REALTORS® Encouraged by Mayor Ford’s Re-Affirmation of Commitment to Repeal Land Transfer Tax.
Toronto, December 15, 2011 – REALTORS® are applauding Mayor Rob Ford for re-affirming his commitment to repeal the Toronto Land Transfer Tax beginning in 2012, as reported by CP24.
Mayor Ford’s comments were made during a televised interview with Stephen LeDrew, Political Specialist for CP24, which quoted the Mayor as saying that Torontonians will see “a portion of the land transfer tax gone by next year.”
“Mayor Ford deserves to be applauded for sticking to his convictions and delivering on campaign commitments. That is what Torontonians elected him to do. The Land Transfer Tax is not good for Torontonians or the City. We look forward to working with the Mayor and Council to get rid of this unfair tax,” said Richard Silver, President of the Toronto Real Estate Board (TREB).
A recent poll conducted by Ipsos Reid, for TREB, indicated that 65 per cent of Torontonians continue to support Mayor Ford’s commitment to repeal the Toronto Land Transfer Tax.
“Torontonians understand that the Land Transfer Tax is not part of the solution to the City’s financial challenges; it is part of the problem. It unfairly forces home buyers and business owners to pay more than their fair share, costing the average Toronto home buyer more than $6,000 every time they move; it is an unpredictable revenue stream that goes up and down with the real estate market; and it makes the City less competitive than other GTA municipalities,” said Silver.
Greater Toronto REALTORS® are passionate about their work. They are governed by a strict Code of Ethics and share a state-of-the-art Multiple Listing Service. Over 32,000 TREB Members serve consumers in the Greater Toronto Area. The Toronto Real Estate Board is Canada’s largest real estate board.
Media Inquiries: Mary Gallagher, Senior Manager Public Affairs (416) 443-8158 maryg@trebnet.com
30 - 1400 Don Mills Road Toronto ON M3B 3N1
NEWS RELEASE
Sunday, December 18, 2011
Thursday, December 15, 2011
Toronto House Prices Hit New Record!
Toronto house prices hit new record
December 15, 2011
Susan Pigg
A sold sign sits on the corner of Toronto's Manning Ave. and Ulster St.
Tara Walton/Toronto Star
The Toronto housing market slipped back into sellers’ territory in November, helping propel prices even higher to a record average of $481,305.
That’s a 2.1 per cent increase from October and, when adjusted for seasonal fluctuations, almost 10 per cent more than the average GTA home was worth a year ago, according to figures released Thursday by the Canadian Real Estate Association.
In fact, November sales across Canada were 7 per cent above the 10-year average for the month, resulting in the fourth highest level of sales on record for what’s typically the slow season, CREA noted.
While no one is uttering the dreaded B-word — bubble — as did Britain’s venerable magazine The Economist when it recently warned Canada’s housing market may be 25 per cent overvalued, the warning is clearly of concern among the country’s housing experts.
“With interest rates expected to remain low for longer, the housing sector will no doubt be closely watched for signs of excess,” say CREA’s chief economist Gregory Klump.
“That said, current trends for resale housing and new home construction suggest that tightened mortgage regulations are working as intended and fostering economic stability in Canada.”
A record November of sales in Halifax-Dartmouth, up a seasonally adjusted 34.7 per cent, helped offset a 10.5 per cent decline in sales in Toronto where 7,773 homes changed homes.
New listings across the GTA were down 4.4 in November while prices climbed by 9.7 per cent.
Despite economic turmoil in the rest of the world, Canadians continue to see real estate as a sure thing: A total of 432,048 homes have traded hands across Canada between January and the end of November, up 2.1 per cent from the same period last year, CREA says.
December 15, 2011
Susan Pigg
A sold sign sits on the corner of Toronto's Manning Ave. and Ulster St.
Tara Walton/Toronto Star
The Toronto housing market slipped back into sellers’ territory in November, helping propel prices even higher to a record average of $481,305.
That’s a 2.1 per cent increase from October and, when adjusted for seasonal fluctuations, almost 10 per cent more than the average GTA home was worth a year ago, according to figures released Thursday by the Canadian Real Estate Association.
In fact, November sales across Canada were 7 per cent above the 10-year average for the month, resulting in the fourth highest level of sales on record for what’s typically the slow season, CREA noted.
While no one is uttering the dreaded B-word — bubble — as did Britain’s venerable magazine The Economist when it recently warned Canada’s housing market may be 25 per cent overvalued, the warning is clearly of concern among the country’s housing experts.
“With interest rates expected to remain low for longer, the housing sector will no doubt be closely watched for signs of excess,” say CREA’s chief economist Gregory Klump.
“That said, current trends for resale housing and new home construction suggest that tightened mortgage regulations are working as intended and fostering economic stability in Canada.”
A record November of sales in Halifax-Dartmouth, up a seasonally adjusted 34.7 per cent, helped offset a 10.5 per cent decline in sales in Toronto where 7,773 homes changed homes.
New listings across the GTA were down 4.4 in November while prices climbed by 9.7 per cent.
Despite economic turmoil in the rest of the world, Canadians continue to see real estate as a sure thing: A total of 432,048 homes have traded hands across Canada between January and the end of November, up 2.1 per cent from the same period last year, CREA says.
Wednesday, November 30, 2011
Canadian Economy Rebounds
November 30, 2011
Canadian economy rebounds
By JEREMY TOROBIN
Globe and Mail Update
Third-quarter gross domestic product grows by better-than-expected 3.5%
The Canadian economy grew at an annual pace of 3.5 per cent in the third quarter, as exports roared back after a steep contraction in the previous three-month period even as domestic demand slowed.
The report Wednesday from Statistics Canada showed sales abroad rebounded from a terrible second quarter that was marred by a host of one-time setbacks such as the effects of Japan's natural disasters on North American supply chains, soaring at an annual clip of more than 14 per cent, the biggest quarterly gain since 2004. Overall economic growth also got a boost as energy production that was interrupted by wildfires in northern Alberta resumed, and a jump in housing-related investment.
At the same time, consumer spending and total domestic demand moderated, and business investment dropped an annualized 3.6 per cent, the first decrease since 2009. Still, while the second-quarter drop was revised to 0.5 per cent from the initially reported 0.4 per cent, the third-quarter result exceeded expectations for a 3-per cent annualized gain and indicates some resiliency in the economy over the summer despite the debt dramas on both sides of the Atlantic.
Exports bounced back from a 6.4-per cent drop in the previous three-month period even as threats to the global economy swirled, in part because of a depreciation in the Canadian dollar.
However, final domestic demand grew at a 0.9-per cent pace, slowing from 3.1 per cent between April and June and marking the most sluggish pace since 2009. That suggests weakening momentum towards the end of the year, economists said, even though growth over the second half of the year is coming in at a better pace than Bank of Canada Governor Mark Carney has projected.
The central banker, whose next interest-rate decision is on Dec. 6, is expected to "look past" the third-quarter result as Europe faces a long downturn and an escalating debt crisis, and emerging markets like China also slow. Mr. Carney may keep interest rates on hold at 1 per cent until as late as 2013, as the economy struggles to average more than 2-per cent growth next year, analysts warn.
"An unsatisfactory pace of job growth - zero net gains in employment since July - in combination with weakening consumer confidence and ongoing losses in equity markets are expected to slow the pace of spending growth over the next few months," said Diana Petramala, an economist with TD Economics. "Meanwhile, global economic growth is slowing substantially, led by a likely deep recession in Europe and moderating economic growth in China. Canada will be negatively impacted through weak commodity prices and slower export growth."
On a monthly basis, the economy grew 0.2 per cent in September, after increasing by 0.4 per cent in each of the previous two months, roughly in line with forecasts and suggesting a decent hand-off into the last three months of the year. Nonetheless, policy makers are clearly growing more worried by the day about a European debt crisis that Mr. Carney last week called "barely contained."
Underscoring the concern, the Bank of Canada joined five other major central banks Wednesday in cutting the interest rate on U.S.-dollar liquidity swaps, and also agreed with the Federal Reserve to extend a $30-billion swap facility that aims to ensure banks are able to get emergency access to U.S. dollars if needed to settle transactions.
The co-ordinated action comes as European leaders struggle to contain a debt crisis that has seen the borrowing costs of countries such as Italy and Spain climb to crippling levels. The central banks' moves are an attempt to instill some confidence in financial markets by assuring investors that banks will have easy access to cash for the foreseeable future.
"The Bank of Canada judges that it is not necessary for it to draw or offer operations on any of these swap facilities at this time, but that it is prudent to have these agreements in place," the Bank of Canada said in a statement on its Web site, adding that policy makers are watching closely for further strains in financial markets and will act as needed to support the stability of the system.
The Globe and Mail, Inc.
Canadian economy rebounds
By JEREMY TOROBIN
Globe and Mail Update
Third-quarter gross domestic product grows by better-than-expected 3.5%
The Canadian economy grew at an annual pace of 3.5 per cent in the third quarter, as exports roared back after a steep contraction in the previous three-month period even as domestic demand slowed.
The report Wednesday from Statistics Canada showed sales abroad rebounded from a terrible second quarter that was marred by a host of one-time setbacks such as the effects of Japan's natural disasters on North American supply chains, soaring at an annual clip of more than 14 per cent, the biggest quarterly gain since 2004. Overall economic growth also got a boost as energy production that was interrupted by wildfires in northern Alberta resumed, and a jump in housing-related investment.
At the same time, consumer spending and total domestic demand moderated, and business investment dropped an annualized 3.6 per cent, the first decrease since 2009. Still, while the second-quarter drop was revised to 0.5 per cent from the initially reported 0.4 per cent, the third-quarter result exceeded expectations for a 3-per cent annualized gain and indicates some resiliency in the economy over the summer despite the debt dramas on both sides of the Atlantic.
Exports bounced back from a 6.4-per cent drop in the previous three-month period even as threats to the global economy swirled, in part because of a depreciation in the Canadian dollar.
However, final domestic demand grew at a 0.9-per cent pace, slowing from 3.1 per cent between April and June and marking the most sluggish pace since 2009. That suggests weakening momentum towards the end of the year, economists said, even though growth over the second half of the year is coming in at a better pace than Bank of Canada Governor Mark Carney has projected.
The central banker, whose next interest-rate decision is on Dec. 6, is expected to "look past" the third-quarter result as Europe faces a long downturn and an escalating debt crisis, and emerging markets like China also slow. Mr. Carney may keep interest rates on hold at 1 per cent until as late as 2013, as the economy struggles to average more than 2-per cent growth next year, analysts warn.
"An unsatisfactory pace of job growth - zero net gains in employment since July - in combination with weakening consumer confidence and ongoing losses in equity markets are expected to slow the pace of spending growth over the next few months," said Diana Petramala, an economist with TD Economics. "Meanwhile, global economic growth is slowing substantially, led by a likely deep recession in Europe and moderating economic growth in China. Canada will be negatively impacted through weak commodity prices and slower export growth."
On a monthly basis, the economy grew 0.2 per cent in September, after increasing by 0.4 per cent in each of the previous two months, roughly in line with forecasts and suggesting a decent hand-off into the last three months of the year. Nonetheless, policy makers are clearly growing more worried by the day about a European debt crisis that Mr. Carney last week called "barely contained."
Underscoring the concern, the Bank of Canada joined five other major central banks Wednesday in cutting the interest rate on U.S.-dollar liquidity swaps, and also agreed with the Federal Reserve to extend a $30-billion swap facility that aims to ensure banks are able to get emergency access to U.S. dollars if needed to settle transactions.
The co-ordinated action comes as European leaders struggle to contain a debt crisis that has seen the borrowing costs of countries such as Italy and Spain climb to crippling levels. The central banks' moves are an attempt to instill some confidence in financial markets by assuring investors that banks will have easy access to cash for the foreseeable future.
"The Bank of Canada judges that it is not necessary for it to draw or offer operations on any of these swap facilities at this time, but that it is prudent to have these agreements in place," the Bank of Canada said in a statement on its Web site, adding that policy makers are watching closely for further strains in financial markets and will act as needed to support the stability of the system.
The Globe and Mail, Inc.
Friday, November 25, 2011
Low Interest Rates Make Home Ownership More Affordable
Back to Low interest rates making home ownership slightly more affordable, RBC says
Low interest rates making home ownership slightly more affordable, RBC says
November 25, 2011
OTTAWA—A new report finds low interest rates are keeping Canadian house prices within reach of homebuyers in many markets.
The Royal Bank’s quarterly report on housing trends, released early Friday, shows housing affordability improved slightly in the third quarter, after two consecutive quarters when things got worse.
