Jingle Bells, Houses Sell

Happy Holidays! It's been too long since I blogged last - October I see. Well, things have changed quite a bit since then. The shock of the HST has warn off, then the landslide win of underdog (?) Rob Ford took our breath away for awhile, and now....we are in the midst of holiday time. This has not stopped homes from being sold or bought in this traditionally slow season. However, this year has seen some changes of heart. While the summer/fall season was slow, confidence in the market re-established itself late in October and continues to stay steady. This is great news of course, despite the resurgence of grumblings by the Bank of Canada and its publication of Canadian household debtloads. Yes, we all carry debt - too much perhaps - but the low interest rates keep us confident that we can afford what we take on. The warning bells are real and we need to heed them as rates, the likes of which we may not see again, are going to climb - eventually. However, home prices are staying on the higher end price-wise, which can cancel out the term 'buyer's market' even as the interest rates are low. So be careful, and don't consume too much this holiday season! Instead, save for that new home in 2011. It'll be worth every saved penny to put towards a new home. In the meantime, enjoy time together with friends, family and share the gift of togetherness. It's free!

Competition Bureau vs Toronto Real Estate Board

Note: These are the personal thoughts of a respected colleague whose October newsletter has summed up this issue perfectly. I am sharing them with you to inform you about the pending case of the Toronto Real Estate Board and the Competition Bureau.

At the end of the month (Oct 29th) the Canadian Real Estate Association will be voting to resolve a battle with the Competition Bureau. The big question that everyone wants to know is how this will change the landscape of Real Estate in Canada.The answer is not very much…there have always been options for sellers whether it has been to sell privately, or to list with REALTORS® or Brokers who provide a multitude of services. I think that a lot of Sellers who would have previously chosen the “private for Sale” option will now be placing their properties on the MLS system with brokerage models who only offer that option.The misconceptions are out there: some consumers think that full service companies will now be forced to list properties on the MLS with little or no service or a schedule of services. This is not the case. It is up to the Owner/Broker to decide what offerings they will make as part of their business model.The BIGGEST misconception is that the Seller is the one paying the commission…think about the transaction. It is the Seller who writes the cheque but the price of the house is paid by the Buyer and the commission is deducted from that price. The Seller wrongly thinks that they are benefiting, but the benefit really goes to the Buyer….it is the Buyer who gets the lesser price to be paid and the Seller may be disadvantaged by not having a full marketing program.As a REALTOR®, I see myself as a marketer and negotiator providing services for a fee. If some Sellers feel that they can manage that part on their own, then I wish them all the best. It has taken years to develop a successful marketing plan. Good REALTORS® make it look easy, we act as a buffer and try to keep a very difficult process as calm as possible.Like any service well done it has lead consumers to think that the process is easy. Some consumers see the transaction as the only time we work; They don’t see the hours of preparing the house for sale, research to get the proper asking price, months of showings with buyers to educate them, licensing, ongoing education and insurance; one of our biggest jobs these days is to make sure that Bona Fide clients are exposed to the property and that clients do not lose proper perspective when negotiating.Unrepresentated Sellers would be well advised to hire a lawyer and use their services. However they should be prepared that Lawyers charge whether the Property sells or not whereas REALTORS® fees, for the most part, are charged on a successful completion of the transaction.There will be some confusion for a while as Sellers, REALTORS® and Buyers get used to some of these changes and some behaviours will have to change. Buyer Representation which involves a service contract between the Buyer and their agent, will become more and more important as it solidifies the fiduciary duty of the agent to the Buyer.Good agents will continue to offer many services to their sellers and Buyers. At the end of the day, competition allows great service providers to shine and this discussion is all about service.

