There is no Canadian Real Estate Market

by Real Estate •

One of the biggest mistakes consumers often make is gauging their actions against national reports about the state of the real estate market.

Looking behind you to predict the future of the housing industry is not a good idea.

There is no Canadian real estate market.

Everyone talks about Canadian average this and average that and average prices that are up or down 5 or 10 per cent.  National averages make zero sense.  You need to look at the trends in your own local area .  You might see in Windsor, the average price is down 18 to 20 per cent, while in Winnipeg, it’s up five to seven per cent so looking at the national average wouldn’t tell you if it’s good to buy in Winnipeg or Windsor.

Work with your Realtor to access the numbers in your own selling area. So don’t let dire six o’clock news reports about the state of real estate in Canada get under your skin because the local picture is probably not as bad.  Remember that the news media doesn’t sell advertizing by reporting on how great everything is.  Ask any media advertizing sales person – fear outsells optimism in the mass market.

A good Realtor can predict what your market will be like in 18 months by focusing on:

  • GDP growth
  • Job growth
  • Population growth numbers

Those three numbers will tell you exactly what the housing market will be like 18 months from now.

If you’re analyzing the real estate market by looking at housing statistics, it’s the equivalent of trying to drive across the city staring at your rear view mirror.  You will crash because they’ve already happened. The only way to know is by looking at the growth in GDP, jobs and population.

It’s a realtor’s job to figure out whether the market they work in will over-perform, under-perform or will be just right.  For a more detailed analysis of your market, look at the average income of the people who are moving in. If the average incomes are growing faster than the provincial average, you’re in a market that will over- perform.

If your goal is to buy in an area where the prices will go up, buy where people’s incomes out-perform the provincial average.

This information is available via the GeoWarehouse property reports that all good Realtors provide to their clients in the course of the property buying selection process.  Would you like the GeoWarehouse report for your current property or a property you are considering purchasing?  Call me today, I’ll get it to you tomorrow.

Don’t Get Bitten by the Law of Common Experience

by Buying a house in Toronto, family, Real Estate •

The Law of Common Experience is a driving principle in all of our lives.  Basically stated, it tells us to take our cues on what we should do from what our family, relatives, and immediate authority figures tell us we should be doing.  A lot of the time, this is the right thing to do.  In your job, it makes sense to perform up to the standards that management has set.  At home, you will want to act in a way that makes your family happy.  But, when engaging in business transactions requiring advanced knowledge, experience, and skills – You really want to get Expert Advice.

Among all the other challenges of purchasing a home, today’s buyer often has an added burden: the advice of friends, co-workers and family.

It can be quite an ego thrill for them to put on the mantle of being an Expert, and it can be seductive to give directions or advise decisions when there is not possibility of personal loss.  After all, it was in the end “your decision”.

And what do these well-meaning-advice givers saying their very ‘knowing’ tones of voice? Well, a sampling of advice might include:

(a) How great a deal you can get from a Power of Sale, or Estate Sale.
(b) How much of a discount you should be able to negotiate;
(c) Exactly how much is too much for you to pay, or,
(d) How you should work down the price after the home inspection by pointing out all the money you will “need” to spend to “fix up” the house.

I recall a first-time homebuyer with whom I was working deciding to withdraw his offer on a property that did meet his criteria for location and amenities and price point.

Why? His co-workers thought he should be able to get a ‘bargain-basement’ price. He told me, “I don’t want to look like a fool paying too much money for this place.” So he let it go… and, he still has not found his perfect home in combination with his perfect price scenario. Or at least, the price that his co-workers insist he ‘should’ be able to get.

Nothing is ever ‘simple’ that is meaningful…. including purchasing a home. The simplicity of advice from someone who reads a headline, but has no idea of the real market dynamics you face, is a typical example of that.

And what are the special dynamics for many buyers in today’s climate? Well, let’s consider:

  • Limited inventory of homes to consider.
  • Multiple offers on properties of good value within hours of the listing becoming public.

