Category Archives: building permits

What happens when builders can’t get financing?

Source: Real Estate Professional – by Neil Sharma10 Nov 2017

In the wake of Castlepoint Numa’s announcement that it failed to secure financing for Museum Flats, the highly touted and anticipated Junction Triangle condo development, many purchasers feel like they’ve been left hung out to dry in a market that’s grown more expensive.

By one purchaser’s account, this is the second time Castlepoint has informed his family that it will not be completing a development.

According to Akshay Dev, a sales agent with REMAX Realty One, researching builders is paramount. If he’d ever encountered a builder who failed to secure financing, he’d steer clear of them.

“I haven’t had a situation like that in my portfolio yet, but definitely before we get into projects I like to do some research about the builder to make sure they have a certain reputation, background and that they have credibility,” Dev told REP. “Some builders I like working with, and some I keep my paws off.”

Dev is frequently invited to development launches, which are good places to conduct due diligence. He likes to scrutinize the builder and their past projects, as well as determine whether or not problems could arise at any point during their latest build.

He added that, because banks typically provide financing when a development is 70% sold, a developer unable to secure financing might hint at other problems.

“If a builder is pulling out of a project, it means they lack credibility right there,” he said. “If a developer cannot achieve [70% sales], it means there’s something wrong there. Either the project or location aren’t good, or they don’t have the experience to handle the whole situation.

While Dev hasn’t had a builder fail to bring a project to market, he would tell his clients not to renegotiate with them for a relaunch, or even buy a unit in a future project.

“I would advise them to walk away. If they reached a point where they haven’t gotten financing, there’s a lot more involved in this. If you’re going to talk to a builder about getting financing, what is the guarantee that they’ll get it, and what’s the guarantee there won’t be problems afterwards? It’s a credibility issue right there and then.”

Zia Abbas, owner and president of Realty Point, agrees with that sentiment, and added that, as a sales agent, his reputation is on the line as well.

“As far as I’m concerned, whenever I go and sell any product to my client, for me the credibility of the builder is as important as the location of the project,” said Abbas, adding a builder’s credibility is in their portfolio. “What if we find the best of the best location but the project won’t proceed because the builder doesn’t have the reputation?”

Abbas admits that some builders he’s spoken to have said that they could pull out of the project and bring it back to market at higher price points that better reflect Toronto’s hot market, they wouldn’t sully their reputations that way.

“They’ll stick with the promises made, and this is what is called credibility,” he said.

But that doesn’t mean unscrupulous builders never give in to temptation.

Such builders don’t just damage sales agents’ reputations, they also lose the latter money.

“I’ve never worked with these builders and I’m not going to work with any builder with whom I’m not comfortable because the money I’m making on commission is all future commission,” he said. “There would be nothing in my hand. What if the project doesn’t go through? I’m going to lose time, money and credibility in front of my client.”

Abbas has been selling in throughout the GTA for a long time and says he’s had a couple of builders pull out of projects. Clients’ deposits were returned with nominal interest. As a veteran sales agent, he knows how to keep builders like that at arm’s length.

Toronto city councillor Ana Bailao recently went on record as saying that there needs to be more protection for purchasers like the ones who won’t be moving into Museum Flats.

Dev agrees.

Purchasers’ deposits are held in trust, but there have been cases in the past in which rogue builders and lawyers took off with the monies.

“Anybody who has invested money in real estate is investing hard earned money,” he said, “and hoping to grow that money and take their net worth to next level. We need to make sure wherever they put their money is safe. If they invest in certain people who don’t have a proven track record, then they are risking their investments. If you go to credible builders, chances are your money is safe, your project will be completed, the builder will get financing and deliver you a quality product. And with the right market conditions, you’ll get a good return on your investment.”

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Mike Holmes: Speaking in code

Before starting any job, it’s important to check code to ensure you’re using the proper materials and practices so that when the project is finished, it will pass inspection. By now, you all know that I like to build above minimum code whenever possible — and by doing so, we’ll have stronger buildings that are built using better products and practices.

In fact, because building codes are different depending on where you live, the best way for me to teach others is to leave minimum code at the curb and focus on teaching homeowners how to build better and stronger homes in the first place.

