My Living Room on Apartment Therapy

 This month, I decided at the last minute to enter my colourful living room in Apartment Therapy's annual "Room for Color" contest.  AT has been one of my favourite home and design blogs for years and they often have great ideas for DIY projects.

When I purchased our condo in 2010, like many first time buyers, my money went towards my down payment and some renovations.  At the time, there wasn't much left over for furniture but I was tired of the furniture I'd used during my years of renting and I wanted something a little more gown up and... me. 

With Corey still in university, we were shopping on one income:  That's when our love of Craigslist began and since we had style but not much money to spare, (after gutting our kitchen and replacing the floors) we made a game of finding unique and well made (sometimes designer) pieces and trying to work them into some kind of cohesive theme. 

My cousin founded an amazing home décor blog called StyleNorth.  I remember reading at the time that he had a large orange flokati rug in his living room.  It was so shaggy and different that I couldn't help thinking that it would be a great piece to work my room around.  I browsed Craigslist for weeks and the odd one came up but they were usually too expensive or not colourful at all.  Finally one day, we found this cute little red number and the seller explained that it had been a gift from her in-laws when they travelled to Greece but she had never cared for it.

From there, we found two glass coffee tables, which allow more floor to be visible and keep our space feeling open and airy, as well as a fabulous retro chrome lamp (which we now love after hours of polishing), vintage chairs, some old bowling lanes which we made into an entrance bench and a table for my office as well as a large painting which I painted myself.  The eclectic style allowed us to display some personal keepsakes such as a large Trilobite fossil and soapstone carving from my grandmother and an old suzani I've always loved.  It was so nice to be able to display these items without worrying about whether they match the room.

We ended up furnishing most of our home that way and we now have fabulous vintage hanging lamps, a church pew in the dining room and many other treasures.  We kept our walls light so that we could display our art without worrying about the wall colour detracting however, I think we may be a little more adventurous in our next home.

Apartment Therapy's "Room for Color" contest is one of my best sources of inspiration for my home and we are honoured to be featured this year.  Check out our entry and make sure you vote!

Competition Bureau vs. TREB: Here's Why I side with TREB... And it's not for the reason you think!

Okay, it's obviously partially because I work in the industry and want to protect my career but, to be honest, there will always be a solid market for those who want to list and buy through a professional.  No, I have other concerns for what it means that the Competition Bureau is pushing to implement rules that will encourage more people to list on their own. 

For those who haven't been following the news, there has recently been more press about the lawsuit between the Competition Bureau and the Toronto Real Estate Board over access to information on the MLS service.  Frankly, as a real estate agent who may also be selling her condo soon, I don't necessarily want the entire world to have access to comments about the condition of my unit, when I am home and instructions for my pets but that's still not my main issue with the public being able to access this information and list on their own.

In an industry where we are taught to give the utmost attention to ethical conduct, detail and accuracy in our listings and diligent research, we also hear the horror stories of what can happen if something goes wrong.  We are trained to negotiate ethically and to also ensure that there is a proper paper trail of all conditions, waivers, amendments etc. to reduce any risk of a mistake.  We also answer to an ethics council which ensure that we behave ethically while practising real estate.  We also maintain insurance to protect us and our clients from errors and omissions.  Even with all these measures, errors occur occasionally and in real estate, when one closing often depends on funds from another, an error or misunderstanding can set off a chain reaction affecting people who have never even hear of the original culprit or their property.

Picture this: Person A has a firm deal to Purchase the home of Person B.  Person A waived their financing condition without speaking with their lender but as closing day approaches, they realize there may be a problem because the bank's appraisal of the property indicates that it is overvalued and Person A cannot fund the difference.  If Person A and Person B both have agents, likely the agents will be in touch regarding the problem and will either renegotiate the price to satisfy both parties, or negotiate who will keep the deposit and allow Person B to re-list immediately in order to mitigate the damages.  If there are no agents involved, things could get tricky.  What if Person A just sends a letter to Person B (or worse, what if they avoid the issue?) asking to be released from the deal?  How do they agree on what is fair?  What if Person B doesn't learn of this until closing day and they are now unable to close on the house they purchased from Person C?  As you can see, things get much more complicated without agents.

