Tuesday, March 31, 2009

Sales Tax Harmonization

In the latest provincial budget, the Ontario government is proposing to "harmonize" (combine) the GST (5%) and PST(8%) into one single tax rate of 13%. It is proposed that this new tax would come into affect July 10, 2010. In doing so, increased taxes would be payable on a variety of goods and services including a number of those involved with real estate transactions such as real estate commissions, legal fees, moving expenses, home inspection costs and so on.
The Ontario Real Estate Association (OREA) has come out strongly opposed to the harmonized tax structure stating that it will erect barriers to home ownership. In a news release, Pauline Aunger current President of OREA states:
"In the last decade, Ontario’s homeowners have faced a barrage of new costs," said Aunger. "From municipal land transfer taxes to sky rocketing property taxes, homeowners are being pushed to the brink to accommodate increasing demands from government. A harmonized sales tax is yet another cash grab on Ontario’s already overtaxed homeowners."
While her statement may be true, increased taxes have become all too commonplace in our society wherein they are begrudgingly accepted and life moves on with many consumers hardly skipping a beat when it comes time to make a purchase, large or small. Let's face it we've already adjusted to the GST, Toronto homebuyers became subject to additional municipally imposed land transfer taxes last year and so on. OREA claims that on average, the harmonized tax will add about $2,000 in added expense to each real estate transaction. Will this curtail consumers from buying a home? Hardly. At best it may delay some first-time buyers in making a purchase as they further save the additional money needed to cover the increased closing costs but it will hardly stop residents of Ontario from pursuing the fulfillment of homeownership.
Homeownership has by-and-large rewarded many with an excellent rate of appreciation in their home's value. Unlike in the U.S. there is no capital gains tax on the profit taken from the sale of your primary residence. So the question remains, will this new tax hurt the real estate market and or delay the rate of recovery from the current slowdown? Personally I doubt it and the OREA claims may well be proven false. OREA also recently took aim at Ontario's Green Energy Act and the proposed mandatory requirement for homeowners selling their homes to have a home energy audit conducted. As with the budget, OREA argued that these audits with a cost of approximately $300 would serve to "tax" home sellers while giving buyers an unfair advantage in price negotiation.
With most real estate transactions in the province now totalling tens of thousands of dollars neither a $300 home energy audit nor additional taxation on real estate related services are going to derail a recovery in the housing market. We have become a society that has become somewhat numbed to increased taxes. The Ontario Real Estate Association (OREA) needs to in my opinion, be more prudent in keeping issues in perspective and picking their fights more wisely. Everyday those of us that practice real estate must on an ever-increasing basis, demonstrate the value proposition that we as REALTORS® bring to the real estate transaction for the fees we charge, which can often run into thousands of dollars. A few extra hundred dollars in additional taxes on a $200,000 or $300,000 transaction hardly becomes an issue and will unlikely have any prolonged affect on the residential housing market.

Saturday, March 21, 2009

Marketing Your Home to Sell Part 2

In my prior post I discussed the relationship you need to have with your REALTOR® and information you should be prepared to disclose etc. when listing you home for sale. The following are some other issues that when addressed openly and honestly, will assist your REALTOR® in effectively marketing your property to obtain the best possible price and withion a reasonable length of time.
It's a good idea to have information on hand that will give the REALTOR® an idea of the costs of running your home -- annual heating bills, along with documentation of any recent major repairs or upgrades -- such as a new roof or new wiring or plumbing. These can be very effective marketing tools.
Your REALTOR® will also tell you that an open house can be another effective marketing tool. While some homeowners are adverse to this idea, it's one you should discuss with your REALTOR® if you really want your home to receive maximum exposure to interested buyers. During an open house or prearranged showings, it's a good idea to make sure that you and any other members of your family (including pets) are absent. Many buyers are intimidated by the presence of homeowners and tend to rush through a home as a result.
Before any showing or open house, it's imperative to make sure your home is clean and uncluttered -- both inside and out. Get rid of junk (don't forget the garage) and any unpleasant odours from smoke, cooking or pets. A neat exterior is inviting and a clean and neat interior just makes good, plain marketing sense. Consider having your home painted. It's a relatively inexpensive way to show it in its best light.
Financing is another area where you may be able to help market your home more effectively. You can make your home more attractive to some purchasers by taking back a mortgage. It's an excellent marketing tool, especially if you're trading down to a less expensive home.
Flexibility on the closing date is another important factor in the successful marketing of a home. Real problems can arise when vendors and purchasers can't agree on a closing date. Again, it's important to work with your REALTOR® and listen to suggestions. Some deals are lost simply because the vendor and purchaser can't agree on a closing date.
Stay Informed. Your REALTOR® should keep you informed by following up after each showing and providing you with a weekly update on how the marketing of your home is progressing. By the same token, if you have any questions or ideas, don't hesitate to share these with your REALTOR®.
Keep in mind that with current market conditions, there is a lot of competition amongst sellers out there to find a suitable and willing buyer. For three consecutive years now, the number of listings that have "expired" in the local market exceeds the number that have "sold." You'll find that a team effort, combined with a realistic approach will help you market your home much more effectively, yielding a potentially higher selling price and in a reasonable amount of time, thus allowing you to move on with your other plans. I have always believed that hard work and a little extra effort brings good luck! This also applies when selling your home.

