If a tree grows in your yard and crosses the property line, is it still your tree?

Okay, I promised in this post to stay away from the news, but I couldn't help myself today.  I was reading an article in this morning's Globe and Mail, and according to a recent Ontario Superior Court ruling, your neighbour can prevent you from removing a tree which is almost entirely on your own property. 

Since we began assessing our backyard, we have been researching tree removal bylaws to ensure that we would be compliant.  We are lucky to have very few trees that sit close to a property line.  Our hope would be that if a tree were ever in question, our neighbours would be reasonable (as would we) but I have heard of lovely neighbours suddenly behaving strangely when a neighbour wants to cut down a tree. 

One of my friends is currently speaking with neighbours about cutting down a tree (mostly on her property) because the roots are damaging the foundation of her house.  What would happen if her neighbour decided they were too attached to the tree?

I clearly disagree with this ruling.  I think people need to be free to alter their own landscape and if a neighbour objects, they should plant their own tree.  In an ideal world, people would come to agreements... but while this happens often (and it's nice when it does) our laws need to provide an absolute answer and not rely on the agreement of other parties. 

Not only would this affect my right to cut down my own tree but it also restricts my neighbour's right to trim branches of my tree that cross the property line.  In my opinion, this ruling puts the rights of both sides (those with trees and their neighbours) in jeopardy.  The only ones protected here are the trees.

It's sad, but you know what this makes me want to do?  It makes me want to cut down my trees before they are large enough for the government (or my neighbours) to have a say.  I'll bet I'm not the only homeowner who feels that this may be necessary if we embrace a future with such restricted rights for property owners...

What do you think of the ruling?

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Your Dream Home: How Do You Know When You've Found It? (Part 1)

As you know, Corey and I recently purchased a house.  No, it's not the lovely home in the picture, but it's an equally attractive (to us) home with a deep lot for Barkley to run and located in a neighbourhood we like and think will improve in the future.  Friends have been asking us how many houses we looked at and how long it took us to find this house and they're often surprised by our answer.  Today, I'll share our story and some of the criteria we used to decide so quickly.  No, our house didn't have any neon signs telling us that it was the right house... although, as an agent, I think that would be awesome!  Instead we used a combination of gut feeling and logic and we are thrilled with our decision!

First, I'll explain the lack of pictures.  It's a personal decision for me not to post even exterior photos until we actually own the house out of respect for the current owners.  Once we take possession, there will be no shortage of "before and after" photos as we share our renovation diary with all of you!

Back in the fall, I turned 30 and had a bit of a grown-up crisis.  I woke up one morning and suddenly remembered that I had never intended to stay in our condo for so long.  Our condo had always been a short-term living situation in my mind but it's funny how life sometimes speeds up and our temporary condo had somehow become semi-permanent. 

We looked at a few houses (perhaps 4 or 5) and spoke with my mortgage specialist at RBC before deciding to hold off for a few months to get our ducks in a row and prepare to sell.  As president of my condo board, I had an AGM coming up and, after a year of many positive changes to our condo, I wanted to see my obligations through before leaving. 

I began staging the condo over the winter and put away some of my more unique art and spruced up with some new bedding and throw pillows.  We listed in January, prepared to stay on the market for a little while and, while I sent listings in our price range to Corey, I refused to look at any myself.  I knew how I would feel if I saw a fabulous house before we were ready to buy and I didn't want to tempt myself until we had sold. 

Shortly after our sale became firm (conditions were waived by our buyers) we decided to see four houses one evening.  We arrived home late and the next morning, I drafted an offer on our favourite of the four. 

This process rarely happens this quickly with buyers and some people assume that it was easier because I am a real estate agent.  This may be true in a sense because I have more awareness of what to expect in our price range and in the current market but I believe it has more to do with the fact that Corey and I both had very clear "needs" and "wants" which helped us to narrow our search rather quickly. 

