Full disclosure: I'm not an economist or a mortgage professional. This is my understanding and my take on the matter. Proceed with some caution...
It was announced today that a few big banks will be increasing their posted rates on their 3 and 5 year fixed mortgages. It's still a great time to get preapproved.
We all know that these emergency level rates can't last. There's widespread belief that B of C will raise the benchmark interest rate in July...or sooner.
There's perhaps a couple of reasons for the rate increase. A strong housing market could use a little dampening if supply doesn't do it's job in this spring market to keep prices from getting much higher.
A second reason is that investors growing confidence has them looking for stronger returns then they have seen in last year or so. If the cost for banks to borrow money on other investments goes up, mortgage rates will rise. Mortgage rates are influenced by longer term bonds and with inflationary pressures, yields go up and hence fixed mortage rates go up.
While some economists predict a mid-strong recovery with some inflationary pressures in 2010, others are calling for a settling down in 2011.
This begs the question...do you as a Buyer lock in a fixed rate or go variable? With fixed rate mortgages going up, variable sounds interesting. Remember, variable rates are affected by the prime rate which is affected by the benchmark interest rate...the one that most economists are certain will go up in July.
It's estimated that if prime rate goes from 2.25 up 2.5 points that this leads to a 30 percent increase in monthly costs for variable rate holders. Some strategize that a Buyer stays variable short term and then decides to lock in. There are advantage to both. So speak to your banker/mortgage broker and see what suits your situation best.
But do get preapproved as soon as you can. And at the same time find that great agent to guide you through the process!
Best-
Monday, March 29, 2010
The Art of the Deal
Every homeowner believes they have the nicest and best house on the street. My job as a Buyer Agent doing what I can to get my Buyers the keys to that Sellers house is to ensure under all circumstances that we too share the understanding that the Sellers reside in the nicest and best house on the street.
So I announce that shortly after I shake everyone's hand. Mr. and Mrs. Seller, I'm here for one reason. You guys have the nicest house we've seen in this price category. It's always great when a nice house has such house proud owners as you are and the caliber of agent you've selected to represent you further demonstrates your comitment to this process.
Then I begin my presentation. I said in the website http://www.TheSmithsBuyAHouse.com
that if your agent didn't charm you, good luck having him charm the sellers. But is there such a thing as "charming" the enemy?
Absolutely there is. Sellers like Buyers are nervous. They can't help but look at the Buyer Agent as the guy whose gonna do all he can to beat them up, come thru the front door and tell them where there house falls short and provide good reason that the asking price is too high.
I'm not that Agent. Through a proper presentation and arming yourself with data, comps/builders floorplans/upgrade costs etc..you can do your job sensitively and very well. Know your position. Know costs. Know the neighborhood. Size up and know the seller.
Last night, I presented to a Russian audience. Not my native tongue. But a well positioned, non threatening presentation with some eye contact that showed that were in this together moved this right along.
Look, I'm not selling snow to eskimos. I'm also not selling complicated financial derivatives. But I am selling a stakeholders position in someones stock and there is an "art" to being succesful at doing this. I've seen enough poor performances over the years to tell you that Good Agents will make the deal in the end.
Cheers-
So I announce that shortly after I shake everyone's hand. Mr. and Mrs. Seller, I'm here for one reason. You guys have the nicest house we've seen in this price category. It's always great when a nice house has such house proud owners as you are and the caliber of agent you've selected to represent you further demonstrates your comitment to this process.
Then I begin my presentation. I said in the website http://www.TheSmithsBuyAHouse.com
that if your agent didn't charm you, good luck having him charm the sellers. But is there such a thing as "charming" the enemy?
Absolutely there is. Sellers like Buyers are nervous. They can't help but look at the Buyer Agent as the guy whose gonna do all he can to beat them up, come thru the front door and tell them where there house falls short and provide good reason that the asking price is too high.
I'm not that Agent. Through a proper presentation and arming yourself with data, comps/builders floorplans/upgrade costs etc..you can do your job sensitively and very well. Know your position. Know costs. Know the neighborhood. Size up and know the seller.
Last night, I presented to a Russian audience. Not my native tongue. But a well positioned, non threatening presentation with some eye contact that showed that were in this together moved this right along.
Look, I'm not selling snow to eskimos. I'm also not selling complicated financial derivatives. But I am selling a stakeholders position in someones stock and there is an "art" to being succesful at doing this. I've seen enough poor performances over the years to tell you that Good Agents will make the deal in the end.
Cheers-
Saturday, March 27, 2010
New Construction vs Brand New Construction and HST
It occured to me lately and was reinforced today as I took some Buyers around, that there's this looming date of July 1st for HST to apply to brand new construction and that it may be an opportunistic time for a certain block of sellers.
With the new HST, The Builder must charge the additional tax but then applies for approx 2% of sold price as a rebate which gets kicked back to buyer on closings after July 1st.
Here's the rough calculation. You buy a 500K house. New tax owing is 40k. Max rebate of 24k applied. Builder applies for 2 percent credit on supplies. Now it's 30k-24k is 6k extra tax to Buyer.
On a 1 million dollar purchase the tax jumps to approx 36k owing.
I'd venture to say that strategically speaking it's a good time for year old construction in the same area as brand new construction to think about selling under the "resale banner". If the home shows well, then the new Buyer will pay HST on legal fees and other closing costs BUT buyer will not pay HST on purchase price.
More then ever before, it's probably important to know the market and pricing and whose selling what and how that stacks up to new construction costs and taxes.
Will there be more resales on newish homes in the next few months where new construction is still taking place? I bet there will be!
Know the market and do your homework.
Best--
With the new HST, The Builder must charge the additional tax but then applies for approx 2% of sold price as a rebate which gets kicked back to buyer on closings after July 1st.
Here's the rough calculation. You buy a 500K house. New tax owing is 40k. Max rebate of 24k applied. Builder applies for 2 percent credit on supplies. Now it's 30k-24k is 6k extra tax to Buyer.