RBC chief economist Craig Wright says a lower interest rate environment, which includes mortgage rates, is helping to reduce the cost of a home.
“Elevated uncertainty relating to the European sovereign-debt crisis and the downside risk for economic growth have contributed to keeping interest rates at low levels,” said Wright.
Those lower rates are helping to cushion the impact of rising home prices in many cities even as the economy slow and consumer confidence weakens.
The bank says affordability levels rose for all housing categories, although most improvements were less than one per cent.
“Housing affordability levels are quite good in most parts of Canada and will pose little threat to overall housing demand,” said Wright.
Among the most marked improvements in affordability were for two-storey homes and bungalows in Montreal, two-storey houses in Manitoba, and detached bungalows in Vancouver, Canada’s most expensive housing market.
Royal’s affordability measure for Vancouver fell slightly from the previous quarter, but remained above 90 per cent.
Toronto is next in the index at 52.1 per cent, Montreal is at 40.9, Ottawa 40.8, Calgary 37.6, and Edmonton 33.2.
“The Vancouver area market continues to be a major exception, with sky-high property values in upscale neighbourhoods making it both extremely unaffordable and the most at risk of a downward correction,” said Wright
A reading of 50 per cent means homeownership costs take up 50 per cent of a typical household’s monthly pre-tax income. The higher the rate, the higher the cost.
RBC forecasts that interest rates will remain exceptionally low in Canada until mid-2012 and rise gradually after that.
“We expect to see further slowing in the pace of home price increases next year, as housing demand levels out,” Wright said.
“These factors will set the stage for a period of relative stability in affordability trends in Canada.”
Low interest rates making home ownership slightly more affordable, RBC says
November 25, 2011
OTTAWA—A new report finds low interest rates are keeping Canadian house prices within reach of homebuyers in many markets.
The Royal Bank’s quarterly report on housing trends, released early Friday, shows housing affordability improved slightly in the third quarter, after two consecutive quarters when things got worse.
RBC chief economist Craig Wright says a lower interest rate environment, which includes mortgage rates, is helping to reduce the cost of a home.
“Elevated uncertainty relating to the European sovereign-debt crisis and the downside risk for economic growth have contributed to keeping interest rates at low levels,” said Wright.
Those lower rates are helping to cushion the impact of rising home prices in many cities even as the economy slow and consumer confidence weakens.
The bank says affordability levels rose for all housing categories, although most improvements were less than one per cent.
“Housing affordability levels are quite good in most parts of Canada and will pose little threat to overall housing demand,” said Wright.
Among the most marked improvements in affordability were for two-storey homes and bungalows in Montreal, two-storey houses in Manitoba, and detached bungalows in Vancouver, Canada’s most expensive housing market.
Royal’s affordability measure for Vancouver fell slightly from the previous quarter, but remained above 90 per cent.
Toronto is next in the index at 52.1 per cent, Montreal is at 40.9, Ottawa 40.8, Calgary 37.6, and Edmonton 33.2.
“The Vancouver area market continues to be a major exception, with sky-high property values in upscale neighbourhoods making it both extremely unaffordable and the most at risk of a downward correction,” said Wright
A reading of 50 per cent means homeownership costs take up 50 per cent of a typical household’s monthly pre-tax income. The higher the rate, the higher the cost.
RBC forecasts that interest rates will remain exceptionally low in Canada until mid-2012 and rise gradually after that.
“We expect to see further slowing in the pace of home price increases next year, as housing demand levels out,” Wright said.
“These factors will set the stage for a period of relative stability in affordability trends in Canada.”
Monday, November 21, 2011
Moving to Your First Apartment
Book Excerpt
Flying the coop: Getting your first apartment
Globe and Mail Update
Published Monday, Nov. 21, 2011 6:00AM EST
Last updated Monday, Nov. 21, 2011 10:51AM EST
Excerpted from No More Mac ‘n’ Cheese!: The Real-World Guide to Managing Your Money for 20-Somethings with permission from Self-Counsel Press (a division of International Self-Counsel Press Ltd.). Copyright 2011 by International Self-Counsel Press Ltd.
From Your Parents’ Basement to Your First Apartment
If you put your time and money to good use while living at home with your parents, you will begin life as a self-sufficient adult. Living at home offers you the time to increase your savings for your first apartment and pay down a large portion of student debt. Whether your income is from part-time work or your first full-time position, you will never have more disposable income than while living in the family home. Set a time limit for how long you will stay, and begin now to plan the steps you need to take for a place of your own.
1. Begin with a Savings Plan
Before you bolt out the door, you need to consider how much money you will need to get started.
Prudent financial wisdom recommends that you have an emergency fund equal to three to six months’ income. While you are still living in the family home, create a simple savings plan, which may look similar to this:
• 30 per cent of your (after tax) income to your apartment fund and emergency fund.
• 30 per cent toward your debt (student loans plus credit cards).
• 40 per cent for your transportation, cellphone, Internet, clothing, entertainment, vacations, etc.
Now consider your starting point. What is the value of your assets? How much do you owe? The difference between these two numbers is your net worth.
How much money do you earn each month? What are your fixed monthly expenses? What is remaining? A cash flow statement can show this information and will indicate if there is a surplus or a shortfall.
2. Selecting an Apartment
The first step is to create a budget. Include all of your existing commitments such as transportation costs, cellphone, loan payments, and so on. If you have a vehicle, include the cost of insurance, gas, and regular maintenance.
Start with your budget in mind. A good rule of thumb is that your rent should not exceed 30 per cent of your after-tax income. You may want to consider shared accommodation just to be closer to your job and to reduce your rent. Remember the less you spend on rent, the more money you have left over for other things.
Consider transportation between your apartment, work, and family and friends. Your apartment should be easily accessible to the places you frequent the most. How long will it take you to get to work or to travel to visit friends and family?
Where you live will have a great bearing on the cost. Large cities can have very high rents, forcing you to spend more, live in a less desirable neighbourhood, or live on the outskirts of the city. If you live on the outskirts of the city, that could mean an increase in gas mileage if your job is in the city centre. If you don’t have a vehicle, you will need to consider whether or not public transportation will be adequate. Also consider the amount of time you will spend commuting.
If you have a budget, and you have a good idea of the area in which you would like to live, start looking at some options within your budget. Inspect at least 10 apartments in different buildings. Take a day or two to consider your choices before signing a lease. Once you have identified an apartment you like, ask for a copy of the lease, take it home with you, and read it. Understand what you are signing, and if you are not sure, use a highlighter and ask the landlord for an explanation of highlighted sections.
Make sure you ask what utilities are included in the rent (e.g., electricity, gas, parking, cable, Internet). If utilities aren’t included, you will need to determine how much the additional costs will be. Add these extra costs to the rental amount. Make sure you are still within your budget.
If you are responsible for paying for your own utilities, call the providers and ask about security deposits. Each of these may be several hundreds of dollars.
You should do a walk-through with the landlord. If there is any damage to the place, it should be noted by both the landlord and you – preferably written down and signed by both you and the landlord. It may also be a good idea to take pictures of any damages to the rental property before you move in, so when you move out, you can prove you did not contribute to the previously documented damages (this should also be done with the landlord present). Ask the landlord if, prior to you moving in, the apartment will be painted, carpets cleaned, and appliances cleaned and inspected.
Sometimes it is possible to negotiate the rent. Do not be shy; if you ask politely and you clearly state your other options, you may find you are able to reduce the rent from the original asking price.
When you have found the place you want, you will be asked to sign a lease. Most leases have a one-year term and can usually be renewed annually. As you sign the lease your landlord will request a two-month deposit. Half will be applied to your first month’s rent. The balance will be held as either the last month’s rent or a security deposit.
Congratulations! You are now a fully self-reliant adult. Thank your parents for their love and support as you start your new life in your new home. Better yet, invite them over for a nice dinner!
© 2011 The Globe and Mail Inc. All Rights Reserved.
Flying the coop: Getting your first apartment
Globe and Mail Update
Published Monday, Nov. 21, 2011 6:00AM EST
Last updated Monday, Nov. 21, 2011 10:51AM EST
Excerpted from No More Mac ‘n’ Cheese!: The Real-World Guide to Managing Your Money for 20-Somethings with permission from Self-Counsel Press (a division of International Self-Counsel Press Ltd.). Copyright 2011 by International Self-Counsel Press Ltd.
From Your Parents’ Basement to Your First Apartment
If you put your time and money to good use while living at home with your parents, you will begin life as a self-sufficient adult. Living at home offers you the time to increase your savings for your first apartment and pay down a large portion of student debt. Whether your income is from part-time work or your first full-time position, you will never have more disposable income than while living in the family home. Set a time limit for how long you will stay, and begin now to plan the steps you need to take for a place of your own.
1. Begin with a Savings Plan
Before you bolt out the door, you need to consider how much money you will need to get started.
Prudent financial wisdom recommends that you have an emergency fund equal to three to six months’ income. While you are still living in the family home, create a simple savings plan, which may look similar to this:
• 30 per cent of your (after tax) income to your apartment fund and emergency fund.
• 30 per cent toward your debt (student loans plus credit cards).
• 40 per cent for your transportation, cellphone, Internet, clothing, entertainment, vacations, etc.
Now consider your starting point. What is the value of your assets? How much do you owe? The difference between these two numbers is your net worth.
How much money do you earn each month? What are your fixed monthly expenses? What is remaining? A cash flow statement can show this information and will indicate if there is a surplus or a shortfall.
2. Selecting an Apartment
The first step is to create a budget. Include all of your existing commitments such as transportation costs, cellphone, loan payments, and so on. If you have a vehicle, include the cost of insurance, gas, and regular maintenance.
Start with your budget in mind. A good rule of thumb is that your rent should not exceed 30 per cent of your after-tax income. You may want to consider shared accommodation just to be closer to your job and to reduce your rent. Remember the less you spend on rent, the more money you have left over for other things.
Consider transportation between your apartment, work, and family and friends. Your apartment should be easily accessible to the places you frequent the most. How long will it take you to get to work or to travel to visit friends and family?
Where you live will have a great bearing on the cost. Large cities can have very high rents, forcing you to spend more, live in a less desirable neighbourhood, or live on the outskirts of the city. If you live on the outskirts of the city, that could mean an increase in gas mileage if your job is in the city centre. If you don’t have a vehicle, you will need to consider whether or not public transportation will be adequate. Also consider the amount of time you will spend commuting.
If you have a budget, and you have a good idea of the area in which you would like to live, start looking at some options within your budget. Inspect at least 10 apartments in different buildings. Take a day or two to consider your choices before signing a lease. Once you have identified an apartment you like, ask for a copy of the lease, take it home with you, and read it. Understand what you are signing, and if you are not sure, use a highlighter and ask the landlord for an explanation of highlighted sections.
Make sure you ask what utilities are included in the rent (e.g., electricity, gas, parking, cable, Internet). If utilities aren’t included, you will need to determine how much the additional costs will be. Add these extra costs to the rental amount. Make sure you are still within your budget.
If you are responsible for paying for your own utilities, call the providers and ask about security deposits. Each of these may be several hundreds of dollars.
You should do a walk-through with the landlord. If there is any damage to the place, it should be noted by both the landlord and you – preferably written down and signed by both you and the landlord. It may also be a good idea to take pictures of any damages to the rental property before you move in, so when you move out, you can prove you did not contribute to the previously documented damages (this should also be done with the landlord present). Ask the landlord if, prior to you moving in, the apartment will be painted, carpets cleaned, and appliances cleaned and inspected.
Sometimes it is possible to negotiate the rent. Do not be shy; if you ask politely and you clearly state your other options, you may find you are able to reduce the rent from the original asking price.
When you have found the place you want, you will be asked to sign a lease. Most leases have a one-year term and can usually be renewed annually. As you sign the lease your landlord will request a two-month deposit. Half will be applied to your first month’s rent. The balance will be held as either the last month’s rent or a security deposit.
Congratulations! You are now a fully self-reliant adult. Thank your parents for their love and support as you start your new life in your new home. Better yet, invite them over for a nice dinner!
© 2011 The Globe and Mail Inc. All Rights Reserved.
Tuesday, November 15, 2011
"Variable or fixed? It's no contest"
This article appeared in the Globe and Mail issue of October 31, 2011 by Rob Carrick.
"Fixed-rate mortgage is your best bet; banks have snuffed out variable-rate discounts, while prime rate has dipped," he further says.
"Variable-rate mortgages are so over.