Without agents, how would a buyer ever know if an mls listing were accurate?  Who would hold the sellers accountable for errors and omissions or would buyers be forced to pursue legal action for every minor hiccup at closing?  In my experience, most buyers find it uncomfortable to view a house when the seller is home so how would they feel about negotiating directly over something so personal? 

Sure, buyers could still use agents but those agents would still expect to be paid and if sellers decided not to, that would fall on the buyers.  Nobody works for free.  And would those sellers really be saving money when they negotiate directly with a buyer's agent who is both a skilled negotiator and not emotionally invested?

What about the discount brokerages who post to MLS but leave sellers on their own for the rest?  Well, aside from the fact that I would need to deal with my own showings, many buyers don't want their agent to deal with someone whom they perceive to be cheap and difficult.  I've had many buyers not even want to look at these properties because they sense an ugly negotiaion may result.  There's also the question of how they respond to inquiries regarding their own listings.  If you have already paid a brokerage a flat rate fee to post a listing, how motivated are they to answer questions or even return phone calls about your home from people who find the listing on MLS?

To me, my home is my largest investment.  I don't object to people listing on their own but it would never consider listing my own home without the assistance of a Real Estate Agent.  Here's a video which outlines some of the many ways we can help:


Why A Moderating Market Should Make Us Smile!

For those who take the headlines at face value, the real estate market has undergone an absolute roller coaster in the past few months.  We've been hearing threats of unsustainable growth and a bubble that's ready to pop, unscrupulous sellers and their agents who have manipulated bidding wars to extreme heights and now... Eeek, it seems that the prices are falling. 

In reality, home sales typically slow in the summer likely due to a number of factors, such as the sticky weather, family vacations and the fact that very few people want to move during the first few weeks of the school year.  Add to that the new mortgage rules and we are seeing the market moderate a little- Something those of us in the business have been expecting to happen eventually.  Far from a crash, a bit of equalizing could be excellent news for the market.

The Globe And Mail ran a great article this week which outlined five great reasons why a small decline in house prices could be very good news.  Topping the list is the fact that this may give many first time buyers who have been discouraged by the number of multiple offer scenarios last spring, a chance to finally break into the market.    Also on the list was the suggestion that this could lead to more rational transactions and negotiations.  Without an auction mentality, it is easy to reason that more buyers will feel good about their purchases in the years to come.

Our housing market is still strong and steady, as is our economy.  If housing prices see a small correction overall, it will likely increase overall confidence in our market and subsequently long-term strength.

How To Maintain Your Privacy During An Open House:

It's the day of your open house and, in this market, that could mean your agent is expecting dozens of interested buyers to visit your home.  Your house is staged and tidy.  A large bowl of fake fruit sits on your kitchen counter.  The floors are scrubbed, the closets cleaned and you feel prepared for anything and excited at the prospect of offers on the horizon. 

Most good agents will request that owners and pets vacate the house during the open house in order to allow prospective buyers to feel comfortable looking carefully and even contemplating changes they might make if they were to purchase the home.  Your agent has advertised the open house and even brought some extra feature sheets, information on local schools and refreshments.  You know you are leaving your home in good hands.  Everything is perfect.  So what are you forgetting?

 Open houses are such a common step in the selling process that we often forget the fact that there will actually be strangers walking through our houses and looking at our things.   When a seller opens their home to showings, each buyer is accompanied by a licensed agent and the listing agent has a record of all visits.  The very nature of an open house, however, is to allow maximum exposure and so many of the visitors will be looking without their own agent.  A listing agent usually stands downstairs to greet guests and answer questions, but who is watching what happens upstairs?

I recently read a fantastic article in Real Estate Magazine on protecting sellers' privacy during open houses and showings.  Many sellers will not feel that all of these suggestions are necessary and some may seem obvious but I think every seller should at least consider them.  I don't know how many times I've seen calendars in houses during showings with vacation time blocked off.  Do you really want all the guests at your open house to know when your home is vacant?

