Quality Selling Fast

by Darrin DeRoches September 27 - October 3, 2012

Fall is officially here and it is starting to get cold but Hamilton’s real estate market is getting hotter by the minute. We should all know by now that we are number one in Canada and Ontario for real estate and investment (if not hit up viewmag.com and look at my past articles) but all I see around the city is “sold” signs. I am getting calls about properties even after we have a conditional offer with people hoping the deal falls apart so they can jump in and scoop it up. This is not just happening in one part of the city, it is happening all over.     One agent listed a property in Rosedale area with three bedrooms, garage, driveway, deck, steel roof, new windows, new kitchen and 2 baths. I am familiar with the property. Since I was doing a market analysis for a property I am listing it was a great comparable. I called the agent who informed me that the seller had already purchased a new home and wanted a quick sale – so they decided to list at $264,900. They put the property up on the market in the morning and within 9 hours it sold for over asking. Since I knew the agent, I had to ask if they had priced it low to get multiple offers? He stated it was priced to sell fast since the client had already bought and did not want to wait to sell. This only confirmed that my new listing can ask even more than what the seller was thinking.     Later in the week I was talking with a colleague who had a property sell in Ancaster. It was priced over a million dollars but sold within days for top dollar. It was a beautifully built builder’s home and worth it’s price tag but to have a home over million dollar sell that fast was impressive. The common thread in both of the properties – Quality.  If you have a property that is in good shape, and priced right, it will sell fast. There are other homes in both of these neighbourhoods that have been listed and sit on the market, but properly marketed homes, staged and priced right are blowing them out of the water.     So if your property is worth 100 thousand or over a million dollars, consider the time it will take to properly market the property and the rewards you will reap in time and money. Take a little time to do the staging, cleaning, painting etc. Since the market is moving fast it will be time well spent. You can only make a first impression once, make it count and you will sell your home fast and you can then spend your time counting the extra money you made on selling your home in a hot market. 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 mail@uniquerealty.ca.

Your Fifteen Minutes

by Darrin DeRoches September 20 - 26, 2012

Fall is just around the corner and the casting calls are coming in. We had our first episode debut this week on the W networks’ My House Your Money  and we received two new casting calls this week.      The first show is a new show with Property Brothers Drew and Jonathan who are looking for a couple who have found their dream home, but find themselves scrambling to put their current home on the market. Are you stressed about viewings & deadlines? Does your old home need a face-lift to make it more appealing to buyers and maximize its value? Let their team of design experts help speed up the sale and get you into your new home. Families moving within and around the Toronto area are invited to discuss the possibility of obtaining a renovation completed on their current home.     The second show is a new program called: Inside Outside Upside! From the producers of Sarah’s House - Inside Outside Upside! is a new HGTV series currently looking for homeowners who have recently purchased their dream home and need help fixing up their existing property before it goes on the market. They are looking for couples located in the GTA (Greater Toronto Area) who have a minimum of $12,000 to put into interior and landscaping renovations and are available to go through renovations in September/October. Participants will receive a sizable amount of product and donated labour for participating on the show. Participants must be willing to appear on air.     If you or someone you may know is interested in one or both of these show just give us a call or email and we can answer all your questions and put you in touch with the right producer to make it happen for you. Filming a real estate TV show can be a very fun and insightful time. The excitement and exposure can also help the resale of your home. They use the top designers and production people to create an amazing end product that will definitely put more dollars in your pocket when selling. We enjoyed filming our episode in and around Hamilton and there is no better way to create a buzz about a property than filming a television show and being able to put the stamp of their designer on your listing.     We also have a close friend who just shot a pilot real estate show produced / directed by Mike Holmes about renovating the space of a single father to set up their place for their children. When this pilot gets picked up they will be looking for single fathers looking to renovate.     So tap into the magic of television and take advantage of all it has to offer. Your home will be the leader in the market and you will get top dollar! Give us a call or email for more information. 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 mail@uniquerealty.ca.

Number One Again

by Darrin DeRoches September 13 - 19, 2012

Hamilton has been named the top city in Canada to invest in. Hamilton has attracted more industrial and commercial development than any other city in Canada over the past year. The Site Selection Magazine analyzed projects with at least one million invested and at least 50 new jobs created or at least 20,000 sqft of new construction.  I will now include a typical email I received after writing about the accomplishments of Hamilton:     “Hey Darrin, enjoy your column, especially the recent one on REIN’s selection of Hamilton as the top investment market in Ontario for the next few years. First I need to check some facts with you. I read recently, I think it was in the Downtown BIA newsletter, that Hamilton had been picked as number one in Canada. Was that last year? Were we not number one in Canada this year, but still number one in Ontario? Can you clarify this? Secondly, and I’m going to be a bit of a skeptic here, but don’t take that personally – I’m skeptical about everything. I’d be curious to know what cities had been picked by REIN in the past, and did those cities actually experience substantial growth and increased market values in the ensuing years after they were picked ? Thanks for shaking the Hamilton pom poms. Regards, Mike”     This email is exactly what I would expect after writing about we are now number one in Canada not just Ontario and, yes, we beat Quebec City who have 16 projects and also that little town down the road called Toronto with 15 projects. We had 20 projects over a million dollars in the last year and we are on track to have a great year with Navistar and the downtown hotels and condos.      So to clarify our recent accomplishments we are number one in Ontario for the top place to invest in according to REIN’s data and we are number one in Canada for the place to invest according to Site Selection Magazine.      We have all the infrastructure, highways, railways, ports, airports, in place to grow inside of our city’s boundaries to become a force to be reckoned with. Stop living in the shadow of the city down the road because their tower isn’t even the biggest in the world anymore.      I do not blame Mike for being a skeptic and I do not take it personally but the city has to start realizing what we have before someone comes in and buys it all up. If you look at what other cities have accomplished by moving forward instead of dragging their feet, you will see the rewards.     Brantford’s casino has proven its worth and we should consider our opportunities. The harbour is the next jewel to be reckoned with and let’s keep the ownership as local as we can. Invest in your own real estate market before outsiders buy it all up and you miss the boat. 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 mail@uniquerealty.ca.

Picking Up More Steam by Darrin DeRoches September 6 - 12, 2012 First bread, now auto parts – Hamilton business parks are picking up some steam. It was announced today that Navistar, which is International Harvester, is bringing a parts depot to the Redhill business park across the street from Canada Breads new plant. It is planned to be up and running in 2014 and will replace their present plant in Burlington. The plant will be 250,000 sq. ft. and will bring 50–60 jobs. This very company left Hamilton years ago and the fact that they are returning is the big deal behind this development.     The mayor was quoted “To have this company return to our community is another major step in our continued renaissance. It also demonstrates that the investment this Council made in our Economic Development function was money well spent as it continues to provide measurable returns in non–residential assessment and jobs.” To put this quote in layman’s terms, it is good to see the city actually doing their job. The Economic Development has been doing an excellent job by moving fast and not allowing the councilor’s time to screw things up by grandstanding and prematurely letting the cat out of the bag.     The NHL and the placement of the new stadium for the Tiger Cats are prime examples where the past and some present councilors put their agenda and egos before the needs of the city. They spent more time getting press and puffing out their chests than actually doing their jobs and they screwed it up. The Canada Bread development was all done before the councilors were even told about it. They had a meeting, gave them all the information and asked them to vote. This is the way it should be done and this is why we have these developments.     The developer of the project, Mr. Joe Hamadi, stated “On Friday, May 4th we requested a meeting with the Mayor, City Manager and Senior Staff. That meeting was convened on Monday May 7th and a pre–consultation meeting for the project was held with Senior City staff four days later. This is clearly a municipality that wants investment and can deliver service.” This quote says it all and does not have to be deciphered as a politician’s quote does. Taking care of business is what the business world wants, not a dog and pony show. The city responded in a businesslike manner and nobody was scared away from grandstanding in the media. Take a second to close the deal – then tweet about it to your heart’s content.     These developments are bringing jobs and people to our city which creates a strong real estate market. We have a great base to build on and it seems that city hall is finally getting it right. I hope they are learning from their recent success and we will be making the right choices for our future. If they pick the right company to run Copps and Hamilton Place, future hotels, condos and maybe even a NHL team may come out of this decision. These developments impact everyone's taxes, equity etc., and if they keep going in the right direction we will all be winners! 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 mail@uniquerealty.ca