Go fixed rate if you're arranging or renewing a mortgage, and think hard about the four-year term. If you take in all the recent developments in the mortgage market, this is the most logical strategy.
Variable rate mortgages are being sold at the prime rate in many cases right now, which is 3 percent. The traditional discount off prime? Snuffed out by the banks. They've decided they aren't making enough money from discounted variable-rate mortgages, so goodbye discount for the most part. If you shop around, maybe you'll get 0.2 of a point off prime.
Now for the fixed alternative. Global economic uncertainty and sluggish growth mean you'll pay in the area of 3 percent for a four-year term." The preceding is a quote from the article.
Very important information to know if you are arranging a new mortgage or renewing one. The complete article can be read by clicking on Real Estate News- Recent Developments on the right column- 2 pages.
Ten Tips For Getting a Fair Price for Your Home
Mortgages
Ten tips for getting a fair price on a home
Amy Fontinelle
Investopedia.com
Published Thursday, Sep. 08, 2011 2:34PM EDT
Whether it's a buyer's market or a seller's market, all homebuyers have one thing in common: they don't want to get ripped off. But how do you know if you're getting a fair deal on the home you're prepared to place an offer on? Read on to find out how to evaluate the price of any home so you can make a sound investment decision.
Research recently sold, comparable properties
A comparable property is one that is similar in size, condition, neighbourhood and amenities. One 1,200-square-foot, recently remodeled, one-story home with an attached garage should be listed at roughly the same price as a similar 1,200-square-foot home in the same neighbourhood. That said, you can also gain valuable information by looking at how the property you're interested in compares in price to different properties. Is it considerably less expensive than larger or nicer properties? Is it more expensive than smaller or less attractive properties? Your real estate agent is the best source of accurate, up-to-date information on comparable properties (also known as “comps”).
Check out comparable properties that are currently on the market
In this case, you can actually visit other homes and get a true sense of how their size, condition and amenities compare to the property you're considering buying. Then you can compare prices and see what seems fair. Reasonable sellers know that they must price their properties similarly to market comparables if they want to be competitive.
Look at comparables that were on the market recently but didn't sell
If the house you're considering buying is priced similarly to homes that were taken off the market because they didn't sell, the property you're considering may be overpriced. Also, if there are a lot of similar properties on the market, prices should be lower, especially if those properties are vacant. Check out the unsold inventory index for information about current supply and demand in the housing market. This index attempts to measure how long it will take for all the homes currently on the market to be sold given the rate at which homes are currently selling. (For further reading, see Selling Your Home In A Down Market.)
Consider market conditions and appreciation rates in the area
Have prices been going up recently or going down? In a seller's market, properties will probably be somewhat overpriced, and in a buyer's market, properties are apt to be underpriced. It all depends on where the market currently sits on the real estate boom-and-bust curve. Even in a seller's market, properties may not be overpriced if the market is on the upswing and not near its peak. Conversely, properties can be overpriced even in a buyer's market if prices have only recently begun to decline. Of course, it can be difficult to see the peaks and valleys until they're history. Also consider the impact of mortgage interest rates and the job market on the economy. (Knowing your mortgage choices is important. For more information, read Shopping For A Mortgage.)
Are you buying a for-sale-by-owner property?
A for-sale-by-owner (FSBO) property should be discounted to reflect the fact that there is no 6 per cent (on average) seller's agent commission, something that many sellers don't take into consideration when setting their prices. Another potential problem with FSBOs is that the seller may not have had an agent's guidance in setting a reasonable price in the first place, or may have been so unhappy with an agent's suggestion as to decide to go it alone. In any of these situations, the property may be overpriced.
What Is the expected appreciation for the area?
The future prospects for your chosen neighbourhood can have an impact on price. If positive development is planned, such as a major mall being built, the extension of light rail to the neighbourhood, or a large new company moving to the area, the prospects of future home appreciation look good. Even small developments like plans to add more roads or build a new school can be a good sign. On the other hand, if grocery stores and gas stations are closing down, the home price should be lower to reflect that, and you should probably reconsider moving to the area. The development of new housing can go either way - it can mean that the area is hot and is likely to be in high demand in the future, increasing your home's value, or it can result in a surplus of housing, which will lower the value of all the homes in the area.
What Is your real estate agent's opinion?
Without even analyzing the data, your real estate agent is likely to have a good gut sense (thanks to experience) of whether the property is priced appropriately or not and what a fair offering price might be.
Does the price feel fair to you?
If you're not happy with the property, the price will never seem fair, even if you get a bargain. Even if you pay a little over market value for a home you love, in the end, you won't really care.
Test the waters
Even in a seller's market, you can always offer below list price just to see how the seller reacts. Some sellers list properties for the lowest price they're willing to take because they don't want to negotiate, while others list their homes for higher than they expect to earn because they expect to negotiate downward or they want to see if someone will make an offer at the higher price. If the seller accepts your price or counteroffer, you'll get an indication that the property probably wasn't worth what it was listed for and you have a good chance at getting a fair deal. On the other hand, some sellers may underprice their properties in the hope of generating lots of interest and sparking a bidding war. Unlike on eBay, however, the seller doesn't have to simply sell to the highest bidder: Sellers can reject any and all offers that don't meet their expectations. If you have your heart set on the property, be warned that some sellers may be offended by lowball offers and refuse to work with you if you chose to employ such a tactic. Also, when you offer less than the list price, you may increase your risk of being outbid by another buyer. (For strategies that will help you to come out on top in any negotiation, read Getting What You Want.)
Get an appraised value and a home inspection
Once you're under contract, the lender will have an appraisal of the property done (usually at your expense) to protect its financial interests. The lender wants to make sure that if you stop making your mortgage payments, it'll be able to get a reasonable amount of its money back when it forecloses on your home. If the appraisal comes in at considerably less than your offering price, you may not be getting a fair deal. In fact, the lender may not even let you purchase the home unless the seller is willing to bring the price down. A home inspection, which is completed after you're under contract, will also give you a way to gauge your offering price. If the home needs many expensive repairs, you'll want to ask the seller to make the repairs for you or discount the purchase price so you can make them yourself.
Conclusion
When you're shopping for a home, it's important to understand how homes are priced so you can make a sound investment and reach a fair agreement with the seller. Using these tips, you'll be able to make a confident and well-informed offer on any home in any market.
© 2011 The Globe and Mail Inc. All Rights Reserved.
Ten tips for getting a fair price on a home
Amy Fontinelle
Investopedia.com
Published Thursday, Sep. 08, 2011 2:34PM EDT
Whether it's a buyer's market or a seller's market, all homebuyers have one thing in common: they don't want to get ripped off. But how do you know if you're getting a fair deal on the home you're prepared to place an offer on? Read on to find out how to evaluate the price of any home so you can make a sound investment decision.
Research recently sold, comparable properties
A comparable property is one that is similar in size, condition, neighbourhood and amenities. One 1,200-square-foot, recently remodeled, one-story home with an attached garage should be listed at roughly the same price as a similar 1,200-square-foot home in the same neighbourhood. That said, you can also gain valuable information by looking at how the property you're interested in compares in price to different properties. Is it considerably less expensive than larger or nicer properties? Is it more expensive than smaller or less attractive properties? Your real estate agent is the best source of accurate, up-to-date information on comparable properties (also known as “comps”).
Check out comparable properties that are currently on the market
In this case, you can actually visit other homes and get a true sense of how their size, condition and amenities compare to the property you're considering buying. Then you can compare prices and see what seems fair. Reasonable sellers know that they must price their properties similarly to market comparables if they want to be competitive.
Look at comparables that were on the market recently but didn't sell
If the house you're considering buying is priced similarly to homes that were taken off the market because they didn't sell, the property you're considering may be overpriced. Also, if there are a lot of similar properties on the market, prices should be lower, especially if those properties are vacant. Check out the unsold inventory index for information about current supply and demand in the housing market. This index attempts to measure how long it will take for all the homes currently on the market to be sold given the rate at which homes are currently selling. (For further reading, see Selling Your Home In A Down Market.)
Consider market conditions and appreciation rates in the area
Have prices been going up recently or going down? In a seller's market, properties will probably be somewhat overpriced, and in a buyer's market, properties are apt to be underpriced. It all depends on where the market currently sits on the real estate boom-and-bust curve. Even in a seller's market, properties may not be overpriced if the market is on the upswing and not near its peak. Conversely, properties can be overpriced even in a buyer's market if prices have only recently begun to decline. Of course, it can be difficult to see the peaks and valleys until they're history. Also consider the impact of mortgage interest rates and the job market on the economy. (Knowing your mortgage choices is important. For more information, read Shopping For A Mortgage.)
Are you buying a for-sale-by-owner property?
A for-sale-by-owner (FSBO) property should be discounted to reflect the fact that there is no 6 per cent (on average) seller's agent commission, something that many sellers don't take into consideration when setting their prices. Another potential problem with FSBOs is that the seller may not have had an agent's guidance in setting a reasonable price in the first place, or may have been so unhappy with an agent's suggestion as to decide to go it alone. In any of these situations, the property may be overpriced.
What Is the expected appreciation for the area?
The future prospects for your chosen neighbourhood can have an impact on price. If positive development is planned, such as a major mall being built, the extension of light rail to the neighbourhood, or a large new company moving to the area, the prospects of future home appreciation look good. Even small developments like plans to add more roads or build a new school can be a good sign. On the other hand, if grocery stores and gas stations are closing down, the home price should be lower to reflect that, and you should probably reconsider moving to the area. The development of new housing can go either way - it can mean that the area is hot and is likely to be in high demand in the future, increasing your home's value, or it can result in a surplus of housing, which will lower the value of all the homes in the area.
What Is your real estate agent's opinion?
Without even analyzing the data, your real estate agent is likely to have a good gut sense (thanks to experience) of whether the property is priced appropriately or not and what a fair offering price might be.
Does the price feel fair to you?
If you're not happy with the property, the price will never seem fair, even if you get a bargain. Even if you pay a little over market value for a home you love, in the end, you won't really care.
Test the waters
Even in a seller's market, you can always offer below list price just to see how the seller reacts. Some sellers list properties for the lowest price they're willing to take because they don't want to negotiate, while others list their homes for higher than they expect to earn because they expect to negotiate downward or they want to see if someone will make an offer at the higher price. If the seller accepts your price or counteroffer, you'll get an indication that the property probably wasn't worth what it was listed for and you have a good chance at getting a fair deal. On the other hand, some sellers may underprice their properties in the hope of generating lots of interest and sparking a bidding war. Unlike on eBay, however, the seller doesn't have to simply sell to the highest bidder: Sellers can reject any and all offers that don't meet their expectations. If you have your heart set on the property, be warned that some sellers may be offended by lowball offers and refuse to work with you if you chose to employ such a tactic. Also, when you offer less than the list price, you may increase your risk of being outbid by another buyer. (For strategies that will help you to come out on top in any negotiation, read Getting What You Want.)
Get an appraised value and a home inspection
Once you're under contract, the lender will have an appraisal of the property done (usually at your expense) to protect its financial interests. The lender wants to make sure that if you stop making your mortgage payments, it'll be able to get a reasonable amount of its money back when it forecloses on your home. If the appraisal comes in at considerably less than your offering price, you may not be getting a fair deal. In fact, the lender may not even let you purchase the home unless the seller is willing to bring the price down. A home inspection, which is completed after you're under contract, will also give you a way to gauge your offering price. If the home needs many expensive repairs, you'll want to ask the seller to make the repairs for you or discount the purchase price so you can make them yourself.
Conclusion
When you're shopping for a home, it's important to understand how homes are priced so you can make a sound investment and reach a fair agreement with the seller. Using these tips, you'll be able to make a confident and well-informed offer on any home in any market.
© 2011 The Globe and Mail Inc. All Rights Reserved.
Tuesday, September 6, 2011
How To Protect Your Home From Burglars
12 ways to burglar-proof your house
September 05, 2011
There are some simple steps you can take to make your home more burglar proof.
SHUTTERSTOCK A friend of mine recently told me about a break- in at her home. The front door was smashed off the frame and all her jewellery was stolen. The loss of heirloom pieces that had belonged to her mother was devastating.
As a result, she installed an expensive burglar alarm system including cameras at both the front and the back of the house.
While Statistics Canada reports that alarm systems and motion detectors have led to a steady reduction in home break-ins in recent years, they may not deter a determined thief. They should be combined with other measures that help keep burglars from finding your home an attractive target.
Here are some things you can do at little or no cost:
1. Take your name off your mailbox: This will prevent thieves from calling 411 to get your phone number. Many thieves will call a house they are planning to rob first to see if you are home.
