Downtown Condos

by Darrin DeRoches June 12 - 18, 2014

This past week the condos at the old Royal Connaught went up for sale and a few other projects also made some announcements. The Tivoli released a picture of their renderings of the upcoming project and the tower seems pretty big. The Artizen condos beside the Lister Block also put up a sign to announce their project. Both of these projects are still far away from selling and are announcing their project because the Royal Connaught was on sale.     My client is very interested in buying condos in Hamilton since we’re named number one city to invest in. For years, people have bought condos as an investment in Toronto and their condo market is so huge that some fear that the capability to make money in prospecting condos has come and gone. This has then brought attention to the Hamilton market, but after this weekend I wonder if we get it. The idea of buying a condo below market rate and then reselling it in 18 months to two years when the project is completed only works if the original price is low enough and the resale market raises enough to make a profit. If you were to buy a condo at $390 per sqft and then sell it two years later at $410 dollars per foot, then on a 1000 sqft foot condo you can make $20,000. This speculating buying process helps the condo builder’s ability to sell all the units and get the project built and at the same time allows for investors to make a better return on their money than sitting in the bank. The problem is that the builder has to be willing to sell at the right price and the market has to continue to rise. This is why it is called speculating.     The Connaught, Tivoli and Artizen condos are all big projects and will have to sell a lot of units. Collectively they will bring in over eleven hundred units to the downtown plus the other projects that are being built will bring a huge influx of people living in the downtown in the next two years. The first question people ask is “who is buying these units?” and the answer is simple – everybody. I spoke with young and older people who have the desire to buy condos and live downtown. The downtown area is changing in the right direction and the Royal Connaught will be the turning point.     Sales are the answer to everyone’s questions and sales are happening. Condos have been in the downtown for many years and different projects have had different levels of success. Over the next six months to a year, you will see the success of these projects selling. The next 18 months to two years you will then see the influx of people moving into these condos and downtown will have the biggest growth it has seen since the Royal Connaught was first built. V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.

A Piece Of The Connaught

by Darrin DeRoches June 5 - 11, 2014

This Saturday, June 7 2014, the sales for the Royal Connaught condo will be available to the public at 9am. Over 3,000 people have signed up on their mailing list and I am curious to see the response to the sale. Personally, I will be there with a client looking to snap up several units but there are only 122 available in the original building with more to come in the future towers. They have not set out prices or announced the amenities and all of the focus is on one demo suite and the grand lobby. I believe this is the best project in the city for today and the future and it will be very interesting to find out how it will be received. The property has sat empty for over a decade and in this time we have had a few condo projects built with varied success and failures.     The Core lofts were the fastest selling condo when they came to market and made a huge splash, and then a few years ago it made another interesting mark when the condo owners had to pay out 20 to 40 thousand dollars per unit in a special assessment. The Witton lofts are the most recent and they were also well received and are a great success.     I predict that the Royal Connaught will be an overwhelming success and only hope that everyone gets a fair chance at buying a unit. Some want them as an investment and others as a piece of history. This sale of our downtown will set the standard for our future condo development.     There are other projects happening and selling but all eyes are on the Royal Connaught. The last special project of this magnitude would have been the Piggott building in the 90’s. The building is grand and well–appointed with well thought out units. Unfortunately, the builder went bankrupt and the receiver came in and sold the units under value. They were surprised how quick all of the units went and took their money and moved on. These same units have increased over the years but never reached their full potential.     The pricing on the Royal Connaught will be important not only to the condo market itself but the future of downtown. You only get one shot at getting it right and hopefully they will not undervalue or overvalue the units. The units will be from 550 to 1050 sqft and you have to decide what is the best size and value when speculating on a project that is 18 months from completion.     The risk is there but so is the reward. I will be there with cheque book in hand making the decision for my client to buy one, two, three or even four units if it all makes business sense. If it does not add up then we would have to walk away and wait for the next opportunity, but when can you own a piece of Hamilton history? Saturday morning in downtown Hamilton, that’s when. V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.