Lazy Daze of Summer

Who would have thought that in three short months the booming Toronto real estate market would change so dramatically? It wasn't really a shock, but the HST put fear into the hearts and minds of buyers and sellers. And justly. While there was no dramatic financial concerns dealing with resale homes (no HST on a resale home purchase) the commissions and other services that come with a transaction had yet, another tax. At the same time as the introduction of the HST came a slight crackdown by the banks on mortgage qualification and the dissolution of 0% down for home buyers. Clearly, these are deterrents and the market has shown that. While sales are still constant, prices remain as they did in the earlier part of 2010 slowing the number of sales by roughly 30+% from the same time last year. On a positive note, interest rates remain low and for buyers, this is an opportunity to get into the real estate market sans bidding wars and stressful competition from 7 or 8 buyers for one property. With a 5% down payment (minimum) and a good credit rating and steady income, you are a good candidate for buying a home a good price. Without bidding wars and competition the process can be a more relaxing and thought out one. Sellers can expect to have their homes on the market a little longer than the traditional 'week' when the market is driven by supply and demand, but if you price well and your home shows its value you will be a satisfied seller. Let's hope the market wakes up this fall (traditionally a busier time than summer) and that both buyers and sellers find that perfect match! Until then, enjoy the rest of summer and have a great Labour Day weekend. Stay tuned for more updates in September.

Has Spring Sprung?

I'm looking out the window sitting next to my cozy fireplace and can't believe it's May 11th.
While the weather is not cooperating much with its seasonal forebears, the real estate market seems to be acting out in its usual way this time of year. For buyers, this is bringing some much needed relief. Up until a few weeks ago, buyers were left out in the cold (literally and figuratively) throughout this very hot sellers market of the last 6 months.
What is causing this you may ask. In my opinion, a number of things. Traditionally sellers like to list their home in the Spring. It shows the home in its colourful (and usually warmer) habitat and after a good 'Spring Clean' homes do show their best. Equal attribution must go to the impending HST which will come into affect July 1, 2010. While the increases in the costs to both buyers and sellers will not be huge, it is yet, another cost from the taxman and I know when buying a home every dollar counts. And there is that little thing we call 'interest rates'. Yes, they are going up - not by much mind you, but an increase is an increase.
So, fair to say that the recent spate in the multitude of listings and the presence of many buyers are these combined factors. I would also say with confidence that the market is healthy. There is no sign of a 'bubble about to burst' or any other such rumour. The situation in Greece is not helping with the fluctuations in currency, but the dollar is hovering where it always has - just below the greenback.
So, have no fear! This is a great time to sell and buy and perhaps for the first time in several years we can say that this is indeed how the market should be. Not an advantage for either side (buyer or seller) but a healthy market which is 'just right'...where the price of a home is not averaging $60K over the asking price or $40K under the asking but selling at or near the posted and realistic value. So here's hoping this trend continues into the summer and keeps the market on a steady and confident road.

It's the Year of the Tiger

Happy New Year! In Chinese astrology, 2010 is the year of the tiger, signifying 'good fortune'. With all the economic doom and gloom of 2009, we could all use some good fortune. Here's to a year of prosperity, safety and happiness! We were told the recession was over in late 2009, but we will have to contend with yet another new tax (HST) in July. This will create an unknown in terms of the Toronto Real Estate Market. The Toronto Real Estate Board was against such a tax but it was passed by our government and so we will have to live around it. Because of that, it looks like the early quarter of 2010 may see a lot of activity in both resale and new homes (as they will be the hardest hit with the Harmonized Sales Tax). Like the introduction of the Toronto Land Transfer Tax in 2007, any new tax sees a peak in real estate buyer activity. Buyers and Sellers want to avoid having to pay any additional taxes for services rendered so it's likely we will see a flurry of activity in this period. As well, the interest rates remain very attractive. A bonus for Buyers. Hopefully we will see more homes listed in this early part of 2010. If not, low supply and high demand may see the continuation of the 'Seller's Market' for the next few months. Food for thought for anyone thinking of selling! Speaking of food, I hope you enjoyed a festive holiday season and I'll see you at the gym!
Until Spring...