With the sudden change in the market, some buyers who bought at the end of March and early April are thinking they might have paid too much. Should they just walk away from the deal and lose their deposits? Bad Idea! Walking away is the most expensive thing you can do. A Seller will then resell the property, probably for less money because you the Buyer will cover the losses. The Buyer will also pay for the extra legal fees, carrying costs of the property, extra costs for where the Seller is moving to, and so on. You get the picture, big bucks! Close now. We don't care what it costs you. The market will bounce back in September and prices will be back to March and April prices by this time next year. Remember, real estate is a long-term investment, think short-term and you can loose. Think long term ...
Should You Walk Away from a Real Estate Deal?
June 13, 2017
The Problem with 'Double Ending' Part Two
June 6, 2017
Welcome to Part Two of Double Ending, or Dual Agency. In Part One we concluded that problems only arrive with Dual Agency when we have multiple offers on a property. This is a Toronto problem. In smaller communities all across Ontario, most top agents double end over 50% of their sales, without any problem. Banning Dual Agency is a bad idea. The solution, as I've said before is to change the act. Listen to me RECO, on all multiple offers, let all buyers and their agents see all offers. Right now, all we can disclose is how many offers and who the buyer agents are. Make everyone see all the offers. Right now, only the listing agents see them, and what an advantage that is if they have their own offer. That's where all the complaints come from too. Simply change that section of the act and the problem is solved ...
The Problem with 'Double Ending'
May 31, 2017
'Double ending' seems to be a bad term in the real estate industry today. Do you know there is no legal term for 'double ending', but rather it is called Dual Agency? That occurs when both the buyer and the seller are given agency service and represented by the same agent. The problem is the agent is defined as the brokerage company, and not a salesperson. Consider a brokerage/company with 1000 sales people. If one salesperson represents a seller and a second sales person, in the same company, represents the buyer (he may not even know the second salesperson), you then have Dual Agency. Most people think that 'double ending' is the same salesperson working both ends of the same transaction. Funny, people only object when the same salesperson is involved on both sides when there are multiple offers. In many parts of Ontario a salesperson working both ends is ...
Toronto Market Report May-June 2017
May 23, 2017
Sales Commentary We have delayed this Report to wait for mid-month May sale numbers from TREB. It confirms what we said previously. The market peaked in terms of prices, and it looks like it peaked in terms of sales as well in March! While April sales were 3.2% lower than for April of 2016 at 11,630 units, they were also down 3.5% from March of this year! Peak sales months are usually May and June each year. For the first half of April, we averaged 435 sales per day. Over the last half of April, it was 345. For the first half of May, the sales number was 359 per day. Based on seasonality, this number should be higher but it also supports the view that we are not in a market correction but rather a temporary slowdown. We have always maintained that our market, in terms of prices, is ...
The Real Story Behind Rent Controls in Ontario
May 18, 2017
The Ontario Government has introduced new rent controls effective April 20th, expanding rent controls to include units built after 1991. So why the rush? A CBC reporter published a story on how her landlord had doubled her rent overnight from $1,600 to $3,200 per month and she was now forced to live on a friend's living room couch. Now I know you can rent a studio for just $1,600, so I contacted her to ask why the landlord would do that to her. There are only two reasons, 1. The Tenant isn't paying rent, or 2. The Landlord wants to sell the unit vacant. She said that she always paid her rent, but her landlord still wanted to sell. If you know anything about tenants, when a landlord wants to sell, they do two things to thwart the sale. They refuse showings on a regular basis and they keep the ...
Underpricing Properties to Fuel Bidding Wars
May 4, 2017
One of our biggest complaints is the list price set by real estate agents in today's market. We understand that given the rapid rise in real estate prices, properties can sell for $50,000 or $100,000 over the listing price, but some real estate agents have taken the practice to an extreme. It seems to be a badge of honor to go $300,000 or $500,000 over asking. These agents start by taking the market value of the property and then they list it at $200,000 or $300,000 below the market price. This attracts the attention of buyers who see the property as a great deal but then drives a bidding war frenzy. Underpricing a property does nothing for buyers and sellers. How would the same agent feel if they walked into a clothing store and saw a designer jacket for $99? They would jump on it! But then, the store manager ...
The Fair or 'Vote Getting' Housing Plan
April 24, 2017
The dust is now settling from Premier Wynne's photo op on the 16 point Fair Housing Plan from last Thursday, April 20th. We call it a 'vote getting plan' for the next election. In reality, there are only two points that impact the real estate market today. The First is the 15% non-resident buyer tax and the second is rent controls. We don't believe the non-residential buyer's tax is a big factor in our market. We have far fewer non-resident buyers than Vancouver. When you look at Vancouver, sales and prices did drop initially, but today, prices are back to last year and sales are picking up. In Toronto, we expected a similar, but smaller 'pause' in the market. We expected some price softening, then prices to regain their upward momentum. This is because Toronto has lots of buyers and very little product. So far we have seen no media ...
Ontario's Expansion on Rent Control
April 21, 2017
Why the Government’s sudden preoccupation with rent controls? The media has reported two cases where the landlord doubled the rent from $1600 to get rid of a tenant. The current rules of the Rental Tribunal make it very difficult to evict a tenant for non-payment of rent or for carrying out illegal activities. This is the only resort for landlords to get a speedy resolution. In both instances, the landlord needed to sell the unit as vacant. We can tell you that landlords value good tenants and want to keep them. By keeping a good tenant, you avoid vacancy costs and you save on leasing commissions. Good tenants can usually get rents below market for these reasons. But there are more tenant voters than landlords. Hence, we have rent controls which will not be good for tenants in the long term. We currently have a vacancy rate under 1 ...
Market Report April-May 2017
April 21, 2017
Sales Commentary Paranoia seems to have set in with the rapid rise in real estate prices over the past year – almost 30% year over year. And most of this increase has happened in just the past four months. Now Governments at all levels are ready to act! But wait! The market in terms of prices has already begun to plateau. It started in the last 10 days of March and has extended into the first two weeks of April. So what has changed? We started from a market with a shortage of listings to one where listings are now at more normal numbers. In the first 14 days of March we averaged 450 new listings per day. Over the last 17 days of March we averaged 630 new listings. At that rate we would have 19,000 new listings in April. So why the increase? For years, many people in ...
Can 'Coming Soon' Signs Hurt Sellers?
April 11, 2017
"Coming soon", what is that suppose to mean?! I've heard of "for sale" and "sold" and even "sold conditionally", but "coming soon"? Coming Soon means a listing has been signed, it's coming to MLS, but no one can do anything but look at the sign. Does this work for the Listing Agent? Absolutely, they're hoping for sign calls. The Agent wants to line up potential buyers, maybe even take them through the property when no one else can. Does this help the Seller; after all, this is what it's all about? Not really. Do you think potential Buyers will see the "coming soon" sign and stop looking at other properties? Not likely. If I was a Seller, I would get it on the market right away, or I would get my ducks in a row and make a big splash putting my property on MLS. "Coming soon" sounds like you're ...