Finding Your Piece of Paradise On The Water

  We have had a long cold winter and while I like many enjoy skiing, snowshoeing and other outdoor activities this time of year, I am now looking forward and I am ready for the warmer weather and especially the start of another cottage season.

  Waterfront properties in the southern Georgian Bay area make up a significant part of our real estate market.  In 2018 the sale of waterfront homes and condominium properties in Collingwood and surrounding municipalities totalled 111 properties with a combined value of just over $85 million.  These sales ranged anywhere from modest cabins priced in the low $200,000 range to luxury high end homes over $2 million.

  Growing up as a kid I was introduced to the cottage lifestyle on Manitoulin Island where my mother was born.  My grandfather, a farmer on Manitoulin built a small cottage on the water and every Saturday after the farm chores were done we would make the three mile or so drive to the cottage to spend the balance of the weekend swimming and fishing with evening campfires.  Not everyone is attracted to those activities but many are and owing a waterfront property is a dream for countless Canadians especially for those living in urban centres like Toronto that long for a cottage property to escape to.

  As stated above, owning a waterfront property is not for everyone nor can a real estate transaction involving the purchase or sale of a vacant waterfront lot, a modest seasonal dwelling or a full time home or cottage on the water be treated the same as buying a residential home in a typical urban subdivision.   Having owned my own cottage for over 45 years I am well versed in what owning a waterfront property entails including added operating expenses and maintenance above your full time residence.  Is it worth it?  In my opinion absolutely.  In addition I have listed and sold many waterfront properties in our market area several of which we well over $1 million.  This is one segment of the real estate market when the value of waterfront properties has increased significantly over the years.  As the saying goes when it comes to waterfront, "they are not making any more" so that along with the increased demand of consumers looking for their piece of paradise has and will no doubt continue to drive up prices higher.

  Thinking about where we want to be five to ten years from now, my wife and I started to look two years ago at waterfront homes that were for sale on Mantoulin Island.  My cottage is just that, a cottage (Bottom photo) versus a full time home and it will be left to my kids.  Having not seen an existing property for sale that we liked, we started top contemplate building from scratch.  Last summer we found the perfect property listed for sale which was an estate sale.  A 1.5 acre waterfront lot nicely treed situated on the largest lake on Manitoulin, Lake Manitou and just 20 minutes from the cottage and other amenities.   Not only was the property exactly what we wanted but it had some added benefits.  The driveway and hydro was already installed along with a large 24' X 32' garage all of which would be $100,000 or more to replace. See accompanying photos.

  As a REALTOR® I quickly did my own due diligence with the municipality and others which allowed us to go in with a cash offer, no conditions and a short closing date.  The offer was accepted so we now own not one but two piece of waterfront real estate on Manitoulin Island.

  This coming weekend March 21st to 24th is the Cottage Life Show in Toronto.  My wife and I will be attending both days and have lined up a number of exhibitors we want to meet with to gather information on building.  In my next post I will share the details that you need to be aware of when buying waterfront property.  In the meantime take a lot at Royal LePAGE'S Annual Recreational Property Report for a breakdown of the recreational property market across Canada.

  If buying a waterfront or other recreational property is on you wish list, please feel free to Contact Me and I will be delighted to share my experience as a cottage owner and real estate Broker to help you find you piece of paradise in southern Georgian Bay.

Consumers Want & Are Entitled To More Real Estate Data

  Over the past few years it seems that real estate has become one of the if not the hottest topics out there.  I get stopped on the street and in the grocery store by people (some of whom I do not know) asking me "how's the market or "what's going on with real estate?"  Not only is real estate of interest from an investment standpoint but judging by the myriad of home improvement shows on TV, home decorating, renovating, buying a second property for vacation purposes and or just moving up to something larger place are all playing a role in our fascination with real estate.

  Lately there has been an added emphasis both inside and outside the real estate community about a number of so-called "disruptive" new players entering the Canadian real estate market some of which are coming from the U.S.  Many have new "business models" removing the buying and particularly the selling process away from REALTORS® putting it into the hands of consumers alleging that there are considerable savings to be had in the form of not paying commission to a real estate salesperson and their brokerage.  A recent story with CBC about this trend asked "Is it the early days of a real estate revolution?"  It may not be a revolution but yes things are changing.

  Technology has played a huge role in our daily lives and real estate is no exception.  When I entered the real estate profession back in 2001 it was the almost the pre-Internet era and we still had MLS® catalogues that were printed by weekly.  By the time the catalogue was received many of the properties were already sold.  When the first "online" MLS ® systems started to appear we could load photos of homes online albeit about three.  Photo capacity was increased so as to permit nine, then thirty.  Now the number of photos we can upload is almost unlimited in addition to floor plans, virtual tours etc.

  Amongst the new players entering the Canadian real estate market are Zillow, Redin and an  Purplebricks who are based in Britain.  Whether these so called disruptors "revolutionize" our market remains to be seem but there is no question the real estate ;landscape is changing.  Some of these companies (and others) have raised tens if not hundreds of millions of dollars in investor financing yet they have yet to make any profit.

  Consumers want, need and in my opinion are entitled to more information that will assist them with their real estate buying and selling decisions.  As real estate professionals it is our responsibility to help them every step of the way  with their real estate buying and selling needs and along with the changes that have already taken place along with those yet to come, we need to adjust our roles in order to provide greater consumer value to the real estate buying/selling transaction.   As professional REALTORS® we need to be the providers of relevant and helpful consumer centric information rather than the self imposed "gatekeepers" of said information.

