Michael Gruenstein's Residential Review

Multi Residential: a few red flags....

2011-08-17T10:29:00.000-07:00

Multi-Residential Asset Class: A couple of tips

This past week I took some investors to view a mutli res building. The building had furnished suites. Furnished suites command a higher rental rate and can compete with rates on short term hotel rental accomodations.
Some red flags:
1. Cmhc won't finance using the income stream provided in the financials. It will take out the premium and look at rental rates fore unfurnished units when it does its market valuation. That will have a substantial affect on the amount it will loan and subsequently the amount you may offer

2. Furnished suites can result in very short term leases. Too much transition can be a serious issue

3. You'll want to make certain that the leases stipulate something around the "wear and tear" of the chattles provided by the landlord. Last thing you want is a tenant demanding a more modern lcd tv

4. You'll want to really know who your tenants are and where they're coming from that they require furnishings to be provided.

CAPS in general:
In low to mid market were seeing caps these days around 5.5 percent. With interest rates low and some unwilligness by investors to look into equities (there are those buyers who see real estate as a sound investment) and one that you can't overlook market lift on top of the CAP. Still make sure you're getting positive leverage. Take you're yield (net income/purchase price relative to cash on cash (net income less annual mortgage/equity).

For more tips or red flags, please don't hesitate to get in touch.

Best,
Michael Gruenstein MBA CSC Sales Representative
Re/Max Realtron(ICI/Res)
Blog: http://mgruenstein.blogspot.com

C:416.271.2066
mgruenstein@trebnet.com

Real Estate as an Investment in Toronto

2011-07-19T07:43:00.000-07:00

Quickly we're going to look at two vehicles for very different real estate investors.

New condos are still arguably a decent place (with some risk) to invest money over a short term horizon and look for a small but healthy bang for your buck.

If you are fortunate enough to be tied to a broker who has an in with a solid developer, you may be invited as an investor to buy into the development well before it is built. In most cases a developer need sell up to 70% of the units at preconstruction phase in order to tie up the financing they require.

Often this 70% can be sold through these relationships with buyers at this stage buying in for 10%-15% below the planned market value. The remaining 70% will get sold to the average Joe Buyer at a higher rate.

Many would argue that buying in at preconstruction should net you 25k-50k plus depending on the developer, location and when you pull th trigger to sell. Some developers will allow you to "assign" (sell the deed prior to closing to another party) and you should still be seeing a pretty penny for this hurried transaction.

Why does this work?

1. Since 70's there's been few buildings built as rentals. I'm talking about high rises. Most have been developed as condos so renters need somewhere to live

2. we still have 100k plus immigrants a year coming to Toronto to look for work. Before they buy a home many rent. You hold the stock!

A second investment is a small apartment building.

In the Toronto core these days, you're looking primarily at 5-6% returns. Not sexy but certainly better then the bank's GIC rate. You need to be prepared to work though. It's a job. The supply of these buildings is in tight order so Sellers are having their way. You need to look past the cap rate and look as a buy and hold. As such the real opportunity lies in the areas inflation If you can find a building buried in a residential area that is seeing growth...all the better.
The one downside is that rental escalations are tied to the CPI and last year that wasn't showing much growth. As a result, rent increases for existing tenants who wish to renew at a low .7%. But there are accounting advantages on taxes for both property and depreciation.

Much more can be said and needs to be addressed.

If you have the interest and time, please don't hesitate to call me direct.

Stay cool....

Michael Gruenstein MBA CSC
mgruenstein@trebnet.com

Toronto Housing Market: What's the Latest? Plus..some tips.

2011-07-06T07:40:00.000-07:00

There hasnt been an abundance to write about.

Market in Toronto continues to churn out listings slowly.

Homes that show well and in sweetspots are still seeing multiple bids.

Interestingly, there may be a bit of a ceiling these days on just how high buyers are willing to bid upwards. We all know bank appraisals are getting a good deal more stringent.

Also days on market in a number of areas has slowly been on the rise.

Is this the typical slowdown we see each summer? Or is this the sign of ano inflated market begining some degree of a correction.

Economists will argue yr over yr prices have not been rising in a bubble formation as the litmus test is comparing wage growth relative to inflation of housing prices and theyve been rising together thus far. And we always talk about Toronto as a world class city with affordable (on relative scale) prices.

We do collectively know that interest rates cant stay this low BUT when will they go up? US debt levels, strong loonie, Eurozone nightmares, not so hot economic growth, a weak second quarter and slowdown economies in developing nations dont exactly scream for heightened rates.

BUT...they did infact raise rates at many banks yesterday on fixed rate mortgages.

2 litmus tests you should know around financing your home:

1. When you buy..know that a 2 percent increase in rates on a 4 percent mortgage will increase payments by 50 percent. Make sure if you think rates are going in that direction that you are confident in 5 yrs or less when you renew, that you can afford this increase.

2. This is a barometer as to whether you should rent or buy. Some use this. Take the monthly rental payments for the year. Divide the price of the house by these payments. If the number is less then 15..theres ano arguement that it may make sense to own a house. If the number comes in 20 or above..it makes sense to rent.

I didnt make this up and frankly i dont know who to credit. If you dont like it..dont use it!

As always, send in your questions/concerns to my email and my best!

See my website @ http://www.TheSmithsBuyAhouse.com.

Michael Gruenstein MBA CSC Sales Representative Re/Max Realtron http://www.TheSmithsBuyAHouse.com http://www.PropertiesintheGTA.ca Blog: http://mgruenstein.blogspot.com O:416.782.8882 C:416.271.2066 mgruenstein@trebnet.com

Multiple Offers/Bidding Wars...How it all goes down!!

2011-06-15T11:32:00.001-07:00

Multiple Offers/Bidding Wars...."The Stage Production"
No other topic is seemingly so searched on google, as multiple offers on a home, these days.

Heres my take...for what its worth.

Dont let the stage production take you in. This is a chance for sellers and agents to get something going.

Act 1:
Listing appears and the (drum roll).."Offer Date" appears. Buyers get excited and nervous.
Act 2:
Sellers provide preinspection. "Hurry Up Offense".

Act 3:
Showings begin. Typical pattern begins. Agent open house followed by showings, a weekend of open houses and the offer date

Act 4:
Listing Agents update listing with a time for offers to be registered.

Act 5:
Offer day comes.

Act 6:
Buyer Agents call to find out how many offers are coming in and keep nervous buyers abreast.

Act 7:
Offer Time. Anxious buyers and their agents park in a row or line up at listing agents office

Act 8:
Agents present. Buyers wait to find out if they get to make it to second round.

Act 9:
Crown the king and queen. "We have a winner"

Act 10:
Most parties leave beaten up and their agents leave knowing their work is still cut out (some are okay with that, others are scarred!)

Heres the thing. This isnt new folks! When you were in school, you competed (well some of you) for the highest marks. On the soccer field you competed to win. This is a competition and the winner isnt always the winner because they played the game better or were better prepared. Sometimes somebody better suited to meet the mortgage payments, chose to stop short as they lost the idea of "value" on this particular property.

Dont let the production sweep you away. Study the market, understand value, offer what the house is worth (not to you but according to the comps); utilize the knowledge of your agent and understand that their are some benchmarking strategies.

And it wont be the last house...even in a market with seemingly not much inventory!

Good luck!!
Michael Gruenstein

Buying a Home..Who else can you ask for help?

2011-06-02T05:56:00.000-07:00

I was out with some buyers yesterday and showed them that there is a periphery or secondary cast of characters that can help do your homework when you're targetting a home outside of the agent's, home inspectors, sellers and lawyers.

When we got to the house yesterday a very kind nanny was there to greet us. She wanted so badly to be part of the action! So...I involved her as much as I could. I asked questions that I never dreamed I'd get answers to...

1) Any clue why these guys are selling...Response: "i know they've had a number of issues with recurring water". Wow...that's a goldmine to uncover.

2. Have there been a lot of showings here? Have you seen the same agents come back a few times? No not really. Seems a little quiet. I know the homeowners were talking last night about it feeling sluggish. Loving this.

When we were outside looking at the front of the house there happened to be a roofer redoing the house right next door.
Why not, I thought. "Excuse me Roofer...from your vantage point...do you notice anything odd about the roof on this house OR does it look fine? Immediately he was thrilled to let us know that there seemed to be some standing water on the flat roof. Again, this is all very helpful.

Across the street a neighbor was standing outside. Neighbors love to talk. We went and discussed the neighborhood for a bit. Schools, neighbours, traffic, safety, parking situation, etc. Nothing like learning first hand from a 10 year home owner on the street. Geez, we got names of babysitters, where the loud dogs lived, the house number of the old lady who does tailoring.

My point here is that if you and your agent are not "pushy" and "professional" there's no harm in asking open ended questions to learn more then the static MLS offers. Keep your eyes and ears open at all times. There's good info that you can learn from those who have no vested interest in your potential transaction!!

Please send any questions to mgruenstein@trebnet.com
And check out my website at http://www.TheSmithsBuyAHouse.com
Thanks-
Michael Gruenstein MBA CSC

Multiple Offers/Bidding Wars...."The Stage Production"

2011-05-29T14:26:00.000-07:00

No other topic is seemingly so searched on google, as multiple offers on a home, these days.

Heres my take...for what its worth.

Dont let the stage production take you in. This is a chance for sellers and agents to get something going.

Act 1:
Listing appears and the (drum roll).."Offer Date" appears. Buyers get excited and nervous.
Act 2:
Sellers provide preinspection. "Hurry Up Offense".

Act 3:
Showings begin. Typical pattern begins. Agent open house followed by showings, a weekend of open houses and the offer date

Act 4:
Listing Agents update listing with a time for offers to be registered.

Act 5:
Offer day comes.

Act 6:
Buyer Agents call to find out how many offers are coming in and keep nervous buyers abreast.

Act 7:
Offer Time. Anxious buyers and their agents park in a row or line up at listing agents office

Act 8:
Agents present. Buyers wait to find out if they get to make it to second round.

Act 9:
Crown the king and queen. "We have a winner"

Act 10:
Most parties leave beaten up and their agents leave knowing their work is still cut out (some are okay with that, others are scarred!)

Heres the thing. This isnt new folks! When you were in school, you competed (well some of you) for the highest marks. On the soccer field you competed to win. This is a competition and the winner isnt always the winner because they played the game better or were better prepared. Sometimes somebody better suited to meet the mortgage payments, chose to stop short as they lost the idea of "value" on this particular property.

Dont let the production sweep you away. Study the market, understand value, offer what the house is worth (not to you but according to the comps); utilize the knowledge of your agent and understand that their are some benchmarking strategies.

And it wont be the last house...even in a market with seemingly not much inventory!

Good luck!!
Michael Gruenstein MBA CSC

Visit my website @ http://www.TheSmithsBuyAHouse.com
mgruenstein@trebnet.com

Condo Investing Basics

2011-05-25T17:54:00.000-07:00

Quick Condo Tutorial:

Theres been a lot of info of late around condos in the media

Why? Probably has to do with the fact that 6 of 10 solds are condos right now in GTA

The appetite for condos is huge!

And thats a good thing as theres no shortage of supply.

Who is buying? Investors are playing a big role.

Foreign investors to be clear.

Are condos a good investment?

The idea of buying a resale condo and renting it out often doesnt better your cash flow. It takes care of much of the expenses until you hopefully see capital appreciation and sell. But you need to hope that there arent too many like minded investors as youll lose some of your competitive advantage in a strong market should a number of units find their way to MLS.

New condos may be a better choice for an investor. Here you do need patience and the initial downpayment of 25 percent. All goes well if you buy off spec and the units appreciate yr over yr for the 3 yrs until the condo is registered then youre in a good position. Again, you wont be the only guy to have this idea so hopefully the mls isnt flooded with listings.

What some investors will do is beat the lunch crowd and look to sell paper before registration to lessen the competition.

Though theres no shortage of this manouver either. Have your realtor email you the supply in many new condos of those owners looking to assign their offers prior to closing.

Btw..a crude measure for rental rates can be 2.10-2.30 per sq ft depending on a number of factors.

So do your homework and understand the market and the workings of the deal. Nothing is a slam dunk but ______ and ______.

Cheers,
See my website @ http://www.TheSmithsBuyAHouse.com

Do we Buy first or Sell first? What does the Agent wasnt us to do?

2011-05-12T06:46:00.000-07:00

This is naturally one of the first questions I get asked. And the truth is, I don't think there is a right answer. I believe you have to weigh your options depdening on your situation. Your situation depends on a few factors not least of which include 1) area of interest and turnover in that area,
2) will your bank assist you in bridging should you need to carry 2 mortgages even for a month or two
3) how quick do you think your house will sell--relative to your neighborhood and immediate comps
4) do you have a contingency plan as to where you could live in the event you sell first and can't buy in time
5) how long have you studied the market
6) what's your risk tolerance

Look, in a market like today's with seemingly not an abundance of supply in many pockets in TO, the arguement may be that your house, all things being equal should sell fairly quickly but the supply may not be great in the area of interest and result in high demand and multiple offers on the place you want to buy making the purchase end more complicated then the sell.

Alternatively, some banks will just about mandate these days that you sell first so you know what you're dealing with in terms of money to buy and they won't have to set up any extra financing for you or hold their breath that your current house doesn't sell quick enough

There are a few strategies that can help reduce the anxiety and put you in the driver's seat. If you sell first, try and ask for a long closing date to insulate yourself with time to purchase your new house. Of course, inventory narrows in the dead of the summer so keep that in mind as it does in the dead of the winter.

If you buy first, come up with a number (emergency number) that if you had to give away your house you could easily fetch. Of course, you'll get more then that number but insulate yourself so you don't buy too much and then put the pressure on to turnaround and get an unrealistic dollar on your current home.

The job of a good agent extends beyond listing and negotiating homes. It's helping you stay grounded and not getting overly emotional in a market like today's so one can make as informed a decision factoring in all costs involved as well as how the bankers are going to view the transaction.

Some believe that agents like when you buy first as it immediately puts pressure on you to sell your house quicker and gives the agent leverage on you. If that's the kind of agent you feel you have...yikes!

If you have further questions (and you really should) around this..please don't hesitate to call or email anytime.

Best-
Michael Gruenstein MBA CSC
Re/Max Realtron
http://www.TheSmithsBuyAHouse.com
mgruenstein@trebnet.com

Knob and Tube --what a Buyer needs to understand

2011-04-27T16:23:00.001-07:00

I'm not a home inspector and I'm not an electrician. I've been around enough inpsections at this point and bought and sold enough homes in areas like Leaside and yonge and lawrence to know a thing or two.

Here's the deal. Knob and tube is considered by insurers to be a riskier form of wiring. It's not grounded and in the insurers world, safer wiring has come to replace this older wiring. Many homes still have knob and tube wiring and it powers the house just fine.

But...over the last few years and certainly over the last few months, it appears there's been a movement of fewer and fewer insurers looking to underwrite homes with knob and tube wiring.

When you inspect the house you purchase, the home inspector is able to give you some sense as to whether or not the house has any active knob and tube wiring. That's pretty much the extent of what an inspector can provide. Unless the inspector opened the walls and had complete access to the attic, etc., they really have to go on an educated guess based on location of house; age of house and any reno's done where wiring may have been updated.

Now, when you go to get insurance on your house, the insurer will ask if there is knob and tube. When you reply --yes..you will learn the position that particular insurer takes. They may tell you they have no interest in insuring you and to look elsewhere; tell you they will insure and provide you with a binding letter to remove all within 60 days of ownership or at least reduce to say under 25% or 10%.

A client of mine learned this week that TD Insurance who for years was insuring knob and tube homes, has walked away from this business (unless you hear differently).

Some insurers will provide you with a binding letter and then mandate that you have a certified electrician come to the house and infact verify the exact percentage of knob and tube and then slate that into a sliding scale of premiums.

The best you can do is call around insurers and learn their positions before you buy.

There are some niche players who underwrite these homes, few questions asked.

At the end of the day, the arguement is...if you're buying a house to reno, you're going to be updating the wiring to run you're high efficiency appliances so the current state of the wiring doesnt mean much.

Also, paying a premium to insure is an annuity. It often pays to get rid of the knob and tube as a one time fee and update.

These decisions of course find their way into the calculator along with your other costs depending on the exact house you buy.

Do not be afraid of knob and tube and do not pass up a great house because it has it. By the way, most homes with knob and tube are also of the vintage to have water boilers in the basement to heat the house. Guess what....these boilers are often insulated with a thing called "asbestos".

Want other things to worry about....
buried oil tanks
lead pipes
tree stumps blocking old clay pipes carrying out sewage

I'm just joking around. The point is...know the age of the house you're buying. Know what to look for. Alot money for work that may need to be done and if you're lucky enough to find a great character house in one of the best locations in this great city-enjoy it!!

Cheers-
http://www.TheSmithsBuyAHouse.com
mgruenstein.blogspot.com
mgruenstein@trebnet.com

Who is enjoying the Toronto Real Estate Market these days?

2011-04-26T04:56:00.000-07:00

Well the answer to that really depends on what side of the coin you land. Simply put, if you're a Seller in a hot pocket in the city and you've priced the listing well----it's a great time to be a Seller. Supply continues to be low and interest rates are very low. I laughed when I spoke to my Banker this week and told her that for the first time as far back as I can remember, it would make sense to pay off a line of credit with a mortgage (at these rates).

That said, let's look at the flipside of the coin. Buyer's are stumbling over each other's feet in hot pockets. I was on an offer presentation last week where there were 20 plus offers on a semi detached in one of the most sought after areas in the city.

Respecting the privacy code, I won't get into details, but the house sold way above asking. I personally wouldn't feel comfortable repping a buyer and winning in that bid. But hey...if the Buyer is happy (and if they get their finaning), who am I to talk?

It's been very tough to be a Buyer in many areas. Buyer's trying to beat the clock on interest rates and avoid multiple offers may do themselves a favour and pack their bags and leave the market behind.

If you're a intelligent Buyer these days, you're still viewing supply; you're studying the market; you're okay with not purchasing "outliers" (those that sell well beyond what comparables would suggest); you're okay with a bit of a bump in rates; you're understanding the process of purchasing; you're well positioned with an agent who has a few avenues outside of MLS to hedge that you'll hear about any/all opportunities and you're not on MLS.ca every 10 minutes making yourself crazy! I keep hearing how "fun" that is. It's not "fun"! If I really wanted tickets to see the Leafs play the Habs, I wouldn't wait and check a single website every 10 minutes hoping some tickets pop up. I'd "work smartly" to get those tickets and explore every avenue available.

I used the Leaf example because Leaf tickets are almost as expensive as buying a house!!!

Stay level headed Buyer's. We're all hoping to see more inventory these days. There is hope yet!

Something bigger then Real Estate>>> http://www.tjzmommy.blogspot.com

2011-04-24T14:01:00.000-07:00

I decided that over this long weekend, I'd like to pay tribute to an old friend and her family and pass on her story and her life. This is her story. http://www.tjzmommy.blogspot.com Please read and please find it in your hearts to give.

Updates on market and strategies will follow after the longe weekend.

Best,

Michael Gruenstein MBA CSC
Re/Max Realtron
http://www.TheSmithsBuyAHouse.com
http://www.mgruenstein.blogspot.com

When Bully Offers don't work...Enter the..."Poison Pill". DEADLY

2011-04-05T08:41:00.000-07:00

When Bully Offers arent enough. So you bud the line because youre not waiting 7 days for offer date youve got a stellar offer with no conditions and you want this house. So you register your Bully and wait to hear if the seller is enticed. The Seller isnt. Based on showing numbers and lack of inventory, the Seller has decided to wait for the actual Offer Date.

Advantage:Lost!

But wait, surely theres something "new" out there that can keep you alive and force the hand of the Seller in the wake of 10 competing bids on offer date!

Welcome the slowly increasing practice...the "Poison Pill" Offer.

Buyer Agent brings in what they believe to be the best offer and gives the Seller 20 min to decide or the offer is dead. A really risky move that can backfire but one just worked leaving 6 agents getting calls in their cars that the Seller just accepted the Poison Pill Offer and all 6 who have yet to present are done for the night!

What's next?

