The Duncan Fremlin Blog

January 21, 2010 - Big Day!

2009-11-11T09:29:15-05:00

I'm pleased to sponsor and promote a concert at Hugh's Room on January 21st, 2010 in support of Artscan Circle. Details will be included in the next blog entry.

This is a registered charity that contributes greatly to the betterment of this province and this country. The first paragraph on their web site reads: "The ArtsCan Circle is an independent, volunteer-run support group dedicated to linking creative artists with Native youth at risk in Canada. Our hope is to encourage self-esteem amongst Native youth in isolated communities through a cooperative exploration of the arts."

I like this for one very good reason. They don't travel to the north to simply bring money and things. They donate their time and resources to "encourage self esteem". Unlike many charities, it speaks to the ancient idea that you don't give a man fish to eat, you teach him how to fish. By visiting these remote locations with instruments and the like, they provide hope to young kids who otherwise might turn to nasty substances.

I just received an email from Carol Teal describing some of the activities that the group has been working on recently. Here are a couple of messages from the communities they've visited.

From the Principal of Missabay Community School, Mishkeegogamang:

"I am writing this letter to let you know how beneficial your program has been for our school. The week your team spent at Missabay Community School proved to be one to the best experiences for our students.

Your enthusiasm and variety of activities were perfectly suited to each individual student's age and grade level. The students were totally immersed in all activities, which showed them the joy that can be achieved through music and art. Many students were inspired by your program and are learning the benefit of cooperative learning and sharing in a very positive way.

This is the sixth time you have come to Missabay and each year the students look forward to your arrival. Again, I thank you for giving us the opportunity to experience your program and we look forward to your next vist.

W. Thorne, Principal"

From Destani Skunk, Brighter Futures Program:

"I would like to extend my thanks on behalf of the youth workers here in Mishkeegogamang. It was great to have you and your team, come in to spend time with the children who attended at our drop in centre. I am sure the kids enjoyed what they created with the arts and crafts, and the singing was awesome.

Last but not least, a big "Thanks" for the keyboard you donated to the youth centre, again I am sure the kids will enjoy learning to play the keyboard and creating wonderful sounds. I was glad to have the opportunity to meet you and work with your group and I look forward to seeing you in the near future.

Thank you,

Destani Skunk"

Efficient Communication

2009-11-10T09:24:00-05:00

Being in the public domain with my real estate web page, my music web page, my blog, my presence on various public web sites, my print and media advertising and on and on.....my email addresses are readily known and available to any and all. This means I receive 100+ emails each day, many of the spam variety. If you ever need anything lengthened or if you are looking for business opportunities overseas, call me. I'm in the know.

This makes me very conscious of what I send to my clients, both in terms of content and frequency. I pore over each submission and edit, only to edit some more, not wanting to waste words or space. However, as a consumer, I pine for the same effort from those who send information to me.

For example, there's a real estate referral company that has been trying to entice me to join their team and this guy is relentless. I can't take it any more and realized yesterday that I stopped reading the subject line months ago. Why I let it go on as long as I did is a complete puzzle to me.

So when I draft an internet newsletter or a snail mail newsletter, I think of companies like this and swear that I will never do this to anyone.

I have a long list of vital Realtors in my contact list and I can very easily click on my mouse and send them information on a property. However, they've learned about the listing from the MLS and don't need me to remind them it's out there. However, once in awhile (maybe 4 times in the past 8 years) there's a listing that isn't selling for whatever reason and so I have to come up with some new and different ways to get the word out. That's when I use the internet in this way. So, since these Realtors rarely receive an information email from me, they're more inclined to read it and consider the details of the property.

I'm working on fine tuning one more aspect of my email campaign, the subject line. I'm thinking this is almost as important as the body of the email. What is it's purpose? If I can communicate my message within the subject line, then there is no need for content in the body and that is my new goal in life.

Fantastic Business Ideas

2009-11-09T09:40:40-05:00

In my role as vice chair of ACCESS Community Capital Fund and former member of their Loan Review Committee, I've attended many interviews with aspiring business people who are searching for new funding to grow their business. Perhaps the most important question I pose to them is "where does your business come from?" and the second most important is "do you have a business plan to solicit more customers?". Most applicants don't know the answer to the first question and answer "no" to the second.

As a Realtor, or perhaps best described as a sole practitioner in real estate sales, I have to ask and answer these questions of myself often. It's perhaps the most urgent issue in making for a successful career.

I mention this because of a short but invaluable piece I read in today's Globe and Mail on page B7 by Harvey Schachter, the "Monday Morning Manager". He writes about a posting on allbusiness.com by Paul McCord on how to generate more referrals from existing customers.

In my profession, referrals are the be-all and end-all. That's all there is to it. Not to say there are not other ways to generate business but I suggest to any and all aspiring Realtors that if they do not have their referral business plan operating at warp speed, they will either not be success or will burn out (whatever comes first). I might even take this a step further and suggest that my dry cleaner, my accountant, my lawyer, my video store guy etc. would do well to heed this advice. On how to generate more referrals, Mr. McCord writes:

1. ASK!

2. ASK AGAIN!

3. REALLY ASK!

4. Define a good referral.

5. Prompt them.

6. Give them time.

7. Get introduced.

Seems simple but it's worth developing the habit.

