Commercial Investment

by Darrin DeRoches August 22 - 28, 2013

Commercial investment in downtown Hamilton is continuing to grow. I spoke with a commercial lender today about a possible new mortgage for a downtown property and the bank was very open to lending. You hear everyone talking about making an investment in the core but when you get down to securing a mortgage things usually get tough. Most landlords were forced to go to “private lenders” and pay upwards of 18 per cent for a mortgage. A few years ago no major bank would lend for  purchasing downtown commercial properties and now they are asking for your business. The broker today said that he can get a four or five percent mortgage on a commercial property. I thought he made a mistake and asked him a second time and he said five per cent tops!     He also went on to talk about several properties that were sitting idle — waiting to develop — that are now moving forward. People are always asking why certain properties are sitting dormant and becoming eyesores in the core. The simple answer is because banks were not lending money to develope the properties. Things have been slowly changing and now they are talking about lending at five per cent. This is the reason why you will see changes happening fast and furious in the core. I have a property that is for lease and I get at least two calls per month with people inquiring about buying the property. I thought they were just “fishing around” but the banks are lending and people want to buy. This is just the first step in bringing buildings back to life. You now have to fill them with tenants, but they too are slowly starting to move back into the core. I just signed a five year lease with a company from Burlington that decided to move into Hamilton’s core to be part of the “shift” or “movement”. The cool factor is there but the architecture and community is what is really selling it. You cannot find “cool spaces” in the suburbs and the core is starting to shine.     The city has won awards and accolades about being the best place to invest in and we are starting to see the first wave of people moving into the core. The Witton Lofts are now being occupied and they turned out great. The “seedworks building” is coming on strong and several other buildings are slowly being redeveloped. It takes time, money and usually a lot of hard work but the “overnight success” of downtown is happening and we should stand up and take notice. Sure the big papers spout all this excitement about a “possible” casino and blah blah blah about any major company opening its doors in our downtown but we have to take real notice of all the development happening by our own citizens. This community is the reason everyone else is taking notice and let’s not overlook the great strides these people are making and shaping our downtown, not just the big guys and big 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.

Testing The Market

by Darrin DeRoches August 15 - 22, 2013

I have clients looking throughout the city at different types of homes – single family, new builds, commercial – and it seems there are a few properties listed way above market value. Some sellers are putting up their properties “just to see” if they can get the money they are asking. Some agents will list a property at any price just to get the listing and it seems to be happening a little more frequently. This week I took a client to a home that had just put up their sign and it was not even listed in the system yet. We knew that she wanted a certain area and we drove through it on the weekend and noticed the sign. The agent did not even have a lockbox on the house yet. First thing Monday morning we were the only people through the property. The client was excited about the house but I had misgivings.     The first problem was the price. This house sold two years ago for $190,000 dollars and now it was listed for $260,000. Maybe they did a total gut job and the house is worth every penny. The second red flag was that the seller was not going to accept offers until a week later. Agents do this to create a false sense of urgency and hope for a bidding war. If the property is worth it, this might work and they could get top dollar. This was an income property and the area and size of the property does warrant a price in the mid $200’s. We were the first ones in and if it was all renovated we would write up an offer for over asking and try to get the seller to agree before their so called offer date.     Bright and early Monday morning we got to the property. From the outside it looked exactly like the old pictures in the listing – maybe they did all the work to the interior. We opened the side door and there was newish laminate – maybe? We walked into the first room and with all certainty we realized it was a dump! The sellers did not spend one dollar on improvements. The old listing even stated the “new” laminate from two years ago. My client loved the area and the house still gave her a “good vibe” but I had to point out that it was overpriced by at least fifty thousand dollars. We agreed to sit and see if anyone would make an offer the following Monday and see if the seller would rethink their strategy.     The agent texted me for my feedback and I told him straight that it was fifty grand overpriced and that my client loved the area and would make a realistic offer in the low 200’s once the offer date comes and goes. His response was that his seller “wants to see the action”. It’s August which is slow and it’s overpriced by a mile so I would expect there will be little action. I will update you next week on what happened! 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.