Initially, our list looked like this:

Needs:

• Price (we wanted our mortgage payment to be similar to our current mortgage and maintenance fee total to ensure that we weren't overextending ourselves)
• Freehold (detached, link, semi or townhouse)
• Minimum 2 bedrooms
• Excavated Basement
• Neighbourhood (we were pretty general here and had narrowed our search to include several Toronto neighbourhoods)
• Backyard (even a small yard was fine but we wanted some outdoor space of our own)
• Parking for at least one car
• Not on a busy or main street

Wants:

•  Parking for at least one car
• A 3rd bedroom
• A large kitchen
• Central Air
• Not on a busy or main street
• 2 full bathrooms
• Detached
• 2-Storey
• Garage
• Deep lot with room to extend the house

We realized rather quickly that we had quite a few choices so we began to narrow our search further.  While I didn't mind the idea of permit street parking, Corey really wanted a parking space so we added it to our "need" list.  We also decided that we'd enjoy some quiet after living on a main street in our condo so we decided to only look at houses which were not situated on a main street.

These modifications left us with 4 houses which still matched our criteria so we decided to see them all.  They were almost all priced within about 10K (one was lower than the others) but they were spread over four very different neighbourhoods.  Here's what we found:                

1. The first house we saw was amazing. It was huge, located on an attractive cul-de-sac (a BIG plus for Corey, since he could already imagine our kids riding their bikes on the street!) and it backed onto a ravine... perfect for nature lovers like us!  The kitchen needed work but it was huge and I had to stop myself from imagining how I would renovate it while I was there.  It was our favourite house of the evening.              
2. The second house was not quite as large as the first house but it had a deeper yard.  The house had more charm (old architectural details) but it was less open-concept so the rooms seemed much smaller than the first house.  It did have some potential and I preferred the neighbourhood to that of the first house.  It did not have central air but was otherwise a decent option.            
3. The third house was detached (a huge plus for us) and priced a little lower than the others.  The layout seemed awkward to us and it smelled like cats.  Still, there was plenty of space on the main floor and several different rooms.  It had a garage (Corey loved that!) but there were several steep steps leading up to the front door.  I'll confess that I pictured my clumsy self with a stroller one day trying to figure out how to get a baby up to my front door without slipping.                      
4. The fourth house was in one of my favourite neighbourhoods.  I know house prices in this neighbourhood are expected to rise and there's plenty of green space around and almost a small town feel!  While the main floor was smaller that the other houses, the kitchen was huge and had space for a large island.  This backyard was my favourite of the four.  I was a little disappointed to learn that the basement was only partial (the front half of the house) and I felt vaguely uncomfortable while inside the house.  I'm not a superstitious person by any stretch but this house just didn't feel good to me.  That being said, I usually try to make decisions using logic.                               

We ended up choosing a house, sleeping on it and changing our minds.  Actually, I woke up to discover that Corey was sick and had stayed home from work.  "Great" I replied.  "Now I have time to draft an offer on that other house before I go to work!"  Luckily, Corey indulges me and happily supported me in making an offer on our second choice... which after some sleep, became my first choice.  Once Corey allowed me to show him some information on the neighbourhood, it became his first choice as well. :)    Note: Corey says I actually woke up and said "No, we're not supposed to buy that house.  We're making an offer on _!"          

Since we have purchased our house, I have stopped looking at other listings in our price range unless it has been for a client.  I have also told Corey that unless it's for work, I'm not going to search neighbourhood sales for at least a year since it's a good way to drive myself crazy.  Besides, there's no point in worrying about prices next year when we plan to stay in this house for at least a decade.                             

Of the four houses, can you guess which one we ended up purchasing?  I'll share the answer tomorrow. :)     

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Why You Should Care About Toronto Land Transfer Tax.

You may have already heard that Toronto's Land Transfer Tax (LTT) has been subject of considerable controversy.  For those of you who aren't sure what it is or what impact it plays on their real estate purchase, here's a little background.

