i dunno, report said they were renting a room at a friends place currently lol. pretty baller to flip if you`re a room mate as a couple.
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COVID and the housing market
- Thread starter mimico_polak
- Start date
I’m not sure if I bought a new house , and occupancy fees double as this couple saw , 4,000 a month , that I wouldt loose the house anyway . Not many first time buyers , or any buyers have an extra 4K a month for a long time .
The devalue is cow poop , wait 5 yrs and that’s over, but the lack of condo forming is a problem.
Her advice , get a good lawyer that will call you in two days and walk you through the contract? Needle in a haystack that guy .
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The devalue is cow poop , wait 5 yrs and that’s over, but the lack of condo forming is a problem.
Her advice , get a good lawyer that will call you in two days and walk you through the contract? Needle in a haystack that guy .
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AllistonGT
Well-known member
Not sure getting a good lawyer would make any difference. Builders have their own contracts and rarely if ever change them. Either you make the purchase and sign or don't.
Best case is, as the purchaser, you now know just how one sided those purchase agreements are.
The $140K could have been their point of no return. Losing ones savings is one thing. Losing future savings is whole different thing.
If they walk away clear and can come up with another deposit they could theoretically buy back into one of the upgraded models and be ahead. The registration issue needs to be addressed but that could be another double edged sword. Slash prices to sell units gets sales but early buyers will complain they didn't get the deals.
Mad Mike
Well-known member
I don't think this is quite correct.
Devaluation: The builder's selling price is based on what the market can bear. In areas outside the GTA, speculation drove the market prices to insane levels, once that corrected the market devalued the asset. Everyone in Guelph with a $850K property would have seen a similar devaluation.
Occupancy fees. Changes are also mainly a market thing. Occupancy fees include maintenance charges which would have been laid out in the deal at $307, subject to adjustments in inflation and occupancy rates. Inflation would have brought it to about $370, lower than expected occupancy would explain the rest. In any case, I'm guessing maintenance on a townhouse in Guelph would be well over $500/mo once the corp is formed.
The final part of the occupancy fees is the rent portion. Lenders don't mortgage unregistered condos, so the builders will hold that financing at an interest-only basis at current BOC 1-year rates, today at 8.09%. Buyers are renting the MONEY, not the house. When pre-build buyers sign the deal, that would have been outlined, but estimates would have used the early 2022 BOC 1-year mortgage rate of 3%, So, changes in interest rates to the current 8.09% easily explain the change from $3250 to $5423.
Bottom Line: They walked from a bad investment they likely could not cashflow, not from a dirtbag builder. The condo feeds would have been the same whether they were closed or paid occupancy fees. The Mortgage PI&T would have been at least the same if they had an excellent rate and 30-year amortization. There is perhaps a small advantage to closing in they could negotiate a longer and cheaper mortgage at around 6.25%.
Some good points. There are a lot of false assumptions people make about condos, what they own, what they can do to it and as you point out, the intricacies of finances.
A good lawyer will point out the above but all too often the buyer only listens to the voice in their head saying “I’m getting a house. If it goes like last year we’ll be laughing.”
I would choose not to be an ahole. Doubling occupancy fees to something grossly above market rental rate is unconscionable. The contract would protect me but I would choose not to screw buyers.
Mad Mike
Well-known member
Occupancy fees vary based on BOC mortgage rates and inflation. The buyer is borrowing (renting) money from the builder at a govt set rate because they are not able to arrange a mortgage on an unregistered condo. Those are pass thru moneys as the builder has to borrow the funds.
If they can find cheaper money, there would be zero occupancy fees other than property tax and $500 condo maintenance fees.
Monthly payments for this couple would be more if they closed, they are only paying interest, they would also pay principal if they took possession.
Wow…can’t even an evict an existing tenant under some obscure law…
www.theglobeandmail.com
Reluctant landlords: Condo buyers find they are unable to evict tenants
Buyers left to deal with un-evictable tenants that have devalued the condo units they purchased
www.theglobeandmail.com
ifiddles
Well-known member
Can't access it unless you're a subscriber...Wow…can’t even an evict an existing tenant under some obscure law…
Reluctant landlords: Condo buyers find they are unable to evict tenants
Buyers left to deal with un-evictable tenants that have devalued the condo units they purchased
I’m not a subscriber and it worked.