On a 1 million dollar purchase the tax jumps to approx 36k owing.
I'd venture to say that strategically speaking it's a good time for year old construction in the same area as brand new construction to think about selling under the "resale banner". If the home shows well, then the new Buyer will pay HST on legal fees and other closing costs BUT buyer will not pay HST on purchase price.
More then ever before, it's probably important to know the market and pricing and whose selling what and how that stacks up to new construction costs and taxes.
Will there be more resales on newish homes in the next few months where new construction is still taking place? I bet there will be!
Know the market and do your homework.
Best--
Monday, March 22, 2010
Seller and Disclosure
What does a Seller have to disclose?
If someone has comited suicide in a house, that has to be disclosed. Nice way to start off.
If the house is insulated with UFFI. A form of insulation that is believed by some to be a cancer carcinogen. Even if it has been removed, the Sellers would do right by disclosing that it existed and remedial action was taken (showing bills and qualified company handled removal).
If there is a buired oil tank underground, this too should be disclosed. The concern here is was it buried with some oil in it that seeped out and contaminated yard. Worse off...did it contaminate neighbours yard also?
Sometimes in basement furnace room you or the inspector may located the remaining pipes coming in through the wall where the oil tank was once connected. I don't have the lingo down pat...i'm just giving you the general idea here.
If there is an active leak in the premise, this too should be disclosed. Putting fresh paint on top of a ceiling leak is not really ethical.
If the Seller did any additions or knocking down of walls during their stay, it is assumed that the work was done with the correct permits involved. Disclosure and proof of those permits would be imperative. Not all improvements are shown on a survey. Some surveys are older by nature.
There isn't a hard and fast rule around asbestos. Typically found with water boilers around the piping used as insulation, asbestos is not typically an issue unless its been disrupted or the owners decided to do some work on their own and change the furnace and didn't handle the disposal properly. An inspector will show you where it may be located. Also under some original basement flooring you may find some asbestos. Again, if you plan on renovating existing home, you'll take special precautions. You can take air borne samples to test at your expense during buying process if you have reason to suspect disruption. Typically not the case.
In some areas of the city where termites can infest homes, even without disclosure, trained eyes can find this pretty quickly. You'll want the right guys on your team depending on age, location and style of home you're searching for.
Otherwise, do your own due dilligence. When an area looks like there's been water penetrating, the general rule is....if the leak has been stopped but the cosmetic work wasn't done to restore, then that's cosmetic more then anything else. With that, you want to ensure that its just a lazy seller who didnt finish the job!
Finally, disclosure is something that can occur as you and your agent locate something specific at the property. Make certain your agent asks the probing questions and gets the answers.
I did a showing this past weekend where an engineering report was left behind showing that along with the brick masonry, battery packs were placed in the foundational walls in the basement. They didnt seem to offer much in terms of structural help and odd perhaps at best. We asked a few questions and reviewed the report. It's not the house for my Buyer but the disclosure was there. 8 years later...that's a new one for me!
Btw...Getting the answers in writing from the other side, is usually a good practice....though I'm no lawyer!
Cheers-
If someone has comited suicide in a house, that has to be disclosed. Nice way to start off.
If the house is insulated with UFFI. A form of insulation that is believed by some to be a cancer carcinogen. Even if it has been removed, the Sellers would do right by disclosing that it existed and remedial action was taken (showing bills and qualified company handled removal).
If there is a buired oil tank underground, this too should be disclosed. The concern here is was it buried with some oil in it that seeped out and contaminated yard. Worse off...did it contaminate neighbours yard also?
Sometimes in basement furnace room you or the inspector may located the remaining pipes coming in through the wall where the oil tank was once connected. I don't have the lingo down pat...i'm just giving you the general idea here.
If there is an active leak in the premise, this too should be disclosed. Putting fresh paint on top of a ceiling leak is not really ethical.
If the Seller did any additions or knocking down of walls during their stay, it is assumed that the work was done with the correct permits involved. Disclosure and proof of those permits would be imperative. Not all improvements are shown on a survey. Some surveys are older by nature.
There isn't a hard and fast rule around asbestos. Typically found with water boilers around the piping used as insulation, asbestos is not typically an issue unless its been disrupted or the owners decided to do some work on their own and change the furnace and didn't handle the disposal properly. An inspector will show you where it may be located. Also under some original basement flooring you may find some asbestos. Again, if you plan on renovating existing home, you'll take special precautions. You can take air borne samples to test at your expense during buying process if you have reason to suspect disruption. Typically not the case.
In some areas of the city where termites can infest homes, even without disclosure, trained eyes can find this pretty quickly. You'll want the right guys on your team depending on age, location and style of home you're searching for.
Otherwise, do your own due dilligence. When an area looks like there's been water penetrating, the general rule is....if the leak has been stopped but the cosmetic work wasn't done to restore, then that's cosmetic more then anything else. With that, you want to ensure that its just a lazy seller who didnt finish the job!
Finally, disclosure is something that can occur as you and your agent locate something specific at the property. Make certain your agent asks the probing questions and gets the answers.
I did a showing this past weekend where an engineering report was left behind showing that along with the brick masonry, battery packs were placed in the foundational walls in the basement. They didnt seem to offer much in terms of structural help and odd perhaps at best. We asked a few questions and reviewed the report. It's not the house for my Buyer but the disclosure was there. 8 years later...that's a new one for me!
Btw...Getting the answers in writing from the other side, is usually a good practice....though I'm no lawyer!
Cheers-
Sunday, March 21, 2010
Is this March a Buyers Market? HST, upward pressure on rates; supply/demand
March break is over. Traditionally this is the time of year we tend to see more listings hit the market. Will there be a scramble to buy a house and close before July's intro of HST? Will there be a further stimulus to buy before rates go up?
Will buyers rush to get preapproved before the new more stringent mortgage rules take effect in mid April? For those who wait a little longer, will that strategy pay off? HST affects new construction costs but also affects periphery costs like legal, moving, reno, commissions. It could add hundreds or thousands to the final bill. Utlimately its not a a large number relative to a few hundred thousand dollar purchase.