Oh, one more thing. I find most are flattered to learn their referral is that important to you. Also, they are reassured that since you want the business enough to ask for it, they feel more confident that their referrals will be well cared for.

Once in a Lifetime Show

2009-11-06T08:38:00-05:00

Imagine walking into the 12th Fret Music Store on the Danforth some afternoon. There are a few people around. In fact, the store is almost empty. Then imagine Eric Claptan walks in with his guitar, followed by his bass player and drummer.

You watch them set up at the back of the store. Darned if they don't mingle with everyone including you. Eric to you "how's it goin'?" You chat a bit about guitars and why he's in town. He has a Coffee Time coffee in his hand. Then he opens his case and with his band, begins to play for you (and 9 other people) for about an hour.

This happened to me yesterday. It wasn't Eric Clapton. It was only the best banjo player in the world, Jens Kruger and his band, the Kruger Brothers.

They performed as the absolute professionals they are. That is, they put on a show as if it was in Massey Hall and the joy on their faces as they played was thrilling. How lucky was I to be there?

Here's a sample of their work:

Hammy Hamster plays The Four Seasons Centre for the Arts

2009-11-05T03:16:00-05:00

Yesterday evening was the longest evening in my life! Yes, I WENT TO THE OPERA!

This wasn't just any opera. It was The Nightingale by Stravinsky and the media raved about it. Apparently, according to the critics, it was even an opera the novice (as in me) would appreciate. What a pile of bull. It was a joke. Ok. It wasn't a joke. Let me put it this way. I DON'T GET IT! What's the appeal?

Let me put it another way. If Hammy Hamster were to star in an opera, it would be The Nightingale. Last night's show featured adults, waist deep in a water container on the stage, floating little boats with little puppets singing an inane story line that was translated above the stage for those of us who don't speak Russian.

So what is the connection to Hammy Hamster? The Adventures of Hammy Hamster was a children's TV show that ran off and on from 1959 to 1998, an astonishing record given the ridiculous premise (and that's what is shared with last night's opera).

As described on Wikepedia, "The program had human voices in sync to the actions of the live animals to give the impression that the creatures were going about on purposeful, intelligent activities. They lived on a place called "The Riverbank". The animals operated various artifacts including toy sailboats, cars, and even a diving bell. The voices were selected to reflect personalities of the animals." I'm sure Stravinsky didn't do this but the producers of Hammy's show fed the rodents peanut butter so they would move their mouths during the voice overs.

I've tried explaining this show to normal semi literate friends of mine and often they don't believe me. Ha! Check out this video and transpose the rodents with Russian royalty and you'll soon see why last night was slow torture.

Much ado about what exactly?

2009-11-03T10:04:42-05:00

The real estate industry has been under siege since I began selling in 1987.

The first big change that I recall was the advent of the Buyer Agency Agreement. This contract allowed buyers to select a Realtor of their choice to represent them in a transaction. It sounds simple enough by today's standards but when it was first introduced, the industry was freaking out.

In "the old days" before the Buyer Agency Agreement, the customer "was forced" to use the first agent who introduced them to the property, either at an open house or by way of a showing. Therefore, it they happened into an open house and the Realtor was sitting on their duff watching a baseball game, that was the Realtor who would be entitled to the buyer's end of the commission split and that was the agent who was most likely to negotiate on their behalf. Not exactly confidence inspiring stuff is it?

This stupid rule was worshiped by many within our industry. Now that it's gone, there's no doubt we're all much better off. The consumer now interviews and shops for a good Realtor much like they do when they select a lawyer and they are much better represented as a result. Also, the Realtors had to pull up their straps and become much better at their trade. If they wanted to succeed in this highly competitive environment, they had to offer added value to their customers. Many of us did just that and again, the consumer wins.

The other change that caused much distress within the industry was the internet of all things. Many feared and pronounced to their spouses and their creditors that "the sky is about to fall - we won't be needed any more". Of course, this proved to be utter nonsense.

There's a new fox in the real estate hen house and I can hear the frantic clucking within the industry as I write this. Again, many of my fellow Realtors are panicking at the potential "opening up" of the MLS. Read about it here.

I'm sure they worry about the consequences of being forced to give away the system (Multiple Listing System) that we've all paid dearly for these past many years. Relax everyone. It's been proved repeatedly that a little competition has only elevated our business to higher levels and this will no doubt be true again.

Those who use discount Brokerages already have access to the market they so yearn for. If you're a seller who uses a discount brokerage or if you're trying to sell independently, you can already reach the customers looking for a house. It's called the internet.

This is not to say there won't be dramatic changes in how the consumer is represented, at least some consumers. There will be much uncertainty within some of the industry in the months to come. However, for those who maintain the status quo, they will continue to be served by the most trained and highly skilled Realtors in North America and will be assured that they will get top dollar for their house, with virtually no risk on their part.

Looking for a dose of irony to start your day? Check out page B3 of The Toronto Star, November 3rd... top of the page is the headline "Toronto home prices to keep rising" and at the bottom, the headline "Realtors ready to yield ground on fees".