To Buy Or Sell First

by Darrin DeRoches August 30 - September 5, 2012

To buy or sell first? That is the question. Usually I would always tell a client to put their house up for sale first and then begin looking at possible homes in the market. I have a great house in the Gage Park neighbourhood ready to go on the market but we are waiting till mid-September to list the property since there are absolutely no desirable properties on the market for my client to buy. We have searched three different areas that they would consider moving to and not one property comes even close to their wish list. Therefore we have to come up with a new game plan.     We met for lunch this week and after a long conversation we have laid out the perfect plan for today’s market. First my client is meeting with a mortgage broker and their bank to set up “bridge financing’ which is exactly what is sounds like. This line of credit is basically a mortgage that will bridge the time it will take to buy a new home and sell the old home. We want to have our money straight so when a quality property comes on the market we can make a strong offer with no conditions and successfully acquire the property. We will likely be facing competition and I for one do not like to lose, so with our “bridge financing’ in place we can make an offer most people cannot compete against.      The second part of the plan is to have the system set up when a new listing comes on the market we are able to be the first one to the door. Speed is of the essence and we put in place a couple of things which enables us to do just that – first people in with an offer ready to go.     The last part of the plan is to have their house ready to be put on the market the second we have a new home secured. The pre-planning, pictures, marketing, signs, internet ads etc. have all been set up and only need a push of the button and a phone call or two to have their property on the market within minutes. This will show the sellers that we are not only ready to buy but their property is on the market, priced well and ready to sell!      The fall market is coming fast and will be hot. As a broker you must be ready for anything and with these clients we are not just ready – we are going to knock it out of the park. The market changes daily and you have to be ready so you not only get top dollar for your property, you will have bought your dream property. My clients will be sitting in the back of our company limousine writing the offer with no conditions beating all others to the door before they even realize it was on the market. Everyone else will be out in the cold when they cannot find a suitable property in September while my clients will be enjoy the holidays in their new home. 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 mail@uniquerealty.ca.

Hamilton Is Number One!

by Darrin DeRoches August 23 - 29, 2012

This is not just a fluke but a second year in the number one spot for the best city to invest in all of Ontario. Who is number two? Who cares? We are number one! The Real Estate Investment Network of Canada considers a great deal of factors to come to this determination. The biggest indicators are Real Estate and Jobs and our future looks pretty bright in these important factors.     R.E.I.N. founding partner Don Campbell states “known formerly as a hard–working steel town, the city has quickly shed this image in the eyes of potential investors – as indicated by the record breaking building permit values Hamilton has experienced in recent years” He also went on to talk about the potential of the city and why high tech jobs will come to our city. R.E.I.N. believes we are good enough to be number one for a second year, so it is about time for us to start tooting our own horn.     Twitter explodes every time a new food truck rolls into town or new artists step onto James Street, but we need to be promoting our city for more than this. By the way, I follow all the food trucks on twitter and loved the chicken poutine on Dirty South this week and I have supported artists for 20 years – my point is we need to promote our business (jobs) and real estate to people outside of our city. We have to stand up a boast a little.     I’ll start. Tonight I saw a promo for season 2 of My House Your Money which featured my episode the DeRoches family episode #29 Tuesday Sept 18 2012 at 7:30 on the W network. We shot the show a couple of months ago in and around Hamilton. The crew was very impressed with the city and kept asking about the real estate and our “cool” streets. They went on and on about having an amazing lunch at the Bread Bar on Locke and this is coming from the “hipsters” from Toronto. They keep calling me looking to shoot another episode in our city but it’s hard to find families who are willing to be on camera.      Our city has so much to offer and we need to work it all together and promote everything. Locke, Hess and Augusta streets, waterfalls, Supercrawl, Ticats, Bulldogs, Innovation Park,  top hospitals, farms, airport, food trucks, film and animations studios, busy water port, well priced properties, parks, Mohawk, McMaster – you name it, we not only have it, we have the some of the best! So stand up Hamilton and say it with me – “We are number one.”     The phones have already started ringing from investors outside of the city and they will continue up to next year when we go for the three peat! So start blowing your horn Hamilton and when they come here for a new high paying job and buy a reasonably priced home let’s take them to Art Crawl and hit up a food truck – I’ll be there. V

Breaking Up Is Hard To Do

by Darrin DeRoches August 16 - 22, 2012

Breaking up is hard to do. Well, not really. In today’s world, it seems that breaking up is the easy part. Settling the assets is the real hard part. Divorce was the big thing in real estate a couple of years ago, but more and more people are buying houses without the marriage part. So when the relationship fails, who really gets the assets? If you are in the process of a separation, one of the most important things to do is “keep up the status quo”.     Separation is always hard and it can get pretty nasty, but keep in mind your financial position. You can always hate each other later; take care of your assets now. First thing’s first – make a plan. If you want to keep the house, talk with a broker to assess the value and he or she will be able to recommend a good mortgage broker who will be able to refinance the property and one party can “buy out” the other party’s half. If this does not work, you can start by getting separate bank accounts and keep paying the bills equally until one party is able to establish credit to be able to refinance the property. A third option is to sell the property and divide the assets.     Most people are usually separating over money issues so the best option is to sell but this also brings in problems with renting, schools for the kids etc. The best plan is to keep things as normal as possible and combine all three options. Separate your money and accounts, establish separate credit scores and keep paying the mortgage – jointly – until a time when the financial picture is better. At this time both parties may be able to purchase new, yet smaller, properties that will work for everyone. It may sound crazy to work together with a partner who you obviously do not like anymore, but the downside is huge for everyone involved. If children are involved, you are going to be paying support anyways so why not use that money to “support” your biggest assets and move forward separately but with a common goal – good credit, home ownership and secure financial future.     Common law and child support will usually override any other squabbles you will have so why not take care of your home? A good real estate broker along with a mortgage broker can sit down and help both parties settle their assets and they can even bring in credit councilor to aid in the process. Once you have come to terms with the reasons why you are separating, sit down with a cool head and move forward with a strong financial outlook. You’d be surprised how much money you can save in the separation if you can keep things moving for the short term and stay amicable. You have a whole life ahead, so enjoy your financial future. You can still hate on your ex once it is all settled and you are enjoying your home – not your ex! V