2. Never leave a note on the door: If you are going out and expect a delivery, resist the temptation to leave a note on the door asking the post office to leave the package with your neighbour.
3. Stop mail or newspapers: Before you go on vacation, stop mail and newspapers. Even if you leave town for a weekend, have a neighbour pick up these items plus unsolicited fliers.
4. Get a yappy dog: Dogs are not free, but if you have one that barks when people come to the door, pay attention. He may know something you do not. Even the most affectionate puppy like mine can scare away bad guys.
5. Prune trees or shrubs: If you have verdant greenery close to the house, tame it regularly so burglars do not have a place to hide.
6. Hide you spare key carefully: A key left under the door mat, on the ledge over the door or under a flower pot is an “open door” invitation to a dishonest person. Be more creative, or leave it with a neighbour.
7. Doors and windows: Always lock doors and windows and change the locks if you move into a new home or lose the key. Combination locks are becoming more popular because it is easier to change the code than replacing the whole lock. Put security bars on basement windows and secure sliding doors with a stick or a metal bar.
8. Don’t leave valuables in the open: If a thief can see valuables like art, electronics, jewellery or silver through a door or window, you could become a target. Consider a bolted down, fireproof safe.
9. Make the house look lived in: Have the grass cut and the driveway shovelled when you are away. Keep a car in the driveway. Use timers on lights, radios and TVs. Don’t put a message on your voice mail announcing your absence.
10. Put neighbours on alert: Let your neighbours know how long you will be away and if someone is coming to feed the cat. Make sure they have a way to contact you in case they see something strange happening around your home.
11. Don’t widely advertise your plans: Never mention you are going to be away to strangers or tweet your plans to all of your 10,000 followers.
12. Hire a house-sitter: Getting a friend to house-sit while you are away is a great way to keep your house safe from burglars. And if you have pets that need care, in-house care for them could be an added bonus.
Desperate, dishonest people are hard to deter. But they may also take the path of least resistance. With a little preparation, you may be able to prevent that path from leading to your front door.
Also see: How to protect your password from hackers and 7 ways to protect your credit cards on vacation.
September 05, 2011
There are some simple steps you can take to make your home more burglar proof.
SHUTTERSTOCK A friend of mine recently told me about a break- in at her home. The front door was smashed off the frame and all her jewellery was stolen. The loss of heirloom pieces that had belonged to her mother was devastating.
As a result, she installed an expensive burglar alarm system including cameras at both the front and the back of the house.
While Statistics Canada reports that alarm systems and motion detectors have led to a steady reduction in home break-ins in recent years, they may not deter a determined thief. They should be combined with other measures that help keep burglars from finding your home an attractive target.
Here are some things you can do at little or no cost:
1. Take your name off your mailbox: This will prevent thieves from calling 411 to get your phone number. Many thieves will call a house they are planning to rob first to see if you are home.
2. Never leave a note on the door: If you are going out and expect a delivery, resist the temptation to leave a note on the door asking the post office to leave the package with your neighbour.
3. Stop mail or newspapers: Before you go on vacation, stop mail and newspapers. Even if you leave town for a weekend, have a neighbour pick up these items plus unsolicited fliers.
4. Get a yappy dog: Dogs are not free, but if you have one that barks when people come to the door, pay attention. He may know something you do not. Even the most affectionate puppy like mine can scare away bad guys.
5. Prune trees or shrubs: If you have verdant greenery close to the house, tame it regularly so burglars do not have a place to hide.
6. Hide you spare key carefully: A key left under the door mat, on the ledge over the door or under a flower pot is an “open door” invitation to a dishonest person. Be more creative, or leave it with a neighbour.
7. Doors and windows: Always lock doors and windows and change the locks if you move into a new home or lose the key. Combination locks are becoming more popular because it is easier to change the code than replacing the whole lock. Put security bars on basement windows and secure sliding doors with a stick or a metal bar.
8. Don’t leave valuables in the open: If a thief can see valuables like art, electronics, jewellery or silver through a door or window, you could become a target. Consider a bolted down, fireproof safe.
9. Make the house look lived in: Have the grass cut and the driveway shovelled when you are away. Keep a car in the driveway. Use timers on lights, radios and TVs. Don’t put a message on your voice mail announcing your absence.
10. Put neighbours on alert: Let your neighbours know how long you will be away and if someone is coming to feed the cat. Make sure they have a way to contact you in case they see something strange happening around your home.
11. Don’t widely advertise your plans: Never mention you are going to be away to strangers or tweet your plans to all of your 10,000 followers.
12. Hire a house-sitter: Getting a friend to house-sit while you are away is a great way to keep your house safe from burglars. And if you have pets that need care, in-house care for them could be an added bonus.
Desperate, dishonest people are hard to deter. But they may also take the path of least resistance. With a little preparation, you may be able to prevent that path from leading to your front door.
Also see: How to protect your password from hackers and 7 ways to protect your credit cards on vacation.
Saturday, September 3, 2011
What to Know About Holding Open Houses
Back to Will an open house help sell your home?
Will an open house help sell your home?
September 02, 2011
Mark Weisleder
Shutterstock I am often asked whether a seller should agree to open houses when they put their home up for sale. Some say it helps the agent find new clients and does nothing to sell the home. Others say it is necessary to find the largest number of potential buyers. Which is correct?
In practice, there are two kinds of open houses. One is limited to real estate agents, so they can conduct research in the area and be able to recommend the right homes to their buyer clients. The second is open to the general public. This can include nosy neighbours who just want to see your home, buyers who don’t have nearly enough money to consider putting in an offer and even criminals who are there to either steal something from the home during the open house or check out the security system so they can come back later.
Open houses will lead to more exposure for your home and more feedback from potential buyers. On the other hand, since we have so much information available to buyers on the Internet, such as video tours of the entire home, wouldn’t it make more sense to wait for a truly interested buyer to schedule a private appointment to see your home? That shows more commitment.
Still, in a seller’s market, where there are more buyers than available properties, open houses are a good idea so the maximum number of buyers can see the property in a very short time period.
If you do agree to conduct an open house, here are some tips:
• Make sure proper home staging is done in advance so your home appeals to the maximum number of potential buyers.
• Do not stay in the house during the open house. You are more than likely to volunteer too much information, including why you are selling. This will hurt your negotiating position later.
• Make sure your agent will be there the entire time.
• It is not against the law to ask for identification in order to allow someone to enter your home. If they refuse to provide it, tell your agent to refuse them entry.
• Sometimes criminals will come in pairs; while one distracts the salesperson, the other is going through drawers. If a lot of people are expected make sure your agent brings an assistant.
• Ask your agent to check all windows and doors before they leave your home to make sure everything is properly secured.
• Remove all valuables or store them in a safe, if you have one in the home. This includes your laptop and any discs that may have your personal information on them.
• Keep all of your bank and credit card statements out of view, as this could lead to identity theft if someone takes them.
• Take pictures of each room so you can check later if something is missing or damaged during the open house.
Whatever you decide regarding an open house, make sure you are properly prepared in advance.
Also read:
Bully bids a symptom of market madness?
More Mark Weisleder columns
Mark Weisleder is a lawyer, author and speaker to the real estate industry. Email him at mark@markweisleder.com
Saturday, July 16, 2011
Do Your Research Before Selling Your House On Your Own!
Back to Should you sell your home on your own?
Should you sell your home on your own?
July 15, 2011
Marc Weisleder
Should you sell your house on your own without an agent?
Shutterstock Everyone wants to sell real estate these days. That is what happens when you have one of the hottest markets in North America.
It means new choices for consumers when buying or selling, but it appears more than 90 per cent of Canadian home sales still involve a professional real-estate agent. The statistic is the same in the United States, where discount brokerages have been operating for the past 10 years. The question is, why?
It is easy to attack real-estate agents and the commissions of up to 5 per cent for buying and selling. But what do you get with the alternatives?
Last October, organized real estate and the federal Competition Bureau reached a deal that allows sellers to use discount brokers and have their listings posted on the MLS system at a discounted fee of a few hundred dollars. Home at Ease and Realtysellers in Toronto are among those offering this service to consumers.
There are also for-sale-by-owner companies, such as the PropertyGuys and ComFree, which will sell you a package so you can sell by yourself, including having your property listed on the for-sale-by-owner website. For an extra charge, you can list on a national MLS website with a registered broker. Their packages cost between $500 and $1,000.
Lawyers are trying to sell real estate through a similar website called propertyshop.ca, where they will also help you negotiate and close your deal, for a fee of around 1 per cent to the buyer and 1 per cent to the seller.
You can also use a public auctioneer to sell your home, for a fee of around 2 per cent to 2.5 per cent total commission.
For-sale-by-owner companies claim to have a unique system for selling real estate. Yet they are not licensed to sell real estate or give advice to consumers. They are not regulated, yet they help people sell their largest investment, without providing any guidance about the pitfalls, especially when hidden defects are not disclosed to buyers.
They are not there to help during the difficult contract negotiations, where mistakes of judgment and in the contract itself can easily be made. Still, more and more sellers are using these services to try and save the commission. Buyers must therefore be very careful before signing anything with a private seller. This includes verifying the lot measurements by asking to see the seller’s deed and survey, conducting a home inspection and asking the seller to represent that they have never had issues with water penetration into the home, or to provide details of any corrective action taken.
Discount real-estate brokerages that merely post listings on an MLS system are not, in my opinion, providing the due diligence required of their provincial codes of ethics. Buyers must therefore conduct the same due diligence noted above before committing to any purchase.
Lawyers can assist with negotiations and can certainly close a deal. However, lawyers are not salesmen or marketers. Will they be there at 11 p.m. to help reach a deal? Do they have the network of buyers and sellers that agents build up over the years, not just from this country, but from all over the world?
With auctioneers, you may pay less in commissions, but are you sure they will attract the most buyers, to get the price you want?
Real-estate agents are far from perfect. For every consumer who tells me about a great experience, I hear many more about incompetent agents who do not properly protect their clients, whether it is overpaying in a bidding war, not listening to requests or receiving unwelcome surprises after closing. I believe the real-estate industry needs to do more to properly mentor new agents, and to reduce the number of part-time agents who don’t do a proper service to themselves or their clients.
In all cases, buyers and sellers need to do a lot of research and ask questions before selecting anyone to assist with buying or selling their next home. Remember, if it was easy, everyone would be doing it.
Also read
Why I wouldn’t sell on my own
Yes you can sell without an agent
Mark Weisleder is a lawyer, author and speaker to the real estate industry. Email mark at mark@markweisleder.com
Should you sell your home on your own?
July 15, 2011
Marc Weisleder
Should you sell your house on your own without an agent?
Shutterstock Everyone wants to sell real estate these days. That is what happens when you have one of the hottest markets in North America.
It means new choices for consumers when buying or selling, but it appears more than 90 per cent of Canadian home sales still involve a professional real-estate agent. The statistic is the same in the United States, where discount brokerages have been operating for the past 10 years. The question is, why?
It is easy to attack real-estate agents and the commissions of up to 5 per cent for buying and selling. But what do you get with the alternatives?
Last October, organized real estate and the federal Competition Bureau reached a deal that allows sellers to use discount brokers and have their listings posted on the MLS system at a discounted fee of a few hundred dollars. Home at Ease and Realtysellers in Toronto are among those offering this service to consumers.
There are also for-sale-by-owner companies, such as the PropertyGuys and ComFree, which will sell you a package so you can sell by yourself, including having your property listed on the for-sale-by-owner website. For an extra charge, you can list on a national MLS website with a registered broker. Their packages cost between $500 and $1,000.
Lawyers are trying to sell real estate through a similar website called propertyshop.ca, where they will also help you negotiate and close your deal, for a fee of around 1 per cent to the buyer and 1 per cent to the seller.
You can also use a public auctioneer to sell your home, for a fee of around 2 per cent to 2.5 per cent total commission.
For-sale-by-owner companies claim to have a unique system for selling real estate. Yet they are not licensed to sell real estate or give advice to consumers. They are not regulated, yet they help people sell their largest investment, without providing any guidance about the pitfalls, especially when hidden defects are not disclosed to buyers.
They are not there to help during the difficult contract negotiations, where mistakes of judgment and in the contract itself can easily be made. Still, more and more sellers are using these services to try and save the commission. Buyers must therefore be very careful before signing anything with a private seller. This includes verifying the lot measurements by asking to see the seller’s deed and survey, conducting a home inspection and asking the seller to represent that they have never had issues with water penetration into the home, or to provide details of any corrective action taken.