Timing Is Everything by Darrin DeRoches August 8 - 14, 2013 In real estate timing may be the most important factor in a successful sale. Most people think you just list a house and it sells but there is a lot more too just throwing it up on the market. A good agent understands timing and it can make all the difference. A client just contacted me about selling her home and wants it on the market ASAP. She has been going through a long and drawn out separation and after a year of trying to make her partner realize the relationship is over it is time to sell the matrimonial home. She wants me to list it now while the iron is hot. Problem is it is August. This is the slowest time of the year and timing can make a huge difference on the bottom line.     You only get to enter the market once and the timing of this can make or break a sale. The first week on the market is crucial and you want to make a great first impression. The month of August is so busy for families with all the vacations and getting ready for the start of school — real estate is the last thing on their minds. Once everyone is settled in school and all the summer activities are over everyone starts to look towards the end of the year. This is when the market is hot and the perfect time to list your home. August is the slowest time of the year but September is then the hottest time of the year. I can easily list the property today as it is in a great area and it will sell but why not wait a month and list it in the hottest market. They will get top dollar in September and then she can find a property to downsize into once the market cools into October. The good old sell high and buy low scheme.     Timing also comes into play when selling your home in a hot market. Picking the right offer to work with can make or break your sale. In a typical sale the buyers will take five business days to do home inspections and get bank financing. These five days can be an eternity in a hot market. If they do not remove clauses and your property is forced to sit off the market you can lose your momentum. A good broker will know how to handle this type of situation and use it to their advantage. Your home can be the perfect property but if it goes on then off the market — potential buyers have moved on to the next one and it can very difficult to attract their attention again. If you are considering on buying or selling soon take the time to meet with a broker now. You should have a game plan in place, pictures taken; brochures printed and are prepared to list your property the right way at the right time. Need help figuring it out just give me a call or email. 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.

Fix Your Issues

by Darrin DeRoches August 1 - 7, 2013

If you are trying to sell your house and you keep hearing the same complaint – do something about it. Every home has something that does not work for potential buyers. It could be parking, paint color, price, carpets etc. Every home has some drawback to potential buyers and if you hear it more than once it is an issue.     I have a listing which has a cat smell and mold. The property is listed as a fixer upper and even priced accordingly but all the feedback comes back to two issues. An offer fell apart due to these issues and now showings are going well but the smell and mold are hurting the potential sale. I had a conversation with the sellers and they are starting to realize that with a little work and money they can easily fix these simple issues which will bring them a sale. The problem is that they are divorcing and neither party will take the initiative – yet.     The husband is starting to realize that he should take on the two issues and help me sell his house but time and money are an issue.  As a real estate broker you can only work with the hand that is dealt to you. So what can we do to get a deal done? I have to think outside of the box and adjust our marketing. I called in a favour and obtained a home inspection which clearly lays out all of the faults, mold, smells and defects of the property. I will send this report to all interested parties to ease their “what if” concerns and show them exactly the scope of the issues. Information can make or break a deal even if it is bad information. Full disclosure shows everyone what they are dealing with and we will also send them all the comparables in the neighbourhood to prove the true value of the home. We could go one step further and get quotes to fix all the problems but sometimes too much information can be detrimental. You have to let the buyer come to their own conclusions and if you lay it all out they may start to smell something is fishy (but really it is the cats).     People are constantly asking me to call them with a “fixer upper” and when you have such a “diamond in the rough” everyone starts making excuses. They try to find a reason why they are not willing to do the work. We tell them it will only cost 10 grand to fix everything then they say 20 grand is the price. You have to let the buyer believe they know best and if they fix the property they will be 10 grand ahead of the game. In time with an open and honest marketing plan the house will sell. Someone can finish the upgrades and have a great home in a great neighbourhood if they can just get over the smell – damn cats! 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.