Wednesday, March 18, 2009

More on Ontario's "Green Energy Act"

Local MPP Jim Wilson and the Conservatives continue to vigorously oppose the Liberal's proposed Green Energy Act known as Bill 150. The following is the latest excerpt from MPP Wilson's office:
"As I wrote previously, if Bill 150 passes, it will drive energy costs up by shifting the risk of cost overruns and scheduling delays in the energy sector from private developers on to taxpayers. It also eliminates the last remnants of a competitive marketplace by allowing private developers to build anything, anywhere, anytime, at any price. When I was Energy Minister, our Progressive Conservative Government said "never again" to that approach. Those who remember Darlington or the $38 billion in accumulated debt from the old Ontario Hydro know why. Unfortunately, it appears as though Mr. McGuinty's Liberal government is now saying "one more time!"But the most controversial aspect of the Bill that directly impacts every homeowner is the requirement in Bill 150 for every home sold to undergo an energy audit. It will cost about $300 and will consider everything from your shower head to your furnace. If one isn't up to snuff, be prepared to fix it. The average cost of repairs? Based on past examples it's going to cost thousands and thousands of dollars.
Gary Weir of the Ontario Real Estate Association noted "the results of these audits will be used by home buyers as bargaining chips to significantly reduce the final selling price". This could be particularly worrying for seniors relying on the equity in their home for retirement. Same for first time home buyers who will now need more money to buy their first resale home."
I have not read the Bill in it's entirety but certainly intend to. I do not however agree with the stand taken by my own provincial real estate association (OREA) on the matter of "...these audits will be used by home buyers as bargaining chips to significantly reduce the final selling price".
The onus to correctly establish the price on a home whether it be as the listing agent for the seller or if we are prepring an offer to purchase while representing a buyer falls to those of us in the real estate profession. We as licensed and knowledgaeble REALTORS® must price properties correctly to both market conditions as well as the condition of the property inquestion. As a Market Value Appraiser (MVA) I look for characteristics in a property which will help establish a fair market value for a property. If I have done so correctly and accounted for such "Green Energy" difficiencies as old windows, an out-dated furnace etc. then hiow much of a "bargaining chip" can a buyer legitimately hold. Granted we are not energy auditors but it doesn't take a genius to recongnize a property that might me a high energy consumer. The stand taken by OREA suggest the old saying applies "let the buyer beware." That attitude not only ignores the growing need for us to reduce our energy consumption but exposes REALTORS® to legal actionfor not protecting the interest of our clients.
Strangely enough, Ontario REal Estate Association is embarking on a multi-million dollar expansion of their office in Toronto and are doing to to LEED (Leadership in Energy and Environmental Design) standards which I am sure is adding significantly to the cost. Would that not appear to contradict their own stand about home energy audits?
One last comment about the concern of MPP Wilson and the Conservatives about the impact to property owners re: the energy audit. In 1995 the then in power Provincial Conservatives passed into law a Bill which resulted in rental condominiums such as those at Blue Mountain reclassified from residential to commercial property tax status. As a result, a condo with a $3,000 annual tax bill saw that amount increase to approximately $7,800! The Conservatives were not too concerned about a homeowner's rights and costs then so are we now to believe they have seen the light? Somehow I for one am not buying it.
Green Energy Act, mandatory home energy audit or not, my mandate is to continue working diligently to ensure that my knowledge and skills as a REALTOR® are utilized to their full extent when pricing properties and representing my client's best interests. Politics simply doesn't enter into that process nor should it.

