sale.
The inspector's role is to identify any structural problems that might affect the value of the home today or in future and, if any are identified, to give the buyer an estimate for repairs.
The buyer can then either accept the fault as is, renegotiate the offer or revoke it altogether.
As the vendor, how much should you tell prospective buyers about defects - hidden or otherwise? Most experts agree that full disclosure is best.
Aside from casting doubt on your integrity, you could jeopardize the sale entirely if your buyer discovers hidden defects during the inspection.
You could also face legal actions if the home is sold and it is later discovered that you knew about a particular defect.
To protect everyone's interests, many real estate boards now ask vendors to sign a statement itemizing improvements and identifying structural problems.
Turn lemons into lemonade. Describe any major structural defects in the listing agreement, but add that you have reduced the price accordingly!
June 29, 2004 in Selling a Home | Permalink | Comments (0)
American sales hit record level
Existing-home sales hit record level in May
Sales of existing homes in the United States shot to a record high in May as people scrambled to buy ahead of an expected rise in interest rates. Existing-home sales leapt 2.6 per cent from the previous month to a seasonally adjusted annual rate of 6.8 million in May, the U.S. National Association of Realtors said. Sales were up 15.8 per cent from a year earlier. The middle of the range, or median, price for an existing home rose 10.3 per cent from a year earlier to $183,600 (U.S.). "In part, the record results from a natural 'fence-jumping' by buyers getting into the market after mortgage interest rates began to rise at a sharper clip in April," said the association's chief economist David Lereah.
June 28, 2004 in Watching the Market | Permalink | Comments (0)
Luxury townhouses in Oshawa
College campuses and conservation area trails are within a short stroll of a new bungalow/loft condominium project in North Oshawa.
Timberlane by Garden Homes is located on Simcoe St., just south of Durham College and the new Ontario Institute of Technology, close to Cedar Valley Conservation Area. Construction has just started on the enclave of 28 townhouses, where 11 units are still available to purchase.
The luxury condos are all approximately 1,700 square feet in size and priced from $218,900 to $228,900. The units are freehold, though services like lawn maintenance, snow shovelling, garbage removal and water are included in the condominium fees, which are $168 per month.
It's the first Oshawa project for Garden Homes, which has recently sold out projects in Newmarket and Richmond Hill.
"This project is being marketed to empty nesters," says sales associate Vaya Pukli. "We're getting buyers from Whitby, Pickering, Courtice and some from Toronto. There is little other product in this area to serve the older market. The Toronto buyers are finding they can sell their homes in the city for a good price and buy something for considerably less here, without having to sacrifice size."
Unlike most townhouses, which typically are 20 feet wide, Timberlane's are 25 feet wide, allowing for more spacious dimensions inside.
"You don't feel like you're in a townhouse," says Pukli. "With the nine-foot ceilings, it's very open, very exciting."
The loft feature is ideal for accommodating visiting children and grandchildren or for use as a media room or home office. Standard features include 9-foot ceilings, main floor master bedroom, ensuites, breakfast bars, colonial baseboard and casing and ceramic tiles in hard surface areas.
On the exterior, architectural focal points, such as dormers, keystones, soldier coursing, etc., lend curb appeal.
The project is an infill site, bordered by mature trees. Two townhouse blocks in the development (Taunton and Conlin Houses) have walking trails at their doorsteps that connect to the Cedar Valley Conservation Area, a two-minute stroll away. Simcoe House units each have their own walkways leading to Simcoe St. sidewalks.
Another cluster, Niagara House, is designed in a stepped-back configuration that follows the natural contour of the land and is bordered by mature evergreens for private backyards.
Public transit is located on Simcoe St. at the development's entrance. Downtown Oshawa is a five-minute drive south and the Oshawa Centre mall is 10 minutes. Just north on Simcoe St. is Windfields Farm, one of the largest thoroughbred race horse farms in North America; nearby Raglan has the bustling White Feather Country Store and picturesque Port Perry with its many boutique shops is 15 minutes away.
The sales centre is open Tuesday to Thursday from 1 to 6:30 p.m. and Saturday and Sunday from 1 to 5 p.m. Call 1-800-609-6526.
