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Mistakes that home sellers make
S
elling your home can be an exhausting experience. Last minute walk throughs, inconvenient calls, price adjustment and the possibility of being stuck with two mortgages are real concerns.
The difference between a profitable smooth transaction and a break even, miserable experience is often a fine line. In the majority of cases it comes down to the subtle know how of your professional. By utilizing the knowledge of a well-trained real estate professional, you'll ensure the quick, profitable sale of your home.
Mistakes to avoid:
- Refusing to Make Profit Inducing Repairs
It always costs you more money to sell 'as is' than to make repairs that will increase the value of your home. Even minor improvements will often yield as much as three to five times the repair cost at the time of sale. Your agent will be able to point out what repairs will significantly increase the value of your home. Seemingly small fix up jobs can have quite an impact. - Provide Easy Access for Showings
Accessibility is a major key to profitability. Appointment-only showings are the important, but use of a lock box makes them less restrictive. However there are certain considerations to take into account: your lifestyle, time frame for the desired sale and the relationship with the person representing your interests. The more accessible your home is, the better the odds of finding a person willing to pay your asking price. You never know if the one that couldn't get a viewing was the one that got away. By developing a trusting relationship with an agent, he or she will show the home with your best interests in mind. - Priced Too Low/Priced Too High
One critical reason to find an experienced professional real estate investment professional is to make sure the property is priced appropriately for a timely and profitable sale. If the property is priced too high it will sit and develop the identity of a problem property. If it's priced too low it could cost you considerable profits. The real estate market has subtle nuances and market changes that should be re-evaluated by your representaive every 10-14 days to help you maximize your return. - Relying Solely on Traditional Methods To Sell Your Home
The real estate professional who is innovative and willing to offer new strategies of attracting home buyers will always outperform those who rely on traditional methods. Demand around the clock advertising exposure, innovative lead generation methods (such as this blog). These services exist and should be offered on your home sale. - Market Timing/Seasonal Selling
Just as a broker who continually follows the trends of a stock, your real estate professional continually follows trends of your home market. They will know if the market cycle is poised to net you the most money. Avoid believing that property sales are seasonal.. property is always selling. - Refusing to Make Cosmetic Changes
The prospective home buyer's first impression is the most important. Hundreds of thousands of home sales have been lost to unkempt lawns, cluttered rooms, bad stains, unpleasant odors... all the seemingly little things. Imagine you were the home buyer and clean your place from top to bottom ... - Wasting Time With An Unqualified Prospect
Your representative's responsibility is to screen a prospect's qualifications before valuable time is lost. Be sure to align yourself with the right professional and eliminate negotiating with unqualified prospects. - Don't Test The Market
Never put your property on line to sell unless you are serious. The right professional will find you buyers and if you are harboring indecision... you will blow the sale. - Believing You are Powerless to Make a Difference
Be a part of the team! Take an active role with your real estate professional to see what you can do to facilitate your sale. Networking with professional peers and personal friends often results in the sale of a home. It's surprising how many homes are sold this way. - Not Considering Other Financing Terms
Cash is not always the most advantageous transaction. Income level, tax benefits and current legislation are all critical factors when considering purchase terms. Real Estate Professionals are experts at home transactions and can lead you down the path that will give you the highest yield. - Believing All Realtors, Brokers & Others are the Same
With all the intricate details and critical decisions to be made concerning your home sale, should you rely on anyone but an experienced real estate professional? Many friends and family members have been estranged as a result of failing to meet expectations. Your home sale is a time consuming, effort related, difficult task. Maximize your profit by utilizing a experienced real estate professional.
January 31, 2006 in Selling Toronto Real Estate | Permalink | Comments (0)
New RE&BB Act implementation
New real estate act takes effect March 31
T
he Ministry of Government Services has finalized regulations under a new Real Estate and Business Brokers Act passed in 2002. The act is the result of input and consultation between the provincial government and organized real estate. The act had not been implemented because the government required time to draft the regulations to accompany it.
The act is an extensive document. After reviewing supplied government information, it appears that some of the key changes require brokerages to be managed by a licensed "Broker of Record" whose duty it will be to make sure that the brokerage complies with the act. The act clarifies disclosure rules regarding the deposit of trust monies (usually the deposit paid by the buyer when making an offer to purchase on a property). Interest on deposits remains with the deposit unless otherwise agreed to in the contract (a clause in an accepted Offer to Purchase could direct that the interest on the deposit can be applied to the balance of the money due on date of completion of the transaction.) In regard to ethics, the RECO Code of Ethics is replaced with a new legislated Code of Ethics. Provisions dealing with false and misleading advertising have been strengthened.
