What’s happening with the Ottawa Real Estate Market? # COVID-19

I’m sure you are all wondering what impact COVID-19 is having on what was a super-heated real estate market. I have some buyers waiting it out, hoping for bargains.

So far we haven’t seen that. Inventory is even tighter than before (and it was lack of supply that was driving the higher prices) and there are still serious buyers out there who need to find a place to live.

What is a bit shocking is to see the change in sales volume at various price points (with thanks to Matt Richling and Jody Lavoie for sharing this on Facebook):


So, what happens next?

Some pundits are predicting the market will come roaring back once COVID-19 restrictions are relaxed. I think there will be some pent-up demand for sure, but much depends on how hard Ottawa has been hit with closures and job losses. Many of those will be temporary, and we are buffered somewhat by having the public service here as well as universities and hospitals.

But it is hard to imagine that even Ottawa could escape the impacts of a Great Depression, so a lot of this will come down to how long this lasts, if the efforts of the federal government are sufficient to mitigate the losses, and how long it takes to get back to some kind of normal.

It’s far from business as usual. Showings are continuing under strict COVID-19 protocols and restrictions. Some agents are using virtual tours in place of showings, but I can’t see that working well for most buyers. My buyers actually want to see a property before they decide whether to put in an offer;  we’ve all seen listings that looked good in pictures but not so great in person, and vice-versa.

So because there are fewer listings out there but also fewer buyers, I think we will see a continuing drop in the volume of sales. Right now, the number of new listings is about equal to the number of conditional sales/sold properties. This is a big shift from a month ago, when sales far outpaced new listings, and when you rarely saw a conditional sale, with people waiving home inspections, financing and even status certificate conditions.

We will still see some multiple offers on particularly nice properties, but we won’t see the crazy price wars we had, simply because there are fewer buyers. That means  prices should be a little more rational and I’m seeing that already: properties  selling at or slightly over or even just below list price are more common than ones selling for well over asking. Instead of someone getting twenty or thirty offers on a property, these days they might get one or two, which is a huge change!

I think over the short term, we won’t see much of a price adjustment simply because demand still exceeds supply. But it’s a more balanced market than the one we were in, for sure.


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COVID-19 Q and As: Why are Realtors still listing houses for sale?

The question raised by a Twitter pal is: “Why are realtors still listing houses and why are they considered ‘essential services'”?

Great question!

I confess, I didn’t think we would be exempt from the shutdown, but there was a lively debate in real estate circles as to whether we are essential services or not. Certainly, if you have purchased a new home and need to sell your current one, having a realtor is pretty crucial. Or if you have just moved to Ottawa and have to find a place to live. Or need to sell to avoid foreclosure.

Along with realtors, the government decided that real estate lawyers, moving companies and the land registry system, can continue operating.

That doesn’t mean it’s business as usual. My brokerage closed down last week to the public, then to us as well, unless we make an appointment. Initially, there was a drop box set up for deposits; now we can only process electronic payments. Our college, the Ontario Real Estate Association, is urging us to  have no face-to-face meetings, and not to have overlapping showings, and we have been told by all of them, including RECO, our regulatory body,  not to host Open Houses. In fact, the Ottawa Real Estate Board is stripping out any reference to Open Houses on MLS to try to shut these down.

Here’s what OREA said:

ALL REALTORS® should stop face-to-face business, including open houses, in-person showings, and maintaining agents and public office hours.

Makes sense to me. But note the use of the word “should.”

The problem with  these recommendations is that they are only that — recommendations. They are not enforceable. Once we were designated “essential services”, that allows us to maintain our business models, whatever those are. OREA says that we were designated essential in order to be able to complete transactions, but that’s not what the Ontario State of Emergency says: it doesn’t limit what what we can do.

Also, we are independent contractors, not employees, so our brokerages have to be careful that they don’t cross the Canada Revenue Agency’s line in telling us how to conduct our business, or they might face serious tax consequences. The more control they exercise over our activities, the less likely we can be considered independent contractors as opposed to employees.

