Real Estate News

Why a buyer's real estate agent matters even more

noreply@blogger.com (The Barrington Team Blog) — Sat, 04 Dec 2010 12:39:00 +0000

When you use an agent to sell your home, you may agree on a commission as high as 5 per cent with the proceeds split two ways. One half goes to the agent who works for you and the other half is paid to the agent who finds the buyer and helps negotiate the deal.
Now that the federal government has brought more competition to buying and selling a home, there are more ways for you to sell a home by yourself. That means the role of the real estate agent acting for the buyer will become even more important to you and the buyer.
Most people understand that when you sign a listing agreement to sell your home if you sell during the term of the agreement, you owe commission to that agent.
It’s a little different for when you’re buying a home. Here, you agree to work exclusively with one agent to find the property you want. The agent protects your interests and negotiates the best price for you. This becomes important if you are involved in a bidding war because you’ll need an objective third party to guide you, to make sure that you do not get too emotional and end up overpaying for the property.
In exchange, you agree to pay this agent a fee, typically a percentage of the sale price. For example, if the homer costs $200,000 and you agree to pay your buyer agent a 2 per cent commission, the cost is $4,000. Usually, the agent will get the commission from the seller. If the seller refuses to pay, then the offer will be readjusted to $196,000, and the buyer will pay the fee directly.
When interviewing buyer agents, be sure to ask for references and then follow up and call them. If you are nervous about signing the agency agreement, you might want to consider signing for a short term, let’s say 14 days, to get a feel for the kind of service your buyer agent will provide. You must understand though, that if your agent shows you a home during that 14 day period that you later buy, you will owe commission.
Sellers should make the effort to co-operate with buyer agents as well, even if they are trying to sell their home by themselves. One of the main reasons is that when a potential buyer approaches a seller directly, the seller has no idea whether this buyer is really looking for a home or even has the financial ability to afford the home. They may in the extreme case be a thief who is only looking to see whether they can come back to this property at a later time. When you work with a buyer agent, you know that they have already qualified any potential buyer so that you have the comfort of knowing that this buyer is in fact ready to buy and more importantly, can afford your home.
In addition, because the buyer agent will protect their buyer by conducting the appropriate due diligence on the property itself, there is less chance that the buyer will discover problems after closing. This means that the seller will not likely be sued by the buyer after closing. This means peace of mind for the seller after closing, as well.
There are advantages to both buyers and sellers in working with buyer agents. Understanding this will make your next home purchase or sale decision much easier

By Mark Weisleder

Housing becoming more affordable

noreply@blogger.com (The Barrington Team Blog) — Mon, 29 Nov 2010 12:42:00 +0000

In its quarterly housing affordability report, Royal Bank of Canada said the cost of home ownership moved lower for the first time in more than a year over the summer, as low mortgage rates and prices made it easier for buyers to pay for their homes.

But while homes were more affordable they were still more expensive than long-term averages in many markets, suggesting “greater than usual tensions exist for Canadian home buyers.”
“These tensions are unlikely to derail demand for housing in the near term but will act as a restraint on growth in market activity going forward,” said senior economist Robert Hogue.
It’s the first time affordability has improved since mid-2009. The RBC Housing Affordability Measure shows the proportion of median pre-tax household income required to pay the principal and interest on a mortgage, property taxes and utilities. The figures assume a 25 per cent down payment and a 25-year loan at a five-year fixed rate.
In the third quarter, a two-storey home ate up 46.3 per cent of the household income of a typical Canadian family, down from 48.9 per cent in the second quarter. The long-term average – going back to 1985 – is 43.3 per cent.
The bank said the improvement could be short lived if mortgage rates begin to move higher to reflect an improving economy.
“Higher mortgage rates will be the dominant factor raising homeownership costs over the medium term, although increasing household income as the job situation continues to strengthen in Canada will provide some positive offset,” he said. “We expect housing demand and supply to remain mostly in balance, setting the course for very modest home price increases.”
Ontario: “RBC’s Housing Affordability Measures fell between 1.3 and 2.4 percentage points, fully reversing the increase in the second quarter. Meanwhile, existing home sales ended their earlier precipitous slide by sustaining three straight gains (on a seasonally adjusted basis) from August to October. This recovery confirmed our earlier expectation that the slowdown in activity in the spring and summer largely reflected various transitory factors – including the HST and changes in mortgage lending rules – that brought demand forward to the start of this year. With the market now back in balance, the recent softness in home prices will likely prove to be a healthy recalibrating following a strong rally.”
By Steve Ladurantaye
Globe and Mail Update