  On the the things consumer want is better access to data particularly for properties that have "SOLD."  Last year the Toronto Real Estate Board (TREB) lost a long standing case with the Competition Bureau claiming that releasing sold information etc. posed a threat to privacy issues.  As a result of the courts ruling, consumers can expect to see sometime in the near future more information available to the public.  Typically our practice is not to release MLS® "sold" information on a property until the sale has closed.  Sales sometime do fall apart and don't close be it for financing or other reasons. As a consumer, you would be both unhappy and disadvantaged if the sale price of your property was freely given out, the sale was not completed and the property have to be put back on the market for sale.  Would you want the world to know what you accepted or are prepared to take for your home?  I suspect not.

  I will report further on this subject in future posts, in the meantime I would love to hear your comments or feel free to Contact me if you have any questions or concerns as it relates to your particular real estate situation rickcrouch@propertycollingwood.com.

Is Storage A Problem In Your Garage?

  Space in and outside our homes is often a problem for many of us but there are solutions. One, you can get rid of stuff (which I have done) and or two, you can create some additional space especially in the garage.  Besides having my own needs to address as real Estate Broker I am always helping clients solve various issues with the properties or ones they are looking to purchase. 

  Like my father (deceased) I am a car nut, actually anything with a motor in it gets my attention. Back in the fifties, sixties and seventies all the new car models came out at the same time usually in early October. It started when I was about four or five years old and my Dad would drag me around on a Friday night and Saturday to the various dealerships looking at all the new cars. I still remember staring at the first Mustangs, Camaros and Firebirds that came out.  I have owned and restored many cars over the years as well as motorcycles and boats.  

  Between my wife and I we have three vehicles, plus a boat and I have a motorcycle.  She has always loved Corvettes particularly the mid-sixties models but they have become very expensive. Looking for something more affordable that she could use and enjoy we found her a great, low mileage 1980 model, fully optioned with a factory four speed transmission which is somewhat rare. With all this "stuff" at home space was becoming s problem so we decided that a car lift in the garage was an potential option to look at. As with most major purchases we shopped around looking at the various vehicle lifts on the market, comparing features and of course price. We settled on a unit made here in Ontario (Oakville) that was well engineered and unlike some others used North American parts versus components imported from abroad. 

  The lift was delivered and installed this week and we are very pleased with the results. Taking advantage of the available ceiling height the lift allows us to store three vehicles plus my motorcycle in our double car garage. For hobbyists like myself a car lift is a low cost option that will pay for itself while de-cluttering your driveway. The lift allows you to raise a vehicle to different heights for cleaning and or doing other maintenance tasks including underneath the car. If you are interested visit The Lift Superstore in Oakville or I would be happy to answer any questions you may have so feel free to Contact Me.

What's In A Seller's Best Interest

  Late in 2016 and early 2017, real estate For Sale signs began appearing in our market with the added message "Coming Soon To Realtor.ca."  Consumers were and still are often confused not knowing what this statement implies so let's clear the air.

  Many of us visiting a movie theatre to take in a film often sit through a parade of ads highlighting upcoming films that are coming to the theatre soon.  "Coming Soon To Realtor.ca" signs have been used in markets such as Toronto and elsewhere for years and are a way in which a listing REALTOR® may choose to pre-market a property for sale before it hits the Multiple Listing Service (MLS).  Often this is done while the property's owner(s) complete some last minute preparations to list their home or condo for sale on the local MLS and this may include such tasks as interior or exterior painting, decorating, the staging of furniture, yard clean up, completing property photos and so on.  While the overall intent of using a Coming Soon To Realtor.ca sign on a property may seem legitimate the big question is, does doing so best represent a seller in exposing the property to as many potential buyers as possible thus helping to ensure they get the best sale price and terms possible?

  As REALTORS® we are governed by provincial law namely the Real estate and Business Brokers Act (REBBA 2002).  This act includes a variety of requirements pertaining to advertising none of which can be viewed as being false, misleading or deceptive.  Let me ask this question. If as a buyer you noticed a property with a For Sale sign that further said "Coming Soon To Realtor.ca," you had a potential interest in the property only to find out that it was sold and never got listed on MLS, how would you feel?  Falsely excited? Mislead? Deceived? I certainly would.

 As a licensed real estate Broker, this is not a practice that I have or would use.  First, installing a For Sale sign of any type on a property must include written consent from the seller(s).  This consent must have an effective date as well as written direction from the seller(s) as to how and when showings of the property are to be managed as well as the date on which offers will be accepted.  Too often these details are overlooked.  Too often the listing REALTOR® may just be trying to find a buyer on their own.  Again, is this in the best interest of the seller(s)?  The answer is probably no!

 The Canadian Real Estate Association (CREA) owns and manages www.realtor.ca.  The only "Coming Soon" sign allowed and or endorsed by CREA is "Coming Soon To Realtor.ca."  "Coming to MLS" is not allowed neither is just "Coming Soon" as is begs the question coming soon to what?  Some real estate boards and associations across Canada do not allow the use of such signs as part of the MLS rules and regulations, personally I think it's time to perhaps consider the same here in our market.  Seller's deserve and are entitled to the best possible service we as REALTORS® can deliver and the same applies to buyers. 

  Ultimately a property is either for sale or it's not.  Let's stop playing games and service our seller and buyer clients in the best way possible with knowledgeable, timely and forthright service that demonstrates the value that we as REALTORS® bring to the real estate transaction.  I would love to hear your opinion on this or feel free to Contact Me with any questions you may have.
        

LED Bulbs May Not Always Be Your Ideal Choice

 In the sixteen plus years I have been in real estate, technology has played a huge role in not only expanding the real estate business but it has also impacted our daily lives in many many ways.  Between advancing my real estate skills, computer knowledge and other facets of life I have always embraced technology and it has served me well.  At the same time however, technology can sometimes backfire and I recently learned this with a problem at my house.