REBBA, our governing legislation, has nothing in it that covers this kind of situation either: it doesn’t set out any kind of protocol for how to deal with a pandemic. Absent an amendment, I can’t see any way that a realtor who defies these recommendations could be disciplined. And while our Board can control the data that appears in MLS listings, it has no authority that I’m aware of  to actually shut down Open Houses if an agent wants to host one.

So at this point, the way that realtors conduct these essential services has been  left to the good faith of realtors.

The vast majority of us will restrict how we do business in keeping with best practices. I see many listings now that require agents to vet buyers before showing them a listing to make sure they are not recent travellers; to wipe down light switches before leaving a property; to refrain from touching surfaces, and so on.

The problem, again, is what happens if they don’t?

In my view, it was mistake to decide that realtors were “essential services” without placing a limit on those services, for example,  restricting them to the completion of transactions that were already underway. Or only to vacant properties. But practically speaking, under current law, we can’t avoid face-to-face meetings with new clients. We are also required to verify the identity of those who are listing by meeting them personally. (There are provisions in the FINTRAC money laundering laws  that allow us to use other forms of ID apply when the client doesn’t have adequate ID, but they don’t absolve us from our responsibility to physically meet with the client to make sure we’re not being cat-fished.)

And taking new listings requires agents to go to those properties to take measurements, because we are required to verify MLS data personally. Someone has to go there to take photos or videos, even if the plan is to restrict showings or only have virtual tours. This is not a business that we can transact only from behind our computers.

So, while I’m glad we were included as “essential services”  for selfish reasons — I have some clients anxious to rent and to sell — I think sellers and buyers would be well advised to ask their agents to detail what steps they are taking to ensure their safety and those of the people who enter their homes.

Don’t assume that because this is what is recommended that everyone will do it, or that they can be sanctioned if they don’t. I don’t see any possibility of that happening under current laws. At the moment, these best practices are recommendations only, and completely unenforceable.

This is the fifth in a series about COVID-19’s impact on the Ottawa real estate market. Keep those questions coming!

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COVID-19 Q and A: Should I take a low offer now or wait this out?

I got this question from “Frank” on the blog and thought it was worth answering:

“If you were a seller who already purchased a home in this market 90 days out, would you recommend waiting until mid-April to re-list, accept an offer slightly under value now, or lease your place with the intention of re-listing next year?”

Really, the seller is asking whether things are going to be better by mid-April, or whether it’s going to take a year to get back to normal. Obviously, he wants the best price he can get. But he also has a new home to pay for. All of this should influence the answers I give him.

There are a few assumptions that I want to address about leasing first.

First of all,  it’s not that easy to get rid of a tenant once you put one in. Let’s assume you sign a 12 month lease. As long as the tenants are paying rent and not breaching the other requirements of being a tenant (like damaging your property), you can’t just cancel their lease and turf them out.  They are entitled to stay even after the end of their lease (which converts to a month to month) until they decide to leave.

The only exception is if a buyer buys your home with the intention of they or a member of their immediate family occupying it . Then you have to provide the tenant with a full two month notice before the lease ends in order to provide vacant possession. Same applies in a month to month tenancy: two full months notice.

Which means that you will be showing a tenanted property if you wait to re-list next year, with all the aggravation associated with providing 24 hours written notice of showings, not being able to get buyers in easily, your tenants being inconvenienced by strangers wandering through their home, and limits on when you can close.

So, unless you have a burning desire to be a landlord, I’d stay away from the leasing option. Even the best tenants will not look after your property as well as you do, so when I add the timing issue, the fact that a vacant home shows better than a tenanted one, and the fact a vacant property (or one you live in)   is easier to show, I’d take that option off the table.

You will take possession of your new home in 90 days.  Which means the real question is do you take a slightly lower offer now or wait to see what happens in April and hope to get more? In all honesty, in my opinion, nothing is going to change for the better for sellers  in the next few weeks due to COVID-19. I don’t expect prices to drop substantially, but they are not going to be hot as they were: we will have lower inventory as more sellers step back from listing but also fewer buyers. The past few days we have seen fewer sales than listings; that’s for the first time in over a year.