Resale Housing Market Figures For October 2010

noreply@blogger.com (The Barrington Team Blog) — Wed, 03 Nov 2010 14:21:00 +0000

GTA REALTORS® Report Monthly Resale Housing Market Figures
TORONTO, November 3, 2010 -- Greater Toronto REALTORS® reported 6,681 sales
through the Multiple Listing Service® (MLS®) in October 2010.
This represented a 21 per cent decrease compared to the 8,476 sales recorded in October
2009. Through the first ten months of the year, sales amounted to 75,582 – up one per cent
compared to the January through October period in 2009.
“The annual change in sales and average selling prices has been quite uniform across the GTA
and by property type as the market has balanced out from record levels of sales in the second
half of 2009 and first few months of 2010,” said Toronto Real Estate Board (TREB) President
Bill Johnston.
“The composition of GTA home sales does differ depending on location. Condominium
apartments accounted for 42 per cent of total sales in the City of Toronto and almost 60 per cent
of sales in TREB’s central districts,” Johnston continued. “In regions surrounding the City of
Toronto, in contrast, low rise home types accounted for almost 90 per cent of transactions.”
The average price for October transactions was $443,729 – up five per cent compared to the
average of $423,559 reported in October 2009. The average selling price through the first nine
months of the year was $430,802.
“The average selling price in the GTA has continued to grow relative to 2009 because home
ownership has remained affordable,” said Jason Mercer, the Toronto Real Estate Board’s
Senior Manager of Market Analysis. “A household earning the average income in the GTA can
comfortably afford the mortgage payments associated with the purchase of an average priced
home.”
“The outlook for mortgage rates and income growth over the next year is favorable. The
average home selling price could increase moderately next year and remain affordable for the
average GTA household,” continued Mercer.

Home sales rise slightly in September

noreply@blogger.com (The Barrington Team Blog) — Sat, 16 Oct 2010 11:26:00 +0000

Canada’s housing market is showing signs of stabilizing at what economists believe is a more sustainable pace.
Home sales in September rose 3 per cent from a month earlier, while prices slipped back to year-ago levels.
Sales were 19.8 per cent lower than last year’s record-setting September, though they were the best sales numbers the Canadian Real Estate Association has posted since May. CREA said that sales were similar to September 2008, 2007 and 2006, adding that the decline appears worse than it actually was because of last year’s record setting month.

“Record level sales activity late last year and earlier this year is expected to further stretch year-over-year comparisons in the months ahead,” the national association said in a release.

The national average resale price “continued to stabilize” in September, it said, at $331,089. That was 1.8-per-cent higher than September, 2009. Last May, the price peaked at $346,881.
“At $331,089, the national average price remained on par with where it stood one year ago,” CREA stated. “September marks the second consecutive month in which average price remained even with year-ago levels.”

New listings remained near the levels of August, down 15 per cent from April’s peak. The number of months of inventory in Canada, on a seasonally adjusted level, stood at 6.6 months at the end of September. That’s how long it would take to sell all the listed houses at the current pace of sales.

“After a seasonally uncharacteristic spring and summer slump, Canadian home sales appear to be stabilizing at a new lower, but more sustainable level,” said Bank of Nova Scotia economist Adrienne Warren.

“We expect interest rates will stay lower for longer, underpinning steady housing demand through the fall, contingent on at least a modest pace of job growth.”
Mortgage rates are at all time lows, but CREA chief economist Gregory Klump said an uncertain economic picture will temper sales for the rest of the year.

“Since Canada’s interest rate outlook is tied to a weakening outlook for economic and job growth, consumer sentiment will remain under pressure until economic prospects improve next year,” he said.

“In the meantime, many Canadians will be focused on paying down their debts in anticipation of interest increases next year. That means the continuation of low and stable interest rates is unlikely to cause housing demand or prices to take off, especially since the hangover from accelerated home purchases earlier this year is expected to persist for some time.”
Toronto-Dominion Bank economist Shahrzad Mobasher Fard noted that the pullback in five-year fixed mortgage rates, by 0.5 of a percentage point since July, is “expected to stimulate loan taking activity and hence, existing home sales activity, relative to the status quo.

“This, together with recent developments in existing home sales activity, signal the likelihood that we are closer to a balanced market position than previously envisaged,” Ms. Mobasher Fard said in a research note. “Some firming up in existing home sales and prices may consequently be in sight. Going forward, downside pressures such as the decelerating pace of the economy, weak prospects for employment and income growth, and rising household indebtedness will limit Canadian existing home sales activity.”