- from TheStar.com
June 27, 2004 in Location, Location ... | Permalink | Comments (0)
Vote for your mortgage
We are in the final stretch for one of the closest federal elections in history. Poor Paul Martin, who was a great finance minister, is now struggling as prime minister. The Liberals have fallen on the axe of the sponsorship scandal, and appear to be offering people an empty platform. Even worse, politically, is the smell of defeat that the media dogs are so attracted to. Suddenly the powerful and successful Martin is painted as ineffectual and out of touch.
At the same time, the NDP's Jack Layton is the friend of any camera he meets. Confident, charismatic, outgoing and with an intriguing political spouse, this guy is now sitting within less than 10 points of the Liberals in national polls. It could translate into more seats than the socialists have had since Ed Broadbent, who has just reinvented himself.
Then, there's Harper. From goofy, nerdy, pointy-headed aliented western also-run, he has now been transformed into a credible contender for the prime minister's office. The Alliance-Reform extremist policies have been watered down by the Progressive Conservative faction within the new Conservative Party, and Harper has been smart enough to agree. So, as the Liberals move to the left, and scare people with tax-and-spend policies, the Conservatives have moved to the center - where, after all, most Canadians live.
This all means a photo finish on June 28th that will probably result in a minority government, Liberal or Conservative. If it's Liberal, then Martin will look to Layton to give him enough support to avoid an early election. If it's Harper, he will have to play footsie with the separatist Parti Quebecois to accomplish the same. In either case, financial markets will worry, with consequences for your mortgage.
In the event of a Liberal-NDP same sex marriage, it is a certainty that government spending will rise and, quite possibly, taxes too. This union could also take the country back into budgetary deficit, and give us programs from which there is no escape - like national child daycare. The result will be market volatility, some downward pressure on the Canadian dollar and fears that the economy will cool. That should be enough to convince the Bank of Canada that this is way too fragile a time to be raising interest rates - leaving mortgages at the current 50-year low level.
If the Conservatives win a minority, backed by Gilles Duceppe and the other Bloc-heads, then it's pretty sure we will get tax breaks for middle-class families, reduced government spending, the elimination of a number of programs, better relations with the United States and a decent investment climate. That will bolster financial markets and probably send the value of the dollar considerably higher. But a high dollar is bad news for our manufacturing and exporting sectors, so the central bank will use the only good tool it has for taming the dollar, which is interest rates. Once again, no reason to think the cost of money will rise and, incredibly, it might even drop.
As mentioned here last week, there is a huge amount riding on the course of the economy and the level of interest rates over the next few years. Canadians have taken on more personal and mortgage debt than ever before in history. Massive amounts of money have been invested in real estate, with the result that we are less diversified than ever before. A jump in mortgage costs and an attendant drop in house values would be catastrophic news for millions of Canadian families.
Ironically, an instable political environment now might be the best insurance that interest rates will stay in a narrow range. So, on June 28th, vote for your mortgage!
- from Garth.ca
June 27, 2004 in Mortgage Financing | Permalink | Comments (0)
Home Inspection Avoids Pitfalls
A house is the largest single purchase most of us ever make. Why is it that so many people spend less then 45 minutes looking at the home they intend to buy?
The first two or three hours spent with your potential new home may be the most rewarding. Schedule a home inspection and take the time to review what is in store for you. A home inspection isn’t designed to put a value on a home, but to assess the soundness of it’s structure, systems and general state of repair, both seen and unseen. An educated and seasoned professional inspector can draw on knowledge and years of experience and evaluate every component of the home; from attic insulation to basement drainage.
By attending the inspection, you also benefit from learning how to shut off the main water and the outdoor taps, where the electrical panel is, and how to change the furnace filter. The home inspection will also give you ballpark figures on how much any repairs or renovations will cost.
“Whether it’s a buyer’s first purchase or fifth, they should consider a home inspection,” said Daniel O’Brien of Canadian Home Inspectors Inc. “It is very reassuring to have someone walk through the home and uncover hidden issues, which may be of concern.”
Home inspectors see all kinds of things. Several years ago Alan Carson of Carson Dunlop & Associates Ltd. was hired to inspect a house that a homeowner had just moved into. The homeowner had spent 15 minutes inspecting the house after dark before purchasing the house. After closing, she looked closely at the house from the backyard for the first time, and was shocked by the large crack running up the back wall.
“Based on the inspection and my knowledge of the neighbourhood, I determined that half of the house was settling because of an underground stream running below the building,” Carson said.
Exterior inspection is a large part of the process as well.
A complete check of the actual house, lot grading, sidewalks, patios and a visual comparison to neighbouring properties is carried out. This can help determine any problems with run-off, leaning or potential basement problems.
