Friday's Globe and Mail had a string of interesting, even useful, real estate articles.
"Well, of course they did", you say, "Friday is the day they publish their real estate section."
Except these better articles were all in the Report on Business section. It was so full of juicy items it took me a few days to get around to writing this up.
With the wee summaries and links below, I quickly maxed out the character limit for Facebook and Twitter ... so you get a blog post. To wit (not to Tweet)...
"Rule changes make mortgages a moving target". Opens with a statement that all the new rule tweaks make "it harder for many Canadians to get a mortgage". Followed by a bunch of reasons why the new changes and restrictions are a bad idea. Towards the end of the article we get stuff more along our thinking: that the new rules help ensure that "the goal and dream of owning a home is balanced with the ability to repay..." A broker suggests the changes affect decisions for 10-15% of buyers. If he is right, I suggest that the new changes probably influenced 90% of those people to make better decisions. In other words, there are very very few people out there who have really good reasons for a 95% mortgage amortized over 35-40 years.
"How to play the low interest-rate game". Pretty solid advice on how to take advantage of the current low interest rates without losing your mind and taking inappropriate risk. My favourite quote (though I admit there are exceptions) "If you can afford to put down only 5 per cent, you can't afford the house".
"The $600,000 question". What do you get for $600k in various parts of the country. If you are just one happy puppy on some acreage in the boonies you can get a lot of house. If you want to step outside and stroll to every imagineable cultural, recreational, and commercial attraction, think smaller.
"The long, slow flip". Cindy Wennerstrom's business is "flipping" homes but she takes an interesting middle ground between the fast buy-reno-flip and the long term investment property approaches. She argues that her approach has risk and tax advantages.
If any of those sound interesting beyond my precis, follow the links and enjoy. Comments also most welcome. Please. Somebody. Comment. On something :-)
Showing posts with label realestate. Show all posts
Showing posts with label realestate. Show all posts
Monday, May 9, 2011
Saturday, May 7, 2011
How Many Houses Do You Sell in a Year?
[Part of a series on how NOT to select a rep.]
When we are being interviewed by a potential client and this question is asked, our first response is "none". That is because we don't "sell" houses. Our clients sell/buy. We help.
But the question is often asked on the premise that the more you sell, the better you are and the more you can do. Sales are results, so more sales equals better results, right?
We think not. Certainly, an agent must have a number of successful transactions per year to be considered "successful" ... and to pay bills and eat. But beyond some point, more sales may mean poorer, or at least different, performance and service levels.
There are only so many days in a year and hours in a day. We limit the number of active clients we will take on at any one time (to 10, though a constant 10 would have us lowering the number in a hurry!). If we assist in the sale of a home a week during the high seasons, we are happy and not really looking for any more business (maybe less).
Why? Because we want to have a life while providing top service. And because we decided we want to be fully involved throughout the process with our clients.
That is not saying we are the best (that's a story for a different place and time). It's just our opinion that a number higher than that requires either reduced service or a different business model.
The reduced service is pretty obvious and unpleasant. The point to be emphasized again: More is not continuously better.
The different service model can work well, but you need to understand what it means. Typically it means a small -- or not so small -- "firm" of professionals and service staff who, to a greater or lesser extent, specialize. The "names" of the firm typically do the signing up -- listings or buyers. For a listing, much day to day contact will be with a staff person. If it's a buyer, or a seller who is also buying, a "buyer agent" may be assigned to that effort.
It's fundamentally the same model as a consulting, accounting, or advertising firm. In those businesses, you only see the senior partners between signing and cheque-collecting when there is a big, BIG problem! It works great with a well-managed firm with good training and a steady supply of young keen fresh meat!
I'm rambling. The point is that that is how an agent "sells" 200 houses a year. They don't. [First, to be repetitive, an agent doesn't sell anything ... except maybe themselves]. A mini-brokerage, firm, team, whatever manages the sale of those homes.
To choose between someone involved in 20 sales or 200 or 300 sales, you need to decide on what kind of model you want and who you want to be working with. The specific number of sales itself is not relevant.
Previously in this series of posts:
When we are being interviewed by a potential client and this question is asked, our first response is "none". That is because we don't "sell" houses. Our clients sell/buy. We help.
But the question is often asked on the premise that the more you sell, the better you are and the more you can do. Sales are results, so more sales equals better results, right?
We think not. Certainly, an agent must have a number of successful transactions per year to be considered "successful" ... and to pay bills and eat. But beyond some point, more sales may mean poorer, or at least different, performance and service levels.
There are only so many days in a year and hours in a day. We limit the number of active clients we will take on at any one time (to 10, though a constant 10 would have us lowering the number in a hurry!). If we assist in the sale of a home a week during the high seasons, we are happy and not really looking for any more business (maybe less).
That is not saying we are the best (that's a story for a different place and time). It's just our opinion that a number higher than that requires either reduced service or a different business model.
The different service model can work well, but you need to understand what it means. Typically it means a small -- or not so small -- "firm" of professionals and service staff who, to a greater or lesser extent, specialize. The "names" of the firm typically do the signing up -- listings or buyers. For a listing, much day to day contact will be with a staff person. If it's a buyer, or a seller who is also buying, a "buyer agent" may be assigned to that effort.
It's fundamentally the same model as a consulting, accounting, or advertising firm. In those businesses, you only see the senior partners between signing and cheque-collecting when there is a big, BIG problem! It works great with a well-managed firm with good training and a steady supply of young keen fresh meat!