What will the market look like with heightened rates past July? Will there be more supply or less supply? Will prices rise but by a lesser amount or will less supply cause great price increases?
Will a stronger economy with continued strength in employment numbers and a higher loonie add fire to the housing market or will it slow it down?
There's a lot of outside issues that buyers may wish to think about. Ultimatelty the timing has to work for you. Do you have the best downpayment you're going to have? Have you managed to get the best rate you can? Are you buying new or resale? Is buying a house a better investment then parking your money in a bank account with inflation climbing? Are you mentally prepared to join the ranks of homeowerns?
Just some food for thought. I have my perspective and I'd be happy to review. Do spend some time with yourself on the above.
BTW, if you're not asking these questions and just into looking at homes and finding the best one for you and offering with the hope you get it...that's probably ok too!
Best,
Will buyers rush to get preapproved before the new more stringent mortgage rules take effect in mid April? For those who wait a little longer, will that strategy pay off? HST affects new construction costs but also affects periphery costs like legal, moving, reno, commissions. It could add hundreds or thousands to the final bill. Utlimately its not a a large number relative to a few hundred thousand dollar purchase.
What will the market look like with heightened rates past July? Will there be more supply or less supply? Will prices rise but by a lesser amount or will less supply cause great price increases?
Will a stronger economy with continued strength in employment numbers and a higher loonie add fire to the housing market or will it slow it down?
There's a lot of outside issues that buyers may wish to think about. Ultimatelty the timing has to work for you. Do you have the best downpayment you're going to have? Have you managed to get the best rate you can? Are you buying new or resale? Is buying a house a better investment then parking your money in a bank account with inflation climbing? Are you mentally prepared to join the ranks of homeowerns?
Just some food for thought. I have my perspective and I'd be happy to review. Do spend some time with yourself on the above.
BTW, if you're not asking these questions and just into looking at homes and finding the best one for you and offering with the hope you get it...that's probably ok too!
Best,
Thursday, March 18, 2010
Staging Homes and Leaving something for Buyer
When I began this blog, my focus was to educate Buyers--a theme that tied in nicely with the website.
I wanted buyers of all ranges to learn about mortgage financing rules; property tax assessments; multiple offers; how to win offers; asking the right questions to determine market value etc; inspections; basic legal stuff; offers that protect buyers, etc.
The blog that most people talk about was the "afternoon delight". Walking into a showing to find our friends engaged in special relations.
So let's stay on a light note again. Why not...its March break and the day the leprechauns are sobering up.
Many sellers spend countless dollars on staging their homes before they go to market. A brand new 1.5 million dollar house can cost 20k to stage (that's for the first month)!!
So its happened twice now. I've walked clients through magnificent homes fully furnished with beautiful art on the walls and silverware adorning the oversized glass table (ya right a family would dine like this). So staged. So much money spent.
Oh oh. The bathroom. Here we go. It looks great but our friends left the lid up and we have a "floater" on display. Propped up, so it too looks staged. Needless to say the two times my clients walked in, it didn't go so well.
I've always encouraged my sellers to keep the lids down just in case.
There's nothing quite like walking in to find that. The buyers faces always sour and the showing is "crap" therein.
When I can, I go into patrol mode and arrive on scene before the sellers for a spot check. Talk about going above your call of duty or ....erasing someone else's call of doodie.
Inflation reading tomorrow may stoke fire for dollar to reach parity. (there that makes this blog seem a little more relevant?)
Next blog we'll get serious again...I think.
I wanted buyers of all ranges to learn about mortgage financing rules; property tax assessments; multiple offers; how to win offers; asking the right questions to determine market value etc; inspections; basic legal stuff; offers that protect buyers, etc.
The blog that most people talk about was the "afternoon delight". Walking into a showing to find our friends engaged in special relations.
So let's stay on a light note again. Why not...its March break and the day the leprechauns are sobering up.
Many sellers spend countless dollars on staging their homes before they go to market. A brand new 1.5 million dollar house can cost 20k to stage (that's for the first month)!!
So its happened twice now. I've walked clients through magnificent homes fully furnished with beautiful art on the walls and silverware adorning the oversized glass table (ya right a family would dine like this). So staged. So much money spent.
Oh oh. The bathroom. Here we go. It looks great but our friends left the lid up and we have a "floater" on display. Propped up, so it too looks staged. Needless to say the two times my clients walked in, it didn't go so well.
I've always encouraged my sellers to keep the lids down just in case.
There's nothing quite like walking in to find that. The buyers faces always sour and the showing is "crap" therein.
When I can, I go into patrol mode and arrive on scene before the sellers for a spot check. Talk about going above your call of duty or ....erasing someone else's call of doodie.
Inflation reading tomorrow may stoke fire for dollar to reach parity. (there that makes this blog seem a little more relevant?)
Next blog we'll get serious again...I think.
Wednesday, March 17, 2010
March Break Slowdown: use time wisely
First things first: Read this post ONLY if you can't get away and position yourself on a patio drinking green beer today.
This is typically a slow week for real estate sales relative to the next few weeks in March. Especially when its topped off with July weather!
If you're looking to get into the market this is as good a week as any to get your ducks in a row.
what to do:
1. Start speaking to friends and family and look for referals to strong agents
2. Call these agents and interview them. Look for some chemistry. The biggest agent may be too busy, the slowest agent may be too desperate. Maybe something in between with experience that you can leverage.
3. Go to the bank and get your preapproval done. Lock in today's rates and if youre a first time buyer, maybe your bank will behave a little different pre April 19th new rules where the mortgage qualifications for CMHC buyers get more stringent.
4. Learn about some areas of interest. Take a walk through the area, speak to the residents at the park. You should use sources outside of realtors too. Who better then a neighbour living in an area of interest.
5. Learn about the school districts if you have kids
6. Take a stroll at night too. See if its the right neighbourhood for safety and fun
7. Once you locate an agent, get them to get you up and running so that heading into what will be a busier next few weeks, you'll be on top of listings in real time. Doesn't mean you have to buy, but it does allow you to begin to learn.
