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Questions Around Estate Sales
The Executor(s) of an Estate are tasked with some very important obligations on behalf of the estate, during what is a very emotional time for those involved. An Estate that involves real estate, typically a principal residence is best approached with the support of a real estate professional. The real estate can represent a significant component of the estates value and maximizing that value is important to all involved.
What is Probate?
A key question that will be asked by a real estate professional in relationship to the sale of real estate as part of an estate is; “Has Probate been granted?”. What does that truly mean:
- Probate is actually now called ” a certificate of appointment of estate trustee with a will” or in the case of no will the “with a will portion” is changed to “without a will” at the end. It essentially grants the executor(s) the right to be the deceased person’s personal representative, to carry out their wishes as stated in the will.
- The Certificate of Appointment may take weeks to get from the court, this can present factors related to potential changes in real estate markets for timing of a sale.
Do You Have To Wait For Probate Before You Sell A Property?
The answer to this question is both yes and no. Consider this:
- The Land Titles Office will not accept a title transfer of an estate without a court certified certificate of appointment, so this document is key to allowing an estate sale to close.
So Yes you must have the Certificate of Appointment before a sale can be completed, however the Agreement for Purchase and Sale can contain a clause to protect this requirement, stipulating within that the Sale is Conditional upon the Executor of the Estate being Granted the Certificate of Appointment. We have more specific wording for this and it is recommended that Executor(s) discuss this with the solicitor for the Estate in advance.
How Long Does An Executor Have To Settle The Estate?
This is often referred to as the “Executor’s Year” and is a general rule of thumb that the Executor has typically one year to settle the assets / debts of the estate. There may be predefined specifics which add to this time period within wills but it is a general rule of thumb to work from.
Executor(s) are responsible to maintain and accounting on behalf of the Estate. We provide a written opinion of value and a full accounting of real estate disbursements on closing to assist the executor(s) with compliance.
Here are some great resources for Executors of Estates:
Have a question related to this topic, click the image below to email the author.
October 2014 Kingston And Area Market Report
Market YTD Sales 2014 YTD Sales 2013 % Change Avg. Price 2014 Avg. Price 2013 % Change
KAREA Board 2865 2957 -3% $285,452 $281,542 1%
City of Kingston 1606 1750 -8% $303,215 $299,886 1%
Notes: Data for this post was sourced from the Kingston & Area Real Estate Association MLS ® System Sales data for the periods as noted within. This pro-active post is brought to you by RealtySource Inc., Brokerage and it is never our intent to solicit buyers or sellers under contract with a real estate broker. It is always our intent to solicit your interest in discussing real estate. Information is provided for discussion purposes only.
What is CMHC Up To With Pending Announcement?
There is likely no small announcement pending this coming Friday at 11 am from Canada Mortgage and Housing Corporation (CMHC). A major announcement from the insurer of what is estimated to be 50% of all Canadian Mortgages, 70% of insured mortgages and the second largest crown corporation (to Canada Post) is well worthy of attention. So what is CMHC up to with this major press release…. lets look at what we do know:
CMHC was originally formed to assist returning war veterans who encountered an extreme housing shortage with funding home purchases after World War II. Today it provides insurance security to major lending institutions for loans with 20% or less down payment. If the loan defaults, CMHC acts as essentially a taxpayer back stopped insurance policy that the borrower pays for (the CMHC Fee) and the bank benefits from (unlike Genworth & AIG Insurance CMHC insures 100% of the loan value). The five major Canadian banks only made around 7.8 Billion in 2012, they oh so need a taxpayer backed support program (estimated to representing a risk factor of $17,000 per Canadian). CMHC is not alone there is Genworth and Canada Guaranty with a smaller percentage of the market but keep in mind CMHC insures their insurance program to 90% of loan value. CMHC has other facets from renovation loan insurance, housing programs, research,reporting and more. It suffices to say that the main business of the corporation is insuring mortgage loans with less than 20% down-payment.