January 30, 2006 in Agency Matters | Permalink | Comments (0)
Toronto land transfer tax - Part II
New Toronto Tax Could Mean More Gridlock and Pollution for GTA
T
he Toronto Real Estate Board (TREB) has told the provincial government that proposed new taxing powers for the City of Toronto could result in more urban sprawl in the GTA.
The provincial government recently released a proposed Growth Plan for the Greater Golden Horseshoe that attempts to prevent further urban sprawl by targeting expected population growth to already urbanized areas, like Toronto. However, the Province has recently introduced legislation that, if passed, would allow the City of Toronto to levy a municipal land transfer tax that could force many homebuyers to choose to live outside Toronto, where they wouldn't have to pay this tax.
"The provincial government has taken some significant steps to prevent further urban sprawl, but it will be difficult to avoid if the door is open to a Toronto land transfer tax," said John Meehan, TREB President.
Under Bill 53, Stronger City of Toronto for a Stronger Ontario Act, the City of Toronto would be given general authority to levy taxes with certain limitations. Land transfer tax is not included as one of those limitations, meaning that this option would be open to Toronto City Council if the legislation is passed.
Homebuyers already face a substantial provincial land transfer tax when they purchase a home. This tax is calculated as a percentage of the purchase price of a property and is payable in full when a homebuyer takes possession of the property. The current provincial land transfer tax on an average Toronto home is approximately $3,900.
TREB has told the Province that, if Toronto housing is made less affordable relative to surrounding areas, it will be more difficult to achieve the objectives of the proposed Growth Plan, which sets out a number of priority areas for population growth. Five of these priority areas are in Toronto.
"Clearly, the intention is that Toronto should be a main focus for population growth in the GTA, but it will be more difficult to encourage people to live here if it is more affordable for them to live outside of the City," said Meehan.
"Good public policy is about balancing competing priorities. TREB understands Toronto's budget constraints, but addressing that concern shouldn't mean more pollution, more gridlock, and a worse quality of life," added Meehan.
The provincial government is currently accepting feedback on the proposed Growth Plan. TREB has outlined its concerns in a detailed written submission to the Honourable David Caplan, Minister of Public Infrastructure Renewal.
January 29, 2006 in Agency Matters | Permalink | Comments (1)
Toronto land transfer tax - Part I
Toronto Real Estate Board Lobbies for Changes to New Toronto Act
T
he Toronto Real Estate Board (TREB) is continuing to lobby the provincial government for amendments to Bill 53, which gives new powers to the City of Toronto.
While TREB believes that Bill 53 is an important part of helping the City achieve a more sustainable position, as currently written, this legislation could have detrimental impacts for real estate markets.
The provincial government introduced Bill 53 on December 14, 2005. TREB is specifically concerned with sections of Bill 53 that could give the City of Toronto the authority to license REALTORS in Toronto and to charge a local land transfer tax on top of the existing provincial land transfer tax. As reported last month, TREB monitored and took action on this issue before and after Bill 53 was introduced. Specifically, TREB met with the Minister of Municipal Affairs and Housing prior to the introduction of Bill 53.
TREB has provided detailed written comments on the legislation to Premier Dalton McGuinty, the Minister of Municipal Affairs and Housing, the Minister of Public Infrastructure Renewal, the Minister of Finance, all City of Toronto MPPs, and various senior bureaucrats responsible for this issue (See below for links to TREB’s detailed written comments). In addition, TREB has been working to raise public and media awareness of this issue.
Bill 53 has only received first reading and is not expected to proceed through the legislative process until the spring. In advance of this, TREB is planning meetings with senior government decision makers and will be making representations on the legislation when it is scheduled for public hearings. TREB is also working to coordinate efforts with other interested parties who share similar concerns with Bill 53.
January 29, 2006 in Agency Matters | Permalink | Comments (3)
More investors buying houses
R
ecent gains in average price are attracting a growing number of investors to major markets across the country, says a new report by Re/Max. It says one in six Canadians plans to buy an investment property in the next 12 to 24 months.
Based on on-line interviews conducted in December 2005 with 1,200 homeowners across Canada, the report highlights developing interest in residential real estate as an investment.
Close to 30 per cent of respondents already owned one or more investment properties and approximately 18 per cent indicated that real estate represented more than 51 per cent of their total investment portfolio, says Re/Max in a release.
“We believe purchasers view residential real estate as a simple, sound and safe investment --something that is very familiar to them,” says Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada. “The risk factor is greatly reduced compared to other financial vehicles.”
The Re/Max report also found that investors were younger than anticipated. Forty-three per cent of those who intended to invest in the next two years were under the age of 40. Once tagged “Generation X,” these individuals supposedly rejected more traditional values like owning a home.