Discount real-estate brokerages that merely post listings on an MLS system are not, in my opinion, providing the due diligence required of their provincial codes of ethics. Buyers must therefore conduct the same due diligence noted above before committing to any purchase.
Lawyers can assist with negotiations and can certainly close a deal. However, lawyers are not salesmen or marketers. Will they be there at 11 p.m. to help reach a deal? Do they have the network of buyers and sellers that agents build up over the years, not just from this country, but from all over the world?
With auctioneers, you may pay less in commissions, but are you sure they will attract the most buyers, to get the price you want?
Real-estate agents are far from perfect. For every consumer who tells me about a great experience, I hear many more about incompetent agents who do not properly protect their clients, whether it is overpaying in a bidding war, not listening to requests or receiving unwelcome surprises after closing. I believe the real-estate industry needs to do more to properly mentor new agents, and to reduce the number of part-time agents who don’t do a proper service to themselves or their clients.
In all cases, buyers and sellers need to do a lot of research and ask questions before selecting anyone to assist with buying or selling their next home. Remember, if it was easy, everyone would be doing it.
Also read
Why I wouldn’t sell on my own
Yes you can sell without an agent
Mark Weisleder is a lawyer, author and speaker to the real estate industry. Email mark at mark@markweisleder.com
Thursday, July 7, 2011
June Market Watch Released
Greater Toronto REALTORS® release June Resale Market Figures
Toronto, July 6, 2011 – Greater Toronto REALTORS® reported 10,230 home sales through the TorontoMLS® system in June 2011 – up 21 per cent compared to June 2010. This number represented the third best June result on record behind 2007 and 2009. The number of transactions during the first six months of 2011 amounted to 48,189 – down by 4.5 per cent compared to the first half of 2010.
“The strong June result capped off an interesting first half of 2011,” said Toronto Real Estate Board President Richard Silver. “The pace of sales was a bit sluggish at the beginning of the year, but rebounded in May and June. Because of the positive affordability picture, home buyers remained confident in their ability to purchase and pay for a home over the long term.”
The average price for June transactions was $476,371 – a 9.5 per cent increase over June 2010. Through the first six months of the year, the average selling price was $467,169 – almost an eight per cent increase compared to the same period in 2010.
“While sales have been strong, we would be on track for a record number of transactions in 2011 if not for the decline in listings so far this year,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “Tight supply meant more competition between home buyers and an accelerating annual rate of price growth in the second quarter.”
“Home owners will likely react to the stronger price growth by listing their homes in greater numbers. A better supplied market would result in more moderate price increases,” continued Mercer.
Toronto, July 6, 2011 – Greater Toronto REALTORS® reported 10,230 home sales through the TorontoMLS® system in June 2011 – up 21 per cent compared to June 2010. This number represented the third best June result on record behind 2007 and 2009. The number of transactions during the first six months of 2011 amounted to 48,189 – down by 4.5 per cent compared to the first half of 2010.
“The strong June result capped off an interesting first half of 2011,” said Toronto Real Estate Board President Richard Silver. “The pace of sales was a bit sluggish at the beginning of the year, but rebounded in May and June. Because of the positive affordability picture, home buyers remained confident in their ability to purchase and pay for a home over the long term.”
The average price for June transactions was $476,371 – a 9.5 per cent increase over June 2010. Through the first six months of the year, the average selling price was $467,169 – almost an eight per cent increase compared to the same period in 2010.
“While sales have been strong, we would be on track for a record number of transactions in 2011 if not for the decline in listings so far this year,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “Tight supply meant more competition between home buyers and an accelerating annual rate of price growth in the second quarter.”
“Home owners will likely react to the stronger price growth by listing their homes in greater numbers. A better supplied market would result in more moderate price increases,” continued Mercer.
Toronto Housing Demand Surging!
GTA housing demand surging
July 06, 2011
Tony Wong
Those cranes on the Toronto skyline aren’t going to disappear anytime soon.
Building permits in Ontario were up by 15 per cent or a seasonally adjusted $2.17 billion in May, compared with $1.89 billion in April according to figures released Wednesday by Statistics Canada.
Much of that was because of the strong condominium market in the Toronto area, and intentions to build commercial projects. Residential permits rose 22 per cent to $683 million in Toronto, while non-residential projects which include commercial, industrial and institutional building, rose by 24 per cent to $488 million.
“Ontario rebounded from the recession with significant momentum,” said a report by Scotiabank also released Wednesday.
Building permits are considered a forward looking indicator of future economic activity. Developers who take out permits today will likely break ground in the following months, buying supplies and creating jobs.
While the province looked to be in relatively good shape, the bank said significant challenges still remained for the province, including a high Canadian dollar and a subdued economic recovery in the United States.
The bank said housing activity would likely slow in the second half of the year as high home prices alongside moderate income growth is expected to dampen affordability.
However, there hasn’t been much evidence of that in the Toronto market in the first half of the year.
Toronto existing home sales are up by 21 per cent in June from a year earlier, according to figures released Wednesday by the Toronto Real Estate Board.
The average price of a home in June was $476,371, up by 9.5 per cent from the same time a year ago.
“Housing demand is currently surging in the GTA but remains flat and relatively soft for all of Canada,” said housing analyst Will Dunning. “Economic confidence is in a weakening phase in much of the world, and this should rein-in expectations, hopefully reducing the frothiness, although not yet a bubble in the GTA.”
The Toronto board said this was the third best June on record for sales, behind 2007, which was the all time high, and second-place 2008.
“The pace of sales was a bit sluggish at the beginning of the year but rebounded in May and June,” said TREB president Richard Silver in a statement.
A strong June capped off a half year that wasn’t quite as strong as 2010 and down by 4.5 per cent, but solid by historical standards.
One problem, according to analysts, is that listings have been down. In June, active listings were down by 24 per cent compared with last year, creating a supply issue.
“While sales have been strong, we would be on track for a record number of transactions in 2011 if not for the decline in listings so far this year,” said Jason Mercer, the board’s senior manager of market analysis. “Tight supply meant more competition between home buyers and an accelerating annual rate of price growth in the second quarter.”
Also read:
Cheaper real estate fees are coming
July 06, 2011
Tony Wong
Those cranes on the Toronto skyline aren’t going to disappear anytime soon.
Building permits in Ontario were up by 15 per cent or a seasonally adjusted $2.17 billion in May, compared with $1.89 billion in April according to figures released Wednesday by Statistics Canada.
Much of that was because of the strong condominium market in the Toronto area, and intentions to build commercial projects. Residential permits rose 22 per cent to $683 million in Toronto, while non-residential projects which include commercial, industrial and institutional building, rose by 24 per cent to $488 million.
“Ontario rebounded from the recession with significant momentum,” said a report by Scotiabank also released Wednesday.
Building permits are considered a forward looking indicator of future economic activity. Developers who take out permits today will likely break ground in the following months, buying supplies and creating jobs.
While the province looked to be in relatively good shape, the bank said significant challenges still remained for the province, including a high Canadian dollar and a subdued economic recovery in the United States.
The bank said housing activity would likely slow in the second half of the year as high home prices alongside moderate income growth is expected to dampen affordability.
However, there hasn’t been much evidence of that in the Toronto market in the first half of the year.
Toronto existing home sales are up by 21 per cent in June from a year earlier, according to figures released Wednesday by the Toronto Real Estate Board.
The average price of a home in June was $476,371, up by 9.5 per cent from the same time a year ago.
“Housing demand is currently surging in the GTA but remains flat and relatively soft for all of Canada,” said housing analyst Will Dunning. “Economic confidence is in a weakening phase in much of the world, and this should rein-in expectations, hopefully reducing the frothiness, although not yet a bubble in the GTA.”
The Toronto board said this was the third best June on record for sales, behind 2007, which was the all time high, and second-place 2008.
“The pace of sales was a bit sluggish at the beginning of the year but rebounded in May and June,” said TREB president Richard Silver in a statement.
A strong June capped off a half year that wasn’t quite as strong as 2010 and down by 4.5 per cent, but solid by historical standards.
One problem, according to analysts, is that listings have been down. In June, active listings were down by 24 per cent compared with last year, creating a supply issue.
“While sales have been strong, we would be on track for a record number of transactions in 2011 if not for the decline in listings so far this year,” said Jason Mercer, the board’s senior manager of market analysis. “Tight supply meant more competition between home buyers and an accelerating annual rate of price growth in the second quarter.”
Also read:
Cheaper real estate fees are coming
Sunday, June 26, 2011
Real Estate Bidding Wars: What To Know
Back to Caught in a bidding war? Know the rules
Caught in a bidding war? Know the rules
June 24, 2011
Mark Weisleder
Multiple offers or bidding wars continue to happen all over the GTA. Buyers, sellers and real estate agents need to be aware of what to expect. The rules may be different, depending on whether you are selling your home through a real estate agent, or privately.
I have been asked a range of questions on this subject: “Why can there not be a silent auction when a house is sold?” “What does registering an offer mean?” “How did the house sell last night when the seller said offers were not to be delivered for three days?”
To create the atmosphere for multiple offers, it may indicate on the MLS listing that interested offers are to be submitted in three days. The seller hopes this will give many buyers the opportunity to visit the property during the three-day period and that this will result in multiple offers.
However, there is nothing stopping someone from delivering an offer immediately. The seller’s agent is under an ethical obligation to bring every offer to the seller’s attention. The seller then has the right to deal with the offer, if they want to.
Most sellers will instruct their agent to tell this anxious buyer to wait until the proper time period. However, if the seller wants to consider the offer, their agent will then change the information on the MLS listing immediately to notify every other agent that the rules have changed, and that offers can be submitted that evening. The agent will also likely call every other agent who has expressed an interest in the property to tell them personally that offers can now be brought immediately.
When a buyer agent has a signed offer, they will usually call the listing agent office to register their offer verbally. There is a protocol that has been established in Toronto that if you were the first to register your offer, you will be given the first opportunity to present it to the seller in person, if there is more than one offer. This is just a protocol, and does not have to be followed by every real estate firm.
However, an offer is not completed unless it is communicated to the seller or seller’s agent, either by personal delivery, fax or email. Therefore, a buyer can still cancel their offer at any time before it is communicated. That is why an offer might be registered but never delivered. The buyer changed his or her mind.
Why can’t we have a silent auction? When buyers make offers through an agent, the agent has an ethical obligation not to disclose the contents of any offer to any of the other buyers. A seller agent can only tell all other bidders how many offers were received. They cannot tell the price or identity associated with any of the offers. However, a private seller could take one buyer offer and just show it to another bidder. This is one of the main reasons private sellers have trouble creating bidding wars.
I think it was a lawyer who created the “sharp bid clause.” An example would be “I agree to pay $5,000 more than any other offer.” This clause would require the seller to tell the buyer what the other bids were so they could bid $5,000 more. An agent cannot do this based on their code of ethics. However, you could give this to a private seller in a bidding war, where the rules are different. If you are thinking of using this clause, I would caution you to add something like “not to exceed $X or a maximum price,” so you do not end up paying more than you can afford.
By understanding the bidding war rules, buyers and sellers can be better prepared for this extremely stressful negotiation.
Mark Weisleder is a lawyer, author and speaker to the real estate industry. Contact Mark at mark@markweisleder.com
Caught in a bidding war? Know the rules
June 24, 2011
Mark Weisleder
Multiple offers or bidding wars continue to happen all over the GTA. Buyers, sellers and real estate agents need to be aware of what to expect. The rules may be different, depending on whether you are selling your home through a real estate agent, or privately.
I have been asked a range of questions on this subject: “Why can there not be a silent auction when a house is sold?” “What does registering an offer mean?” “How did the house sell last night when the seller said offers were not to be delivered for three days?”
To create the atmosphere for multiple offers, it may indicate on the MLS listing that interested offers are to be submitted in three days. The seller hopes this will give many buyers the opportunity to visit the property during the three-day period and that this will result in multiple offers.
However, there is nothing stopping someone from delivering an offer immediately. The seller’s agent is under an ethical obligation to bring every offer to the seller’s attention. The seller then has the right to deal with the offer, if they want to.
Most sellers will instruct their agent to tell this anxious buyer to wait until the proper time period. However, if the seller wants to consider the offer, their agent will then change the information on the MLS listing immediately to notify every other agent that the rules have changed, and that offers can be submitted that evening. The agent will also likely call every other agent who has expressed an interest in the property to tell them personally that offers can now be brought immediately.