I'm rambling. The point is that that is how an agent "sells" 200 houses a year. They don't. [First, to be repetitive, an agent doesn't sell anything ... except maybe themselves]. A mini-brokerage, firm, team, whatever manages the sale of those homes.
To choose between someone involved in 20 sales or 200 or 300 sales, you need to decide on what kind of model you want and who you want to be working with. The specific number of sales itself is not relevant.
Previously in this series of posts:
Sunday, April 17, 2011
Days NOT on Market
I'm reviving a series on how NOT to select a rep. The intro was posted previously. You can find it here. There was also a chat about the not-validity of evaluating an agent by the ratio of sale price to listing price (You know the drill: "SOLD OVER ASKING!!") ... That piece is here.
Another common suggested criteria is "Average days-on-market". A low number is deemed an indicator that the agent prices and markets well, allowing properties to sell high and quickly.
We agree that a properly priced home will generally attract the right buyers and receive the best offers. And, as a result, it will typically mean a prompt sale. But list price is ultimately the seller's decision and there can be reasons to "test" higher prices. We can (and will) decline the listing if we have major problems with the plan, but sometimes the logic is there.
For example, a common reason for "testing" a higher-than-likely price is an estate sale. An executor may feel pressure to demonstrate to the heirs that every attempt was made to attract the highest price.
All that said, the ultimate "days-on-market" stat is often deceptively low for much the same basic reason that sale:listing price ratios are meaningless.
Another common suggested criteria is "Average days-on-market". A low number is deemed an indicator that the agent prices and markets well, allowing properties to sell high and quickly.
We agree that a properly priced home will generally attract the right buyers and receive the best offers. And, as a result, it will typically mean a prompt sale. But list price is ultimately the seller's decision and there can be reasons to "test" higher prices. We can (and will) decline the listing if we have major problems with the plan, but sometimes the logic is there.
For example, a common reason for "testing" a higher-than-likely price is an estate sale. An executor may feel pressure to demonstrate to the heirs that every attempt was made to attract the highest price.
All that said, the ultimate "days-on-market" stat is often deceptively low for much the same basic reason that sale:listing price ratios are meaningless.
Wednesday, April 6, 2011
New app for us iPhonies (and Webbies, too)
Anybody done mortgage rate comparisons at RateSupermarket.ca? What did you think?
We haven't been serious viewers/users of the site but it reads as a fairly neutral place to get an idea of current comparable real mortgage rates. I quite like how straight forward they are about their independence and how they make money (see the "About Us" tab on their site).
How do they make money? Advertising and referrals. The advertising is clearly identified as such. And the referrals come only if you ask.
I looked at them a little more closely today because they announced an iPhone app connected to their service. It seems pretty straight forward. You could be looking at a home and start to feel that "what if I bought this" tingle. Out comes the app and tells you who wants what rate today for whatever type and term you ask about. It also has a mortgage calculator to check the actual payments. Could be handy. You don't have to actually talk to anybody or give out your information to anybody to get a solid idea of what would be involved mortgage-wise.
All that said, if you know you are house-hunting you should get pre-approved. Find a good mortgage broker (we know several) and go through the process. You will know what you can afford, you can lock in a rate, and you will be stronger at the negotiation table. It's all good.
If you're interested in real-estate related apps, you might want to have a peek at a series of earlier posts on the subject: Part 1, Part 2 and Part 3
We haven't been serious viewers/users of the site but it reads as a fairly neutral place to get an idea of current comparable real mortgage rates. I quite like how straight forward they are about their independence and how they make money (see the "About Us" tab on their site).
How do they make money? Advertising and referrals. The advertising is clearly identified as such. And the referrals come only if you ask.
I looked at them a little more closely today because they announced an iPhone app connected to their service. It seems pretty straight forward. You could be looking at a home and start to feel that "what if I bought this" tingle. Out comes the app and tells you who wants what rate today for whatever type and term you ask about. It also has a mortgage calculator to check the actual payments. Could be handy. You don't have to actually talk to anybody or give out your information to anybody to get a solid idea of what would be involved mortgage-wise.
All that said, if you know you are house-hunting you should get pre-approved. Find a good mortgage broker (we know several) and go through the process. You will know what you can afford, you can lock in a rate, and you will be stronger at the negotiation table. It's all good.
If you're interested in real-estate related apps, you might want to have a peek at a series of earlier posts on the subject: Part 1, Part 2 and Part 3
Sunday, March 13, 2011
What should you do?
A (not so much fun) day in an agent’s life.
1. The seller paid to have the knob and tube wiring removed when a kitchen reno was being done. But the home inspector finds that the knob and tube is still extensive on both the first and second floors. What do you do?
2. A sale is firm, but on the same day as a buyer visit there is a substantial winter rainfall and the basement floods. What do you do?
3. There is a verbal agreement on a sale. As both parties are out of town there is a 24 hour delay to get it all in writing. The buyer’s wife wakes up with very cold feet and they want out of the deal. What do you do?
Going back to bed and pulling the covers over your head is not an option.
1. The seller paid to have the knob and tube wiring removed when a kitchen reno was being done. But the home inspector finds that the knob and tube is still extensive on both the first and second floors. What do you do?
2. A sale is firm, but on the same day as a buyer visit there is a substantial winter rainfall and the basement floods. What do you do?