“Certainly, the promise of continued upward trending in housing values is a major factor influencing these investors, particularly in British Columbia and Alberta,” says Elton Ash, regional vice-president, Re/Max of Western Canada, in the release. “Over the past five years, residential prices have appreciated close to 10 per cent on average, nationally. That’s a fairly impressive return on investment.”
In recognition of residential real estate’s potential for long-term growth, 50 per cent of investors indicated they plan to hold their properties for 10 or more years. However, if an investor were to realize a tidy profit in the interim, he or she may be inclined to move on to the next income property, says Ash.
Females represented 16 per cent of those who say they intend to purchase an investment property in the next two years. Singles are also playing a greater role in investment, with 10 per cent planning to buy an income property in 2006 and 2007.
“Real estate speaks to a broad range of purchasers,” says Polzler. “You don’t have to be a millionaire to invest in housing. According to reported household income levels, today’s investors are solidly within the middle class, with one in five earning $50,000 – $60,000 a year and one in three earning $75,000-$100,000.”
The report found spending intentions almost equally split between those planning to spend less than $200,000 and those considering properties in the $200,000 - $500,000 range, suggesting that investment interest is spread throughout the marketplace, with respect to property, category and geography. For example, 41 per cent of investors say they intend to purchase a home, 35 per cent a multiple unit building, 24 per cent a condominium, and 13 per cent a townhome.
The report says corporate executives and entrepreneurs are expected to be the most active investors, representing 25 per cent and 19 per cent of respondents respectively. Investors were generally well-educated, with most possessing some post-secondary education. Fourteen per cent had gone on to a master’s or professional degree.
View the report in PDF format:
January 28, 2006 in Buying Toronto Real Estate | Permalink | Comments (0)
Brokers worry about commissions
W
ith even the most bullish housing cheerleaders in the United States warning of a slowdown in the housing market, brokers should be worried about 2006, right?
Not exactly. In an annual survey of readers, Real Estate Broker’s Insider says that fully half of brokers expect 2006 to be better than 2005 for their firms. Only 29 per cent expect 2006 to be worse, while 21 per cent predict 2006 will be about as good as 2005.
"Brokers have grown weary of media speculation that a housing crash is imminent,” says Editor Jeff Ostrowski. “Still, brokers aren’t entirely Pollyannas. Three quarters of brokers expect mortgage rates to rise this year, and only a quarter expect sales volumes to grow."
Brokers acknowledge that they face a number of challenges in 2006, according to the survey. Chief among these are:
- Increasing commission pressure from discounters. With homes nearly selling themselves in many hot markets, consumers will increasingly wonder why they need to pay five to six per cent to full service agents
- Cooling economy and housing market. With gas prices soaring, housing costs rising, and wages relatively stagnant, some brokers fear an economic slowdown isn’t far behind
- Difficulty recruiting qualified agents. No matter whether the housing market is booming or bursting, real estate brokers can be counted on to worry about recruiting
January 27, 2006 in Agency Matters | Permalink | Comments (3)
Conservatives impact real estate
S
everal planks included in the Conservative Party platform could have an impact on real estate and encourage real estate as an option for small investors in Canada, according to The Canadian Real Estate Association (CREA). The Association's 83,000 member REALTORS® will be looking for action on several public policy priorities during the next session of Parliament.
Real estate is a major factor in the Canadian economy. A study prepared by Clayton Research for CREA shows that between 2002 and 2004, residential sales made through the Multiple Listing Service® generated $10.8 billion in ancillary consumer spending annually.
GST adjustment
REALTORS® point out that the Conservative proposal to reduce the Goods and Services Tax (GST) will reduce the cost of new homes, and the cost of services associated with a real estate transaction. The proposed first-phase reduction in GST would save a homeowner $4,000 on a new home selling for $400,000. Setting the GST rate at five per cent as the Conservatives propose would restore the effective rate of federal sales taxes on new homes to the level that applied prior to the introduction of the GST in 1991, when the new rate is combined with the new housing rebate.
“It all helps keep housing affordable” says Pierre Beauchamp, the Chief Executive Officer of The Canadian Real Estate Association.
Capital gains
The Conservative Party platform also calls for the elimination of capital gains tax for individuals who reinvest profits earned from selling real estate or financial investments within six months. The move would apply to physical and financial assets, potentially benefiting people who sell stocks and bonds, or properties such as cottages and family businesses.
Currently, Canadians who have financial assets or property other than a principal residence must pay tax on the capital gains resulting from the sale of a financial asset or property.
According to CREA's National Commercial Council (NCC) small-scale investors are often unable to “grow” their real estate investments because of the tax consequences when selling a small asset to buy a larger one.