What to do? Research your market area well and consult a knowledgeable source for your information. Remember that ‘the market’ is an ever changing situation, and that few if any ‘rules’ consistently apply. Then move ahead.

This moment in time continues to be an incredible opportunity for buyers – prices are becoming increasingly more ‘reasonable’ and interest rates are low. Now is the moment.

Don’t be greedy.

Don’t assume that you are somehow smarter, a better negotiator, or more deserving of a good deal than the seller.

There are real live people on the other side of the transaction.  Keeping that in mind will make you a better person.

A letter to sellers from a buyer

by Real Estate •

Dear seller:

I’m a buyer interested in buying a home in your neighborhood.  I’m ready to make an offer, I’m qualified, and I have the money to buy a house in your price. I like your neighborhood, it has the things I’ve been looking , and the location is great. I’ve been doing research and studied the area, drive around almost every weekend, walk around the parks,have done some shopping in the stores around. Also I have visited some houses for sale, so I now the available layouts, the space, storage, amenities….  I  really,really ,want to live in your neighborhood!… But I’m looking for that one house that will create an urgency,  a need, a desire to say  “This one is mine”  “I need to put the offer right now!”

I want to share with you what are the things that I’m looking for, so when I go to yours it turns to be the one…. Keep in mind that I love the neighborhood, and I have the money… I just need the house!!!!

I will start from the outside, the outside of my new home needs to look welcoming. The lawn well taken care, and trees and shrubs in great shape. If the house have some flower beds, they have to look nice. I only want to see a beautiful entrance. When I see a house with a nice outside, then I’m excited to go inside.

I believe that walls and houses talk. Yes, they can tell if they have been well cared and loved. Once inside I imagine myself living in the house,friends andfamily coming and staying. I want to feel really good about this!! Clean carpets, spotless hard floors, windows, screens. It does not need a coat of fresh paint, but it most be clean and in good condition.  I’m not looking for white walls, if they are in neutral tones, will be nice. I do not like strong aroma of candles, because they may be hiding other smells that will tell me more about the house. Your furniture does not need to be new, but they need to be clean,stains and dirt are telling me a story about you. And I will get distracted by them, I’m starting to think more about you and less about the house.

The kitchen needs to be well taking care of and super clean.  The cabinets do not need to be new, but they need to be very clean and look and feel good. Be prepared because I look inside cabinets, pantry, everything with doors… I will open all of them!! I’m looking for scratches,stains, all kind of marks. Everything must be spotless, everything I touch must be clean.. I open all the big appliances staying with the house, hey I’m going to buy them, I need to know the condition. A clean fridge and dishwasher will give a great deal of good information. Everything must be spotless, no marks of grease, cooking,burning,baking and no mold around the sink. Get all magnets, knicknacks, stuff out of the counters. I have a tendency of getting distracted, and start thinking  more about the you and less about the house…

Then I will go to your bathrooms….I get a lot information there!! Mold no matter the color, green,red, black is not a  good signal for me, a bad caulking job around toilet, bathtub or cabinets. I want to be able to look at myself in the mirror.  I will open all cabinets and drawers… So be aware… The mold and caulking has the ability to distract my brain again, my thoughts can go far away from the house.. These are making me deciding this is not the house….

But are you getting the picture, clean, spotless, smell free, airy, light, free of a lot of stuff, welcoming, neutral…

You see I can get easily distracted, by anything…I need help from you to focus the great things your house has to offer.If you help me on this the probabilities that I will buy your house will increase a lot.

Remember,  I’m in love with your neighborhood, I like the layout and design of the houses and I have the money to buy your house. Do you think I will fall in love with yours or with your neighbor’s house, two houses down the street?