To learn more or chat around this..call or email anytime

Cheers-
Michael Gruenstein MBA CSC
Sales Representative Re/Max Realtron http://www.TheSmithsBuyAHouse.com http://www.PropertiesintheGTA.ca Blog: http://mgruenstein.blogspot.com O:416.782.8882mgruenstein@trebnet.com

Preapproval Certificate VS Mortgage Disbursement -You were preapproved but your house was rejected!

2011-04-04T07:22:00.000-07:00

I'm going to make this entry quick. Really, this is your bankers or mortgage specialists job to explain....but it impacts you and me and some financiers aren't doing a good job explaining how this works.

When you go to your bank of choice and apply for a mortgage, you are taking the first step, looking to be "PREAPPROVED". Let's not get technical. All the bank does at this stage is look at your credit scores and your income and debt levels and ensure that you'd be able to service the extra debt burden known as the mortgage with your current income stream and your current debt obligations and that no more the 35% of your income is being eaten up by paying your monthly mortgage.

On top of the mortgage amount the bank preapproves you for...you then put your downpayment. The total of which will determine the HOUSE PRICE you can afford.

Now, you're well into the game of looking at homes. You've located a home and are bidding on it. You win in the bids. NOTE******* your bank sometime before the closing date will send an appraiser to the property. The focus now shifts from you being able to afford the debt to the bank believing that you paid the right amount for the house. Should they dispute that number, they will forward the mortgage amount but you will now have to increase your downpayment to offset the lowered valuation. Remember the bank is using your house as collateral in the event that you go bankrupt or the market shoud correct, the bank wants to feel as good as they can that you paid "market value" for the home you purchased.

In today's environment with low inventory and plenty of bidders, some buyers are paying wacko dollars for homes. Maybe they didn't understand that the preapproval differs from the final mortgage disbursment which takes place following the bank satisfying themselves with the purchase price on the agreement. Some deals are struggling to close of late b/c the valuations the buyers aloted to the home just don't add up.

So now you know that the bank first approves you as a Buyer. Later and only after you buy does the bank approve the actual house!!

This needs to be understood by erach and every buyer and again a claim can be made to use an agent who knows what's going on in the area of interest to you!!

Keep the comments and questions coming by email.

Cheers-

Michael Gruenstein MBA CSC
mgruenstein@trebnet.com
http://www.TheSmithsBuyAHouse.com

Calling all Inventory?? Toronto Market not supplying the homes

2011-03-30T13:06:00.000-07:00

Well for the last few weeks us realtors have blamed the slow inventory roll out on the obvious---March Break!

March Break is done and the inventory isn't there...yet.

So buyers are scrambling to buy homes and tripping over each other.

I've seen some mind blowing sales of late in areas like Allenby and Yonge and Lawrence for example.

Homes are going for big bucks! Winning in multiples these days can get one sided. It's tipping towards the sellers side with the prices some homes are selling for.

I've said it in a previous blog...be careful if you're a buyer in this market. Yes, it is challenging to figure out market value sometimes and there is a range of values. But, paying beyond this range can create problems. The most obvious problem is the financing on the property. Some bank appraisals are coming in lower then the price the buyers pay for the house. The buyers are left to make up the shortfall.

Why the lack of inventory?

My best guess is that the tradeup is getting expensive.

Take a small family of 4. Suppose they live in a detached valued at 700k in a decent neighborhood. Now, they require a main floor family room, a 4th bedroom, an office as well as a rec rm in basement and a driveway for 2 cars. That very house in the same area they fell in love with may now be 1.2 million. After they net say 400k after remaining mortgage, they may have a downpayment saved up of 50k-100k and they require a 600k-700k to trade up. Some are prepared to do this...while others are not.

So if the 700k homes aren't opening up then the market stalls. All the while with low inventory what was 600k before is the new 700k!

So it's tough. But, the arguement remains that this is our new reality and people are typically better owning and building equity, all else being equal.

There is still nothing like owning a home. And when people today see what it costs to rent relative to interest rates on a purchase, it still makes sense to buy.

Here's the thing ...affordability and bubbles are measured by the rise in income relative to the rise in home prices. Over the last many years, they've risen in tandem which doesnt suggest an overheating or bubble. But..lack of inventory confuses everything!

Cheers-

Michael Gruenstein MBA CSC
http://www.TheSmithsBuyAHouse.com
mgruenstein@trebnet.com

Buyer too smart for his own good! New campaign slogan "Buy Responsibly"

2011-03-24T11:06:00.000-07:00

True Story:

A buyer of mine lets call him "Jack Bum" and me had been looking at homes together for the better part of 7 months. Let me give you a rundown of the value added "Jack Bum" received:
-mls listings on day 0
-non mls and exclusive listings thru my contact base (so he's seeing more product then just about any buyer out there)
-explained market value and pricing using 3 different methods so he could go into the market with as much confidence as possible. Homes are priced all over the map and selling all over the map
-lessons on strategies for setting up for offers and how to best position yourself in multiples
-countless hours of coaching

So...heading into month 8, this buyer decides to stop in at an Open house on his way home. He puts in an offer with the listing agent.
He buys the house. Feels guilty and doesnt want me to know.,

Finally I find out. I inquire as to which house.

Here's where we both lost out.

The particular house that he bought had been on the market for 2 years with 4 different agents. The house wasn't discussed as it was above his range.

This time around the house was still above his range but less so. The 4th agent dropped the price a tad. Jack Bum had no time to waste and put an end to our 7 month relationship for the big victory.

Punchline: House had been marketed for years. The owners were prepared to take much less then asking price but felt that in this kinda market maybe they'd find someone desperate enough to get into the area and they'd overpay. Jack Bum wins!!

I had to tell him that going around me probably didn't save him any money (many agents don't have that sizable reduction if they double end a deal, if any deduction).

Anyhow, I had to inform my client that if he thought he saved 10k, I could have saved him six figures b/c everybody in the industry who worked the area knew that these sellers were leaving town and needed to sell.

I lost a good client and my too smart client lost over 100k easily.

Moral: Don't be too smart and too desperate to get a house. "Buy Responsibly". This may be my new campaign slogan.

For more information, call or email,

Michael Gruenstein MBA CSC
http://www.TheSmithsBuyAHouse.com
http://www.mgruenstein.blogspot.com
mgruenstein@trebnet.com

Happy Hour--the realtor meets the disgruntled buyer over drinks

2011-03-18T07:29:00.001-07:00

Two guys in their 30’s enter a Toronto Bar in the trendy distillery district. It’s happy hour. At least that’s what the clock is flashing. Mike, a 30 something Toronto born realtor sticks to his Friday single malt while Trent spices it up with a Caesar. It’s minutes from taking place. That is…the small talk that ends a work week. Mike’s business relies on his networking ability and though it’s been a tough week and he’d prefer to stick to the head down on the bar approach, that little voice inside him tells him he needs to reach out and follow the real estate mantra of “adding prospects to a database”.

So here it is. The moment: ”Hello, I’m Mike. Let me guess..Bloody Caesar? Either you’re not much of a drinker my friend or you’re going light as it’s been a pretty good week for you?”
“50% accurate Mike. I’m Trent and I’m not much of a drinker. If I were, I’d probably skip the food coloring of the Clamato and hit the vodka”.
“Talk to me. What’s got you down Trent”?
It’s nothing really. In the big picture it’s really nothing. Or maybe it is. Maybe it’s my future? I’ve been shopping for a house in this Toronto market for well over a year. I’ve been listening to the pundits and naysayers explain that we’re on the cusp of a 25% correction anytime now. Yet, the US continues to pump money out and hold interest rates low so something’s a miss. Even when the Canadian economy looks to keep rates low, corporate earnings, demand for commodities and a strong dollar seems to foster an environment that seems anything but corrective in nature. I just feel like I’m never buying a house in this market. To make matters worse, there’s almost no inventory to speak of, so when a house that shows well hits the market, there’s a backlog of buyers interested in it creating a multiple offer situation that ends up with a sold price well out of the reach of our budget. We were once 700k buyers so 649k homes were our game. Now it looks like we’re gonna have to somehow get excited by 599k list prices. A 599k house isn’t what we imagined buying. So I drink this Caesar wishing I was toasting a victory this week, instead we lost 2 more homes.”
“Trent, your story is being echoed across the city. And on top of your purchase price you now have stricter mortgage rules (which may be a good thing depending on how financially sound you are) and you have 2 land transfer taxes and increasing property taxes just around the corner when they’re reassessed in 2012 for the next 4 yr cycle.”
“Mike with all due respect, you’re kind of like the enemy. You must be having a good time Mike. Agents are digging this market, no?”
If you’re on the right side of the equation, it can be fun and financially rewarding. My business like many realtors is split between listing properties and filling buyer mandates. When I take a buyer to see the few listings available, the Buyer is already flash forwarding to just how much competition he will face on the date of offers. 70 plus cards are falling out of the bowl used to contain the agent’s cards who have showed the property. Sometimes were not even making it to the date of offers with some buyer really gunning for the house and attempting to squeeze the seller by looking at an offer prematurely, known as a “bully offer”. If the Seller likes it..the house never makes it to day 7.

“Look Trent, agents are not the most liked group out there. What the public doesn’t understand sometimes is that we can report to work every day and work an honest 30 days and not bring home a dollar. Every agent will tell you the story about the long time client who suddenly disappears and once they’re confident with the market they buy through the listing agent (usually a big mistake) or they invite their mother law in to finalize the deal and collect the commission. Being a realtor is not about collecting easy money. You’ve got to have thick skin and you have to learn to size up people to determine if they’re going to be loyal to you. So yes, listing property in today’s market is pretty straight forward depending on the area. Some still need a real push and clever marketing especially if priced at the absolute top of the range”. But working with buyers has become an exercise of hand holding and constant dialoguing convincing the buyer that you are the right fit; more inventory will come; you are using alternative methods to find a house for them; and proving over and over that your knowledge of the market is unmatched” Finally you have to look your buyer in the eyes and explain that though the house is asking 799k, it should sell for well above, perhaps as high as 920k depending on how low it was priced; the competition (in this market of late, little); the comps that have sold; and of course the number of offers that hit the day of. So in effect, you are the buyer agent whose traditional job it was to help your Buyer bid down the asking price, now bid up the purchase price. It’s a different role Trent, even in the last decade I’ve been working my tail end off to get Buyer’s into homes. The final twist…some buyers are simply overpaying for the property. Yes, they were preapproved based on their earning for a mortgage of x amount. But when they bring a firm offer and purchase, remember the bank has yet to appraise the property. About 1 week before close the bank will appraise and they may come back to you and say that the money you paid doesn’t align with the number the bank has appraised the house at. To save the deal the Buyer may need to come up with the 100k difference and raise their down payment. So knowing market values, and doing your homework may be more important now, than ever before.”
“Trent you want to own a house. I’d like to sell you a house. Fortunately I have patience; knowledge; proven strategies for negotiating deals and resources that should get you comfortable even before we start seeing homes. Bottom line…it’s getting harder for you the Buyer and it’s certainly not getting any easier for me the Agent. The way I see it…we can both sit in a boat being rocked by waves or we decide to grab the oars and move in the right direction. What do you say I buy you one more drink Trent? Such a pleasure to be quoted 22.00 for drinks and not have to pay one dime over. Wait…with so much demand for scotch, I suppose we could orchestrate a bidding war?
Michael Gruenstein is a GTA realtor. He recently had the pleasure of working with a first time buyer couple. The couple, John and Jill didn’t know it when they signed on, but they were about to have a heck of an experience. From multiple offers to understanding market values to home inspection limitations to title searches and the games that are played, this young couple were put through the ringer.
When the couple finally bought a house, they joked that their realtor should write a short story on their experience so others could learn alongside. Michael took it one step further and created a website that traced their experience from the initial interview to getting the keys on closing. The website and blogs (regularly updated) serve as superb resources for those entering the market for the first time or those buyers looking to downsize who have been out of the everchanging market and need a quick refresher course.
http://www.TheSmithsBuyAHouse.com and
http://www.mgruenstein.blogspot.com

Buyer's Beware....Don't rock the boat too hard and tip it.

2011-03-11T09:49:00.001-08:00

Was that a catchy title? Maybe I'm getting better at this?

Here's the deal. We've talked about the lack of inventory primarily in the central Toronto core. It doesn't take an economist to understand that if prices are going up and interest rates are still at all time lows AND it's springtime AND there's a lot of buyers needing roofs over their heads....then there's going to be competition for good homes. Good homes may be defined as those near transportation or major arteries, with parking; decent layouts; updated (either by way of mechanics or by renos OR both).

So, I like many agents have experienced a number of multiple offers over the last few months. Always nice sitting with the Sellers on these nights. The Buyers duke it out until 2 are left standing. The 2 (or maybe 3) combat UFC style for the house with the ultimate winner crowned.

Here's where the "don't rock the boat" part comes in! Buyers may fall in love with a house, know they can afford it, be tired of losing and decide to go "all in" to win the house. So, they spend a "big buck". "Big bucks" may be okay if it's the "right" house for the buyer given their budget and their circumstances and assuming they've done their homework and then some. However we need to distinguish "big bucks" from "sky high dollars". The latter can be the "boat rocker". The latter can create an issue that both the Buyer and Seller (yes Seller too) may need to think about.

You see, if the Buyer is getting mortgage financing (especially if the Buyer isn't getting a conventional mortgage and is putting the house in the care of CMHC hands to be insured)...there will be an appraisal done. Now, if the bank disputes the value paid for the house, the Buyer may find themselves either shopping for other sources of financing OR figuring out quickly sometime near closing how to increase their downpayment to make up the difference they thought the bank was financing!

Appraisals are often finalized weeks before closing, so the Buyer and Seller often don't know until there's little time to correct. In some cases, little can be done and the deal doesn't close. Is this happening? It is.

I'm very adamant with my Buyers that they stay well within a reasonable range and encourage them to have open communication and cement a strong relation in this kind of market, with their banker/mortgage specialist.

So, Buyer's this should be good news to you. Get out there. Again, do your homework. Know your budget and have a good grip on market values and comps. If your agent can make you see where he/she is getting his/her valuations from and it makes sense to you---great. If you get the feeling your agent is looking to get paid and they're encouraging you all to quickly to put that "huge number" on the offer...ask yourself if this is the best move for you.

Happy March Break to those lucky enough to have time off. For the rest of you, it's a great time to give me a call and talk about the market.

Visit my website http://www.TheSmithsBuyAHouse.com

Best,

Michael Gruenstein MBA CSC
ReMax Realtron
416.271.2066
mgruenstein@trebnet.com
http://www.TheSmithsBuyAHouse.com

Multiple Offers...Are they good? Are they fair?

2011-03-01T14:04:00.000-08:00

I'm not going to define "good" and "fair". I'm just going to mention that it's been my experience over the years that one party favors the practice and another can't stand it. Where it gets really interesting is when the party that favors it, turns into the party that wants it abolished.

When you sell your house...if your house shows well and is priced under market value or damn close (especially in a market with low inventory and low rates) you'll likely do quite well and be happy that you attempted an offer date. Why with some homes selling 100k or more above ask...it's gotta be great to be a seller with 13 offers on the table.

But wait...where did you stand in the realm of the offers submitted. Were you the victor? How much did you beat the second in line? Often this kind of thinking will make many buyers crazy. I've always told my buyers to somehow pretend that they're the only ones bidding on the house that night. It's a great house and we decide what fair market value for the property is based on the work we've put in. That way win or lose, most of the buyers feel like they put their best foot forward and didn't go in to lax or to bullishly.

With the practice of multiples all too common in this market, sellers are having a field day (again if they've priced well and show well).

But...these sellers will taste the other side when they become buyers, should they be buying in the similar market.

So...maybe it is fair and the shoe fits both feet so to speak?

The clear winners are those downsizing and putting money in the bank, but if youre young and moving up...you're at a good stage in life too!! Just not when you're buying a house in this market.....until you win.

Inventory should increase. The competition often helps level the playing field somewhat. Also with headlines in the media these days about household debt and rates to rise and new mortgage rules to hit soon, it's possible it'll be a kinder place for buyers. So keep learning the market and get a good agent. They do add value. Not sure they do. Visit my website @ http://www.TheSmithsBuyAHouse.com

best-

Michael Gruenstein MBA CSC
416.271.2066
mgruenstein@trebnet.com

Random Thoughts on Toronto Housing Market by Michael Gruenstein

2011-02-22T07:16:00.000-08:00

I'm going to throw out a bunch of random facts/ideas that may be of use to you if you're looking into the real estate market this spring: pt 4 in list below is a little out of context (just saying)

1. Bully offers are back.

There's been little supply in many areas and pent up demand. An urgency by some buyers to beat the March 18th deadline and keep their preapproved low rates is causing some buyers to do whatever it takes to get a leg up before the offer date.

2. Taxes-

there are 2 forms as a buyer. The first is the landing tax or the land transfer tax. A toronto portion and a provincial portion are paid by the buyer on closing. Note, there are rebates on both at source when you're a first time buyer

The second tax is property tax. Propety tax is little understood. In Jan 2008 the city did their appraisals from which to base a tax billing for the next 4 yr cycle. The increase of the 2008 amount over the prior period is then divided in 4 payments and each yr the value of the house increases and hence the taxes paid as a percentage of the house increase as well. Until we get to the 2012 cycle.

3. Order of Payments in an Offer-

If you successfuly bid on a home and win then you have 245 hrs to supply a certified cheque. It holds the house while you preform your due diligence. This deposit money is often approx 5% of the purchase price of the house. If you're taking this money from an RSP, make sure you order the funds out 90 days in advance or they won't be ready. The deposit forms part of the ultimate downpayment you will pay in addition to any adjustments plus land transfer plus moving costs plus borrowed funds on close.

4. I'm up to 2 afternoon delight showings now. I walk in with clients and find a couple of lovers showing the utility offered in the bedroom. Always fun!

5. A home inspection is limited and needs to be treated as such. Note obvious restrictions include in winter months-inability to study the foundation where it meets the earth, limited roof access, inability to check if a/c works and always limited ability to determine just how much knob and tube wiring is active. Really it's guess work. You're taking the house in similar condition to how it read the date of the inspection.

6. When you get a new mortgage on a property and take posession, theres typically a interest adjustment date for your first payment. you are paying an interest payment pro rated for that month. this may provide some breathing room.

7. if you're a commercial buyer right now---banks are tough to squeeze money out of and cap rates aren't very aggressive. but still a good investment if you can find the right one.

8. though we're seeing some positive numbers from the US, labor and housing markets are still not looking good. Most recently Canadian inflation looked tame and with the strong loonie, it doesn't look like there's imminent pressure to raise rates. Though the Middle east conflicts are certainly raising oil and gold prices and ultimately that could lead to globabl inflation. something to watch.

9. work out the scenario with your individual lender in terms of how bridge financing would work in the event you needed funds short term as you're taking posession before your current residence closes. don't leave this for last minute.

10. ask a lot of questions! there's so much more to know, including how to valuate properties in a market that should soon see prices all over the map!

Thanks,

Michael Gruenstein MBA CSC
http://www.TheSmithBuyAHouse.com
mgruenstein@trebnet.com

why must you be such a "bully"? simple..to get the house I want!

2011-02-13T07:59:00.000-08:00

It's back folks. It's Spring. It's buying season in the GTA. Interest rates are low with a push for the next little while with the new mortgage rules.

So you're looking in a hot neighborhood for your next or first house. You're out their hitting the pavement (hopefully scouting the inventory as early as you can with a competent and effective value adding agent).

I once wrote a blog and refer to this on my website http://www.TheSmithsBuyAHouse.com---those using MLS.ca are almost sure to be out of contention. You're just not buyers. You're lacing up your skates in the 3rd period frankly.

It's happening more then some would like whereby an offer date is set and then somebody swoops in and steals the house from right under you and its off the market. In most cases, you had a fair shot at it...so don't complain to me.

Get in and see homes early. If you're interested your agent should know how to make sure your in contention from the beginning. 2 homes this week decided to change the offer date because a "bully offer" (typically a verbal offer to listing agent giving the sellers the price they'd be willing to not wait around for the dogfight to get and the closing they require). In some cases, the listing agent ammends the listing an hour before and has no interest in calling the other agents to see if their interested buyers can mobilize. That's not good form.

Most other agents will call around to find out if any other interested parties would bring an offer in advance of the posted offer date (sorta in the best interest of their sellers to collect as many as they can). Sellers get antsy and if a number is dangled infront of them that makes sense and excites them, they realize it may not be their in a few days and so they oblige to look at the offer prematurely.