Most trade contracts allow for changes due to unforeseen conditions and newcomers to the business soon learn to incorporate the clauses.
More than one homeowner, car owner has failed to divulge a known hidden condition and demanded the trade stick to their quote.
Pretty smart move by some hotels in the city. Regular and steady clients for a month at a time (or more).
www.thestar.com
Find one with a kitchenette and you can have a nice space for a year or so, cheaper than renting from a **** landlord. Obviously without the protections of tenancy laws.
Is it cheaper to stay in a hotel than rent in Toronto? Some are offering $2K month-long packages
Amidst the ongoing cost-of-living crisis, one hotel is undercutting Toronto’s rental prices by offering rooms on a month-long basis. Will it work?
www.thestar.com
Find one with a kitchenette and you can have a nice space for a year or so, cheaper than renting from a **** landlord. Obviously without the protections of tenancy laws.
Another development under construction burns. It would be very interesting to see if there is a statistical change in construction fire rate. They have always happened, hearing about individual events means little. I wouldnt be surprised if the rate was higher now as people are desperate but without seeing the database of calls it is hard to confirm.
barrie.ctvnews.ca
'Burnt to the ground': Blue Mountains new townhouses destroyed by fire
An early morning fire raged through and destroyed four new townhouses in the Blue Mountains
Mad Mike
Well-known member
Speculator lightning again?Another development under construction burns. It would be very interesting to see if there is a statistical change in construction fire rate. They have always happened, hearing about individual events means little. I wouldnt be surprised if the rate was higher now as people are desperate but without seeing the database of calls it is hard to confirm.
'Burnt to the ground': Blue Mountains new townhouses destroyed by fire
An early morning fire raged through and destroyed four new townhouses in the Blue Mountains
With the overall numbers being low a fire or two can spike numbers so it's hard to confirm a trend.Another development under construction burns. It would be very interesting to see if there is a statistical change in construction fire rate. They have always happened, hearing about individual events means little. I wouldnt be surprised if the rate was higher now as people are desperate but without seeing the database of calls it is hard to confirm.
'Burnt to the ground': Blue Mountains new townhouses destroyed by fire
An early morning fire raged through and destroyed four new townhouses in the Blue Mountains
Last week is was people losing 100-150k....this week it's up to 300k...
www.thestar.com
What happens to people that put a deposit and their house burned down?
Toronto-area buyers are walking away from deposits on new homes — some losing as much as $300,000
‘This is just the beginning,’ say experts, noting buyers of new builds further from Toronto are most vulnerable.
www.thestar.com
I'm no expert...but I'd say it's easier to burn a site down than it is to try and sell it in our current economic environment.Another development under construction burns. It would be very interesting to see if there is a statistical change in construction fire rate. They have always happened, hearing about individual events means little. I wouldnt be surprised if the rate was higher now as people are desperate but without seeing the database of calls it is hard to confirm.
'Burnt to the ground': Blue Mountains new townhouses destroyed by fire
An early morning fire raged through and destroyed four new townhouses in the Blue Mountains
What happens to people that put a deposit and their house burned down?
Yeah, simple analysis may not show much as there are a lot of variables. Something like xx fires (count events not units burned) in yy developments may be a start. Now, a 1000 dwelling development is probably more likely to have a fire than a four unit development (logically but maybe not in reality). Also you are combining databases as development doesn't know about fires and fire doesn't know about developments that don't burn.
Interesting question. Given that the timeline for closing will be destroyed, I am not sure if that gives the buyer an out to terminate without costs. I am sure the builder will argue that the delay is beyond their control and therefore not a valid reason to back out (assuming the current buyer is the builders most profitable option). If you were actually waiting for a house to move in to, adding another year or more to the move-in date is expensive and painful.
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