What Is The Correct Price?

  Following a good start to 2013 in January where unit and dollar sales were up 10% and 14% respectively, unit sales in February declined modestly -1% while February's dollar volume was down 7% from the same month in 2012.  Month-to-date, the March numbers are holding steady to March of 2012 and it would appear we may eclipse last year's results by 3% or 4%.

  I am always reluctant to use the term buyer's or seller's market.  A buyer's market suggests that there is lots of inventory (which there is) and that seller's are deeply discounting their prices to attract a buyer.  The latter is not true in our market.  On the other hand, a seller's market suggests that buyers are paying the going asking price and in fact may be over-paying due to multiple offers on the same listing. Again, this is not happening to any significant degree in our market and there are a number of reasons why.

  The bottom line is one thing and one thing only sells a property and that's having it appropriately priced.  No amount of print or online marketing exposure, virtual tours, open houses or other initiatives will sell a property that is not properly priced.  As I have stated before, characteristics such as location, condition, features and so on are important but they too are ultimately a factor of  price.

So what is the correct price?  Despite a comprehensive comparable market analysis or even a formal house appraisal only a buyer knows and establishes what a property is ultimately worth.  In our market, a list-to-sale price ratio of 95% is commonplace.  Sellers often price their properties high saying "people can make an offer." The bottom line is most buyers will not make an offer on an over-priced property and in fact they may not even find it.  In the Internet age, most property hunters are looking online and in doing so, stick to a price range when executing their searches.  A person looking in the $350,000 to $400,000 range typically does not expand their search to say $410,000 or $420,000 with the assumption they can buy it for less.  For that reason I typically would recommend an asking price of just under $400,000 in order to get the listing in front of those buyers.

  In a market such as the Greater Toronto Area buyers are used to properties selling for close to or even above the asking price. That is just the nature of that market.  My belief is this "conditions" those buyers to the point where they expect they will have to pay close to the full price so why look at properties that may be priced 3% or 5% higher than what they can afford. 

  Buyers from the GTA make up a significant part of the real estate sales activity in the southern Georgian Bay region.  If you have and or are going to list your property for sale think about who the potential buyer(s) may be or where they might be from.  If you want your house or condo etc. to sell, then price it accordingly to where it should be priced.  Example: If the property's market value is $295,000 to $300,000 then price it accordingly in that range.  Not only will you attract a potential buyer sooner but you might get more than one.  That's seems to be the norm in the GTA and there is no reason the same shouldn't apply and or work here.  Pricing too high under the belief "we can always comes down" will only extend the time your property is on the market while raising the question in the buyer's mind as to "what's wrong with this place, why hasn't it sold?"

Heading to Mt Tremblant, Why Not Fly?

I just returned from three days of skiing and snowboarding with my son at Mont Tremblant.  It was a great father son outing and to add to the adventure we flew down out of the Toronto Island Airport on Porter Airlines.   I can highly recommend this to anyone travelling to Montreal, Mont Tremblant or to any of the other 17 destinations that Porter serves in Canada and the U.S.

  Flying out of the Island Airport is a unique experience first crossing on the ferry ($11 by car).  Parking on the Island is somewhat limited but at the same time relatively inexpensive for downtown Toronto ($113 for four days).  The airport itself has been a huge success thanks to the business that has been generated via Porter. Currently under construction is an $82.5 million pedestrian tunnel which when completed, will whisk passengers from downtown on moving sidewalks under Lake Ontario to the terminal. The terminal at Mont Tremblant is essentially akin to a log ski chalet but is nonetheless very efficient at getting passengers in and out complete with the full array of security equipment. 

 Obviously the need is there and consumers are responding favourably to this flying alternative versus having to deal with travelling out of Pearson International.  There were three ladies from Collingwood on the flight as well that had gone to ski so it's not just for the city folk. Porter has carved themselves out a unique niche in the market at a time when many airlines are struggling.  It's nice to see another Canadian success story. 

Condominium Insurance - Are You Adequately Covered?

Buyers looking to purchase a condominium are often unfamiliar with this form of property ownership and how it might impact not only their intended use and enjoyment of the property but also other things such as insurance.  A recent online discussion forum among some Royal LePAGE colleagues has brought up an issue I felt worth sharing with my readers as it affects not only those that might be considering a condo purchase but those of you that are already condominium owners as well.

Fundamentally, insurance coverage that condominium owners take out is much the same as contents insurance for renters.  You are responsible to obtain coverage for your belongings etc. whereas the condominium corporation’s master insurance policy covers liability insurance for any accidents that may happen on the property as well as any losses incurred to the building through flooding, a fire etc.   

A unique feature of condominium insurance which individual owners need to secure is what is referred to as loss assessment coverage.  What is loss assessment coverage?  As an example, let’s say a party was injured on the condominium’s ground such as in the parking lot or elsewhere which resulted in a $1.5 million insurance claim.  If the condominium corporation’s policy has a liability limit of $1 million then under the condominium association's bylaws, each owner will be assessed a proportionate share to cover the balance of $500,000.  The amount of loss assessment insurance you have under your particular policy may or may not be enough to cover your share.

As insurance coverage for all of us seems to go up, some condominium corporations are attempting to reduce the annual premiums on their master insurance policies by increasing their deductible amounts.  These increased deductibles subsequently increase the financial burden on your loss assessment coverage so it is important to keep that coverage in line with what might be required should a liability payout ever be incurred.

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  Having sold many condominium properties over the years as well as having attended and spoken at annual owner’s meetings, I find that many condo owners don’t attend these meetings and or when correspondence comes from their property manager it is seldom opened or reviewed.   Here is just one example of why staying on to of your condominium corporation’s activities is of paramount importance.  Should an accident happen resulting in a hefty insurance claim that is not adequately covered via the master insurance policy held by your condo corporation, the last thing any owner wants is to have to reach into their wallet to cover a loss assessment against them for which they had inadequate loss assessment coverage.  My advice is to review your policy and talk with your insurance broker to make certain you are not exposed in this regard and as always, attend your owner’s meetings and review any and all correspondence that they or your property manager sends out.