3. There is a verbal agreement on a sale. As both parties are out of town there is a 24 hour delay to get it all in writing. The buyer’s wife wakes up with very cold feet and they want out of the deal. What do you do?
Going back to bed and pulling the covers over your head is not an option.
Sunday, February 20, 2011
App – ropriate. Part 3: Zoocasa, Zillow and others.
This series of posts concerns what I think I know about smartphone apps and their kin as it relates to real estate. We had a go at the new CIBC app in part 1, and looked at the mobile version of realtor.ca in part2.
Zoocasa, Zillow and others are websites with accompanying mobile apps that are supposed to represent the future for access to real estate information.
Maybe they do, but they aren’t there yet.
Zoocasa is supposedly backed by Rogers and committed to developing its content and presence over the long haul. We, and quite a few other agents in our community, have committed to a presence with them. (Translated: they can include our listings and our advertising appears on the site).
In our case, we weren’t expecting them to “take off” instantly. But given their apparent level of commitment and sophistication they seemed to have the best chance. And we liked “being there” with the ad presence if and when take-off happened.
Advertising and promotion OF Zoocasa has disappointed us somewhat. As a result we are not sensing that many people are using the site. Are you? If you are, tell us about it.
Again, the site and the app will map an area you select and “pin” listings in the area. You can then call up the details for any listing – photos, room info, listing agent, etc.
Tuesday, February 8, 2011
"comfree"
Have you seen the ads on TV for "comFree"?
I first thought this was a new entry in the flat-rate listing segment. Given the timing -- with the recent news items around opening up the MLS® system, etc -- it made sense that somebody would start some heavy promotion.
Early in my initial investigation, I started getting agitated counting up how many Board and rules they were breaking on their site. Then I figured it out!
It seems that this is NOT an MLS® listing service. It is, in fact, a juiced-up "For Sale By Owner" package. You get photos, signs and some other support. You also get on their website and in a "magazine" they publish. Even the market comparison to determine price appears largely do-it-yourself.
The packages list from around $500-900, though they are currently heavily discounted. You can also buy additional ads in their magazine.
As I read it, you DO NOT get listed on any MLS® system. It would not surprise me if their representatives did offer some sort of listing service or referrals while signing you up for the basic stuff -- but I don't know this and don't see anything on the site that suggests it. Anyone out there know the answer to this one?
You may have seen "By The Owner" signs in the past, with a traffic light logo. This is in fact the same company, renamed.and relaunched.
FYI
I first thought this was a new entry in the flat-rate listing segment. Given the timing -- with the recent news items around opening up the MLS® system, etc -- it made sense that somebody would start some heavy promotion.
Early in my initial investigation, I started getting agitated counting up how many Board and rules they were breaking on their site. Then I figured it out!
It seems that this is NOT an MLS® listing service. It is, in fact, a juiced-up "For Sale By Owner" package. You get photos, signs and some other support. You also get on their website and in a "magazine" they publish. Even the market comparison to determine price appears largely do-it-yourself.
The packages list from around $500-900, though they are currently heavily discounted. You can also buy additional ads in their magazine.
As I read it, you DO NOT get listed on any MLS® system. It would not surprise me if their representatives did offer some sort of listing service or referrals while signing you up for the basic stuff -- but I don't know this and don't see anything on the site that suggests it. Anyone out there know the answer to this one?
You may have seen "By The Owner" signs in the past, with a traffic light logo. This is in fact the same company, renamed.and relaunched.
FYI
Friday, February 4, 2011
App – ropriate. Part 2: Realtor.ca
Triggered by a new real estate/mortgage app for your iPhone/Blackberry and an article about real estate and mobile apps, we began a little review of a few of them, starting yesterday with the new CIBC product. If you missed it, scan down the blog or go HERE.
Today we have a peek at the mobile coulsin of Realtor.ca -- the website familiar to many. It’s the official public site for the MLS® system. There is an iPhone app and a WindowsPhone7 app by the same name, with Blackberry en route.
The iPhone app reviews are pretty uniformly negative. People like the idea but find the app buggy. I think they are being a little harsh.
Thursday, March 25, 2010
Uh-oh! ?
As usual I am confused and uncertain enough to be unable to fall in behind either the doomsayers or "everything-is-fine" types with respect to real estate, the economy, exchange rates, pretty much everything.
Generally speaking, everybody is probably partially right. It's the timing that is the rub.
However, here is an interesting little factoid. Today, Thursday, March 25, 2010 in our core business area there were 48 agent open houses for new listings. That is two or three times as many as we would normally expect. Why?.
As usual, I don't know. But here are some possibilities.
• Interest rates are going up soon due to creeping inflation. This will slow the market so everybody is putting their house on the market now to beat the slump. If you buy this one and you need to sell soon, best get your abode on the market NOW. If you buy this one and are looking to buy soon, you might risk waiting a while for the market to slow down. And/or, you should re-double your market-watching -- a big increase in "supply" (new listings) should, all by itself, put a little more balance in the market and could reduce the multiple-offer craziness.
• People THINK interest rates are going up soon ...blah blah. This one could be self-fulfilling. Or not.
• The weather was nice for a few days. Typically, the big rush to market would happen closer to, or just after, Easter. But much like the "winter" slowdown, a significant factor is whether people "decide" that Spring (or Winter) has arrived.
• Some other reason. What do you think?