  As may of you are aware I recently sold my own home and moved from Collingwood to Clarksburg which is adjacent to Thornbury.  My better half and I have been living in our own homes for many years and it was time to consolidate two residence into one.  She and I both work long hours, this combined with maintaining two homes plus a cottage(s) I have owned for many years on Manitoulin Island had become more than full time jobs and it was time to simplify our lives.

  I had made many improvements to my Collingwod house including steps that were aimed at reducing my energy consumption and expense.  In addition to newer appliances, a hi-efficiency gas furnace and central air conditioner I had also switched most of my interior lighting to LED's. One area in my home where the LED lights backfired so-to-speak with on my garage door opener. The standard incandescent light bulbs on my opener were always burning out mostly the result of the excess vibration they had to endure from the opener itself every time the door was opened or closed.  Even rough service bulbs seemed to fail fairly often so I switched the standard bulbs over to LED's.  I also did the same on mt spouse's garage door opener.

  Things worked fine with better lighting in the both garages other than we found the garage door remotes had lost some of their effective range and they would often fail to activate the door openers unless you were very close by.  Ultimately I discovered that the problem was not the opener or the remotes, it was the LED bulbs.  LED bulbs have a frequency of their own and this was creating a conflict with the frequencies of our garage door openers and their respective remotes.  Once I removed the LED bulbs and replaced them with normal incandescent bulbs the remotes went back to working as they always had.

  A move that was implemented to lengthen the life of the garage opener light bulbs ended up causing more frustration than just having to replace the standard type of bulbs on a somewhat regular basis.  If you are having trouble with the performance of your garage door opener and you too have installed LED bulbs on the unit, this is more than likely the problem.

  We have plenty of LED bulbs throughout the interior of our Clarksburg home. The garage door works perfectly with the tried and true incandescent filament type bulbs, I will just have to be content replacing the door opener bulbs more frequently when they fall victim to the wear and tear they are subject to via the opening and closing of the garage door.  Lesson learned.


     

Georgian Triangle Real Estate Market - 2017 Year In Review

  During 2017 we continued to see a strong demand for real estate across the southern Georgian Bay Region.  Following record MLS sales that were reported by the Southern Georgian Bay Association of REALTORS in 2016, the bar was raised once again in 2017 with total MLS volume for the year of $1.091 billion.  This was roughly a 5% increase in sales over 2016.

  Despite the higher sales volume last year, a shortage of MLS listed properties for sale continued to plague the local real estate market in 2017.  Sales activity in the first half of 2017 remained strong, with MLS unit sales to the end of June up 1% or roughly the same equivalent from 2016.  MLS sales volume at the end of June were up 27% and totalled $6234 million.  Meanwhile MLS listings during the same time frame were down 16% from the first six months of 2016 totalling 2,014 properties compared to 2,385 new listings one year earlier.

  Despite the shortage of properties listed for sale, MLS dollar sales in 2017 remained strong as the result of increased sales in the higher price ranges primarily the $500,000 to $2 million category.  Sales of properties between $500,000 and $1 million were up 31% and 36% respectively totalling 571 units compared to 432 in 2016. Sales between $1 to $1.5 million increased 63% with 83 sales reported versus just 51 a year earlier. Lastly, sales in the $1.5 to $2 million range were up 71% with 29 sales compared to 17 in 2016.

  In total there were 1,551 MLS single family homes sales in 2017 a reduction of 19% from 2016.  Condominium sales in 2017 totalled 523 units an increase of 9 units or 2% from the 514 condos sold in 2016.  Lastly, MLS sales of vacant land in 2017 totalled 316 properties, an increase of 4% over the number of vacant land properties sold in 2016.  As pointed out in the past, these MLS sales and listing statistics do not include properties listed, built and or sold by developers outside of the local MLS system.  The Blue Mountains was the only area municipality that realised an increase in MLS sales of existing single family homes in 2017 with 227 sales reported compared to 223 a year earlier.  All other municipalities saw a reduction of MLS residential home sales in 2017 their results are as follows: Grey Highlands down 26%, Cleaview down 25%, Wasaga Beach down 21%, Collingwood down 15% while sale in the Municipality of Meaford were down 13%.

  As we head into 2018 I feel that we will see a change in market conditions especially from the hectic first few months of 2017. Inventory will no doubt remain soft and the recent changes in mortgage rules will no doubt impact some buyers and that may well decrease the multi offers and over list price sales that we experienced in the early months of last year.  Meanwhile, the development of new homes and condominiums in the area will serve to add some much needed housing inventory to our market(s) over the next 2 to 5 years.  The demand for area properties will remains strong, fuelled to a large degree by buyers from the Greater Toronto Area and from cities in southwestern Ontario such as Guelph, Cambridge, Kitchener, Waterloo, London and others.  We are still in the early stages of buyers in their retirement years looking to move to this area long term.

  As I have stated before, the challenge(s) for many of the local municipalities will be to manage the growth of the southern Georgian Bay area in such a way as to preserve the very reason why people want to vacation and or retire here in the first place.  Municipal services such as sewer, water and the local transportation infrastructure will all feel the pressures of the coming market growth.

  For further information on real estate sales in this area please visit the Newsletter section of my personal real estate website www.rickcrouch.realtor.   For a confidential no obligation conversation about you buying or selling real estate needs please feel free to Contact Me. 

10 Questions To Ask When Buying A Home

Given some of the irregularities we have seen in the real estate market this year with seemingly more buyers than there are homes for sale, buyers have often elected not to or did not have the luxury of doing a home inspection especially when faced with multiple offer scenarios.  Whether you are having a home inspection done or not, here are 10 questions that every Buyer or their REALTOR® should be asking about a prospective property the Buyer is interested in. 

1. How old are replaceable portions of the structure (the roof, windows, guttering, siding, etc.) and the major appliances (HVAC systems, water heater, kitchen appliances, etc.)?