Tuesday, March 17, 2009

Marketing Your Home to Sell Part 1

There is no denying that real estate market conditions have softened and sellling your home is not an easy as it might have been just 6 or 8 months ago. Both buyers and lenders are more cautious, competition amongst home sellers is fierce with a lot of product on the market and there is also an ever-increasing number of new home development to choose from.
If you're thinking of selling your home in the near future, you may think that all that's required is a "for sale" sign strategically placed on your front lawn -- but any real estate professional will tell you there's much more to it than that. While a sign on your lawn is of paramount importance to the sale of your home, a well-thought-out marketing plan is also essential. Your REALTOR®, of course, is another vital component in the process, and one of the first things he/she should discuss with you is a marketing strategy designed to give your home maximum exposure.
Keep in mind that effective marketing of your home requires a lot of communication between you and your REALTOR® and there are several things you can do to make sure your home gets the best possible exposure. First of all, disclose everything you can about your property and the neighbourhood in general. This information will help your REALTOR® a great deal and he/she can choose how and when this information can be related to prospective purchasers. For example, there may be something about your home or the area you live in that you may take for granted, but that characteristic could be a major selling point for your home -- such as its close proximity to local schools and recreation facilities.
It's also wise to be candid about any potential drawbacks as well, so both you and your REALTOR® can be realistic in arriving at a suitable list price. Where possible, your REALTOR® is likely to have some suggestions as to how these problems can be improved upon. As well, your REALTOR® may notice some serious flaws in you home or even some basic elements that are missing. They may not bother you, but could work to your detriment when it comes to selling your home. As a result, your REALTOR® is likely to make helpful, reasonable recommendations that will enable you both market your home successfully. It's important to keep an open mind and follow his/her advice.
In my next posting we will talk about some of the other issues and factors that you need to be aware of in order to attract potential buyers to first view the property home and one that will hopefully follow-up with an acceptable offer. Stay tuned for more...

Saturday, March 14, 2009

The Big 3 Aren't So Big Anymore

As a car enthusiast I daily follow the ongoing melee taking place in the auto sector. Much like the demise of shipbuilding in Collingwood, the dependancy on the automotive industry to drive the local economy is unfortunately yet thankfully behind us. Goodyear (a former employer) Bendix, Alcoa are gone and had they not already left, the doors would certainly be in jeopardy of closing now given the state of Ford, GM and Chrysler.
In reading various letters to newspaper editors and blogs, consumers are showing little support for the Big 3, their management or their unionized workers. As per today's article in the Globe and Mail entitled "Tax fight imperils Chrysler's survial" the spat bteween Chrysler and Revenue Canada over unpaid taxes is just another festering sore that consumers in general have with the North American auto companies.
I give credit to Ford. They seem to have an ever-increasing array of product that is consistent with the demands of today's buyers and they are not asking for a bail-out, at least for now. The management at Chrysler and particularly GM just don't get it and neither does Ken Lewenza and his CAW followers. The only blame for their current predicament that seems to exist within these factions is the current "credit crunch." There is no acknowedgement on the part of management that for years, they have and continue to produce vehicles that do not meet the quality or fuel efficiency demands of the consumer. I am a car enthusiast more than most but come on, for GM and Chrysler to be spending money they don't have on bringing to market a 6.2 litre Camaro and a 6.1 litre Hemi Challenger at a time when oil prices hit an all time high is just plain stupid!
As for Ken Lewenza and the CAW. They provide no acknowledgement whatsover that maybe, just maybe their ludricous demands for wage and benefit packages over the years via their practice of "pattern bargaining" are no longer sustainable in the global economy. Rather than bailing out these floundering auto companies that have yet to deliver believable and viable resturcting plans, it is perhaps time that governments on both sides of the border invested money developing knowledge and technology based industries that will get us off the cyclical, feast or famine auto manufacturing treadmill.