Mr. Evan Siddall was appointed by Jason Kenny, the Federal Minister who oversees the Crown Corporation as the Chief Executive Officer in December of 2013 and took the post January 1st of this year. Mr. Siddall has an investment banking background and has worked for Goldman Sachs & Co., Nesbitt Burns and Irving Oil Ltd.. A Globe and Mail Article announcing the appointment contained the following quote from Finn Poschman, vice-president of research at the CD Howe Institute which could prove telling:
“He is calm, understands financial markets, and clearly has the confidence of government, and the Finance Minister, in the direction he and they may take with respect to CMHC,” Mr. Poschmann said. “Whether the route is toward a larger private role, or something more like the status quo, it is a terrific appointment.”
In December while speaking to reporters Finance Minister Jim Flaherty told reporters: “Regrettably, CMHC became something rather more grand, I think, than it was intended to be…We’ll see over time what that role should be.”
In the recent budget the government restated that CMHC will pay guarantees fees to the Receiver General to compensate the Federal Government for mortgage insurance risks. This move will also align CMHC with guarantee fees paid by private mortgage insurers who already do this.
So Speculation Option 1 – Some Form of Privatization? This would be big news and create great political fodder. If privatization was a part of the announcement it would likely be under taken through a partial break up of the crown corporation through transfer of the core Mortgage Insurance business while Research, Indian Affairs Programs among others would remain. Australia took a similar approach with success.
The recent budget included the statement “The Government continues to adjust the housing finance framework to restrain the growth of taxpayer-backed mortgage insurance and securitization ” which have also been a running theme to statements made by the Finance Minister. Reducing future taxpayer burden is clearly part of the agenda. So the question that begs here, is what step could they take to reduce taxpayer risk, which leads to our Speculation Options 2 and 3:
Speculation Option 2 – A change to the down-payment requirements: A return to 10% down-payment structure, eliminating the 5% down option. This would have a major impact on a lot of consumers, housing affordability thresholds and the economic engine that is the housing industry. In our opinion this move would be wrong in so many ways!
Speculation Option 3 – A reduction in the amount of insurance protection offered: Will it be less geared to impact the end consumers of mortgages and more directed to impact the degree of security provided to banks (the companies making billions) ? If Genworth and Canada Guaranty offer 90% insurance to banks is it fair that a public backed crown corporation under a government that wants to promote a more competitive environment (this was referenced in last budget with legislation changes to assist smaller banks access to mortgage insurance) is competing with an uneven playing field? So a change to the mortgage insurance guarantee from say 100% to 95% and then 90% would put CMHC on a level playing field, pave the way for a future transition to privatization just like the Receiver General Fee structure guidelines placed on CMHC within the last budget did. Is this not the trend? All the while reducing the tax payer risk a clear mandate of this government.
My money is on Speculation Option 3 while at the end of the day we can only speculate while awaiting with anticipation as to what what this major player in the real estate insurance market has to say this Friday!
The writings expressed here are that of the writer Patrick Hulley, broker of record and founder of RealtySource Inc.. Click the image to the left to email Patrick directly or add your comments here…debate welcomed and encouraged!
January 31, 2014 Kingston and Area Market Update
There is no doubt that the weather has had an impact on the January market Kingston Area Real Estate Association Board Wide sales reflect a 22% decline in sales volumes over 2013 as of the end of January 2014. Prices posted modest gains board wide, largely as you can see from the City of Kingston sale price averages attributable to an increase in rural sale price averages in January. It’s too early to read a trend line into this for 2014 but there is likely no doubt that the severity of weather has impacted real estate sales. Sales numbers tabled below:
Market Unit Sales 2014 Unit Sales 2013 % Difference Avg. Price 2014 Avg. Price 2013 % Difference
KAREA Board 123 158 -22% $284,204 $275,219 3%
City of Kingston 81 96 -18% $306,987 $308,072 -0. 3%
As always your comments are welcomed and encouraged. We encourage you to follow us on twitter @rsourcetweets for our latest updates or visit us online at http://www.realtysource.com. To email the author, just click the image to the left.
Notes: Data for this post was sourced from the Kingston & Area Real Estate Association MLS ® System Sales data for the periods as noted within. This pro-active post is brought to you by RealtySource Inc., Brokerage and it is never our intent to solicit buyers or sellers under contract with a real estate broker. It is always our intent to solicit your interest in discussing real estate. Information is provided for discussion purposes only.