Voila...the house is sold! How you doing on MLS.ca. It's day 2 of this listing and guess what...chances are it didn't hit MLS.ca but it's already sold!

Not every seller or agent subscribes to bully offers. Infact most don't. But it's worthy of knowing about and taking precautionary steps.

How you ask??? I'm giving free (and pretty good) advice too often I'm told. I need to keep some competitive advantages for my clients!

If you're looking towards the market these days; new mtg rules; multiple offers; pricing and valuations have made the landscape a little tricky to navigate.

Call or email anytime. Be happy to speak.

Cheers-

Michael Gruenstein MBA CSC
http://www.TheSmithsBuyAHouse.com
mgruenstein@trebnet.com
416.271.2066

Residential real estate is cookie cutter!

2011-01-31T11:30:00.000-08:00

I was out with a good friend the other day. He's a bright guy and usually a nice guy. When he said to me that "residential real estate is cookie cutter" I was a little surprised.

For those of you who know me, I wasn't going to intimidate my old 6'4 pal with my built.

Best rebuttal would be a challenge. By the way I sold this guy a house last year. And it was a pretty complicated deal so I'm not sure where he got the idea it was easy.

Here's the scenario I gave him;

A buyer locates a house they love. There's an offer date on the property.

After viewing the house they need to devise some strategy for the offer date.
-How much will they offer?
-How many offers will they compete with?
-What have comps sold for? If comps are plentiful, you use the best available and make all your adjustments-time; size; lot size; mechanics; parking situation; basement; # washrooms; ensuite; bedroom sizes; location on street; street itself, etc.

The inspection reveals that some work needs to be done;
-new roof
-new furnace
-grading issues
-knob and tube wiring exists. Not sure how much at the time of inspection. They have some work cut out around insurance issues.

The survey reveals that there is an easement at the back of the property. It's a substantial easement. The easement no doubt affects the use and enjoyment of the property.

A family room addition was completed in 1999. There's been 2 owners since so permits aren't available. It's being sold "as is" The survey does not show the family room addition. It's an existing survey.

The parking is a mutual drive with a pad park infront of the house. Though there is no legal permit for the pad. The owners claim it has been grandfathered and can be used as is. There may be some considerations here that affect enjoyment, use, resale value.

The mechanics are updated though it's known that these homes all contained oil tanks some 70 years ago. There's some investigating necessary around the oil tank.

It's an estate sale. Closing may be complicated while awaiting a certificate of appointment. The closing may also be pushed back week after week so make sure you have a contingency plan if you have a house to sell.

On the finance side, you may have some work and costs involved in the event that you close on your purchase prior to getting the equity out of the sale of your current address.

At this point my big buddy conceded that there's a few issues that he may have overlooked.

I've always been okay with the fact that I'm not doing rocket science for a living but I do have specialized knowledge and the more transactions I see, the more I can say no two are the same.

Cheers--

Michael Gruenstein MBA CSC
http://www.TheSmithsBuyAHouse.com
http://www.PropertiesinTheGTA.ca
mgruenstein@trebnet.com

Looking Inside A House....at its "guts"

2011-01-27T08:47:00.000-08:00

Here's me (an agent not an inspector) giving you some basic advice when you start looking at homes.

Not unlike us, homes get tired. Some get really tired. Nothing is built to last (forever). Most homes work in 20 year cycles. I've written about this before I'm pretty sure. But 90 blogs later...I'm losing track.

Anyway, a furnace, air conditioner, roof, windowws, plumbing and wiring make up most of the mechanics of the house.

If you've located a house you like...here's the tough decision if it turns out that the house is nearing that 20 yr cycle.

What's your budget like after land transfer tax and some renos that you'd need to do to be satisified with the property. I ask because in the event that the furnace and all other mechanics have had their day...you may be looking at 25-50k in mechanical work that you may need to put into the house the first year you take possession.
You'll wanna factor that into your offer price.

The Sellers are responsible for keeping the house in "working order"...so if the mechanics are old but heat is being distributed and the windows aren't cracked, they have every right to say it's in working order. Of course, you have every right to offer what you feel the property is worth.

THE LUCKY homebuyer finds the house at the 5 year mark on most mechanics and a seller who has taken to servicing the mechanics regularly.

Knob and tUBE:

Many older homes have this wiring. In some cases it has been replaced where renos have been done, for ex a kitchen. But bedrooms and some fixtures still have working strands of the wiring. The tricky part with this wiring is that the inspector can only "guess" at how much of this wiring is in the house. Basic removal of receptacles for light switches or in an unfinished bsmt it may stand out. Otherwise you really don't know until you buy. Once you buy, you have options. A few insurers will cover at a premium, others will mandate that if you can prove that less the sat 20% of the house has knob and tube...they're ok to insure, still others will force you to rid the wiring within a specified time period.

Asbestos:

I get asked about this all the time. Asbestos is like a band aid that is used to insulate pipes and keep the contents warm. It can be found above a water boiler in the basement; it can be encased in ductwork; it can even be in certain glues as a mold on older linoleum type floors. So when you do renovations you want to hire a team that is conscious of the age of the house and takes caution when removing old boliers or flooring for example. Undisturbed asbestos is not much of a concern for you.

Water:

Water is a problem for all homeowners and most homes have seen water. When you look at older homes in say North Toronto you may find markings on ceilings and patchwork. You're probably right to guess that it is water. Here's the thing: if it was the sight of water but was taken care of and just the owners did a crappy patch fix on the ceiling---that is one thing. What you need to concern yourself with is if water is still "active". If it is...this can be a costly repair and you better budget for it.

Thought I'd arbitrarily point these things out. They came up last night during a showing with some clients and I felt it worthy of a quick blog.

For more information about homes or the market...don't ever hesistate to call.

Best,

http://www.TheSmithsBuyAHouse.com
http://PropertiesinTheGTA.ca
mgruenstein@trebnet.com
416.271.2066

Sellers Beware: Home Inspection Complete and Abatement Requested

2011-01-20T13:01:00.001-08:00

Sellers see this all the time. A Buyer makes a conditional offer. One condition involves a home inspection.

Of course any seller of an older property in the City of Toronto will be concerned about what gets revealed during the inspection and how the Buyer reacts when the Inspector reviews his findings.

The Inspectors in the City are pretty good and from my experience, very few are out there to ruin a deal. Some are though. Most inspectors pass on their findings and then the concern is how the Buyers take this information.

Here's an example. I sold a property (my listing) a few days back. It was a 60 year old detached. The wiring had been updated over the years. It had an oil tank and an old furnace. As well as an older roof. Otherwise the property was in impeccable condition for its vintage.

I've explained this before in a different blog; mechanics in a home have a lifeline. Major mechanics like a roof may last 15 years, a furnace 15-20 and windows 15 yrs. The hope of any Buyer interested in a specific property is that the mechanics have been updated recently. In some cases it's a total victory. In others, the mechanics may all be reaching their natural lifespan. In the latter case, there's going to be a caution from the Inspector that the major mechanics may last a week after closing or months but even years.

Often Buyers will go back to the Seller asking for an abatement (money off the purchase price). So...should the Seller comply?

Well that all depends. How much demand is their for the house? How much are the Buyer's asking for? Is it a good deal and worth losing some money to finalize this deal? These need to be explored.

Technically speaking...the Seller is responsible to deliver the house in working order including all mechanics. If the day of the inspection the mechanics are in working order, they should be in similar working order on the date of closing.

A resale property is just that. It's not really the responsibility of the Seller to see to it that they purchase a new furnace for the Buyer or a new roof for that matter.

This issue creeps up a lot. Its a delicate line. Deals can fall apart over this; require further negotiations and certainly close to the Seller standing pat or giving in to some form of an abatement.

Its been said many times but a "good deal" is one where both parties feel they've "won".

Cheers-
Michael Gruenstein MBA CSC
http://www.TheSmithsBuyAHouse.com
mgruenstein@trebnet.com

Are we missing something?Are these new mortgage rules to slow down a bubble and restrain people from getting over their heads? Really? Not so fast!

2011-01-18T08:29:00.000-08:00

I don't mean to sound like a cynic here.

Truth is that over the last few years the banks in Canada have come up with creative ways to reduce the chances of a housing bubble.

In an environment where the US has such low interest rates; a strong loonie; emergency lending rates; people willing to go into great debts...naturally borrowing is going up.

Inflation being light or reasonable and the strong dollar domestically doesn't leave room to cool the market by raising rates.

So tinkering with mortgage rates and rules to keep people away from market who may find themselves buried when rates rise (the very same ones who may look to ammortize over 35 years to make it affordable to buy) is the next best idea the government has.

If we slow down borrowing and the heated res market, then perhaps a bubble won't burst and consumers won't find themselves in deep shit. When consumers run 70% of your economy, if they go belly up (or down), you've got big problems in your economy!

Here's the thing...guess what has happened in these 3 recent instances:

1) HST is introduced
2) Mortgage rates and home lines of credit rules are tweaked so that buyers must satisfy 5 yr fixed heightened rate to qualify
3) Mortgage rules changed so that buyers can't amortize over 30 years and you can tap less of your houses value for money

In each one of these circumstances, there is a deadline for the rules to kick in.

The net result::

There is a surge of activity in the markets. Buyers feel like they better run to the bank and leverage the existing rules and buy. So more homes sell. In fact the numbers spike. And then the arguement is that they should taper off when the new rules hit.

I also can't help but wonder about the timing. Introducing further rules to restrict the ease of mortgage credit and having a commencement date of 60 days....that takes us right to the heart of the "spring market"....the busiest season for buyers.

Buyers will come out of the woodwork and figure out ways to get excited and work on their banks. Banks are still in the business of loaning money. Hey in the US, the banks are keeping rates low so money gets lent.

Anyway, what I'm suggessting is that all these attempts to slow a bubble and restricty those buying homes, when passed thru the media with a looming date of changing rules, seem to get the mortgage lenders, banks, realtors and buyers and sellers excitable and we actually get a further push into the market!

Real Estate Myths....when buying or selling in GTA

2011-01-11T12:26:00.001-08:00

Whether you flip homes for a living or are looking to purchase your first home, there are many myths about buying or selling. Be cautious: Here are just a few that immediately come to mind in the 10 min I have before going out to do an offer for a cherished buyer of mine.

Myths:

1. Your first offer is your best offer.

No doubt this was invented by a Realtor who was looking to close a quick deal and fire up the paperwork. I've had offers the day of a listing release that didn't compare to the one that came in 3 weeks down the road. I do believe there is a "right" buyer for your house. And I do believe the "best offer" is just that..."the best offer for .....you"!

2. In multiple offers, you'd better have the biggest offer price.

Not always the case. Preparation and a clean offer can be worth more to a seller than 10k. If the seller needs a quick closing date or needs to have a clause that he/she can extend the closing date...if a buyer can meet these specific needs...this can help win the house. Your agent needs to learn the motivation and needs of the Seller before the offer presentation.

3. Selling in the spring market gets you the biggest buck.

Not always. There's a lot of competition in the spring market. If better featured homes then yours sell for x amnt, then you may have to settle for less. Probably a truism when you have the best looking house on the street. Sometimes selling in the dead of winter with no competition is the best time to sell.

4. Prior to selling...redoing the bathrooms or kitchen will net you a lot more then the cost of renovating these areas.

If you use high end finishes and make sure that your choices are neutral and you have good layouts and user friendly space to work with...yes, it should be the case. But if you bang out a mediocre bathroom or kitchen, depending on the price point, if the buyer thinks that its not suitable, he/she will not pay your for the upgrade in the way you hoped. Frankly, if they're going to redo it anyway, you should have left it alone in the first place. You may now be eating into your return.

5. The best home inpection company will find the issues with the house.

While there are better inspectors....if you purchase a house in the winter, depending on the exact day...most companies will not be able to look through the snow and ice on the roof to detail the state of the roof like they would in the summer. The snow around the perimeter of the house makes finding foundation cracks on the exterior more difficult too. Also, you can't test the A/C in freezing weather. So no matter the inspector, winter buying has some risks.

6. Always sell before you buy or buy before you sell.

This is the toughest one. You need to know your specific circumstances. You need to determine|:
-whats the inventory like to buy in my range
-what's the competition like to sell my house
-will your bank help you bridge finance? what are their specific rules and costs?
-if you sell first do you have a plan B if you don't find the house you're looking for?
-if you buy first...lowball what you'll get for your house so you're not surprised

7. Seller always keeps the deposit if the deal doesn't go through.

Luckily I haven't been thru this scenario. Here's the thing. The money is held in trust with the listing brokerage. In order for it to be released to the Seller it has to be legally directed. In other words, the Seller may have to go to court to get the money. The Seller may sue for damages should the seller have to resell property in a less hot market. For specifics here...speak to your lawyer.

8. If you buy a house with a legal pad park then it automatically transfers to you upon close.

New rules state that the new buyer must reapply for the legal permit to be in order.

9. If the current owner has a street parking permit for his second car, then you'll have no trouble getting one too.

Better double check with the city here. Many streets actually have waiting lists for street parking. You can check prior to making an offer of the status of this so you aren't buying a parking 3 streets away!!

10. All agents do the same job! So I will use my sister in-law who is part-time!

No way will I accept this. I work too hard to accept this.
Go to http://www.TheSmithsBuyAHouse.com and learn more around this and me!!

Cheers-

Condo's-Good Investments? What's going on out there?

2011-01-11T05:40:00.000-08:00

Are Condos a good investment?

You'll get many different answers here, depending on which economist you ask, which builder you ask, which renter you pole, which realtor you interview and which condo owner you ask and finally which building you are focussing on when you ask this question.

Look, in the perfect world, one would buy a condo off spec from the builder and pay entry level prices. Then the condo would be built and owners absorb their units. If the market is participating with low interest rates and a large buyer pool (particularly first time buyers)--you're going to likely be happy with your investment should you decide to sell.

That game is old. Where it gets tricky is when you factor in economic realities. So for those who bought say 5 years ago and moved in a year ago and decided to sell...it may not be quite so simple. Whats going for them is, 1) interest rates are low 2) strong pent up demand 3)prices have increased.

Now the tough part. If everyone decides to do the same at leverage this strong market, multiple units hit the market at the same time. So now a buyer is left scratching their head at the numbers and whats going on in this building that everyone wants out. For some it has been drilled into their heads that home is where you lay your hat and if you bought and immersed yourself in the purchase of your condo, you'd likely live there upon completion. Often not the case. With that many units for sale, naturally the supply outstripping demand, buyers have the upper hand on negotiations but still may not feel great about moving into what feels like an "empty" building.

I just ran into this scenario in the central core. On MLS my buyer and me found 3 units available. When we got there, the concierge showed me 25 lockboxes. There were so many available that sellers didnt want the impression that everyone was selling. So they asked the doorman to advertise the units for sale and let agents know they exist upon requesting the keys for the units booked through MLS!!

Another issue with new construction that you just won't know until down the road is the mix of renters versus owners. Renters dont have the same vested interest in the upkeep of the building and have little interest in talking the building up and continuing the marketing job after the developer has left the building, the same way that the owners will.

That said, we also run into a square footage issue in Toronto development. At 500-600 dollar a sq ft and little new inventory being built in the 1000 plus sq ft range (for obvious reasons...a developer can squeeze more units in and there are more buyers in lower range then higher range). So new construction is often built with open concept and light colors and big windows and tall ceilings to create a larger feel. The good news is that the finishes often rival those of detached homes. And if youre lucky and do your homework, you can find a good split plan open concept building that suits your needs. Layout in this ftg is everything in my opinion.

Finally, its the age old arguement of fees. It's true that the sexier buildings are often sold with the pool, gym, billiards room, concierge, spa, dining room, movie room, etc. All those amenities clearly increase the fees. If you're going to use the amenities-wonderful. If you're not, think twice.

Often older buildings have stronger reserve funds/savings for rainy day stuff. But...older buildings may soon need replacement of windows, furnaces, roofing, refurbishing of units and common areas and this can result in a special assesment (temp increase in fees for a period of time to top up the reserve fund after the fixes are complete.)

Reserve funds are always an issue. Often buyer can't see the documents of the condo corp until they come to a conditional agreement. If the condo just had a big withdrawal, you need to analyze for what purpose? Are you going to buy and get caught with the letter in your mailbox that fees are going up for a period so as to replenish the reserve fund? How old is the building? Typically lifeline of mechanics is 15-20 yrs. You'll wanna try to learn when mechanics were last updated and what service contracts there are available as well as who is responsible for the mechanics.

Look, at the end of the day, I strongly believe you want to build equity. Renting does not achieve that. Detached homes are quite expensive for many buyers and condos can offer a great simplified lifestyle.

Theres pros and cons to the condo lifestyle for sure. Often money decides quickly which direction you will go. Now if you edge towards condo shopping...there's lots to know!

As always, I'd love to hear from you. Email anytime. And thanks for all the questions thru the website http://www.TheSmithsBuyAHouse.com

Michael Gruenstein MBA CSC

2011 Housing Market: Up or Down?

2011-01-03T09:04:00.000-08:00

With 2010 behind us....well kinda behind us.

To be fair were going into 2011 with much of 2010.

In 2010:

Goverment kept rates at emergency lows
Gvt introduced HST on new home purchases
Gvt made mortgage rules tighter so that it was more difficult to get a mortgage
Gvt offered no home tax credits

Net Result:

After a 20 percent leap in prices post 2008 recession in 09, prices continued to grow in 2010 more modestly.

Inventories for back half of year were down in many neighborhoods

Canadian household debt hits damn near 150% of income (thats very high)

So...what's in store for 2011??

Canada not really in position with dollar at par to increase interest rates to further strengthen dollar and cripple manufacturing so tough talk is that there may be further mortgage crunching to make even more difficult to get a mortgage

Inventory always increases in the summer months

Ford may tackle second land transfer tax

Once stimulus wears off in US so long as employment doesnt go up, rates should go up and as rates go up, typically fixed rates on mortgages increase

It really will boil down to supply and demand. How many ppl will list their homes. Theres always a ready supply of buyers. If buyers with good credit are out and sellers are scarce then prices will moderate.

530 pm BNN is going to make an arguement about the success of the 2011 real estate market. I will be tuned in.

Happy New Year to all.

******Sign up to get free listings sent to your inbox 24-48 hrs in advance of mls.ca. Your competition is on it.

Michael -

http://www.TheSmithsBuyAHouse.com
mgruenstein@trebnet.com

Home (Less)

2010-12-22T10:29:00.000-08:00

I've spent the better part of 2010 preoccupied with the GTA housing market (perhaps justifiably so being a realtor). I've tried through my website TheSmithsBuyAHouse.com and this blog forum to educate propsective homeowners about the ins and outs of making offers; calculating market value for yourself; how to best your chances for getting a mortgage (often by pitting competitors against each other); keeping you informed about new developments that impact the purchase of a house from HST to more stringent mortgage requirements to land transfer tax and any rebates that were once available.

I've tried to use my economic background to look into trends and educate you on how mortgages work and how banks do their business so you get a glimpse of what's going on behind the scenes.

It's been a year of many developments and I've enjoyed making this blog into a sort of resource for those of you who visit.

I am struck though with how fortunate we (as a collective) are. Perhaps it was an article I read in the Star this morning about a Harvard graduate who followed a homeless man around the streets of Toronto and has been blogging using the words of the homeless man to tell his stories and life. "Homeless Man Blogs" by Phillip Stern.

Perhaps it was the outing with my family on the downtown streets of Toronto checking out the festive lights while explaining to my 4 yr old son that the people sleeping in doorways with skimpy blankets are not likely to become potential homebuyers or client's. These people are without a home...I explained to my son. It's a very confusing lesson and dialogue for a kid whose spent each winter wrapped in his cozy bed with the heat blasting.

Today, I'm not interested in reviewing the housing market. I'm interested in the number of homeless people on our streets ranging in age; skin color and histories. I'm inspired to do something.

I remember a post by an old friend on facebook where he was collecting sleeping bags for some homeless people. At the time I read it, I smiled and then had an offer presentation for a client. I commend DG for his efforts and to all of you who have done their part.

We're fortunate to concern ourselves with interest rates and downpayments and taxes as we plot our paths towards home ownership! Multiple offers suck. But homelesssness sucks way more (would be my guess).