8. Get to know your end costs. Land transfer tax, legal, moving, adjustments.
9. Use the time to get to know your mortgage options as well. THe preapproval is a must. But also ask the bank about posted rates vs lowered rates; prepayment options; ammortizations; ease of switching from variable to fixed; capacity to split mortgages between some fixed portion and some variable portion if there's a clear advantage for your situation; learn what documentation they require; if your self-employed find out how they will treat your income and what documentation is needed.
10. Call me!
Enjoy the spring weather.
http://www.TheSmithsBuyAHouse.com (Follow John and Jill's recent purchase and their journey).
This is typically a slow week for real estate sales relative to the next few weeks in March. Especially when its topped off with July weather!
If you're looking to get into the market this is as good a week as any to get your ducks in a row.
what to do:
1. Start speaking to friends and family and look for referals to strong agents
2. Call these agents and interview them. Look for some chemistry. The biggest agent may be too busy, the slowest agent may be too desperate. Maybe something in between with experience that you can leverage.
3. Go to the bank and get your preapproval done. Lock in today's rates and if youre a first time buyer, maybe your bank will behave a little different pre April 19th new rules where the mortgage qualifications for CMHC buyers get more stringent.
4. Learn about some areas of interest. Take a walk through the area, speak to the residents at the park. You should use sources outside of realtors too. Who better then a neighbour living in an area of interest.
5. Learn about the school districts if you have kids
6. Take a stroll at night too. See if its the right neighbourhood for safety and fun
7. Once you locate an agent, get them to get you up and running so that heading into what will be a busier next few weeks, you'll be on top of listings in real time. Doesn't mean you have to buy, but it does allow you to begin to learn.
8. Get to know your end costs. Land transfer tax, legal, moving, adjustments.
9. Use the time to get to know your mortgage options as well. THe preapproval is a must. But also ask the bank about posted rates vs lowered rates; prepayment options; ammortizations; ease of switching from variable to fixed; capacity to split mortgages between some fixed portion and some variable portion if there's a clear advantage for your situation; learn what documentation they require; if your self-employed find out how they will treat your income and what documentation is needed.
10. Call me!
Enjoy the spring weather.
http://www.TheSmithsBuyAHouse.com (Follow John and Jill's recent purchase and their journey).
Monday, March 15, 2010
Multiple Offers: Staying on this Topic as the bidding stays
If you're just getting into the market here in Toronto and much of the GTA, welcome to multiple bids. If you've been in the market for some time, it would be strange for me to be welcoming you now! You've seen it all before.
Its starting to feel like every property good or bad is holding back offers. Whether they've been staged or left standing on one leg about to collapse, they're proposing a date that you can bring your offer.
Sometimes but not always you can take your cues from the agents wording in the listing. "No offers before March 15th" isn't as bold as "offers @ 7pm on Sunday register @ 5pm". That may or may not be a clue as to how successful the sellers/agent believe they will be at having a busy night and "may" give you a glimpse into the mindset of the Seller. Note that most agents hide this language internally in a part of the mls listing you the public cannot access. Your agent hopefully is giving you the "whole picture".
When you do move forward with an offer and the listing agent tells your buying agent that you should put your best foot forward and the sellers will just be reviewing your first and only offer---not true.
Go damn close to your best number but keep some in your back pocket. If you're in the running to round 2....you will be asked if you'd like to better your offer,
Though, I have clients that I simply tell to put your best number down and we'll call it a night, whether they ask for more. It really is a case of knowing your client.
Deposits count in multiples. If you're uncertain you'll be the biggest number, get the exact closing and give the biggest certified deposit you possibly can.
In this economy, a seller wants to sleep at night. A buyer could walk from 10k. 30k gets a tad more difficult to walk from. Shows the seller you want the house. If you can.
Finally, understand that if you lose it may just be the rational result. Some valuations are borderline excessive and remember its gotta make sense. If you're being financed, the bank will appraise and you don't want to find out that your valuation is greater than your lenders!! Especially those buyers using Cmhc---that particular lender uses an extra set of glasses to appraise the house!! So you do want to buy within market value.
For other tricks of the trade, strategies and advice---youre always welcome to email or call.
Best of luck!!
www.TheSmithsBuyAHouse.com
Its starting to feel like every property good or bad is holding back offers. Whether they've been staged or left standing on one leg about to collapse, they're proposing a date that you can bring your offer.
Sometimes but not always you can take your cues from the agents wording in the listing. "No offers before March 15th" isn't as bold as "offers @ 7pm on Sunday register @ 5pm". That may or may not be a clue as to how successful the sellers/agent believe they will be at having a busy night and "may" give you a glimpse into the mindset of the Seller. Note that most agents hide this language internally in a part of the mls listing you the public cannot access. Your agent hopefully is giving you the "whole picture".
When you do move forward with an offer and the listing agent tells your buying agent that you should put your best foot forward and the sellers will just be reviewing your first and only offer---not true.
Go damn close to your best number but keep some in your back pocket. If you're in the running to round 2....you will be asked if you'd like to better your offer,
Though, I have clients that I simply tell to put your best number down and we'll call it a night, whether they ask for more. It really is a case of knowing your client.
Deposits count in multiples. If you're uncertain you'll be the biggest number, get the exact closing and give the biggest certified deposit you possibly can.
In this economy, a seller wants to sleep at night. A buyer could walk from 10k. 30k gets a tad more difficult to walk from. Shows the seller you want the house. If you can.
Finally, understand that if you lose it may just be the rational result. Some valuations are borderline excessive and remember its gotta make sense. If you're being financed, the bank will appraise and you don't want to find out that your valuation is greater than your lenders!! Especially those buyers using Cmhc---that particular lender uses an extra set of glasses to appraise the house!! So you do want to buy within market value.
For other tricks of the trade, strategies and advice---youre always welcome to email or call.