Older appliances, roofing, siding, etc., may mean large expenses are on the horizon, which should be considered before making an offer.

2. How old are any major renovations?

If, for instance, any additions have been recently made, request the permits and related paperwork. You don’t want to find out after the sale that a beautiful new sunroom wasn’t approved and must be torn down or moved!

3. Is there documentation on work done to the house?

If repairs have been made to appliances, mechanical systems, etc. a copy of the paperwork could mean that some systems are still under warranty after the sale. At the very least, you would know when the repairs were made and by whom, in case follow-up work is needed. It’s even a good idea to ask for details on the paint used throughout the home, as this information would make it easy to repaint walls should future repairs require touch-ups.

4. Are there any water-related problems?

Have any of the pipes burst? Has the sewer ever backed up? Have there been any leaks between the water meter and the house? Has there ever been standing water in the basement or crawl space? Knowing what problems have occurred will keep you aware of any signs of a repeat performance… and will help you look for any mold or structural damage that may have resulted.

5. Is there anything that’s NOT included in the sale of the house?

There may be a garden shed the owners intend to move, ceiling fixtures they plan to keep, or other seemingly “built-in” items the owner plans to remove, like bookshelves, mantles, etc. Be sure you know exactly what you are buying and have it written into the contract to avoid any nasty post-purchase surprises.

6. How many times has the property changed hands?

If the home is very old and/or historic, there may be a long list of prior owners. What you want to know, however, is if there has been a rash of short-term owners. This may indicate problems you can’t see. Ask why the previous owner and the current owner are selling.

7. How much is this property worth in today’s market?

An agent should be able to offer details on recent comparable sales on similar houses in the same, or similar neighborhoods. S/he should also be able to tell you how long it is taking for houses to sell and whether or not most sellers are getting more or less than their asking price. Additionally, they should be able to tell you how long a property has been on the market, which could indicate how much negotiation power you have.

8. Is the seller willing to help with closing costs?

Closing costs can really add up. If it’s a buyer’s market, you may be successful in including this as a negotiating point on a purchase offer.

9. May I speak with the current owners?

The current owners may be less guarded in what they say than their real estate agent. They will also know more about what it’s like to live in the house and the neighborhood and will have the best advice on everything from local restaurants to nearby mechanics.

Of course, the seller’s agent will likely discourage the owners from talking to you—and your agent may provide similar advice out of concern you’ll accidentally reveal details about your own situation that could hurt your negotiating position. This is why it’s usually better to work through licensed real estate professionals.

10. Is there anything negative in the history of the house?

Has this house been the site of any crimes (murders, meth lab, illegal companion services, etc.)? Has it been the home of a negatively famous/infamous individual? Has it experienced a flood, fire, earthquake or other natural disasters? In some states, some of these items must be disclosed, while other states put the onus on the buyer to ask.

  A lot of this is common sense that shouldn't be overlooked while you ogle the new kitchen or the recently renovated bathroom.  Finding some major deficiency in a home after you have closed that take the shine off your purchase pretty quickly especially if there are some major repairs need to remedy them.   These tips were taken from an article published by the Real Estate Buyer's Agent Council of the National Association of REALTORS® in the U.S. of which I am a member.  

  As always I welcome your questions and comments.  If you have had an unfortunate real estate buying experience due to some unforeseen issues with a property and need some advice, I would love to here from you.

Multiple Representation and You

  There has been plenty of controversy over the years in real estate circles about the issue of Multiple Representation commonly referred to as "double ending" or "dual agency."  Seemingly, a large majority of consumers do not know what Multiple Representation is yet it is something not to be taken likely with some REALTORS® failing to explain the implications.  This has become such a contentious issue that the Provincial Government has launched an investigation into the matter and I suspect we will see some changes coming in the future. In the next couple of posts I will bring some clarity to this matter.

  First and contrary to common belief, REALTORS® are not agents.  The Brokerage we work for is the "agent," we are either Salespersons or in my case I am a Broker.  Multiple Representation is when a real estate Brokerage and not just a singular Salesperson or Broker represents both a Buyer and a Seller in a real estate transaction and there are different examples as to how this can play out. 

 Few consumers understand that in legal terms there is a difference between being a client versus a customer.  When we enter into a Listing Agreement for a Sellers property, they become a client and we have a fiduciary duty to look out for their interest(s).  Similarly, when we enter into a Buyer Representation Agreement with a Buyer(s), we have established them as a client and similarly there is a fiduciary duty to protect their interest(s) as well.  If a party to a real estate transaction is merely a customer and not a client, no fiduciary duties exist.  Yes we must act honestly and truthfully with respect to dealings with a customer but we are not responsible for looking out for their best interests. 

  The simplest example of Multiple Representation is when I have a Buyer for one of my own listings. This is obviously Multiple Representation as not only myself but the Brokerage is representing both the Buyer and Seller in this transaction.

  If a Salesperson from my Brokerage represents a Buyer for one of my listings it is once again Multiple Representation as the Brokerage is representing both the Seller and the Buyer in the same transaction

  Here is where it gets a little trickier.  If two Salespersons from my Brokerage are representing two different Buyers for the same property that is listed with not only with our Brokerage but any other Brokerage such as ReMax or Century 21 etc. this is still Multiple Representation as our Brokerage is representing two different Buyer clients for the same property.

  When in Multiple Representation, the Brokerage must not share information or act in a manner that would compromise either party Seller or Buyer.  This includes not sharing the degree of motivation that a Seller or Buyer may have, why the Seller is selling, how much the Buyer is willing to pay or the Seller is willing to accept etc.  