So after being so consumed with working in the housing industry and blogging about it religiously, I wanted my last post of 2010 in the spirit of the holiday season to put some responsibility on my plate to assist those who won't likely read these blogs but can use our collective help.

The best of the New Year

Condo Owners vs Freehold Owners-oh...they are different!

2010-12-20T11:47:00.001-08:00

Can you compare these owners?
These owners may be different because of many lifestyle; budget; locational needs; transportation sources, etc.

But...make no mistake. At any stage a condo owner is different then a freehold dweller.

1. A condo owner is like the knowlegable investor. They typically have a RIP (not rest in peace but Regular Investment Plan). They pay monthly fees that for the most part don't change w/o a major reason that's voted on by the board. A freehold dweller often can't figure out how often they pay heat or hydro or better yet don't have a clue what company or what phone number to dial should they require service. So....they call me to find out!

2. A condo owner who wants to do upgrades, typically has most of what they need readily available. Floorplans, square footage, layout. A resale homeowner (freehold) hasn't a clue often enough how many sq ft are on their main living space when they buy the house and hence need it measured so they can calculate how much laying hardwood flooring for example will cost.

3. If a condo owner is short on cash and something happens...say a leak in the main lobby...the condo will go to the pool of monies (much like a mutual fund) and pull out the required amount to fix the problem. If the reserve fund is ample...the condo owner may not feel any pinch at all. "May not".

4. The condo owner never asks their agent..."How the hell do I read this survey"?!

5. A condo owner typically doesnt worry about where his/her parents will park when they come for a visit.

6. A condo owner can break down to the penny what a sq ftg of space costs. Not so in many older resale freehold properties. You start doing that kind of math and you're gonna get some funky numbers when you valuate property.

7. Condo owners may have to plan their entries and exits with savvy to avoid certain neighbors. Not as easy as looking out your front window of your detached house to see if their car is in the lot.

8. Condo owners know the city...I find. They don't have much greenspace so they go searching for it.

So much more. But just a few points when a freehold owner looks over at the condo owner and shakes their head.

Wishing you the best of the holiday season. Peace and Prosperity. Most importantly...good health.

Be in touch in 2011.

Michael Gruuenstein MBA CSC
http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca
mgruenstein@trebnet.com

Year End Note on Housing Market/Prices in and around Toronto

2010-12-13T11:33:00.000-08:00

The year began with emergency rate interest rates. The year will end at low levels.
After a bounce back of approx 20 percent from Jan 09-2010 Jan...the remainder of the year was a bit of a bumpy ride. We grew and peaked in April in many areas and sputtered in most areas into the summer months.

We didn't put as many of our homes on the market after the summer and saw a decent fall but really a Seller's market with lowered inventory and hence heightened prices.

Midway thru the year the government worried some that we were creating a bubble in the housing market with these extraordinary low rates and consumer debt was reaching all time highs. So...the government in a round about way tried to put the brakes on the level of purchasing by making the qualifications for first time buyers more difficult and taking away tax advantages for renos. Most banks shortened their ammortizations and first time buyers needed to qualify based on the 5 yr posted rate.
Did this take any steam out of the market?

Overall...not really. Canadians had seen enough of the foreclosure woes in the U.S. that banks and buyers wanted for the most part to afford their mortgages.

We saw a boom in condo purchases especially outside the city in areas like Mississauga and Richmond Hill. Areas that no doubt are more enticing with one land transfer tax as oppose to Toronto's 2.

So heres the picture moving into 2011:

1. Rates are low. Bank of Canada did not raise last week
2. Supply is lowered. Bodes well for Seller's but Buyer's may argue they feel good as rates are low
3. People will continue to need homes
4. On a world scale, Toronto is not terribly expensive and we continue to have demand from immmigrant populations looking to begin their lives here
5. Now the Bank is actually saying that consumers in Canada are being more dilligent and cleaning up their balance sheets

But...anything can happen. Just ask Bernake!
We'll no doubt take our cues from the U.S. as they stage their recovery
There's been some healthy data but unemployment numbers are awful

In areas I frequent here are some year end examples of pricing:

Aveneue and Lawrence:
we saw 3 homes on the same street east of aveneue all sell well into 800ks-mid 900ks. All 3 bdrm homes, on 25 ft lots with mutual driveways and some front pad parks. The homes did show well overall.

Upper Forest Hill Village:

50 ft lots with tired homes but good layouts for renovators were hitting 1.2 approx---depending on street, location on street, timing, exposure, number of bedrooms, etc.

Thornhill Woods:

Homes on 40 ft lots typically by 80-90 with 4 bdrm 4 washrooms were all over the map. 600k-870k. Depending on builder, upgrades, when built, finished basement

Semis/Thomes-
450k-575k

Armour Heights:

We saw 2 storey 3 bdrm 2 bath on periphery streets (just outside of main area nearing bathurst) approach 700k

Of course the core streets saw homes sail into mid 1 millions and certainly higher on ravine lots.

With that....if you have any specific questions---don't hesitate to ask.
Wishing you a happy and healthy New Year!

Please call or email if I can be of any assistance to you or your family.

Michael Gruenstein MBA CSC
http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca
mgruenstein@trebnet.com

Wth..is that going to ultimately affect my mortgage payment. How do mortagages work?

2010-12-09T05:46:00.000-08:00

Okay, so this isn't the sexiest dialogue...but I still seem to get a ton of questions about interest rates and mortgage rates. I figured in my shortest blog entry I would oversimplify the explanation:
______________________________________________________
VARIABLE RATES:

We have short term rates and long term rates.
Bank of Canada decides on the discount rate (prevailing interest rates)
This rate is determined by risk of inflation vs growth prospects vs strength of dollar amongst other things
When B of C increases interest rates, chartered banks may lift their "prime rates".
Banks offer variable rate mortgages which use prime rate

So lets suppose B of C is worried about containing inflation then they may raise the
discount rate.
Then banks may lift prime rate
Then variable/floating rate mortgages may rise (prime rate plus a premium)
If you have a variable rate mortgage and rates go up..this will offset the amount of your payment that goes towards principal vs interest. Of course, your interest is for as much of you payment to go towards principal so you like low rates.

FIXED RATES:

Conversely, fixed mortage rates like the 5 year fixed rate that guarantees a specicif rate for 5 years is subject to change as well due to many factors.

Suppose, investors believe that the economy is going to start clipping along. Their appetitie for safety falls. Bond holders holding 10 year notes and collecting interest may decide to sell their bonds and move that money into the stock market. In doing so because their bonds may suffer from a lowered interest rate, the bondholder needs to sweeten the deal. How? They offer a discount on their bond which kicks up the yield for a new investor to grab hold of.

Now when yields go up in the long term bond market...this isn't great for banks who loan money out (mortgages). Now the banks borrowing costs when they sell bonds has gone up. To match and ensure that they make money on their loan portfolio, an increase in borrowing rates will ultimately lead to an increase in rates the bank will offer on mortgages.

SO variable rates are subject to change and fixed rates are subject to change.

What changes either is different.

Again, I'm not an economist. I am a realtor. If your economist says I'm a lousy make believe economist....I'm comfortable with my abilities to move real estate, so no worries.

Hope this clarifies.

Michael Gruenstein MBA CSC
http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca

Buying or Selling in Late November/December...know this!!

2010-11-29T11:31:00.001-08:00

Keep these tips in mind:

Banks and lawyers vacation too. Make sure if your lawyer is to preform a title search or close out the transaction in late Dec that he or another lawyer are physically available. Make these arrangements early. You may need to go a week or 2 early to sign some of the documentation.

Make sure as a Seller that you give as much notice as you can to utility providers to come do final readings for adjustment purposes. These large companies get stacked to towards the end of the year and doing these readings timely will help streamline the adjustments for closing purposes.

Call moving companies as early as you can. You will being paying a premium likely to do a late Dec or early Jan move. So more then any other time, price shop and ask for referals.

If you're a Seller leaving town after listing in December, be sure to have access to a dedicated phone line/fax line to deal with any offers and make sure someone is looking after your house. Awful time for a water pipe to burst. It won't happen...but be prepared for anything.

Shovel Sellers. It's already a pain in the butt when buyers arrive and the streets aren't plowed so they circle around for 10 minutes just to find a spot to come view your house. If you didn't shovel your driveway and front steps...you're going to leave a negative taste in the buyer's mouth...assuming they don't fall and eat snow.

Make certain that you leave lights on at all times. The days get grey and so do homes inside, no matter how many windows or the perfect exposure. Also, turn the heat on. Take it off the program while you're at work for the few weeks the house is being marketed. Yes, your bills will temp go up but the selling price should easily take care of those bills.

Buyers-open all the blinds and look for the condensation. It's there!! Home inspection will determine the need for replacing windows or simple sealing jobs.

Humidifiers should be on. Many older homes have mold in basement and do have an odor. Putting moisture in the basement air and opening up windows from time to time can only help.

There are many more things to know when purchasing into the winter season. If you have any further questions around this or the market...don't hesitate to ask me.

Michael Gruenstein MBA CSC
mgruenstein@trebnet.com
http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGta.ca

Let's pretend to be Economists for a sec...

2010-11-25T06:35:00.000-08:00

A few weeks ago it was announced that October saw a solid rise in condo purchases, most falling in mississauga and richmond hill. Land getting more expensive, condo units get smaller. The smaller units have to attract end users by offering up good amenities and clever sleek designs. Apparently, we have an appetite for low rates still and don't mind living in close quarters to get out of our parents basements and build equity. I thinks that's a good move.

Other data saw September's TO market drop almost 2% in prices. Of course, this should be further identified by looking into specific areas as trendy blocks with little supply are hitting homeruns on sales prices.

Now, if the world is playing games with currency interventions to keep their exports fuelled and say buying up CDN dollars serving to strengthen the loonie while at home inflation remains beneath the target rate...basically you get a Cdn economy losing its power with a high currency as an exporter while still tempting home buyers into the market with low rates. When these rates go up the arguement is that is when the "bubble bursts". It's not imminent from what I understand. But that seems to be where were at.

Currency intervention by developed countries; low domestic rates; an appetite to own homes and a strong loonie create a challenging landscape. At least we're not choking off growth and playing austerity games that will almost undeniably slow growth elsewhere.

The biggest concern by most economists around housing is the sheer level of indebtness that personal households are holding and the future of employment.

The market for homes in TO is getting closer to balanced but prices albeit some small drops of late still take us above pre recession levels by about 3% (National Post source).

So its not cheap out there. There are good opportunities though and for those who are prudent....get in the market and leverage these low rates. Just don't blow your brains out!!

Michael Gruenstein MBA CSC
mgruenstein@trebnet.com
Re/Max Realtron Realty

Random pieces of knowledge about homes and the market. Just throwing out some ideas. Easy read. You'll learn something!

2010-11-24T07:39:00.000-08:00

Here's a random blog. Just some ideas that I've come across in a decade of buying and selling real estate that may be of interest (or not) to you. Let's do this:

1. For tepid sellers....there is a way of attempting a multiple offer scenario. The seller rather than asking for a clear date to review offers...asks for a 24-48 hr irrevocable (time to review the offer). During this period a good listing agent will attempt to draw in further business and have competing offers. Note, when this strategy is used..usually the ask price won't be on low end, like the more "bullish" seller who has underpriced with a pre inspection and an offer date.

2. Homes work in 20 year cycles. If you're lucky enough to purchase a resale house that has just undergone the correct maintenance you may be fortunate in that the sellers are taking goood care of their home and recently updated windows, roof, furnace, etc. If not, you may be looking at a healthy first and second year budget on top of your "welcome to" land transfer cost and closing costs in year 0.

3. Buying homes that are less then 7 years of age and Tarion warrantied...the warranty is transferrable. Though towards the last year or two of the warranty, the new owner has lost a lot of the warranty. At this stage, youre basically safe guarded should the house crumble if its demonstrated that its the fault of the poor construction. So don't take too much comfort in a warranty nearing the end.

4. When buying brand new...make sure in your offer you have a condition for a final inspection of the property. A walk thru with the builder to compile a deficiency list is important. By close or shortly thereafter its the hope of the buyer that the builder makes good on the list. Otherwise, Tarion may act as an arbitrator to ensure fairness in process.

5. Most asbestos tiles in older homes containe traces of asbestos as do water/boiler run furnaces. Removal of furnaces or tiles should be done by experts. It isn't a problem until its mishandled and then it becomes quite costly. This is not for the most part an insurance issue like knob and tube but it can become a saftety issue.

6. When caught in a multiple offer scenario, therte are strategies that may assist you. One such strategy works off the law of averages and determines for a like neighborhood and the number of offers in play, a percentage premium per offer that you'd tack on to the ask price to figure out where the house may sell at the end of the night. This is a crude benchmark, used in conjuction with adjusting comps and the ability of your agent to leverage relations with the listing agent (best to use an agent familiar with fellow agents in an area that they work). Timing of the presentation of your offer may also have a distinct advantage.

7. When going out to look at homes, namely a townhome or a semi..do not purchase until you've gone for a "dinner time" showing. Wait til the kids next door or dog are home. Then judge the level of noise. The listing agent will most of the time represent the house as very quiet and well constructed but best to learn on your own and go for a peak hour showing. Also when looking at a house, don't be shy to ask the neighbours. They're a wealth of info. You may find some who are very happy and others who aren't. Are the happy ones closer to your demographic and those not as happy perhaps older and liked the good ol' quiet days pre construction.

8. Canadian banks have recently raised draft fixed rates. With investors abroad seeking higher yields then those in other developed nations, the cost of borrowing has increased for our banks and in turn lending rates have had to go up on fixed mortages. Yesterday we had higher inflation data then expected. It's not clear when rates may work their way up. Tho Canada is looking relatively okay, Europe debt issues, US unemployment and potential deflation and emerging market bubbles may keep rates down domestically for some time. That said, locking in rates for a period if you're planning on hitting the pavement in the spring...is probably a good idea.

9. Many older homes have knob and tube wiring. A crude estimate of the cost to replace may be 1000 dollars a room. A room may be defined as a hallways as well. Some insurers will allow for a home to contain total k and t while other may ask for a percentage reduction and still others won't put up with any. You need to shop around and weigh insurance premiums relative to cost of doing work right off the bat.

10. Where can you save money and still live in a "trendy area". Here are some ideaas:
a) a townhouse or a semi will save you some money
b) if you have one vehicle and don't mind parking on street--typically these homes have less buyers in line
c) often corner properties are devalued
d) a house that shows poorly and has an unfinished basement (factoring in "over time") what needs to be done---it may represent a good opp for you
e) a smaller lot. yes, its a skinnier house for certain, but if its got an open layout and gets you into the school district and has a deep enough lot for further build out--this may be a good option
f) some estate sales or foreclosures
g)exclusive listings-if you're agent is tapped into the market, he/she may be aware of these kinds of opportunities. With fewer buyers and a seller not looking to "play the game", you may locate a house at fair market value and not be suckered into paying more and getting less.

This is a cross section of ideas. If you're getting into the market; have questions or want to learn more--please email or call. Also one of my sites...http://www.TheSmithsBuyAHouse.com is a great reference guide and may offer further insights.

Appreciate your time in reviewing the above.

Michael Gruenstein MBA CSC
416-271-2066
mgruenstein@trebnet.com

What the heck is "market value" on a home? Any basis for pricing these days??

2010-11-18T09:36:00.000-08:00

Seeing that we realtors can't pinpoint an exact price on a house, (in fairness we don't know whose out shopping, how many parties may bid on house and we work for the sellers and sometimes are convinced for a period of time that they're price is "correct"---we default to "market value/range of value".

At the end of the day, the goal is to keep that range as tight as possible, unless we've priced at 999k and get lucky and sell for 1.3 million.

You should know that a few things make the calculation and arrival at market value more meaningful in most cases.

1. what have recent comps sold for?

2. how can you time adjust and adjust differences from one house to the next to make sense of a house asking price?

3. how long did it take this house to sell in similar environment over last many years?

4. Is this house being marketed after a recent termination?

5. whats the supply like of homes in the surrounding community. If low and in this interest rate environment...we'll market value is going to move upwards for sure (if house is priced okay and shows well)

6. what side of the street is the house located on? there is often a premium when backyard has southern exposure.

7. what renos/additions have been done? when were they completed. Even if they look great...you may need to depreciate the cost some to arrive at today's value?

8. Has there been a recent land sale on street. Trace back what a builder spent to put up new house when he purchased the land. Now tie in land value vs the full ask price of the house you're looking at. This should serve some basis

9. what are the mechanics like; electrical; plumbing; insurance premiums if any...take these into consideration relative to comps

10. don't discount the knowledge of a neighbour. some won't talk to you. others will tell you stuff that may actually make or break your decision to buy.

Theres so much more. I never saw this as ....person sees house. person likes house. person offers timely on house. person moves in.

But many do!

Michael Gruenstein MBA CSC
ReMax Realtron
mgruenstein@trebnet.com
http://www.TheSmithsBuyAHouse.com

Condo In your near Future? Do you know what you're getting into?

2010-11-18T08:31:00.000-08:00

A condo can be a great purchase. Why? Typically not because it offers wonderful upside potential relative to a detached home, but its the ease of lifestyle. For those who want to be pampered and have underground parking, lawns maitained, windows repaired and like amenities that require nothing but a change of clothes and an elevator to arrive at....condos are great.

When you go condo shopping, go armed with some knowledge of questions to ask:

1. How long on avg do units take to sell? If the cheaper units are taking some time, that's typically not a great sign.

2. How long has the building been standing? This will point to the reserve funds strenght. A newer building is gonna need to play catch up to get an ample reserve fund built?

3. What are the plans for the building over the next yr? Do they intend to create more amenties, redo the lobby, etc.? That's going to require you as a unitholder of common elements to beef up your monthly fees for some time. Be prepared

4. Are the heating/cooling mechanisms owned? When are they serviced? How old are they? Is it your borne cost to replace? Are the rented? Are the part of service contract and monthly fees?

5. If building is approaching say 20 years plus...it may be time to replace windows for example. How long will you have to live with drafty windows before they get to your unit?

6. What's going to be built around the condo if vacant land exists. If you're buying for that south west view of the lake..will you enjoy that for long? how will a new structure effect the resale value if you lose part/all of the view?

7. Whats the split between investors vs owners who reside in the condo. Remember, tenants have less of a vested interest to upkeep the units as well as the common elements. Also, in an older building, renos by multiple units will increase the value of the units. Tenants tend to not put any money into their units. Why would they? In a perfect world you'd like something like a 75% plus owner occuppied building.

8. How's the visitor parking?

9. What's the turnover? If it's high....why?

10. Final piece of advice (in this article..) interview anyone you bump into at the building during a showing from the doorman to the guy in the elevator to the girl walking her dog outside. They have more knowledge on the day to day then the agent and you combined.

Michael Gruenstein MBA CSC
Re/Max Realtron Realty
http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca

Call or email with questions anytime @ mgruenstein@trebnet.com

blurred picture for residential market and pricing herein. what's going on?

2010-11-08T06:48:00.000-08:00

First, we have the talk of the new commission structure. Most agents don't seem very concerned in the least. They look to the U.S. where homeowners have been offered discount brokerage/menju options for years now. It penetrated approx 3% of that market and this is before the housing crisis.
I've had top realtors in the city tell me that for an experiment they've spiced things up in their farm area and offered terribly low commissions and the phone calls and interest changed little.
Much as the public doesn't like paying the commission, its a sunk cost that sellers build into the pricing of their home and its equitable in that when they go to purchase a house they watch the sellers this time pay the commission out. It's an itch that gets scratched. Perhaps, like watching the Leafs no matter how awful a season its now turned into.

New home construction readings fell today. So the arguement may go that now there are fewere homes and some who would have looked at new construction will focus on the inventory of resale properties. Thus, the supply of homes will decrease and hence as the demand side goes..prices should stabilize if not rise.

This of course may be squashed by increasing rates tho with a dollar as high as it sits today and little inflation worries, it seems apparent that the rates may sit low for some time, helpping to prop up the prices of homes yet again.

What may disrupt the upward movement in prices may be the desire for Canadians with ever high household debt to become net savers and pay down theirt balance sheets making do with their current residence, though Canadians are comfortable with having mortages.

