Toronto Real Estate Report

New Website

Why does someone visit a real estate website?  To look for homes for sale and get information.  With this in mind I have launched my new website with all sorts of great new tools and features.

When searching through the listings, you can now request a Street View, and see what the neighborhood actually looks like, and then you can map the area for schools, restaurants, grocery stores, day cares etc., an awesome way to view listings!

Looking for a home?  Check out the "Search by Map" tool and really target your search.

A variety of cool calculators are available, such as loan and mortgage calculators, rent vs buying, land transfer tax and amortization schedules.

The Real Estate News link will keep you informed, with regular updates to keep you on top of the most current real estate headlines.  Real Estate reports are available on a variety of topics and tips for both buyers and sellers make this an excellent resource.

Please check it out and let me know what you think? HelgasHomes.com

Mere Postings

Everyone has read about the settlement between the Canadian Real Estate Association (CREA) and the Commissioner of Competition.  It basically allows a seller to "merely" post a listing on the MLS for a flat fee. The broker or salesperson who takes this listing has chosen or agreed not to provide services to a seller other than submitting the listing for posting on the MLS system.

So, just because it's allowed, doesn't mean that professional real estate sales people will participate.   In fact if they are professional and bring value to the transaction, rather than just acting as a sellers gateway to the MLS, they won't participate.

In fact they would be crazy to take a mere posting.  The Real Estate Council of Ontario (RECO) is the industry watch dog and enforcer.  According to a recent publication, they have reminded us that regardless of the terms of the Consent Agreement, all persons registered to trade in real estate in Ontario must comply with the Real Estate and Brokers Act, 2002 (REBBA) and its regulations including the Code of Ethics.

If a Realtor takes a mere posting they are obligated to verify the information before posting on the MLS and are responsible for its accuracy.  They continue to be bound by the requirements under REBBA, which is a very intense set of rules and regulations that guide our industry and PROTECT the consumer.  Which is why a professional Realtor can't take a listing and agree not to provide any service, our real estate licence actually prohibits it.

As the saying goes, " If it looks like a duck, quacks like a duck and walks like a duck, it's a duck" and if you act like a Realtor you have to provide the services of a Realtor. However REBBA doesn't guide real estate commission, that would be anti-competitive, and I get that.  Realtors can charge whatever commission they like, based on the value of their service. Consumers are free to choose who to work with, and what fee they are willing to pay for the service. Trust me, real estate is highly competitive.

It all comes down to value.  I get paid to produce a result, not to merely post a listing.  End of story.

Check out the details of the consent agreement: Real Estate Council of Ontario

How To Win A Bidding War

Go high and go firm! That's the strategy.  What it means is to pay more than list price, which almost goes without saying when there are multiple offers, but you are also expected to have a firm offer, which means no conditions.

No condition on financing, so you may want to run the deal past your mortgage advisor.  But keep in mind that you may be pre-approved for a certain dollar figure, but if the bank doesn't agree with the value relative to the price you paid, you will only get your mortgage on the appraised value. Be very careful and don't get too caught up in the frenzy, there will always be another house.  A good Realtor will provide you with a market analysis of comparative properties that have sold, and will help you to determine current market value.  In a market that is rapidly moving upwards you may have to pay more than the last sale to get the home. 

No condition on a Home Inspection. You have some choices here.  You can schedule a home inspection prior to the offer date.  That way you know what you're dealing with and your offer will reflect the conditon of the home.  This is risky, as you may end up paying roughly $400 and still not have the highest offer or get the house, but many buyers would not be comfortable without a home inspection. 

Some homes have a pre-listing home inspection available for review.  Generally this is for information purposes only, and you can't rely on the report, often there is a disclaimer to this effect in the Schedule of the offer.  The Home Inspector is only responsible to the person who contracted their services.  Whether it's purchased by a potential buyer or the home seller, the information will be the same, and is an un-biased assessment of the home, they can't hide anything for the seller or fail to report findings.