No one doubts that the MLS, in it's present form, has served home owners well and few will want to change that. Good MLS yields good sale prices. It's a simple as that.

Real Estate and Seniors

2009-11-01T11:28:28-05:00

Every time you turn around, there's an article, book or service being promoted to the community of senior citizens and their caregivers. It's really become big business and we're told that it's only going to get bigger.

It's a difficult market to communicate with in some ways. As long as a senior has good health and is active and involved in their day to day life, they have no real need for most of the products and services designed to help with the senior years. However, once the aging process really kicks in and they begin to slow down (and that can encompass all aspects of their life), they're less likely to want to pick up the phone and ask for help. Perhaps their health is failing or maybe they've lost a spouse and are afraid to make any major changes in their daily rituals.

The older they get, the less eager they are to make major lifestyle changes. I think this is one reason the so called Zoomer advertising model will not be as successful as they expect. It's the children of the senior citizens who will be most instrumental in dealing with many of these issues and they tell me, as their Realtor, that they need facts and solutions and they need them now.

This is a long winded way to tell you about the most useful publication for this demographic, "Help's Here. Resources for Seniors and Caregivers".

It's a small magazine, not fancy and glitzy like the Znaimer publication but let me tell you, it's full of very useful information that speaks directly to the families looking for creative solutions on how to deal with the concerns of the senior population and their kids.

For example, in this month's issue, there's an article written by Pat M.Irwin, president of Elder-CareCanada offering a creative idea on how to inspire someone to downsize.

I advertise in this free comprehensive publication and have had many opportunities to speak with the publisher and her staff. They impress me each time we communicate. They're very responsive. That is, they call when they say they will and their follow through is an inspiration to anyone who dreams of owning their own business. Consistency is their model in their dealings with me. They are upbeat and effusive and a joy to talk to.

More importantly, this is the go-to publication for information on these issues. They publish twice a year and they make the publication available at hospitals, pharmacy's, libraries etc. Being an advertiser, I also have many copies available for anyone who would like one.

Condo Fees in flux

2009-10-30T09:49:56-04:00

We had a surge, as in dramatic increase, in energy costs a few years ago. As I predicted here, the local condo boards had to address this added cost so they of course raised the fees. All of the condos I sold that year had received maintenance fee increases.

Within the last 30 days, I've had the pleasure of viewing three status certificates of good condominiums around town and was quite surprised by the results.

In each case, the projected condo fees for the next five years are scheduled to increase on average, at a rate of approximately 15% per year.

Some of this can be explained away by the urgent need to increase the contingency fund that was deemed too low by the Board of Directors (tough decision for a board to make no doubt). There will also be the added costs stemming from the Harmonized Sales Tax. In another instance, the costs of garbage disposal was going up quite dramatically so that of course had to be paid for from the maintenance fee.

Regardless of the reasons, and there will be no shortage of those in the months/years to come, there's no doubt that the cost of living in a condominium will be increasing steadily as the national cost of living increases and new buyers should take that into account before they buy.

I wonder if CMHC, the people who insure the mortgages on these condos, are also taking this into account. Somehow, I doubt it.

Another City Walk

2009-10-27T09:03:02-04:00

Over the years, in my quest to know more about the neighbourhoods I sell, I've been trekking the long streets that define who we are. So far, I've walked the Danforth, Queen Street East, Yonge Street, Kensington Market, Spadina Avenue and Queen Street West.

On the weekend, an old friend, circa 1966, was visiting Toronto and wanted to experience the music scene here. John Mabbott had a Hagstrom guitar back then and I, owner of a lowly Stella, was mightily impressed. He was the first musician I ever played with if I recall so in a way, he was my Pete Best.

Our stroll began at Queen West near McCaul and the plan was to head west until we stopped.

The Rex, a local jazz club, was a happening joint. The stage was covered with musicians and their little music stands with their little sheet music. In my little world, that can only mean music with no soul. On to the next club. The Cameron House. Now, there's a club with soul. The room has soul. In fact, it screams at you when you enter, "I'VE GOT SOUL!" As we walked in the door, the three piece band began.... Tall lanky guitarist/singer, dog house bass player (doubled on dobro) and old time honey tonk pianist (doubled on accordion) and wow, were they fantastic!

The band is called the Rattlesnake Choir starring (a man who I should have recognized since we've performed together before) John Borra. There was a fantastic keyboard/accordion player who's name I never caught but he told me in passing that he's played with various bands around town, including Blue Rodeo. The bass player was no slouch. The cost for this fine entertainment? They passed the jug. They play the Cameron every Saturday, 6 to 8.

With a happy helping of good acoustic music under our belts, we continued our journey. Stopped at the sex toy store (can't recall the name since I wasn't looking at the sign but you must know the one I mean) to watch "the ladies" dance and gyrate in an attempt to lure us in. Being the wiley old buggers that we are, we resisted their tempting offer and continued walking. The street scene was right our of the Rocky Horror Picture Show as in, lots of young people dressed up as gargoyles and freaks and the like. Did I miss something? Did they change Halloween to the third weekend in October? I really must listen to the news once in awhile.