While most home sellers will not intentionally mislead someone, most will not point out problems unless asked specifically.
A home inspection is usually performed either prior to putting in an offer, or after an offer to purchase has been accepted. Many offers include a clause indicating the offer is conditional upon a satisfactory inspection. The condition should be worded so that the final decision on buying the home rests with you and not the home inspection company. The condition in the offer includes a time limitation so that the inspection is carried out promptly.
June 27, 2004 in Buying a Home | Permalink | Comments (0)
Exterior Cladding 101
When you look at a house from the outside for the first time, what do you see?
Water Penetration
Most serious wall problems are related to water in one way or another. Rainwater may enter wall systems in several ways. It may be driven by wind, it may enter either by gravity or by capillary action.
Condensation. Water may also be a problem in wall systems if warm, moist air moving through the wall (from indoors in cold weather and from outdoors in warm weather) is cooled and deposits condensation inside the wall system. Smaller amounts of condensation may also form if moisture moves into the walls by vapour diffusion.
Implications. You should watch for water damage to wall systems, although in many cases you won’t be able to see it. If the siding is deteriorating, it is a good indication that there is some damage behind it. However, in many cases the siding looks fine while the sheathing and wall structure behind deteriorates.
Drying potential. The ability of a wall system to dry often determines the amount of damage done to the cladding and the structure. Wall systems with sidings that have good drying potential, such as aluminum or vinyl, may be less likely to suffer damage than synthetic stucco, for example, which has poor drying potential.
Strategy. As you look at exterior surfaces, look first at the cladding materials and see if they’re in good repair. Second, try to determine how water might get into the wall system and whether there are any areas where you might reasonably suspect concealed damage. Your inspection of the inside of the building should focus on the vulnerable areas that you noticed outside. In some cases the water getting into the wall system will show up on interior finishes, allowing you to confirm your suspicions. However, damage to wall assemblies doesn’t always show up on the building interior — at least not in the early stages.
Pay attention to the drying potential of the wall system. Brick veneer systems with vented rain screens have good drying potential, whereas most stucco systems do not.
Too Close to Grade
Wall cladding materials should be six to eight inches above grade to protect the cladding system and the structure from water damage. This means that we can see some of the foundations above grade and below the siding. Foundations are designed to withstand the moisture in the soil. People may not like the appearance of exposed foundations, but from a functional standpoint, we want to see them.
Masonry. Masonry should usually be at least six inches above grade. There are exceptions because some bricks, for example, are designed for use at and below grade. You’ll be able to tell on older buildings whether the brick was designed for use below grade, by looking for damage. On new homes, it’s hard to know. You should describe any new brick within six inches of grade as suspect, but allow for the possibility that it’s going to be all right.
Other sidings. Most other sidings, including wood and wood-based products, stucco, fibre-cement, metal and vinyl should be at least eight inches above grade.
Causes. Siding materials too close to grade are typically the result of:
• Poor construction and landscaping.
• Grade levels altered during landscaping or surface water control work.
It’s possible that the siding is too close to grade because the building is settling. But there are bigger problems if this is the case.
Implications. It’s easy to recognize the damage to the wall cladding materials. This may include:
• Spalling and cracked brick and missing mortar.
• Obstructed weep holes in masonry veneer.
• Rotted wood.
• Swollen, buckled or cracking wood-based products.
• Peeling paint.
• Staining.
• Rusted fasteners.
• Rusted lath and drip screed on stucco.
Weep holes covered. In some cases, veneer walls with weep holes and flashings along the bottom course suffer dramatically if the weep holes are below grade. Water won’t be able to drain out, air won’t be able to get in, and moisture may seep from the soil through weep holes. Severe spalling can occur.
The more serious and concealed implications are the damage to the wall and floor structures behind the siding. This includes rot and insect damage at sheathing, studs, sill plates, headers and floor joists, for example.
Damage to interior finishes and components is also possible. Sometimes it’s not visible until considerable damage has been done. This may be the first indication that there is a problem.
Strategy. Check around the building perimeter for adequate clearance between siding and grade. Can you see part of the foundation? Where the siding is below or too close to grade, look first for damaged siding. If possible, probe to look for damage to the structural members behind.
Note the areas where siding is too close to grade and check inside the building for evidence of water leakage and damage. Try to find the top of the foundation wall. How far above grade is the top of the wall?