Know Your Market

by Darrin DeRoches August 9 - 15, 2012

Real estate listing has been low for the past couple of months. This week a client of mine called about a property in the west end and, after looking on our system, I could not find it. I proceeded to check the e–mail to see if I had the wrong address and once confirmed, I checked again – still no listing. I did a history check on the property and even looked at the old agent’s current listings – still no new listing. I finally went on the MLS system and found the listing. It was listed with an out of town agent. That may seem to be no big deal but in the end it may have cost the seller ten thousand dollars or more. I am not knocking on an out of town agent but after talking with the seller and other agents about the property, it became very apparent that the seller would have made ten thousand more. If it starts to sound like sour grapes since my client did not have a chance to bid on the property – it isn’t. It was not a case of “you snooze you lose” but rather a case of an out of town agent not realizing the local market conditions.      The property is located in the west end of Hamilton which presently has a shortage of listings. It was priced under $200,000 which makes it very attractive to a large amount of buyers. It was listed on the weekend in a different real estate board, not Hamilton. So the only way to know about the listing was on the MLS or driving by the sign. The seller had a couple of showings and received an immediate offer $9,000 under asking.     In the meantime, myself and a couple of other agents showed the property only to be told an offer had been accepted. Again no sour grapes, but the agent did not give the property proper exposure and then accepting an offer under asking – lost the seller a lot of money. I spoke with the agent and the seller and asked to be informed if the original offer falls apart to call us since we would be willing to make a strong offer immediately.      I had to ask the owner how she selected the agent and she told me it was her daughter’s friend. I told her it was hard to find her listing and she told me the agent had it on the Hamilton system but it was not. I was tempted to explain to her that I and the other agent I spoke with would have offered full price or more to secure the property. It was not my place to explain the mistakes made and the reality of making more money but it should teach us a lesson. Friends are friends and business is business.     So if you are looking to sell your property and get top dollar for it, consider using a broker who works full time in your market and understands the present market conditions. In this case, the seller left thousands of dollars on the table.  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 mail@uniquerealty.ca.

Hydro - The Monopoly by Darrin DeRoches August 2 - 8, 2012 Did you know that if your electricity is turned off for more than six months you will have to have several inspections and spend hundreds of dollars in costs? Did you know that the basic cost of having electricity connected but not running costs you over $60 dollars a month or about $800 for the year? I had a client that was redeveloping his commercial property and had two services for his building. Since it was vacant, he was not using any electricity and he figured he would just use the one service he was paying for and leave the other alone. After a year and a half passed, hydro disconnected the second service and again he thought nothing of it since he was not using it anyways.      Well a month ago he changed the direction of the property and decided to lease it out to new tenants and when he called hydro to re–connect the service he figured it would be pretty simple. Boy was he wrong. First off – hydro had a bill for about $2,300 for the cost of the service sitting dormant for the year and a half and disconnected for another year or so. He argued that he did not use any electricity but they explained that the base cost of over $60 a month plus the usage of the last tenant that was not paid came up to over $2,300. He argued and called supervisors and pretty much lost it. His new tenant was moving in and the hydro was still off. After two weeks of calls and running around, the final answer was simple – pay the $2,300 or they will not turn on the power for the new tenant. So he had no choice but to pay the ransom and then asked when they would re–connect. Two or three weeks! WTF!     It now seems he has to get a $300 inspection from the electrical authority which happens on Wednesdays or Fridays, plus a meter locate. The inspection made sense but what is a meter locate? Hydro will send someone out in the next two or three weeks to look at the meter and determine it has not moved or been tampered with. This will cost you another $500 in construction costs. The landlord was losing his mind and after paying the ransom he now had to pay another $800 and wait two or three weeks to have the hydro turned on for a new tenant.     I have done a lot of business with this landlord so I stepped in. I called the company – explained to them he would lose this tenant if it took three weeks etc. and with a little bit of negotiations we had it all taken care of in under a week and over $3000 dollars.  One inspection took four minutes, the next 10 minutes and connection under 15 minutes. The landlord then figured it would have cost him about two thousand dollars in base fees if he kept paying for a service that he was not using, but the stress and aggravation was not worth the extra $1,100 he had to pay. If you figured in the deposit that the new tenant has to pay, it was pretty much a wash.  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 mail@uniquerealty.ca.

Industrial To Commercial Rates

by Darrin DeRoches July 26 - August 1, 2012

There is a big difference in the tax rate from industrial to commercial rates. This may not seem like a big deal but with the city starting to grow and the brownfields being redeveloped, a company will look at all factors. This week I dealt with a company that has been in Hamilton for many years and about 5 years ago they built a brand spanking new facility without taking in to consideration the tax rates. They are now looking at how they can bring down their costs and they’ve realized that they are paying a higher industrial tax rate. Their facility has about 20 per cent of industrial production and the other 80 per cent is commercial space. They called me for advice and asked if I could refer them to a tax specialist. They believed they could explain the usage and get the 80 per cent of their facility changed to the lower commercial tax rates. This would be a huge savings and help their business thrive in our city.      I made a call to a specialist in these matters who has done over 10,000 cases in lowering the tax rates for such commercial companies. He was able to give great advice but unfortunately the company that I was helping would not be able to lower their taxes. Their point that 80 per cent of the facility was being used as commercial and therefore should be taxed as such does not fly with the government. If every company sent in a request to lower their taxes stating a percentage of use inside their facility, the government would have no way of policing this. So even if 1 per cent of the property is being used as industrial, the other 99 per cent will be taxed at the higher rate.     Obviously we did not like this answer and continued searching for a solution. The answer made sense but the costs were prohibited. If a separate building housed the industrial part of the business then it would be assessed as industrial tax rate and the main building would then be able to given the commercial tax rate and drastically bring down the yearly taxes their company is paying. This designation of separate buildings is the only way the government will accept the division of tax rates, but in this case, building a separate structure would cost way more than the savings. This company will continue to pay industrial tax rates on the entire property for years to come.     The answer to the problem seems pretty simple, but it got me thinking. Whoever designed, built and advised the company to build their new state of the art building should have known about this. The big thing in today’s buildings is about LEEDS building and saving energy. The company that is building the facility should have simply separated the 20 per cent industrial section to save them a great deal of money in wasted tax payments. A little bit of knowledge is dangerous. 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 mail@uniquerealty.ca.

Worse Than Friday The 13th

by Darrin DeRoches July 19 - 25, 2012

What is the busiest day for real estate closing this year? August 31st. This year August 31st falls on a Friday and most people in the industry book their closings on Fridays so the lawyers and banks can take the week to get everything in order. The busy spring market tends to have closing all lining up for possessions for September. This being true plus the end of the month being on a Friday with the long weekend on the same weekend, you must be crazy to even consider this date.     The possibility of many closing failing to occur on such a date increases due to delays in getting mortgage advances for buyers which will have a chain reaction causing delays to other closings. You will be under enough stress looking to move into your new dream home but add the factor the bank was unable to complete your deal and the seller’s lawyer screaming at you about the delay. You will be unable to move your belongings into the new home since the deal did not close. It is a long weekend and the offices are closed on Monday, plus it will take a long time on Tuesday to “catch up” with the mess left from Friday. This scenario does happen and you “legally” cannot move into the new home unless the lawyers have them money from the bank and the bank will not be working past five o’clock on a Friday – especially on a long weekend.      Let’s also remember that all moving vans will be booked out and if you live in a building with an elevator – they too will be booked on this day. Everyone wants to be ready for the new school year and be in their new property but at what costs? Most real estate agents would not even think to look ahead and in all reality they will not have to deal with any of this stress, unless you are calling them freaking out that you cannot close on your new home and you are homeless for at least the weekend. There are other dates that come up throughout the year but Augusts 31st on a Friday this year will be the absolute worst – to date. Again if you already have this date booked a van booked and you think it will not affect you think again.     The person who is selling their home to you may not have a truck booked and their bank or lawyer may not be able to process their deal and you will find yourself sitting in your moving van out on the street unable to take possession of your new home. The problem may not be you, your lawyer, your bank, their bank, their lawyer it may just be the processing at the ministry who has all their staff booked off for the last long weekend. This is not a Y2k thing where all the computers may stop working it is more of a long hot summer thing where August 31st Long Weekend may be more important to someone in the chain of closing and while they are at the cottage enjoying the weekend you are stuck sleeping in a moving van someone else has booked for the next day! 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 mail@uniquerealty.ca.