Kingston and Area 10 Year By Area Market Report
We recently compiled a by area report of the Greater Kingston and Area Real Estate sales in a year by year format. Curious about what the average price has been doing in your area you will find this report an interesting read. We added a by area map to assist in targeting in on your area and each year includes a summary of overall market activity. Just click here or the image on the left to preview the report, from your source for real estate RealtySource Inc., brokerage.
May 31st 2013 Greater Kingston And Area Market Update (By The Numbers Only):
| Karea Board Wide 2012 versus 2013 Market Comparison By Price Range as of May 31st, 2013 | |||||
| Sale Price Range | 2012 Unit Sales | 2013 Unit Sales | Difference | ||
| $150,000 to $200,000 | 233 | 195 | -16% | ||
| $200,000 to $300,000 | 755 | 639 | -15% | ||
| $300,000 to $400,000 | 358 | 333 | -7% | ||
| $400,000 to $600,000 | 144 | 137 | -5% | ||
| $600,000 + | 32 | 43 | 34% | ||
| Market Area Sales Stats As of May 31st | 2009 Unit Sales | 2010 Unit Sales | 2011 unit Sales | 2012 Unit Sales | 2013 Unit Sales |
| City of Kingston Only | 923 | 976 | 927 | 1042 | 907 |
| KAREA Board Wide Sales | 1398 | 1606 | 1424 | 1642 | 1447 |
As always your comments are welcomed and encouraged. We encourage you to follow us on twitter @rsourcetweets for our latest updates or visit us online at www.realtysource.com. To email the author, just click the image to the left.
Notes: Data for this post was sourced from the Kingston & Area Real Estate Association MLS ® System Sales data for the periods as noted within. This pro-active post is brought to you by RealtySource Inc., Brokerage and it is never our intent to solicit buyers or sellers under contract with a real estate broker. It is always our intent to solicit your interest in discussing real estate. Information is provided for discussion purposes only.
Making Sense of Sensational Real Estate Headlines:
You have to give the media credit; they just love captivating headlines to draw readership in. One of my favourites was from a recent Financial Post article headline:
Moody’s analysis contemplates 44% drop in Canadian housing prices
Holy smokes, you say a 44% decline in real estate values; I am going to wait until the market drops to near 50% of current values before I buy or even think of looking at real estate as an investment. To me that’s the headlines intent but there is one key word squeezed in here for good measure and that word is “contemplates” which really means “to think about”. So Moody’s has thought about a 44% decline in real estate values; I have lots of thoughts all the time but I don’t know if they are all headline worthy.
The Financial Post Article is one of many about a slowing real estate market which is no doubt true. If you take a look at the previous post to this one on our market in Kingston, Ontario, you will see how we expanded our comparison to put context to the numbers. It’s now time to put context to the sensational headlines. 2012 was a banner year which means any comparison to 2012 sales volumes will likely lose but does that mean we should contemplate a 44% drop in real estate values? I’m not selling papers but I do own a brokerage that sells real estate so I can easily be construed as bias but I do think the above headline is just that, a media headline and as a 20 plus year veteran, I’ve seen this before.
A TD Long Run Rate of Return For Canadian Home Prices Study predicted in “nominal terms”, the rate of return on real estate over the next 10 years to be “roughly 2%”. It also noted within “we project a 3.5% annual rate of return to prevail beyond 2015”. Once again, key words within have huge impact and in this instance the words “nominal value” are not the same as “real value” (see here for clarity). The TD Report actually predicts that after 2015, real estate prices will rise roughly 3.5% per annum! The nominal rate of return is adjusted down to compensate for inflation (your buying power the actual return is higher – but that’s not a great headline). Let’s put the above numbers in perspective and forecast this future:
i) If the average sale price in the City of Kingston in February 2013 was about $298,000 and we project a 1% increase in value for 2014 & 2015 and then move to 3.5% for the remaining period, the average price in 2023 is now $391,760. A gain of $93,700!
ii) If we were to buy a home at the average sale price in the City of Kingston in February 2013 at $298,000 and put 5% down and take out a 10 year mortgage (rates for 10 year are as low as 3.64% ) and make bi-weekly payments of $737, at the end of 10 years were would have paid down the mortgage to $186,676 (note we included the CMC fee in the mortgage after the 5% down). That principal reduction amounts to $104,210.
iii) So in summary based on the above assumptions (somewhat supported by people much smarter than me who wrote the TD Report), the gain at the end of ten years (taking out the initial investment of 5% down) is roughly $183,000 (principal reduction of mortgage and projected appreciation per this scenario). Keep in mind if you don’t own a property and don’t live in your parents basement rent free, you are likely paying someone rent…which could very well be paying their mortgage, your landlord thanks you!