Tuesday, March 10, 2009

Mandatory Home Energy Audits

A couple of weeks ago the Ontraio government announced through its Green Energy Act potential legislation that would make it mandatory for home sellers to have a home energy "audit" done on their homes prior to finalizing a sale. Since that time numerous critics within the real estate profession including the Ontraio Real Estate Association have stepped forth objecting to the process on a number of grounds.
First let it be known that the real estate profession supports "green" initiatives and have in fact created a new designation for REALTORS® to obtain in support of increasing their knowledge and awareness regarding energy efficiency. Home buyers that I deal with regardless of their financial status, all seem to be genuinely concerned about rising energy costs and environmental issues. With this proposed legislation, home sellers would be required to have an energy audit done on their respective homes in order to determine its energy efficiency a process that costs around $300.
While the legislation is well-meaning the most serious shortcoming is two-fold. One is that there currently exists a shortage of qualified energy auditors throughout the province. More significantly, there is no universally accepted or standardized rating system leaving much of the test results for a home subject to the auditor's "interpretation."
Personally I am in favour of the concept of mandatory audits provided they result in some meaningful and reliable results that are universally applied to all properties. Proponents against the legislation argue that it will add an additional cost to home sellers and will give buyers additional leverage to drive down prices on those homes that obtain poor results from their audits. To the first point, a $300 expense for an audit is hardly going to break the back of a home seller. I have spoken with some individuals that have already had an audit done on their homes in the interest of determining how they can reduce their energy consumption costs. Most report that the audit uncovers numerous and inexpensive ways inwhich they can improve their home's energy efficiency. As far as buyers using the results of an energy audit to drive down the price, that should hardly be an issue. If a listing REALTOR® has done their job, they should have already made monetary adjustments in the listing price to account for such characteristics or energy deficiencies as old windows, an outdated heating system etc. When showing older properties, I am always quick to point out to a potential buyer if a homeowner has replaced older windows, improved the insulation or has installed a new mid or high efficiency furnace. Other energy improvements that have been made to a property may not be so obvious and this is where an energy audit system could prove to be useful for both home sellers and buyers alike.
Like all legislation, the introduction of mandatory home energy audits will be a controversial issue in certain circles. While the concept is a good one, the overall effectiveness will ultimately be contingent on ensuring that an adequate number of trained/qualified auditors will be available to handle the workload and more importantly that a standardized rating system be established so as to create a consistent rating system that can be applied without undue "subjective" interpretation by the individual conducting the audit. Ontario's "Drive Clean" program has already made it mandatory for vehicle owners in the province to have emission tests done on their cars, this is nothing more than the same procedure for your home. The Drive Clean program has been claimed by many to be nothing more than a scam. If the mandatory energy audit legislation is passed, let's hope the testing process and the accompanying results are arrived at accurately, fairly and consistently. If not, then the whoole process will be just another money-grab with no appreciable benefits to the environment achieved.

Sunday, March 8, 2009

Collingwood Council Passes Heritage Plan


Collingwood Council recently passed the "Downtown Heritage Conservation District Plan" which provides for clearly defined regulations governing both development in the designated Heritage District as well as the restoration or renovation of any buildings within said district. The fact that this plan was passed unanimously suggests that all members of Council have finally embraced both the direct and in-direct value(s) that preserving Collingwood's signifcantly historic buildings have on the economic well-being of the community. The following quotation was taken directly from the "plan"


"The District is integral to the preservation of Collingwood’s identity and origin as a small, 19th century Ontario, waterfront town. It is also critical to the long-term economic vitality of the community."


In my posting of February 4th see "Collingwood Makes News in The U.K." I mentioned a recent article from the Financial Times wherein Collingwood's 19th century downtown was deemed to be on the many attractions of our area. Further, in passing the "Downtown Heritage Conservation District Plan" Council also passed a resolution of support for Heritage Canada Foundation's effort to call on the federal government to establish tax incentives for the rehabilitiation of heritage buildings. Funding to do this locally via Collingwood's heritage grants comes solely from the municipality's coffers.

Heritage conservation has been a thorny issue in the past stemming from the proposed 6 storeys of the now "on-hold" Admiral Collingwood project. Perhaps this newly adopted plan will serve to guide future development in the designated downtown core consistent with preserving the past in such a manner as to avoid future conflicts.