Klump from the CREA sounds like hes counting on a slower inventory year in 2011.

I suppose we have some news to sort thru in the US, commodity prices, deflation vs inflation and consumer confidence will all work their way into the housing market.

For the time being, inventory is low so in good areas we're seeing prices remaining quite high.

Best advice: get a strong agent, stay on top of the market and lock in rates with a preapproval.

If you have any questions I can help you with, don't hesitate to call or email. I still believe the site I've pieced together should be a great starting point for newcomers and those who haven't been in the game for some time.

But I'm always available.

Best,

Michael Gruenstein MBA CSC
http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca

Waiting for the spring market to sell?

2010-10-26T12:42:00.000-07:00

Folks,

wait for Gadot. don't wait to sell.

Here's why:

1. For the past many hot spring markets there have been "winners" and "losers". But you only hear of the winners!
A spring market works as follows: Everyone waits for springtime to sell. The obvious advantage is that the weather is nicer, the house shows better, buyers come out of their caves. The flaw is that there are more homes on the market. There are schools of investors that believe that when everyone wants to buy into the stock market, that's the exact time to sell and when people are saying its a bad time...buy.
My point is that in the spring market, you better have the prettiest house on the block if you want to get top buck. Buyers are slower to make an offer as they need to weed through all the inventory. The first guy who sells may sell at a price lower then you hoped he would and now your chances of selling for your buck are minimal.

In a market like today's there is not an abundance of inventory. That's typically great for a seller. Interest rates are low for the buyer so they feel pretty good. With banks still permitting 30 year ammortizations on top of low interest rates, buyers payments become more affordable.

Canada in general is seeing some of the highest debt levels per household ever. The theory goes that households will have to clean up their balance sheets and in doing so will become net savers. That doesn't necessarily point to a great market for sellers.

Some are predicting a correction of up to 15 percent in 2011 in some pockets. Who knows? We've been calling for a correction since I walked into real estate in 2002. Time will tell.

What I am certain about is homes are seeing similar prices that the heights of the spring market brought. In some cases --higher. Just supply and demand without the supply.

So if you're thinking about the spring market, the month of November just might be a heck of an opportunity for you to sell.

You can always look for a long closing to insulate some time to locate a great house. Ya, you might be a buyer in the spring market and pay a bit of a premium..but there should be more inventory if the house you want isn't here sooner.

It just may be better to be a buyer this spring market then a seller after all!

Michael Gruenstein MBA CSC
http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca
mgruenstein.blogspot.com

"Offer Time" for Smith's...lets see how it goes

2010-10-25T11:04:00.000-07:00

They locate a great house. It's even priced at market value. Closing date looks good. Heck, this is straight forward...make an offer and buy the damn house.

Can this not be so straight forward? Might there be some key issues here?

There just might be. Here's some things that the Smiths in all their excitement may not have cleared up and may affect their enjoyment and hence the resale value of the property of interest.

1. There's a major city easement that runs through the backyard. it actually chews off 10 ft of the rear property. So this 40 ft lot is contained to 30 feet on the westerly side for potential development. if they wanted to build a pool or a deck of plant a garden...they may have serious issues.

2. The family room addition is great space. It's hard to say if it was built legally. Current sellers bought it "as is". Better do some investigating and insuring

3. Property has some knob and tube wiring. There are some insurers. Some will ask you to cut the amount of knob and tube, others may request a complete update and inspection by third party. On top of land transfer and closing costs, this may be a sizable cost. So do they keep it "as is" and pay premium for year OR change immediately. Is one insurer more accomodating then the next?

4. The inspection revealed some moisture and active water coming from roof of house. Conditions run out tmrw for them to move forward or walk away. What's best course of action? Is their a way to try to get an abatement but still have capacity to move forward if sellers dispute?

5. Parking spot infront of the house isn't legal. But it's been in operation for a while. Do you ask the city or keep your mouth shut and assume it "as is" and hope for best.

6. Smiths need a second spot. No problem right? This area/street has street parking. Careful here if youre moving forward and not doing homework on this issue.

7. The taxes on the property seem low. That's great news for the Smiths? Does the city know about the 2 additions and 2 new washrooms added on to the top off of the existing bungalow? This property may be up for reassesment any time now and the property taxes may be artifically low so make sure you have an eye on that.

8. During negotiations a second offer pops up. How do you handle this now strategically. You were the first ones in. Does this give you an advantage. Is there a way to treat signbacks of offers for some added protection.

We found ourselves for years in an environment where if you had an average agent and lost a house then inventory was plentiful. So you hurt for a few days until you found the next one. Inventory is not as plentiful so the arguement is some buyers are feeling rushed to pull the trigger. Some agents love the hurry-up offense.

My arguement is that you can still be quick to the plate and cover yourself properly.

We're not trying to get you to the moon here. We'd like to get you into a great house and there are strategies and concerns that trained realtors can assist with.

I hate those realtors can help commercials. It oversimplifies the issues. It's a legal document with clauses that too often are breezed over which can have ramifications on the purchase of your greatest asset.

Cheers,

Michael Gruenstein MBA CSC
ReMax Realtron
mgruenstein@trebnet.com
http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca

do it yourselfer meets realtor--round 1. freindly sparring

2010-10-22T06:47:00.000-07:00

sure sell/buy your house alone---good luck my friend.
let's start from the beginning:

1. Seller is asking 849k
fair price?
diy--do you have comps? don't want to overpay. may find out banks appraisal differs from yours and banks are getting tighter with these debt levels. sucks when you find out 2 weeks before close at time of appraisal that theres a disagreement.
i'd think those comps would be important\

realtor-i got the comps. i also have the land registry for private sales. oh..i also have the knowledge that theres ways of disecting a listing to come to market value (with some room for subjective value). i'm gonna ask some questions to give my client the upper leg. here's some:
1. what side of the street is house on?
2. when did it last sell? how long did it take?
3. what are semis selling for relative to detached?
4. in the area what's the premium for a private drive or mutual drive
5. cost of redoing the kitchen, wiring, plumbing --how will that factor into "market value"

DIY: house asking 849K. bypasses agent. goes to listing agent and offers 825k. DIY did it! good work. got the reduction. It's just that the house was so overpriced that 810k would have been a win/win for all. hey, what's an extra 15k savings, especially when its coming out of sellers pocket??

DIY: this guy is glued to the paper and mls.ca--the papers advertise typically 3-4 days after it hits mls.com where agents have taken their top clients to the front door and house could have sold. mls.ca---48hr delay. then call the listing agent who has 3 buyers in mind and likely will invite you to the open house on Sunday or struggle to return your call. Agent--takes you in on day 1 as inventory is tight and gives you time to make a decision. It's like the DIY arrives 2 days late for the flight to Miami. The agent boarded the flight and gates are closed.

I don't want make this blog too long and beat up on the DIY. I have friends who are DIY's. They're still friends. Just tough to watch them navigate the system of buying a home. It's just money and a house so let them be happy I say!

Gotta go show some homes. They just came out ande 2 are exclusive. DIY's can't possibly know about them. 9 years of cultivating relationships with other agent's got my clients the "early bird special" to see these places.

My best---

http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca
http://www.mgruenstein.blogspot.com

You do it yourselfer you. Ity

2010-10-22T06:46:00.000-07:00

October Market..inside scoop

2010-10-21T06:55:00.000-07:00

Here it is: issues for October

1. If you're wondering what's going on in terms of pricing in GTA...think "big".
Why? Lack of supply and low rates continue to prop up prices. I'd argue were above in many districts where we saw prices in this past hot spring market.

We just witnessed 23 offers in Allenby on a semi this past week. So are their buyers still out there? Indeed. Is their supply? Not enough. Do the math!

This may be the kind of market where you need an agent who is creative and hard working and has established a steady network with fellow agents. They're not competitors of one another. We actually can work quite well together and secure the interests of our 2 parties.

2. As for flat fee sellers leveraging the MLS system---no real concern. This has been around in the US fore many years and less then 3 percent of the entire market went this way. Bottom line is....I'd still trust a dentist over a welder to fix my teeth. Sellers don't have exposure to negotiating homes. And always valuate their homes well above market value
3. I just sold a house that involved using my network. We located a great property that wasn't listed on mls. A truly great way for a buyer to buy and a great way to stand out amongst the other agents. A win/win if you will. So there are still ways to locate homes in a low inventory area, but it takes time and work!
4. Household debt is huge in Canada these days. With these teaser rates, buyers continue to leverage the rates and may be buying more then they should. So, don't "overbuy". Buy but be prudent! But get into the market.

If you have any questions about the market or just want a second opinion...please get in touch!

Best

http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca

All the best-

Michael Gruenstein MBA CSC Sales Representative Re/Max Realtron http://www.TheSmithsBuyAHouse.com http://www.Propertiesinthegta.ca Blog:mgruenstein.blogspot.com O:416.782.8882 C:416.271.2066 mgruenstein@trebnet.com

POST TURKEY DINNER SHOWING

2010-10-12T06:32:00.000-07:00

Mental note to myself. Next year don't show properties the day after a turkey dinner. We arrived at a beautiful house to do our showing. The instructions were that the owners of the house would be home and they'd open the door for us. No problem. Always prefer when vendors are our so we can have freedom for open dialogue and run around the place at our pace. But, no worries. The owner, a man in his 40's decided to be a "tour guid". I did at the onset mention that the showings I've done with buyers typically run smoother when the seller makes as though he's not home and let's us do our thing. This guy wouldn't have it. Proud of his upgrades and pie shaped lot and pot lites and new cobblestone yards, he'd captain this visit right to the bitter end.

Okay, off we go. We follow him as though we're in grade school. Our teacher in the lead and we don't break rank or single file. My luck, I'm a foot behind this gentleman who makes mention that he really overdid it between the scotch and turkey the night before. "Never been so full" he whispers, as though we're old friends. A moment later a gastly smell attaches to me. Trying to remain professional, I look at my buyers and it seems they're totally immune to our tour guide's missles. Now it's a matter of holding my breath as long as I could. My crappy lungs are losing this damn battle. I try to make room between us but each step upstairs is a potential land mine for me with this man 2 steps in the lead. 10 minutes into the tour and trying my hardest not to run out of the house, my buyers are now part of the experience. Their more visual then me putting their hands around their necks and making crazy faces.

When the owner showed us the walk out in the basement, it was a mad dash to get outdoors for air. I've never spent more time looking at a non landscaped 25ft bu 110ft backyard in my career. I suggested that we'd walk around to the front and not bother to walk back thru the house.

We left. I caught up with my buyers some hours later and they decided for many reasons not least of which was the awful experience during the showing, to keep looking.

As for myself, I've made it a rule that I will not work the day after Thanksgiving dinner.

http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca

con't from last post...

2010-10-05T08:09:00.000-07:00

Here's the state of the market:

1. Listings are not plentiful but depending on area, you can find a solid home

2. Buyer's need to be on top of the inventory as good listings are selling quickly

3. There is talk of further government controls to cool the market

4. In many areas, pricing is feeling on par with March/April 2010

5. Muliple offers are pretty common so know your strategies and do your homework so you're ready, armed and not bumped out

6. Try to get your financing taken care of so that you may proceed w/o a finance clause to strengthen your offer where possible

7.The new rules for homeowners listing their property on MLS and dealing with the cooperating broker direct, may cause some headaches but if the results are anything like what we've seen while this has been taking place in the U.S., an overwhelming number of sellers still put their trust in a brokerage to represent the sale of their biggest assets. Problems in the sale of a house aren't typically in the thousands. THEY ARE MAMMOTH. They can lead to the carrying of 2 homes (if your bank will assist) or the non closure by the buyer of the house you just sold.

8. Because supply isn't abundant in most pockets, be prepared to have a conditional period of no more then 2 business days following acceptance and get your best/biggest deposit to the seller. Seller's are increasingly worrying that the Buyer will walk. It's just the feel out there.

9.Stop waiting for MLS.ca to spit out a listing. Sold another house this week and 5 angry callers working w/o an agent were upset that I sold the house before the 48 hr lag until they got to see it on mls. During that period we had an offer and 15 showings.

10. Don't pay too much attention to the paper. Everything sounds just a little scary right about now. Find an agent who knows what they're doing, let them catch you up to speed; go see homes; learn about values; discuss strategies and try to have fun.

http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca

First week of October. What's up with market asks the Buyers?

2010-10-05T08:07:00.001-07:00

Fall Buyer Seminar for GTA buyers/Sign Up and get dates. Don't miss out.

2010-09-24T10:50:00.000-07:00

It's been years since I've conducted one of these.
It's hard to find the time to plan and schedule.
But, it's time. The more Buyers I speak...the more I feel this is a "must"

****There's been enough changes over the last 6 months that seem to have blanketed today's buyers with a lot of confusion.

The Internet is an incredible resource for those looking to purchase a home. It falls short if you're trying to be on top of the market and simply can't answer your questions the way a live body can.
-----------------------------------------------------------------------------------
Here are some topics that will be included: (if you know the answers don't waste your time with this seminar):
******
1. How do you analyze market value in an economy that went down 15%, back up 20%, settled back down in the first month of 2010 and then went flat. Where are sellers coming up with fair market value?

2. How do property taxes work? Are they assessed in cycles? Can they go up or be reassessed once I buy?

3. What's Title Insurance? Why get it? The house has insurance on it.

4. Is a variable rate mortgage still the best option for getting the best rates? How do you qualify for a mortgage? Is it good to shop around or a danger?

5. What strategies should help increase your chances of winning in multiple offers? Yes..they're back!!

6. Economically speaking, where are prices headed? Do I buy now or wait?

7. What are closing costs these days? Title Insurance? Land transfer tax? Property tax? Moving costs?

8. When do I supply a deposit? What conditions can I have in an offer these days? How can I strengthen my offer while still being completely protected?

9. Are banks still doing drive-by appraisals or are they being more invasive?

10. Why use a buyer agent? How much will that cost me ultimately? Don't I get a better deal if I cut out the middleman (boy...do I have stories to tell here).

Let's look at some scenarios:(if you know how to handle these scenarios, don't waste your time here either)

CONDITIONAL OFFERS:

1. You present an offer that is conditionally accepted. Your inspection reveals some issues. You have a few hrs to present the waiver to seal the deal. You can also try to amend the agreement and ask for an abatement (money off). Which do you do? What are the risks here? Can you do both?

ADDITIONS:

2. You purchase a house and it has a family room addition on it or a small built out kitchen. The owners bought it that way. Could you find yourself in hot water should an inspector from the city come by? What should you do?

MULTIPLE OFFERS:

3. Your told there's 4 offers on a property. Is that the case? Is there a better time to present your offer? Can a particular agent actually better your odds of winning?

CONDOS AND RESERVES:

4. The condo you are interested in has a shortfall in its reserve fund and a special assessment is about to be levied. You love the condo...would it make sense to move forward? Under what circumstance might you?

PARKING ISSUES:

5. You locate a house that you have intense interest in. The house has a pad park. The owners have been using it for years and so did the prior owners in this 100 year old house. Does it now "run with the land" and become legal on title OR do you have some homework to do around this? What if you require street parking. Is that automatic because you have a deed to a residence on the street?

INSPECTIONS AND INSURANCE:

6. Your home inspector beleives that the house has a few key issues...knob and tube and galvanized steel plumbing. Also there are large trees around the premise that may affect the drainage system and could lead to roots blocking the flow of water and hence a back up. Firstly, what can you do? Secondly, how does insurance work on both these issues?

I'm going to work in some dates in the month(s) to come. This will be informal. This will include other partners involved in the home buying process. This will not cost you anything. This will prove to be hands down the most educational and informative seminar/meeting of the year.

Sign up thru http://www.TheSmithsBuyAHouse.com (copy and paste). On the home page there's an area for your information. Make mention of your interest in the fall/winter seminar and I will keep you in the loop.

Best---

good news/bad news of toronto real estate market

2010-09-22T17:45:00.000-07:00

With September nearing a close, here's the good news and bad news if you're a Buyer;

Good news:

Interest rates remain at historic lows and don't look poised to move up soon based on many recent economic indicators

More supply is hitting the market in most areas

Prices have slowed in growth from what we got used to seeing a year ago

Low inflation will keep rates low for a while yet

Bad news:

Multiple offers are creeping up in some areas

Days on market is lowering again. Though some stuff is sitting...if priced well, a lot of listings are selling quickly. Some before even hitting mls.ca and many before the open house

Prices are not really moving down. In many areas they're moving upwards. Often a result of a lack of supply.

Still a good time to begin your shopping and always a good time to get educated.

Always happy to speak further,

Michael---

http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca

Toronto market offers many new listings in first week of September...or does it??

2010-09-12T15:33:00.001-07:00

There's been quite a few listings over the last week to pop up on MLS. Were you in the market over the last few months? Most weren't given the statistics. Well...I was. It wasn't my favorite market...but I was there. Sometimes just being there is helpful. I'm a lot better then the guy who just shows up. But this is a case where just showing up would certainly be a major step!

Why? Simple. Many of the listings aren't new to MLS. They didnt sell in their 90 day mandate that begun in June and now they're back (some with different photos, some with different agents...all with different MLS #s).

Why care? Well...the arguement is that the inventory may not be new. So statistically speaking, this is important as they're not truly "new" listings and it's also important b/c some have responded to the new market structure while others may have increased their prices. I'd think you'd like to know as a buyer coming to market this September.

The history of the exact listing is important for obvious reasons. The history of what's going on on the street is also important and the "feel" for what's happening on the ground is also crucial.

Again, this is stage 1. There's obviously much more to this. Just thought I'd offer up some free advice.

Call me this fall or email with any questions. Look forward to speaking with you.

Best,

Michael

http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca

Welcome Back Buyers in GTA. Predictions for a September Housing Market

2010-09-07T06:55:00.000-07:00

As you make your way back to work today...you've likely indulged in headlines all summer about the housing market. Rates are going up this week for sure has been the most popular arguement. Canada is growing and it needs to be slowed. Interestingly enough, the last bout of increased rates still had Canadians scrambling for treasuries/safety and yields moved downward causing mortgage rates to fall (fixed term).

Gone are the days of multiple offers read the headlines. Yet from where I sit, the lack of supply often resulted in homes in certain pockets selling above with a few offers on the table.

There is a housing bubble and prices will crash others argue. I've been hearing about this for the better part of the last few years. I haven't seen it. The economists are worried about the increasing debt loads of Canadians and how home owners are going to start saving more and hence the economy will falter and housing prices will fall. Though, they put into place some stricter guidelines already that apparently have had some effect on eroding the bubble.

Anyhow, nobody has a crystal ball. Certainly the U.S. didn't!!

I'm betting that we see an increase in listings this month and while traditionally the stock market doesn't fare well in September, home buyers make their way out of the wood work and purchases go up from an inactive summer.

In any event, rates remain low, product can only increase from where we've been over the last few months and people always need to have a roof over their heads. People like having equity and there's no faster way for most to make their asset column look stronger then purchasing a home.

As I've argued for years, the seller pays the commission and its embedded in price you pay as a buyer. A strong agent will not only make sure your offer is one sided to your advantage where possible but should be able in this market to negotiate the best price and terms on your behalf.

I'd be happy to speak to you should you have any questions at all and see my website http://www.TheSmithsBuyAHouse.com (great resource).

Happy September---

What the hell is going on in the housing market in Toronto?

2010-08-25T13:15:00.001-07:00

Here are my observations from the front line:

1. Supply is lower

2. Prices are coming off but they're overall up above 10% year to date. It's just of late in many pockets we've seen a downward movement

3. Homes in certain pockets; Leaside, Forest Hill are still seeing multiple offers and selling above as recent as yesterday. Why? Supply is low and people need to purchase ahead of the school year.

4. The market prices don't look like they're going to show a sizable drop in the near future

5. Interest rates aren't much of a threat. The U.S. is dealing with deflation and Canada is seeing treasury yields fall as people park their money in safe havens. As such banks are reducing their closed mortgage rates....so the rates are still looking great for the next while

6. HST is an issue, but understand it doesn't affect resale home prices. Some periphery services will increase a bit

7. It was presumed that HST would have led to a heightened inflation index. It didn't for the most part.

8. People always need to buy and sell. Households get larger or smaller. People want a certain school district and new condos need occupants. So there is a market. We should see an increase in inventory in September and its important to note that August is tradtionally the slowest month of the year for real estate.