  Every time I list a property for sale for a Seller client or when working with a Buyer Client I always make it a practice to explain in detail how these various representation scenarios may unfold.  It's not only a good business practice but disclosure of this information it essentially the law and it goes a long way to avoiding any misunderstandings during the transaction and or afterwards.

 In my next post I will delve into this matter further especially as it relates to situations when Buyers are in multiple offer situations which has become a regular occurrence in our market of late.  On the meantime if you should have any questions please do not hesitate to Contact Me.  My knowledge is always shared openly and freely.

  

Making Buyers Fall In Love With Your Home

In addition to being a REALTOR®, I too am a home buyer/owner. Personally I have owned eight homes over the course of my lifetime, not as a speculator but as the provider for my family. These various homes were purchased as the result of either changing family needs or changes in my employment status where I was transferred to a different location including a move to Collingwood, Chicago and others. Every time I bought a home, I knew instinctively when I walked through the door, this is, or could be the "one!" If you are thinking of selling your home you need to know what it takes for a potential Buyer to fall in love with your house.

The Ottawa Citizen newspaper recently publish a very good article titled: "Advice from a REALTOR - Helping buyers to fall in love with your home." Even in this robust market with an absence of houses listed for sale, your property needs to put it's best foot forward in terms of making a favourable impression on buyers. Much of what is contained in this article is pretty simple stuff but far too often it is overlooked by both Sellers as well as the listing REALTOR®.

Not every property needs to be staged and frankly I find that staged homes often look exactly like what one definition of staged said, "contrived for a desired impression" which is exactly how model homes look with fake food and all. Rather, your home needs to convey a look whereby the Buyer(s) could imagine living there.

Often overlooked when getting your home ready for the market are just some basic cleaning and housekeeping tasks. I have been in countless homes where the carpets were dirty, the kitchen counter(s) were cluttered and the same with bathrooms all of which are easy fixes. What about your kids rooms? Does your teenage son or daughter have posters plastered all over their walls some of which might be offensive to some Buyers? Then there is the issue of the beer bottle or ball cap collection. My advice? You are moving, start packing that stuff away now!

When preparing to sell you home, both you and the listing REALTOR® need to take a very objective look at the property. Is there anything evident that would turn off potential Buyers? Too often I find that my REALTOR® peers are reluctant to say anything to their Seller clients about getting rid of things around their home (inside or out) that may turn off a potential purchaser. This also applies to areas of the property that needs cleaning or other or attention. If the owners truly want to sell and for the best price, having an honest and frank conversation about what needs to be done to prepare their home to sell is not offensive, it's doing them a favour.

Not sure what to do to prepare you home for sale? Read my "10 Things to do before you list your home for sale." or Contact Me and I would happy to visit your home and provide you a a no obligation assessment of what should be done to get it sold and for the highest price.

Beware of "Lease To Own" Scams For Your Home

  Over the past several years, home owners have been presented with "lease to own" schemes for everything from water heaters and furnaces to central air conditioners and more as an affordable way to acquire new and often costly components for your home. But beware, these offers come with a price and a steep one at that.

  Let's face it, not everyone has $4,000 or $5,000 lying around to purchase a new furnace when their quits in the dead of a cold January night.  As such, getting a new furnace for a low monthly fee seems very attractive and likewise when you'd love to have central air when the temperature is 30 degrees plus but your bank account is showing a minus balance.  I had a salesperson knock on my door one night offering me the opportunity to get a high efficiency natural gas furnace for a low monthly fee on a lease to own basis.  Just out of curiosity I listened to their pitch only to find more holes in the their proposal than a wool sweater housing a colony of moths.  In this case the salesperson was attempting to sell the whole concept on the natural gas that I would save with a new high efficiency furnace.  The natural gas savings were touted as literally paying the lease payments.  Upon further examination however a $4,000 furnace was costing in the end about $10,000.  Most of these programs offer no prepayment privileges if you want to buy out the lease fine but you have to pay off the remaining balance so there is no savings in interest.

 I have faced this issue more than once when listing and selling homes.  Two years ago as a member of the Ontario Real Estate Association committee that drafts and revises the real estate forms used across the Province, we revised the Agreement of Purchase and Sale to address this issue. Sellers are required to disclose any equipment on their property that is not owned.  Rented water heaters are typically not an issue but furnaces, central air conditioners and elaborate home security systems due to their cost are.  One home currently listed for sale by my office has an outstanding bill well over $10,000 for rent to own equipment in the house and this will have a real impact on the sale price.  

  The bottom line is if someone calls or comes knocking on your door with a proposal to replace your furnace or another critical element of your home on a rent to own basis, be very very careful of what you sign up for.  If you have any questions about this subject please feel free to Contact Me.

CMHC Announces New Changes For Financing Rental Properties

With the Province of Ontario pushing the concept of intensification and the rising cost of home ownership especially in places like Toronto, many would-be buyers are looking at an accessory apartment in their home as being a way to help make higher mortgage payments.  Canada Mortgage and Housing Corporation (CMHC) has just announced new rules that will make it easier for homeowners wishing to rent out a portion of their residence to obtain financing.

Effective September 28, 2015, homeowners will now be able to use 100% of their rental income when qualifying for a mortgage, prior to this just 50% of the rental income was allowed. In order to qualify for this new CMHC financing option the following conditions must be met.

• The property must be owner-occupied.
• The property being insured can have only two units (i.e., a duplex or a single home with a legal secondary suite). 
• Rental income cannot be used if the suite is “illegal/non-conforming” but “legal non-conforming” is okay. (Non-conforming means that the suite was grandfathered in before zoning/regulations restricted such units. You can check with the city to confirm if a suite is legal.)
• The suite must be self-contained with its own entrance.
• Property taxes and heat must be factored into the borrower’s debt ratios (which is currently not the case when using rent from legal secondary suites).
• For existing units, there must be two-year history of rental income from the suite. The maximum rental income allowed for qualification is a two-year average of the unit’s rent.
• For new units, a market rent appraisal can be accepted if an appropriate vacancy rate has been applied to the estimated rental income.
• Mortgage applicants must “demonstrate a strong history of managing credit” with a minimum credit score of 680.