9 Million Reasons To Celebrate

by Darrin DeRoches July 12 - 18, 2012

I just wrote about the Downtown Renewal Program and since writing the article, it keeps coming up in conversations. I have two downtown commercial properties up for sale and all the potential buyers are very surprised when I tell them about the programs. Without re–hashing the whole programs the simple terms are if you are located downtown or are in a B.I.A – there is free money and interest free money available from the city. These loans can make or break a project in the core and the new Staybridge Suites – which opens next week – used the program to the tune of 4 million dollars or so and we now have a new hotel in our city.     The same developer – who by the way is doing about 200 million dollars of new construction in our city – just got approved for another 9 million dollar interest free loan. He is bringing a second hotel with the Hilton Company as well as new condos to Bay and King and will be ready for 2013. The city approved the loan today and everyone is getting excited about a 9 million dollar loan. The project is already on the go, a second crane is being erected, jobs are being created and everyone is skeptical about the company behind the investment. What other private company is investing over 200 million dollars in our downtown? It has taken years for this developer to acquire the land and get all the financing in order. All the projects they have done have changed the landscape in our downtown. The press gets overly excited since the company does not do big interviews and make big promises as some other so–called developers have done,  and are yet to produce anything. This company just does what needs to be done. Put shovels in the ground and get the buildings built.      The loans that the city are handing out have helped a great deal of projects come to life. There  was only one project that had defaulted but it was eventually turned around and completed. The fund is going strong and it is the crucial part of many projects that would have never happened unless the city was involved. So let’s not get excited over 9 million dollars for one project because of the additional revenues created through taxes and jobs will far surpass the 9 million dollar mark. Also remember it is a loan with no interest. The money will be paid back in 5 years and then be lent out again for the next project. The success of these loans will only bring in more and more investment into our city which will create a better future for everybody in the city. I applaud City Hall and all the companies taking advantage of the programs to improve our buildings and create a great future landscape of our downtown. 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 mail@uniquerealty.ca.

25, 30, 40 Year Mortgages, Oh My!

by Darrin DeRoches July 5 - 11, 2012

The big thing this week is the change in the mortgage lender practices. Everyone has been reporting how the 30 year mortgage amortization is gone and only 25 year will be available plus they are changing the Gross Debt Ratio is being lowered to 39 per cent and lastly they will only allow 80 per cent on refinancing. There are also other rules about buying over a million dollars, but if you are buying at that level, you’ll have to put 20 per cent down. So suck it up.     Everyone is focusing on the new rules but no one is really talking about what you can do if these rules affect you buying a home. First off you can apply for a mortgage before July 9th and you can have that rate held so you can qualify for the old rates as long as you must complete the transaction before Dec 31st 2012. That can make a big difference for the average home owner who is looking to buy this year and want to get the most house for themselves. The average consumer will be able to get almost $50,000 more in an available mortgage which can make a huge difference in the location, size etc.      The 85 per cent loan to value on your home will also enable the average consumer about $20,000 dollars more than the 80 per cent new rule. So if you are even considering on doing a re–finance to do renovation or whatever you will have to get it done before July 9th. Even if you do not use the money available to you, it will be approved and you can use the money in the future. The funny thing is the government only allowed 18 days for these changes to take place, so banks will be overwhelmed with applications and may not be able to process everyone.  Some banks may even start the new rules early while others may try to compete by locking in the old rates to the end of the year to attract new business.     The other thing most people will not tell you is that these rules only apply to the “big banks”. Credit Unions and private mortgage lenders will still offer the old rates.  That being said you will need a good mortgage broker who will shop your deal around to these lenders. There is always another way to do a deal so if you are looking to get the most bang for your buck consider looking into the alternative. The difference between a 25 year and 30 year mortgage is very little in the monthly payment but it can make a huge difference in the home you will be able to qualify for. If you consider the life of the mortgage and the size of the home, location etc., you will make a great deal more on the larger home and it will cover the difference of the five more years of payments. Plus you will be living in a better home over the course of the mortgage. Remember, five years ago we were taking out 40 year mortgages and now we are discussing 25 year mortgages. Wow! 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 mail@uniquerealty.ca.

Grants & Low Interest Loans

by Darrin DeRoches June 28 - July 4, 2012

There are parts of Hamilton that are eligible for grants and low interest loans. The interesting part is that property owners are not lining up to get the free or cheap money. The programs have changed, for the better. and I was not aware of the new opportunities available to property owners. There is the “Gore Improvement Grant Program”, the “Downtown Commercial Façade Program”, the “Commercial Property Improvement Grant Program” and the “Hamilton Downtown Office Tenancy Assistance Program”.     The basic requirements for all of these programs is that you follow all the building codes, permits etc; and that you have all your property taxes paid. Of course there are other fine details but the overall message to all these programs is the city has money available to property owners who want to improve their downtown properties and bring back business and people to the downtown. Since the inception of the programs there have been great success stories and a couple of questionable situations, but all in all, the city is doing more than their part to improve our downtown.     In the Gore Improvement Program the city is basically giving up to $50,000 in a matching grant to those who own a property in the Gore Park area to fix almost anything in the building. The Downtown and Commercial Improvement Programs are granting from $10,000 to $20,000 matching grants for those owners who will use the money for the facades of their buildings. This money can be used for windows, signage, awnings, brick cleaning etc. You can apply each calendar year and improve your building with this program. So if you want to do new windows this year and awnings and brick cleaning the next, just re-apply.     The last program is the Downtown Office Tenancy Program which has funds to loan up to $450,000 dollars at a rate 1 per cent below the prime rate for up to 90 per cent of the cost. Where in the world can you get a loan that is below prime and will cover 90 per cent of the work? The work can consist of HVAC, paint, walls, data systems etc.  Basically the city will help you with the lowest loan possible if you are willing to put up 10 per cent of the funds to create office space in the downtown.  So fix up your property, add value and entice new tenants with a state–of–the–art property.      It seems too good to be true but apply for the grants or loans, follow the rules, and you can add value to your property — it is just about that easy. There are also interest free loans for condo conversion available. If you would like more details about these programs or other programs the city is offering just email me and not  only will I send you the information I can arrange a meeting with the city to get the money flowing.  I can also help with providing the post appraisal of what your property will be worth once the work is done. Free and cheap money is just sitting there waiting for you to take it! 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 mail@uniquerealty.ca.