Here’s a question I’m asked often: When it comes to fasteners, what do I use? While there’s not one fastener for all occasions, when it comes to screws or nails, I’m going to use screws wherever possible.

The right fastener for the job

When it comes to fastening, I always say to glue it and screw it. Gluing gives you a solid connection while the screws will keep it there — and not loosen over time. Find the right fastener for the job by checking code first.

There are some projects where you need the right kind of screws, and other jobs where screws on their own just won’t cut it.

Wood screws are used to secure lumber, but the kind of job you’re doing will dictate what kind of screws to use. There are screws that are designed for interior or exterior projects.

In the case of exterior wood screws, you can get them specifically designed for the type of wood you’re using, like cedar, or a pressure-treated wood. Pressure-treated wood is treated with Alkaline Copper Quaternary (ACQ), which is more corrosive for metal. That means you need a fastener that is approved for outdoor use with ACQ treatment in mind.

For indoor projects, drywall screws are designed to hold drywall securely in place because they have deeper threads than a typical screw, which keeps them from dislodging from the wall.

Screws popping out of drywall

Have you ever had your screws pop right out of your drywall? There are a few reasons why this could be happening — but it usually comes down to an issue with the installation. A lot of installations are done too quickly. If you’ve only got one guy installing the drywall as fast as possible they might not be putting proper pressure on the sheet of drywall making sure it’s on tight.

Too many builders worry about speed, without taking the time to truly do the job right.

In the case of minor popping there’s a relatively simple fix. Push the drywall in and ensure it is snug against the stud, and add some new screws. From there, mud over the screws, sand it, and add a fresh coat of paint.

Squeaky floors

If you’ve ever tried to quietly sneak around your house only to be given away by the telltale sound of a squeaky floor — the problem may actually lie in your subfloor, and how the builder fastened the sheathing to the floor joists. You can sheath a subfloor with hardwood but you will find that it contracts and expands depending on the humidity conditions in the home.

Because the hardwood is nailed to the subfloor, in time, as the wood contracts, the nails can pop out.

To keep things quiet and in place, use a plywood subfloor that’s been properly glued down and secured with screws. The glue makes the connection between the sheathing and the subfloor, and the screws hold everything in place without loosening over time.

Builders often use a nail gun to install subfloors, and you sometimes have the nail missing the joist. When not completely secured, the floors will move when pressure is placed on them (every time someone walks on them), causing that annoying squeak you hear.

Before you decide on fasteners for your next project, always check what code dictates in your area. The spec of the job will let you know what kind of fastener you should be using. If it’s my choice — I’m going to glue it and screw it.

Building a strong house that will stand up to anything you can throw at it is all a matter of building it right and choosing the right materials.

Watch Mike Holmes in his series, Holmes Makes It Right, on HGTV. For more information, visit makeitright.ca.

Source: National Post – Mike Holmes | April 1, 2017

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Mike Holmes: How to control mould in your home, whether it’s visible or not

If mould in your home covers an area more than 10 sq. ft., or if there’s sewage involved, bring in a professional remediation company. Any surface with over 10 sq. ft. of mould should  be cleaned by licensed professionals.

Mould can present a serious health issue and it can also eat away at building materials, insulation and support structures. Unfortunately, homes and the materials inside them can provide the right food source and the right conditions for mould to grow. It’s important to know what to do if you detect mould in your home.

Mould needs an organic food source to grow, such as drywall, wood, paper, carpet, grout, wallpaper and fabrics — the kinds of materials you find in most homes. It also needs moisture and warmer temperatures.

Areas in the home where mould tends to grow include the basement, bathrooms, walls, ceiling corners, the attic, crawl spaces and on windowsills. If you live somewhere humid, the garage can also be place for mould to thrive. When you do your seasonal maintenance, make sure to check these areas for mould.

There are thousands of different types of mould. It can be green, black, yellow, white, even pink and, depending on the conditions, a single type of mould spore can be any number of colours.

It’s extremely difficult for homeowners to detect what type of mould is growing in their home and whether or not that type of mould poses a danger to their health.

A lot of people are sensitive to mould spores; they may trigger allergy and asthma symptoms when inhaled. Typically, the mould found in homes is not toxic, but it can still present a health risk. There’s no real standard for a mould level that is ‘OK’ or ‘safe’ — every individual reacts differently to mould.