  This new changes offer some great benefits for consumers.  Borrowers will now have easier access to mortgages when looking to buy a property that contains an accessory apartment.  This will make home ownership more affordable while also potentially increasing the number of rental units available for tenants.  As with every positive there is a potential negative.  Easier financing for properties with rental units could further heat up markets such as Toronto but overall I would have to say that this is a good example of public policy making.

 Locally in our market there is a strong need for good quality rental units.  As of the end of June, the 12 month average price for a single family home in our area was $338,000.  Being able to use 100% of any rental income you might have from a basement apartment etc. can go a long way in helping a buyer qualify for a mortgage while hopefully over the long term, providing for an increase in much needed rental units.

Kitec Plumbing - A Threat to Sellers & Buyers

Real estate is something that is ever-changing due to a variety of variable.  As REALTORS ®
we are expected and in fact have a fiduciary duty to protect the interests of our clients whether they be sellers or buyers.  New issues arise every day and while we are not expected to be experts on them all, we do have a duty to advise our clients to seek expert advice when we suspect something might be up with not just a property but also with the transaction itself.

  One of the latest issues that has reared an ugly head is a construction related matter involving plumbing and the use of plastic piping. Commencing in the mid 1990's, many builders began using plastic, instead of copy piping in home.  Plastic piping is easier to run as it requires fewer tees and elbows. It was also perceived as being quieter.  Copper piping had long been used which replaced galvanized pluming in older homes.  Galvanized piping would rust inside and corrode causing a reduction in water pressure over time.  Copper pipe did not have this issue however, the solder used in copper pluming contained lead and we all know that lead isn't good.

  Not all of the flexible plastic piping on the market is of questionable performance.  The brand/type that presents the largest threat is known as "Kitec."  The following is a quote regarding what Kitec is and how to identify it

"Kitec plumbing consists of flexible aluminum pipe between an inner and outer layer of plastic pipe (PEX pipe) with brass fittings. Marketed as a cheaper and easy-to-install alternative to copper piping, Kitec was sold between 1995 and 2007 for potable water, in-floor, and hot-water baseboard heating systems. The sizing of the pipe require fittings from its own manufacturer, IPEX, and these fittings were made with a high zinc content that caused dezinctifying in situations with aggressive water conditions. This in turn could either restrict water pressure or cause the fittings to fail completely, causing flooding and water damage to homes."

"Most Kitec plumbing can be identified by its bright orange (hot water) and bright blue (cold water), which were the most common colours; however, it was also sold in red, blue, gray and black. The pipe is typically marked with one of the following brand names; Kitec, PlumbBetter, IPEX AQUA, WarmRite, Kitec XPA, AmbioComfort, XPA, KERR Controls or Plomberie Améliorée."

  We have seen Kitec pluming used in this area.  Some insurers will not insure a home with Kitec.  Other may with the stipulation that you replace it within a certain time frame. As you can imagine, re-pluming an existing home can be a costly affair, which is yet one more reason why most of us selling real estate recommend buyers obtain a home inspection from a qualified inspector before finalizing a purchase.

 For more information on this subject you see http://www.kitecsettlement.com/ and CBC news also has a good story on this.  Have any of you had experience with Kitec plumbing?  I would love to hear from you.

Creating An Outdoor Room

Walking through numerous retailers such as Canadian Tire, Home Depot and others it is not hard to see that with a wide variety of patio furniture and other accessories creating an "outdoor room" is all the rage.

 If you are in the process of trying to sell your home now is a great time of year to stage your patio or deck in a manner as to accentuate the potential outdoor living that buyers could enjoy.;  Little things like this can help to set your house apart from the competition in both the eyes of REALTORS®
as well as prospective buyers.

Here is a good article with 50 Outdoor Room Ideas to help inspire you in creating your own special outdoor living area.  For more ideas you can also visit my Outdoor Living Pinterest page.

It's Spring - Come Out of Hibernation

  Other than on the ski slopes and up on top of the escarpment, the snow is almost gone and the ice coverage is retreating from the Bay.  It's been a long cold winter and most are glad to be getting back outdoors to partake in warm weather activities.

  I have been assessing some of the clean up work needed around my own home and it is extensive!  With all the snow we've had this winter there is an abnormal amount of sand on my lawn thanks to the liberal amount of sanding that was needed on our snow covered streets this winter.

  Many of you may be thinking about getting back out into the yard for clean-up and other gardening chores.  Not where to start?  My Home Cents Help Tip titled "Spring Out of Hibernation" may help you.  

  If you are perhaps thinking of selling this year, creating strong curb appeal is an important aspect of getting your home ready for market.  It not only creates a positive image and feel when prospective buyers arrive to look at your property but a well kept home appearance-wise suggests that it has probably received due care relative to other maintenance task.  A neglected home in terms of its appearance suggests that other aspects of the property such as the mechanical systems may have been neglected as well.  Buyer are fussy and with three times the number of homes listed for sales versus those that sell, they have plenty of choice.  

  Make sure that your property "stands out" from the rest of the competition.  Start by improving the exterior to create a good first impression and a positive story about the rest of the property.  

The Sale Is Dead - What Happens to The Deposit?

  Buyers and Sellers entering into a real estate Agreement of Purchase and Sale are usually at opposite ends of the spectrum on a number of issues the most important of which is money.  Obviously the purchase price is the biggest hurtle to agree on, secondary to that, deposits can sometimes be a thorny issue as well.