Enough Already

by Darrin DeRoches June 14 - 20, 2012

I was showing a young couple with three young kids a student home this week and I was a little puzzled as to why they were considering buying a student investment property. My first question was “Have you seen any other student properties?” Their response was “Oh yes, we have viewed over 40 properties.” Big red flag comes popping up. Who in their right mind would truck around their three small children and view over 40 properties? My response was “well you obviously know the drill so I will just answer any questions you  have.” I was still curious as to why they were not be able to find a property that works for their family within viewing 40.     As the showing progressed, we talked about what they were looking for, the area, size, yard etc. I asked why they were considering a student property and they wanted some income to help with the cost of the home. This particular property was $340,000 because it had a potential income of over $2,400 a month but if they lived in it, they would be making about $1000.00 a month income. I suggested that they consider a duplex or triplex in an area that would provide them the size, yard and all of the ‘must haves’ on their wish list. They answered with “well, we are considering student homes – right now.” Another red flag hit.     We ended the showing with them checking out the yard, roof etc., and they politely asked for my card but we both knew there is no way they would be buying this house, let alone a student house. I told them about other properties we have listed and they asked if they can view them – but I explained to them that the yard, size of rooms and everything considered would not work for their family. In saying goodbye I wished them a good day and said to enjoy the nice weather and they answered “We have another house to view.” Red flag – house number 42!     The reason that I was curious about their situation was not to knock them for looking at over 40 houses, but the fact that they are not using a real estate agent in their quest to find the perfect family home. In the ten minutes that I spent with them, it was obvious that they were really taking all properties into consideration. They wanted to make the right decision for their family and that was where a good agent would be able to narrow down the search and figure out really what they are looking for. Is it income, location, size or are you not really ready to buy a home today? Maybe the wife and husband have two totally different ideas of a dream home. Buying a home is a huge financial and emotional decision and if they would use an agent instead of the internet, their kids could be playing in the yard of their dream home instead of driving off to home number 43. 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 mail@uniquerealty.ca.

Mobile Agent To The Rescue

by Darrin DeRoches June 7 - 13, 2012

The bank rate held again today at 1 per cent. Sounds pretty much the same, no glitz or glam, just a safe banking system that is strong and keeping our lending rates low. The only reports on an increase in the rate is that in the near future a modest rate increase may happen and there is a 50 per cent chance that it will occur. Pretty wishy washy stuff. So it looks like low mortgage rates are here to stay.     This brings me to my experience of renewing one of my house mortgages. The bank contacted me about six months ago and offered a low one time rate to get me to renew with them and to avoid the possibility that I would shop around the mortgage. I figured that the rates would be the same so I left it until today to look into it. The bank sent me a second renewal where they asked me to check a box and send in the renewal and they now are offering me the posted rate, which is considerably higher than the one they offered six months ago. I made an appointment with the bank and sat with their “inside mortgage” agent who then offered me a rate lower than the posted rate but still not as competitive as other lenders. I told the agent that I deal with a lot of brokers and that I could “shop around” my mortgage and asked if she can do better? The answer was that she could send it to head office with an explanation that we would be willing to open new accounts and consider other products – if they would give us a better rate. She also justified the rate by saying it was so much lower than the rate we had 5 years ago – Really? No shit! Come on, that is the best pitch, it’s lower than the rate we have been milking you for over the last five years. I should be so grateful. Plus just fill out the paperwork and bring it back in – do all the work and we will just keep making money off of you.     So I left with the hope that the big man in Toronto will consider giving us the same rate that everyone else is offering in the open market. This bank has an “inside” mortgage agent, a “specialist” mortgage agent and a “mobile” agent. The funny thing is that they all can offer you different rates. Same bank, different employees, better rates. Sounds like I am making this up – but it is true. So I called a mobile agent that I have met before and asked her to look into the renewal and she guaranteed me that she can get the best rate, and she does. I did not want to go through the hassle of shopping around a mortgage and coming up with all new paperwork etc., but I still had to “shop it’ inside the same bank. Weird but true. The worst thing is that each bank does it differently, but the “mobile agent” tends to do all the work for you and will get you the best rate inside your own bank! 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 mail@uniquerealty.ca.

Get Your Sunscreen Ready

by Darrin DeRoches May 31 - June 6, 2012

How’s the market? How’s the weather? Hot Hot Hot! Things are moving so fast that if you blink, it’s gone. May has shown us a very strong market and if you or your agent are slow to move – it’s gone. This week I did a deal in Kitchener/Waterloo and the properties there are moving just as fast. We were one of a dozen showings in a 24 hour period. The difference is, while everyone was discussing the house, we made an offer on the spot and tied up the house – under asking. So what is the big deal?     The market is moving so fast right now, that multiple offers are happening all over the place. They can occur in a couple of ways. Homeowners hold off offers until a certain date with the intent of creating a multiple offer situation. Agents can also wait until all showings, open houses etc., happen and then collect offers. Both of these situations were occurring with the properties my clients were interested in and if I waited to make an offer, we would have definitely been in a competition for the property and most likely paid over asking in both situations. I removed conditions on the first deal that I did last week and the agent not only thanked me for a “quick and clean deal”, he went on to tell me how he has been receiving tons of calls on the property – even though it was listed as “ conditional – no show”. This basically tells the market that the owners feel strongly about the deal and do not want to deal with showing their house anymore. Agents kept calling hoping my deal would fall apart. If these same agents moved faster and were smarter in the first place, they could have competed with my client for the property. Instead, they are sitting waiting for another comparable property to come up on the market so that they can at least show something to their clients. The fact is, no comparable properties have come up on the market in the last two weeks. So if you have a property in the west end and are considering selling,  give me a call – buyers are waiting.     The Waterloo house is basically in the same situation. It is a starter home in a great area and the 12 or so buyers are now upset that they missed out. I drove up from Hamilton and was able to do a deal on the spot and we are now doing a home inspection to close the deal. The market is hot, and so is the weather – so prepare by getting pre–approved, work with an agent who is ready to move fast, and use a little sunscreen because you just may get burned if you are not careful! 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 mail@uniquerealty.ca.

Don't Take No For An Answer

by Darrin DeRoches May 24 - 30, 2012

I would like to continue my article with the client I mentioned in last week’s article. He was discouraged when he found a property and went to his bank to be told he did not have enough money saved for his down payment and closing costs. Within 24 hours, we not only had him pre-approved for a better rate mortgage, he also had three options to close the deal. He fired his agent and his bank. We took him out in our company limousine and showed him three possible homes to consider. He also wanted to look at the house he had thought was “the one” before the bank turned him down. We viewed three properties in the West end all within his dream area. All three had their pros and cons. We then went on to the property he wanted to buy in the Stinson neighbourhood and he was convinced that I would agree that it was “the one”.     Once we pulled up, I was impressed with the street but once we walked through the house my opinion changed. The house had no yard or land and was renovated in a very peculiar way. I started to point out all the shoddy workmanship and the costs it would take to improve. The house had a very “artsy” feeling but the bad foundation, original windows, old roof and overall depressed state was very apparent to me. My client was so in love with this property that I felt bad pointing out all the bad things he did not notice on his first visit. By the time we were leaving he realized that it really was not “the one”. We discussed the four homes we saw that day and he ruled out “the one” and began to consider the other ones we had viewed.     He came down to one in the West end and one near Pier 4. He was leaning towards the one at Pier 4 since he believed it was larger and had a bigger upside. After discussing the current market and future market, he realized that the home in the West end was his best investment. There were six showings that day so if he really wanted the property we would have to move fast.He decided to put in an offer right then and there. I called the seller’s agent and arranged a time to present and we sat in the limousine and typed out an offer, printed it, signed it and we were ready to go! Within hours we had negotiated the deal and our client had his dream home.     A week has passed and my client went from total disappointment to total elation. There is always a solution to your situation if you work with the right people to find the right answers. My client started to ask the right questions and we worked with him to find the right answers. He now has the right house in the right area with the best mortgage because he did not allow the bank’s “no” to stop him from owning his first home. 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 mail@uniquerealty.ca