“A capital gains rollover provision for small-scale investors, which REALTORS® have been proposing for several years, would introduce greater flexibility into the small-scale residential rental investment sector,” added Mr. Beauchamp. “If this tax change is implemented effectively, it will encourage more Canadians to look at real estate investment opportunities, especially with small and medium sized income opportunities.”
Property rights
The Conservative Party platform also proposes to amend the Constitution to include the right to own property, and promises to enact legislation to ensure that full, just and timely compensation will be paid to all persons who are deprived of personal or private property as a result of any federal government initiative, policy, process, regulation or legislation.
”Property owners often take their property rights for granted, but all levels of government enact countless rules and regulations that restrict property rights,” said Mr. Beauchamp. “REALTORS® believe that property rights should have the same legislative status as other rights in Canada.”
The Canadian Real Estate Association has also surveyed Canadians about property rights issues. In the 2005 survey conducted by Pollara Research, the majority of Canadians polled (88%) said it was important or very important that compensation be paid to a property owner when restrictions are placed on the use of their land. More than 90 per cent of respondents said it was important or very important that compensation be paid when property was expropriated
January 27, 2006 in Agency Matters | Permalink | Comments (0)
Federal privacy complaint upheld
Expired MLS® listing info used to market services
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he federal Privacy Commissioner's Office has advised the Canadian Real Estate Association (CREA) of a pending decision in which it found that a broker violated the federal privacy Act (PIPEDA) by using personal information of another broker's client contained on an expired MLS® listing. The case is the second decision involving real estate issues to be handed down by the Privacy Commissioners Office.
A CREA Dispatch, issued in December 2003, had advised members they should not use the information on the MLS® system to contact sellers when the listing agreement had expired.
The federal investigation began in 2004 when a broker complained another broker used personal information from an expired listing to market services to the seller. According to the Privacy Commissioner's office, the seller authorized both the listing broker and the Board to use and disclose all information she provided for the purpose of listing, marketing and selling the property, including placing the information on the Board's MLS® system The consent clauses did not include any authorization by the seller for the information to be used by other agents to market their services to her.
The other broker involved in the complaint contended that publicly available personal information was used to contact the seller. The broker said an agent noticed the expired listing, or somehow knew the individual wanted to sell, and then used a telephone directory to get the sellers name and contact information.
The Privacy Commissioner's Office found that scenario “improbable”, and said the more likely sequence of events was that the agent noticed in the MLS® system that the listing had expired or was about to expire, and contacted the seller using the information contained in the listing. Even if the broker did use a public telephone directory to find the contact information, the Privacy Commissioner said there was the matter of the link between the intention to sell, which the agent knew from the MLS® system and the contact information.
Because of that link, the Privacy Commissioner said there was more information being used than mere contact information, all contained in a database available only to Board members and not available to the public. That link tainted the contact, even if the phone number itself could be used without consent.
January 26, 2006 in Agency Matters | Permalink | Comments (0)
Home buying practices changing
Home buyer and seller survey shows rising use of internet.
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echnology is transforming how people buy and sell homes in unexpected ways, including how they work with real estate agents and brokers, according to one of the largest surveys of real estate consumers ever conducted. The study was released today by the National Association of Realtors® (American).
Nine out of 10 home buyers use a real estate agent in the search process, but use of the Internet to search for a home has risen dramatically over time, increasing from only 2 percent of buyers in 1995 to 77 percent in 2005; it was 74 percent in 2004. The next largest source of information for buyers is a yard sign, mentioned by 71 percent of buyers.
When asked where they first learned about the home purchased, 24 percent of buyers identified the Internet, up strongly from 15 percent in 2004 and only 2 percent in 1997. Although most buyers use an agent to complete the transaction, 36% first learned about the home they bought from a real estate agent and 15 percent from yard signs; five other categories were 7 percent or less.
January 25, 2006 in Buying Toronto Real Estate | Permalink | Comments (0)
Gay & Lesbian condo lauched
Condos Specifically for Gays & Lesbians to be Built in T.O.
T
orontonians shopping for condos in the city have a lot to consider -- neighbourhood, lifestyle, price... etc. But now one developer is adding sexual orientation to that list -- with perhaps the world's first condo aimed specifically at gays and lesbians.
It all started with Vivat -- a marketing group targetting gays and lesbians. They teamed up with the Bank of Montreal, and Context Developments -- and the result is "The Bohemian," a 12-storey tower planned for King East near Sherbourne.
It's not in Toronto's gay village -- and that's no accident. The founders of Vivat say their members aren't into the bar and party scene.
Instead, the tower features a big lobby with a library and a video room, where residents can socialize with like-minded people. The marketing lauch for the building takes place later today.
January 25, 2006 | Permalink | Comments (1)