Sincerely,

A ready and willing buyer

Peter Sigurdson, Toronto Realtor

by Peter Sigurdson •

Peter is an experienced real estate professional specializing in the Willowdale, Bayview Village, and Liberty Village communities of the Toronto marketplace. His areas of expertise include residential and commercial property marketing, commercial leasing, business sales and purchases, and mortgage financing.

Peter also works in the purchase, renovation and resale of residential properties and building new homes, and so has deep personal knowledge and experience to assist you with achieving your real estate investment goals.

From assisting with securing financing, to recommending contractors and trades, Peter will help you put the deal together.
Peter can be contacted at his office at 905-764-7111 x1212 or by email at peter.sigurdson@century21.ca

Common Misconceptions Among Buyers

by Buying a house in Toronto, Real Estate, Real Estate Agent Toronto • Tags:

Misconception: If you pay list price, you’re paying too much.

Many people have a romantic self-image of themselves as being Canada’s Donald Trump – the consumate tough negotiator.  But part of being a great negotiator is going into the sales discussion armed with all the facts.  If comparable properties in the area are selling for $646K plus or minus a couple of thousand dollars, what really is the chance of the owner selling to you for $625K – would you, if you were the seller?

If you don’t know what the current market value is for homes in the area and whether the market is appreciating or depreciating, you don’t know what a fair price is and you’re likely to miss out on a great deal by trying to low ball a house that’s already priced well.  One of the most valuable services I provide is detailed analytics of the area, and projected assessments of future growth – this information is vital to making a decision you will be comfortable with now and five years from now.

If the house meets your goals, is within your budget, and is priced competitively, it’s a bargain and you should make a strong offer. Get assistance from a professional to help you recognize a good deal and grab it before it’s gone.

Misconception: Power of Sales are the best buys.

Many buyers find out the hard way that Power of Sale properties are full of headaches, may need extensive repairs, require great patience over an extended period, often don’t have the criteria that’s most important to you, and may never close.

Power of Sale properties must sell in Ontario “as is”. While you can certainly ask to bring in your Home Inspector, the seller will not take the property off the market, and someone else’s offer may be accepted before yours, after you have paid $300 or more for the inspection.  These properties are often in poor condition with challenges that may take longer than normal to resolve.  While these may be a good buy for an experienced investor, or Flipper, they are NOT for the first time, or conservative home buyer.

Misconception You get a better price if you buy directly from the owner.

Bargain hunters sometimes avoid Realtors, thinking that they will get a better price if they buy directly from a FSBO.  Also, many “direct approach buyers” have credit problems, and ask the seller to for a Mortgage Takeover.  DON’T EVER DO THIS.  You will remain personally responsible if the Buyer defaults.  What this Buyer is really telling you is that a Bank won’t give them a loan, but you should.    Buyers will always insist the price is too high (which is generally is, since advising a Seller of the realistic market price is a key function a Realtor provides), and demand the 5% Commission taken off, or rebated to them in Cash.  Meanwhile, the sellers are also trying to save on the commission, so they’re not getting expert advice either and often price their homes above market value.  Additionally, emotions become quite volatile since you are coupling people’s money, and where they live – the two hottest hot buttons anyone has.  Since the Lawyer gets paid by the hour to process the paperwork, the Seller may quickly exhause any cost saving they hoped to realize after a few wrecked deals.  The Realtor by contrast gets paid only AFTER the deal has closed.

The end result is often that a buyer pays too much or the FSBO is unable to get the house sold. A savvy Realtor working on the buyer’s behalf, armed with market data and great negotiation skills, is much more likely to get a great deal than buyers can by negotiating for themselves.

If you’re buying a house, it’s a great idea to find a good Realtor and listen to their advice.

The merits of re-mortgaging in the current interest rate conditions.

by Real Estate, Toronto • Tags: ,

In the last couple of weeks, I’ve found myself answering a lot of questions regarding the merits of re-mortgaging given the current interest rate conditions.  If you have not spoken with a mortgage advisor in the past couple of months – MAKE IT A TOP PRIORITY TO DO THIS TODAY!!!!