There is of course other ways to look at this, from a newspaper headline point of view, here is just a few examples:
National Post: Canadian housing boom over, economists say
Globe & Mail: Don’t expect a large return from your house in next 10 years
Toronto Star: Canadian housing prices to rise “lacklustre” 2% per year (they missed the word nominal in headline or the 3.5% foreacst after 2015)
As always, seek independent advice, draw your own conclusions, evaluate the market and your own personal situation (how long you plan to stay is a key factor here). We can do so much to assist home buyers… we can show you what the house originally sold for, comparable sales, market reports and trends (our website RealtySource.com is full of info and advice to assist you). The point of this post is that the headlines too often miss the real story and that story simply is that small percentages compound nicely over time (banks know this all too well) and that principal reduction of your mortgage adds up (your landlord thanks you).
As always we welcome your comments, input and genuinely hope that this article is informative to you beyond more than just the headline!
Notes: Data for this post was sourced from the Kingston & Area Real Estate Association MLS(R) System Sales data for the periods as noted within. This pro-active post is brought to you by RealtySource Inc., Brokerage and it is never our intent to solicit buyers or sellers under contract with a real estate broker. It is always our intent to solicit your interest in discussing real estate, so we welcome your input and encourage you to follow us on Twitter @rsourcetweets. Information is provided for discussion purposes only.
The trademarks MLS® , Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA).
The Kingston and Area Real Estate Market Report That Puts The Numbers In Context:
I recently had a conversation with KAREA Board President, Tim Barber, which had a bearing on the direction of this month’s marketing report. The comment Tim made was simply that comparing 2013 monthly sales to year over sales for the same month, given that 2012 was somewhat of a banner year, may not be the best context for the review and that expanding the comparison a few years further might balance the comparison. This discussion point struck me as a worthy basis for this month’s review. I decided then to look at monthly sales comparison from Januray / February 2010 to 2013. Here are the residential sales numbers from this review for the entire KAREA Board:
Table 1 – Entire KAREA Board Residential Sales –
| Year | January Unit Sales | January Avg. Price | February Unit Sales | February Avg. Price | Total Unit Sales | Avg. Sale Price |
| 2010 | 164 | $222,497 | 224 | $239,769 | 388 | $232,402 |
| 2011 | 153 | $246,581 | 174 | $272,531 | 327 | $257,726 |
| 2012 | 180 | $272,020 | 248 | $262,724 | 428 | $270,106 |
| 2013 | 156 | $273,504 | 192 | $273,594 | 348 | $275,173 |
It’s clear from the above snapshot that 2012 was a higher average sales volume year, as for that matter was 2010 in comparison, however, when compared to 2011 the volumes for 2013 are higher, so the sky is not falling. Year to date sales volumes when compared to 2011 show a 6.4% increase in unit sales while the same comparison to 2012 unit sales volumes reflects an 18.6% decline in unit sales year over comparison as of the end of February 2013. Clearly 2012 was a banner year for real estate and presents a significant volume to maintain for a year over comparison. Reciprocally a 6.4% increase over 2011 sales volumes is about a 3.2% increase average per year. While this only represents a brief snapshot in time, there is clearly some softening in the rise in average sale price. Average sale price increased roughly $13,000 between 2011 and 2012 for the same period and around $5,000 year over 2012 for the same period based on the above table.
