Avoid The Media Hype

by Darrin DeRoches November 21 - 27, 2013

As the year is coming to an end the experts are starting to make their predictions for the Canadian Real Estate Market. We are being warned to raise our interest rates from a European council based in Paris who believes our market will no sustain its present strong increases. They then go on to predict our market will increase from 2 to 3 per cent in the coming years?  Are they really looking to help themselves by asking us to raise our rates?  Then you read about this “bubble” coming in the market.  A “bubble” happens when there is too much inventory on the market and not enough buyers and it will finally burst and the market is flood with lower priced inventory to try to right itself. You read about the Toronto and Vancouver markets where they are building condos at a high rate and many are sitting empty. I myself was in Toronto this weekend and everywhere you look a new condo is popping up. All these glass towers may become Toronto’s problem in the future but they are more concerned about the glass pipe right now.      So how do you know what is real and what is just media hype? Stop believing what everyone is writing. But of course you are reading my article right now so what makes me right?  I look past all the media hype and the company slogans. I am involved in real estate in market daily. I speak with real estate agents, brokers, banks, lawyers and credit councilors weekly.  These people are dealing with the market and these are the real indicators.  This time of the year is slow for real estate, so you start to look ahead in to the New Year and figure out what is going to happen.  It has been a strong year for real estate and Hamilton is moving at a good pace. There are investors coming to town.  Companies are relocating. A good amount of “Toronto buyers” are buying in Hamilton. The new GO Station is coming next year and sure it will have some impact but not as strong as “all day” trains. All this “growth” shows a strong movement in the coming years.     Hamilton’s real estate market has been moving upward for the last fifteen plus years. We have kept up with the pace of the market but lately we are now on top of this growth. I would not say that Hamilton’s real estate market is “hot” or the “next best thing” but who wants to be that? Warren Buffet invests in strong, steady and robust companies and that is what Hamilton is right now. Ambitious City is what is being thrown around right now but I believe strong and steady will always win. Throw in a little ambition and you have a great future in the market within a great city!  Lastly, Oskee Wee Wee — Tiger Cats — bring home the cup!  It would be great way to finish the year at being # 1. 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.

Sellers' Market

by Darrin DeRoches November 14 - 20, 2013

October was another strong month in the Hamilton – Burlington real estate market. We continue to increase the sales and prices while the amount of listing decreases. This is the reason it is a sellers’ market. The low inventory allows the seller to increase their price since competition is low and buyers are out there looking for properties. The average sale price of $397,403 was an increase of 3.9 per cent over the previous October. There were 1730 properties listed in October, an increase of five per cent over October of last year.  End–of–month listing inventory is 6.3 per cent lower than last year.     The fact that the average sale price is almost $400 grand in Hamilton is big news. It was not long ago Hamilton broke the $300 grand mark and the last couple of years the market has been increasing at 6 and 7 per cent. All the so called experts are now calling for the market to stay strong through 2015 which tells you to invest now. Hamilton is still undervalued and will continue to grow until it levels off to the surrounding areas levels. One day there may be a slight “adjustment” in the market but Hamilton will weather the adjustment. If you look into the future there are a lot of developments coming in the condo market, residential and most importantly commercial lands. These factors will strengthen the Hamilton real estate market and where else will you get a 7 per cent return.     The old Lifesaver Building near Gage Park just announced it will be converted into condos and the city property in the old Banisters strip club is open looking for rents higher than they expected. There is also a business park being built downtown on old brownfield properties. These projects have taken over five years to come to market but they are finally happening. The condos in the old government building on Caroline are about to be closed in and the sign is almost up to start selling them. The building on the corner of Hess and King has drywall up and looks to be almost ready to sell and rent. These projects are varied in size and uses but all of them are showing a strong market and huge success. Brownfields, burnt out buildings, old unused spaces are finally coming back to life.     These are all indications that the market will remain strong and you should be considering on investing in your city. The phones keep ringing from out of town investors looking to buy up property in our city and we should reap the benefits as well. The big question is which ones will be the best investment. Take Burlington for example, the condos on the water gave huge returns as compared to condos being built by Upper Middle Road. The right investment in the right project will be the big question next year. 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.