Roughly translated, LTT is a tax imposed by the government and paid by the purchaser of a property.  Of course, we have tax breaks for many first time buyers but it is important to remember that the tax is calculated based on the purchase price of the property.  This minor detail makes a large difference to a family who has sold their condo for $400,000 and purchased a $900,000 house.  They will owe LTT on the $900,000 house, and in Toronto, they essentially have to pay twice.

How much is it?  This is a question I am asked frequently by clients.  It's actually not a mystery, as many people think although seeking legal advice is always best since there are exceptions.  The tax rates are shown below:


Provincial LTT

Amounts up to and including $55,000 -0.5 %
Amounts exceeding $55,000 up to and including $250,000 - 1.0 %
Amounts exceeding $250,000 and up to and including $400,000 - 1.5 %
Amounts exceeding $400,000 where the land contains one or two single family residences - 2.0 %


Municipal LTT

Single Family Residences containing one or two units:
Amounts up to and including $55,000 - 0.5 %
Amounts exceeding $55,000 up to and including $400,000 - 1.0 %
Amounts exceeding $400,000 where the land contains one or two single family residences - 2.0 %

All other Toronto Property:
Amounts up to and including $55,000 - 0.5 %
Amounts exceeding $55,000 up to and including $400,000 - 1.0 %
Amounts exceeding $400,000 up to and including $40,000,000 - 1.5 %
Amounts exceeding $40,000,000 - 1.0 %


In case you missed it, this means that when we buy property in Toronto, we essentially double our LTT.  This means that if you purchase a $500,000 home in Toronto, you can expect to spend about $12,200 on tax and if you purchase a $1,000,000 home, you can expect to spend about $32,200! We are the only city in Ontario subjected to this excessive taxation and it is simply unfair. 

The Toronto Real Estate Board has initiated a  Let's Get This Right, Toronto campaign to repeal this unjust tax.  Their two step approach suggests removal of the tax and better budget planning for the government.  Please visit their website to learn more and find out how you can help the cause with a simple email or letter or even just by sharing the site on social media. 

I have had clients who have said that the LTT played into their decision to guide our search to the suburbs but remember, this is not just a Toronto problem.  While city dwellers are paying the tax, long term consequences such as fewer people moving to the city (a lack of demand) could impact neighbouring housing markets as well. 

We're called "Toronto The Good" and we are generally fair.  We say "please" and "thank you," we give up our seats on the subway if we see a pregnant woman, we don't want a casino in our backyard.  We're practically a few steps away from prohibition... Okay, maybe not quite.  Still, we expect our taxes to be based on some level of fairness and we don't appreciate being treated like fools.  We're polite, not docile!  Let's do our part to keep Toronto affordable!

11 Apps to Help You Find the Perfect Home... and 5 More for After you Move:

It is a new era in real estate and both buyers and sellers expect to be better informed than ever before.  While a good Realtor can answer most of your questions, there's nothing like the Independence you feel when you have the information at your fingertips.  My list of Apps is designed for Toronto buyers but many are relevant to other cities and many cities have similar tools for their residents.

1.  Realtor.ca:  This one is probably obvious but it's nice to have the MLS content formatted for a smartphone.  It is now also available for your iPhone or iPad.  Ask your Realtor for more detailed listing information.

2.  Magic Plan: This app is so cool!  Not all listings include blueprints but buyers like to know if a room is the right size or if their dining table will fit in their new space.  This app creates blueprints from photographs!  It's slightly more complicated than that but only slightly.

3.  Zeitag TO:  This fun app allows you to see historical photographs of your future neighbourhood.

4.  Mortgage Calculator:  This comes with 7 common mortgages and amortizations for both Canada and the US.

5.  6 in 1 Real Estate Calculator:  Perhaps even better than the mortgage calculator, this app also calculates LTT (land transfer tax) as well as rent vs. buy scenarios.

6.  Walk Score:  This apps shows local schools, restaurants, parks and many more important neighbourhood amenities.

 7.  Tourism Toronto:  Great for those who are new to the city, this offers information on events, dining and things to do.