  Contrary to what you may believe, an Agreement of Purchase and Sale is a binding contract even if there is “zero” monies paid as a deposit.  A contract is made based on considerations being made.  In real estate, the considerations made in an Agreement of Purchase and Sale includes the Seller transferring the title to the property to the Buyer.  It may also require the Seller to include specific items ie: the appliances and other things that are specified in the Agreement.  Similarly the Buyer agrees to pay the Seller the agreed to purchase price on a specific date etc.  All of these items are essentially promises that are being made by both parties in the terms of the contract.  What makes the contract binding is not the deposit but the fact that the Agreement is signed “under seal.”  As you will note on most real estate forms, signatures are make next to a small black seal and the Agreement is noted as being SIGNED, SEALED and DELIVERED…..

  Virtually all Agreements of Purchase and Sale do however include a deposit the mount of which can vary.  There is no specified or accepted deposit amount ie: 10% of the purchase price etc.  The deposit is a further show of good faith by the Buyer.  The amount of the deposit is not only based on price but also the length of the closing date is an important factor as well.  If a Buyer purchases a property with a long closing date ie: 6 months with say a $2,000 deposit, there is not much of a deterrent for them to not complete the Agreement if all they have at risk monetarily is $2,000.

  Most real estate transactions today have “conditions” that for the most part need to be satisfied by the Buyer.  These can include the sale of the Buyer’s current home, securing a mortgage to complete their purchase, obtaining a satisfactory home inspection report and so on.  Conditions are typically worded such that if they have not been either satisfied or waived by the Buyer by a set date and time, “…the offer shall become null and void and the deposit shall be returned to the Buyer in full without deduction.”  Seldom are deposits “non-refundable” unless specified as such which is rare.  Sellers are as a rule not eligible to keep the Buyer’s deposit even when the Seller feels the Buyer has reneged on the terms of the Agreement. 

  Deposits are for the most part held in the trust account of the real estate Brokerage representing the Seller(s).  So what happens with the deposit when an Agreement of Purchase and Sale becomes null and void or should a conflict arise between a Seller(s) and Buyer(s) and the Agreement is not completed?

  Real estate Brokerages can release a Buyer’s deposit one of two ways.  When an Agreement is aborted, the Seller and Buyer sign a “Mutual Release.”  This releases both parties from the contract, the Brokerage holding the deposit refunds it to the Buyer(s) and life come goes.  If either the Seller or Buyer refuses to sign a Mutual Release it may be an indication that one of the two parties is going to litigate in an attempt to make the Agreement enforceable.  Should that be the case, the only way in which a Brokerage can release a deposit to the Buyer is via a Court Order.  

  If you are a Seller, you want a sufficient enough of a deposit so as to feel comfortable that the Buyer is committed.  A relatively large deposit potentially signifies that the Buyer(s) have the financial ability to complete the transaction.  As a Buyer, you naturally may want to cough up as small a deposit as possible as most deposits are held on non-interest bearing trust accounts.  This means that if your money is sitting in a real estate Brokerage’s trust account for several months, it is not earning you any interest.  As a Buyer, providing a larger deposit shows you are serious and depending on the Seller it may give you more leverage with respect to negotiating the price, closing date and other terms that you want.

  I hope you find this information helpful and I encourage your comments.

Technology Can Make or Break a Deal

 Even those of you that may be not so inclined to use it extensively will readily agree that technology has and will continue to impact our lives.  I am an ardent believer and typically an early adopter of technology, provided it offers a meaningful purpose.  At the same time however, it is not meant to replace the personal contact or the human oversight that is a hugely important part of a legal transaction such as real estate.

  It is not uncommon during the real estate transaction to have documents transmitted back and forth between both REALTORS® and their respective clients via fax or more likely email.  All real estate documents in the province of Ontario have been reformatted to letter versus legal sized pages for this purpose.  While this mode of document transmittal is fast and in the case of email much more legible than faxing, it does not lessen the burden on all parties of making sure the required forms are fully and legally executed.

  Today’s forms require initials on every page to ensure none are missed, and any and all changes must be initialed by both the Buyers and Sellers.  I just read an article titled “How Email Killed the Deal” in a real estate publication I follow that went like this.  A recent court case arose when a change in price on an Agreement of Purchase and Sale had not been fully endorsed or acknowledged by both, the Buyers and Sellers resulting from an initial(s) and or a signature(s) having been missed on the documents.  Who was at fault?   In this case it was the REALTOR® for the Buyers.  The Buyers were under the impression they had an accepted offer at one price whereas in the Seller’s mind it was a higher price.  The matter went to court and due to the missing initial(s) the Judge ruled there was in fact no contract.  The Buyers got their deposit back but no house and the Sellers lost a sale.

  All of this stemmed from the fact that documents had been transmitted back and forth as attachments to emails but were seemingly not opened and checked by one or both REALTORS® to make sure that all changes etc. were duly executed by both the Buyers and the Sellers.  With something as complex as today’s real estate transactions, no amount of technology can take the place of the required human intervention and care as is required to cross all the T’s and dot all the I’s.  This is where a trained and conscientious REALTOR® must exercise due care on behalf of their clients.  Even when not dealing with people face-to-face, I always make a call during which we review the documents, I answer any questions and most importantly cover all the areas where they need to initial and sign.  Just one missing initial can create a loophole thus jeopardizing a sale so it’s a matter of checking and double checking everything.

  In my next post I will explain the process of what happens with Buyer’s deposits when a real estate transaction is aborted.  

The Five Biggest Turn-Offs For Homebuyers

  On March 25th I did a posting titled "5 Tips To Help Sell Your Property" which I hope my readers that may be trying or are thinking of selling found useful.

