Monday, June 18, 2012

Disclosure in Real Estate

One of the issues that plagues both REALTORS® and sellers is the matter of disclosure. Both factions can often be unsure of what circumstances pertaining to a property need to be disclosed to a potential purchaser. Publications put out by organized real estate often detail the long and costly legal proceedings that arise when the decision is made to withhold information that would impact a buyer's decision to purchase a particular property and there are usually no winners in such scenarios.
  As a general rule-of-thumb, I always ask both myself and my sellers “would this item (ie: a deficiency in a home or incident that happened therein) affect your decision to purchase the property?” If the answer is yes then disclose, disclose, disclose is the order of the day. I’ve seen or heard of incidents where a prior fire or basement flood took place, mould remediation was done or where a suicide happened that were not disclosed to a buyer until after a deal was firm or closed and you can imagine the legal ramifications that ensued.
  We have one such potential incident in the area which some of us have recently talked about. Many of you will have heard and or read about the double murder that took place in Craigleith recently. We can only sympathize with the victim’s families and further, hope the police apprehend those responsible in due course. The house in question had been listed for sale and no doubt will once again be on the market at some future point of time. This is a prime example of what can only be described as a “stigmatized” property. The question is, how much does such a stigma devalue a property? Many buyers would never even remotely consider purchasing a property that was the scene of a murder no matter what the price. Those that would, still have to consider the long term impact on value and saleability that an incident such as this will forever have on the home.
  REALTORS® are ethically bound to abide by the direction/instructions of their clients as long as it's legal.  In an instance where a seller wishes not to disclose a pertinent fact about a property, a line must be drawn between obeying the client and what is ethically and morally correct.  Not disclosing a material fact about a property that would impact a willing buyer's decision to purchase, a fact that a seller wishes to keep secret is in the long run not in the seller's best interest.  The seller's REALTOR® is obligated to council the seller accordingly and if the seller insists on not disclosing a matter of importance, it's probably best to walk away from the listing. Honestly always pays off and disclosing a material fact about a property to a buyer and their representative is in my opinion, one of the highest forms of honestly a REALTOR® can display.

Thursday, June 14, 2012

Area Real Estate Sales Up 12% in May

  While area real estate sales dipped in May from April's near record high, sales remained very strong throughout the month. Absent however were the number of sales in the upper price ranges suggesting those with money are holding onto it.
  Sales activity reported through the MLS® system of the Georgian Triangle Association of REALTORS® in May posted a gain of 12% in terms of unit sales while dollar revenue for the month increased a more modest 9%. Sales in the lower price ranges remain very strong and from my perspective it is encouraging to see that average real estate purchasers are more confident with their finances and purchasing power than they have been in some time. Sales below $200,000 during the month were essentially unchanged from May 2011 however in the $200,000 to $349,999 price range units sales were up 20% for the month. No sales above $800,000 in our entire MLS® trading area were reported in May which is somewhat unusual and it’s not because of an absence of upper end listings.
  Year-to-date MLS® sales now total 811 properties, up 17% from the first 5 months of 2011. MLS® dollar sales now total $233.9 million for the year, an increase of 11% from last year. For the year, residential sales below $200,000 are up 12% while sale in the $200,000 to $349,999 and $350,000 to $499,999 price ranges were up 22% and 14% respectively. While sales above $1 million are running at the same pace as 2011 with 13 properties sold year-to-date, to date there has only been one sales over $1.5 million whereas last year there were 3 MLS® sales reported above $1.5 million plus 1 additional non-MLS® sale for a total of 4. Year-to-date sales in 2011 between $500,000 and $799,999 total 59 properties, an increase of 25% from one year ago. Between $800,000 and $1 million however sales are down 50% with 5 properties selling this year compared to 10 in 2011.
  It would appear that market conditions overall will remain strong through the balance of 2012 and may in fact increase as we get closer to another ski season. Whether we see a rebound in upper-end home sales in the months ahead remains to be seen.

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Royal LePAGE Locations North (Brokerage)

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