8.  Rocket Man TTC:  For those who use public transit, knowing that the buses run frequently in their new neighbour could offer great peace of mind.

9.  Wellbeing Toronto:  While it's not available for smartphones yet, this fantastic web tool allows you to view different Toronto neighbourhoods in terms of crime, demographics, health and more.  You can even check specifics such as voter turnout and library hours.

10.  Dictionary of Real Estate Terms:  Many of these are American and different markets tend to use slightly different terms.  For instance, Americans say "earnest money" but in Canada, we expect to hear "deposit."  This is a great way to stay in the loop.

11.  Home Tracker:  This app allows organized buyers to take notes when viewing listings.  They may also save information such as photos and map property addresses on Google Maps.

After you buy a home, you may be interested in the following:

1. inSured or My Home Scr.APP.Book: These clever apps help maintain an inventory (with photographs, serial numbers and appraisal information) of your valuables in case of an insurance claim.

2.  Home Design 3D:  This one is handy for those post-move renovations!

3.  Mike Holmes- Make It Right:  With tips from Holmes and tools to plan a renovation, this app should make a new owner feel a little more confident.

4.  HomeSavvy:  Keep your investment in good repair.  This app allows you to design a custom maintenance schedule based on the needs of your home.

5.  HomeStars:  While not a mobile app, this is a great website for those who need to find the right expert for home repairs.  As always, I recommend asking friends and family for referrals first, the rating system on this site is usually pretty accurate.

Swapping Roles From Agent to Seller: Week 1

It has been a week since we listed our condo for sale and, I'm gaining a whole new respect for my seller clients!  While I have experienced the process from the buyer's side, this is my first experience with a personal sale.  I hired a friend in the business to list my condo and spent some time staging and cleaning to prepare for showings.  Now I am hoping for the best.

I thought my readers might find it helpful to know my "to do" list prior to each showing.  When I list a client's home, I give them a similar list to ensure that their home shows well and I certainly hold myself to the same standards.

Before Each Showing:
-  Tidy, tidy, tidy.  This includes all personal items and valuables locked in the safe.
-  Vacuum.  This is necessary when you have a dog or are listing in the winter.  We are dealing with both!
-  Wipe surfaces in bathrooms and kitchen.
-  Clean those bathrooms.  Do not leave out your half finished toothpaste tube or a brush with clumps of hair.  Yuck!  Toilets should be scrubbed and sparkling.
-  Make the bed.  We don't pretend to be daily bed makers... Especially when Corey is working nights.  However, for the sake of selling our home, we are!
-  Take care of odours.  This includes opening and checking the fridge, the closet where we store dog food, the laundry hamper and especially the dog's bed.  I walk through with a bottle of febreeze and I light some candles in the kitchen and bedroom.  Lavender is nice and relaxing for a bedroom, while I prefer a Bath and Body Works candle that smells like fresh baked bread for the kitchen.  I do this with enough time that the candles can be put away right before a showing.
- Turn on our digital photo frame. While we keep our decor fairly neutral and remove many personal items during the listing period, we feel it doesn't hurt to allow buyers to see that nice, happy people live here. We have a small digital frame with a carefully edited selection of photographs which allows a small part of "us" to be visible.
-  Turn on the lights!
- Leave with the dog.  I love my dog and I know he's gentle when I'm around.  However, many dogs become fearful or aggressive when they perceive a threat such as strangers in their home.  Some sellers prefer to lock their animals in a small room or crate but I prefer to give buyers an opportunity to see a home without the distraction of noise or possible allergies.  Even those without pets should give buyers the privacy to fully explore their home by leaving or (at the very least) remaining in the back yard.

Does this sound exhausting?  Yes, it is but it's worth the effort to give buyers the best possible impression of my home.  I'm prepared for a long listing so I may be singing a different tune next month but for now, we're sticking to our list. :)

To view my listing, click here.  Or, enjoy my fabulous virtual tour.

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.

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.