According to a Mayo Clinic study conducted in 1999, 93 per cent of chronic sinusitis cases were attributed to mould. Children, the elderly and people with weakened immune systems may be more sensitive to the effects of mould exposure. If anyone in your home is experiencing headaches, sinus problems, sore throats or other respiratory symptoms, speak to your doctor. The cause could be mould.

If the mould in your home covers an area
more than 10 square feet, or if there’s sewage involved,
bring in a professional remediation company.

In most cases, you can tell if your house has mould by its musty smell and black stains. Other signs include water damage and black mould around baseboards, walls and ceilings. If there is a musty smell in your home but you can’t see any stains, mould could be behind your walls. In that case, I recommend having a certified professional home inspection done that includes thermal imaging, and possibly an indoor air quality assessment that includes mould testing.

If you find a small amount of mould that covers an area 10 square feet or less, you can typically remove it yourself. Use a solution of strong soap or detergent and water. I use a product that is non-toxic, anti-microbial, requires no scrubbing and kills mould at the root, not just the surface. Whatever you use, remember to wear the proper protective gear, such as goggles or safety eyewear, a mask and gloves, and keep the area well ventilated. And do not use bleach! Not only is bleach toxic, but the mould will come back anyway.

If the mould in your home covers an area more than 10 square feet, or if there’s sewage involved, bring in a professional remediation company.

If you bring in a professional, do your homework and ask the right questions. What are their credentials? What training have they gone through? What kind of professional accreditation do they have? Do they have references? Mould remediation is a fairly new industry, and like anything new, it’s the frontier. To make sure the job will be done right, find someone with Institute of Inspection Cleaning and Restoration Certification (IICRC).

The best way to get rid of mould is to control the moisture in the house and remove the mould. It could be something you can remove yourself, or you might have to bring in a professional. If you’re not sure, hire a professional, because when it comes to your health, it’s not worth the risk.

Source:  Mike Holmes, Special to National Post | May 28, 2016 | Watch Mike Holmes in his series, Holmes Makes It Right, on HGTV. For more information, visit makeitright.ca.

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Architecture for the ages

Architects Janna Levitt and Dean Goodman designed a house that could easily shift to accommodate children, future renters and, one day, their golden years.

Architects Janna Levitt and Dean Goodman designed a house that could easily shift to accommodate children, future renters and, one day, their golden years.

Young adults are getting squeezed out of the housing market. Their parents, meanwhile, want to downsize without leaving familiar neighbourhoods. The solution couldn’t be simpler to a growing group of designers: Rethink (and rebuild) the family home to suit several generations for the long haul.

When a strange young man entered her bedroom, Kelly Rossiter wasn’t entirely surprised. “He had had a bit too much to drink,” says Rossiter, who lives in Toronto, “and had gotten lost on the way to the front door.”

On the way, that is, from a party at her daughter’s place; Rossiter and her husband Lloyd Alter live below their daughter Emma, now 28, in a 1913 house that’s been split into two apartments. The door that links the suites in their home is usually left unsecured. “But after that night, I began locking the door whenever she had a party,” Rossiter says.

That incursion was a “rare hiccup” for the three family members, who occupy the same house that Alter, 63, and Rossiter, 57, have inhabited since 1984. Recently, instead of trading it for a condo in another area, they hired David Colussi of Workshop Architecture to divide the rambling building into a duplex. Now they live in a suite in the first floor and basement; Emma is upstairs with her fiancé and a roommate.

Janna Levitt and Dean Goodman designed their family home so that part of it could be converted into a rental when their children moved out.

Janna Levitt and Dean Goodman designed their family home so that part of it could be converted into a rental when their children moved out.

 

Janna Levitt and Dean Goodman designed their family home so that part of it could be converted into a rental when their children moved out.

 

Like a growing number of Canadians approaching retirement, Alter and Rossiter have taken a creative approach to the architecture of the “empty nest.” Rapidly rising housing prices – particularly in Toronto and Vancouver – are squeezing the middle-class expectation of home ownership for young adults. At the same time, their parents, people such as Alter and Rossiter, are not always eager to move into apartment living or to give up on the advantages of a familiar neighbourhood.