Low interest rates (as low as 2.2% if you have a solid credit score) will in many cases make it worthwhile to pay the penalty (customarily 3 months’ interest costs) to break your current mortgage and re-mortgage your property.  Many people will look at combining this will taking some equity out of their property to disburse other, higher interest loans, or provide funding for educational or other family priorities.

Your credit score is one of the key ingredients of your eligibility to negotiate good financing terms.  Make and work your plan to pay all your bills a week in advance of the due date, and always pay at least 50% more than the minimum payment.  Use Transunion.ca to monitor your own credit score at least a couple of times a year, and IMMEDIATELY action any issues than are impacting your score.

The other key element of a mortgage re-financing is the value of the property.  There are a number of ways to determine this, and I would love to spend some time discussing your property’s value with you – Just call me to set up some time.

A simple of direct way to determine property valuation is to examine the selling prices of other comparable property’s in your area.  There are also a number of Valuation tools available in the Ontario Land Registry system.  These reports cost about $30 to $50 depending on the level of detail, and I will run your property’s valuation for you at cost.

The most thorough way to value a property, and the mechanism used by lenders to validate mortgage loan applications, is the formal appraisal.  This is a detailed estimation of the value of the property conducted by a professional Appraiser.

It has become more important to have a real estate appraiser when looking to purchase or sell a home than ever before. However, if you have never worked with a real estate appraiser before, you might not be able to tell the markers of a high quality one from an average or even a poor one.

The use of an Appraiser is of even greater importance if you are purchasing an investment property, particularly with partners whom you are syndicating the deal with.  This will take all the personal opinions out of the picture and provide an objective, professional third party evaluation.

Here are the five things I’ve found to be of key value when hiring a real estate appraiser.

The first thing to look for when seeking out a real estate appraiser is that he or she has the proper and necessary certification by the province in which he or she practices. In Ontario, the Ontario Association of the Appraisal Institute of Canada, or the OA – AIC, is the biggest of the real estate appraiser organizations. More broadly, real estate appraisers receive either the Accredited Appraiser Canadian Institute or the Canadian Residential Appraiser from the Appraisal Institute of Canada.

When you enlist the services of a real estate appraiser who has both of these designations, then you know that he or she has met the highest industry standards of the profession of real estate appraisal in Canada. You will know that he or she is likely to perform high quality work in valuation within his or her specialized field. While it is important to keep in mind that certification or licensure will not always indicate the real estate appraiser’s work will always be of the highest quality, it does provide you a benchmark for comparison by informing you that the person has met particular standards and has received authorization by the province to conduct real estate appraisals.

Second, do not be afraid to ask a potential real estate appraiser for a copy of his or her license. A high quality appraiser will not hesitate to provide this information to you, as copies of licenses will often be requested by loan officers as well as by banks and mortgage brokers.

Third, ask the real estate appraiser who you are interested in working with what percentage of his or her work is performed in the neighborhood where the property of interest is located. This is important because if an appraiser does much of his or her work in a particular area, they will usually have a good amount of knowledge of how much properties are worth in that area.

Fourth, ask them if they have experience performing real estate appraisals for individual consumers, or for commercial companies. You will want an appraiser who is used to working with individuals, as he or she will be in a better position to meet your unique needs.

Fifth, look for a real estate appraiser who is easy to stay in touch with, whether this means by physical, face to face contact, or by phone call or email. An appraiser who you can reach is likely to deliver services that please you.  In this way, a good Appraiser is like a good Real Estate agent – an ongoing source of expert advice and consultation.  A key part of your team.

The Sigurdson Group’s Mortgage Agent works with over 60 lenders and will negotiate to get you the best rates available.

Contact us at 416-857-2264, or peter.sigurdson@century21.ca

Price matters. Sell your house in the “critical first 3 weeks.

by Real Estate, Selling your House, Toronto • Tags: ,

I’m sure you’ve noticed that the sale merchandise in a store is always “old”. The new stuff never goes on sale until it’s obvious they’re not going to sell any other way.