In any case, it was a huge number and it has us paying attention to see what other signals might appear.
P.S. If you are buying, we are selling. Our new listing is priced at only $389.900 and is well-renovated and a stroll to absolutely everything in and around the Beach. If this sounds interesting, off you go to www.drop.io/AshlandAve
Generally speaking, everybody is probably partially right. It's the timing that is the rub.
However, here is an interesting little factoid. Today, Thursday, March 25, 2010 in our core business area there were 48 agent open houses for new listings. That is two or three times as many as we would normally expect. Why?.
As usual, I don't know. But here are some possibilities.
• Interest rates are going up soon due to creeping inflation. This will slow the market so everybody is putting their house on the market now to beat the slump. If you buy this one and you need to sell soon, best get your abode on the market NOW. If you buy this one and are looking to buy soon, you might risk waiting a while for the market to slow down. And/or, you should re-double your market-watching -- a big increase in "supply" (new listings) should, all by itself, put a little more balance in the market and could reduce the multiple-offer craziness.
• People THINK interest rates are going up soon ...blah blah. This one could be self-fulfilling. Or not.
• The weather was nice for a few days. Typically, the big rush to market would happen closer to, or just after, Easter. But much like the "winter" slowdown, a significant factor is whether people "decide" that Spring (or Winter) has arrived.
• Some other reason. What do you think?
In any case, it was a huge number and it has us paying attention to see what other signals might appear.
P.S. If you are buying, we are selling. Our new listing is priced at only $389.900 and is well-renovated and a stroll to absolutely everything in and around the Beach. If this sounds interesting, off you go to www.drop.io/AshlandAve
Friday, February 19, 2010
Competition vs. MLS -- Part 2-ish
The real estate section of today's Globe has an article headlined "Under the Gun" It starts off with an example of a couple in court because they got badly screwed around by unscrupulous-sounding agents. Then to the lady in the main photo who has burned through 4 agents who "failed" to sell it. We get a little dose of an agent defending their services, then into a Queen's professor who pretty much slags the current MLS setup. Ouch. Allow me to pull a couple of things out of the article that you may have missed in the whole "agents are useless crooks who are about to get their comeuppance" flavour of the thing.
First of all, the court case. Sounds like the agents failed to disclose "multiple representation" or "dual agency" and failed to disclose a family relationship between an agent and a buyer/seller. If true, nail them.
Or maybe they disclosed but did a poor job (accidentally or on purpose) of explaining and/or the sellers didn't read or pay attention to what they were signing. If true, nail both sides.
In any case, what the hell does a single anecdote of unethical behaviour have to do with the state of the industry? That was rhetorical; the answer is "It doesn't". Every profession has its baddies ... the occasional accountant steals, the occasional lawyer steals or screws up, the occasional financial analyst runs a massive Ponzi scheme. Shouldn't happen but it does.
Next up, the lady who burned through four agents who couldn't sell her house. Sounds like every time she went with one who said he "had clients who were interested" or "had contacts". Four times? We all have contacts and clients. That's not how you pick an agent. At least not four times.
So she decided to sell it herself, thereby supporting the "real estate is messed up and needs to change so that people have more options" theory. Well, she did have an option and she tried it (selling it herself). That didn't work either. Her bottom line: "She is now planning to list with [another] agent" but apparently using different selection criteria.
If you burn through four agents, plus yourself, and are working on number five, this is NOT an indication of systemic flaws in the industry. Even if you are cosmicly incompetent in selecting professional advisors, your house will eventually sell on MLS ... unless ... Unless your market truly stinks (not true here ... this was Calgary, not Detroit) or the house is seriously overpriced (I'm putting my money on this one).
And at the risk of being repetitive, she's about to hire an agent!
Finally, the prof. He says a rival database to MLS could give better information, the industry is protectionist, the consumer should have do-it-yourself choices, etc. But what would he do if selling his house? "I would probably pay full commission for the full service ... I know I would be able to find somebody really really good".
I am not saying our system is perfect. I am not saying that all agents are expert and professional. But here's a summary of this article from one perspective:
A certain number of agents behave badly. A lady in Calgary is learning that selling a home involves more than putting a sign on the lawn, and requires some care in selecting an appropriate representative. And an expert observer who seems to think big changes are needed would use a good traditional approach to selling his own home. Hmm.
P.S. Why is this called "Part 2"? Check it out.
First of all, the court case. Sounds like the agents failed to disclose "multiple representation" or "dual agency" and failed to disclose a family relationship between an agent and a buyer/seller. If true, nail them.
Or maybe they disclosed but did a poor job (accidentally or on purpose) of explaining and/or the sellers didn't read or pay attention to what they were signing. If true, nail both sides.
In any case, what the hell does a single anecdote of unethical behaviour have to do with the state of the industry? That was rhetorical; the answer is "It doesn't". Every profession has its baddies ... the occasional accountant steals, the occasional lawyer steals or screws up, the occasional financial analyst runs a massive Ponzi scheme. Shouldn't happen but it does.
Next up, the lady who burned through four agents who couldn't sell her house. Sounds like every time she went with one who said he "had clients who were interested" or "had contacts". Four times? We all have contacts and clients. That's not how you pick an agent. At least not four times.
So she decided to sell it herself, thereby supporting the "real estate is messed up and needs to change so that people have more options" theory. Well, she did have an option and she tried it (selling it herself). That didn't work either. Her bottom line: "She is now planning to list with [another] agent" but apparently using different selection criteria.