Rather than moving house, why not reshape our houses to fit us?

Such adaptability can be built into a house’s architecture. One example is the Grange Triple Double, a house by Williamson Chong Architects: Their clients, a Toronto couple in their 30s with a young son, decided to move in with the husband’s parents. They built a bespoke house that would accommodate them all together with rental income – and then change, multiple times, as the family’s needs evolve through the decades.

“The ingredients for this kind of house,” explains partner Betsy Williamson of Williamson Chong, “are spaces that are discrete yet flexible.”

The Triple Double, at about 3,200 square feet plus basement, sits on a corner; it is a three-bedroom, three-bath home which spills across three levels – and abuts rental space located on the ground floor and in the basement. The tenant space can be configured as one or two apartments; half or all of it can also be joined to the main house with the removal of cabinets or wall sections. In addition, one of the house’s bedrooms can be closed off as a semi-private area for the older residents. In time, the architects imagine that the house could take many different configurations; for instance, one or both of the grandparents might move into the main floor rental space.

The Grange Triple Double, a house by Williamson Chong Architects, was designed and built to change, multiple times, as the owners' needs evolve through the decades.

 

The Grange Triple Double, a house by Williamson Chong Architects, was designed and built to change, multiple times, as the owners' needs evolve through the decades.

 

The Grange Triple Double, a house by Williamson Chong Architects, was designed and built to change, multiple times, as the owners’ needs evolve through the decades.

 

From the architects’ point of view, such adaptability is fairly easy to design. The house’s heating and ventilation systems can be separately controlled in each of three potential units; extra sound insulation provides a buffer of privacy. But the biggest consideration is, as Williamson explains it, a matter of space. “You need rooms,” she says. “You need rooms that are closed off that can be opened up to each other.”

This logic can be applied to houses that don’t have the scale or the unusual geometry of the Triple Double project. Janna Levitt and Dean Goodman of LGAArchitectural Partners, who are married and have two children, designed their own house a decade ago, when they were in their early 50s. “When we moved in, we had teenagers,” Goodman explains, “so we tried to figure out, what kind of house would work for that age of our family and what would work after that?”

‘It’s important to think about what you’re building for,’ Goodman says, ‘not just right now, but in the longer term. And how much longer?’

‘It’s important to think about what you’re building for,’ Goodman says, ‘not just right now, but in the longer term. And how much longer?’

 

‘It’s important to think about what you’re building for,’ Goodman says, ‘not just right now, but in the longer term. And how much longer?’

 

The first need was privacy: Their kids wanted their own space, and they got it in the basement, which is high (the windows start three feet off the ground) and has two bedrooms, a bathroom and a living room, plus generous windows.

That basement has room and the plumbing rough-ins for a kitchen; it also has a space for a front door and staircase which is, for now, buried under soil in the garden. (“We thought, if we give the kids their own door when they are 14 or 15 years old, we’ll never see them,” Goodman explains.) Now the kids have moved out, and the couple is preparing to rent that space out, providing a source of income.

And the upper levels, with about 1,600 square feet, two bedrooms, are still larger than the average Canadian house of 50 years ago. Goodman says he and Levitt are happy to reduce their ecological footprint, and simply don’t need any more space.

There is a lesson in this: Design matters. Levitt and Goodman are excellent architects, and their house is efficiently planned to be comfortable and adaptable despite its relatively modest size. “It’s important to think about what you’re building for,” Goodman says, “not just right now, but in the longer term. And how much longer?”

The upper levels of Levitt and Goodman's house, with about 1,600 square feet, are still larger than the average Canadian house of 50 years ago.

The upper levels of Levitt and Goodman's house, with about 1,600 square feet, are still larger than the average Canadian house of 50 years ago.

 

The upper levels of Levitt and Goodman’s house, with about 1,600 square feet, are still larger than the average Canadian house of 50 years ago.

 

That raises the question of old age and a potential loss of physical mobility. Levitt and Goodman will live, still, on two levels; this goes against the emerging wisdom of “retirement communities,” in which people are choosing to retire to houses that are often on one level and wheelchair-accessible. Kelly Rossiter and Lloyd Alter have likewise chosen to live on two floors.