Whether we’re talking clothes or houses, one thing’s for sure: Price matters. I talk to my sellers about the “critical first 3 weeks.” While I’ll do everything I can to get you top dollar for your home, I would be doing you a great disservice if I told you we could price it 20%, or even 10%, above market value and still find willing buyers. As a matter of fact, starting out high could end up netting you less, since the longer your home is on the market, the more likely buyers will become “bargain shoppers”.

Being able to price a home properly so it sells for maximum value is a skill I’ve mastered over the years.

Call or email me today and let me share with you my plan to sell your home.

To read more, see my detailed analysis at

http://www.thesigurdsongroup.com/7-Reasons-why-your-property-wont-sell—Peter-Sigurdson-Toronto-Realtor.html

The graph below represents sales data for the Yonge – Bathurst / Finch – Sheppard area for the Nov 1 to Nov 30, 2011 time frame (based on Toronto Real Estate Board MLS Statistics).  You can see that only 1 property sold after the magical 3 week time window.

In this chart, EXP means Expired (it didn’t list and the listing ended).  SUS = Suspended and TER = Terminated listings.

New are For Sale listings, and SLD is the happy state of SOLD (where YOU want to be!)

Thinking of investing in a property?

by Property Investing, Real Estate, Toronto • Tags:

Considering an investment property?  Prices are down currently so now is a great time to find a modivated seller and get a bargain.

When searching for a bargain investment, you should start by understanding the difference between chronic and acute problems with a property.  What you really want in an investment property or flip is a property that has a lower price than other recent area sales because of some acute problem such as the kitchen is old, the paint job or walls are bad, the interior needs repair – things that are amenable to repair.  You want to buy properties that are underpriced compared to their immediate value due to problems that can be fixed with some time, money and construction skills.   Even if the house is listed as “As Is”, you can and MUST still bring in an experienced home inspector, with a background in home construction, to examine the house.

By contrast, some houses are cheap because they have chronic, that is, non-fixable problems.  The area may have alot of mortgage defaulters, which will translate to being a bad environment - and you won’t sell for any higher than you bought for.  Look for areas that will attract good quality buyers or tenants.  Start by walking around the area – is it a neighbourhood you might like to live in?

Find a Realtor who has their own investment properties, then work with them to run the numbers on prospective properties.  A good background investigation of a property should include a historical analysis of how that property has performed over time.  Use Google Earth and drive-arounds of the area to look for problems.  Is there a hydro field, train track or garbage dump in the area?  Is the property too close to stores or other busy spots?  Is there abutting land that might be developed in the future into something that will depreciate the area?  Your background investigation should include a few hours at City Hall to discuss the zoning, tax rates (including any planned increases or improvement fees) and other potential concerns with the staff there – they are more than happy to help you if you ask.  For about $80 you can get a Letter of Compliance that will disclose any problem areas the city knows about the property.  This may include zoning violations or work orders.  Problems don’t necessarily mean that you should avoid buying – but you must discuss the implications with your lawyer and Realtor in thorough detail.  If you can get a substantial discount on the purchase due to the problems, and you have the cash reserves to address the problems, that land might be a great investment.

Your Realtor should be able to provide you with recommendations on contractors, mortgage brokers, appraisers and home inspectors.   Always get recommendations from contractors you are considering employing, and get your arrangements with them in writing.  Contractors tend to work a little harder when you are around, so you can coordinate your time to be on-site while they are working.  You can paint or rent a garbage bin (about $300 for 7 days) to clean up the property while they are redoing the kitchen or bathroom.

ALWAYS make sure the Realtor you are working with is an active real estate investor themselves.  There is no way to understand the process end to end with living it.   When you are ready to find out more, call me at 416-857-2264, or by email at peter.sigurdson@century21.ca