If you can get a price you can live with and have the funds to close on your new house, this one seems like a no-brainer to me. I’d take the certainty of a sale over the uncertainty of the impact of the virus in the short term, even if I got less than I had originally hoped for, particularly when I have a new house to pay for.

Hope this helps!

This is part four of a question and answer series on COVID-19 and its impact on real estate. Keep those questions coming!


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COVID-19: Q and As – will my condo price drop?

A Twitter pal asks: “my condo went up in value in recent years. Will I lose all those gains because of COVID-19?”

I don’t have a crystal ball, so all I can do is give you my best guess for the short term and long term.

You note that your condo increased in value. It sure did!

Ottawa real estate was under-valued for a long time. Some of the increase in prices was due to new job creation and people moving here from elsewhere to work or retire. Also, the mortgage stress test made it very hard for self-employed or retired sellers to get financing to enable them to buy a new home before they downsized. A lot of older people were afraid of listing their homes in case they couldn’t find anything they liked.

It was harder for first time buyers to borrow money, so they had to rent for longer periods. The rental market got very hot as lower priced properties were snapped up by investors, driving up prices. The Ottawa real estate market saw double digit increases for the first time in decades, due to low inventory.

But now we are facing COVID-19, so things are changing fast.

Even though realtors, real estate lawyers, moving companies and the land registry office have been declared essential services during the shutdown, it’s far from business as usual.

The Ottawa Real Estate Board office is closed. Brokerages are closed. People are working from home, and that’s not easy to do in a business that relies heavily on face-to-face meetings and in person viewings. The numbers of listings and firm sales have dropped dramatically in recent days. Some listings have been cancelled by nervous sellers who don’t want strangers wandering around in  their homes.

That said, there are serious buyers out there who have no choice but to buy, and sellers who have no choice but to sell. So if anything inventory is  even tighter than it was in an already super hot market.  As a result, sales prices in the past few days are still high and I am still seeing multiple offers, although generally,  properties are getting fewer showings and fewer offers than they would have even two  weeks ago.

So, at this point,  I don’t think your condo has dropped in value. If you had to sell today, you would probably find a buyer, but not have the same frantic activity we saw a few weeks ago. A few weeks ago, things were a little crazy! How long that continues, or whether we start to see a major drop in sales/prices  is hard to say. Much depends on how long this shutdown continues and what happens internationally.

Over the next few months, unless a vaccine is identified, I expect to see a drop in sales volume and an increase in how long it takes to sell a property, as more buyers stay home. But  there are still  buyers who absolutely need to buy, and have financing or cash, which is why I think we won’t see much of a price drop, at least for a while.

It’s only if we get smacked with a recession, or something akin to the Great Depression, that I think we’ll see the market start to slide. I can’t see how Ottawa could be immune from those kinds of global impacts.  Depending on how quickly economic relief rolls out, I expect to see more power of sale properties hit the market.

That said, we still have another wave of LRT construction ahead, and we have a lot of people employed in universities, hospitals and the public service, so we have a more stable  real estate market than many other cities. If Canada handles this crisis well, Ottawa may become even more of a destination for foreign buyers.

And with so many scientists working world-wide to combat this virus, we have every reason  to believe they will find a vaccine or even a cure quite quickly, given these intense international efforts. Infectious disease experts and epidemiologists are telling us to expect that to take a year or eighteen months: my guess is that they will get it done sooner.

At that point, the Ottawa fundamentals will still be there: great city, educated population, safe, good place to raise kids, great place to retire, stable workforce, affordable housing. And things can start to return to normal.

It’s worth noting that after SARS hit Toronto hard in 2003, there was no real negative impact on the housing market at all:

Interestingly, housing sales data from 2003 in Toronto show no apparent signs of suffering. Sales increased to 78,898 units in 2003 from 74,759 units in 2002. Similarly, the average sale price increased by around $18,000 during the same time period. Essentially, the growth in sales and prices in 2003 was in-line with long-term trends.