Best of luck!!
www.TheSmithsBuyAHouse.com
Thursday, March 11, 2010
Basements and Floods and a little misery
I've been in my current home for some time now. I got the dreaded phone call. It wasn't my wife telling me we had dinner plans with that couple I can't stand....it was my wife letting me know that there was black dirt coming thru our laundry room drain. That black dirt is what makes up sewage. Our sewage drain backed up on us. It was plenty gross and plenty dirty. We called in the plumbers and a commerical snake wasn't able to fix the problem. Somewhere there was a structure blocking and ultimately breaking the piping that takes the sewage from our house to the street. With the use of a camera down the drain, the area in question was located and repaired and it cost thousands of uninsured dollars to repair. A bad day for any homeowner.
So you, the Buyer, as you make your way into the housing market and start learning about pricing and market values, strategies for multiple offers, inspections, financing, surveys, property tax assessments, protective clauses, deposits, finalizing mortgage documents, negotiations and legal stuff...know that there is a budget you should have for unforseen expenses.
Here's a tip though. I mentioned in my website http://www.TheSmithsBuyAHouse.com that inspections are important and limited. A typical inspection does not look into drains. I also mentioned that you should learn about the area of interest. When were the homes built? Has the city done any upgrades to piping? Even if the city has, has the homeowner? Many older areas have clay pipes underground. These pipes like everything else have a lifeline. In certain areas its getting damn close to the end for these pipes. When they corrode and cause backup...you have to fix at your cost and it aint cheap!!
So...during your home inspection you may want to learn more about this. And, you can at anytime do a scope of the drain (a cost above and beyond the typical inspection) but it may prove very worthwhile and provide some real important information about potential expenses to come!!
All these free tips! This one you're getting completely at my own expense!
Cheers-
So you, the Buyer, as you make your way into the housing market and start learning about pricing and market values, strategies for multiple offers, inspections, financing, surveys, property tax assessments, protective clauses, deposits, finalizing mortgage documents, negotiations and legal stuff...know that there is a budget you should have for unforseen expenses.
Here's a tip though. I mentioned in my website http://www.TheSmithsBuyAHouse.com that inspections are important and limited. A typical inspection does not look into drains. I also mentioned that you should learn about the area of interest. When were the homes built? Has the city done any upgrades to piping? Even if the city has, has the homeowner? Many older areas have clay pipes underground. These pipes like everything else have a lifeline. In certain areas its getting damn close to the end for these pipes. When they corrode and cause backup...you have to fix at your cost and it aint cheap!!
So...during your home inspection you may want to learn more about this. And, you can at anytime do a scope of the drain (a cost above and beyond the typical inspection) but it may prove very worthwhile and provide some real important information about potential expenses to come!!
All these free tips! This one you're getting completely at my own expense!
Cheers-
Monday, March 8, 2010
Open Houses and Ego Maniacs
The warm weekend brought with it an abundance of Buyers (mostly non serious ones) into my Open Houses.
For years I`ve gotten a kick out of those who come into an Open House looking to either teach me something or let me know that they`re well researched. It`s not been the case that I`ve been beaten down by one of these visitors as yet.
I`m guessing it`s an Ego thing for the visitor.
It usually begins with the vistor telling me that they don`t have to sign in. You do. It`s the Sellers house and we`re taking inventory of who is coming in. We`ve been hired by the Seller and trusted to make sure that we`re aware of who is coming in and out for security purposes. In fact some agents ask for ID.
Then comes the questions or the grilling by this specific Ego maniac.
The questions aren`t being asked necessarily to learn the answers. It`s more of a game to see if I don`t know the answer and then the other team wins.
I get asked about wiring, plumbing an awful lot. Truth be told, I`m not an inspector and often the home owner doesn`t know what`s behind the walls completely.
Some homes have undergone reno`s so they can pinpoint the amount of knob and tube wiring. Some homes have sprung a leak and so they know that there`s new piping in certain areas that adjoins the older piping. Still others don`t know very much.
So I always answer questions as honest as I can and there are third parties; home inspectors, plumbers etc that you, the Buyer, can rely on for their expertise.
For those Ego maniacs running into open houses this spring season, perhaps I can supply some further questions you may wish to ask so that you come in and can ambush the listing agent. Be fair though...many listing agents don`t do their own open houses. They`ll have somebody else sit the open house. It may be that person`s first visit to the house and the`yll not have intimate knowledge of the house. You`ll beat them up easily.
Some questions:
Are there any easements or encroachments
Is their an updated survey showing all improvements
Is the pad park legal
Is their a buried oil tank
Is their a Seller Property Information Sheet for this property
Has the sewage backed up and if so, was all piping repaired
Is their any asbestos in house
Is hot water tank owned or rented
Anyhow, there`s so many things you can ask. Typically I know who is serious when they visit the open house. As mentioned in my website http://www.TheSmithsBuyAHouse.com ---most serious buyers are working with agents and if the listing came out Monday and they`re hopping into a Sunday Open House---armed with these questions....they`re gonna miss this house and they`re not real candidates but we``ll get them their answers.
On a final note, Open Houses aren`t a solid strategy for buying a house. You need to see the house well before the open house to get your ducks in a row if it is to be a viable option for you.
With that, here`s to Open House season!!! Enjoy and to be clear....you should absolutely ask your questions. You need too!!
Cheers-
For years I`ve gotten a kick out of those who come into an Open House looking to either teach me something or let me know that they`re well researched. It`s not been the case that I`ve been beaten down by one of these visitors as yet.
I`m guessing it`s an Ego thing for the visitor.
It usually begins with the vistor telling me that they don`t have to sign in. You do. It`s the Sellers house and we`re taking inventory of who is coming in. We`ve been hired by the Seller and trusted to make sure that we`re aware of who is coming in and out for security purposes. In fact some agents ask for ID.
Then comes the questions or the grilling by this specific Ego maniac.
The questions aren`t being asked necessarily to learn the answers. It`s more of a game to see if I don`t know the answer and then the other team wins.