Work With The Right Brokers!

by Darrin DeRoches May 17 - 23, 2012

A new client of mine went into his bank and wanted to get a mortgage so that he could make an offer on a property immediately. He had found a property that he thought was perfect and he was raring to go. The bank had already “pre–approved” him so he was excited and ready to go. While at the bank, they came back with a little problem. The bank told him that he does not have enough money for closing costs and he cannot buy the house. Pissed off, he heads to the pub trying to figure out where he went wrong.     This is where I stepped in. A mutual acquaintance hears him complaining about the “closing costs” and suggest that he should talk to me. He calls me and tells me his troubles with the bank and his agent. Within 24 hours, I not only have him approved by a mortgage broker, I have convinced him to look at better areas and properties to invest in.     The agent he was working with suggested using a mortgage broker and gave him a list of three referrals, then left the client to figure it out on his own. He also told the client to buy a property in an area that is terrible for re–sale. The fact that the property was vacant and sitting on the market for a long time did not tip them off. The client can afford a property in his desired area that will have a great return on investment. The bank looked at his savings account and told him that he needed about $3,000 for closing costs and until he saved it up he was out of luck!     There were two simple problems for this new client to work out. First was to fire his bank and second was to fire his real estate agent. Within a five minute conversation, I realized that his agent was not asking the right questions and his bank did not know their ass from a hole in the ground. This client had more than three options available to him. First was the “no money down option” second was the “congenital mortgage” and third was the “line of credit and RRSP option”.      We met the next day with a mortgage broker who also gave him these three options and had him approved for more than he needs and at a great rate. The client had the best credit score I have seen in a long time; RRSP’s he can use to make up the closing costs and was a first time buyer which will qualify him for rebates on closing costs. The agent should have taken this client to a mortgage broker or been aware of the RRSP’s, credit score, first time buyer rebates and stepped in and called the bank to make them aware of their mistake. I met the client, had him approved and looking into possible dream properties – all within 24 hours. What was their left to do? With this great weather, we went golfing and within a week I am sure we will find him his dream home! 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 mail@uniquerealty.ca.

Re-Mortgage Or Re-Group

by Darrin DeRoches May 10 - 16, 2012

I was speaking to a mortgage agent this week and we had an interesting discussion about re–mortgaging. Apparently the average time for a re–mortgage is three years. That seemed a little odd to me since most people take out 5 year mortgages, but in reality more and more people are getting a 2 or 3 year mortgage term, nowadays. A lot of clients are looking for money in all the wrong places.     He also works with a trustee and debt counselor who help people correct problems with their debts. The first place they go for money is the home. It seems most people are unable to live inside their means and when they get in trouble they look for the golden egg which is the house. Last year it was reported that homes in our area went up 7 per cent and about 5 per cent the year before. Therefore people in trouble look to take out the 12 per cent of equity their home went up. Most of the time it is to pay off the credit cards and clean the slate. Once the slate is clean and all that available credit is just sitting there – well you can guess the rest. Two years later they are knocking on the mortgage agent’s door looking to re–mortgage once again.     There are occasions due to illness, divorce, death etc., where people need to legitimately re–mortgage their property. If you have not ruined your credit, some banks will go all the way up to 90 per cent of the value of the home. So if you owe $100,000 on a $300,000 home, the bank will lend up to the $270,000 dollar mark and you would have $170,000 available to you. In most cases though, you are in a tough spot and credit is already ruined so you can only get a 50 or 60 per cent loan to value which would be about $80,000 available to you.      The interesting part of the discussion was not the great business he is getting from the debt counselor but rather how he tries to tell people they would be better off selling their home and taking the proceed, buy a more affordable property and start over. He explains to them that they are just putting off the inevitable and will be struggling for the forseeable future. But nine out of ten clients still rather re–mortgage, pay through the nose and keep trying to hold on to the big house. Sometimes stepping back is the best move anyone can make. Re–group and make a plan to not end up in the same position. Divorce is the biggest problem when it comes to the “big house” syndrome. The first answer is “I do not want to make my kids change schools”. Well in todays world, your kids can still stay in the same school even if you do not live in the district. In every district there are more affordable homes that you can buy or rent after selling the “big house” and still keep the family in the same school, hockey, soccer and whatever else is the excuse. Be honest with yourself and take care of your financial future. 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 mail@uniquerealty.ca.

Perception Of Hamilton

by Darrin DeRoches April 26 - May 2, 2012

I had the pleasure of giving a tour of Hamilton to Toronto investors this past weekend. We met them in the west end, hopped in the back of the limo and began our tour. The first thing they wanted was to stop at a Starbucks. I explained that we have only 5 Starbucks in the city but about 60ish Tim Horton’s and went on how Timmies began on Ottawa street etc. – but Starbucks it is. We proceed over to Locke Street stepped out and got them their Starbucks. They pulled out their “gold Starbucks card” and I realized it will be a long day explaining Hamilton to these Toronto investors.     They are looking to buy an income property outside of the GTA. We drive around the Locke Street area heading to the east end and they are impressed with homes and neighbourhood of the west end. Our first stop is a commercial/residential property on Cannon and Gage. I explain we are building a $275 million dollar stadium steps away from the property but they are not impressed and ask to move on. We head over to Parkdale at the link and look at a 12 unit apartment building that has a good return and they do decide to get out of the limo and take a look. We walk around the building and I point out how the “Linc’ makes this property very desirable and how tenants will be able to get to and from work, buses etc. Then the questions begin.     “I know the steel factories employ about 4,000 people so where does everyone else work?” “I read that the vacancies rates are….” “I believe Barrie has a higher income level and maybe we should invest there instead of Hamilton” I understand they have read all the information about where to invest in Ontario, but it seems they are not getting the right feeling about Hamilton. We hop back into the limo and head towards Fennell and Upper Ottawa.  Along the ride I am pointing out what the city has to offer when they ask me if I own a bike. I answer of course I do. I go on about how the rail trail and Bruce trail run throughout the city. The amount of waterfalls and Pier 4 are great places to bike when they correct me by saying “No, a bike – vroom, vroom”      I answer “a motorcycle, No why?” and they respond “Well we heard from friends that Hamilton has a lot of biker gangs” I begin to laugh and explain to them that their perception of Hamilton is coming from the 60’s and the city has evolved immensely in the last 50 Years. We continue on and show them the rest of the city. We end up having lunch on Locke Street and they leave the city with a desire to buy a property in the west end. The day has taught me that we as a city have a long way to go on marketing our image to our neighbours who are looking to invest millions and millions in our city. 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 mail@uniquerealty.ca.

Don'y Believe the Hype!

