The Art Of The Deal

by Darrin DeRoches September 26 - October 2, 2013

In real estate the “art of the deal” can be the most important part when selling your home. There are tons of real estate agents out there who can write up a deal and then there are the ones who know how to structure a deal. In Hamilton — Burlington there are about 2500 agents at any given time. So your chance of getting the best agent or one of the best is kind of a crap shoot. Some people go with the agent who has the most advertising. They figure the agent must be the best if he constantly sells the most. Others go with a friend or family member. Again, any one of these can write up a deal but very few know how to structure a deal.     Last night I made a deal with an agent who had been in the business for over 20 years and I had never worked with her before so I did not know what to expect. First things first, she showed up and presented the deal in person. Secondly, the opening offer was reasonable and the clauses were pretty standard. Finally, she was likeable, talkative but still business minded. These three things seem standard to any agent but you would be surprised. In today’s world of real estate a lot of agents do not “present” their offer they just fax or email it in. This impression gives the seller very little to work with. We can ask all of the standard questions – are they pre–approved, first time buyer etc. but having the agent actually sitting across from the table, the answers and information they give you is invaluable. Sometimes the way that they say it or their reaction to a “tough question” gives you a lot more information than an email.     Negotiations start with the first phone call, first impressions and all the way through to the last word. Anyone can list their house on the internet and wait for someone to come with an offer but how you present the property and most importantly negotiate the deal — this is where you make your money. The agent presented a good deal and we were fifteen thousand apart and if we went the regular route of negotiations we would have ended up at $290,000 for the property. This is only the first step in making the sale because, again, anyone can make an offer and sign an agreement but it is more important that they can close the deal. The agent showing up and explaining their clients, time frame and all the little details help with the negotiations. My clients felt as though these buyers would not only pay a fair price but close the deal, so we could move forward. My client wanted to sell to move on with their life but also to get top dollar so price was just as important as time and hassle. We got $292,000 which is over their expectations but more importantly we have a deal that will close fast with no hassles. 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

James Street North

by Darrin DeRoches September 19 - 25, 2013

All eyes were on James Street North last week with the biggest event of the year in Hamilton – Supercrawl. For those who have not attended, it is a great opportunity to see your city in a different light. The first year I went I walked up and down the street and I noticed buildings and architecture I had never seen before. Now, I drive down James Street at least once a week and you probably do not see the street as I did when the festival was going on and everyone was having a great time. This past week I walked the street with investors from Toronto and showed them all the opportunities that the street has to offer when it comes to real estate.  We walked all the way down to Pier 4 and I had to point out all the investments, new restaurants, the future go station etc. They were impressed and felt it was like Rosedale area in Toronto from twenty plus years ago. A couple of properties “popped out” to them and they asked me to find out more information.     I already knew the prices and once I told them they were less impressed. A lot of prices are “aggressive” to put it nicely. I did the history on the properties and with using a comparative analysis I cannot justify the prices to the investors. Sure, the area is “hot” but what defines it? Price, return on investment, future investment? The area is doing amazingly in comparison “but anyone who is cool knows money does not buy you cool” – Fonzi. Money buys you what the property is worth today not what the future holds. So I took them up to the Durand neighbourhood to a property I believed was worth investing in with a good return and future improvements. They loved it and I had to do the reverse explanation of why has no one bought this property. Again, the price was aggressive but the neighbourhood can justify the price point. Doing a history on it we see the seller dropping the price over 10 per cent within months and it is finally price right. This area is also considered desirable and it has proven to be a great place to invest in with great returns over the years.     We are going to keep an eye on James Street to see if the prices come back down to reality and make a move on the property in Durand neighbourhood. You should take a second look at your city and it’s culture, architecture and artistry. The city looks amazing through the lens of how fast a street can move from nothing to becoming the jewel within the core. Artcrawl, Supercrawl and all those people who are rejuvenating the core from the Witton lofts to the storefront businesses are making it a great area to invest in. Be proud Hamilton. 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

Mortgage Rates Rising

by Darrin DeRoches September 5 - 11, 2013

Mortgage rates are slowing creeping up from historical lows. It has been more than three years since we saw any real movement in mortgage rates — so why now? Simply put, bonds yields rise and mortgage rates follow. This is happening because the United States is slowly recovering from their real estate catastrophe and they are taking their money out from Canadian markets where they put it for safe haven. This is the reason that we are being given. You will also hear about how our housing costs are cheap compared to other markets, the market is going to hit a bubble, things are slowing down etc. They will give you 101 reasons why it is rising but the rates have been low for a long time and the big banks are looking for any excuse to raise the rates. One bank did it and the others slowly followed. Last year a bank would raise the rates slightly and the other banks would offer a “deal” to steal some of their business. This year they are going to raise them up to secure themselves against the bond rates.     The next logical questions are how high will these rates go? Again, who really knows, we were all paying up to 6 per cent before the drop. It will take time to get there but it definitely will hit a strong 5 per cent next year. This will not affect anyone who just renewed but if you mortgage is coming due in the next 12 months you may want to look into an early renewal. A mortgage broker can figure out the costs of an “early renewal” and secure you a today’s rate. You most likely will be paying the mortgage over the next five years so if you can secure a lower rate today, the savings will really add up. No one can really predict the future but the rates are definitely going to rise over time. The bank rate will most likely follow this trend upwards and we will be paying higher mortgage rates for years to come. This adjustment will help the loonie become stronger which will only help if you invest in currency or take a vacation in the states.     The American economy is once again costing us money in the costs of our mortgages but it is supposed to strengthen our economy with jobs and maybe we will be able to afford these big houses we bought over the last five years. The other side of the coin is that the prices of our properties will settle and we will be able to get more house for our dollars. We have no control over the economy but we can negotiate the right mortgage to save ourselves money in our homes. If you need advice I can refer great mortgage brokers who can explain the savings to “break” or “renew” your mortgage to set you up before the rates get to high. 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.