|
 An article in the Toronto City News put a positive light on the “for sale by owner” today in the news. As many know, the Competition Bureaus move to open up the MLS ®* to everyone has REALTORS ®** and real estate boards talking up the risks of REALTORS ®** selling your own home privately. One of the biggest arguments presented by outlined in the Star was that “you’ll get a lower price if you sell on your own”. Let’s tackle that statement.
Studies show that this is actually incorrect. In 2007 a study conducted by Northwestern University Igal Hendel, Aviv Nevo and Francois Ortalo-Magne found that there really was no difference in sales price. If any difference showed it was that properties sold for more than the asking price. According to a 2008 study by Stanford University’s Douglas Berheim and Texas A&M University’s Jonathan Meer, prices sold for 7 percent more when REALTORS ®**were not involved.
There are ups and downs to any situation when it comes to selling your property Privately. Please read the rest of the article here and visit our website at www.byownersale.ca to see how you can sell your property privately and stress free. You can also search for a house for sale by owner in Ontario.
* MLS® and Multiple Listing Service® are trademarks of the Canadian Real Estate Association. Byownersale Real Estate Inc. is not associated with CREA or their trademarks.
** REALTORS® and REALTOR® are trademarks of the NATIONAL ASSOCIATION OF REALTORS®. Byownersale real estate inc. is not associated with the NAR or their trademarks.
According to an article in the Globe and Mail the Warm weather heats up cottage country. Along the curving roads of Lake Muskoka the real estate potential has been busy since the end of March, says Paul Crammond a cottage-country real estate agent. In comparison to the years before, March 2010 saw the fastest start to the season. Could this increase in cottage buyers be due to the extreme heat Ontarians are experiencing?
If you’re into numbers, Crammond estimates that 68 waterfront cottages have been sold in Muskoka since the beginning of the year, compared with 33 properties that sold just a year ago around the same time. Yes cottages are not a cheap investment, but less than half were valued at more than $2.5 million.
Since the number of listings increased, if it continues at such a pace then this area will need more listings to meet such high demand.
To read more about cottage-country real estate visit the Globe and Mail article.
If you’re interested in purchasing a property (or selling yours) visit www.byownersale.ca
Enjoy the Weather!!
 July 1st is behind us meaning that the new harmonized sales tax has begun to affect millions of Canadians piggy banks. Suitably the HST has been nicknamed the “tax on everything”, but there is one flaw to this newly acquired name. An article in the Toronto Star demonstrated that when it comes to real estate the HST applies differently depending on the type of real estate, whether it is re-sale housing, newly constructed housing or business properties.
We all know that whenever you are thinking of purchasing a home that the taxes can really add up, whether it be on-going cost of property taxes or the upfront cost of the land transfer taxes.
Even though this HST has affected virtually every aspect of Canadian living, it will not increase the tax burden for homebuyers who purchase re-sale housing. These re-sale houses were never subject to provincial sales tax or the federal GST therefore will fortunately be exempt from the HST.
On the other side, if you’re looking to purchase a newly constructed home unfortunately you not be as lucky as these new homes are hit with additional tax under the HST.
To read more about these HST changes affecting the real estate market follow the link in this blog.
Have something to say? Comments and feedback are welcome.
An article from REM Online informed the public about rising interest rates and more increases which are expected later in the year. This is the time to ask your bank whether a fixed-rate mortgage or a variable-rate mortgage is best for you, and make sure you absolutely understand the difference between the two.
Variable – rate or “floating rate” mortgages rates are tired directly to the prime rate, which is set by the Bank of Canada, usually through regularly scheduled announcements. Those who choose to use a variable rate have been instructed by their mortgage brokers to to keep in contact with them on a regular basis because they are able to explain interest rate trends and help them keep an eye on the prime rate.
Different than variable rates, fixed-rate mortgages are priced in relation to the bond markets, as bonds are the main competing investment to mortgages for investors. These rates are usually between 1.2 per cent and 1.9 percent to account for higher risks of default and administration costs incurred by investors who hold mortgages.
Currently, a majority of Canadians are more inclined to go with the five year fixed-rate mortgagee. The most logical reason why is because discounted rates for this type of mortgage have been trending upwards in recent weeks.
At the end of the day, whichever type of mortgage rate you use, fixed or variable, is dependent on your own preferences and unique circumstances” explains Dron Margaret Dron a professional mortgage broker.
If your looking for a mortgage broker ByOwnerSale.ca can help you locate a mortgage agent in your neighborhood. You can send us an email or contact us at 905-608-9993
Comments are welcomed!