So...hopefully you've enjoyed your summer vacation, saved up your downpayment and are getting excited about the purchase of your new home this fall or winter.

If you have any questions; would like more detailed information on a certain pocket; gain access to listings with no strings attached or are interviewing agent(s)...please contact me anytime.

My best---
www.TheSmithsBuyAHouse.com

Toronto Mortgages in a Buyer Market. Deflation and Rates?

2010-08-04T06:16:00.001-07:00

Its looking like there's reason for the B of C to gradually increase the overnight lending rates (short terms). These affect variable rates mortgages indirectly as they're tied to the prime rate. So barring some seriously corrupt news from the US, this would be my guess.

That said, we find ourselves in an environment where fixed rates with the likes of the 5 yr rate going down. Royal Bank just dropped their posted rate.

Why? In short, the US is worried about deflation as oppose to inflation. There's talk of the FEDS injected money back into the economy by way of buying up long terms bonds, thus creating the demand to keep rates low and flushing banks with more money to lend and not hoard.

This money in theory should go to writing mortgages and stimulating the economy. But US households are on a savings kick and unemployment should inch up.]

Put all that together and fixed bonds yields should fall. The more who run into the bonds for safety lessen the yield that needs to be paid. People are happy with low yields these days as long as they're not losing money.

B/c Canada is linked to US the bond market rally continues here and as a result fixed rates are temporarily going down, while prices have certainly gone up year over year, a more balanced market should keep prices flat.

So, once again BUYER's go get preapproved, start looking at homes and for god sakes find a good agent.

visit http://www.TheSmithsBuyAHouse.com

Cheers-

Mortgage Basics when buying a house as of today

2010-07-28T07:19:00.000-07:00

In short and not from an economists mouth....here's what buyers are faced with.
Do you lock in or do you stay with variable rate mortgages with tempting low prime rates.

Over the last many years emergency rates have made variable products much more attractive and even with the heighetned risk attached to variable products, historically holders of these mortgages have fared better then their fixed counterparts.

There are arguements that this may change moving forward. Its pretty certain the the government is going to be increasing short terms rates which affect variable products. Interestingly in the wake of these prime rate increases, the banks borrowing rates have been falling likely due to the avialbility of credit and the desire for Canadian banks to lend money as oppose to a few years ago. With that, though prime rates are increasing, some variable rate mortgages are still priced below prime.

On the other end, fixed rates are being pushed down according to the yield curve. Why? Likely, consumer confidence and difficulites in the U.S. and the flocking of many investors to safe havens of government bonds even with low yields.

Investors puchars mortgage securities to get returns. These vehicles carry greater default risk the a similar comparable 5 year bond. So if 5 year bonds are offering low yields, there is room for fixed 5 yr mortgages to stay low for a period and potentially move lower so long as investors in these products get a premium return relative to the spread theyd see on an investment in a 5 years fixed gvt bond.

So right about now, you and your mortgage holder may want to discuss what option suits you best. Theyll want too review your risk appetitie, time horizon for any other investments coming due or the chances that you'll have excessive cash coming to you soon to pay down a closed vs open mortgage (both carry diff weightings). If your advisor believes a double dip is inevtiable then they may feel that deflation is a concern and variable rates have further to dip.

Anyway, I like venturing out of my comfort zone every now and then. I'm pretty confident the above is sound but if you know better, write me and teach me. I'm just a realtor....with an MBA.

The inventory is low. We're 20% off sales volumes from last June. It's a slow summer but september tratditionally ramps up. So if you're contemplating getting into the market---the balanced market is always a "fair" time to shop.

If you don't have an agent and wish to learn more--pick my brain and let's chat anytime.

My best

http://www.TheSmithsBuyAHouse.com

MLS disclosure and buyer's chief complaints in Toronto

2010-07-20T06:44:00.001-07:00

Over the years the following seem to create frustration for buyers when they're focussed on listing information readily available before they see a property:

1. Central Air Conditioning-"yes". Older homes with boilers (water heated) often have a wall mounted a/c unit in the house (or 2). This often get ticked off as "central air conditioning" though it's not really a central air conditioner. FYI...a house with a water boiler cannot run a central air conditioner. If the owners have upgraded and spent a good amount of money, there may be what is known as a "space pac" which is an air conditioning method that begins in the attic and runs thru piping from room to room.

2. Mutual driveway listing with 1 detached garage. Note, in most older homes, the mutual drives are so tight that most of today's autos won't fit. So the garage is nothing more then a storage facility---which is fine so long as you go in knowing that it's not going to house your car.

3. Pad parking spots-MLS rules are becoming stricter around agent's disclosing that the parking spot in front of the house is "not" legal. Often there will be a badge displayed on site that shows that the spot is registered with the city.

4. Transferance of pad parking--this requires the new Buyer to actually reapply for the pad park. Another means for the city to form revenue. Note, this must be done.

5. Number of bedrooms--a house is noted as a 3 plus 1. Often this means that there are 3 bedrooms on the upper floor(s) of the home and an additional room in the basement. Sometimes the room in the basement has neither a window nor a closet. It's a glorified closet.

6. Partly finished basement--most of the time you can assume this means an unfinished basement and budget to do the whole basement. Sometimes the basement is completely unfinished and in the back there is a laundry area or maybe a couch with an ikea rug on top of the poured concrete (we see this in newer homes quite a bit as the owners wait the year plus for the foundation to level before finishing).

7. No mention of asbestos. Asbestos is no where near as scary as it has been made out to be. It's often used above boilers to wrap the piping to insulate the water and keep it warmed. So long as the asbestos is not disturbed or "encapsulated" (looks like a white bandage around pipe). Sellers to date do not have to disclose the existance of asbestos. As a prospective home buyer it's of use for you to know that it exists, espectially if you were planning major renos, you'd want certified people to handle the matter.

8. Property Tax quoted on MLS. It may seem low. If the house has had a recent addition done the city may not be aware of it and is assessing house off the existing structure from 2008 assessment date. Be sure to know. Also taxes are increasing until 2012 each year by the difference of the 2008 assessed value and the prior one.

9. Pets permitted in condos---you'll want to make sure if you have a pet that you get your agent to do some digging here for sure. Some agents will say "yes" under the condo listing and it may turn out to be a "no" OR the corporation of the condo may have restrictions as to what size pets permitted. Also, be sure to verify what is included under the monthly maintenance fee. Some times agent's tick off the wrong boxes and this will most certainly affect your monthly budgeting (especially first time buyers).

10. GST/HST when buying a new home. The agreement should always read that GST/HST is in addition to the purchase price. But, often the HST will be buried in the price you pay. You'll want to know for potential rebate purposes. I will defer to the accountants and lawyers here. Just bringing up the issue.

There are countless other areas of confusion for Buyers. As I continually say in these blogs...stay informed and hire someone who truly has your best interests covered.

Thanks-

http://www.TheSmithsBuyAHouse.com

Offer Strategy before you waive condition in Toronto

2010-07-15T08:35:00.000-07:00

Here's a scenario...

John and Jill have conditionally purchased a house. Their amazing agent Michael negotiated great terms and the offer is conditional upon the results of a home inspection to the sole and absolute discretion of the buyers.

Let's suppose that the inspection revealed that there was some active water in the basement and upper ceiling in a bedroom due to some minor roof mishap (perhaps the flashing around chimney has come undone).

John and Jill are willing to take the house in "as is condition" based on the inspector advising the couple that the matter isn't a big deal, will likely not worsen in the next 60 days prior to closing and the house has to be transferred in like condition to the way they purchased it.

John and Jill were going to paint anyway. So now they have a little roof work and some ceiling work. All said and done the rest of the house proved to be in good condition. With that they budget aloted for the fixups was approx 1k. This is a very manageable amount for a 0-2 year time frame post inspection.

If the final waiver is to be submitted by 8pm tonite (the waiver removing the final condition) and making this a binding agreement....John and Jill have 3 options.
1. The home inspection is to their sold and abolute discrtion so they can walk
2. The couple may just waive the condition and accept the minor defect and move on
3. The couple's agent can submit an amendment, changing the initial agreement and putting the onus on the seller to repair the roof by closing at sellers expense and offering up all documentation to show it was repaird. The Sellers then can walk from the amendmnet (not agree) or agree to it.

Here's the thing...make the amendment due by 7pm and not the 8pm that the original agreement dies at (the time the waiver is due). Here if the sellers don't agree to play ball and the buyer decides to move forward, after 7pm the deal defaults for the final hour back to the original contract ---the very one that gives the buyuers until 8pm to "waive" the condition and own the house.

This is a small tip but a good one to know. I've got plenty of these tips for you. It's all about staying on top of the game!

http://www.TheSmithsBuyAHouse.com

Cheers-

Buyers Market still depends on basics of supply and demand

2010-07-12T10:30:00.000-07:00

There's no denying that there's a shift going on out there in the market.

So what does this mean?

It means no matter what we always fall back to the basic economics of supply and demand.

Yes, some buyers have had their dreams dashed for a period as they failed to qualify with stricter terms on mortgage.

But, others are noticing that the market has lost some of its competitiveness. Has it though?

Some things to be cognizant of:

1. When there's little supply in a demanded pocket---even in a so called "buyers market", you can still find multiple bids. See http://www.TheSmithsBuyAHouse.com. Look under mutliple bids and strategies.
I've run into a few circumstances of late where the price of homes were still bid up and competition exists. Not April competition, but competition.

2.June to June prices have increased. A buyers market does not neccesitate falling prices. It would be nice

3. New building permits are down, so if there are enough buyers in market then stock of resale (supply) will dictate the competition and interest.

4. Rates are still very low. The big banks all dropped rates last week on closed mortgages.
5.With the recent job #s, it looks pretty certain that the BofC will raise rates. More workers should translate into more demand for assets. If supply is plentiful, the buyer market continues.

6. Know the neighborhoods you're searching in and look at those stats to better understand what a "shift" means for you.

Deposit, Mortgage, Downpayment, Adjustments, Interest--Tracing your Buyer Money Thru the process of buying a home.

2010-07-07T12:10:00.000-07:00

Tracing your $$$ as a buyer

When you locate the house you decide to make an offer on, this is what will transpire:

1. If after negotiating an offer is accepted (conditionally or firm), the buyer has 24 hrs to certify a deposit to "hold" the house until closing.
As a benchmark we use 5 percent of the purchase price. In unsteady economies the seller may request more.
Note: if the buyer does not close/make good down the road on bringing the money...the sellers doesn't automatically get the deposit money. It typically would go to court where the seller will sue fore deposit money, plus interest plus damages plus legal fees.
This can also be taken care of outside of court.

The deposit money given at this stage by the buyer sits in an interest bearing account typically with the listing brokerage where it will earn a laughable amount of interest in most cases depending on brokerage.

The deposit money is part of the downpayment--all monies calculated by buyer (outside of land transfer taxes, moving costs, legal fees, adjustments and net of mortgage buyer is taking).

On closing, there may be adjustments. Ex: seller has paid taxes for the month or quarter and buyer owes back some money. These adjustments are taken care of at closing. Also, a buyer may opt for title insurance approx 300-400 dollars as a one time fee.

On the date of closing, the bank will forward the mortgage to the buyers solicitor and the buyer will forward all other monies needed to pay seller.

The buyers solicitor will pay out the sellers solicitor and in return the buyer will earn the keys to their new home.

Commissions are stripped out from purchase price and seller is issued cheque net of all borne expenses.

Hopefully this clarifies when and how your money is spent.

Of course depending on where your downpayment is coming from ie RSPs, there are a few further complexities that you're mortgagor will catch you up to speed on.

Today, it was announced that sales in Toronto in June were off nearly 10 percent from last year. The average price of a detached is approx 435k and that the second half of the year we will see a slowdown. Prices may stabilize if new construction stays soft, reducing supply to mostly the resale market.

Cheers-

Michael Gruenstein MBA CSC Sales Representative Re/Max Realtron http://www.TheSmithsBuyAHouse.com http://www.Propertiesinthegta.ca Blog:mgruenstein.blogspot.com O:416.782.8882 C:416.271.2066 mgruenstein@trebnet.com

GTA Housing Market 2015

2010-07-05T06:02:00.001-07:00

I'm curious how the housing market will shape up in say 5 years from today?

We've enacted the HST and made some stringent qualifications for first time buyers.
That group used to walk into the bank, apply at a variable rate based off prime rate (very low as a percentage), ammortize the heck out of the mortgage, put 5 percent down and go house shopping.

Now, we have the same group qualifying at the 5 year posted rate as of April. This distinction has surely dropped many buyers first time buyers out of the market.

One could argue that that's not a bad thing. After all, with emergency rate loans and giving these guys mortgages...it could set up for a tough run when rates go up during their 5 year term (most popular term). And unless their incomes go up, it takes a bigger bite of household debt (which is already at all time highs here in Canada).

My concern is that I've always seen the first time buyer as the foundation of the pyramid. Less then 1 percent own 1 million plus homes. The bread and butter or sweet spot is 200-450k (just under and just above the average price for a detached in the GTA). In the past, we've seen first time buyers enter the market and begin the process of leveraging and increasing their networth. They get the keys to their basic semi that they paid 400k for. They do some renos; follow the rule of location and in an up market they see the value of the larger detached in area increase year over year by double digits thus pulling the value of their smaller home up by leaps and bounds. 5 years down the road, their semi has gone from 400k to 650k. Welcome to Avenue and Lawrence and Leaside folks. Now they paid down some of their mortgage and saved a little and their ready to upsize. So the guy sitting with the detached a few doors down is waiting for the semi owner to buy his house.

Taking more buyers out of the market shrinks the size of the buyer pool down the road for the second and third level homes. True, it only takes 1 buyer and theyll be enough one-off buyers out there but we've loved having 16 buyers bid up a house for the better part of the decade. Will the market not be so interesting then? So much damn fun for buyers (I really mean sellers).

Anyway, just a thought. I agree it's important to make sure a buyer can afford a house. So I'm not anti the new regulations. Just, every action seems to have a reaction. With that, buyers who train hard and do their work will be as okay as ever.

Enjoy the heat?

http://www.TheSmithsBuyAHouse.com

HST and GTA homes...now what!!

2010-06-28T09:33:00.000-07:00

Well we've anxiously awaited this date. It's only a few away on the calendar. Interesting it coincides with Canada day and celebrations. Okay, it's not to be celebrated....but is it to be feared? Will HST change the landscape of the residential market here in the GTA as we know it.

Not much. Most argue. The main concern is when your purchasing a new home. But...its so difficult these days to calculate costs per sq ftg from one builder to the other and one neighbhourhood to the next so builders will bury much of the cost in the sticker tag of the house. I don't think they're going to piss the buyer off and dangle the HST as an extra all the time. Without getting into the tax consequences of how this gets done, as I'm not a lawyer or an accountant (sorry mom)..it'll get done...above board...or underground...it'll get done.

When Tarion warranties came out, for less thenm 1,000 on a 1 million dollar house, builders and buyers would fight over who pays the enrolment feet. We're here to scrap over everything and then feel like someone one or lost. So we'll scrap it out.

Interest rates are still low today and thats a saving grace for the builders selling new homes as buyers can leverage these rates and justify the costs (somewhat). This wouldn't be taking place now nor work out if the interest rates were double digits! I suppose this would all be different in that event.

On that note, rates are going up. There doesn't seem to be much arguement there. Some economists argue 1.5% prime rate (currently at .5%) by year end and above 3% by next year. Enough to get current mortgage holders to think twice about their debt levels both inside and out of thier home expenses.

In the meantime, the residential real estate market got a jolt in April when they made it more difficult for first time buyers to get into the market. This is more of an issue I'd think. I've always seen the first time buyer as the lifeline of our economy. Once they`re in, they increase their net worth overnight, own a major asset and begin the lovely process of leverage. In a few years they become our crop of 700-1million buyers (mostly on the increase in the house values) not their amazing savings abilities!!

If you`re out their buying now, the timing is pretty good. Demand is lower and supply is quite low, hence a more balanced market in most areas. And interest rates are still really low. The HST in the resale market will have little effect so don`t be scared off and listen to the doomsayers. Go get yourself a house.

If you have questions along the way---ask me!

BTW, I`m leaning towards starting a home buyer seminar over the hazy days of July. It`ll be free, informative and as fun as this can get. It would be a good first step if you`re looking towards the market for the first time or havent been in the market for a decade. A lot has changed.

If you`re interested, send me an email or call my office " 416.782.8882 and have me paged.

TheSmithsBuyAHouse.com..you can email me inside the site.

FIFA and Canada's Housing Market

2010-06-22T09:52:00.000-07:00

FIFA is everywhere.
FIFA is a smorgus board of countries around the world with varying issues.
Some like Greece come to South Africa with unprecedented debt problems and lowered credit ratings.
Spain is the next pot brewing up a massive debtload.
Germany is angry at its lazy Euro peers.
U.S. is feeling a bit of relief and even considering raising rates.

Canada didn't make the cut. But it's banks have won the tournament on a global scale for being in the best shape of its peers.

While the U.S. contends for a position in the finals in the World Cup against maybe Greece or England (another balooning deficit country)...Canada will use the time to show the rest of the world not glued into the World Cup, how to lead a strong economy and banking system.

Though, this system has put some hardships on first time buyers here at home, it is probably saving these buyers from a world of hurt when interest rates start working there way up.

Remember, banks will work with you if they see a "future" with you. But be prudent. Don't get excited b/c the bank will throw a large mortgage your way. You have potentially 2 land transfer taxes, the potential for an upped property tax bill and the arguement that some areas are caught in a bubble.

I do believe that we're seeing a balanced market with lowered demand and lowered supply. If you're a buyer, keep both feet on the pavement because listings in July and August usually are priced well as the sellers need to sell. So don't despair at the low volume, rather make your agent work to find the product and seek out those that need to sell.

Go Argentina?

Cheers-

Residential Propety Taxes in Toronto and HST: expenses for you.

2010-06-19T13:00:00.000-07:00

You knew there would be…..HST is coming to town
GST- Is the property a resale or new construction. Resale properties are not subject to GST. New construction is. The GST can be included in purchase price OR in addition to.

You’ve probably heard in the media about the much dreaded “HST”. Were just beginning to learn about how this will work. Here’s what we’ve learned to date as far as the housing market is concerned:

HST-this is new and will increase taxes to 13%. This will apply to new homes being purchased after July 1st 2010.
On a purchase of 500k, additional tax is 40k. Builders will apply for 2 percent tax credit on supplies-10k. Now 30k owing. There is going to be a max 24k rebate on a 400k plus purchase. So effectively you will owe 6k more in taxes. Doesn’t sound that high right? Well, most new homes in this city are above 400k. Let’s look at a 1Miliion dollar home purchase with the new HST. You can go ahead and add another 36k on sticker price!!

HST on resale puts a small dent in your pocket in increased tax on legal fees, moving costs, etc.

The concerns some have with the HST include:
How will it affect builder’s quality as they try to keep asking prices lowered
How will this affect interest of buyers of new homes

Red Flag: Property Taxes. MLS will point out property tax bill. You want to pay attention here.

In 2005, MPAC valuated properties in the city. These valuations became the basis for applying the tax rate to. In Jan 2008, MPAC reassessed most properties in the city and in most cases the valuations went up with the market. The 2008 valuation difference above the 2005 valuation is then split in 4 equal amounts and from 2009-2012 inclusive the equal amounts will be placed on top of the 2005 valuation amount to gradually increase taxes owing according to tax rate. In 2009, if seller is posting a tax amount on MLS, it may be according to a 2005 valuation. This is important to note as it will up your annual tax bill for property. Again, stay ahead of your competition with your knowledge!

It's being debated that with Canada looking to reduce its budget deficit per GDP, governments will cut spending and look to increase revenues. HST is one source, but a further hike in property taxes is certainly a means to get more money in the governments accounts.

http://www.TheSmithsBuyAHouse.com

What a Buyer Needs to know in Toronto Housing Market before offering.

2010-06-18T08:48:00.000-07:00

Initial Homework with your Agent:

Sample of Questions I’d think you would want to know some answers too.