But is that even a problem? Alter, who is a writer on design and sustainability and an adjunct professor at Ryerson University, argues passionately that being located in a walkable neighbourhood, served by transit and connected to neighbours, is what matters as one ages.

“Older people, when they move into single-family houses in subdivisions, they’re setting themselves up for failure,” he says. “It’s a hell of a lot likelier that they’ll lose their keys before they lose their ability to walk up the stairs.

“This is one solution: this re-intensification of our neighbourhoods.”

Levitt and Goodman plan to live on two levels into retirement.

Levitt and Goodman plan to live on two levels into retirement.

 

Levitt and Goodman plan to live on two levels into retirement.

 

As Alter correctly points out, the conversion of houses into apartments (and back again) is nothing new – especially in Toronto, where such ad hoc adaptations have always provided a major portion of the city’s rental housing. But for upper-middle-class families, they now make sense. “Now we’re going into a generational change where the kids don’t have enough money,” Alter says, “and the parents have the house and don’t need it.

That idea drives much of the business for the Vancouver design-build firm Lanefab, which specializes in energy-efficient laneway houses. Since the city made zoning changes in 2009 to allow such projects (small new houses in the backyards of existing houses), the firm has worked with clients who are house-rich, aging, and ready to simplify their lives.

“If you’ve got an 80-year-old house in Vancouver, being able to move into a new building that’s energy-efficient – that’s appealing,” says Lanefab’s Mat Turner. “They can stay in their neighbourhood, in a house that’s custom-designed for them.”

This sort of promising equation may be enough to break some middle-class expectations about dwelling and family. Alter and Rossiter, with their upstairs-downstairs living in Toronto, are finding that their friends love the idea. “People come, they see it, and they say, ‘I’d love to do this,’” Alter reports. “‘If I could ever get my kids to go for it.’”

 

Source: ALEX BOZIKOVIC The Globe and Mail: Thursday, Feb. 25, 2016

Janna Levitt and Dean Goodman designed their family home so that part of it could be converted into a rental when their children moved out.

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Self-employed? Prepare for a long conversation with your mortgage broker

Getting financing isn’t as easy as it used to be, say mortgage brokers — and for the 15% of Canadians who earn money for themselves without a steady employer’s salary, it’s harder still.

If you’re self-employed and about to apply for a mortgage, be prepared for some serious form-filling. Getting financing isn’t as easy as it used to be, say mortgage brokers — and for the 15% of Canadians who earn money for themselves without a steady employer’s salary, it’s harder still.

“Back in the day, five years ago you could hold up three fingers and say ‘I promise I earn $100,000, and many lenders would take your word for it,” says Claire Drage, a senior mortgage agent with Mortgage Alliance in Greater Toronto. But things have changed, she warns. “It will take more paperwork, more documentation, more justification from the borrower on why they should be approved.”

Since 2008, the government has lowered the maximum amortization period from 40 to 25 years, and reduced the maximum gross and total debt service ratios to 39% and 44% respectively. Then, last October, the Office of the Superintendent of Financial Institutions’ B-20 rules put the underwriting practices of federally regulated financial institutions under scrutiny.

“Generally these changes have made for more rigorous review of documentation which does impact the self-employed borrower programs to a greater extent than salaried borrowers,” says Gary Siegle, Alberta-based VP of the Prairies for mortgage services firm Invis.

The self-employed often hinder themselves with creative accounting to lower their income. “They may have a different way of reporting all their income, reducing all their taxes as much as possible. Those are the ones that are more challenging,” says Daryl Harris, a broker at Verico One Link Mortgage & Financial in Winnipeg, and chair of the Canadian Association of Accredited Mortgage Professionals. Those not reporting cash jobs also reduce their provable income, making it harder to get a mortgage.

 

“Even though you’re self-employed and you benefit from amazing tax breaks, and your personal income tax return is incredibly low, you still have to prove to the lender that you can afford to pay this mortgage back,” adds Ms. Drage.

For those that find it hard to prove their income, stated income programs are an option. Designed for those with less than three years’ business operation, it requires at least a 10% downpayment, and not all lenders support it. TD Canada Trust, for example, looks instead at documented income such as T1 financials, business financials, and notices of assessments.