The Swan, local oyster bar/restaurant beckoned as we walked by so we ate heartily and socialized with an old friend in the process. Damien is the proprietor of The Swan. I met him years ago when he was waiter #1 at Cafe La Gaffe in Kensington and 12 years ago, he took the plunge and opened this fine restaurant in a strip of Queen Street (across from 999 Queen, the old mental hospital in fact) where there were no other fine restaurants. This establishment was quite instrumental in changing the area and he is to be congratulated for his courage.

Satiated with good halibut and good wine, John and I are now in the final stretch. For a couple of old 60 year olds, it's getting late and I'm fading fast. It's 9:00 pm for crying out loud. I can't stay up all night.

My plan was to take him to the Caddie (Cadillac Lounge), home of Whiskey Jack the first Sunday of every month. However, the sandwich board in front of the Gladstone advertised another band I've performed with often and they're one of my favourites, Mr. Rick and the Biscuits.

As it turns out, John couldn't have picked a better Saturday to walk the strip. This band was also in fine form and we finished the night listening to their version of the gospel classic, Down By The Riverside. Wow. They brought the house down.

Queen West at night? Not a finer street in the city.

Real Estate and the Self Employed

2009-10-26T06:51:47-04:00

When I first began selling real estate in 1987, I rarely encountered a self employed person who could buy a house. Unless the individual had a few years of success (accompanied by income tax assessment notices) under their belt, institutional money was not available to them. Banks would not lend them money for a house. (They wouldn't lend them money for anything else come to think of it.)

I don't really consider doctors and lawyers to be in this category. Banks generally have an open-vault policy in regards to these professions.

Retailers and service providers on the other hand were to be avoided. Occasionally I could find a private lender who would work with an entrepreneur but only if the down-payment was substantial. Even then, the interest rates charged were prohibitive.

Then came the 1990 recession. Our local economy was transformed from a manufacturing economy to a service industry based system and all of a sudden, the thousands of unemployed factory workers were seeking other ways to make a living. I don't have the statistics at my fingertips but anecdotally, the clients and friends I worked with at that time were finding lower paying, part time work and many were exploring the notion that they could perhaps begin their own business.

Gradually, the banks followed suit and the lending climate changed quite dramatically, Now, the self employed still have to provide income tax assessment notices but there's much more money available to them should they decide to buy a house or condo. In fact, it appears the dramatic changes in the auto industry and the energy sector (to name two) are forcing us to redefine our employment priorities once again and thankfully, this new lending climate will enable many of these people to enter the market. Nowadays, many of my clients are self employed and there is no longer a wall of fear preventing them from accessing money.

Self employment and real estate are intertwined in one other important way of course. I wonder how many new business ventures are funded by borrowing against the equity in a home.

Oh, one more thing. I did some digging and discovered that the Martin Prosperity Institute (Rotman School of Management, U of T) estimate the average entrepreneur makes three attempts at setting up a business before he/she succeed. That's a lot of failed businesses folks.

Mandatory Energy Audits on Resale Homes? Not quite.

2009-10-21T16:09:44-04:00

There is new legislation about to receive royal assent and it will have some affect on the real estate industry. It won't be as onerous and intrusive as we first thought because as with most new legislation, the final product was watered down and the government caved into special interest groups.

So, here's the deal:

Anyone making an Offer of Purchase and Sale on a house has the right to receive an energy audit from the Seller. We don't yet know what the details are but they should be available soon. I've written here about the energy audit I had on my last house so I have a pretty good idea what's involved. They're very valuable and should be mandatory.

I, as a Realtor in the transaction will be compelled to perform certain duties relating to this audit and provide relevant information but even this is yet to be determined.

However, the most important part of the new law in the immediate future is the right of the Buyer to "waive" his right to receive this audit. Think of this as a "notwithstanding" clause as in a dumb clause.

In other words, a Seller will offer his/her house for sale but to avoid spending the few hundred dollars for the audit, will only consider offers from buyers who are willing to waive their right to receive the audit. I'm drafting the new clause as I write this. My message to Sellers will be, "if you have the time and money, have an audit performed. If the audit reveals faults that can be easily corrected, have the work done it will make your home more sale-able and more valuable."

Few will make the effort.

Banjo Show Review

2009-10-18T14:02:13-04:00

Steve Martin, comedian and banjo player is touring the U.S. and Canada to support the release of his only banjo CD, "The Crow: New Songs for the Five-String Banjo". He played Roy Thompson Hall (of all places) last Thursday and I was in attendance.

I have this "thing" about the sound of a show. Technology being what it is, I fully expect most shows I pay a lot of money to attend will sound as good as it does in my CD player at home. Sadly, on this night, the sound I heard was disappointing. Steve does not have a hard driving style, nor does he use a particularly good banjo (he played the same banjo when we jammed on a movie set a few years ago - see photo here) so it came out mushy with many overtones. A banjo sounds good when each note is heard distinctly and this did not happen on Thursday night.