I get asked about wiring, plumbing an awful lot. Truth be told, I`m not an inspector and often the home owner doesn`t know what`s behind the walls completely.
Some homes have undergone reno`s so they can pinpoint the amount of knob and tube wiring. Some homes have sprung a leak and so they know that there`s new piping in certain areas that adjoins the older piping. Still others don`t know very much.
So I always answer questions as honest as I can and there are third parties; home inspectors, plumbers etc that you, the Buyer, can rely on for their expertise.
For those Ego maniacs running into open houses this spring season, perhaps I can supply some further questions you may wish to ask so that you come in and can ambush the listing agent. Be fair though...many listing agents don`t do their own open houses. They`ll have somebody else sit the open house. It may be that person`s first visit to the house and the`yll not have intimate knowledge of the house. You`ll beat them up easily.
Some questions:
Are there any easements or encroachments
Is their an updated survey showing all improvements
Is the pad park legal
Is their a buried oil tank
Is their a Seller Property Information Sheet for this property
Has the sewage backed up and if so, was all piping repaired
Is their any asbestos in house
Is hot water tank owned or rented
Anyhow, there`s so many things you can ask. Typically I know who is serious when they visit the open house. As mentioned in my website http://www.TheSmithsBuyAHouse.com ---most serious buyers are working with agents and if the listing came out Monday and they`re hopping into a Sunday Open House---armed with these questions....they`re gonna miss this house and they`re not real candidates but we``ll get them their answers.
On a final note, Open Houses aren`t a solid strategy for buying a house. You need to see the house well before the open house to get your ducks in a row if it is to be a viable option for you.
With that, here`s to Open House season!!! Enjoy and to be clear....you should absolutely ask your questions. You need too!!
Cheers-
Friday, March 5, 2010
Even mice can sell a house!
Now that Title wasn't meant to sound like Realtors aren't incredibly savvy and intelligent life forms that you should leverage when buying or selling a home. You should...and they are!
I'm refering to a recent occassion when I brought my buyers to a vacant new home. I opened the door first (gentleman that I am) and my clients followed close behind.
As I began the tour, I was sure that something made a mad dash along the floor in the kitchen area. I'm a squeamish guy with pests. We just don`t understand each other I suppose.
Anyhow, I felt a shiver down my spine as I made my way towards the kitchen, concerned for me but also for my clients. How embarassing this would be for them.
My nightmare was confirmed when not one but two little grey mice were positioned along the kitchen wall just seemingly there to greet us. Were they realtors...nope. They worked together too well to be realtors I thought!
I turned to my clients and grimaced and started to pick up the pace as I walked away from the kitchen and I`m pretty sure I said it was time to go. But the Buyers also saw what horrified me.
Their reaction was quite different. They laughed at me and one member of the entourage kneeled down and whispered to the mice. He then proceeded to move closer. Was he a mouse charmer...are there such things
To save everyone from the unpleasant experience I recommended we take immediate action and bolt the heck outta this house and hit the next one on our list. The gang with some hesitation followed me out but dialogued for a bit about the house as we departed.
That afternoon we viewed 6 other homes and called it a day.
The next day the out of town Buyer decided to make an offer on a home. You guessed it....the `mouse house`.
I was shocked and spoke to them at great lenghts about possible infestations and that newly built vacant homes located in open fields like new developments are prone to mice. I drew up a few fancy `mouse`clauses to get the Sellers to work on remedying the problem by closing.
I`m happy to say the Buyers are enjoying their house and their off and on again pets (notice I didnt dare say ``pests``)
That house will always go down as the ``mouse house``. But the Buyers are happy!!
Now I`m not going to pretend that I drop in to that house too often to visit. I tend to send or courier small gifts from time to time!
In the last post it was young lovers. Today it`s all about mice. And here I set out to blog about interest rates, budgets, mortfage rules, building permits, multiple offer strategies and choosing the right agent for you.
Blogs are organic. They just grow I suppose. Anyway, nothing wrong with having some fun here and there.
If you haven`t already visited my brand new website...drop by http://www.TheSmithsBuyAHouse.com
I'm refering to a recent occassion when I brought my buyers to a vacant new home. I opened the door first (gentleman that I am) and my clients followed close behind.
As I began the tour, I was sure that something made a mad dash along the floor in the kitchen area. I'm a squeamish guy with pests. We just don`t understand each other I suppose.
Anyhow, I felt a shiver down my spine as I made my way towards the kitchen, concerned for me but also for my clients. How embarassing this would be for them.
My nightmare was confirmed when not one but two little grey mice were positioned along the kitchen wall just seemingly there to greet us. Were they realtors...nope. They worked together too well to be realtors I thought!
I turned to my clients and grimaced and started to pick up the pace as I walked away from the kitchen and I`m pretty sure I said it was time to go. But the Buyers also saw what horrified me.
Their reaction was quite different. They laughed at me and one member of the entourage kneeled down and whispered to the mice. He then proceeded to move closer. Was he a mouse charmer...are there such things
To save everyone from the unpleasant experience I recommended we take immediate action and bolt the heck outta this house and hit the next one on our list. The gang with some hesitation followed me out but dialogued for a bit about the house as we departed.
That afternoon we viewed 6 other homes and called it a day.
The next day the out of town Buyer decided to make an offer on a home. You guessed it....the `mouse house`.
I was shocked and spoke to them at great lenghts about possible infestations and that newly built vacant homes located in open fields like new developments are prone to mice. I drew up a few fancy `mouse`clauses to get the Sellers to work on remedying the problem by closing.
I`m happy to say the Buyers are enjoying their house and their off and on again pets (notice I didnt dare say ``pests``)
That house will always go down as the ``mouse house``. But the Buyers are happy!!
Now I`m not going to pretend that I drop in to that house too often to visit. I tend to send or courier small gifts from time to time!
In the last post it was young lovers. Today it`s all about mice. And here I set out to blog about interest rates, budgets, mortfage rules, building permits, multiple offer strategies and choosing the right agent for you.