I would add to the suggestions in the article that it is prudent to ensure that your agent is requesting that each guest sign in with first and last name as well as a home address and telephone number.  People tend to be more respectful when their identity is known.  Another good idea if you own a very large home or if your agent is expecting heavy traffic is to ask your agent if they have a colleague who can assist them by walking around and answering questions.  I also happen to think a one day open house that lasts two hours tends to generate more traffic than an open house that stretches an entire weekend.  Remember, other open house guests also serve to eliminate snooping behaviour.

Last but not least, plan, prepare and then RELAX.  You have hired a professional whom you trust so if you have any nagging concerns, allow them to set your mind at ease with their own security ideas.


DIY Real Estate & For Sale By Owner- Is It a Good Idea?

Now, I'm obviously a little biased where this topic is concerned since I make my living by assisting people in buying and selling homes.  Still, I plan to examine the title question as objectively as possible.
It seems we live in a society where Do-It-Yourself or DYI is becoming increasingly popular.  Our technology allows us to access professional (or amateur) resources from anywhere and it is easy to feel that we are all just a few weeks of Internet research away from being experts at other people's jobs.  I know I am also guilty of this and have gone to the doctor having already looked up some possible causes of my symptoms.  When I was having my will prepared, I recalled a legal article and asked to refine one of the clauses.  I have even speculated at a reason for the noise my AC was making to the repair person.  Am I an unusually annoying consumer?  Perhaps, but my point here is that we all do this to an extent and I find that many professionals respect a savvy consumer who asks educated questions.
But what about those consumers who actually take matters into their own hands and cut out the pros?  It's a matter of opinion.  We could probably cut our own hair, represent ourselves in court or install our own kitchens... but how many of us want to?  In fact, shows like Holmes on Homes show us the many pitfalls of attempting work without the right professionals.  So why do discount brokerages and listings for sale by owner exist?  Some sellers feel that the compensation paid to real estate professionals is too high and would rather try it on their own.
Are they correct?  Perhaps in some cases, they are.  However a good agent should serve as a market expert, assisting with staging, pricing and marketing their property, arranging showings (because an owner who is present for a showing is a huge deterrent for an interested buyer) and orchestrating maximum interest to ensure a good position for their clients during negotiations.  They should have a keen eye on the market and be able to advise their clients when to list, when to adjust the price and when to accept offers.  They should be familiar with clause wordings and be able to negotiate the best price and terms for their clients.  They should be available long after the sale to ensure that conditions are met and closing proceeds smoothly.  A very good agent remains in touch with clients and can act as an adviser with respect to renovations which pay off or tradespeople or professionals that may be required in the future.

So, when is it worth it to try to sell your home on your own?  In Toronto, with the average seller offering about 5% commission, which would mean 2.5% to their own agent and 2.5% to a buyer's agent, a smart seller will never cut the commission paid to a buyer's agent as they want their home to be attractive to agents who may have a buyer.  Of the 2.5% that they would pay their own agent, they should consider the costs of staging their home on their own, paying a discount brokerage to list their home on MLS, added legal fees since they would require a lawyer to review all offers and possibly multiple sign-backs, marketing expenses, the stress of negotiating offers,  the inconvenience of arranging showings and the expectation that homes sold without an agent are generally expected to sell for less and sit on the market longer.  I can confidently tell my clients that I can easily justify my compensation and they will more than likely make more money using me, than they would save on my commission. 
A recent Globe and Mail article discusses one couple's adventure with their own DIY listing.  It has long been an accepted fact in the real estate community (and even a source of easy leads for some agents) that for sale by owner properties or FSBOs don't sell.  Many of us even read about the FSBO company founder who sold his own property using a broker.
One would expect this FSBO theory to not apply to a HOT market like Toronto's, so I watched this listing to satisfy my own curiosity.  The owners were optimistic that they would have multiple offers on their offer date of June 14th.  I cannot confirm whether or not this was the case but it is now June 20th and the home is still listed.  I checked to see if it was overpriced but it actually seemed to be priced fairly low for the area with the lowest sale of a 3 bedroom, 2-3 storey, detached home this year in the district at $512,000, the highest at $911,000 and the majority of the 18 sales falling between the mid-$600,000's to the mid-$800,000's. 

In my opinion, there will always be some people who prefer to risk doing something themselves if it will save them a couple of bucks and it is wonderful that we all have the freedom to do so.  The question is: Are they even really saving any money?  Each case is different but I tend to doubt it.