Steve is a funny guy. He was often funny during the 90 minute show. I wasn't expecting hims to dazzle with his banjo skills. Only those who devote their entire lives to an instrument can expect to dazzle and he's been too busy making movies and being funny to achieve that level of prowess. As it turns out, I was right. I did expect his band to be awe inspiring however but they were never allowed to burn it up much so even they were a bit of a let down.

With taxes and parking, the show cost most attendees (of which there weren't many) approximately $8.32 per song. Of the 16 tunes he performed, 14 were banjo songs he wrote himself. Generally speaking, they were pretty good songs but none were memorable. As a banjo player, I value a song that excites me and inspires me to run home and play along. Only two songs that night inspired me in that way and he didn't write either. Judging by the stone cold faces on the RTH crowd around me, that pretty much sums of the success of the show.

Steve joked that a tour like this with a bluegrass band is only costing him $12,000.00 but I'm sure there's more truth to this than most realize. The Hall was half or more empty. Except for the few musicians I recognized in the crowd, I'll bet most were simply Steve Martin comedian fans who had perhaps never before heard music like this. Except for the two songs I mentioned, I doubt he converted any of these over to the bluegrass cause. He's a good banjo player but not a great banjo player. The band, Steep Canyon Rangers was mostly good but were great on two tunes, one featuring their fantastic and unconventional fiddler on a sizzling version of Orange Blossom Special. The other song that brought the crowd to its feet was a stunning a cappella version of the gospel song "I Can't Sit Down". Unfortunately, this was not good enough to satisfy a rather un-country, un-bluegrass crowd.

If this show had been in a smaller venue such as the Cadillac Lounge, it would have "rocked". Beer would have made sure of that.

Cash Backs? Smells dangerous to me.

2009-10-13T16:02:42-04:00

I've had some clients this year who have taken advantage of a cash back program offered by some lenders. It's none of my business how a client finances a purchase but it is my job to understand the borrowing practices of the lenders and offer my opinion if I think it's worthy.

I've been bothered by the "idea" of a cash back. In principal, the Scottish genes in me yell out, "if you don't have the money, don't buy the house". However, I needed more information before I went off on a tangent so I asked my mortgage guru, Lois Volk to provide some information. Here is what she wrote:

"There are 2 ways to purchase a home without a cash down payment, i.e. by either borrowing the down payment or arranging a ‘cash back’ mortgage.

Cash Back Mortgage

· The maximum mortgage amount is 95% with a 5% cash back

· The insurance premium is .15% higher, i.e. 2.90% instead of 2.75% for a 25 year amortization

· The minimum term is 5 years

· The mortgage rate is posted, not discounted – currently approximately 5.5% for a 5 year term vs 3.99% discounted.

· The minimum beacon score is 680

· The lender advances the 5% required for the down payment to the lawyer on the closing date in addition to the funds for the mortgage

· The cash back funds can, but do not have to be used for part or all of the down payment

· The client must have 1.5% of the purchase price for closing costs

· If the mortgage is paid off before the maturity date a pro-rated amount of the cash back has to be repaid.

· Cash back mortgages are not offered by all lenders and guideline can vary.

Borrowed Down Payment

· Part or all of the down payment can be borrowed from a line of credit, personal loan or credit card

· The mortgage rate is discounted

· The insurance premium is .15% higher than for a cash down payment

· The payments on the borrowed funds must be included in the client’s debt/income ratio (TDSR)

· The minimum beacon score is 680

· The client must have 1.5% of the purchase price in non-borrowed funds for the closing costs

On Facebook? Beware!

2009-10-09T09:14:29-04:00

I read a column recently written by a young journalist who tried to un-subscribe to Facebook. After many days of deletions and unsubcribing, he still wasn't successful. I've never tried to do this myself so I don't know the difficulties he encountered but his story sounds believable.

My conspiracy complex goes into high gear when I read about the internet social sites. I'm sure the "establishment" is still out to get me. (This is simply a 1970 Richard Nixon flashback, please ignore.)

Recently, I met a guy at a party who told me his business isn't doing too well. Not long after that, we became friends on Facebook. Within moments, I figured out why his life was tanking.

He plays on-line video games and boasts about his scores on Facebook.

Yup. I have this guy figured out. Oh, and by the way, the entire Facebook world has this guy figured out. Does he really have enough spare time to play video games? Perhaps this spare time could be better spent revamping his business plan? Looking for a job?

I guess he doesn't make the connection and his poor judgment is just another reason his business is failing.

I've used Facebook to market special properties, gigs and myself of course. I've also used it to share a witticism or two. Beyond that, I'll use the phone. When I hang up, the conversation ends. Pfffft. That's it. Much better.

Confusion over electrical renovations

2009-10-07T08:40:38-04:00

It's reached the point where I don't rely on the seller to tell me about the details of the renovations they've paid good money for. It's not that they lie to me. It's that they're often uninformed about the extent of the work performed.

Case in point. Two properties I recently listed and sold had had their electrical systems upgraded. In both cases, I asked "has the knob and tube been removed?" and in both cases, the Vendor was certain beyond a shadow of doubt that it had. After all, they had spent $10,000.00 so it MUST have been totally updated.