I hope this helps!

This was the third in a series of COVID-19 related blog posts — keep those questions coming!


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COVID-19 – Qs and As – Is the Ottawa Real Estate Market Slowing?

This is the second in a series I’ll be doing on the impact of COVID-19 on the Ottawa real estate market, so keep those questions coming!

Twitter pal Jenn asks: “I know it’s only been a week but do you see the market slowing (not many listing, not many buying ) Not being able to show must have a huge impact.”

There are an assumption in that question that I want to address first. There is no ban on showing listings currently; however, our brokerage has banned Open Houses and many others are following suit.

It would be reckless, in my opinion, to hold Open Houses during a pandemic: no responsible home owner or agent should allow strangers to enter their home during a time like this. The risk of infection and cross-infection would simply be too high.

As for showings, however, these are continuing but are taking place with strict precautions. Here, for example, are directions from one listing agent to agents interested in showing his new listing:

“Only the listing agent, buyer agent and two buyers are allowed to view the property. Interior showings will be limited to 30 minutes. The agent showing the property must ensure that all parties sanitize their hands or apply gloves during the viewing. Ask clients to refrain from touching any surfaces “keep hands in pockets” during the showing. Don’t use the washroom unless it is an emergency. Do not shut off the lights on exit. After closing and locking the door, sanitize or wipe down the handle, key, and lockbox. Ask clients to please notify you if they become ill within two weeks of the showing.”

Now, to your actual question: are there signs of the market slowing after the events of this week?

The number of new listings has slowed down dramatically as sellers hold off selling. Inventory was already tight, and it has tightened further.

But, there are still buyers out there who need to buy homes because they are moving to Ottawa for  jobs or because they have already sold their homes, so for the moment, sales are still outpacing listings. What I am seeing, however,  is a drop in the number of listings selling for well over listing price, which suggests that there are fewer multiple offer situations.

So I think we will continue to see sales outpace new listings, but not the same frenzied buying we saw up until recently.

All of this can change quickly, of course, if governments shut down non-essential businesses, as it would be hard for agents to accept new listings where we have to meet with clients to verify their identity, enter their properties to measure rooms, take pictures, etc. For now, however, the business of buying/selling homes continues: it’s just not “business as usual.”

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COVID-19: Q and A’s. Can a Buyer do a Home Inspection?

A Twitter pal, John,  asks: “Given COVID-19, can buyers have home inspections?”

Great question, John, because it touches on a bunch of things: rights of the buyer, seller, and home inspectors during the sales process in challenging times. Let’s deal with each one in turn.

When the Ottawa real estate market was red-hot, a lot of buyers were waiving home inspections. That’s always risky. Now that the pandemic is underway, sales are still brisk — for the moment — but the number of showings are dropping. Open Houses have been banned altogether by our governing body, RECO.

Understandably, sellers are fearful of having strangers going through their homes and as a former lawyer, I worry about liability as well, if we’re not careful in how we conduct our business. But as the market slows down (which I believe is inevitable: I can’t see how Ottawa can be immune from a global recession and the layoffs  associated with businesses shutting down), buyers will no doubt start to put home inspection conditions back in their offers.

If the buyer’s offer containing such a condition is accepted by the seller, there will be a time limit within which the inspection has to be completed to the satisfaction of the buyer  or the deal will be null and void.

The problem that may arise, and is already starting to pop up anecdotally, is finding a home inspector to do one.  Normally, that’s not a problem: there are lots of home inspectors. But given the virus, some home inspectors are limiting their inspections to vacant properties only. Others are closing their business for a while.

But there are some that are still doing inspections while taking precautions. I received an email this week from Pillar to Post home inspectors, for example, that reads as follows:

At Pillar To Post, the health and safety of your customers and our realtor partners is our highest priority.  In response to the public health situation related to coronavirus (COVID-19), we are diligently monitoring updates from the Centers for Disease Control and Prevention (CDC), the World Health Organization (WHO) and medical professionals to ensure we are taking the necessary precautions to ensure  health and safety is at the forefront of how we serve you.