If you burn through four agents, plus yourself, and are working on number five, this is NOT an indication of systemic flaws in the industry. Even if you are cosmicly incompetent in selecting professional advisors, your house will eventually sell on MLS ... unless ... Unless your market truly stinks (not true here ... this was Calgary, not Detroit) or the house is seriously overpriced (I'm putting my money on this one).
And at the risk of being repetitive, she's about to hire an agent!
Finally, the prof. He says a rival database to MLS could give better information, the industry is protectionist, the consumer should have do-it-yourself choices, etc. But what would he do if selling his house? "I would probably pay full commission for the full service ... I know I would be able to find somebody really really good".
I am not saying our system is perfect. I am not saying that all agents are expert and professional. But here's a summary of this article from one perspective:
A certain number of agents behave badly. A lady in Calgary is learning that selling a home involves more than putting a sign on the lawn, and requires some care in selecting an appropriate representative. And an expert observer who seems to think big changes are needed would use a good traditional approach to selling his own home. Hmm.
P.S. Why is this called "Part 2"? Check it out.
Tuesday, February 16, 2010
That might work, ... if ...
The Feds have announced some changes. If everyone sees them for what they are -- and what the Feds say they are -- they should be good. They should slow you down if you were about to do something silly. But they shouldn't stop you or seriously restrict you in doing what you want to do in real estate.
The first and major change requires. you to "qualify" for your mortgage at the five-year fixed rate. So you qualify by "pretending" that you are getting a mortgage at say 4.7% (whatever the 5 year rate du jour is). Then you go ahead and grab that juicy 2.5% variable rate.
This is kind of like your government protecting you against yourself. Might make our FoxNews-watching neighbours scream "socialism" and go a little crazy. But might also make you thank them if your variable rate starts up in a year or two.
Next up, is a new limit on the maximum amount you can refinance to. It's still early and I need more details on this one, but here's what I THINK they are up to. You can still go 95% mortgage when you buy a house. But, when your mortgage comes up for renewal, you have to get to at least 10% equity/90% mortgage. Why?
They are trying to encourage building up a safety cushion of equity. Presumably they are also discouraging a few folks who have lots of equity but are tempted to borrow back the whole wad in order to "buy themselves something frilly". For example, say you think it's time to buy some stocks or a snazzy cottage, etc. -- Well, fine, just don't risk absolutely everything on some delusion that interest rates will nudge zero forever and real estate will go endlessly and uninterruptibly up. ("Uninterruptibly"???)
Third is the one that I hope won't turn into one of those things that shows up in the headlines with the explanation continued on page 6. Headline: MINIMUM 20% DOWN"... page 6: "if you are buying a place for speculation/investment/rental income". In other words for 95% of you, it doesn't change anything.
First take. If I screwed it up, you can tell me. Or I'll post clarifications, corrections and apologies later.
The first and major change requires. you to "qualify" for your mortgage at the five-year fixed rate. So you qualify by "pretending" that you are getting a mortgage at say 4.7% (whatever the 5 year rate du jour is). Then you go ahead and grab that juicy 2.5% variable rate.
This is kind of like your government protecting you against yourself. Might make our FoxNews-watching neighbours scream "socialism" and go a little crazy. But might also make you thank them if your variable rate starts up in a year or two.
Next up, is a new limit on the maximum amount you can refinance to. It's still early and I need more details on this one, but here's what I THINK they are up to. You can still go 95% mortgage when you buy a house. But, when your mortgage comes up for renewal, you have to get to at least 10% equity/90% mortgage. Why?
They are trying to encourage building up a safety cushion of equity. Presumably they are also discouraging a few folks who have lots of equity but are tempted to borrow back the whole wad in order to "buy themselves something frilly". For example, say you think it's time to buy some stocks or a snazzy cottage, etc. -- Well, fine, just don't risk absolutely everything on some delusion that interest rates will nudge zero forever and real estate will go endlessly and uninterruptibly up. ("Uninterruptibly"???)
Third is the one that I hope won't turn into one of those things that shows up in the headlines with the explanation continued on page 6. Headline: MINIMUM 20% DOWN"... page 6: "if you are buying a place for speculation/investment/rental income". In other words for 95% of you, it doesn't change anything.
First take. If I screwed it up, you can tell me. Or I'll post clarifications, corrections and apologies later.
Tuesday, February 9, 2010
Competition vs. MLS ... part 1
So, the government (in the form of the Competition Bureau) wants to open up access to the data on the MLS system which is the property of organized real estate via CREA (Canadian Real Estate Association).
The idea is that the MLS system, built and operated by organized real estate, is the focal point for such a huge percentage of real estate sales in Canada that it is impossible for alternative approaches or systems to establish themselves and compete.
Theoretically, easier and more open access to this data would create lots of options for people to handle much more of the buy/sell process themselves at a much lower financial cost.
I’m going to rattle on for a post or two with some thoughts and perspective that I don’t expect to see very clearly expressed in the media. I might even be right about some of it.
And I’m actually still thinking some of it through. I understand the value of competition and I know that real estate commissions represent a lot of money, and there are probably changes that should be made to the MLS system.
But I think that I’m going to conclude that what the competition folks are after is wrong-headed and will leave homebuyers and sellers with weaker service, more risk, more confusion and will not ultimately save them any money.