As it turns out, both homes had at least 50% knob and tube in the walls. Yes, the home owner had replaced much of the wiring, had upgraded the service from 60 amp to 100 amp and had installed circuit breakers. However, the electrician had not rewired the house.

Rewiring an older home is expensive, intrusive, dirty and time consuming. Most electricians I've spoken with do not like to do this kind of work. It means crawling around a dirty spider infested attic (electricians are afraid of spiders). It involves breaking holes in the walls and stringing new wires through old dirty joists (electricians don't like to get dirty) and it involves patching these holes and then repainting replacing the wall paper and yes, electricians don't like this work.

Electricians are a sensitive group, sort of like a cult. They're a privileged lot with a finely tuned sense of entitlement. Not unlike teenagers come to think of it.

There are a couple of ways to find out what's going on with
the electrical system. Have the property inspected by a qualified electrician, preferably one not suffering from arachnophobia. The other is to have the home inspected by a qualified home inspector (one not so inclined to suffer from arachnophobia or mysophobia).

They'll know what the deal is.

Obligation of a Realtor

2009-10-06T11:14:36-04:00

There are many advantages to working with a Realtor when buying or selling a home. One of the less known facts is perhaps one of the most important and that concerns the Realtor's obligation to disclose.

Of course, we have a general obligation to exercise care and skill on behalf of our clients. There is a code of conduct we must abide by and this duty only makes sense. After all, we experts in our field and if we can't be relied on, who can? We must also ensure that the information we provide is complete and accurate. On this front, we are accountable.

But, if we are aware of a flaw with the property or a possible future problem, we must inform our client. Suspicion of water damage? Yup. It's out job to learn what we can about this, give it to the client and let them decide what to do about it. Dead body under the basement floor? Yup. The client will want to know the source of any future odor or fly infestation.

I wonder how many Realtors are aware of this obligation to disclose.

Mortgage Insights

2009-10-05T10:32:00-04:00

I don't think I've published the full text of an article in this blog before but this one is worth the read. It is an article in the Globe and Mail dated September 30th, 2009. The author is Paul Brent.

It quotes the mortgage professional I turn to when I need help, Lois Volk. I also encourage my clients to call this person before they begin their search for financing and it pains me to see them call inexperienced mortgage specialists and sign up without knowing all the details.

The article refers to ING mortgage rates and my clients and readers know about my experiences with this organization. For those who don't, I do not recommend and ING mortgage, regardless of the alleged savings.

September 30, 2009

GlobeandMail.com

Haggling over your first mortgage

Today's low rates make buying a house tempting but the stakes are high and the learning curve is steep

You've been to the open houses, explored various neighbourhoods and perhaps even checked out local schools before settling on the home of your dreams. Now it's time to negotiate your first mortgage, a process which done right, could save you tens of thousands of dollars.

Today's low interest rates have made buying that first home easier but it can also breed complacency. Rates will rise eventually so purchasers need to not only find a place they can afford, but ensure that they have negotiated the best mortgage terms possible and educated themselves on the document they are about to sign.

When it comes to mortgages, the first lesson is that not all mortgage lenders are created equal. That become quickly apparent to Naysan and Nahid Hariri, both 28, who are mortgage shopping for a $438,000 home now being built for them in Richmond Hill, Ont. “I found that a couple of institutions were a number of (interest) points higher than others,” he said.

The Hariris also found that the big banks, which tend to have higher posted rates than smaller financial institutions, were reluctant to lower their rates. “My understanding with banks is that if you have services with them, they tend to work out something better for you.” Because first-timers typically have less money parked with a particular institution, they tend not to have the leverage to demand lower rates.

The stakes and the learning curve are higher for first-timers.“Usually they are borrowing a lot more money and there is quite a lot to learn,” said Lois Volk, a 22-year mortgage broker with Invis in Toronto's trendy Beaches neighbourhood. “If they don't know, certainly we go through everything: make sure they are comfortable with the concept, what their payments are going to be, work through a budget if necessary and help them consolidate debt if necessary.”

But before couples even start house shopping, they should meet with their bank to obtain a pre-approval or, at the very least, a rate guarantee, said Martin Beaudry, head of lending underwriting at ING Direct.

Mr. Beaudry said that the difference between the big banks and independent firms is rate transparency. “The big banks start very high with their rates and you need to negotiate the rates down and sometimes they have as much as 1.5 per cent leeway on their posted rates while small institutions like ING Direct will post their lowest rate.”

ING Direct's most popular mortgage term among its customers is its 5-year fixed rate, currently sitting at 3.99 per cent. Five-year, fixed rate mortgages for the big banks range between 5.49 and 5.55 per cent, according to Globe and Mail data. The lowest rate found was 3.94 per cent offered by Meridian Credit Union.

Crunch the numbers

Obtaining a pre-approved mortgage forces new buyers take a long, hard look at not just how much house their bank says they can afford, but how much debt they are willing to shoulder to get into home ownership, combined with whatever else they owe. Be aware that your comfort zone and the lending institution's are not necessarily the same. Banks are in the business of maximizing earnings which could translate into a mortgage which you can afford – on paper at least – but one that leaves little money left over for fun indulgences.