Blogs are organic. They just grow I suppose. Anyway, nothing wrong with having some fun here and there.
If you haven`t already visited my brand new website...drop by http://www.TheSmithsBuyAHouse.com
Thursday, March 4, 2010
Showing Everything in this housing market
To be young and in love is wonderful. It makes the world going round. It raises your game in everything you do.
However, to be young and making love....while I'm unlocking the door to your home to show it to my clients after we've formally provided notice for a showing and been confirmed to enter is awkward.
There was no sounds as we begun our viewing of the house. The basement was tidy and had high ceilings. The main level provided great sized pricipal rooms and a magnificent kitchen that adjoined a small breatkfast area surrounded by glass doors (wall to wall). The 2 kids bedrooms were pretty well laid out and a great 5 pce bathroom anchored the upper hallway.
Lights on in master bedroom and movement. No sheets. No clothes. No apologies. Just a quick glance at us told us that these guys weren't stopping for anything. I kept my composure and "interest" but noticed that my clients had left the room and the house altogether.
Needless to say, there won't be a second viewing...of the house or our friends in the master bedroom.
You see strange and funny things in this gig. Only question that still remains....was this planned by the Seller? Do they really want to sell the house OR are they looking for maximum exposure of a different sort?
Either way...it was not your everyday showing. Thanks for the memories Sellers.
However, to be young and making love....while I'm unlocking the door to your home to show it to my clients after we've formally provided notice for a showing and been confirmed to enter is awkward.
There was no sounds as we begun our viewing of the house. The basement was tidy and had high ceilings. The main level provided great sized pricipal rooms and a magnificent kitchen that adjoined a small breatkfast area surrounded by glass doors (wall to wall). The 2 kids bedrooms were pretty well laid out and a great 5 pce bathroom anchored the upper hallway.
Lights on in master bedroom and movement. No sheets. No clothes. No apologies. Just a quick glance at us told us that these guys weren't stopping for anything. I kept my composure and "interest" but noticed that my clients had left the room and the house altogether.
Needless to say, there won't be a second viewing...of the house or our friends in the master bedroom.
You see strange and funny things in this gig. Only question that still remains....was this planned by the Seller? Do they really want to sell the house OR are they looking for maximum exposure of a different sort?
Either way...it was not your everyday showing. Thanks for the memories Sellers.
Wednesday, March 3, 2010
When MLS isn't enough!
Yes, its the Spring Market in the GTA. So far in 2010 in many prime neighbourhoods in the GTA there hasn't been an abundance of listings for buyers to peruse. Not necessarily a sign of things to come. January and February are traditionally months that stoke the fire for the March madness. March is typically a solid month for action.
Here's my "edge". Like those agents who work this career and made the right friends in the industry....we're dialing up favours and helping each other. One of my Buyer's who has been in the market for a while got a call from me a few nights ago about an opportunity to view a house that was not on MLS. A house that few were aware of. A house that had no For Sale sign on it. A house that would never see MLS.ca. It suited my client's really well and I'm happy to report that they purchased the house. They're thrilled. I'm thrilled.
As mentioned in my website, there's multiple avenues for finding a house in today's market. We had been busy with all avenues and it took some time. But our persistance and having some connections... drove the deal home!
Congrats to my Buyers. Let's call them "The Smiths". And then let's say that they have a website about their experience. http://www.TheSmithsBuyAHouse.com.
Cheers-
Here's my "edge". Like those agents who work this career and made the right friends in the industry....we're dialing up favours and helping each other. One of my Buyer's who has been in the market for a while got a call from me a few nights ago about an opportunity to view a house that was not on MLS. A house that few were aware of. A house that had no For Sale sign on it. A house that would never see MLS.ca. It suited my client's really well and I'm happy to report that they purchased the house. They're thrilled. I'm thrilled.
As mentioned in my website, there's multiple avenues for finding a house in today's market. We had been busy with all avenues and it took some time. But our persistance and having some connections... drove the deal home!
Congrats to my Buyers. Let's call them "The Smiths". And then let's say that they have a website about their experience. http://www.TheSmithsBuyAHouse.com.
Cheers-
Tuesday, March 2, 2010
2008 Expired Listings Become 2010 Listings at Heightened Prices
Look, the market has gone up since 2008. October 2008 was the approximate bottoming. In 2007, we saw continued year over year strength. In some parts of Toronto, we saw high double digit growth. In 2008, the market tanked (lets keep it in perspective)...it fell. Depending on the neighbourhood, prices are just starting to match their 2007 highs. In some areas, it seems we're still off the 2007 highs-think Forest Hill Village. In others, we've passed the 2007 prices by a nice margin.
With that, it is interesting to note that with a 20% year over year recovery (on avg in GTA) going into the spring market of 2010, we're seeing listings that couldn't catch a break and attract attention in 2008 that are being given new life in this market. In some cases, its astonishing to see the turnaround in list price and then capturing multiple offers and being bid upwards beyond a 20% uptick in the last reported ask price.
In some cases, its a simple function of supply and demand and home prices in a new recovered market. In other cases, its a function of the home seller now wondering if they shouldn't just list their property in this market at a big buck and see if they can hit the jackpot. No pressure on the Seller who hasn't bought. As Buyer's we like when Sellers have some pressure.
So Buyers will have to distinguish the "prospectors" from the "sellers" in the next while.
Being subjective, we can't penalize those who bought in the latter part of 2008/early 2009. They bought into the stock at its low. And they're just going for the ride. For those who had a house to sell and sold in the same market...it's all relative at the end of the day.
Cheers-
With that, it is interesting to note that with a 20% year over year recovery (on avg in GTA) going into the spring market of 2010, we're seeing listings that couldn't catch a break and attract attention in 2008 that are being given new life in this market. In some cases, its astonishing to see the turnaround in list price and then capturing multiple offers and being bid upwards beyond a 20% uptick in the last reported ask price.