So, if this interests you, follow the blog or subscribe or whatever. I’ll try to get at least one piece on this topic up daily for a week or so. And I would love it if you got in on the conversation.
Final thing today … here’s the official Royal LePage thought for the day:
Royal LePage Position
Royal LePage Real Estate Services believes that CREA and the MLS system are important components in Canada's real estate market. It is important to note:
1. The real estate market in Canada is highly competitive, and includes a wide variety of companies with diverse and innovative business models and price structures
2. There are other channels through which buyers and sellers can participate in the market, including online and do-it-yourself options
3. The organized structure and efficient attributes of the Canadian real estate industry are recognized globally, and many emerging markets would like to adopt a similar system.
Consumer protection and trust are the hallmarks of our business, and we will advocate strongly for our business, our partners, and our customers.
The idea is that the MLS system, built and operated by organized real estate, is the focal point for such a huge percentage of real estate sales in Canada that it is impossible for alternative approaches or systems to establish themselves and compete.
Theoretically, easier and more open access to this data would create lots of options for people to handle much more of the buy/sell process themselves at a much lower financial cost.
I’m going to rattle on for a post or two with some thoughts and perspective that I don’t expect to see very clearly expressed in the media. I might even be right about some of it.
And I’m actually still thinking some of it through. I understand the value of competition and I know that real estate commissions represent a lot of money, and there are probably changes that should be made to the MLS system.
But I think that I’m going to conclude that what the competition folks are after is wrong-headed and will leave homebuyers and sellers with weaker service, more risk, more confusion and will not ultimately save them any money.
So, if this interests you, follow the blog or subscribe or whatever. I’ll try to get at least one piece on this topic up daily for a week or so. And I would love it if you got in on the conversation.
Final thing today … here’s the official Royal LePage thought for the day:
Royal LePage Position
Royal LePage Real Estate Services believes that CREA and the MLS system are important components in Canada's real estate market. It is important to note:
1. The real estate market in Canada is highly competitive, and includes a wide variety of companies with diverse and innovative business models and price structures
2. There are other channels through which buyers and sellers can participate in the market, including online and do-it-yourself options
3. The organized structure and efficient attributes of the Canadian real estate industry are recognized globally, and many emerging markets would like to adopt a similar system.
Consumer protection and trust are the hallmarks of our business, and we will advocate strongly for our business, our partners, and our customers.
Thursday, October 22, 2009
229 Bain Avenue
We have a new listing. It's a beauty, in the heart of Riverdale. You can read all about it here, or better yet, come and see it. Open Houses this weekend (Sat./Sun. 2-4 pm, Oct.24 &25)
Saturday, October 3, 2009
Some things we still don't know...
We read the stories, we study the numbers, we talk to colleagues, we think (even when it hurts). We would love to just keep quoting the monthly amazing news out of the recent real estate market ... most sales ever for the month ... prices up ... recession bottomed out . But ... you knew there would be a "but" didn't you? . Back in the Fall of 2008, the headlines read "It's all going away ... hide in the basement ... the sky is falling". Down a couple of paragraphs, the story usually said something like "well, actually we're not in nearly as bad shape as the U.S., and even with the 6-10% price slippage we're still way ahead historically, and even that slippage is deceptive as it only applies to some market segments, and ...".
And if it didn't qualify the bad news, there would be a whole article a couple of pages on saying everything was going to be fine.
Nothing much happened early in 2009, even when it SHOULD have been happening ... Spring market and all that.
And then away we went. Maybe people just couldn't resist the low rates. Maybe they looked around and decided they were ok and could move ahead. For whatever reason, the buyers came back. Sellers were a little slower and that magnified the return to rising prices.
Traditionally it all slows down in the summer. Not this year. That led to the screaming headlines about some summer month having umpteen percent more sales than a year ago ... a new record!
Well yeah, July and August sales were way ahead of last year because hardly anything ever sells in the summer, but it did this year. What wasn't in the headline was that year-to-date roughly the same number of houses have sold in 2009 and 2008. Not very many in Feb., tons in August, in total up only 1.2%
And the standard two paragraphs into the articles about the end of the recession comes the comments about how long and hard the recovery will be and how jobs come back last.
Our own financial analyst, who I am beginning to hate despite what a good job he does, is pretty sure the hurtin' isn't over.
So?
So, if you think the trouble is over and everything is cheery you are probably wrong. And if you think it's all insanity, everybody is drinking the KoolAid and we're doomed you are probably wrong.
The market IS currently healthy and active. Interest rates ARE amazingly low. So if you are thinking of a move and are reasonably secure with decent credit, go for it.
But don't forget how you swore you were going to be more sensible about spending, and you weren't going to step quite so close to the financial edge anymore, etc.
Take advantage of cheap money, reasonable prices and your personal stability. But leave a little wiggle room in case ... well, just in case.
If that made sense and you are looking, and you're looking for a great bright excellently-maintained 4 bedroom home in our part of the world, wander over to www.drop.io/AmsterdamAve and have a look at our newest listing.
And if it didn't qualify the bad news, there would be a whole article a couple of pages on saying everything was going to be fine.
Nothing much happened early in 2009, even when it SHOULD have been happening ... Spring market and all that.
And then away we went. Maybe people just couldn't resist the low rates. Maybe they looked around and decided they were ok and could move ahead. For whatever reason, the buyers came back. Sellers were a little slower and that magnified the return to rising prices.