Practicing Good Hygiene Etiquette:

  1. Your Pillar To Post professionals are following recommended preventative safety measures.
  2. We are cleaning our hands often and at least 20 seconds with soap and warm water.
  3. We are using hand sanitizer when product is locally available.
  4. We are keeping a safe distance (6 feet) from people who are sneezing/coughing.
  5. We are cleaning frequently touched surfaces with disinfectant wipes when locally available.

Keeping Our Customers, the Homeowners and Realtors Safe:

  1. Before entering a customer’s home or property, we will communicate that we’re healthy and ask if our customer is as well.
  2. We won’t shake hands or elbow tap but we will give a friendly greeting from a safe distance.
  3. We will utilize shoe covers to prevent tracking in contaminants.
  4. We use hand sanitizer throughout our inspection process if we are able to obtain it locally.
  5. We conduct our inspections according to the most recent company update and procedures.

What Can You Do To Help?

  1. Let us know in advance of your appointment if you have any concerns or want us to communicate anything directly with your clients.
  2. Let us know if you would like us to take any special precautions.
  3. Inform us if anyone attending the Inspection has health issues, like the flu or a cold.
  4. Let us know if you would like us to limit the amount of information we provide. We can make necessary adjustments or email information instead, if requested.

All of these seem like good ideas and definitely best practices.

I think, as a seller, before accepting an offer conditional on a home inspection, I would want to know (through my listing agent) whether the buyer had already booked a home inspector, who it is, and what kinds of precautions they will take to keep my home safe. I would also want to be sure that no-one entering my property has been travelling in the previous 14 days.

When it comes to the buyer’s right to be present during the inspection, that’s been the practice, but it’s not actually specified in the condition. The current home inspection clauses is worded as follows:

home inspection clause

Normally, we have buyers  following the home inspector around asking questions, but I don’t know that that will be possible, or even acceptable, when we are being told to maintain a six foot distance from each other in social distancing. So I think we may see sellers restricting access to home inspectors but asking the buyers to stay away. The buyer’s agent, of course, would be present because they have to arrange access and are supposed to be there during the inspection. I think it could be handled like when we have overseas buyers, and do Facetime or video walk throughs of the inspection, so there are ways to handle that for sure.

What about the seller?Do they have a right to be present?

Well, the buyer has never had a right to exclude the seller from being at home during a home inspection. We discourage it so that the inspector can speak freely to the buyers, but as long as they don’t interfere, it’s their right to stay in their own home as long as they don’t interfere with the inspector.

I can see how in this situation, the home owner may want to be nearby to wipe down surfaces as the home inspector moves from room to room. Also,  with people exercising social distancing, it may  not easy for home owners to leave the premises. If the sellers are self-isolating because they have travelled recently, I think that would be something the sellers would need to disclose to the buyer in the same way that latent defects must be disclosed to sellers. There is no way for a buyer to know otherwise.

Timelines might need to be adjusted to allow periods of self-isolation or quarantine to expire: no home inspector can do home inspections if there are parts of the home that are off limits because there is someone in the home who is in isolation or quarantine.

The concern I have currently is that if virus numbers ramp up, all non-essential services could be shut down. And so even if a seller accepts a home inspection clause, in a rapidly changing situation, the buyers may not be able to do them at all.

So while the answer to the question “Can buyers do home inspections during Covid-19?”  is “yes, buyers can do home inspections,” the caveat is “For now.” The situation could change quickly in the next few weeks. But if you are going to proceed with a home inspection, whether buyer or seller or realtor, be sure to ensure that best practices are followed.

Thanks for the question, John – I hope this helps answer it!







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Before and After – My New Listing! #340 Tribeca

Well, despite the coronavirus, I’m still listing new properties but only as long as they are vacant. I’m  taking lots of precautions: no overlapping appointments, Purell sanitizer is out, everything is wiped down, and so on.