In some cases, its a simple function of supply and demand and home prices in a new recovered market. In other cases, its a function of the home seller now wondering if they shouldn't just list their property in this market at a big buck and see if they can hit the jackpot. No pressure on the Seller who hasn't bought. As Buyer's we like when Sellers have some pressure.
So Buyers will have to distinguish the "prospectors" from the "sellers" in the next while.
Being subjective, we can't penalize those who bought in the latter part of 2008/early 2009. They bought into the stock at its low. And they're just going for the ride. For those who had a house to sell and sold in the same market...it's all relative at the end of the day.
Cheers-
Interest Rate Announcement
Bank of Canda is commited to keeping short terms rates at all time lows for immediate future. With surprisingly strong GDP numbers for fourth quarter and builder confidence and housing starts to increase as well as some wage improvements--its looking certain that by July we'll see an uptick in rates. As of today, the loonie is continuing its rise as a dominant currency and much of the slack keeping prices low in economy and warding off inflation is being stripped away creating an environment where inflation needs to be watched closely.
****So if you're flirting with the market, I'd recommend that you get your preapproval certificate in order nowish.
It's been an interesting kick off to the spring market of 2010. Certain areas are enjoying increased supply so far while others feel chocked off. With that, the warmer temperatures will bring increased competition and increased listings. Spring market is when you need to have your ducks in a row and game face on. If all year long most Buyers are playing warm up tournaments, welcome to Wimbledon. Players will come out in strength. Some prepared and others will behave like weekend warriors and make their weekends nice and complete by dodging into Open Houses.
Maybe because I'm in the industry and see homes everyday...but that lack of focus and simply using Open Houses as a Sunday outing seems like it would get old quickly!
Those same Buyers hitting the Open House circuit (pretending to be really engaged with the market) then spend hours later trying to find out what each house eventually sold for. I suppose it can be somewhat of a "hobby". You know I'm going to yet again tell you that this isn't how people who end up purchasing a home win the house.
Don't be shy to connect with an agent at a stage you presume to be "premature". There is help and direction offered by a solid Agent at each phase. And this is part of what we as Agents signed up for!!
Enjoy the nice weather and get those preapprovals stamped!! Cheers-
****So if you're flirting with the market, I'd recommend that you get your preapproval certificate in order nowish.
It's been an interesting kick off to the spring market of 2010. Certain areas are enjoying increased supply so far while others feel chocked off. With that, the warmer temperatures will bring increased competition and increased listings. Spring market is when you need to have your ducks in a row and game face on. If all year long most Buyers are playing warm up tournaments, welcome to Wimbledon. Players will come out in strength. Some prepared and others will behave like weekend warriors and make their weekends nice and complete by dodging into Open Houses.
Maybe because I'm in the industry and see homes everyday...but that lack of focus and simply using Open Houses as a Sunday outing seems like it would get old quickly!
Those same Buyers hitting the Open House circuit (pretending to be really engaged with the market) then spend hours later trying to find out what each house eventually sold for. I suppose it can be somewhat of a "hobby". You know I'm going to yet again tell you that this isn't how people who end up purchasing a home win the house.
Don't be shy to connect with an agent at a stage you presume to be "premature". There is help and direction offered by a solid Agent at each phase. And this is part of what we as Agents signed up for!!
Enjoy the nice weather and get those preapprovals stamped!! Cheers-
Monday, March 1, 2010
Olympics and Home Buying
Our athletes did fantastic. Truly made the country proud cemented with the mens hockey nail biting victory last night.
There are some similarities between these Olympic Athletes and a GTA Buyer.
First, both require persistance and training to get the prize.
Second, both rely on their innate skills but also utilize professionals (coaches/agents) to guide them through the ups and downs of the everchanging landscape ao they can keep their competitive advantage
Third, in some races five or more guys line up at the starting gate and only one will win the prize (lets face it, they're only chasing gold). 4 will walk away. Of the 4 1 or 2 will be very sour given the time and work they put in and the hours spent dreaming of owning that prize (gold medal or house). The final guy will be okay with not winning the prize and set out for the next competition as he put his best dollar forward and simply got beat, even if it takes 4 years to do it again. (in a home buyer's case, it may take a few months...certainly not 4 years).
Finally, when you succeed at buying your new house, the government taxes you on many levels.
Well, it's my understanding that when our athletes win their medals, the prize money they receive is also taxable in the hands of the Canadian tax system. Sounds cruel but some generalization in the tax code makes this permissable.
Anyhow, I think the point I'm making is that you need to work hard buying a house; you need to do your homework; you need the aid of a coach who has inside knowledge and you need not be afraid to compete for what you want. Could you imagine an athlete at the Olympics deciding that he just wasnt going to go for the gold because there was competition!!
In closing...all you homebuyers are Olympians!! Cheers-
There are some similarities between these Olympic Athletes and a GTA Buyer.
First, both require persistance and training to get the prize.
Second, both rely on their innate skills but also utilize professionals (coaches/agents) to guide them through the ups and downs of the everchanging landscape ao they can keep their competitive advantage
Third, in some races five or more guys line up at the starting gate and only one will win the prize (lets face it, they're only chasing gold). 4 will walk away. Of the 4 1 or 2 will be very sour given the time and work they put in and the hours spent dreaming of owning that prize (gold medal or house). The final guy will be okay with not winning the prize and set out for the next competition as he put his best dollar forward and simply got beat, even if it takes 4 years to do it again. (in a home buyer's case, it may take a few months...certainly not 4 years).
Finally, when you succeed at buying your new house, the government taxes you on many levels.
Well, it's my understanding that when our athletes win their medals, the prize money they receive is also taxable in the hands of the Canadian tax system. Sounds cruel but some generalization in the tax code makes this permissable.
Anyhow, I think the point I'm making is that you need to work hard buying a house; you need to do your homework; you need the aid of a coach who has inside knowledge and you need not be afraid to compete for what you want. Could you imagine an athlete at the Olympics deciding that he just wasnt going to go for the gold because there was competition!!
In closing...all you homebuyers are Olympians!! Cheers-
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