The Hariris, who both work for IBM Canada, decided to determine their debt threshold before sitting down with a financial institution. “The first thing you need to do is figure out your monthly budget,” said Mr. Hariri. “My wife and I sat down for months in advance to see exactly what we can afford, what is comfortable for our lifestyle.”

On their own, they also managed to say the 20 per cent of the purchase price for a down payment so that they don't have to carry the extra expense of mortgage insurance from Canada Mortgage and Housing Corporation(CMHC).

Naysan and Nahid Hariri, who have been shopping around for the best mortgage rate to finance their new home, are seen here on the site of their future home, which has yet to be built.

Financial institutions say that mortgage borrowers should devote no more than 30 to 32 per cent of their combined gross incomes to mortgage payments, property taxes and heat. “CMHC will also allow you to go up to 40 per cent or sometimes slightly higher if you have no other debt,” said Ms. Volk, the mortgage broker.

As ING Direct clients, the Hariris are leaning towards taking a fixed rate mortgage with that bank. While financial experts say that over the long term borrowers do better with variable rates, new buyers often opt for the peace of mind that fixed rates offer.

And while the Hariris are not using a mortgage broker to help them hammer out the best deal possible, it is an increasingly popular option. Last year 33 per cent of purchasers used mortgage brokers, up from 27 per cent the prior year, according to a CMHC survey.

Do some research

Mortgage brokers, who are typically paid on a commission basis by lenders, may save borrowers some money on the rates and terms they negotiate, but Ms. Volk says a large part of their role is educating people. “The main things to watch for is terms and conditions of the mortgage.”

With the recent drop in mortgage rates, Ms. Volk says many people have been dismayed to find they cannot take advantage of potentially huge interest rate savings because the “break fee” to get out of their current mortgage is prohibitive. Interest penalties for getting out of your mortgage early vary and may take the form of a three-month interest payment or interest rate differential charge. Make sure to get your lender to spell out the break fee to you, and get it on paper.

Some lenders offer “blend and extend” options which can allow some borrowers to get at least some of the benefit of lower rates. Typically, the penalties for breaking the original mortgage are included in the blended rate calculation so borrowers are not faced with an upfront charge.

Pre-payment privileges are also something first-time buyers should seek for two reasons: Because they are typically early in their careers, they can reasonably expect higher take-home earnings through promotions or switching employers for a better paying job and are able to make additional payments to the mortgage. As well, the interest on mortgages is front-end loaded, meaning that the majority of payments in the early years of 25-year amortization mortgage go to interest, not principal.

The math

Here is why shopping around for the best rate possible is no trifling matter. Take a half-point interest rate difference on a 5-year, $500,000 mortgage with a 25-year amortization period. With a 5.75 per cent rate, the mortgage holder would have monthly payments of $3,125.11 versus $2,979.59 at 5.25 per cent. That doesn't sound like much until you run the 5-year amortization schedule. At the higher rate, the buyers made mortgage payments of $187,506.60, with 72 per cent of that, or $135,086.29, going towards interest payments. At the 5.25 per cent rate, the mortgage holders not only pay $178,775.40 less, but 68.8 per cent or $123,032.28 less goes to interest and more to chipping away at the principal. The difference? A total of $8,731.20 less in payments - $12,054.01 in interest saved and an extra $3,322.81 to the reduction of the principal owed.

The Canadian Association of Accredited Mortgage Professionals has a variety of calculators on its website, including a prepayment calculator, maximum mortgage calculator and a rent vs buy calculator.

Romantification of Travel

2009-10-02T09:19:00-04:00

I've written here before about a middle aged couple who sold there house a couple of years ago for a huge amount of money and hit the road. I don't know them all that well but they have included me on their travel emails and I've read each one with great interest.

For the most part, their travels to India, Southeast Asia, the southern United States and now Spain have sounded wonderful. However, with a bit of "reading between the lines" and a whole lot of "imagining what it must really be like", I've concluded this nomadic lifestyle is not for everyone.

They haven't settled in any one place for any length of time. When they do return to Canada, their emails are pleas for temporary accommodation such as house-sitting opportunities and the like. In situations like this, "you gets what you pays for" and I can't imagine these so called opportunities have always been wonderful.

Their many months traveling the back roads of India involved a lot of intestinal discomfort (as in very sick for along time) and if that's someone's idea of a good time, good on them.

Their emails paint each experience in the most positive light but the last one from Spain really does seem wonderful given all the sunshine and fresh food.

"This is our last week in Orgiva. The first two weeks were
very hot summer weather and then the temperatures dropped to a very
comfortable level. It is sunny and warm today, with lots of clouds,
and there is thunder rumbling...this lovely Spanish-style house is
cosy...

We know the village well now. We do the 20-minute walk to town every
few days or so to buy food. Every Thurs is market day with the local
farmers and hippies selling their wares. We combine market day with a
visit to the local thrift shop which is run by a women's group (made
up of mainly foreigners) with all monies going to help battered women.
One of the volunteers is a young woman from Oakville, Ont. Orgiva has
two health food stores. We know where to buy local fruits and
vegetables in the village. There are two small supermarkets that carry
a large amount of British food b/c there are so many Brits living
here.