What have comps sold for in area?
Is this a typical or atypical house for the area?
Has this house been marketed before?
What is the lot size relative to comps?
Is their new construction in the area and with that can we gage what portion of price is going to “lot value”?
What is maximum built out permitted by city on this house should you decide to renovate down the road?
How many days has house been marketed and hence motivation of Seller?
How many days was this house on the market the last time it sold?
Have the Sellers completed a pre home inspection? What company did it? What were the results?
From a layman perspective, are there any blatant defects to note? Windows in rough repair, ceiling cracks beyond settling cracks, is there water gathered/pooled in the yard and not in neighbors?
What’s the age of the house? If mechanics are new…who did them? Was it the owner or a certified electrician?
What’s the parking situation? (more to come on parking. There’s actually a bit to know on this topic).

Here’s an interesting story: Don’t try to be too smart!
I had a client who decided to go their own way and buy through the listing agent b/c it was day 1 of the listing and the Buyer thought they’d get a great deal doing this fast and with the one agent. They bought the house. Only thing is….this was the 5th listing in a row over a few years and the market price didn’t reflect 2 very important elements 1) market value in current market and 2) insider knowledge many agent’s had that Sellers were uncomfortable dropping list price as they didn’t want to appear desperate, but that they were “very flexible” on the price. My old Buyers paid close to full pop and did very poorly. Again, know the market and be clear what the “best deal” really means!

My estimation is that I would have saved them in excess of 50k on this purchase if they had let me negotiate it. Story sound extreme?

It doesn’t happen every day but agents in the field often have similar stories to share!!

http://www.TheSmithsBuyAHouse.com

House Hunting and how to get ahead!

2010-06-18T08:45:00.000-07:00

Shopping Time: Go have some fun BUT be “Strategic” here.

This should begin with a “wish list”. Often the wish lists get more realistic with time. But it’s needed as a benchmark and a starting point. Often the house you finally locate from the initial “wish list” is pretty darn close to what you went searching for only you included a few wishes that you didn’t really need.

How to Suffer in this Market

Some buyers get the idea that Sat/Sun Open Houses are where it’s at. WRONG. Homes trade hands Mon thru Fri and often waiting until the weekend can put you at a serious disadvantage should preparation be needed to advance to an offer, especially if there’s more than one competing offer. You should be out there hitting the pavement timely, especially in this immediate market with lessened supply and strong demand (in most pockets of the GTA). This is real easy. Let your agent help you narrow down some homes to see and let them make the plan and orchestrate the outing. To be fair, if you have a weak agent, this could play out like a really bad date. Some homes sell the first day on market. Just last week I listed a property in the central core and entertained 16 phone calls on Wed (property was listed on Monday). We had a few offers in play on Wed. All the callers who located the property some 48 hrs after it was listed (working off MLS.ca) were told it was too late. A shame…it was a great house in an area where there’s little supply. So if a Buyer (or in this case at least 16) have been watching this area and are ready to buy…why would they be sitting at home waiting for it to pop up on MLS.ca with a lag while competing Buyers knew of it days in advance. I will let you guess which Buyer is expecting delivery of the keys in a month!

How would you see a house before it came out so that day 1 you’d have a chance?
Simple…make sure you have a strong Agent! I’ve made sure to build relationships with my competitors/fellow agents. In turn, I can put myself on a short list for homes coming out in certain areas I work. I get a heads up. What an advantage for my Buyer!

If your strategy is to utilize MLS.ca as your main lead generator, you’re doomed. I know few guys who succeeded at sitting at the bar and waiting for the girl to give out her number. You have to be proactive. This is reactive work and it simply won’t work in this GTA housing market.

MLS.ca lags the official MLS system by up to 48 hours, so you’ve already missed some supply that your competition is aware of and may have seen and even bought.

MLS is one means of locating a home. Some Sellers for personal reasons (don’t want nosey neighbors, estate sale, don’t want sign on their lawn) entrust a sole brokerage to market their property on the hush either within the walls of the brokerage or within the network of the brokerage. So having an agent who is plugged in to the process also puts you in an advantageous position relative to most of your competition. Ask your agent about their firm’s supply and success of housing inventory off MLS.

Let your agent see homes through your eyes and get a solid feel for your needs, so that while you’re busy working, your agent is busy working on finding you a good house. Some Agents first send their Buyer to an Open House and wait to get reported back to. In many cases, the Agent has yet to see the house, so they’re really interested in your report!! Perhaps the Agent is too busy with prior commitments?

In the Real World
Depending on your price point and areas of interest, there may be fewer homes then you’d like out there. Now more than ever, you need to see homes timely and you need to be made aware of any and all opportunities outside of MLS. Make sure you’re working with an agent who will provide this…or “say hi while you’re out there on the Open House circuit”!!

ADVANTAGE: Buyer working with solid Agent.

Mind the Language of the Listing Agent's for Clues....

2010-06-16T17:32:00.000-07:00

As discussed here and in the media...there is a shift going on in the marketplace.
It's almost tangible. More listings are popping up in most neighborhoods and multiple offers aren't happening as frequently.

The language listing agents are using of late is important to note...

3 months ago...this would have been typical in the brokers notes in the MLS:
"Offer(s) if any, to be reviewed March 25th @ 8pm, register by 6pm."
There was a decent chance that a "bully offer" may have sparked an earlier offer date.

Today...this is more common language in the MLS:(I've come across it countless times in the last few days in many ranges and areas I represent buyers).

"Please provide 48 hr irrevocable on all offers per vendors"

This is often a less aggressive/less confident way of trying to collect offers. Here, the sellers are hoping that if their agent collects an offer and the house is priced to market, that they buy time to connect with all other agents who showed the property and voila....we're back in "multiple offers" (if all works out for the sellers). The only thing that changed is the "softer tone".

The good news is, there are fewer multiple offers and with more supply to hit, rates increasing and many arguing that the bubble is bursting---the market is infact looking like a brighter place for buyers to be!

http://www.TheSmithsBuyAHouse.com
http://www.PropertiesintheGTA.ca

Hiring a guitar teacher costs more then hiring a realtor to buy a house!

2010-06-15T10:29:00.000-07:00

We need to be clear. Very clear. I'm having discussions with clients and friends about where the market is at and the talks are footnoted by stats people are reading.

A few things to pay attention to when you interpret the data:

1. National averages and market movement tells us little about our immediate market

2. Toronto statistics tell us little about the market as well. Its best to divide the market into either small geographic districs OR price points. This data is the most helpful and immediate for comps and predicting future movements of supply and demand.

3. When discussing the average price in Toronto (which as I just pointed out means little for you) read carefully what the time constraints are. Is the data pointing to an increase in sales/volume year to date which would consist of no recession OR is the data looking at this years #s ie; 2010. The 2010 data is skewed b/c most would argue that many buyers forwarded their purchases to beat HST, April mortgage deadlines and grab a hold of the emergency rates.

Its been a real interesting period to follow the market. In some price pts and areas, weeks in timing have led to sellers missing seeing more then one offer on the table and taken first time buyers out of the game altogether.

Its my belief that the first time buyer, not the top 1 percent, drive the ultimate direction of the market. For the most part, it looks healthy out there but it really depends where you're looking.

My suggesstion, study and study the area of interest. Learn the pricing of those that sold off mls and on mls. Become an expert. If you have the resources and time do this as a full time gig. If you have your own full time gig..get help!

I recently picked up the guitar. I used to play a bit. I'm stagnating a little. I can keep going at this alone or I can get a professional and learn inside tips. And my investment in hiring a guitar coach is greater out of pocket then yours in hiring a real estate professional whose costs are covered by the seller!

Cheers-

Michael Gruenstein MBA CSC Sales Representative Re/Max Realtron http://www.TheSmithsBuyAHouse.com http://www.Propertiesinthegta.ca Blog:mgruenstein.blogspot.com O:416.782.8882 C:416.271.2066 mgruenstein@trebnet.com

Market Timing and Buying your home!

2010-06-09T08:07:00.001-07:00

There was a solid article in the Financial Post today that talked about owning a home as a long term investment. Some have been succesful no doubt at timing the market, most aren't. You see most people around this time in the cycle think that ahead of further interest rate hikes and before more supply hits and demand falls off further as it has been in certain ranges due to interest rates; hst; general economy and european debt, high undemployment, etc., that its the time to cash in and sell. Looking for a longer closing date, insulating themselves with time for the market to drop off a little bit. Then like a stock they can buy into the market at a rosier time---a buyers market. Some economists will argue that the lowered prices from increased supply may be offset by the interest rate hikes increasing the monthlies you pay. It really depends on your financial picture and specifically the home you buy and sell...but timing the market isn't so easy.

We have seen a drop in building permits across the nation and from the ground I'm feeling the shift in momentum away from the sellers market towards a buyers market.

Of course market variables and supply have been changing so fast and furiously where we see interest rates on fixed mortgage go up and then down in a few weeks. This isn't a straight forward market.

Keep doing your homework and learn the market as best you can. Most importantly dont overextend and buy a home in an area with upside potential..preferably one with more then just the natural inflation of the market as those heady gains are behind us for some time now.

Cheers-

The times they are changing!

2010-05-31T12:35:00.000-07:00

Today's GDP numbers for Canada; the emergency level rates in the economy; the housing market valuations; decent manufacturing and employment numbers (all relative) and the loonie flying under par.....it seems pretty certain that tomorrow we'll witness our first rate hike in years. Hey, that's not a bad thing for prospective buyers. Yup, mortgages become more expensive (marginal...for now anyway) but housing prices should cool. Not from a one time hike tomorrow but over time.

I'd argue it's a great time to get that preapproval and get in the game if you've been on the sidelines.

Summer listings are not as plentiful as spring or fall for that matter, but the quality can be great and the competition can fall off some.

And...if you don't like what you see this summer, then use the summer along with your agent to learn the market so you can spring into action in the fall market.

In short, take advantage either way of the late spring/early summer market buyers!

http://www.TheSmithsBuyAHouse.com
http://www.Propertiesinthegta.ca

Stay cool!

Market Update and Commentary

2010-05-26T07:57:00.000-07:00

CIBC found the market to be about 14 percent overvalued (residential market). Benjamin Tal would argue that a 5-10% correction is in store for the housing market. Between heightened rates and more money going to pay off mortgages from household income, the arguement is it needs to cool.

The stock markets have cooled and by definition we find ourselves in "correction mode".

Just a few weeks ago it seemed a no brainer that rates were headed up on June 1. The world picture has made that a tad more confusing. A retreat in commodities and a falling Canadian dollar as well as increased supply in the housing market for buyers to choose from has made for a confusing picture.

After a few small and quick interest rate hikes while ppl were leaving the safety of the US dollar heading into the recovering markets and now we find yields and mortgage rates falling again.

Some signs show pessimism around a recovery. Banks aren't lending to each other at bare bone rates again so a little bit of a squeeze on credit. China's market is down 25 percent since April heights. Treasury yields continue to fall and we've found our way under a few 200 day moving averages.

With all that...supply in the housing market is looking good. So if the above did little more then serve as an opportunity for me to demonstrate a tiny bit of knowledge---that's good enough for me.

And what's good enough for you....the market is a friendlier place to shop now and should continue. So get your game on!

Cheers-

3 Quick and "Clever" Games to understand Buying Property

2010-05-18T09:59:00.001-07:00

Let's play some games today.

GAME 1:
Let's play>>>>

"Darts". I give you 3 darts and I take 20. You shoot first. I shoot second. Not fair? Of course not. I have more chances to increase my score.
In real world: Buyers going to open houses see maybe 10% of inventory available. Many don't open house.
Buyer's working thru mls.ca miss first 2 days of marketing of property-theres a lag buyers working w agents don't have.
Good agents have networks for "exclusive/non mls/no sign on property listings.
Advantage--guy with more darts and guy with Agent gets more chances to throw darts!

GAME 2:
"MARBLES"

One red marble and 10 white marbles get dropped on floor. Red marble is asking price of homes in this market that you're looking at.
White marbles are recent solds and recent asks and history of house you're interested in.
As a Buyer, you need to know the comps inside out. Have the others been reno'd? What are the reno's worth? What's the lot size? School district? What's history of house being marketed? How many times has it been marketed? How long did it take the first time around to sell? Were comps sold is similar market and how to adjust for smaller lot, mutual drives, south side of street, easements...etc.
Advantage--guy who has all his marbles together!

GAME 3:

"You're the Agent"!
Let's make up a scenario. Here it is:
House for sale. Ask 699k. Easement in back. Pool inground. Reno's done namely a family room addition. Mutual drive with pad park.
Do your best negotiating. My hunch is you're thinking price and closing date and deposit and you're gonna work you're magic to get a deal.Assuming it's not multiples (where other strategies come in)!
Hey...were you concerned at all about saving your ass here?
Did you consider the easement and the pool? Is it legal to have pool over easement?
Is family room addition legal?
Survey illustrate that?
Was the pad park legal?
So on top of the price, deposit and closing date...this scenario would call for quite a few clauses to protect you on closing or it could get costly.
Btw...if the house was assessed pre renos/additions...MPAC will msot certainly reassess and taxes will go up. But you knew that! There may be a need for a holdback here folks!!

My point...these are 3 quick games. In our world of buying and selling, there's a lot more. A dedicated and knowledgable buyer agent is a must and commission is priced into the house regardless--sunk cost so you might as well get the help you likely need!!

cheers----

Keep your head up...in hockey and in buying a house!

2010-05-14T07:49:00.000-07:00

We've all heard the cliche..keep your head up. The translation seems to mean that by looking up you stay positive and open yourself up to better experiences and expand your horizon to grab this fortune.

I've had a few experiences in the last day or so that for more logistical reasons have had me thinking again about keeping my head up.

Watching hockey over the last few weeks, Ive seen some ugly open ice hits. A guy trying to do too much with the puck gets absolutely run over in a clean hit (albeit a painful as shit looking one). What could this player have done different? "Keep your head up" so you can see the hit coming and make a move. Making a move can have a domino effect as the puck gets brought down the ice---maybe even leading to a goal?

My second experience was this morning when I went out to my yard to see the landscaping coming to bloom. I'm fixated on the grass. We get patches of funny looking weeds maybe on the periphery of the lawn in an otherwise handsome looking lawn.

My wife thinks I'm nuts (as she should) cuz when she sits and sips her coffee from the patio she admires the green carpet with nice trees. I on the other hand have a compulsion that requires me to drink my coffee too quickly and seek out these pesky weeds. Hey...if I modelled my wife's behavior and sat and enjoyed the coffee and the backyard for what it is (our little muskoka in the city)...I'd actually be keeping my head up!

So, I'm going to work on keeping my head up.

Now, bringing this home to real estate. Many buyers have been feeling down about the market and multiple offers and inventory and the new rules, etc. Here's an idea. While your competition is getting roughed up (like an open ice hit they didn't see coming)...why don't you just keep your head up and keep going! (with the help of the right Agent)!!

Enjoy a much deserved nice day out there.

Cheers-

Hard to get a Pulse right now on Toronto Residential Market

2010-05-12T09:03:00.000-07:00

Look, I'd be lying to you if I said that this market in central Toronto is pretty easy to follow rigth about now. It's not. Too many factors happening at the same time. I've blogged about them but maybe a recap and summation in of value to some of you.

1. On April 19th mortgage qualification grew more stringent. Now first time buyers had to be qualified at the heightened posted 5 year fixed rate and not the low low variable rate. That took some buyers out of the market

2. HST is coming to town July 1st. Not such a big affair for resale properties but a big deal for buyers of new construction as their price point goes up.

3. Mortgage rates have steadily risen on the fixed end. The pullback in government stimulus and the need for the private sector to step in has created an environment where the private sectors demand higher returns then the gvt did at the emergency levels. Hence we saw the 10 year Treasury yield rise.

4. As rates are increasing, so too is the inventory of homes available. The two may counteract each other.

5. Some homes are missing offers. Others are selling 300k above in multiples the same night. Really depends on home and inventory surrounding that home. We just saw a house in the upper village go last night for approx 300k with a bully offer above list price

6. The Canadian economy is showing some signs of strength in terms of GDP growth and employment which may serve to keep housing prices at current levels

7. Conversely, many Canadians are heavily indebted through their mortgages picked up at emergency loan levels. Decent increases in these rates and the upcoming increases to follow in the variable market may push some homeowners into foreclosure. It is a concern that economists are looking into. Though we've had a strong track record of banking in Canada, theres no doubt that when rates rise systematically some will be pushed to the brink. This may serve to stop the escalation of housing prices depending on the volume of this occurence.

8. With the US dollar again the safety currency and people buying it up, yields are falling and hence mortgage rates may fall for a period. Still a great time to go qualify and lock in.

9. Building permits are up so there is confidence in the marketplace.

10. Many Buyers are out shopping and taking the added value steps that a strong Buyer Agent can offer. Don't be fooled into getting a deal by avoiding a Buyer agent. Unless you do this for a living and know all the "games" that get played...get some help!!

I'd be an idiot, if I didnt end off saying to call me for such help!

Cheers-

Whose a Seller Today??

2010-05-10T06:19:00.000-07:00

It's that time of year. The spring/early summer market. Some guy is sitting at home with a thougt. He tells his wife (or vice versa) that he can't get over what some of the neighbouring homes are getting. So, the home owners decide on a whim to call an agent they know and list their property for sale at "top buck". No harm done. It's within their consitituitonal right.

Up goes the For Sale sign. Up goes the listing on MLS. Pretty pictures, a nice write-up, an agent willing to do the work at this price and let the marketing machine rev its engine. Lots of showings (even at this price) and what do you know...an offer! The offer is brought in under the ask price and reflects in a very transparent market the fair value. Not rocket science...our sellers used the immediate sales on their street to price their home and buyers and agents alike can do the math pretty easily. The Sellers decline the offer without a signback.

The Buyers knowing with certainty that the house is priced above market value want it so badly they return with the asking price on their offer. TURNED DOWN. What?? It's the price they want. Ya, but our friends, the Sellers, haven't begun looking for a house and remember this is all a knee-jerk reaction to seeing some great sales on their street. Now its a reality for the Sellers and now their dialogue shifts dramatically. They're now saying to themselves....if we get a ridiculous price we'd (probably-still not guaranteed) move! And this ask price, good as it is, isn't gonna make our neighbors heads spin if we sell.

So, the Sellers decline and in fact don't even signback. What to do? Walk away. No don't walk...that's crazy...RUN away.

Some agents like signage. They like seeing their sign on a nice house. Our Sellers provided that. Also, the dialogue may have been..."Hey if you get something out of this Mr. Agent...perhaps a sign call....and we decide not to sell...its not a complete loss for you. Just don't kill yourself with the marketing cuz were not entirely comited to this process." Now, the Agent figures out his/her self serving interest with this particular listing and the Sellers haven't paid a dime to play.

This is an unfortunate part of selling in this kind of market. You get the "Sellers" and then you get the "Prospectors". Your Agent should be able with little effort distinguish for you who is serious and where to maxmize your efforts!

Btw...to all those Sellers who woke up this morning and decided that they'd put on a sign on their lawn for something to do......here's a suggestion. Go golfing?!

Uplifting Friday (not talking about the stock market)

2010-05-07T08:24:00.001-07:00

After a very unsettling day yesterday on the markets and mass confusion in England and the Eurozone...I came across this and thought it was a good story and inspirational. So I figured I'd post and relax from the housing blogs.

Karoly Takacs. You've probably never heard of him. However, in Hungary he's a national hero-everybody there knows his name and his incredible story. After reading his story, you'll never forget him...

In 1938, Karoly Takacs of the Hungarian Army was the top pistol shooter in the world. He was expected to win the gold in the 1940 Olympic Games scheduled for Tokyo.

Those expectations vanished one terrible day just months before the Olympics. While training with his army squad, a hand grenade exploded in Takacs' right hand, and Takacs' shooting hand was blown off.

Takacs spent a month in the hospital depressed at both the loss of his hand, and the end to his Olympic dream. At that point most people would have quit. And they would have proably spent the rest of their life feeling sorry for themselves. Most people would have quit but not Takacs. Takacs was a winner. Winners know that they can't let circumstances keep them down. They understand that life is hard and that they can't let life beat them down. Winners know in their heart that quitting is not an option.

Takacs did the unthinkable; he picked himself up, dusted himself off, and decided to learn how to shoot with his left hand! His reasoning was simple. He simply asked himself, "Why not?"