Changing attitudes among lenders makes it more difficult for the self-employed to deal with top-tier banks, says Don Barr, president of Verico Select Mortgage in Victoria. “It is forcing a lot of stuff out of the ‘A’ business and into the alternative business,” he says. Alternative lenders, some of which are not federally regulated, may take a less rigid approach when assessing self-employed applicants. However, the trade-off is often a higher interest rate.

There are several things to remember when applying for financing:

• Loan-to-value matters. Offering a 10% downpayment will make the process far more difficult. They care more than ever about up-front equity.
• Keep up with your payments. Make sure that you are up to date with the CRA before applying to a lender.
• Be organized. Ensure that all your accounting and tax documentation is up to date, and that you are reporting
• Pay off your credit. Get those outstanding cards and lines of credit paid down before you let your lender score you.
• Be prepared to adjust your expectations. You may have to adjust your target price after talking to a lender.
• See if your lender will ‘gross up’ your income. Some lenders may add a percentage when assessing your taxable and/or non-taxable income to allow for business expenses you incur.

And above all, start early in the process, preferably with a pre-approval before you look for a home, because one thing’s for sure: you’ll be doing more hoop-jumping than you think.

Source: Danny Bradbury, Special to Financial Post |September 19, 2013 

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How to Fulfill Your Fantasy With a Custom Home

Source: Realtor.com

If you dreamed as a child of someday owning a home with your own dance studio and ballet barre, or a personal game room with a Skee-Ball machine alongside an indoor putting green, then a custom home may be your best option to making that dream come true.

While buying a home fulfills a big part of the American Dream, building a home to your specifications elevates the experience. Before you begin to make decisions about your future home, you will need to spend significant time learning about the custom-home building process.

Organize Your Financing

Building a custom home isn’t necessarily more expensive than buying a newly built or existing home since it’s possible to build a small custom home, but sourcing all materials on an individual basis rather than in bulk can raise the price above production homes. The important thing to understand is that your decisions about the land you buy, and the design and quality of construction you choose will impact the final price.

Financing a custom home requires a construction loan, something not all lenders offer. If you don’t already own land, you will have to finance the land purchase and then the construction. Often you will have two closings, each incurring settlement fees.

Since building a custom home is considered risky by lenders, you typically need excellent credit and a down payment of at least 20% to 25% to qualify for a construction loan. In addition, lenders typically require more cash reserves for borrowers who are building a custom home to ensure that they have funds in place for any glitches that extend the construction period.

Make sure you check into appropriate insurance, too, during the construction period.

Interview Architects and Builders

If you already have a sense of the type of home you want to build, you can begin searching for architects in your area who design similar residences. Some custom-home buyers opt to find a builder first who can then recommend an architect, while others choose to hire an architect first. There are also design/build firms that handle the entire project. No matter which route you choose it’s important to check references, interview potential partners and visit examples of their work to see the quality before you finalize your choice.

Start With Land and a Plan

If you already own land, you should meet with potential builders and architects at the site so you can discuss potential issues and plans. If you don’t own land, some builders can help you find a site or they can direct you to a REALTOR® who can help. It’s essential that your home design and land plan match: You wouldn’t want to design a residence and then find that the site you’ve purchased can’t accommodate it.

Your builder should walk the property with you and determine how much preconstruction work is required, such as the placement of utilities, a septic system and a driveway.

Consider the Neighborhood

Most people who build a custom home believe they will never sell it, but eventually you may want to move to a different area or even build another custom home. It’s always wise to consider resale value when building a home. In particular, you want to match the price range and general size of your custom home to others in the neighborhood so that your house doesn’t stand out as oversized or overpriced.

Avoid Delays and Cost Overruns

Planning your home from the foundation to the roof and every single item in between can save you time and money when you are building a custom home. Your decisions about every detail in your home should be made before construction begins so you can reduce the possibility that materials won’t be available when needed, or that you will need to rip out things already built to accommodate a change order.

Good planning and hiring a good team can make the custom-home experience as easy as dreaming.

Michele Lerner writes about real estate, personal finance, and business news. She is the author of two books about home buying. She also enjoys writing fiction, visiting art museums, and tutoring kids.