  While scanning through some of the real estate websites that I follow this morning I came across an article summarizing "The Five Biggest Turn-Offs For Homebuyers."  It came as no surprise that these five things dovetailed with the five issues I raised a week ago, here they are:

1. Overpricing for the market
2. Smells
3. Clutter
4. Deferred maintenance
5. Dark, dated decor

  If you currently have your home for sale and have not attracted a Buyer as yet or if you are thinking of listing this spring, this is a great article from which you could create a checklist of "to-do's" that will get your property ready and in prime shape to attract interested Buyers and the top price!

5 Tips To Help Sell Your Property

 Contrary to what you may or want to believe, successfully listing and negotiating the sale of  your home or other property is much more of an art than it is luck.  Below are five proven tips that if followed, will help you get the best price in the most reasonable amount of time.  While it's no guarantee and other market factors may be working against you, these are nonetheless proven factors in successfully getting the inevitable sale results you are hoping to achieve.   

Create Great Curb.  Like the saying says “you only get one chance to make a good first impression.”  Most home buyers want homes which look great from the outside. It's not just a question of curb appeal it's also about buyer perception. If a home looks good from the street it probably means the property has pride of ownership, has been well cared for and is ready for a new occupant without a lot of cost or aggravation for the new owner(s). Buyers have less interest in a home that doesn't appeal to them from the street and some may not even get out of the car to look inside.

De-clutter Your Home.  I am often amazed when I show properties just how much clutter there can be.  When your home is for sale, it is not the time to be showcasing your beer bottle collection or Elvis memorabilia.  I always ask myself, “why is the listing REALTOR® not addressing this with the owners?”  A clutter-free home offer fewer distractions allowing the buyer to visualize there furniture and belonging there.  It will make interior spaces look larger and eliminates the need to get rid of stuff when you are in the midst of moving.  Sometimes it may make sense to donate unwanted items or otherwise reduce clutter before a home is placed on the market.  Rent a small storage unit perhaps to put excess "stuff."  This is not only a good marketing initiative but it also serves as a practical step toward relocation.  If you are really committed to a move, start packing now.

Good Working Mechanicals.  Make sure that your home's systems such as the furnace, air conditioner, central vacuum and others are in good repair and that they function properly.  This will help to ensure they meet the scrutiny of a professional home inspection. Homes with good mechanicals are much more appealing to buyers that are fearful of major repair expenses.

Seek Pre-qualified Buyers.  While many sales may be for cash, the majority still require financing.  At one time, mortgage financing was somewhat of a given but times have changed.  It is frustrating to enter into a sales contract with a potential buyer who ultimately cannot obtain the required financing to purchase your home.  Have your listing REALTOR® determine if the buyers that are contemplating making an offer or have made an offer on your home have been pre-approved.  While still not a guarantee, pre-approval of a buyer(s) is a much strong indicator that the financing condition in an offer will be fulfilled.

Price and Negotiate Properly.  Pricing your home correctly at the outset means everything!  In addition to overall economic and market conditions, such factors as location, amenities and condition are just some of the characteristics that impact the price.  When an offer is received, the terms in that offer should be given equal consideration as to price.  A strong price along with a myriad of conditions and a long closing date may not be as attractive as a cleaner offer with fewer conditions, a shorter close and lower price.  These are all things to consider and need to be discussed with your REALTOR® during offer deliberation and subsequent negotiations.  

Send me your selling and or buying questions on Facebook and I will be glad to provide answers to you without obligation.   

10 Things You Need To Know When Making An Offer

  As we get closer to spring, many of you may be contemplating a home or other type of property purchase.  Once you have found a home that you’d like to submit an offer on. The next and most important question you ask yourself and your REALTOR® is how much do we offer? 

  The following are 10 things that you need to know in order to help you formulate an offer and a negotiating strategy.  I have separated these 10 things into two distinct categories.

Market Conditions

- What are the list and sale prices of similar properties, preferably sin the same 

   general area?

- What is the current trend in prices, up, down or stable?  What is the ratio     

   between the list and sale prices.

- What is the current supply and demand in the area you are looking? In a high \

   demand low supply market you may be faced with competing offers.       

   Conversely in an area or price range with lots of inventory you are not.

- What is the absorption rate ie: the number of month’ supply of inventory in the 

   area? Less inventory in a given area can make for a more competitive market for 

   Buyers.

- What is the “average time on market?” Because listings expire and properties are    often re-listed for sale, the cumulative time that a property has been on the 

   market is important.

Property Facts

- Is the property you are considering well kept, up to date and in good condition   

  of are substantial repairs and upgrades needed?

- What sis the cumulative length of time on market for the property?  Substantial 

  days-on-market can signify slow market conditions, a pricing issue with the 

   property or some other form of problem such as location, deficiencies in the 

   home etc.

- What is the seller’s motivation?  Often it is not possible to find this out and the 

   REALTOR® that has listed the property is obligated to keep his Seller client’s 

   motivation private.  They may however have an offer on something themselves 

   or are otherwise anxious to get the property sold so you can always ask.

- What terms is the Seller looking for?  The cleaner the offer with fewer 

   conditions the better.  Having pre-approval of your financing or being able to 

   make a cash offer with a short closing gives you a lot more leverage to negotiate 

   with.

- What is the sales history for the property?  While what someone paid for a 

   property is somewhat irrelevant, it is very easy for a REALTOR®  to check 

   land registry records in order to see what a property last sold for.  Using that 

   information, plus allowing for increases or decreases in market values plus the 

   cost of any improvements that have been made will assist you in determining a 

   fair price for the property today.

  
By obtaining answers to these 10 questions, you will have some valuable insight into preparing an offer and then further negotiating the process that will allow you to arrive at a purchase price that represents fair market value for both you and the Seller.  Contact me to learn more.