Is Toronto Real Estate a Good Investment Right Now?

Between all the headlines stirring fear of a bubble that's doomed to burst and soaring house prices, some potential investors are wondering if now is the right time to buy.  In fact, a recent article in Maclean's magazine which claimed that Canada looks like the US before their housing market crashed has actually spawned some more balanced perspectives to surface.  One such article in the Financial Post, examines some of the Maclean's headlines from 2007 to present which all seem to warn of imminent Canadian housing market collapse.  It's actually quite a good read.  In the end, we need to accept that danger and doom tends to see newspapers and magazines better than headlines reading "Clear Skies and Smooth Sailing Ahead" and it is really up to the consumer to find a market professional whom they trust and conduct their own research as well.

With interest rates so low and bound to eventually increase, some buyers are looking for homes which would provide them the option of renting a floor for extra income.  While not a bad idea, research into the Residential Tenancies Act as well as local zoning laws and addressing questions to a trusted real estate professional are all advisable. 

In a recent Fincial Post article, the writer, Fabio Campanella urges buyers to consider their own financial situations over market conditions when assessing whether it is a good time to buy.  The most successful investors purchase properties which they can afford to hold onto until market conditions dictate the timing is right for them to sell.  In contrast, investors who spread themselves too thin by investing in multiple properties and stretching their means, are more likely to be forced to sell if conditions or their situation were to change.  Campanella writes:

"If the Toronto residential market is used as a barometer, we can see that residential real estate has treated us quite well over the past 20 years. During the period from 1992 to 2011, the average sale price for a home in Toronto increased from $214,971 to $465,412 according to the Toronto Real Estate Board (TREB)."
He calculates a ROI based on an investor putting 25% down and finding a tenant whos payments cover only basic operating costs like interest payments (not principal) on their mortgage, taxes and maintenance.  The results are impressive... especially when compared with those of the TSX. 

He even addresses investors' fears of buying just before a dip in the market by looking back at the shattering crash in 1990:

"In fact, even if you were to have purchased a property at the bull market peak just before the infamous GTA real estate crash of 1990, you would still have achieved an 8.94% ROI if you held the property with a decent tenant until 2008 even though the value of your investment would have dropped by 25% over the first four years."

Questions regarding the comparison between real estate and stocks are common although, they are really like apples vs. oranges.  First of all, we cannot live in our stocks, enjoy our families, decorate or garden or any of the other things we associate with a home.  We need to live somewhere and we so seldom consider what our monthly payments would be as renters when considering our home expenses.  Finally, unless you hold an important position with the company of which you own stocks, you do not have much control over your stock investment (aside from deciding to sell) whereas with real estate we can upgrade, renovate and stage to our heart's content. 

Still, real estate seems to win the comparison as seen by the chart (above, right) which was published on a property inventment company's website.  While our stocks are still recovering from the downturn in 2008, the real estate market only experienced a minor bump in the road.

All in all, while specific advice should always be sought, it appears that real estate is still a solid investment for Canadians.


We are Women Hear us Roar... And Watch us Enter the Real Estate Market in Record Numbers!

With RBC's 19th annual home ownership poll showing us that women are more likely than men to be first-time buyers in the next two years, it seems that Sandra Rinomato's new show, Buy Herself premiered at the perfect time.

Like men, women looking to purchase their first home prioritize down payment, job security and readiness at the top their list of concerns although an interesting difference between the genders crops up where rick tolerance is concerned, with only 16% of women (versus 25% of men) willing to take on a variable rate mortgage.

Rinomato has already seen success with her show Property Virgins and I'm interested (both as a real estate agent and as a woman who purchased my first home on my own) to see how she deals with the unique concerns that many single women have in terms of security, a single income and many other factors.  I'm also wondering how they'll inject drama into the show without couples disagreeing on which property to buy... Perhaps we'll see some crazy characters or overly involved parents.  After all, it is television first and reality second!

The Big Four: How Are Toronto's Newest Luxury Condos Shaping Up and Why is Trump's Venture Trailing the Group?