So with those considerations in mind, I staged a lovely  property yesterday that will hit the market tomorrow. It’s a 2 Bedroom/2 Bath condo in Barrhaven, just off Longfields, near Farm Boy. Diane Ritchie from my office helped me take a car load of stuff, which really was great of her and a super big help– it can take me eight hours or more to stage a property and a lot of that time is spent in going back and forth with furniture.

Anyway, here’s a sneak peek of the before and after for some of the rooms.

The living room had a lot of big furniture in it, so the sellers removed the TV and shelving and I replaced that with art. I also replaced the lamp with something a little simpler: I found the lamp was drawing the eye instead of the room. Here’s the before:

And here’s the after. New cushions; my signature  roses, and some lovely vases. I worked with the owner’s rug, which I thought was quite beautiful. I also like to put books out; a house without books is a house without a heart, in my view!

The master bedroom is a really lovely space with three windows and a built in storage bench in the window seat. It just needed some terrific bedding, lots of cushions of course and a little art! Here’s the before:

And here’s the after:

The painting above the bed, by the way, was all of about $ 40 at HomeSense and is one of my favourites when it comes to staging. The quilts were also from HomeSense, as were the shams. I use them and re-use them all the time!

The second bedroom was pretty empty; just a couch and two bookcases.

I didn’t have more furniture on hand so I added a rug and used one of the end tables from the living room to give the room a more complete feel. There are lots of knicknacks in the shelves, including one of my favourite new purchases: a set of marble and brass cat book ends! Again, a piece of art and some lovely cushions from my stockpile makes all the difference!

The open concept kitchen/dining room just needed a few items to complete it: it was already bright and beautiful. (The light is new: I picked it out for the sellers and they put it up last week.) I kept the dining room table but told the sellers I’d bring in different chairs.

There is a lovely big kitchen island with the most beautiful granite, the same granite that is on the counters. Here’s the before:

And here’s the after:

I bought those chairs decades ago from a little store in Cornwall and had them at my cottage for years. Now I use them for staging.

I don’t have a picture of the main bathroom “before”, but here’s the after: I replaced the shower curtain (right down to the shower curtain rings), added an Indian mirror and some lovely towels. (I love putting a vase of roses in a bathroom: it adds such a note of elegance.)

Finally, there is an ensuite bathroom: again, all I needed to do was add some big fluffy towels, soap dispensers and other small items to add life.

And that’s it!

This gorgeous unit is located at 340 Tribeca Private and will be listed for $ 374,900; we are holding off on offers until next Friday. The building has an elevator, and the entire unit has been thoughtfully designed to allow the owner to age in place gracefully. All switches and thermostats are mounted lower on the walls, and the hallways are generous.

The parking spot is right in front of the front door, so easy access — you step inside and there’s the elevator! Contact me for more details if you’re interested!





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My exchange with a Twitter pal about RECO disciplinary hearings!

I had an interesting exchange with a twitter follower recently about RECO (our regulatory body) and the difference between RECO and local real estate boards  that I thought I would share (with his consent: he’s the one who suggested I post it on the blog!) Here we go:

Sorry that last post is so blurry – I had to take a snip of a screenshot to make it fit! Not your eyes at all!

So, to summarize, RECO — the Real Estate Council of Ontario –is our governing body, kind of like the Law Society in each province governs lawyers. The Ottawa Real Estate Board is different. They take responsibility for listings and making sure that MLS data is accurate. Their disciplinary proceedings where there are violations are not publicized, nor are the outcomes, and usually if an offence is proven (or admitted), there is a fine.

RECO has far more powers right up to search and seizure, and the real estate equivalent of disbarment. Their disciplinary decisions are published and the last 12 months of their rulings are posted on their website, complete with names and the penalties imposed.

My Twitter pal was not aware of any of this and suggested I post it up as a Q and A: hope you found it useful!


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A relative has died in another city and I’m the executor. What do I do?