 An article in the Toronto Star titled “Rookie landlords have a lot to learn” highlight Scott McGillivray and Michael Sarracini. If you are not familiar with these names don’t fret, they are the hosts of Income Property a show on HGTV which discusses the world of first-time landlords and home renovations.
As celebrities these two investment moguls are constantly asked questions from prospective investment property owners. It is not doubt that we are in a new era, a generation of homebuyers who have banked on their basements or an extra storey in their home to help finance their mortgages.
There are 3 top questions that McGillivray and Sarracini get from viewers.
1) How do I find a good investment property?
2) How do I find good tenants?
3) How do I finance a real estate investment?
In an interview with McGillivray he admits that he is astounded by the number of people who do not know what their interest rate is; is it fixed or variable? “And if you ask them what the amortization period is they often don’t know that either” this lack of knowledge is dangerous because it can lead to an unhealthy investment whereby the purchase of a $500,000 home may end up costing actually $1.5 million for that house.
Also, McGillivray warns viewers that the two digit mortgage rate of 18 per cent that was known to the 80’s could come back again. As a tip, McGillivray instructs everyone to calculate their mortgage at that pre-existing 18 per cent which would be $5,000 to $6,000 a month at that rate and see if you can truly afford it.
These two local celebrities are eager to educate the public and inform them of healthy ways they can invest and prepare for future home purchases. They have launched a news letter titled The Successful Landlord where they answer the many questions landlords encounter.
McGillivray, a successful investor with a portfolio of 18 properties with more than 100 tenants comprising students, young professionals and families has a few tips for the public. He says that “having the right information about your tenants and working with the right people helps”
 An article in the Toronto Star reflected on the sale of homes in the past few months from February to March and April. According to statistics last months sales figures surpassed May 2008s 9,411 transactions. These numbes were not comparable to the 11,146 sales that took place in May 2007, which remains the strongest of all months on record.
In the region with the familiar area code of 905 there were 5,583 transactions compared to the 3,887 sales in the 416 region which have actually increased since May of last year.
Regardless of these sales activities increasing and decreasing from the previous years, the sales activities have shown to be remarkably strong. The Toronto star writer has done his homework as he states that the average price of a home in the GTA is $446,593. Which represents an almost 13 per cent increase over the May 2009 average price of $395,609.
There are a number of factors that have affected this sudden increase but homage can be made to this new harmonized tax that will hit Canadians on July 1 (Oh Canada!). Many homebuyers have rushed to purchase new homes before they are hit hard with rising interest rates and property taxes.
On the down side though, sellers have been eager to put their properties on the market in hopes that it will make for a quick sale. Because of these optimistic sellers the gap between sales and listings has begun to increase.
Even though real estate is known to fluctuate and is a rather unsteady market, the current pattern indicates that we will likely experience more balanced market conditions for the remainder of this year.
What do you think of this current market situation? Please comment.
An article in the Toronto Star announces that Canadian new home prices rises have risen since April.
The vice president of builder Daniels Corp, Pugh, has 150 affordably priced new homes available in Brampton, but when he is going to put them on the market is his little secret.
According to the Star, Pugh is so confident in the market. He strongly believes that his homes for new buyers will sell rapidly.
But how does this relate to those who have no faith in market? Some skeptics said the housing market is overpriced and due for a fall. Pugh makes a good argument, “there will always be a need for housing aimed at first time buyers. And I agree.
Daniels Corps has had much success in the market in previous years. The Mississauga properties went from $159,000 to $335,000 and sold out in just over five hours.
Builders have already been successful in selling their product to eager buyers, but ALSO the prices of new homes in Canada rose by 0.03% in April according to figures released by Statistics Canada on Thursday. Talk about luck all around.
On another note, the new harmonized sales tax (HST) will come into effect in Ontario and British Columbia as of July 1st, which will of course increase the prices on new homes even more.
Are you a new home buyer? Please leave your comments.
Cheers!
 A recent Toronto Start Article posted on June 4th 2010, titled Existing Home Sales Down In Toronto, posted an interesting yet familar article on resale home prices.
Current home buyers are bewildered by the lack of offers they have received on their property despite the immense amount of action their properties have endured in the first couple of days. For example, Darren Ford an eager Toronto condo owner was expecting to sell his property within a few weeks of it being listed. He received a “mountain of business cards” from other agents, yet no one wanted to make a deal.
According to the Toronto Real Estate Board (TREB), the Toronto market has slowed down by a whopping 1% since May of 2009. TREB recorded 9.470 sales last month. This drop in the market does not coincide with the months between January and April where the real estate market was a hot commodity.