We furthered our comparison to include just the City of Kingston and found similar trend with this expanded comparison:
Table 2 – City of Kingston KAREA Board Residential Sales –
| Year | January Unit Sales | January Avg. Price | February Unit Sales | February Avg. Price | Total Unit Sales | Avg. Sale Price |
| 2010 | 100 | $241,470 | 143 | $253,659 | 243 | $250,187 |
| 2011 | 97 | $260,199 | 110 | $289,771 | 207 | $274,123 |
| 2012 | 124 | $301,202 | 150 | $294,367 | 274 | $300,784 |
| 2013 | 96 | $308,073 | 116 | $286,258 | 212 | $296,841 |
Clearly from the above table there is actually a slight decline in average sale pricing between 2012 and 2013; the difference is moderate, however, it is reasonable to forecast from the above that sale prices are likely not going to keep the robust growth going forward as the market begins to stabilize. That said, the above tables do provide a better context than just a year over comparison of sales volumes, with positive news on some competitive interest rates offers with spring weather just around the corner, the real answer to real estate trends remains in the future. We look forward to keeping you posted regularly with our monthly market reports. Have a question on real estate, value of your property or area, come home to your source for real estate, RealtySource. We welcome the opportunity to assist you.
This month’s photo is a night photo of Kingston City Hall (thanks to great iPhone app called HD-Pro) taken on a cool February evening after enjoying a dinner out in our fine downtown. Talk about real estate appreciation City Hall was completed in 1844 at a cost of £20,000 (Canadian currency was referred to as british pounds until 1858). Kingston City Hall has had quite a history from everything from the Provincial Capital, housing a jail and the renting of space to a saloon, small theater and bank. City Hall is located along Ontario Street adjacent Confederation Basin Marina. Speaking of Ontario Street, RealtySource is underway with a new office location opening soon at 275 Ontario Street, visit our pinterest page to follow along with the renovations.
Notes: Data for this post was sourced from the Kingston & Area Real Estate Association MLS(R) System Sales data for the periods as noted within. This pro-active post is brought to you by RealtySource Inc., Brokerage and it is never our intent to solicit buyers or sellers under contract with a real estate broker. It is always our intent to solicit your interest in discussing real estate, so we welcome your input and encourage you to follow us on Twitter @rsourcetweets. Information is provided for discussion purposes only.
The trademarks MLS® , Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA).
The First Kingston Real Estate Market Report of 2013 Is Right Here:
New for 2013 we are adding our city photo of the month to our market report blog post, capsuled with a bit of information about our fine city that we hope you find interesting. This month’s photo was taken on a cold January day, where even at -11 c, the inner city harbour at Confederation Basin presents a captivating view with RMC visible in the background. We are fortunate to live in a city with such a rich historical history from Lord Sydenham (the name behind Sydenham Public School actually named Charles Poulett Thomson) who became governor General of the Province of Canada and named Kingston the first Capital of the Province of Canada. While the designation as capital was short lived, the historical impact of this designation in addition to Kingston’s strategic location at the entrance of Lake Ontario and the St. Lawrence River has created a city rich in history. A testament to the city’s rich historical background is found throughout the city, with nearly 700 historical properties listed in the heritage register and is capsuled into the city’s motto “where history and innovation thrive”. Martello Tower shown here (one of four towers) built after the war of 1812 is a testament to the city being sometimes referenced to as “the limestone city” and numerous limestone buildings are found throughout the city and surrounding communities. Now on to our current market report:
It was an interesting month for media posts on the economy, lots of contradictions, some example reads here:
January 16th – Toronto Star: Toronto home sales up at midway point in January
January 17th – Financial Post: Bank see more evidence of slowing mortgage growth
Janaury 18th – Globe & Mail: Is the slump in home sales nearing bottom?
January 22nd – Globe & Mail: Is Canada talking itself into a housing crisis?
Janaury 23rd – Globe & Mail: Rate hike delayed as bank cuts forecast
Clearly there were mixed messages found from the above articles on the economic outlook. The article of January 23rd on bank interest rates makes for an interesting read, outlining within that while a housing bust has been averted, “there is little reason for the central bank to continue to emphasize the potential threat of a housing bust”. Further, the article goes on to say that there is not likely any need to raise interest rates until 2014 given economic growth forecasts. In short, the article projects stability to interest rates, short term. As changes to interest rates are seen as a key factor impacting real estate activity, the avoidance of a rate hike is in our opinion a positive for our market.
We can never lose sight of the one constant to news headlines and that is….change. So it’s early days into the new year and as we progress forward, we will look to read market trends and update our posts to keep you informed.