Traditionally it all slows down in the summer. Not this year. That led to the screaming headlines about some summer month having umpteen percent more sales than a year ago ... a new record!
Well yeah, July and August sales were way ahead of last year because hardly anything ever sells in the summer, but it did this year. What wasn't in the headline was that year-to-date roughly the same number of houses have sold in 2009 and 2008. Not very many in Feb., tons in August, in total up only 1.2%
And the standard two paragraphs into the articles about the end of the recession comes the comments about how long and hard the recovery will be and how jobs come back last.
Our own financial analyst, who I am beginning to hate despite what a good job he does, is pretty sure the hurtin' isn't over.
So?
So, if you think the trouble is over and everything is cheery you are probably wrong. And if you think it's all insanity, everybody is drinking the KoolAid and we're doomed you are probably wrong.
The market IS currently healthy and active. Interest rates ARE amazingly low. So if you are thinking of a move and are reasonably secure with decent credit, go for it.
But don't forget how you swore you were going to be more sensible about spending, and you weren't going to step quite so close to the financial edge anymore, etc.
Take advantage of cheap money, reasonable prices and your personal stability. But leave a little wiggle room in case ... well, just in case.
If that made sense and you are looking, and you're looking for a great bright excellently-maintained 4 bedroom home in our part of the world, wander over to www.drop.io/AmsterdamAve and have a look at our newest listing.
Wednesday, July 15, 2009
Update: beyond housevalues.ca to justlisted.ca
A while ago, I did a quick explanation of how the tv-advertised housevalues.ca works. That post is here, or see below. Now there is another ad airing for a site called justlisted.ca. What's it all about?.
Same company, same deal. It's a US company whose product is leads for agents. So yes, you can sign up for new listings to be emailed to you, but you will also be immediately contacted by whatever agent has purchased the rights to your area.
You can get the same information from the local agent of YOUR CHOICE. Any Toronto Board agent can set up a "match" which will automatically email you listings or changes that match your criteria -- criteria much more refineable than the justlisted.ca options. They aren't evil, but you should know what you are getting into.
Same company, same deal. It's a US company whose product is leads for agents. So yes, you can sign up for new listings to be emailed to you, but you will also be immediately contacted by whatever agent has purchased the rights to your area.
You can get the same information from the local agent of YOUR CHOICE. Any Toronto Board agent can set up a "match" which will automatically email you listings or changes that match your criteria -- criteria much more refineable than the justlisted.ca options. They aren't evil, but you should know what you are getting into.
Wednesday, June 24, 2009
Transitions Seminar
Thanks to all who attended the "Transitions" session we were part of on Monday. Initiated by "Trusted Transitions" , we delivered ideas and information on how to get a home "working" better in order to stay in it longer and happier; plus material on the process, options and issues if a move is the answer. It went well, only one person fell asleep, and we may have been tagged for a repeat performance!
Kathy Zaremba of Trusted Transitions started things off going through the 8 steps of "smartsizing" -- "preparing for change as we age" and talked about it being absolutely "OK" to make a change that makes your life more enjoyable and just better.
Changes in the current living arrangement can keep you there longer and happier. And there are ways to make the changes without spending the money you need for day to day life.
We all spent a bit of time on the various options available if staying in the current home just doesn't work.
We homed in on the selling process. We recognized that the very thought of selling is just the beginning of the potential stress. But there are lots of ways to get help and minimize the stress. And it's all en route to the next fabulous stage of life.
Kathy Zaremba of Trusted Transitions started things off going through the 8 steps of "smartsizing" -- "preparing for change as we age" and talked about it being absolutely "OK" to make a change that makes your life more enjoyable and just better.
Changes in the current living arrangement can keep you there longer and happier. And there are ways to make the changes without spending the money you need for day to day life.
We all spent a bit of time on the various options available if staying in the current home just doesn't work.
We homed in on the selling process. We recognized that the very thought of selling is just the beginning of the potential stress. But there are lots of ways to get help and minimize the stress. And it's all en route to the next fabulous stage of life.
Tuesday, June 9, 2009
May Statistics & Analysis
Market Watch.*
June 6, 2009. The May statistics are out and we are silly enough to try to figure out what they mean.
[While we have been doing this sort of analysis (and more) for ourselves and our market understanding, we have only put it “out there” since April, 2009. It takes a fair bit of extra work to make it “pretty” and understandable (I hope) to the layman. Please, if anybody out there reads this, tell us what you think. Useful? Useless? What should be taken out? What should be added? Do you agree with the analysis? We really want the feedback.]
Overall: It’s busy out there, much like “Spring” always is. Prices are holding. Relatively low supply and high demand suggest the activity will remain brisk through June. It doesn’t always do that!
The total number of ACTIVE listings declined 8% or about 2000 from last month. Not surprisingly this is well above the peak sellers’ market of ’07. Somewhat surprising in this environment, total active listings is also well below last year this time, indicating a relative dearth of supply.
Why? As noted, sales remained strong. And, although more NEW listings came on the market in May than in April, it was a minor increase. New listings continue to run 30-40% below previous years. So, although demand is down from the peak, supply is down much more.
So what? Sellers continue to “sit tight”. This helps to keep the market reasonably in balance, as you will see from the price discussion. Economic uncertainty is balanced by amazingly attractive interest rates, so the buyers are still coming out. Unless summer arrives the day after this post and everybody goes camping, the market should stay strong through June because supply is tight and there is good demand.