Not all is lost though, it turns out that new listings were also up by 38% over last year, showing that sellers are confident that an economic recovery will take place. This is great news for buyers as they have more choices asserts the Toronto Star.
Add to this large pool of “for sale” properties a 13% increase in average prices from last may to 446,593 compared with 395,609 and the real estate market seems be flourishing.On the down side, CREA commented that the national average price of homes is expected to decline by 2.2 per cent in 2011.
What do you think of this? Does this seem like a true concern? Or are the constant fluctuations in the retail market almost inevitable?
 Weak messaging from a falling monopoly. A recent Toronto Star article posted April 23, 2010 titled Competition Bureau misguided about MLS ® * seems to be the same defensive position against the strides made by the same Bureau in support of a level playing field.
The article is predicated on the lowest common denominator of argument – the For Sale By Owner model. The article examines the inherent weaknesses in this model namely the lack of resources required to make the process work without dire consequences. They make it sound like the only possible way to sell a home is with a REALTORS ® **.
Let’s have a look at what the scare tactics are and what our response to them is;
FSBO = Self selling of your home with all the risks you could imagine.
You get no advice, comparable data, neighbourhood information, pre qualification of buyers, pricing strategies, disclosure of defects advice, a lower resale price, no home staging advice, lawsuits for whatever- friendly and professional service… the list goes on.
To be clear, there are FSBO services which do leave the home owner in many a conundrum if they just pay to list their home on a web site with no additional services. These organizations are clearly just loss leaders trying to skim the market for easy prey.
Byownersale.ca actually redefined the FSBO opportunity for home owners to sell with a unique Hybrid of the low cost of FSBO listings without the high cost of REALTORS ® ** commissions. We provide a sliding scale of services including all the ones mentioned which were potentially lacking in the generic FSBO model.
The issues put forth in the article just are not valid. The justification of high fees for these services is completely disconnected as home values increased and a combination of technology and market efficiency has made a “Sub Prime MLS ®*” service today’s preferred model.
This article coupled with a new campaign by the CREA which helps try to justify “How REALTORS ® **s Help” clearly shows how defensive the support for REALTORS ® **s really is. They must face the market realities of a reduction in fees, a burgeoning online competition and a quickly changing consumer sentiment against the de jour business model.
* MLS® and Multiple Listing Service® are trademarks of the Canadian Real Estate Association. Byownersale Real Estate Inc. is not associated with CREA or their trademarks.
** REALTORS® and REALTOR® are trademarks of the NATIONAL ASSOCIATION OF REALTORS®. Byownersale real estate inc. is not associated with the NAR or their trademarks.
In today’s Globe and Mail an article called “Five reasons to love rising interest rates” offers that for savers and retirees rising rates brings about rising Bond Yields so that in a year or so we may see those GIC’s and “High Yield” savings accounts “rocket up” to 5% returns.
What is also presented is the calming effect of easy money whereby mortgage funds available will be reduced as the new calculations are in effect now.(see previous blog post on why this works) So the much hated bidding wars and “luxury home market- above $1.5M” will start to settle down.
So the question that comes to mind is, “Is the smart money already out of this market?”. It seems that the market makers are telling people to list their homes in the spring market and ask more than market value for just about any property. As first time buyers have been scrambling and have secured mortgage rates for about the next 90 days, you can guess when the offers will start drying up.
For investors, rising rates means a couple of things depending on where you are in the lifecycle. If you have done reasonably well with equity appreciation in the last 5 years or so, now might be the time to lock in those profits by selling a property. Rents will have to increase in the coming years as mortgage costs increase. Turnover of renters may be a problem and the fact that many renters may have become first time buyers in the last 5 years.
To sell now or wait it out?
If prices start to soften and the market psychology shifts sentiment there could be a new buyers market for first time buyers and investors alike. The question is when and how much? It’s hard without the rearview mirror to call the market timing and be 100% right.
 Is it time to get out and lock in profits? Let us know what your situation is- leave us a question or comment and perhaps we can assist in making a decision in the short term.
Photo credit-Globe and Mail
Posted in Buying Tips, Costs and Value, Financing, Mortgage financing, RE Market News, Selling tips
|
Tagged Financial advantages, FSBO, gta home sale, Home pricing, Market knowledge, Mortgage advantages, Real estate investment, selling your home advice
|
|
|
An article in the Toronto City News put a positive light on the “for sale by owner” today in the news. As many know, the Competition Bureaus move to open up the MLS ®* to everyone has REALTORS ®** and real estate boards talking up the risks of REALTORS ®** selling your own home privately. One of the biggest arguments presented by outlined in the Star was that “you’ll get a lower price if you sell on your own”. Let’s tackle that statement.