We've heard them called Caviar Condos and right now, Toronto has four of them.  With Residences at the Ritz-Carlton and Trump International Hotel and Tower open and Four Seasons Private Residences and Living Shangri-La both scheduled to open this summer, many are wondering exactly who is buying these 1 million to 28 million dollar residences attached to luxury hotels and whether there can possibly be a demand for over one thousand of these units hitting the market within a year.

Toronto Life recently featured a fun article comparing these luxury developments in terms of percentage of units sold as well as some of the challenges these developers have been facing.  The Four Seasons seems to be the hands down winner, with around 90% of the units sold and stories of some early investors who have already sold their units (over half a decade later) for nearly double what they paid.  Second place seems to go to the Ritz with over 90% of units sold.  The difficulty now is that the 20 units listed for resale could prove difficult for the builder to sell their remaining inventory.  Third place goes to Living Shangri-La with around 85% of their units sold with Trump trailing with only 40% of residential units sold and 80% of all units.

 This news about Trump Tower shouldn't surprise anyone who has been following some of the bad press this residence has been receiving.  It seems that while the hotel condos are selling (certainly faster than the residences) many buyers have encountered problems with financing due to the different rules applied to commercial properties.  A few buyers have so little confidence in the project that they are even attempting to break their contracts or walk away from their significant deposits.  Not only can property taxes be much higher for commercial properties but most lenders require the bar to be set higher in order to qualify a commercial buyer.  For me, this is just a shame.  I like to see DT thrive and I never miss an episode of The Apprentice.  Perhaps this will just mean we'll be seeing this real estate mogul in Toronto more frequently as he attempts some damage control.

Luckily, not everyone feels pessimistic and our luxury condo market seems to be an attractive investment for foreign buyers.  While it is difficult to obtain statistics on foreign investors, Janice Fox, the director of sales at The Four Seasons estimates between 30% and 40% of sales have been to international buyers.  In fact, The Four Seasons enjoyed a record setting sale last year of a 28 million dollar unit to a foreign family with plans to move here.

This optimism is also shared by many industry experts here in Toronto.  Oliver Beumeister, a real estate agent purchased a unit in one of these luxury developments five months ago and, according to a Reuters article, his plan is to wait until the surplus of units has been sold off in about four years and to then sell his unit for a 20% profit.  Not bad.

Will a Home Inspection Clause Disqualify my Offer?

Most buyers today generally accept the value of a home inspection.  This is especially true with many of the older homes in some of Toronto's established neighbourhoods.  A recent Huffington Post article reminds us of some of the areas an inspector typically examines and there are many sub-areas of specialty including termites and old wiring.

For between $300 and $500 on average, buyers can have an expert set of eyes examine their prospective home or sellers can obtain a pre-listing inspection as an added value feature to entice buyers.  So, what happens when a buyers is competing against multiple offers and the seller's agent is asking for "clean" offers (without conditions) only?

Only the buyer can make this decision.  I've seen buyers fall in love with a house and ignore the odd problem uncovered in a home inspection.  In fact, I typically remind buyers that in my experience, a home inspector always finds something... even if it's small, since no house is perfect.  On the other hand, there is something to be said for entering into the largest purchase of your life with open eyes and an awareness of major repairs that may arise.  Indeed, an inspection is not a guarantee and sometimes there are issues that cannot be examined due to access, time of year etc. but my concern for buyers who ignore this step is that they may wonder "what if..." down the road.

For buyers who are worried about forgoing an inspection in order to make their offer more attractive, I remind them that it is their choice and leave them with the options:

They may waive the inspection entirely (I don't advise this) and hire an inspector once they move in to give them some awareness of any upcoming repairs or preventative maintenance.

They may request a copy of the pre-listing inspection (if there is one) and allow their own inspector or contractor to read through it.

They may ask the seller permission to pay for an inspection prior to submitting an offer.

OR, They may include an inspection clause in the offer with a short conditional time.  In this case, it is up to their agent to convey to the seller's the good intentions but fair concerns of the buyers and highlight the other attractive aspects of the offer.

I often ask my clients to imagine two different frames of mind when paying a roofing company to re-shingle the roof one year after moving in.  Would you rather be thinking: "Well, we knew we'd need to do this and we budgeted and considered it in the purchase price." or "I can't believe we're already spending more money!  I wonder if we would have bought this place if we had known we'd need to do this so soon."