Instead of focusing on what he didn't have-a world class right shooting hand, he decided to focus on what he did have-incredible mental toughness, and a healthy left hand that with time, could be developed to shoot like a champion. For months Takacs practiced by himself. No one knew what he was doing. Maybe he didn't want to subject himself to people who most certainly would have discouraged him from his rekindled dream.

In the spring of 1939 he showed up at the Hungarian National Pistol Shooting Championship. Other shooters approached Takacs to give him their condolonces and to congratulate him on having the strength to come watch them shoot. They were surprised when he said, "I didn't come to watch, I came to compete." They were even more surprised when Takacs won!

Cheers-

What's in a house price?

2010-05-05T06:17:00.000-07:00

January-April of 2010 was if not painful for buyers...it was predictable. A shortage of supply; pent-up demand from buyers hiding during the recession; emergency loan rate levels all created the perfect storm for Toronto's buyers. Homes that took the time to show themselves well would most likely create a bidding war and sell above the ask price.

I've talked about the changing or shifting winds in a few blogs of late. Now, I think my pulse is correct. Because shifting implies some of the old is still in play as we move to some of the "new".

Over the last few weeks, I've seen some homes that months ago would have garnered much attention and hence a few offers..miss out on their offer date. Last night I was involved in a multiple offer that felt a lot like it was a few months ago. 5 agents and buyers wrestling for home ownership.

I do believe that the subtle rate increases combined with growing inventory is going to steady this marketplace in the months to come. In short, it should be a kinder time to be a Buyer. So, if you've been bruised and battered, dust yourself off and get back in the game. And if you're just making your way into the market---your timing is pretty good overall and go grab a strong agent and see property timely. Remember, just because the listing says offers are next week, doesn't mean that a "bully" offer won't land prematurely (see previous blog on this topic). And for crying out loud, stop going to Open Houses and using Mls.ca as your strategy for getting into the market. A good agent doesn't expect you to buy overnight and part of their role is to educate you at the very introductory stage of the buying curve.

I had a nice couple come into one of my open houses this past weekend. They were so upset with the buying process. They were agonizing over the process. When I inquired how they're seeking out homes they mentioned the Open House route, mls.ca (48 hour lag from when clients working with agents see homes) and calling the listing agents. All losing strategies. I promised to give them a "trial run" with me and show them the difference. Things are already looking up for my new friends.

Cheers---

Are Condos a good investment?

2010-05-01T10:11:00.000-07:00

You'll get many different answers here, depending on which economist you ask, which builder you ask, which renter you pole, which realtor you interview and which condo owner you ask and finally which building you are focussing on when you ask this question.

Look, in the perfect world, one would buy a condo off spec from the builder and pay entry level prices. Then the condo would be built and owners absorb their units. If the market is participating with low interest rates and a large buyer pool (particularly first time buyers)--you're going to likely be happy with your investment should you decide to sell.

That game is old. Where it gets tricky is when you factor in economic realities. So for those who bought say 5 years ago and moved in a year ago and decided to sell...it may not be quite so simple. Whats going for them is, 1) interest rates are low 2) strong pent up demand 3)prices have increased.

Now the tough part. If everyone decides to do the same at leverage this strong market, multiple units hit the market at the same time. So now a buyer is left scratching their head at the numbers and whats going on in this building that everyone wants out. For some it has been drilled into their heads that home is where you lay your hat and if you bought and immersed yourself in the purchase of your condo, you'd likely live there upon completion. Often not the case. With that many units for sale, naturally the supply outstripping demand, buyers have the upper hand on negotiations but still may not feel great about moving into what feels like an "empty" building.

Another issue with new construction that you just won't know until down the road is the mix of renters versus owners. Renters dont have the same vested interest in the upkeep of the building and have little interest in talking the building up and continuing the marketing job after the developer has left the building, the same way that the owners will.

That said, we also run into a square footage issue in Toronto development. At 500-600 dollar a sq ft and little new inventory being built in the 1000 plus sq ft range (for obvious reasons...a developer can squeeze more units in and there are more buyers in lower range then higher range). So new construction is often built with open concept and light colors and big windows and tall ceilings to create a larger feel. The good news is that the finishes often rival those of detached homes. And if youre lucky and do your homework, you can find a good split plan open concept building that suits your needs. Layout in this ftg is everything in my opinion.

Finally, its the age old arguement of fees. It's true that the sexier buildings are often sold with the pool, gym, billiards room, concierge, spa, dining room, movie room, etc. All those amenities clearly increase the fees. If you're going to use the amenities-wonderful. If you're not, think twice.

Often older buildings have stronger reserve funds/savings for rainy day stuff. But...older buildings may soon need replacement of windows, furnaces, roofing, refurbishing of units and common areas and this can result in a special assesment (temp increase in fees for a period of time to top up the reserve fund after the fixes are complete.)

Look, at the end of the day, I strongly believe you want to build equity. Renting does not achieve that. Detached homes are quite expensive for many buyers and condos can offer a great simplified lifestyle.

Theres pros and cons to the condo lifestyle for sure. Often money decides quickly which direction you will go. Now if you edge towards condo shopping...there's lots to know!

Thanks and enjoy the beautiful day.

As always, I'd love to hear from you. Email anytime. And thanks for all the questions thru the website http://www.TheSmithsBuyAHouse.com

cheers-

as-best-os/asbestos

2010-04-27T08:10:00.000-07:00

I wanted to add an extra "s" after the as above.

What is it? We hear about it, but what do we know of it?

In short, it's a fibrous material that's primary function is to provide insulation. It can be found around the exterior lining of ductworks in a centralized heated and cooled home. It can be found on pipes leading from a water boiler in the basement furnace room. If left undisturbed it can provide its intended fuction with no real concerns for maybe even the life of the home. If a new furncae is to be replacing the old furnace, proper handling of the asbestos is required and can be done relatively painlessly. Removed incorrectly and the fibrous particles can split and become airbourne. As airbourne particles, there still doesn't present too much of a risk, unless huge amounts are released. Clean up is left to specialized teams and typically its an out of pocket expense as its a preexisting conditions and a non insurable claim.

There are lab tests that can trace the number of airborne molecules of asbestos lingering in the house. There are also different types of asbestos. Type 1 (most common) isn't much if any of a health concern, but corrective action including removing of the paper/bandage can be done and encapsulation. Type 2 and Type 3, requires more specific and indepth work.

Asbestos can also be located in old plaster ceilings or in the base of an original tile in a landury room for example. Even the glue used to hold the bottom end of the asbestos tile contains traces of asbestos. With that new homes still feature tiles with degrees of asbestos. Car brakes when tapped emit asbestos particles. In fact if you were to take a airborne sample in downtown Toronto you'd probably see a reading that may cause your head to spin. It's all around us, blowing in the winds!

A typical home inspection does not look for asbestos. If inspector notices, he may point out to you. Sellers unless they have reason to believe that it is distrubed and needs repair don't have a duty to disclose per MLS as they would say UFFI (a older form of insulation) or mould issues.

At the end of the day, if you're concentrating on buying a home in the central core or west or east core and you just can't escape the charm of the old victorian, or high ceilings or city streets..you're going to face more housing concerns. Mould, termites, asbestos, old joists, sagging roofs, grading, leaky basements, water boilers, knob and tube wiring, etc. Of course a home inspector is of use. A buyer agent who understands the above can help prep your mind set and understanding of the particular costs and possible issues you may face with the house you just fell in love with. You need an agent to illustrate these issues clearly and not overblown!

Another day...hopefully another piece of knowledge for you?

Cheers-

Bully Offer!!!!!!

2010-04-25T05:58:00.000-07:00

Over the last few years, real estate "lingo" has made its was into main stream dialogue. Everybody sounds like a "realtor". Dunno that this is a good thing?

I remember 5 years ago sitting with friends of ours out for dinner and my buddy's wife leaned over and said something to the effect...friends of ours have listed their house for sale. They've done a "preinspection". They're worried cuz they have some "knob and tube" wiring and may have "asbestos". They're "holding back" offers and hoping to get "multiple offers" on the bid date. Another friend of ours was told by their realtors to do a "bully offer" on a property they wanted, she explained.

I had to break down the dialogue with her over dinner. So we looked at each of her new found real estate words.
-Preinspection
Holding Back
Multiple Offers
Knob and Tube
Asbestos

Let's face it, most of the above are straight forward but she didn't do such a great job at explaining the knob and tube and asbestos part. I wish I could recall her exact definitions. Lucky for her, I sold her a new home with a warranty that didn't contain either of her concerns.

Of late (and I don't think its gonna last much longer at all)..the term "bully offer" has become all the rage.

Just so it's out there....a "bully offer" is as it sounds. A party really pressing to buy a particular home tries to bud everyone else in line. Typically the buyer agent contacts the the listing agent and a verbal offer is presented. The dialogue may be..."what would your sellers be happy with to avoid any further disturbances of having people coming in and out of their residence. What's their most suitable closing date and if my buyers put that on a piece of paper (offer), can we bang this thing out in an hour and put the sold sign up?" I don't want to put words in other realtors mouths, but that's about the crude dialogue as a buyer agent I'd have with the listing agent.

The Sellers may take the bait even if they've had tons of showings. The upside for them is they get a price and closing date that suits them. The inherent risk is what if 10 parties would have bid up the price even higher. And if a seller is out of town for the week for convenience, the arguement of making their life easier holds little water.

It's not fun as a buyer to fall for a house and work on getting your ducks in a row only to find out that there's a bully offer. One thing to make sure you are doing to safeguard yourself somewhat is to book a showing for the property on day 1. Out of respect, the listing agent should call any buyer agent who has booked a showing to see the property to update them of the news. But the listing agent can only do so, if they know you exist (a booked showing is the only confirmation of you).

Their are strategies at play in a bully situation and of course your experienced, savvy and charming agent will assist you with those.

In the meantime, I have seen some offer dates come and go that a few months ago would have sold firm that night. This should offer some optimism.

For those buyers who are being removed from the home buying process with sharper lending regulations and heightened rates, the rest of you buyers should find yourself in the months to come in an environment with more supply and less sharp price increases. Some light at the end of the tunnel?!?!

Cheers and as always if you'd like to speak, email me of find me thru my website at http://www.TheSmithsBuyAHouse.com

Changing Winds??

2010-04-22T10:13:00.000-07:00

There's a change in the air entirely in some ranges and crosswinds coming in other areas.

The end of 09 and first few months of 2010 was a true Sellers market. Not much supply, emergency rates, pent up demand. That's the Sellers dream.

This week credit got a little harder to come by with the new mtg rules, HST coming to play, rates on fixed mortgages have increased .65 plus basis pnts, variable rates will go up as early as June 1st and supply has hit the market in most neighborhoods.

The result..inconclusive really. First time buyers are feeling the pinch the most with the recent developments.

Though, buyers of all ranges are getting a chance to feast their eyes on more and exciting listings. Some buyers are also comfortable applying a "wait and see" what's still to come attitude. So we are in some cases seeing days on market creep up and some offer dates passing with no bids.

With the canadian economy chugging along and rates still low, there is demand. Homes priced well and that show well will see offers quickly. But, I have seen some cases in area like yonge and lawrence where the seller 2 months ago in a very direct comp did much better then the guy out last week.

As always, if you have any questions about the changing landscape; want to discuss the market or know of someone who may be in the market for my services---please contact me at your convenience.

Finally, if you haven't visited my website, please do and forward to family and friends where fit.

Listing Error

2010-04-19T15:24:00.000-07:00

Every so often, I make a mistake. Yes, I'm prone to them. I recently lost a listing presentation in my farm area. How? Simple,,,I know the area too well. The Sellers were asking an unreasonable dollar in my humble opinion given recent comps and land value. My marketing plan was stellar, our rapport was strong. All I needed to do was change my number to suit them. Many agents do this and then work on the Sellers to drive the price downwards over time. The arguement goes, it's better to have a listing then not and youre one step closer to earning the commission (even if it is a long painful journey).

The Sellers opted to use another agent who was quicker to believe in their number. I was convinced wearing my Listing Agent hat that this property would sit. It did. For about 1 day and sold close to asking.

What I didn't do is try on the hat that many Buyer's are wearing these days. Scared out of their wits of tougher mortgage standards, increasing rates, HST (which doesnt have much of an effect on prices tho the media will have you believe it's huge), they're buying up property and in many cases paying a pretty penny for it.

When I work with my Buyer's I'm so focussed on pricing and comparables, etc. that often enough I don't see the value that other Buyer's may readily see with their representation.

Next time I go to a listing presentation and the Sellers name their price, I just may think twice and remember how that one went down! But, that's me on the listing end. Catch me on the Buying end and it's a different hat!

Best,

http:www.TheSmithsBuyAHouse.com

The Great Convergence

2010-04-14T08:36:00.000-07:00

All forces point to a strong spring market.

What are they?

1. Continued low emergency rates for mortgages that are being pushed upwards.
2.HST to hit in July
3. Mid April banks will apply more stringent methods of reviewing candidates--relying on fixed rate products and not the lower variable rates posted. Also, banks will like to see stronger downpayments.
4. More inventory to hit market, making it more enticing for buyers to get out and see homes and find the best deal

With all that, demand is going to continue to outstrip supply for a while. And that means prices aren't coming down while rates are going to go up.
The market is strong, the economy seems strong and people need to own homes.
Get your preapproval stamped today and if you're planning on buying and believe in the almighty variable rate...know that June 1st (if not July), that sucker is headed upwards too!!

The good news is...there are good opportunities out there in all ranges. Yes, the competition is tough. And you've gotta be ready and quick to the draw. Today marks the third day in a row, that I attempted to book a showing for a buyer client on day 1 of the listing to find out that the house sold firm the first hour it hit the market!! If you're looking to spend your hard earned cash and need to buy, please don't sit at home in this market and rely on realtor.ca You'll officially be seeing everything 2 days too late. Get in the game folks. The rules are changing, the players are changing and the speed is lightning quick. If what your doing isn't working...change it up. Bring in help!!

Cheers-

Housing Perspective

2010-04-12T17:29:00.000-07:00

The pursuit of your house is certainly one of the most exciting and stressful events of your life. We get very caught up in the highs and lows. Some buyers begin to feel so down when they lose the house they thought was theirs.

Little reminders in life sometimes help to put this stuff in perspective. I don't know if it's been just a very highly sensitized week for me, but I've heard terrible stories of health concerns and I know its time for many awareness campaigns for causes like MS and Arthritis and Diabetes. When we put the housing market in perspective, we're fortunate on many levels to be able to concern ourselves with this pursuit!

So on some basic level, I suppose collectively we should feel "lucky" to be involved in this part of life right now.

I just had a deal fall thru. I represented the Seller. It was conditional for 3 business days on financing--a formality we were told. We came to a conditional agreement. I picked up the phone in the morning to hear that the Buyer's could no longer make good on their condition. The stories started. First, they couldnt get their financing and then worse yet...they couldn't get a downpayment together.
I will assume they had "cold feet".

Who knows..maybe the Buyers got so used to losing bids that when they won, they didn't feel as good as they hoped?

Maybe the Buyers and their Agent didn't collectively do the homework they needed to do to walk into the transaction with confidence.

I can't say it enough....do your homework. Allow someone who has the experience and knowledge to guide you there. You'll know if that person does. All this talk of changing regulations in this industry and buyers as much as they ever did---require a solid agent to assist in what is a very involved, emotionally and mentally drawn out process. Let alone the financial and negotating of the biggest purchase of your life!

Cheers-

Market and Pricing

2010-04-07T11:22:00.000-07:00

My website http://www.TheSmithsBuyAHouse.com has a whole section on Market Pricing and who and how homes get priced. May be worth your review.

With that, there's been a drastic uptick in the number of listings on mls since the beginning of the week. If you're a Buyer, its gonna get more exciting and more stressful. Which house do you see first; what are these homes gonna sell for; what strategies do you employ given that we'll likely find ourselves in multiple offers; which properties are priced well and which ones are clearly undercut so tremendously to sucker you in.

It's not easy for some Buyers but it can be said that if you're a 700k buyer and homes are listed at 699k taking offers in a few days and history is showing that 699k homes are selling for 775k (above your affordability level)...it may be time to grow more comfortable with a lower asking price to give you the flexibility to bid upwards. Not great news but it'll get you into a house as oppose to sitting on sidelines or getting beaten to heck in offers.

Now is the season where all the tricks come out to play. "Bully offers", offers that arrive prior to the scheduled offer date. There are ways to safeguard against. "Flippers" who bought in last years market and did some renos and throw onto market at heightened prices that may/may not reflect market value.

Anyways the message remains the same. Do your homework. Be on top of the market and have fun!

Best--

Attention First Time Buyers!

2010-04-05T06:37:00.000-07:00

This is advanced notice that tomorrow a listing in Davenport Village at Davenport and Lansdowne will be brokerloaded on mls. It won't be seen on realtor.ca for some 48 hours thereafter. It's a well appointed, condo townhouse approx 4 years of age and original owner. Stainless steel kitchen opens to combined living/dining area. 2 great sized bedrooms with a master bedroom 4 pce ensuite and a second 4 pce. On the main level, there is a third bedroom or den. 2nd floor laundry room and walk out thru living room to outdoor patio with bbq. It's an exceptional complex for first time buyers and very low maintenance fees (under 200 dollars/m). 1 underground parking space included. It shows very well and will not last in this marketplace.

If interested, please email me @ mgruenstein@trebnet.com or call 416.271.2066.

Pictures and links will be available here by Wed.

Mortgages/Demand/HST Is it slowing down? Are the winds changing?

2010-04-04T10:12:00.000-07:00

Again...just an opinon piece. Debatable. Take what you will from it.

With rates making their way up (some having already gone up on the fixed side) and the variable rates to follow the benchmark index rate as early as June/July, will this be the catalyst to slow down pricing in Toronto and pull some buyers out of teh market?

In my humble opinion, likely not. We still need to work off the basics of supply and demand. The demand remains very strong (artificially so maybe) with emergency loan rates, fear of upcoming HST (which is overblown unless your buying new construction) and variable mortgage rates to increase.

All that said, there is a strong immigrant base who need homes, Canadians are not showing trepidness in the wake of increasing their debt levels (not a good thing, but it isn't keeping them out of the mortage line ups) and supply has been light versus demand.

It's my humble belief that supply will not keep up pace with demand, that interest rates in the next while will not rise as quickly as they need to to make a dent in buyers decision making, the new tests for cmhc buyers qualifying for stricter mortgages still enable banks (from what i'm hearing) to make mortgages work---all these combined suggest that buying in this spring market will continue strong, prices will continue to make their way up and all the resistance factors namely; HST, mortgage rates; mortgage qualfications; debt levels---won't slow down the demand.

We need to see much more supply to reach a different market in Toronto.

So, shop around, get the best mortgage and find the best house for you while not pushing yourself to the brink.

Happy Long Weekend.

Mortgage Rates...up they go!

2010-03-29T15:05:00.002-07:00

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-

2010-03-29T15:05:00.001-07:00

The Art of the Deal

2010-03-29T07:10:00.000-07:00

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-

New Construction vs Brand New Construction and HST

2010-03-27T12:53:00.000-07:00

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--

Seller and Disclosure

2010-03-22T11:02:00.001-07:00

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-

Is this March a Buyers Market? HST, upward pressure on rates; supply/demand

2010-03-21T12:01:00.000-07:00

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,

Staging Homes and Leaving something for Buyer

2010-03-18T06:09:00.000-07:00

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.

March Break Slowdown: use time wisely

2010-03-17T07:59:00.000-07:00

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).

Multiple Offers: Staying on this Topic as the bidding stays

2010-03-15T14:54:00.001-07:00

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

Basements and Floods and a little misery

2010-03-11T14:07:00.000-08:00

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-

Open Houses and Ego Maniacs

2010-03-08T05:55:00.000-08:00

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-

Even mice can sell a house!

2010-03-05T06:10:00.001-08:00

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

Showing Everything in this housing market

2010-03-04T07:55:00.000-08:00

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.

When MLS isn't enough!

2010-03-03T16:16:00.001-08:00

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-

2008 Expired Listings Become 2010 Listings at Heightened Prices

2010-03-02T12:01:00.000-08:00

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-

Interest Rate Announcement

2010-03-02T06:29:00.000-08:00

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-

Olympics and Home Buying

2010-03-01T07:57:00.000-08:00

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-