My opinion is that you could get a few different home inspectors to look at the same house and they may all find something different.  It's a visual, non-intrusive inspection of the home, which may not be able to reveal all the potential issues a homeowner may face.  There is no perfect home, so be prepared.

Bring a large deposit. Size does count, the larger your deposit, the more attractive your offer is.  Make sure it's either certified or a bank draft.  If your offer isn't the one chosen, you just take the cheque back and re-deposit, a little bit of a hassle, but necessary.

There are a few other creative ways to make your offer more attractive......but I can't reveal all my secrets.

Good luck.

Picture by: Photographer: renjith krishnan

Semi-detached homes are hot!

Buyers are hot on the trail of semi-detached homes in central Toronto.  Trouble is, not enough good listings and too many buyers.

Here is an example of a few recent bidding wars in the desirable Yonge/Eglinton neighbourhoods.

Listed for $599,000 - attracted 22 offers! sold for $706,000

Listed for $648,000 - sold for $707,000

Listed for $649,000 - attracted 5 offers, sold for $722,800

Over the last 30 days, based on 11 semi-detached homes sold in the C10 MLS district, the homes sold between $585,000 up to $722,800, average price of $661,000.  They sold for between 93% - 118% of list price, average of 104% of list price.  There was only one home that sold below $600,000.

It's intersting to note that semi-detached homes don't necessarily sell for less than a detached home, as they will often provide the same amount of living space, and sometimes they can be larger than a detached. The features that will drive up value include a private drive, main floor family room, main floor powder room, kitchen and bath renovations.

We've had a few bumps on the real estate road over the last couple of years, but overall the market is strong, and increases in value year over year.  What are you waiting for?  BUY REAL ESTATE!  I believe it's the best long term investment you can make.

One Dollar Commission

The Toronto Star reports today "Get set for cheaper fees for Canadian real estate transactions."

The article details the recent agreement between the Canadian Competition Bureau and the Canadian Real Estate Association which will now allow real estate agents to provide "innovative services and pricing options to customers." Toronto Star Article

This is a landmark deal?  Real estate agents have always been allowed to be innovative and offer a variety of pricing options.  A listing agreement can be arranged based on 5, 6 or 7% commission. There is no price-fixing in commission fees, the rate is related to the value of the service. You can also charge 1% or NOTHING, if you like to work for free.

I noticed a listing on the Multiple Listing Service this week, which has been on the market for 89 days, before this landmark deal was reached. The commission offered to the Co-operating Broker (the one who brings the buyer) is $1. The remarks to Brokers is as follows :

The Seller Is Selling Privately And Will Negotiate Directly With Cooperating Broker Under Guidance Of His Lawyer. All Appointments And Offers Are To Be Arranged Directly With The Seller

So there you have it folks! Innovative pricing, $1 commission, and someone who is selling privately and is listed on the MLS. Congratulations!

But what does that accomplish? The listing has been reduced from $709,000 to $689,000 and has been sitting on the market for 83 days. Statistics indicate that properties that are handled by a skilled professional Realtor will be on the market for less than 30 days, and on average sell for 97% of list price.

One of my clients, was very eloquently able to communicate the value of a Realtor, in his letter of recommendation to me he wrote:

While the financial results you obtained were exceptional what impressed me most was the thorough and professional approach that you took throughout the process. You were industrious, practical, and honest in your treatment of both the prospective buyers and me.

Perhaps your greatest asset is your attention to, and skill at, communication. I was very inexperienced in the process of selling a house but such was the information you provided regularly that I came to feel comfortable and competent, and always in the loop.

 My family chose you over agents that we knew and who offered a discount rate. You were worth every penny of your commission and proved once again that one usually gets what one pays for.

I rest my case.

Listed for $1

Are you looking for a hot real estate deal in Toronto?  The market has been slowing down, but it's not dead! As the HST gets incorporated, buyers adjust to slightly higher interest rates and the uncertainty leaves the market, the Toronto real estate market will continue to march forward.