Don't Believe The Hype!

by Darrin DeRoches April 19 - 25, 2012

Calm before the Spring Storm. I was talking with a few mortgage brokers this week and they all were saying the same thing. Things are slow. The weather and 2.99 per cent mortgages have caused a little stir in the past couple of weeks but the market is still quiet. The mortgage brokers were all busy when the 2.99 per cent came out and people did flock to them to be pre–qualified but are not presently looking. One broker called clients and explained that the 90 days is coming close and if they do not use it the rate will go up and the client was not motivated by this.The bank rate was just announced this week as staying the same but with a cache that they are thinking of raising it soon. The press have been saying this every time it is announced since they have nothing else to report on “the bank rate –same!” pretty boring. “It may go up” stop the presses!     While I am writing this I actually just took a call about the “no money down” mortgages and had to explain that of course your credit score must be high and yes you do pay higher rates to pay back the down payment. Nothing is free in this world and when everyone is knocking the “no money down” or 2.99 per cent mortgage has conditions – what the hell do you think it is? The conditions on the 2.99 per cent mortgages are no different than the other low rate mortgages we have been signing up for in the past. Yes you have to sign a closed 5 year mortgage. You did this five years ago with a 5.1 per cent mortgage and no complaints. Understand that the bank is offering the 2.99 per cent than suggesting you look at the higher rate 2 or 3 year mortgage and everyone is on the band wagon that a closed 5 year is bad. Don’t, don’t, don’t believe the hype! Heehaahaw!     The spring market is about to bloom and these pre–approved mortgages at 2.99 per cent may be expiring but there are still more out there to be had. It is important to listen to advice from those who are not making money on the product. The bank tells all of its employees the 2.99 per cent mortgage is bad and they spread the gospel, some mortgage brokers even tow the company line since they get paid less on the deal. People will argue that most people break or re–mortgage every three years so why lock into a 5 year mortgage. Why? Cause it is only 2.99 per cent! If you find yourself needing to get equity out of the house before the mortgage matures – get a line of credit. Banks want you to re–mortgage to take money out since they make more money on that product than they do on a line of credit.       Think ahead and make your decisions wisely. The spring market will come fast and furious so be ready, get pre– approved, work with a good broker and you will be ready to compete in a market that will be moving fast! 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 mail@uniquerealty.ca.

Commercial Investing

by Darrin DeRoches April 12 - 18, 2012

I have a new client from Toronto that is looking to buy an income property in Hamilton. They have never bought an income property and their main concern is Cap Rate. They want it to be in a good area and be easy to maintain but all they talk about is Cap Rate and ROI. For those who are unfamiliar with these terms Cap Rate is what many real estate investors determine the value of an income property by using the capitalization rate, aka cap rate. It is probably the one most misused concept in real estate in investing. A broker prices a property by taking the Net Operating Income (NOI), dividing it by the sales price, and bing bang boom – there's the cap rate. Example:     Say the property has an NOI of $100,000, and the price is $1,000,000.     $100,000/ $1,000,000 = 10 per cent cap rate     But what does that number tell you? Does it tell you what your return will be if you use financing? No. Does it take into account the different finance terms available to different investors? No. Then just what does it show?     What the cap rate above represents is merely the projected return for one year as if the property were bought with all cash. Not many of us buy property for all cash, so we have to break the deal down, usually by trial and error, to find the cash on cash return on our actual investment using leverage (debt).     So a realistic Cap Rate is around 7 or 8 per cent in our city. This really means very little so we really should be talking about ROI which is Return on Investment. If you are buying a commercial property and the bank requires you to put down 20 per cent then you want to know the ROI on your 20 per cent investment. People who have never invested before believe that if they invest 200 grand in a million dollar property they should make $80,000 dollars a year since there is an 8 per cent return. The reality is the 8 per cent return is on the $200,000 you invested (ROI) which would be $16,000 dollars a year not $80,000. The investor then thinks $16,000 dollars a year is not worth the investment. Wrong!     No other type of investment gives a safe reliable return of 8 per cent or higher.  The bank will give you 1 or 2 per cent the stock market will give you promises of high returns, but then you can lose it all. Real Estate will produce the 8 per cent or better return plus the property itself will value up yearly and it is all relatively safe.     My new clients just keep asking for the highest ROI and think a Cap Rate of 8 per cent is the way to go but there is a lot more involved in just looking at the “real estate jargon” being thrown around. Luckily I have ability to wade through all the bullshit and will be able to find then a safe and reliable investment that will create a great ROI. 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 mail@uniquerealty.ca.

Toronto's View On Hamilton

by Darrin DeRoches March 29 - April 4, 2012

I just spent the last three days shooting a TV show here in Hamilton with a crew from Toronto and it was very interesting to get their perspective of our “real estate market.” Every single one of the 10 crew members asks me about real estate in Hamilton at least once. We shot at three different locations and they were curious about values and locations throughout our city. They were impressed with our first location in Ancaster; they went on about the area and homes. They really felt how the house felt like a “home” instead of a property laid out in a grid pattern of suburbia. We then shot in a vacant renovated home near Eastgate Square. The property was a four level back semi–split and was a large home for about $230,000. They began to ask about its value and I asked them to guess. Most came in around at least $300,000 and up. I explained to them the area was okay and the house was actually a little overpriced.     Throughout the day the producer explained how he has been purchasing student houses in St. Catharines and asked how does Hamilton compare? Basically the comparison comes down to the property. Bring in a few hundred more a month but it will cost at least $50,00 to $100,000 more for the property. He felt that buying in Hamilton will not allow him enough profit, but when I explained to him the vacancy rates, and how Hamilton went up seven per cent in value last year, plus we still are considered “undervalued’ he started to ask more questions. By the end of our conversation he started to see how over the course of 15– to 25–years he would make substantially more money in real estate investing in Hamilton compared to St. Catherines.      One of the cameramen just bought a small condo in Toronto for $235,000 and he also wants to buy income properties in Hamilton. Our third location was a home near Gage Park that could easily be converted into an income property and cost less than his condo in Toronto. He went to Mohawk College to become a cameraman and he was also interested in student housing near the college. It seems whenever we had a break in shooting we were either talking about real estate or looking on the MLS to show them the value of investing in Hamilton. The director of the show even started to consider on ‘retiring’ to Hamilton since she could sell her home in Toronto buy a comparable home in Hamilton for cash and have a lot of money left over to travel.      It was very interesting to get the different perspective on the real estate market from 10 different people who own in Toronto and enjoyed every part of our city. They lunched on Locke Street and were so impressed with what our city had to offer in real estate, culture and amenities. The show is called “My House Your Money” and we are filming episode three for season two which will air late summer or fall!  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 mail@uniquerealty.ca.