We have found a favourite inexpensive Spanish red wine. We have been
enjoying some wonderful French cheeses and a local Spanish cheese. We
add local olives to our wine and cheese and (rediscovered & updated to
whole grains) British Ryvita crackers for our late afternoon
'indulgence' as we sit on the terrace admiring the view of the
orchard/garden and the Sierra Nevada mountains behind.

For dessert, after our mostly vegetarian dinners, we have found an
excellent store-bought flan, and dark chocolate with almonds. I tried
making homemade honey vanilla almond (no sugar) ice cream but it
didn't turn out well. Perhaps it was using goat's milk instead of
cow's milk that made the difference. No one else liked it so I had to
eat it all -- all by myself!

We know how to pick and dry almonds, when to pick pomegranates, how
to seed them and the best way to eat them, and exactly when the figs
are ready for eating right off the tree. We are still trying to figure
out how to pick the walnuts b/c they are covered in a black ink which
stains everything in sight! We have huge respect for 'water' after
overseeing the weekly acequias water irrigation allotment with
Antonio, the Master of the Water, and his one-eyed dog.

We both enjoyed reading Chris Stewart's "Driving over Lemons" and "A
Parrot in the Pepper Tree" which are all about his life as a Brit
settling and farming outside of Orgiva with his wife and daughter (who
was born here).

We have met several British people who have made a life for themselves
here...We met one fellow and his little 6-year-old daughter, Carlotta,
as we walked to town recently. Carlotta speaks German b/c her mother
is German, French b/c her father is French, English b/c they were
living and working in London, and Spanish b/c she is going to school
in Orgiva for the year. She seems to have very little confusion with
the separate languages. She spoke English to us and French to her
father as we walked along. We also met in town a young woman from
Montreal (very few other nationalities besides Brits have settled
here) who lives in a yurk outside of town with her French partner and
two-year-old son, and no electricity or running water. We talked with
her for quite a while...so interesting the choices people make...

We have explored some of the surrounding small Moorish villages, and
hiked some of the Sierra Nevada mountain ridges and valleys with
English friends (avid 'walkers') who came to stay with us...

Word on the Street? Nuit Blance? How good is this?

2009-09-30T09:31:35-04:00

Do you need more evidence that this is the most exciting city in this country? How about Word on the Streetlast Sunday. Thousands of book lovers descended on Queen's Park and area (too large to see it all) and spent hours wallowing in all things to do with reading. Book worms and nerds everywhere!

There was ol' fuzzy hair herself, Ms. Atwood, holding court to her hoards of followers (she should start her own religion and write a new bible and call it the Book of Dry Humour). That broad can sure attract a crowd. Not to be outdone, I watched our own Julia Child, the one and only Elizabeth Baird cooking in front of a small but indifferent crowd who had very little else to do on this lovely sunny day.

Sorry. My cynicism gene reared it's ugly head and I very quickly was lulled into a state of boredom after about 15 minutes of walking around. People were lining up to get an autograph from some author who wrote a book. What's going on here? The line up for some kid's TV character was even longer.

Mostly though, it was tent after tent after tent selling books that no one else wanted and lots of magazines (that's not really true).

Then, I saw this young girl sitting by this statue of a soldier on a horse (King Edward VII in case you were

wondering) and realized that the event was really quite special and worthy of all the attention it gets each year.

The next big event that will take over the city in a very good way is Nuit Blanche. It's really quite remarkable how many citizens leave the comfort of their homes and wander the streets city wide looking at "art". Yes, they're actually venturing out of their comfort zone for "art". Amazing isn't it?

Interpersonal Skills and Success

2009-09-29T06:49:00-04:00

I wish our high schools would teach this stuff. It's more useful than calculus.

I'm not sure if I've seen a good definition of success. The problem is, it's a very personal thing. Many so called successful personalities are not successful by my definition but are very successful in their own minds.   The best definition I've found is from the Concise Oxford and it reads.."accomplishment of end aimed at".

I think of this because I read a most brilliant article in the Globe and Mail a few weeks ago. The heading is "Marks of a leader: cultivating relationships".

The author describes a meeting he had with the managing partner of an international law firm. At the end of the meeting, the lawyer walked this writer to the elevator, rode down to the front door of the office building and saw that he got away ok. The author went on to say, after many many years, "his courtesy continues ot make an impression on me".

Jim Gray, the author of this article writes that "the higher you go in any organization of value, the better the interpersonal skills of those you meet. And that's important because no one achieves great success, and maintains it, without the help of others".

He lists four things leaders do to make them who they are:

1. Leaders Give Back. This means they volunteer and contribute. Simple but powerful.

2. Leaders Express Appreciation. This can be a simple thank you or a special phone call to congratulate someone on a promotion.

3. Leaders Stay Connected.  They answer their e-mails. Phone calls seldom go unacknowledged. The author writes "the lower you go down the corporate food chain, the more e-mails go unanswered. By failing to respond, recipients are nevertheless sending a message - about themselves."

4. Leaders Create Supporters. Joe Stumpf calls these supporters "advocates". They're out there singing your praises and in my business, these fine people are gold and quite literally, the finest human beings who have ever lived.