In the end, the answer to the question in the title is a definite MAYBE... Many sellers would likely prefer to take a "sure thing" which in this case comes in the form of an offer without conditions.  A buyer who insists on an inspection may not get the house but I'm a believer that you'll never know if you don't try.


Is Buying U.S. Real Estate as Easy as it Sounds?

A recent blog post on Condo.ca discusses a prospect many of us have probably contemplated lately: looking for an investment property South of the border.  For Torontonians and Canadians in general, the past few years have certainly seemed like an ideal time to invest in the American housing market and for most of us, the thought evokes an image of a sunny little pied-a-terre to escape to during our chilly winter months.  In fact, with all the stories of Florida condos priced so low they could practically be purchased on a credit card, it may be surprising that many Canadians are straying from the sunbelt and some are even opening their wallets wide enough to purchase in the luxury market!

I find it reassuring that, while our workout habits may suffer on vacation, our national conservative attitude towards mortgage debt seems too deeply ingrained for a south-of-the-border lapse.  This is evident by the fact that 9 in 10 Canadians are paying for their U.S. properties in cash.

While many Canadians have already purchased vacation or investment properties, for those who are looking to take the plunge, here are a few factors to consider:

Consider whether you intend to rent out your property while you're not using it and have a frank discussion with a trusted real estate professional regarding the challenges and benefits to being a landlord. Royal LePage just released the results of our 2012 Recreational Property Survey and we know that while 51% of Canadians intending on purchasing a recreational property within the next five years would consider renting it to offset ownership costs, 83% of those who currently own vacation properties do not actually do this.  

Consider asking your own real estate agent for a referral to an agent who practices in the U.S.  Many of us attend international networking events regularly and seek out colleagues with similar professional characteristics who would provide our clients with the same level of service that we would at home.

Speak with a lawyer!  I cannot stress this point enough.  Not only are there taxation rules to be aware of but the landlord and tenant laws (should you plan to rent) can vary widely.

The main point here is to do your research.  Real estate in the US may be cheaper than it is at home but it is still a large investment.

In a HOT Seller's Market, Where is the Line Between Savvy Business and Sneaky Tactics?

In a recent Globe and Mail article Carolyn Ireland asks this very question and many agents (like myself) who have both buyer and seller clients are pondering a fair answer.  While, in many pockets in Toronto, it is currently normal to expect a listing to sell for over asking, some of the severely underpriced homes on the market can be misleading and frustrating to buyers.

For sellers who may want to draw as much interest as possible, or who list low expecting multiple offers (or, as many like to call these scenarios- bidding wars) and are disappointed when they don't see numbers as high as they had hoped, this strategy seems reasonable.  After all, it may be a great time to be a seller in Toronto but aren't we all just trying to make the most of our investments?

For buyers however, who may have already placed offers on other homes which were not acccepted, the thought that some of the properties on the market may be listed in a totally different price bracket may seem overwhelming.  Ireland's article seems to scoff at the fact that this obvious game playing is legal and accepted practice.

At one point, Ireland asks if a customer would expect to walk into a retail store and offer the proprietor the $2.99 posted price for a tube of toothpaste only to be told by the owner that, they were actually hoping for $3.45 since there are many customers and few tubes of toothpaste and they will not accept anything under $3.20?  Of course this sounds ridiculous but it works the other way as well: In a time of toothpaste abundance, a buyer would likely not expect to offer the shop owner $1.75, "take it or leave it" and make much progress.  Well, this is exactly what buyers expect in a real estate market which favours buyers so why shouldn't the reverse be acceptable for sellers?  In the end, this is a very important and large purchase for most people (unlike a tube of toothpaste) and is therefore very obviously subject to the laws of supply and demand.

My opinion?  Buyers need to find an agent whom they trust and ask candidly about properties that seem too good to be true.  This market requires some strategizing and preparation on the buyer's end but with the right information and advice, it is just another minor challenge to overcome on the road to a new home.

As for the "games", I advise my buyers to remember that just as we are trying to find the best terms for them, the seller's agent is doing the same for their client.  I like to think of the lowball listings as just another strategy... Good or bad, it is just that.

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