Call A Broker First

by Darrin DeRoches November 7 - 13, 2013

If you are considering selling your property in the near future, consider calling your real estate broker first. Sellers think they may have to do extensive renovations and spend a lot of money with the belief that they will make more money when selling. This may be true in some instances, but most of the time less can be more. An experienced broker can help you make the right decisions on which renovations you should do to increase your selling price.     The easiest and cheapest is a professional cleaning team who will do all the little things which will show your property in the best light. Painting is the next best thing a seller should do and brings the biggest bang for your buck. Carpeting is the last and most economical facelift to your property. These three things are the cheapest and easiest things that will make a huge difference when selling any property. If you bring in an agent and they start rhyming off a huge list of things to do, you should maybe consider doing nothing. Every property has its price and sometimes the best thing to do is nothing.     Some agents think that they know everything and want the seller to invest a lot of money to sell their home when the real answer is to market the property as a “fixer upper” or “updates required”. These properties may be more appealing to the market depending on timing and price. A lot of agents want you to do everything under the sun to make it easier for them to sell the house when the right answer is to do nothing and sell it ‘as is’ and make more money. A properly marketed property will sell in any condition.     Calling your broker first can save you a lot of time and money. A good broker will be more than happy to advise you on what work should and should not be done. They should even know what colours to paint to be “on trend” and help sell the house. A good broker should be able to suggest a painter, carpet company, and plumber etc. who will do the work right and for a good price. Again, if an agent comes in and gives you a huge list of improvements and does not help with the process then maybe you should call a different agent and get their opinion. Brokers go into hundreds of homes every year and they should know what is working to help sell a property. You may think that you need to spend thousands of dollars when all you need to spend is a couple of hundred on new outlets and a thorough cleaning. I have waited over a year for some clients to get their property ready and then sold it within a week. I have walked into a property that was in terrible shape and sold it within a week. Listen to a broker who has the experience and can help you make the right decisions and in the end make you the most 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.

Fixer Upper

The Fixer Upper

by Darrin DeRoches October 31 - November 6, 2013

Everyone watches the HGTV shows about fixing up a house and making a huge profit. People think it is so easy to flip a house and you hear about it all the time in real estate. Talk to any agent and they always have people who tell them to “call me when you see a house to flip”     The problem is – by the time you call these people the house is already sold. I recently listed a “flip house” on the market and it usually goes something like this. The first day it is listed you get calls from about a dozen agents and you set appointments all day. Day two another dozen agents call and they want to get in and you allow them through. By the end of day two you have had a couple of calls about buyers wanted to pay a low ball number. You explain to them it will not sell that low and yes you agree it will take “30, 40 or 50 thousand dollars to fix up and the selling price will be – whatever they think and yes there is no profit in it”. Day three it hits the MLS system and you start getting inquiries from buyers without agents who want to buy their first “flip” and “can they now set an appointment?” You also get a couple of your own buyers through who also agree the profit is too small for their time.     By this time you have had every “flipper” and so–called builder through the house and you may even get some quick “low ball” offer. If you did your homework you should know what the top dollar the property can get and where the number should reasonably fall. By the end of the first week you should have had a couple of low offers and one offer that may be close to what the seller is looking for. A good agent will make the sale with a good offer. A bad agent will take a lowball offer and explain to the seller that the house needs a ton of work and you should take the offer before the house sits on the market forever. A great agent will take the close offer and get it up to a number the seller deserves and close the deal to the highest bidder who will get the opportunity to the “flip” and make a nice profit once they do the renovations.     Some builders will not take on a project for less than a twenty thousand dollar clean profit but others realize they can do the work and make a quick profit, even if it is a little less. They can then move on to the next “flip” to continue to make more money.     There are a lot of unknowns when taking on a flip but a great agent should know the real costs of a flip to help the seller or the buyer make a proper business decision so everyone wins. The seller should get top dollar and the buyer should make a nice profit. Win, win! 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.