I was asked this question on Twitter recently and thought it was a good one to dedicate a blog post to. My parents have already passed away, but lots of people my age are finding themselves having to deal with a family member’s property, and often they lived in another city or province. It can be overwhelming trying to figure out how to go about selling a home when you don’t live nearby, and even more so if the property needs to be emptied.

First of all, you need to be the executor of the will to list the property for sale, or have a court appointment. You can’t just go in and start removing items or listing things for sale when you’re not the owner. This applies even if you are the sole beneficiary. So be sure to get legal advice if you’re not sure what this means: it’s more complicated if there is no will at all and if your family member died intestate. But assuming you have the legal authority to act, there are ways to make the process less stressful.

There are financial institutions like TD Wealth that have estate divisions that can help you. I have worked with their trust officers many times; they are terrific. They can pretty much take care of everything for you. They will go into the house, check for the tax returns and financial statements and monthly bills so that bills are paid and estate returns are filed. If there is a house full of contents to clear, they can arrange for that to happen too.

Here in Ottawa, the two trust officers I’ve worked with most closely (Heather Richardson and Dilia Ayotte-Mayost) usually arrange for an inventory to be taken of furniture by a local company  that specializes in this kind of thing  (they most often use MacLean and Associates) to determine what is of value and should be sold at auction and what should be disposed of or donated. MacLean and Associates are auctioneers and appraisers and deal with a lot of estates: they are excellent.

Sometimes a “remove junk” company is called in to take things away if MacLeans is too busy. These companies are amazing though: in a matter of days, they can clear even a hoarder’s house.

It is usually one of the TD trust officers who contacts me to ask for a letter of opinion of the value of the property; they also get an independent appraisal done. That sets the parameters for what price the property should be listed at. Once again, they can take care of all the steps required to get the house on the market, and depending on whether they are advising the beneficiaries, or acting directly under a delegated authority from the estate, they can select a realtor and sign the listing paperwork too. Working with beneficiaries every step of the way, they look after everything that is needed from managing insurance (insurance can lapse if a property is vacant for more than six months), arranging for the home to be checked daily, changing locks etc.

Sometimes, they have asked me to find trades to fix things that are broken or that might impede a sale; for example, getting an electrician in to pigtail aluminum wiring so that we won’t run into issues with buyers getting insurance. We often paint the property and do small things, like install new lighting, to make sure the property shows at its best.

I am not sure what their fee arrangements are, but I do know that TD has offices everywhere, so that’s where I’d start: I have found their trust officers to be professional, dedicated, and a pleasure to work with. The two trust officers I mentioned, Heather and Dilia,  travel to different parts of Ontario too, even though they are Ottawa-based: I know they handle business around  Kingston and North Bay and go as far north as Thunder Bay on occasion.

Feel free to contact me for details on how to reach them.


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Buying an investment property – what’s involved?

We have a hot, hot, hot rental market in Ottawa, so a lot of people are turning their minds to investing. Rents are high; so is demand. What’s involved in buying an investment property? Well, that depends on how many units, what type of property, and how much money you have. (I’ve blogged before with tips on  how to find and keep good quality tenants  and how to identify a great prospect so I won’t repeat myself: you can find those links here):



This is a complicated topic, so all I can do is give some general advice.

If you don’t plan on making an all cash offer, you will have to get financing. In most situations, the lender will want an appraisal to make sure the property is worth what you have offered but also to find out what the fair market value of rent would be from the property. The appraisal and financing are two of the clauses we would write into a deal as “conditions” to be satisfied before the deal firms up. That way, if there are any issues, you can back out and get your deposit back. (There can be other conditions too. We might also want an inspection as one of the conditions, or a WETT inspection for a wood burning fireplace. We may want a fire retrofit inspection as a condition if the property is a duplex; each deal has individualized clauses.)

Investors have different reasons for investing. I am working with a client right now who bought her investment property because she thought the underlying value of properties in the area would go up. It has: now she is ready to sell. So for her, the amount of rent she would get from the unit was less important than where she bought. I have other clients currently who bought a unit to use as a principal residence down the road. For them as well, having a great tenant who would care for the property was more important than the amount of rent they would get for it.