The worst case. The foundation wall may be too short to allow the siding to end six to eight inches above grade. This is the more serious situation. We can’t remove soil and create a trench around the house because we’ll have a chronic flooding problem as surface water is funneled against the house. The foundation is ideally raised to solve the problem, but this can be disruptive and expensive.
A better case. If the siding is too close to grade because the grade has been elevated to form a garden, for example, the solution may be to restore grade level to its original position. This is less disruptive and expensive.
Another better case. If the siding has simply been installed too low, the solution may be to remove the bottom few inches of siding. This is only practical if the foundation is tall enough.
Masonry veneer walls. Masonry veneer walls typically have weep holes and flashing near the bottom of the wall. Look to see if these have been buried. There should be a weep hole (missing vertical mortar joint) about every fourth brick along or near the bottom of the wall. Buried weep holes can lead to considerable damage to the brick veneer and the structure.
Too close to roofs
Siding materials should not be chronically wet. We’ve talked about this with respect to grade level. It’s also true where the bottom of the siding intersects a roof. On dormers, for instance, the best practice is to keep the siding material two inches above the roof. There are step flashings under the siding and roof, so it’s okay to keep the siding above the roof surface.
Causes. Wood and wood-based products are particularly vulnerable to moisture wicking up into and damaging the siding. End grains of wood and cut edges of hardboard, OSB and plywood draw moisture into the wood enthusiastically. It’s common to see siding deterioration along a roof/wall intersection.
Implications Again, water damage to the siding and possibly to the structure behind are the implications.
Most sidings discolour if they are chronically wet. Paint may peel. Stucco may soften and crumble. Brick may crack and spall, especially if the moisture in the brick freezes. Efflorescence may develop on the brick.
Strategy. Look for a one to two inch separation of siding and roofing materials. Where there is little or no clearance, look and probe for deteriorated siding materials.
Planters or gardens
Gardens should not be built against houses if they push earth against the siding. For instance, if there is a raised planter with three sides against a house, the home’s wall acts as the fourth side. Siding materials are not designed to be in contact with earth. What’s worse is that people water their gardens so the soil is perpetually damp.
Causes Planters and gardens against siding are a landscaping problem.
Implications. The implications are damage to the siding and wall structure behind and below.
Strategy. Look for siding to be six to eight inches above exterior grade. If the siding itself is susceptible to water damage, it should be eight inches above grade.
Where you see raised gardens or planters, look for evidence of damage to the siding on the outside and look for evidence of water penetration and damage on the interior.
Raised planters close to buildings should have four sides and should be set out roughly two inches from the siding. This is not a common detail but it is easier on the building.
Insulation problems
Sometimes you will see a large number of patched holes on exterior wall surfaces. If these are in a uniform pattern, they often indicate insulation blown into the wall. This insulation can include cellulose and controversial materials such as urea formaldehyde foam.
Causes. Adding insulation through building exteriors is a retrofit to reduce energy costs and improve house comfort. This approach is usually taken when no interior renovations are planned but insulation improvements are considered a priority.
Implications. Adding insulation from the outside creates a number of holes in the exterior siding that may or may not be properly patched. In some cases, the patches are visible. In other cases, they are patched so well they are invisible.
Possible leak spots. Poor patches may be water entry points.
Insulation may cause damage. Insulation in old walls can reduce temperatures in wall assemblies and result in condensation problems where none had existed before. The insulation makes the wall cavity colder. Since insulation is often added without providing an air/vapour barrier, there’s a higher risk of the warm, moist air, which leaks through the walls, condensing within the wall system.
Strategy. Watch for patched holes that suggest insulation has been blown in. It’s often not done to the whole building because it’s expensive. Watch for areas on the north or west sides of buildings, which are typically colder. Watch also for small areas that project out from the house. They tend to be cool and uncomfortable. This includes second floors overhanging first floors, bay and oriel windows, etc.
Check that the application holes have been patched and are weathertight. Suspect concealed water damage to the walls caused by condensation, especially in cold climates. Watch for evidence of water damage, especially near the bottoms of wall assemblies. Again, you’ll have to check on the inside and outside of the building.
Summary. Water kills houses. It’s a problem at roofs, at foundations, and on the exterior cladding. If you think about nothing else as you inspect the outside of homes, think about water getting into the building.
June 27, 2004 in Home Maintenance | Permalink | Comments (2)