Price: Prices remain virtually unchanged over the past two years. As we explained last month, in order to get to “the same” average price as 2007, prices have risen, fallen, and risen again. And “on average” hides the fact that a lot of the volatility was in the higher dollar brackets.
So what? It STILL sort of depends what you see on the horizon – a rising sun, or a nasty fall off the edge of the world! The analysts seem to think the bottom of the recession is near, but it isn’t unanimous.
Time: “DOM” means “days on market”. Followers will know that we don’t put much stock in this statistic when applied to a single sale or a small sample. But applied to the whole market it still tells a story. Average days on market, year over year has increased significantly! It fell by a couple of days from April to May which is consistent with a busy market but borderline significant statistically.
So What? Homes are taking longer to sell. Buyers generally have more time to think and are being more careful; and sellers have to keep their home beautiful and clean a lot longer!
There are, however, more examples of multiple offers than in recent months, though nothing like the ’07 craziness. This is due to the overall “busy-ness” and also suggests sellers have accepted that prices are not going up like they did and are pricing more reasonably.
More detail: Below are a few selected numbers, recognizing that the bulk of our clients are in the Toronto East areas.
If you need help interpreting these, have questions, or would like some specific numbers or analysis, contact us anytime. If you are masochistic enough to want to see the entire Market Watch report, off you go to http://www.torontorealestateboard.com/consumer_info/market_news/mw2009/pdf/mw0905.pdf Enjoy.
This Month (May 2009)
| Area | Active | New | Sales | AvgPrice | MedPrice | AvgDOM | Avg%List |
| E01 | 123 | 135 | 109 | $458,088 | $428,000 | 19 | 102 |
| E02 | 100 | 131 | 100 | $537,815 | $453,050 | 14 | 100 |
| E03 | 205 | 180 | 149 | $386,833 | $370,000 | 26 | 98 |
| E04 | 165 | 135 | 104 | $261,618 | $277,750 | 31 | 97 |
| E06 | 110 | 94 | 69 | $380,891 | $360,000 | 21 | 98 |
| E08 | 201 | 160 | 103 | $293,101 | $286,000 | 38 | 96 |
| All East | 4,423 | 3,103 | 2,158 | $314,238 | $288,000 | 34 | 98 |
| All TREB | 21,524 | 13,686 | 9,589 | $395,609 | $337,000 | 35 | 98 |
Last Month (April 2009)
| Area | Active | New | Sales | AvgPrice | MedPrice | AvgDOM | Avg%List |
| E01 | 128 | 115 | 90 | $421,850 | $412,500 | 22 | 99 |
| E02 | 105 | 95 | 85 | $641,479 | $484,000 | 28 | 98 |
| E03 | 222 | 171 | 130 | $353,453 | $350,000 | 23 | 98 |
| E04 | 181 | 115 | 102 | $237,866 | $264,750 | 36 | 96 |
| E06 | 130 | 83 | 63 | $396,573 | $320,000 | 34 | 96 |
| E08 | 206 | 107 | 77 | $276,521 | $280,000 | 32 | 96 |
| All East | 4,747 | 2,744 | 1,820 | $306,890 | $278,500 | 36 | 97 |
| All TREB | 23,515 | 12,995 | 8,107 | $385,641 | $330,000 | 37 | 97 |
Last Year (May 2008)
| Area | Active | New | Sales | AvgPrice | MedPrice | AvgDOM | Avg%List |
| E01 | 166 | 205 | 109 | $450,784 | $410,525 | 14 | 105 |
| E02 | 150 | 195 | 101 | $512,674 | $464,200 | 14 | 101 |
| E03 | 321 | 305 | 165 | $387,564 | $380,000 | 19 | 101 |
| E04 | 297 | 213 | 99 | $263,417 | $284,500 | 26 | 98 |
| E06 | 145 | 131 | 57 | $400,423 | $349,900 | 20 | 99 |
| E08 | 297 | 170 | 95 | $287,986 | $287,000 | 29 | 97 |
| All East | 6,186 | 4,330 | 2,241 | $310,724 | $287,000 | 28 | 98 |
| All TREB | 27,267 | 18,715 | 9,411 | $398,148 | $338,000 | 31 | 98 |
Two Years Ago (May 2007)
| Area | Active | New | Sales | AvgPrice | MedPrice | AvgDOM | Avg%List |
| E01 | 139 | 189 | 140 | $408,705 | $386,750 | 13 | 106 |
| E02 | 126 | 174 | 128 | $507,874 | $440,950 | 13 | 104 |
| E03 | 327 | 296 | 169 | $344,077 | $335,000 | 20 | 101 |
| E04 | 292 | 236 | 124 | $270,894 | $282,000 | 24 | 99 |
| E06 | 129 | 138 | 74 | $365,798 | $311,800 | 17 | 100 |
| E08 | 369 | 209 | 121 | $295,755 | $277,000 | 37 | 98 |
| All East | 5,710 | 4,225 | 2,610 | $305,168 | $280,000 | 28 | 99 |
| All TREB | 23,739 | 17,399 | 11,146 | $382,787 | $325,000 | 28 | 99 |
*Market Watch is a monthly publication of the Toronto Real Estate Board (TREB) which consolidates monthly statistics for the GTA real estate market.
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