When a buyer agent has a signed offer, they will usually call the listing agent office to register their offer verbally. There is a protocol that has been established in Toronto that if you were the first to register your offer, you will be given the first opportunity to present it to the seller in person, if there is more than one offer. This is just a protocol, and does not have to be followed by every real estate firm.
However, an offer is not completed unless it is communicated to the seller or seller’s agent, either by personal delivery, fax or email. Therefore, a buyer can still cancel their offer at any time before it is communicated. That is why an offer might be registered but never delivered. The buyer changed his or her mind.
Why can’t we have a silent auction? When buyers make offers through an agent, the agent has an ethical obligation not to disclose the contents of any offer to any of the other buyers. A seller agent can only tell all other bidders how many offers were received. They cannot tell the price or identity associated with any of the offers. However, a private seller could take one buyer offer and just show it to another bidder. This is one of the main reasons private sellers have trouble creating bidding wars.
I think it was a lawyer who created the “sharp bid clause.” An example would be “I agree to pay $5,000 more than any other offer.” This clause would require the seller to tell the buyer what the other bids were so they could bid $5,000 more. An agent cannot do this based on their code of ethics. However, you could give this to a private seller in a bidding war, where the rules are different. If you are thinking of using this clause, I would caution you to add something like “not to exceed $X or a maximum price,” so you do not end up paying more than you can afford.
By understanding the bidding war rules, buyers and sellers can be better prepared for this extremely stressful negotiation.
Mark Weisleder is a lawyer, author and speaker to the real estate industry. Contact Mark at mark@markweisleder.com
Friday, June 24, 2011
Toronto Housing Market Continue To Surge
Toronto housing market continues surge
By STEVE LADURANTAYE
From Saturday's Globe and Mail June 4, 2011
Sales in Vancouver show signs of slowdown, as index price tops $800,000
When you're hot, you're hot.
It was the second best May for Toronto real estate sales since the Toronto Real Estate Board began compiling data, according to statistics released Friday.
Sales increased 6 per cent from May 2010, while prices gained 9 per cent to an average $485,520. The number of listings to hit the market decreased by 15 per cent from last year, meaning more competition through the summer as buyers compete for fewer houses. Houses were on the market an average of 23 days in May.
The real estate board breaks out sales by median prices, with detached homes hitting $505,000. Other categories include semi-detached at $395,000, condo townhouses at $305,00 and condo apartments at $303,000.
The Canadian Real Estate Association compiles data on the 15th of each month, but the country's 101 real estate boards often release regional data earlier. Vancouver reported Thursday, saying sales were up 7 per cent compared with last May while prices were up 6 per cent.
Sales are showing signs of slowing in Vancouver, however, slipping 8.1 per cent below the 10-year average in May.
The market has caused concern because of the high prices; the board said its index price for a detached house was $805,000 in May, up 10 per cent from a year ago. The index "represents the price of a typical property within a market, taking into consideration what averages and medians do not - items such a lots size, age, number of rooms, etc."
The board said there have a been a lot of high-price sales in Vancouver this spring, which makes big headline numbers deceptive. "Of all residential properties sold on the MLS in Greater Vancouver in 2011 to date 21 per cent sold for $1-million or higher and 20 per cent sold for $350,000 or lower," the board stated.
"While 77 per cent of the properties that sold for over $1-million were located in West Vancouver, the Westside of Vancouver or Richmond, the properties that sold for $350,000 or lower were located throughout the entire board area."
The Globe and Mail, Inc
By STEVE LADURANTAYE
From Saturday's Globe and Mail June 4, 2011
Sales in Vancouver show signs of slowdown, as index price tops $800,000
When you're hot, you're hot.
It was the second best May for Toronto real estate sales since the Toronto Real Estate Board began compiling data, according to statistics released Friday.
Sales increased 6 per cent from May 2010, while prices gained 9 per cent to an average $485,520. The number of listings to hit the market decreased by 15 per cent from last year, meaning more competition through the summer as buyers compete for fewer houses. Houses were on the market an average of 23 days in May.
The real estate board breaks out sales by median prices, with detached homes hitting $505,000. Other categories include semi-detached at $395,000, condo townhouses at $305,00 and condo apartments at $303,000.
The Canadian Real Estate Association compiles data on the 15th of each month, but the country's 101 real estate boards often release regional data earlier. Vancouver reported Thursday, saying sales were up 7 per cent compared with last May while prices were up 6 per cent.
Sales are showing signs of slowing in Vancouver, however, slipping 8.1 per cent below the 10-year average in May.
The market has caused concern because of the high prices; the board said its index price for a detached house was $805,000 in May, up 10 per cent from a year ago. The index "represents the price of a typical property within a market, taking into consideration what averages and medians do not - items such a lots size, age, number of rooms, etc."
The board said there have a been a lot of high-price sales in Vancouver this spring, which makes big headline numbers deceptive. "Of all residential properties sold on the MLS in Greater Vancouver in 2011 to date 21 per cent sold for $1-million or higher and 20 per cent sold for $350,000 or lower," the board stated.
"While 77 per cent of the properties that sold for over $1-million were located in West Vancouver, the Westside of Vancouver or Richmond, the properties that sold for $350,000 or lower were located throughout the entire board area."
The Globe and Mail, Inc
Thursday, June 23, 2011
Wednesday, June 22, 2011
Canadians Want to Pay Off Mortgages More Quickly!
Canadians aim to pay mortgages sooner
Ottawa— The Canadian Press
Published Wednesday, Jun. 22, 2011 9:35AM EDTLast updated Wednesday, Jun. 22, 2011 9:40AM EDTcomments
Canadian homebuyers are showing “a high level of financial literacy,” according to a new Canada Mortgage and Housing Corp. survey that found both high levels of research and a determination to pay off mortgages quickly.
The survey, released Wednesday, said 75 per cent of respondents felt it “very important” to pay off their mortgages as soon as possible and that 39 per cent had set payments higher than the required minimum.
As well, 20 per cent had made at least one lump sum payment since obtaining their mortgage and 39 per cent planned to reduce their amortization periods at their next renewal, CMHC said.
Meanwhile, the survey found 80 per cent of respondents had researched mortgage terms and conditions, 88 per cent had a good understanding of how big a mortgage they could afford and 81 per cent have some form of savings.
CMHC said areas in which mortgage and financial professionals can offer advice and guidance are long-term mortgage and financial strategies, budgeting and managing debt.
It said research showed that during their mortgage research, just 23 per cent of first-time buyers received advice on budgeting and 18 per cent on managing debt.
In addition, the survey found that one in four recent buyers were not sure of where to go to receive reliable advice in case of financial difficulty.
CMHC conducted the online survey of 3,512 recent mortgage consumers between Feb. 25 and March 25.
© 2011 The Globe and Mail Inc. All Rights Reserved.
Ottawa— The Canadian Press
Published Wednesday, Jun. 22, 2011 9:35AM EDTLast updated Wednesday, Jun. 22, 2011 9:40AM EDTcomments
Canadian homebuyers are showing “a high level of financial literacy,” according to a new Canada Mortgage and Housing Corp. survey that found both high levels of research and a determination to pay off mortgages quickly.
The survey, released Wednesday, said 75 per cent of respondents felt it “very important” to pay off their mortgages as soon as possible and that 39 per cent had set payments higher than the required minimum.
As well, 20 per cent had made at least one lump sum payment since obtaining their mortgage and 39 per cent planned to reduce their amortization periods at their next renewal, CMHC said.
Meanwhile, the survey found 80 per cent of respondents had researched mortgage terms and conditions, 88 per cent had a good understanding of how big a mortgage they could afford and 81 per cent have some form of savings.
CMHC said areas in which mortgage and financial professionals can offer advice and guidance are long-term mortgage and financial strategies, budgeting and managing debt.
It said research showed that during their mortgage research, just 23 per cent of first-time buyers received advice on budgeting and 18 per cent on managing debt.
In addition, the survey found that one in four recent buyers were not sure of where to go to receive reliable advice in case of financial difficulty.
CMHC conducted the online survey of 3,512 recent mortgage consumers between Feb. 25 and March 25.
© 2011 The Globe and Mail Inc. All Rights Reserved.
Tuesday, June 14, 2011
Wednesday, May 18, 2011
Monday, May 16, 2011
Saturday, May 14, 2011
Why I Would't Sell My Home Myself
Back to Why I wouldn’t sell my home myself
May 13, 2011
Mark Weisleder
Alison Philpot sold her house privately but wonders if it was worth the trouble she experienced.
Since writing about whether you could create a bidding war without an agent, I have received numerous emails from sellers, real estate agents and companies that provide “for sale by owner” services on the pros and cons of selling by yourself.
Allison Philpot sold her home in Ottawa using a For Sale by Owner marketing service. She listed her home for $419,000, and was able to create a bidding war after her first open house. She received a top bid of $429,000, which she accepted.
The buyers seemed like nice people, as they lived in the community. Unfortunately, they later terminated the deal, relying on a condition in the offer, although Allison suspected that they just found a house that they liked better. The second bidder was no longer interested.
She then dealt with another buyer, who was represented by a buyer agent. Allison later admitted that she was out-matched in the negotiations, and eventually sold her home for $405,000. In addition, she agreed to pay the buyer agent a commission of approximately 2 per cent or $8,000. So her net selling price was $397,000.
After the fact, she reasoned that had she used an agent from the start, she would have probably sold for about $430,000, and that even if she paid $20,000 in commission, she would have netted $410,000, or $13,000 more, without any of the aggravation.
Still, Allison states that had she not gone through the experience herself, she would probably have felt that she had overpaid the agent.
The buyer who walked away from the first deal later told Allison that he would never try and buy a property again without an agent, as he found the process way too stressful himself.
I received many emails from real estate agents talking about their additional network of potential buyers that they bring to every sale, as well as their own experience in qualifying potential buyers in advance and protecting sellers from unusual clauses that are sometimes inserted into agreements. Many agents in Vancouver are now setting up marketing events overseas, as more and more foreigners are looking at Canadian real estate as a safe haven to invest. More buyers mean better prices for sellers.
I spoke with Patrick Sullivan, a vice-president for Com Free, a company that provides services to assist home owners selling by themselves. These tools include a guide to assist the seller in determining the sale price, staging the home for sale, conducting open houses and preparing for negotiations. He suggested that there is no real harm in a seller trying to save money selling by themselves. They can sell with an agent later if they are not successful. He also claims that Com Free listings continue to grow and that they have many success stories. However, because they have no contract with the seller, the seller is not obligated to tell them how long it took to sell and what the property sold for, so it is difficult for Com Free to state how their seller compares with sellers who use an agent.
If you plan on doing this by yourself, at a minimum either have your lawyer look at the contract before you sign it, or make the deal conditional on your lawyer’s review and approval of the agreement. In my opinion, no marketing service can properly prepare buyers or sellers to deal with the stress and emotion that will invariably be involved with any real estate negotiation. It is not easy. Every buyer, seller and property are unique and will require a successful strategy to win.
Whatever method you choose to buy or sell your next home, be prepared and fully informed before you start.
Saturday, April 23, 2011
Ways To Save On Mortgages
Excerpts from an article of Nate Moch at Zillow Blog..
The tips below are based on this hypothetical mortgage example (savings will vary based on your actual loan facts and timing of the change):
-- $200,000 mortgage
-- 30-year fixed rate mortgage
-- 6 percent interest rate
-- $1,199 monthly principal and interest payment
1. Add One Extra Payment Each Year
Perhaps the easiest way to save money on your mortgage is to make an extra mortgage payment each year. These extra payments are automatically applied on your principal, not interest. Not only does your remaining balance drop, but you will not have to pay interest each month on that principal for the remainder of the loan term.
Savings: $47,000. By making one extra payment of $1,199 each year and applying it to your principal, you could save over $47,000 in interest and cut 5 years off the life of the loan.
2. Set up Bi-Weekly Payments
Another trick to pay off your loan early is by creating a bi-weekly payment plan. Put half of your monthly mortgage payment in a savings account every other Friday (or, on your pay day). Each month, pay your mortgage from the account. At the end of the year, you will have made 26 half payments, which is 13 full payments. This will leave with you an extra payment that you can put toward your principal. Most people manage the separate accounts themselves, but there are companies that you can hire to act as an escrow service and manage the payments for you. Beware that they could charge you for this service.
Savings: $47,000. Same as extra payment.
3. Get Rid of Your PMI
If your down payment was less than 20 percent, you were probably required to pay private mortgage insurance (NYSE: PMI - News). However, you can petition your lender to cancel the insurance as soon as your mortgage balance falls below 80 percent of the home's appraised value. This can happen if your home's value has gone up or you have repaid some of the principal. This may require a new appraisal but could shave hundreds of dollars off your monthly payment.