STEVE LADURANTAYE — REAL ESTATE REPORTER
From Saturday's Globe and Mail
Published Friday, Oct. 15, 2010 9:29AM EDT

GTA REALTORS® Report Monthly Resale Housing Market Figures

noreply@blogger.com (The Barrington Team Blog) — Wed, 06 Oct 2010 10:08:00 +0000

GTA REALTORS® Report Monthly Resale Housing Market Figures
TORONTO, October 5, 2010 -- Greater Toronto REALTORS® reported 6,310 sales
through the Multiple Listing Service® (MLS®) in September 2010.
This represented a 23 per cent decrease compared to the 8,196 sales recorded
during the same period in 2009. Through the first nine months of the year, sales
amounted to 69,069 – up four per cent compared to the first three quarters of
2009.
“The level of sales in the second half of 2010 has been lower, representing a
balancing out period following record levels of sales in the latter half of 2009 and
first few months of 2010. We remain on track for one of the best years in history
for existing home transactions in the GTA,” said Toronto Real Estate Board
President Bill Johnston.
The average price for September transactions was $427,329– up five per cent
compared to the average of $406,877 reported in September 2009. The average
selling price through the first nine months of the year was $429,657.
“Resale homes in the GTA remain affordable,” said Jason Mercer, TREB’s Senior
Manager of Market Analysis.
“It is important to consider the positive impact of declining mortgage rates over
the past two decades. Simply considering home prices relative to incomes does
not allow for an accurate analysis of affordability,” continued Mercer. “The share
of average household income going toward a mortgage payment on the average
priced home in the GTA remains within accepted lending guidelines. This is why
the average home selling price has continued to grow.”

Homes are unaffordable (oh and p.s. that whole bubble thing ...not happening)

noreply@blogger.com (The Barrington Team Blog) — Mon, 27 Sep 2010 16:14:00 +0000

Economists are undoubtedly glass-half-empty types. Many have been calling for a Canadian housing bubble for a while now. And it hasn't happened, so people have quieted down. An article posted in the Globe and Mail on Thursday was entitled "Bubble or not, Canadian market in for rude awakening". That is backpedaling if I ever heard it: "Okay, okay...so there might not be a bubble. But we're still screwed." Come on.
Essentially the author, David Rosenberg, indicates that whether or not a housing bubble occurs, the Canadian economy will not continue to experience bolstering growth. According to Rosenberg in the Globe and Mail:
By my calculations, every basis point of the Canadian economic recovery was the result of the boom in the housing sector. That goose is no longer laying any golden eggs.
Okay, so he's right. Although there's a ton of projects launching this Fall, Canadians builders' intentions to build are decreasing. But that doesn't mean the housing market or the Canadian economy as a whole is going to plummet-- it hasn't so far.
And you'd think that would be music to the ears of economists. But, according to the Globe and Mail today:
In its quarterly housing affordability report, [RBC's] economists said that while the number of sales fell significantly in the second quarter, fewer listings meant prices did not decline.
Okay, so prices didn't decrease like everyone is expecting (hence the bubble expectation). But instead of celebrating the strength of the market, the media has framed the results as "Housing becoming less affordable" instead.
You can't have it both ways. If prices dropped substantially, houses would be cheap...but then we would have experienced a bubble. If prices remain stable, then affordability will erode (especially as the Bank of Canada continues to raise rates).
In fact, in an article published by the Financial Post, a senior economist at RBC said that housing affordability remained "within a safe range". So...I don't see what the issue is. This is a good news story in my opinion. Housing prices are stable, and affordability is still within a reasonable range.
It's just media hype and scare tactics, yet again. For some reason, readers like pessimistic stories.