Renew With Someone New

by Darrin DeRoches May 29 - June 4, 2014

One would think being loyal to a lender or insurance company would bring the best results in premiums and rates but you are totally naive to think this. Every time your renewal comes up for your mortgage or insurance policy, change companies! I have been with CIBC for over thirty years and that means absolutely nothing when my mortgage comes due. They have two of my mortgages and that fact also means nothing to them. Insurance companies tell you about these multiple savings and I just questioned them about my renewal and their solution was to increase my deductible by $2500 to five grand and they would give me a 4 per cent deduction or about $130 a year or just about $10 off a month to stay with them. Remember they are already over charging me and have three houses, a commercial property and vehicle insured so their solution is to up my deductible so that if I actually ever use the insurance, I will be out $2500 more and they will drop my premium by $10 per month. So if I was to do the math, that would save me about $1,300 in ten years so if in the next 20 years I would save the increase of $2,500 in deductible to a plan that is already overpriced on just one property of several they are insuring.     There was a study done to prove that staying with your mortgage company upon renewals is the worst case situation. They may give you a so–called discount but if you took that same mortgage to a broker they will get you a better discount and it costs you nothing but time and energy and that is the real issue. Taking the time and energy to send some paperwork and make a few calls to a broker is why most people just renew thinking they are getting the best deal. In some cases you may only save a little and in some cases a lot. Why? The time you renew certain lenders may have some great deals to “drum up some business” and if your timing is right you can save a ton of money. Most people are afraid that the bank or insurance company will not cover them while they shop around but it only takes broker hours to find a better deal. A couple of days if it is a busy time.     I have to get on the phone once I finish this article and find a new broker for my insurance since their solution of increasing my deductible is not only insulting to my intelligence it made me realize how much I hate dealing with insurance – but it is time to make the move. First time buyers get better deals than anyone with loyalty so if you are up for renewal give us a call and we can guarantee you a better deal with brokers we deal with. It takes a little time but it will save you money! V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.

Pre-Approval

by Darrin DeRoches May 22 - 28, 2014

The infamous line that “my clients are pre–approved” holds a little weight in a typical negotiation and might sometimes help you win the sellers over, since you are truly able to buy their property. The funny thing in today’s market is that pre–approvals are a thing of the past and most people are not aware of it. A few banks still do pre–approvals, but most do not spend the time and effort to do so. In the past, you would provide the mortgage broker with all of your information and they would basically work the deal to get you the most money that a lender would “approve” you for. The lenders realized recently that they were doing all of the work twice and in a lot of cases, they would “pre–approve” you even though you would go with another institution. In today’s market, the pre–approval is more like a general over view of your income and major debts to give you a so–called ballpark rough idea of how much you can afford.     The problem arises when you ask the client to describe their income and debts and in most cases they leave out a couple of crucial items. It goes back to the old saying “buyers are liars” but this seems a little harsh. All banks have a tab on their websites that say “how much can I afford” where you list your basic information. The problem is that you want to buy a home that you probably cannot afford, so if you adjust things by a little — maybe you can afford it. You then get the idea in your head that you can afford a property in the $400 thousand dollar range and in reality, you cannot even be approved. So how can this be?     Everyone has different credit scores, issues and income so there is no secret sauce to figure out what you would be approved for until the broker inputs all your information. The problem is that this is only a general scope of what you can afford. If you are thinking of buying an income property or a second home, then other rules fall into place and you may not be approved. This is causing a lot of deals to fall through since you believe the client or the mortgage broker but the bank has the last word and they will not commit until you send them a “real deal”. So sellers have to be aware that the best deal on the table may not be the highest offer but the one where the buyer can actually close the deal. If you are considering buying in the coming months, make sure that your credit and debts are all in order so that you can get approved. Your agent will have to know even more information about your financial position to be able to sell your deal to a seller, since the phrase “don’t worry they are pre–approved” holds no weight in negotiations. V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.