Savings: $130 per month. If you only put down 5 percent and had a PMI rate of .78 percent, you could save $130 per month.
4. Reduce Your Assessment
Property taxes can cost thousands of dollars a year. If you think your home's value has decreased in the last year and it was not properly accounted for in your tax assessment, you can petition your assessor and fight your assessment. Lowering your tax assessment will lower your yearly taxes.
Savings: Varies. Depends on your local tax rate and home adjustment, but could be hundreds of dollars a year.
5. Reset Your Mortgage
This is not commonly known, but some lenders will reset (recast) your monthly payment if you make a large payment towards the principal of your mortgage. Your monthly payment stays the same, but the term of your loan shortens. When the loan is recast, your monthly principal and interest is recalculated so you end up with a lower monthly payment over the existing term of the loan.
Savings: $120 per month. Putting $20,000 into the loan would reset the payment to $1,079, saving you $120 per month.
6. Modify Your Loan
If you are late on your payments and are going through a financial hardship, you may be eligible to modify terms of your loan (such as rate, term, or principal balance) to make it more affordable. The goal of these programs is to allow borrowers to stay in their homes and continue making their monthly payments. Not everyone qualifies for these types of programs, but if you do, they can save you a lot of money. To find out if you qualify, contact the servicer of your mortgage or visit the Making Home Affordable eligibility site.
Savings: Varies. It can reduce your interest rate to as low as 2 percent, extend your term to 40 years, or reduce your principal.
7. Refinance
Lastly, the most common way to save money on your mortgage is by refinancing to a lower interest rate. Reducing your rate can lower your monthly payment and help you save on interest payments. However, there are costs associated with refinancing so you want to be sure you are going to save enough to cover the refinancing fees. With rates at historic lows, if you can refinance, and you haven't already, you should consider it.
Savings: $126 per month. By lowering your interest rate to 5 percent, you would have a payment of $1,073 which would save you $126 per month. If the refinance costs $5,000, you would recoup the fees after 40 months.
The tips below are based on this hypothetical mortgage example (savings will vary based on your actual loan facts and timing of the change):
-- $200,000 mortgage
-- 30-year fixed rate mortgage
-- 6 percent interest rate
-- $1,199 monthly principal and interest payment
1. Add One Extra Payment Each Year
Perhaps the easiest way to save money on your mortgage is to make an extra mortgage payment each year. These extra payments are automatically applied on your principal, not interest. Not only does your remaining balance drop, but you will not have to pay interest each month on that principal for the remainder of the loan term.
Savings: $47,000. By making one extra payment of $1,199 each year and applying it to your principal, you could save over $47,000 in interest and cut 5 years off the life of the loan.
2. Set up Bi-Weekly Payments
Another trick to pay off your loan early is by creating a bi-weekly payment plan. Put half of your monthly mortgage payment in a savings account every other Friday (or, on your pay day). Each month, pay your mortgage from the account. At the end of the year, you will have made 26 half payments, which is 13 full payments. This will leave with you an extra payment that you can put toward your principal. Most people manage the separate accounts themselves, but there are companies that you can hire to act as an escrow service and manage the payments for you. Beware that they could charge you for this service.
Savings: $47,000. Same as extra payment.
3. Get Rid of Your PMI
If your down payment was less than 20 percent, you were probably required to pay private mortgage insurance (NYSE: PMI - News). However, you can petition your lender to cancel the insurance as soon as your mortgage balance falls below 80 percent of the home's appraised value. This can happen if your home's value has gone up or you have repaid some of the principal. This may require a new appraisal but could shave hundreds of dollars off your monthly payment.
Savings: $130 per month. If you only put down 5 percent and had a PMI rate of .78 percent, you could save $130 per month.
4. Reduce Your Assessment
Property taxes can cost thousands of dollars a year. If you think your home's value has decreased in the last year and it was not properly accounted for in your tax assessment, you can petition your assessor and fight your assessment. Lowering your tax assessment will lower your yearly taxes.
Savings: Varies. Depends on your local tax rate and home adjustment, but could be hundreds of dollars a year.
5. Reset Your Mortgage
This is not commonly known, but some lenders will reset (recast) your monthly payment if you make a large payment towards the principal of your mortgage. Your monthly payment stays the same, but the term of your loan shortens. When the loan is recast, your monthly principal and interest is recalculated so you end up with a lower monthly payment over the existing term of the loan.
Savings: $120 per month. Putting $20,000 into the loan would reset the payment to $1,079, saving you $120 per month.
6. Modify Your Loan
If you are late on your payments and are going through a financial hardship, you may be eligible to modify terms of your loan (such as rate, term, or principal balance) to make it more affordable. The goal of these programs is to allow borrowers to stay in their homes and continue making their monthly payments. Not everyone qualifies for these types of programs, but if you do, they can save you a lot of money. To find out if you qualify, contact the servicer of your mortgage or visit the Making Home Affordable eligibility site.
Savings: Varies. It can reduce your interest rate to as low as 2 percent, extend your term to 40 years, or reduce your principal.
7. Refinance
Lastly, the most common way to save money on your mortgage is by refinancing to a lower interest rate. Reducing your rate can lower your monthly payment and help you save on interest payments. However, there are costs associated with refinancing so you want to be sure you are going to save enough to cover the refinancing fees. With rates at historic lows, if you can refinance, and you haven't already, you should consider it.
Savings: $126 per month. By lowering your interest rate to 5 percent, you would have a payment of $1,073 which would save you $126 per month. If the refinance costs $5,000, you would recoup the fees after 40 months.
Tuesday, April 12, 2011
Monday, April 11, 2011
Thursday, March 10, 2011
Wednesday, March 9, 2011
Ten Things You Need To Know About Real Estate
Back to Real Estate: 10 things you need to know
Real Estate: 10 things you need to know
March 09, 2011
Tony Wong
It's true what they. When buying a house, location is everything.
Shutterstock/Shutterstock Next to public speaking, buying or selling a home is at the top of many people’s fear and loathing list. A home is the biggest investment you’ll ever make and while exciting, the potential for things to go wrong is pretty big.
Here are 10 things to consider when buying a home.
1. The housing market isn’t really a market
At least not in the way you might think. While housing analysts like to compare real estate returns to stock market returns, it is a misleading comparison.
The first big difference is that a stock market is a place where you can by and sell immediately. In the real estate market you can wait months for the home you want to come on the market and just as long to find someone who wants to buy yours. The price you expect may not bear any resemblance to the one you get.
The long run return on stocks is also a lot better. The average stock in the Standard & Poors 500 index, a basket of blue chip U.S. stocks, has returned about 6.3 per cent a year after inflation in each of the last 25 years. The average increase in the value of a Canadian home over the same period petty much tracks the rate of inflation which during the same period was 2.5 per cent.
A home is also more than an investment. It has all kinds of intangible qualities, including a neighbourhood you want to live in, a spot with a particular view or landscape, a type of architecture that you enjoy. So, while it’s tempting to think of your primary home as a profit centre ripe for a flip, that shouldn’t be the main purpose.
Besides, your Microsoft stock can’t keep you warm at night. (Unless you bought it when Bill Gates was still working out of his garage. In which case, you probably have your own heating company.)
2. It’s always a good time to buy
No it isn’t. People who bought at the height of the market in the 1989 real estate bubble, didn’t break even until prices bounced back in 2002. That’s 13 years. And even then they didn’t make their money back. Factoring in inflation, they actually lost money. House prices don’t go up forever. Buy when your circumstances dictate, not because your neighbor the agent says it’s a good time to.
3. Location, Location, Location.
Yah, they’re right. You’ll pay more initially, but investing in a property in the good neighborhood close to transit will pay dividends down the road when it comes time to sell
4. Buy the cheapest house on the street
Some people argue you shouldn’t, because the home will compare poorly to the other homes when you sell.
I say go for it. It may already be discounted because it looks like a shack compared with other properties and provides far more upside if you spruce it up in the future. A rising tide can also help to lift all boats. As the street gentrifies, infill housing will continue to keep property values high. Getting your foot in the right address is half the battle. Hello Park Place!
5. Do I need an agent?
No, you don’t. While a good realtor can be a huge asset, not everyone needs professional advice. If you have time, selling your own home can save you a ton of money on commissions. With the advent of the internet, and the opening up of the Multiple Listing Service there are many more services for the do it yourselfer to choose from.
6. If you want an agent…
If you don’t have the time, or would rather use professional advice, a good realtor can be a boon, because they know the neighborhood and can potentially get you top dollar. But like any other service, the results will vary. So make sure you interview several before choosing.
7. Renovating will give me huge return
Stop watching all those television shows where some fancy designer redos the entire house in a week with faucets that cost more than your BMW. Okay, I like them too, but that doesn’t mean you have to gut your kitchen to sell your home.
Most experts say you’ll get the best bang for your buck by redoing the kitchen and washrooms. But even for the most sought after features by homebuyers, the return on investment is anywhere from 75 per cent to at best 100 per cent. That means in many cases if you spend $10,000 you’ll only add that much vale at best and maybe far less.
8. It just needs a coat of paint
When it comes times to sell, you may have been living in your home for so long that you don’t notice the coffee stains on the couch and the Sponge Bob wallpaper in the washroom. Get a second pair of eyes to have a look around. This could be friend, relative or your agent and hopefully they’ll tell it like it is.
You may want professional help in the form of a home stager who can arrange your furniture and make your place look showroom ready. But you don’t need to pay big bucks. Start by asking a friend. She’ll tell you why Sponge Bob must go.
9. Don’t try to time the market
I know people who sold their home at the peak of the market, and rented a condo while riding out the crash.
After the crash, they repurchased near the same neighborhood for substantially less. This is the dream of every home investor. I also have friends who thought the market was going to crash, so they waited for four years to buy a home. Prices kept going up and they finally threw in the towel and bought at a higher price than they expected. Then the market crashed. Housing is a long term investment, and sometimes you just have to commit.
10. Keep your perspective
My friends think think their 1,500 square foot semi is worth a bundle, because they spent hours building the deck and hand painting the cute gold cherubs on the walls.
Being emotionally attached to your home means that when it comes time to sell, your objectivity is compromised. In a down market, with more competing listings, your home is going to be difficult to sell and the price less than you expect. Can you accept that?
Toronto Star business reporter Tony Wong has been writing about real estate for the past 10 years.
Real Estate: 10 things you need to know
March 09, 2011
Tony Wong
It's true what they. When buying a house, location is everything.
Shutterstock/Shutterstock Next to public speaking, buying or selling a home is at the top of many people’s fear and loathing list. A home is the biggest investment you’ll ever make and while exciting, the potential for things to go wrong is pretty big.
Here are 10 things to consider when buying a home.
1. The housing market isn’t really a market
At least not in the way you might think. While housing analysts like to compare real estate returns to stock market returns, it is a misleading comparison.
The first big difference is that a stock market is a place where you can by and sell immediately. In the real estate market you can wait months for the home you want to come on the market and just as long to find someone who wants to buy yours. The price you expect may not bear any resemblance to the one you get.
The long run return on stocks is also a lot better. The average stock in the Standard & Poors 500 index, a basket of blue chip U.S. stocks, has returned about 6.3 per cent a year after inflation in each of the last 25 years. The average increase in the value of a Canadian home over the same period petty much tracks the rate of inflation which during the same period was 2.5 per cent.
A home is also more than an investment. It has all kinds of intangible qualities, including a neighbourhood you want to live in, a spot with a particular view or landscape, a type of architecture that you enjoy. So, while it’s tempting to think of your primary home as a profit centre ripe for a flip, that shouldn’t be the main purpose.
Besides, your Microsoft stock can’t keep you warm at night. (Unless you bought it when Bill Gates was still working out of his garage. In which case, you probably have your own heating company.)
2. It’s always a good time to buy
No it isn’t. People who bought at the height of the market in the 1989 real estate bubble, didn’t break even until prices bounced back in 2002. That’s 13 years. And even then they didn’t make their money back. Factoring in inflation, they actually lost money. House prices don’t go up forever. Buy when your circumstances dictate, not because your neighbor the agent says it’s a good time to.
3. Location, Location, Location.
Yah, they’re right. You’ll pay more initially, but investing in a property in the good neighborhood close to transit will pay dividends down the road when it comes time to sell
4. Buy the cheapest house on the street
Some people argue you shouldn’t, because the home will compare poorly to the other homes when you sell.