But, back to the real estate deal.  How would you like a piece of land, 15.46 x 100 feet to build your dream home at Queen & Strachan?  Listed for $1.00, yes you're reading it right, it's "one dollar".

Well actually, the sellers won't accept $1.00 and as the listing indicates in the Brokers comments, "Seller Reserves The Right To Refuse Any Offer Or Bid Regardless Of Offering Price, Terms And/Or Conditions".

It's been on the market for over a month, so if this was a strategy to create a bidding war, maybe it didn't work?  Or, they have received offers, but none at the price they are willing to accept.  Then why don't they list it at the price they are willing to accept?

During offer negotiation, a seller may accept, reject or counter offer.  It's often frustrating when a buyer submits an offer in good faith, at full list price and the seller refuses to accept it.  Now, I'm not suggesting that they should accept $1 for the property, but they should conduct a proper market analysis and list the property accordingly.  Why don't we stop playing games.......

Want to have a look at the listing, here it is: 840 Richmond St.

The Competition Bureau

Attention: Melanie Aitken, Competition Commissioner

Dear Ms. Aitken,

It must be nice to sit in your cozy office and pass judgement on the real estate industry.  You have the nerve to call Realtors anti-competitive, do you actually know how competitive the industry really is? We don’t stop people from trying to sell their own homes, or in fact regulate what someone should charge for commission.  There are starving real estate agents that will take your listing for practically no commission.  The only thing that is highly regulated is the rules and regulations to protect the consumer found in the Real Estate and Business Brokers Act and the RECO Code of Ethics which we are bound by.

Why don’t you take and pay for all the courses required to get your real estate licence, from the Ontario Real Estate Association,  then pay all the fees to the

•    Canadian Real Estate Association (CREA)
• Toronto Real Estate Board
• Real Estate Council of Canada (RECO)
• Errors and Omissions Insurance

Then order your business cards, signs and marketing material.  Now go out and try to find some business.  You have to be motivated, a self-starter.  You see, we don’t get a pay cheque every 2 weeks like you do, we actually have to find our pay cheque.  Then the funny thing is, we have to pay the Broker a part of the commission to cover office and administration costs, someone has to answer the phone, book appointments and deal with a lot of paperwork.  If we are associated with a reputable brand we also have to pay a franchise fee, and then the government (which pays you) also takes a percentage of the commission.  Then what’s left, I get to earn. But that’s only if I make a sale, which in fact, is VERY COMPETITIVE.

There are currently 29, 619 real estate agents registered with the Toronto  Real Estate Board.  The total transactions in 2009 was 87, 308. So we have roughly 30,000 agents chasing 90,000 listings.  The odds aren’t in our favour. 

So let’s do the math.  3 deals per agent, average price of a home is $431,000, we split the 5% commission and receive 2 ½ which would amount to $10,775, now multiply by 3 deals for a gross income of $32,325.  Let’s say you’re on a 80/20 split with the Broker, your end is $25,860.  Now pay tax on the income, say 25%, you’re left with a net income of $19,395 per year or a whopping $1616 per month.

To make a living in this highly competitive industry, it’s not simply about listing a home on the Multiple Listing Service, it’s about competing for business, providing exceptional service and expert advice, guided by strong ethical principles and best business practices in order to protect the consumer.

Protecting the consumer – isn’t that what you should be doing?

 

 

 

 

 

 

 

 

 

Realtors Under Fire

When homes sell quickly, over list price it may appear the Realtor had very little impact, however preparing the home for sale, proper marketing and exposure of the listing and negotiating skills are developed over years of experience and help set us apart as professionals.  A fast sale and the ease of the transaction is related to the expertise a real estate professional provides in guiding the process.