Broken Record

by Darrin DeRoches March 22 - 28, 2012

I do not want to sound like a broken record but the discussion on mortgages are far from over and the biggest talking point is on whether it is smart to lock into a 10–year mortgage. If you are looking for a longer amortization on your mortgage you will save more with a 10–year fixed rate mortgage. Your savings will be greater down the road when interest rates are more likely to be higher than they are now. This means a long term 10–year rate could make a lot of sense. As a general rule the longer the amortization on a mortgage the greater the benefit (in today’s interest rate environment) in going with a 10–year fixed rate mortgage.     Right now the decision to take a longer term is cheaper than usual, as the difference between five– and 10–year mortgage rates are nearing all–time lows. So it may not be a bad idea to pay 0.9 per cent for an additional five years of security. After all there is little doubt that rates will be higher in five years. Mortgage rates will go up in the next two months. The bond market and the signs of strength in the global equity markets Canadian Bonds will continue to increase in yield. When Canadian Bond yields go up, so to do mortgage rates. It is as simple as that, many banks would have you believe that it is not so simple but this is just so that they can over charge unsuspecting customers. Banks are trying to “buy” mortgage shares in the market right now. They did a promotion in January and realized 2.99 per cent drove a lot of customers in their doors. The reason the 10–year fixed rate is so low today is that the experts who trade in these products are also concerned with how long bond yields will continue to increase.     If you took a 5–year term today at 3.09 per cent and rates increase so upon renewal (five years from today) rates are at 4.5 per cent or more you would lose money and would have been better off taking todays 10–year fixed rate at 3.99 per cent. What we do know is that interest rates are at all–time lows and no one can argue with a decision to lock into a 10–year fixed rate mortgage. These rates will be gone within weeks so you can lock into them for at least 120 days, think about it but do not wait! 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 mail@uniquerealty.ca.

Mortgage Rates

by Darrin DeRoches March 15 - 21, 2012

Mortgage rates have dropped to the lowest levels in my lifetime. I had written about the rates in January with the caveat that they were ‘teasers” to get people in the bank and ‘upsell’ them but these current rates are here to stay – for now. The lowest rate posted today on a one year mortgage is 2.69%. No gimmicks, just a low rate you have to qualify for with good credit and a job. All the major banks are at 2.99% for five years with Bank of Montreal leading the pack. The other big drop that is causing people to notice is the 10 Year rate as low as 3.79%. Bank of Montreal is at 3.99% for ten years and this low rate from a major bank is what is really causing a stir.     The low ten year rate is causing such a stir since banks do not lend money out long term to lose. The Bank of Montreal is basically saying they believe that in ten years our economy will warrant a rate at 3.99%. I know a couple who ten years ago signed a ten year mortgage for 6% thinking the rates will rise and they are locked in for a ‘good rate’ and over time they would win. The rates were in the 4% range when they signed and over the course of ten years the rate did rise into the high 5% rates but it never reached 6%. In retrospect they should have never signed a ten year rate since they could have saved a great deal of money over the ten years. So the bank won. The banks always tend to win, so with the major banks posting a 3.99% rate for ten years they are telling us they believe the rates will not go over this rate in the next ten years.      With all of this information, what should a consumer do today? If you have a rental property which you plan on keeping for a long time then sign a ten year mortgage and be locked in at a rate that is going to keep steady at 3.99%. You’ll benifit from your rental income will increasing about 2% a year over the next ten years. If you are buying a new property I would suggest in signing a five year rate a 2.99% instead of a short term 2.79% since you will probably live in the new property at least five years and the rates will be in the mid to high threes in the coming years. All the indicators are there so make an educated decision before signing a mortgage today.      Keep in mind that these rates can be held for at least 120 days so if your mortgage is coming up in the next three months or you are considering on moving or buying in the coming months, go to a bank or mortgage broker and qualify for these rates even if you do not use it – you will be locked into the rate! Last thing, if you are interested in a 0% down or 5% cash back mortgage at 4.73% check around, it’s possible! 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 mail@uniquerealty.ca.

February Time

February Market

by Darrin DeRoches March 8 - 14, 2012

The results are in for the real estate market of Hamilton for the month of February.     The REALTORS® Association of Hamilton–Burlington (RAHB) reported 1126 property sales through the RAHB Multiple Listing Service® (MLS®) for the month of February, a 4.9 percent increase in sales over the same month last year. RAHB also reported a 9.2 percent increase in average sale price and an 8.3 percent increase in the number of new listings in the month of February this year compared to February of last year.     Seasonally adjusted sales of all property types were virtually the same as February 2011, with the average sale price increasing 7.9 percent for the month. Seasonally adjusted numbers of new listings, however, were 14.5 percent lower from the same month last year     So here we are again for the second month in a row with a great increase in price but a large glut in the market for listings. This low listing is creating the increase in sale price. A client of ours bought a property last week for a great price and in the week we took to arrange our financing the property still had interest and another buyer wanted to put in a “back up offer” in case we did not fulfill our conditions. This goes to show you that it is a sellers’ market– big time! The property needs work but the location is good and the price was high but we knocked it down into reality. The seller probably hoped we did not fulfill our conditions since she probably would have had a higher offer from the second interested party. Back up offers usually do not happen but in a sellers’ market with low listings agents have to be careful who the sign up with.      If a buyer has a ton of conditions or worse yet has a house to sell, you should not “tie up” your property right now. A great agent would negotiate a deal on the house with a clause that they must remove conditions within 48 hours (or less) if they have a second offer pending. You cannot take a second offer once you have agreed with the original offer, but the market is so low on listings and if you are about to list a property that is in good condition and a good area you must take the market conditions into consideration. Properly marketing a property in today’s market – which will change in the coming weeks – is vital to getting a sale or becoming a “forgotten property” in the spring market. I drove by a property today on the way home with a sold sign on it. It had been on the market for at least four months and was getting pretty stale but since there is very little competition it found a buyer. Market conditions and timing is just as important as location and price. If your property has not sold in the last 60 days someone is not marketing it properly or the price is way too high, since your competition is selling for a 9.2 percent increase in February.  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 mail@uniquerealty.ca.

RRSP Time

by Darrin DeRoches March 1 - 7, 2012

Seeing as it is RRSP time, I thought I would expand on the opportunity to use your RRSP to buy a home. The Federal Home Buyers Plan allows first time home buyers to withdraw up to $25,000 from their RRSP for the purpose of buying or building a home. The primary benefits are that the RRSP issuer will not withhold tax on the amount nor will you have to declare the money as income. The total amount must be repaid in 15 years with a minimum repayment of 1/15 of monies borrowed.     The stipulations are that you have not done it before, you have to be considered a first time buyer and your spouse can also take out $25,000 in the same year. So before you go off and say this does not apply to you, consider a person a first time buyer if you have not owned a home in five years as a principal residence you can qualify. There are a lot of people who have been divorced and rented for some time after and if it has been five years you are once again a property virgin, a first–time buyer virgin or some kind divorced virgin. So, if you have built up your RRSPs or better yet, got them in the divorce and have not owned a property as your principal residence, you can qualify.     The next cool thing about taking out the RRSP that most people are not aware of, is you do not have to use it for the down payment. The money can be used for any purpose: new furniture, renovations, and flat screens – whatever you want. If you buy a home with five percent down or zero down then you can use the remainder of the RRSP for any purpose you want and not be taxed.     The other misconception is that when you sell your home you have to pay back the full amount. This is not true at all. All you have to do is keep up with the payments even if the property is sold. People think that putting more money in a RRSP you will gain larger tax benefits, but when the home you buy values up over the years and you do not pay tax on the capital gains, since it is your principle residence. You will actually make a better return than sticking it in a RRSP. Remember one day you will have to pay tax on all the profit you make from the RRSP, so do not get blinded by all the money a RRSP will make during the maturity of the investment and focus on the property, increased value of the home and the lifestyle you will enjoy living in the home for the next 15 years.           You cannot live in a RRSP but it can help you buy your next home!  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 mail@uniquerealty.ca.