Saturday, March 7, 2009

The Media Spin on Real Estate Continues

A news article published on ReportonBusiness.com states that optimism is returning to the housing market. An annual report published by the Royal Bank of Canada states that there is some optimism "seeping" back into the real estate market with younger Canadians and most notably first time buyers leading the charge. With interest rates at record low levels, home listings at record high levels thus offering buyers lots to choose from, it's little wonder some potential purchasers feel this way. As long at their confidence level remains high with respect to their employment and subsequent ability to meet mortgage obligations they have every reason to feel optimistic about buying. Nonetheless they are a relatively small group and can only create so much impact on the sluggish market.
With spring just around the corner, many buyers will no doubt come forth in greater numbers. January through February and into early March have traditionally been softer months for home listings and sales and with the severity of this year's winter, looking at properties over the past few months has hardly been ideal. Furthermore, spring has always brought forth a plethora of new listings for buyers to choose from and this year will be no different.
Much speculation remains about how long the current economic downturn will last and the ongoing affect it will have on home sales and prices. A report in the Globe and Mail suggests that since the downturn in the economy this time has been so severe and so sudden, we may have already hit bottom and a recovery may appear as quickly as this whole financial melee started. Let's hope this is the case and espceially for our neighbours south of the border on which we so heavily rely for export shipments. With all of the negative dialogue circulating these days the new term "pessimism porn" has been coined to describe the countless stories of doom and gloom that prevail in certain circles. In good times and bad, there's always a new catch phrase to describe a situation. Ultimately each one of us has the ability to turn the current economic situation around by demonstrating a postive attitude and spending just a little money to get things moving again. It seems some would rather spend time and money reading about the mess rather than investing a little to correct it.

Thursday, March 5, 2009

Controlling Your Own Destiny

My real estate partner Doug Brown and I share similar backgrounds both having spent a number of years in corporate executive positions before entering the real estate profession. A postion with Goodyear Canada is what originally brought me to Collingwood in 1985. Following that I was retained by a company that was at the time the largest customer of Goodyear's Collingwood plant and I spent 5 years running their Canadian business unit in Barrie before being transferred to the U.S. as Vice President of Sales and Marketing. With these companies I had front-line responsibility in dealing with vehicle and heavy equipment manufacturers such as General Motors, Ford, Chrysler, Mack, Kenworth and Peterbilt trucks, Caterpillar, John Deere, Ford New Holland and others. Other large maufactuers we dealt with were the likes of Dofasco and Stelco Steel, the latter of which just shut down their plants indefinitely. Each and everyone of these companies are currently struggling taking massive layoffs, idling or closing many of the very plants I have been in and some are close to entering bankruptcy protection. I can't help but think how difficult my job(s) would be these days if I was still working for my prior employers.
Self employment such as being in real estate sales is not easy either in good times or bad. Nonetheless it is very rewarding running what is effectively your own business. Planning, budgeting, developing an effective marketing strategy and most importantly gaining clients and and satisfying their real estate needs is to say-the-least very gratifying. Do I miss my corporate jobs? Yes. The steady salary, benefits, travel and other perks were all hard earned rewards that came with the territory and the business experience I acquired was second-to-none. Would I want to be working there now? Absolutely not! The pressure and stress of trying to sustain sales at a time when your customers are on-the-ropes would be no fun at all and I can't imagine how miserable it must be for some of those people to be heading off to their jobs these days. For all the alleged security one thinks exists in the corporate world, it no longer does and you only need to pick up the newspaper on any given day to see that. It's not the same work environment today that existed not so many years ago and frankly I'm glad to be out, controlling my own destiny as a self employed real estate broker.

Wednesday, March 4, 2009

Oh Deer!

I've noticed this winter a growing proliferation of deer in the area, perhaps it's due to the severity of the weather we've had and their need to forage more diligently for food. The accompanying photo was shot today by the traffic light at Mountain Road and Jozo Weider Blvd. Three deer were just off the road one of which made a mad dash across Mountain Road headed west towards the ski hills dodging cars as it went.
Almost daily as I travel along Highway 26 west of Cranberry Links, numerous deer can be seen in the woods on the north side of the highway, often they are lying down in a group which you don't often see. They seem quite accustomed to all the traffic as I have on occasion, pulled off to the side of the road, put my car window down and they are completely unphased even when you are no more than 75' or 100' away. While it's nice to experience nature up close, just make sure it's not due to one embedded in the grill of your car. Perhaps the 50KM speed limit on Highway 26 west isn't such a bad idea after all.

Contact Me

Royal LePAGE Locations North (Brokerage)

330 First Street, Collingwood, ON L9Y 1B4



Email:
rickcrouch@propertycollingwood.com



Direct: 705-443-1037



Office: 705-445-5520 ext 230




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My Profile

Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.