But in both cases, they had to get financing, and when you are financing an investment property, you need to have at least 20% in cash to put towards the purchase (the “down payment”). Some alternative lenders will let you use 15% but they will charge higher interest rates and often have stiff penalties.

You will need to figure out your ROI, or return on investment when you start looking around to see if the property you’re interested in is worth it. This requires taking into account the costs of purchase, including the costs of financing, the carrying costs, annual costs, and rents. I’ve  blogged about how to calculate the ROI so I won’t repeat it: here’s the link.


I personally won’t invest unless I am getting a minimum of 5% ROI on a hundred per cent cash purchase because I can do better elsewhere. I’m getting 5.6% on one investment and 7.2% on another, and the underlying value of my investments is going way up each year. I have great tenants who look after my properties as if they were their own, so I’m happy.

Anyway, let’s assume you have your financing in place and you are only looking for one rental property with one set of tenants and you have a budget in mind and a good idea of what to expect in terms of net rent and ROI. (Life is more complicated for financing when you get into triplexes or fourplexes; I will blog about those later).

You first have to decide whether you want to buy a freehold property, eg. a townhouse,  or a condo property, like a townhouse or apartment.

If you buy a freehold property, you are going to have to act as your own property manager or hire someone to do this. Expect to pay about 10% of rent for this service.

By contrast, in an apartment style condo building the condo corporation hires property managers who take care of much of this. There will be a set of condo rules governing things like where the tenants are to put garbage, noise restrictions, pet restrictions etc. I personally prefer to invest in a good, well-run condo because while I have to pay monthly condo fees, the property management company takes care of a lot of things I would otherwise have to be concerned with.

If you go with a freehold townhouse or detached house, you will be responsible for exterior maintenance and repairs. If you buy a condo, most of these are covered by the condo corporation, depending on the complex: there are no blanket rules when it comes to condos; each is a little different. Who is going to mow the lawn in a freehold – you or the tenants? Who will handle snow removal? These are things that are handled by the condo usually, so that’s another chore I don’t have to worry about not getting done, or not getting done properly, by investing in a condo instead of freehold.

Whether you buy freehold or a condo, in each case, you will be required to deal with interior maintenance like leaky dishwashers, toilet leaks, broken appliances, electrical issues inside the unit, etc., so make sure you have a roster of good plumbers and electricians who are able to fix things quickly. (Once you find a tenant, if it is a condo, be sure to take out landlord’s insurance on top of the condo insurance. In both cases, be sure to require that your tenants carry liability insurance and insurance over tenant’s belongings including coverage for water damage: that’s important.)

When you find a property you like, if it’s tenanted, you cannot remove the tenant even if you think the rent is too low. You have to take the property subject to the tenancy, whether the tenant is month-to-month or on lease. So make sure you know what the terms of the existing tenancy are and what the current rent is, because you will be stuck with that rent with only modest annual increases (as set by the province) until the tenant decides they are ready to leave. If it’s a lease, you will want to have a copy of the lease. These are things your realtor can make sure are provided as part of the deal.

If the rent is too low, you may never get to fair market value for rents: that tenant may decide they want to stay forever because they have such a great deal.

The only way you can terminate the tenancy is if you plan to occupy the property or if a member of your immediate family wants to move in. So don’t think you can buy an investment property, get rid of the existing tenants, and/or increase the rent: that’s not going to happen (and if it does, and you get caught, the penalties are huge).

I think the posts I’ve linked to have most of my tips on what else you need, but feel free to reach out if you have any questions! Investing in a rental property can be a great experience or a horrible one. My experience (I’ve owned three investment properties) has been terrific and it’s great to have that passive income, but you need to know what you are doing. I hear horror stories of people who waded in to the rental market and have had nothing but trouble. And as I mentioned, it gets much more complicated the more units are involved. Talk to a realtor!




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