Real Talk!

Supposedly, the economy is starting to right itself and the rebound in real estate supports the theory. The spring housing market is expected to reach a fever pitch. "It's extremely busy out there right now. There is clearly a shortage of properties for sale in many parts of the country," says Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada.

“...there is an increasing risk that we are going to get a mini boom/bust." Doug Porter, deputy chief economist with Bank of Montreal, recently said.

Still, the real estate world is facing the usual gamut of issues...

1/ Rising Interest Rates on the long end of the mortgage market are being cited as a catalyst in creating a mini boom this spring. On July 1st, Bank of Canada is expected to hike short-term interest rates.... as if this is some scary monster!!!! Am I the only person who remembers mortgage rates at near 22% back in ‘81?

2/ New mortgage rules that take effect April 19 will make it tougher for some people to borrow, in some cases. Just the thought of it, scares people! What does it mean? Simplified, it means that new federal guidelines require anyone buying a home with less than 20 per cent of the purchase price for a down payment must be able to qualify based on the posted rate for a five-year mortgage... just in case.

3/ The HST- okay, the new “harmonized tax” will affect a real estate transaction by adding between $1,500 and $3,000 in costs, on average- on “resale” homes, it only applies to the services connected to the transaction... such as the Realtor/lawyer, etc. Services that were charged GST of 5% will now be subject to a 13% tax. Now, the effect on new home construction will be more dramatic.

4/ Ongoing press coverage of the Competition Bureau v.s. the Canadian Real Estate Association regarding MLS... which nobody really wants to talk about, but includes a lot of inaccurate reporting! See #5

5/ The cost of doing business as a real estate sales person. See also #4

Let me tell you a little about #s 4 and 5.....

In my humble opinion, there’s way too much talk about the horrendous cost of using a Real Estate professional... the truth is that commission rates are negotiated at the time that a Real Estate pro and the Seller sign a contract... called a listing agreement... and there are no “set” fees.

There are all sorts of creative ways to construct your contract if you wish to keep your commission costs to a minimum, however, most Sellers understand that there is a lot more to selling property than simply sticking it on the MLS website, www.realtor.ca and they’re happy to pay a reasonable amount of compensation to have a professional do it for them.

Nobody said you HAVE to use a real estate professional, it’s just that it’s been proven time and time again that a real estate professional will get a significantly better deal... because we are trained in the business... PLUS, we take the brunt of ignorant phone calls- at all hours- the tire kickers, scheduling nightmares and we know how to market a property at its optimum advantage. I could go on. and on. and on.

It’s a hard business, this. It is full of cynicism and distain... and the truth is that most people haven’t the foggiest about what it costs to be in the industry- especially in rural areas. I’m not going to waste anyone’s time trying to explain or defend this... trust me, it’s not easy to make a living in this business. It’s hard work and long hours and we fight tooth and nail for every cent.

The media confuses a lot of people... recently, I actually had buyers ask me when I expected the desperation sales to begin. They figured that the economy would have created much better “deals” than they were finding.

I think that all the hype about going “for sale by owner” is fooling people into thinking that DIY is a cake walk. Most people wouldn’t think of doing their own electrical, dental, plumbing or legal work. Why? Maybe because it isn’t that easy to do it well?

In fact, I think Sellers have gotten a bit lazy, too. They think they just have to sign a listing paper and they’re done their part... but Buyers are savvy... they want documentation and verification. Homeowners should keep an organized file of paperwork that relates to their property and all of its components... but most don’t.

Property lines are simply pointed out, with a grunt in a direction and a shrug in the other. Easements are confused with right-of-ways... and let’s not even start about encroachments. Many Sellers aren’t sure about their zoning and that means that they aren’t sure if the property is compliant. Sellers may not be aware of the intricacies of their property... it may not have seemed important to them and they may not have stumbled upon any problem... but if these matters aren’t sorted out at the onset, there’s possibility for ugly stuff later!

Somebody has to take responsibility. No doubt most home sellers want to move on, in the comfort that they will not be followed by any aggravation related to their prior abode. & buyers want to have someone thoroughly explain every detail, including potential pit falls, to them. A good real estate professional helps resolve these matters, before they become ISSUES.

I recently read this quote from the ReMax Ontario-Atlantic Vice President Polzler, “Right now, a realtor is not often needed in the selling process, but you sure need a realtor in the buying process. If you don’t have a good realtor in this market, finding the right property and going in at the right price, people are being rejected all over the place.”

It’s true, having represented 100s of buyers and sellers, most Realtors understand the process of closing negotiations and bringing the parties together to form an amicable agreement. That’s one of our finer qualities! How come nobody reports that kinda stuff?