I say go for it. It may already be discounted because it looks like a shack compared with other properties and provides far more upside if you spruce it up in the future. A rising tide can also help to lift all boats. As the street gentrifies, infill housing will continue to keep property values high. Getting your foot in the right address is half the battle. Hello Park Place!
5. Do I need an agent?
No, you don’t. While a good realtor can be a huge asset, not everyone needs professional advice. If you have time, selling your own home can save you a ton of money on commissions. With the advent of the internet, and the opening up of the Multiple Listing Service there are many more services for the do it yourselfer to choose from.
6. If you want an agent…
If you don’t have the time, or would rather use professional advice, a good realtor can be a boon, because they know the neighborhood and can potentially get you top dollar. But like any other service, the results will vary. So make sure you interview several before choosing.
7. Renovating will give me huge return
Stop watching all those television shows where some fancy designer redos the entire house in a week with faucets that cost more than your BMW. Okay, I like them too, but that doesn’t mean you have to gut your kitchen to sell your home.
Most experts say you’ll get the best bang for your buck by redoing the kitchen and washrooms. But even for the most sought after features by homebuyers, the return on investment is anywhere from 75 per cent to at best 100 per cent. That means in many cases if you spend $10,000 you’ll only add that much vale at best and maybe far less.
8. It just needs a coat of paint
When it comes times to sell, you may have been living in your home for so long that you don’t notice the coffee stains on the couch and the Sponge Bob wallpaper in the washroom. Get a second pair of eyes to have a look around. This could be friend, relative or your agent and hopefully they’ll tell it like it is.
You may want professional help in the form of a home stager who can arrange your furniture and make your place look showroom ready. But you don’t need to pay big bucks. Start by asking a friend. She’ll tell you why Sponge Bob must go.
9. Don’t try to time the market
I know people who sold their home at the peak of the market, and rented a condo while riding out the crash.
After the crash, they repurchased near the same neighborhood for substantially less. This is the dream of every home investor. I also have friends who thought the market was going to crash, so they waited for four years to buy a home. Prices kept going up and they finally threw in the towel and bought at a higher price than they expected. Then the market crashed. Housing is a long term investment, and sometimes you just have to commit.
10. Keep your perspective
My friends think think their 1,500 square foot semi is worth a bundle, because they spent hours building the deck and hand painting the cute gold cherubs on the walls.
Being emotionally attached to your home means that when it comes time to sell, your objectivity is compromised. In a down market, with more competing listings, your home is going to be difficult to sell and the price less than you expect. Can you accept that?
Toronto Star business reporter Tony Wong has been writing about real estate for the past 10 years.
Friday, January 14, 2011
TD Overhauls Mortgage Program
GLOBE AND MAIL
October 11, 2010
TD overhauls mortgage program as housing market slows
By STEVE LADURANTAYE
From Tuesday's Globe and Mail
Collateral mortgages designed to make borrowing easier, switching to rival lender more difficult
TD Bank TD-T is revamping its mortgage program, making it easier for homeowners to tap into their equity and harder for them to switch to another lender when their mortgages come up for renewal.
At the heart of the overhaul is a switch to collateral-charge mortgages, which are similar to lines of credit. The bank is encouraging employees to approve customers at 125 per cent of a home's actual value under certain circumstances, so the homeowner can easily borrow more money if their property increases in value.
Unlike traditional mortgages, the collateral mortgages are difficult to transfer from one lender to another, because they must be paid in full to be cancelled. That means if someone wants to change lenders, they need to renegotiate from scratch.
While other banks offer variations on the collateral mortgage, TD is the first to switch exclusively as of Oct. 18. Existing mortgages aren't affected by the change.
The bank's move comes as the housing market cools and fewer Canadians apply for mortgages. It's an attempt to entice buyers who expect to tap into rising values and don't plan to shop around for better rates in the future.
Competition for new business is intensifying; record low mortgage rates weren't enough to stop a slowdown of new buyers in the market during the summer. Sales fell by more than 30 per cent in Toronto and Vancouver, sending lenders scrambling to secure new business with innovative products and even lower rates.
Bank of Montreal currently offers the least expensive five-year fixed term at 3.59 per cent, although only its best applicants are likely to qualify at the special rate. Bank of Nova Scotia offers its customers the ability to split mortgages into two or three different components, each with its own terms.
TD said its new offering will ensure customers don't pay additional charges to tap into their rising equity, which it called "great news for both you and your customer" in an internal memo to its mortgage brokers.
"Customers may under many circumstances choose to register their collateral charge for more than the approved principal amount of the mortgage, up to 125 per cent of the property value," the e-mail stated. "This will allow them to borrow additional funds in the future without having to re-register ... eliminating any solicitor and in-house registration fees."
A homeowner can't simply call the bank and access the extra money they were approved for, however. The deal is dependent on values rising, and in each instance the bank said it would need to inspect the home.
"Part of our credit approval includes an assessment of the current value of the property - an appraisal of the property - to ensure the existing value can support the increased borrowing," said spokesperson Kelly Hechler.
The move has sparked anger among the country's independent mortgage brokers, who see the change as a direct shot at an industry that has been gaining market share from the big banks by competing fiercely on mortgage rates.
"Credit unions have always gone this route so it's not like they are reinventing the wheel," said Mike Averbach of Vancouver's Averbach Mortgages. "People literally have to cash out if they want to change over, so it's just another way for them to be handcuffed to the bank."
Thursday, January 13, 2011
Monday, January 10, 2011
The 2010 Housing Market! Will house prices fall? Hard to predict-
January 06, 2011
These are excerpts taken from The Toronto Star
Tony Wong
After three decades in the business, Toronto real estate broker Paul Swartz is still trying to figure out the market.
“I really don’t know what to tell clients. It’s just been about impossible to predict. We all know the ride is going to end, but nobody knows when.”
Swartz figured, like many analysts did, that 2010 would be slower because of a recovering economy. But despite the predictions of economic gloom, the Toronto existing home market rang out 2010 with the third best year for sales on record.
“I can’t tell you how many times I’ve gotten in trouble counseling first time buyers to wait because prices may fall. And then four years later they’re still going up.”
Make that 14 years. Prices have been appreciating since 1996, despite stock market crashes and global economic meltdowns along the way.
Some analysts have said the market is overvalued by as much as 25 per cent. But that hasn’t spooked buyers.
The Toronto Real Estate Board reported Thursday that 86,170 homes changed hands last year, down by only one per cent from 2009, which was the second best year recorded.
However, that number did not come close to the peak year of 2007, when 93,193 homes sold. But most realtors, expecting a far tougher year will likely say third place isn’t bad at all.
“Expectations of a depression were so dire that when we merely had a recession there was a kind of euphoria, people voted with their pocketbooks and with larger sized mortgages,” said Phil Soper, president and CEO of Royal LePage Real Estate Services.
After a pause in the third quarter as many had anticipated, the fourth quarter of the year was stronger than expected, buoyed by continuing low interest rates.
“The low cost of money has been the dominant driver in the valuation of property,” said Soper. “When people saw that rates remained low and that it wasn’t going to be a double dip recession that seemed to prompt a surge back into the market.”
The average selling price of a home in 2010 was $431,463, up by 9 per cent from 2009.
Two storey homes showed the strongest price appreciation, followed by condominiums and then bungalows, according to a separate report released Thursday by Royal LePage.
House price appreciation eased off in the second half of the year after a strong start, when figures were in the double digits.
“At the outset of 2010 we were experiencing annual rate of price growth at or near 20 per cent,” said Jason Mercer, TREB’s senior manager of market analysis. “This was the result of extremely tight market conditions coupled with the fact that we were comparing prices to the trough of the recession.”
Price appreciation declined rapidly in the second half of the year, but the strong start out of the gate meant that prices were firmly in positive territory in 2010.
The Toronto Real Estate Board still expects prices to go 5 per cent higher in 2011. But that is the optimistic end of most predictions. Royal LePage is forecasting a 1 per cent increase for 2011.
Soper said six weeks earlier his analysts would likely have forecast a flat or negative return for home price appreciation in 2011.
“We didn’t expect the fourth quarter to be as strong and we were expecting better economic news out of the U.S. But affordability ended up being much better than expected.”
The Bank of Canada paused in their hikes to the key overnight rate in October and December, leaving it at 1 per cent because of continuing economic weakness.
Affordability has improved as a result. The quarterly RBC affordability index shows that it now takes 56 per cent of pre-tax income to afford a detached home in Toronto. That’s down six percentage points, a significant drop from the second quarter.
Still, sales are expected to be down by 5.9 per cent next year, according to Royal LePage.
“Like 2010, we expect a strong start to the year because of continuing low interest rates, before tapering off at the second half,” said Soper.
The market is already slowing down. December had 21 per cent fewer sales than in 2009. Active listings are also up by 9 per cent. And it took 37 days to sell a home in December of 2010 than it did a year earlier.
Interest rates meanwhile, have nowhere to go but up. Analysts expect the hikes to continue as early as May of this year with the key rate doubling to 2 per cent by the end of 2011, which will further chill the market.
These are excerpts taken from The Toronto Star
Tony Wong
After three decades in the business, Toronto real estate broker Paul Swartz is still trying to figure out the market.
“I really don’t know what to tell clients. It’s just been about impossible to predict. We all know the ride is going to end, but nobody knows when.”
Swartz figured, like many analysts did, that 2010 would be slower because of a recovering economy. But despite the predictions of economic gloom, the Toronto existing home market rang out 2010 with the third best year for sales on record.
“I can’t tell you how many times I’ve gotten in trouble counseling first time buyers to wait because prices may fall. And then four years later they’re still going up.”
Make that 14 years. Prices have been appreciating since 1996, despite stock market crashes and global economic meltdowns along the way.
Some analysts have said the market is overvalued by as much as 25 per cent. But that hasn’t spooked buyers.
The Toronto Real Estate Board reported Thursday that 86,170 homes changed hands last year, down by only one per cent from 2009, which was the second best year recorded.
However, that number did not come close to the peak year of 2007, when 93,193 homes sold. But most realtors, expecting a far tougher year will likely say third place isn’t bad at all.
“Expectations of a depression were so dire that when we merely had a recession there was a kind of euphoria, people voted with their pocketbooks and with larger sized mortgages,” said Phil Soper, president and CEO of Royal LePage Real Estate Services.
After a pause in the third quarter as many had anticipated, the fourth quarter of the year was stronger than expected, buoyed by continuing low interest rates.
“The low cost of money has been the dominant driver in the valuation of property,” said Soper. “When people saw that rates remained low and that it wasn’t going to be a double dip recession that seemed to prompt a surge back into the market.”
The average selling price of a home in 2010 was $431,463, up by 9 per cent from 2009.
Two storey homes showed the strongest price appreciation, followed by condominiums and then bungalows, according to a separate report released Thursday by Royal LePage.
House price appreciation eased off in the second half of the year after a strong start, when figures were in the double digits.
“At the outset of 2010 we were experiencing annual rate of price growth at or near 20 per cent,” said Jason Mercer, TREB’s senior manager of market analysis. “This was the result of extremely tight market conditions coupled with the fact that we were comparing prices to the trough of the recession.”
Price appreciation declined rapidly in the second half of the year, but the strong start out of the gate meant that prices were firmly in positive territory in 2010.
The Toronto Real Estate Board still expects prices to go 5 per cent higher in 2011. But that is the optimistic end of most predictions. Royal LePage is forecasting a 1 per cent increase for 2011.
Soper said six weeks earlier his analysts would likely have forecast a flat or negative return for home price appreciation in 2011.
“We didn’t expect the fourth quarter to be as strong and we were expecting better economic news out of the U.S. But affordability ended up being much better than expected.”
The Bank of Canada paused in their hikes to the key overnight rate in October and December, leaving it at 1 per cent because of continuing economic weakness.
Affordability has improved as a result. The quarterly RBC affordability index shows that it now takes 56 per cent of pre-tax income to afford a detached home in Toronto. That’s down six percentage points, a significant drop from the second quarter.
Still, sales are expected to be down by 5.9 per cent next year, according to Royal LePage.
“Like 2010, we expect a strong start to the year because of continuing low interest rates, before tapering off at the second half,” said Soper.
The market is already slowing down. December had 21 per cent fewer sales than in 2009. Active listings are also up by 9 per cent. And it took 37 days to sell a home in December of 2010 than it did a year earlier.
Interest rates meanwhile, have nowhere to go but up. Analysts expect the hikes to continue as early as May of this year with the key rate doubling to 2 per cent by the end of 2011, which will further chill the market.
Wednesday, January 5, 2011
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