Kiyoko Fujimura
Buzzbuzzhome Corp.
September 27, 2010

Housing market not in free fall, report argues

noreply@blogger.com (The Barrington Team Blog) — Thu, 09 Sep 2010 11:44:00 +0000

John Morrissy, Financial Post · Wednesday, Sept. 8, 2010
OTTAWA -- Canada’s cooling housing market continues to put the brakes to residential building plans in Canada, although the
slowing trend in no way signals a U.S.-style housing free fall, the Conference Board said Wednesday.
The Ottawa-based think-tank weighed in on the housing-bubble debate on Wednesday, after Statistics Canada released data showing
the value of building permits for residential construction fell for the fourth straight month in July.
The 2.4% decline, to a monthly rate of $3.5-billion, follows similar data showing housing starts and resale activity in Canada
declining for months now, along with reports arguing that Canada’s housing market is a bubble waiting to burst.
Not so, the Conference Board of Canada argued in a report Wednesday.
“The housing market has lost its lustre. No doubt about it,” said Mario Lefebvre, the centre’s director for municipal studies.
“However, this will not lead to a free fall for Canada’s housing market. This country will not experience home-price declines to the
tune of what we have witnessed in the United States over the past few years.”
Signs of a slowdown were unmistakable in Statistics Canada’s report. It showed weakness in residential permits was much more
broadly based than in the nonresidential sector, with declines registered in six of 10 provinces, said Scotia Capital economist Derek
Holt.
Yet, he added, the report “is directionally in line with expectations for softer housing markets,” and that the number of residential
permits “nonetheless remains 31% higher than a year ago.”
Mr. Lefebvre conceded in his report that the next few months will be weak, thanks to a slowing economy, the arrival of the
harmonized sales tax in Ontario and B.C., declining consumer confidence, European debt worries and a jobless recovery in the U.S.
At the same time, home prices now average more than $300,000 in Vancouver, Edmonton, Calgary, Toronto, Ottawa and Montreal
— far above the $150,000 to $200,000 historical average — according to a recent report from the Centre for Policy Alternatives
Canada’s cooling housing market continues to put the brakes to residential building plans in Canada Mark Blinch/REUTERS
which said those markets have all the hallmarks of an “accident waiting to happen.”
But Mr. Lefebvre argued the country will only see a pause in home-price growth, with some possible small declines in a few markets.
Mr. Levebrve said prices have held up despite declining resales because those sales “are coming off incredibly high levels in most
markets — levels that were simply not sustainable.”
The board said it does expect housing starts to decline. But like the resale market, this will mark a return to more normal levels
rather than a collapse in the market, which, in the case of the U.S., was the result of laws that allow mortgage deductibility for tax
purposes and the “ring-fencing” of mortgage debt, which prevents lenders from pursuing other assets of a mortgage holder, the board
said.

Tough New Rules for Home Buyers Announced Today

noreply@blogger.com (Angela Wood) — Tue, 16 Feb 2010 19:13:00 +0000

Rules tightened for home buyers

February 16, 2010

THE CANADIAN PRESS

OTTAWA—Finance Minister Jim Flaherty is tightening mortgage rules to crack down on speculators and discourage homeowners from taking on too much debt.

He is responding to growing concerns that Canada’s housing market is overheating, although he stresses that there is no bubble in Canada’s real-estate market — yet.

“There’s no compelling evidence of a housing bubble, but we’re taking proactive, prudent, measured and cautious steps today to help prevent a housing bubble,” Flaherty said Tuesday.

The finance minister says all borrowers will need to meet stiffer criteria to take out mortgages. In order to qualify for an insured mortgage, borrowers will have to meet the standards for a five-year fixed-rate mortgage — up from the current standard of three years.

He’s also raising the down payment that borrowers must pay for speculative investments. If prospective home buyers want to purchase a property where they will not be living, they will have to come up with a 20 per cent down payment, Flaherty said.

“We’re not aiming here at investment properties” such as rental units, he said. “What we’re getting at is the speculation in multiple-condo markets, in particular.”

And he’s imposing tighter restrictions on how much money people can borrow against their houses. Instead of being able to borrow 95 per cent of the value of their property, the limit will now be 90 per cent.

“This will discourage the kind of mortgage refinancing that can create unsustainable debt levels as interest rates go up,” Flaherty said.

“We are encouraging people to build equity over time, using home ownership as an effective way to save, rather than a vehicle for quick cash.”

The new rules are expected to come into force on April 19.

Economists have advised the minister to be stricter on who can get new mortgages, but they’ve also warned the government not to put on the brakes too strongly, in order to preserve the fragile economic recovery.

“These measures may have some stabilizing effect on the housing market,” Flaherty said. “Stability is a good thing for a consistent economic recovery.”

The Bank of Canada has been warning for months that homeowners should ensure they can absorb an increase in their floating-rate mortgages once rates start rising, likely as early as this summer.

Contact The Barrington Team today for more information
on the new rules and how they will effect your home purchase
and for your Strategic Buyers Guide
E: info@TheBarringtonTeam.com
Douglas Barrington, P:1.866.949.3684