Here is a brief outline of January sales data, sourced from the KAREA Board MLS® System as of February 5th, 2013:
City of Kingston Residential Sales January 1st to 31st, 2013:
Average Listing Price: $314,474.53
Average Selling Price: $306,368.02
City of Kingston Total Sales January 2013: 95 units
City of Kingston Residential Sales – January 1st – 31st, 2012
Average Listing Price: $306,866.95
Average Selling Price: $301,201.80
City of Kingston Total Sales January 2012: 124 units
In summary, residential sale price increased 1.7% year over while unit sales declined just over 23% . In our 2010 market report, we highlighted the trend of fewer unit sales with steady increases in prices, which while very early to read the New Year, would not be a surprise to see this trend continue. It appears at least from the Globe & Mail article of January 23rd, referenced above that bank interest rates are not planning major increases anytime soon, which should further bode well for the 2013 real estate year.
KAREA Board Residential Sales – January 1st – 31st, 2013
Average Listing Price: $280,427.23
Average Selling Price: $271,926.40
KAREA Board Total Residential Sales January 2013: 155 units
KAREA Board Residential Sales – January 1st – 31st, 2012
Average Listing Price: $278,582.33
Average Selling Price: $272,019.86
KAREA Board Total Residential Sales January 2012: 180
The entire KAREA Board area reflected no real change in average sale price and a unit sale decline year over of -13.8%.
It is way to early to draw much from these numbers, month over variations are not in frequent and the consistent trend over time provides a much better market read. There were 824 listings in January (residential, land, farm and commercial) with a total of 171 sales which is a strong indicator of a Buyers Market. As always, we will keep you posted as we have further market updates. If you ever notice any room for improvement to these posts or any inaccuracy, we welcome and encourage your input. We post all updates through our twitter account @rsourcetweets .
Notes: The average residential sale prices sourced from the Kingston & Area Real Estate Association MLS(R) System Sales data for the periods as noted within. This pro-active post is brought to you by RealtySource Inc., Brokerage and it is never our intent to solicit buyers or sellers under contract with a real estate broker. It is always our intent to solicit your interest in discussing real estate, so we welcome your input and encourage you to follow us on Twitter @rsourcetweets. Information is provided for discussion purposes only.
The trademarks MLS® , Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA).
Renters Planning On Buying A Home? Be Smart On Setting Closing Date:
When you are going from a rental to ownership you have a key advantage to setting your closing date, which is especially valuable if you are renting in the same market you are buying in. If your current rental arrangement allows 60 days notice from the first of the month to the Landlord (always check leases & terms) here are two great tips for you:
1) Don’t give notice to your landlord until you have purchased your property, so you are sure you have a home to go to.
2) Do not set the closing date for your purchase as the same date you have to move out of your rental, set it a few days before you have to move out or more if you want to renovate (always check with insurance on leaving home vacant first).
As an example, it’s the 20th of the month and you have found your ideal property and are ready to offer, you need say 7 days to do your home inspection, confirm financing, insurance and other recommended conditions of purchase. This gives you time to firm up your purchase and then deliver your 60 day notice to the Landlord before the first of the month. What is your ideal closing date in this situation for the home being purchased? Certainly it is not the same day you would have to move out of your rental and into your new home…no the best closing date would be a couple of days before you have to move out of your rental.
If you apply these steps you can move in at your leisure, paint a room or two before the furniture comes and take full advantage of the fact that apart from the cost of a few days overlap that you have prepaid rent, you have the time you need to move and settle in. By being smart on setting closing date for your purchase the added pressures of moving in and out on same day are avoided.
Hope you find this informative, we always welcome your input and blog suggestions so please let us know how we can help you. Visit online anytime at www.realtysource.com and sign here for new listing updates here we welcome the opportunity to earn your business.
This pro-active post is brought to you by RealtySource Inc., Brokerage, it is never our intent to solicit buyers or sellers under contract with a real estate broker. This post represents the opinion of the writer, independent review of rental contract terms is always recommended.
It is always our intent to solicit your interest in discussing real estate, so we welcome your input and encourage you to follow us. We eat, sleep, real estate on Twitter @rsourcetweets. Thanks for visiting!
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