Working as a Realtor is a Risk/Reward occupation.  When listing a property for sale, we take on the costs of marketing and invest our time in getting a clients home sold.  There is time spent on a thorough market analysis, to determine the current market value and best list price.  The knowledge on market values comes from inspecting hundreds of home, staying up to date on current market conditions and what has sold, writing offers, negotiating deals, participating in bidding wars, knowing what it takes to get a home sold.  The Realtor’s goal is to price a home properly to attract the greatest number of potential buyers, which in turn will lead to a fast sale and the highest possible price.  It’s not that we can’t take weeks or even months to market your home, but who wants buyers traipsing through their house for months on end, and the longer it’s on the market, the further from list price you tend to sell for.  It can be very stressful for homeowners to sell their home, Professional Realtor’s ease the stress and get the home sold.

The risk is taking on the listing and all the related components, the reward is a commission, that we have EARNED.  We don’t get sick days, paid holidays, company pensions, extended health plans, we are self-employed, independent contractors.  We work, and if we do a good job, we get paid.

There is a surgeon lopping of the breasts of women who didn’t even have breast cancer, pathologist that have sent people to jail for crimes they didn’t commit,  investment advisors scamming people out of their savings.  We don’t do that.

Obviously every profession has individuals that tarnish its reputation, however the media paints all Realtors with a very broad brush and the Competition Bureau is supporting the idea that all it takes to get a home sold is to list it on the Multiple Listing Service.  If they are successful in forcing CREA to open up the MLS system to unqualified users, poor, unsuspecting sellers could lose thousands of dollars of  value in their home,  open their homes to fraudulent scammers, all in the interest of trying to save commission and avoid  paying someone for doing a good job and protecting the consumer.

Click on the link to read a recent article in the Globe: Realtors Under the Gun

 

 

 

 

Changed their mind

"It's a Woman's Prerogative to Change Her Mind"

So the saying goes. Everyone knows it.  I found it interesting to find out it has its roots in law.  Years ago, when a couple got engaged to be married, the man's promise to marry a woman was considered a legally binding contract.  If the man changed his mind, this was considered a breach of promise and the man could be subject to litigation for damages.

However, the same rule didn't apply if a woman changed her mind, and thus the saying was born.

So what about a seller?  Can they change their mind and decide not to sell their home, after it's been listed and you submitted an offer to purchase it?

YES! That's exactly what happened to clients of mine this week.  We found a property they were interested in, they went out and certified a cheque for the deposit, I prepared an offer and submitted it on the day offers were being accepted.  As fate would have it, there were no competing offers, and we were excited about the house.

The offer was fair, not some low-ball just because we were the only offer at the table. A large deposit, short time frame for a home inspection, no financing condition required and a fast 30 day closing.

The offer was presented and they said "No thank you". What? Turns out they weren't all that serious about selling their home.  The listing agent had just spent a week showing the home, based on a strict tenant requirement, appointments could only be at specific times of the day, and she had to be there.

I spent time with my clients, researched the comparable sales & prepared the offer.  All for nothing.

We were all disappointed, after we got over being mad and disgusted by the process we were subject to.

So, Buyer Beware, "It's a Seller's Prerogative to change their mind". 

 

 

 

 

Rosedale Gem

I love Rosedale.  It's such a great neighbourhood, filled with parks, mature trees and beautiful homes.  A long time ago I enjoyed living in a triplex on Glen Road and was married at Rosedale United Church.  Our wedding fell on the same day as the annual "Mayfair" held in Rosedale Park, so traffic was a bit challenging.  My limousine had to compete with the parade of kids streaming down to the fair.

According to Wikipidia, Rosedale is one of the wealthiest and highly priced neighbourhoods in Canada.  It's home to some of the "rich and famous", such as the late Ken Thompson, one of the richest men in Canada.  The name is a tribute to the many roses that graced the estate of the original founding family, the Jarvis Estate.

Real estate is all about location, location, location, and this neighbourhood is one of THE BEST locations in the city.

Are you ready to join the elite? Then check out this beautiful new listing at 3 Astley Ave., not your average "cookie-cutter" home. Architecturally designed to maximize bright, natural light throughout every room with soaring windows and 6 skylights. 

3 Astley Ave.

Call me if you want to have a look - 416-566-9914.