RENT TO OWN

The following is an email I just received and I feel a lot of people are looking to own a home this year but “Renting to Own” is not the answer:

“We've been talking to some folks who operate a "Rent to own" deal. Everything seems to be legit, and they seem to be pretty transparent.  They buy the house we choose; we give them 3% and pay them what a mortgage + taxes would be at 6% over 25 years, with an agreement to buy at the end for 3% per year more than they paid.  They refund us what we would have paid towards the principal and the deposit that we then use towards the down payment.  We pay all house expenses. They make a shit load of money in interest, but its money that would go to a bank anyways.  To me, 6% and 3% per year isn't unreasonable ………no different than high risk/low money down mortgage. We want to spend under 200K, and live in the downtown core. They seem to think I'm crazy and keep sending me listings in Rosedale, the East end or on the Central Mountain for 225K.  Every one of them an ugly box bungalow. They don't like any listings I send them, either location. What do you think?  Rental prices for houses in the Hammer are pretty high, we'd likely end up spending $1200/1500 a month anyways. Assuming the contracts are good and everything is on the up and up, it seems to work for everyone? “

What I think is really just spitting back what the reader says in his email. “Everything seems to be legit” is the first red flag.  The facts you give them 3% down when all you need is 5% down to buy a property yourself then pay all the cost at a rate of 6% instead of a going rate of 3%. The last line is classic “… it seems to work for everyone?”  The person goes on about their credit being weird and if they rented it would be about the same anyways.  I answered him with the simple line “Bullshit”. That’s it, I called it – bullshit.  If you are able to come up with 3% down then wait to you have saved another 2%.  Fix your credit and buy your own home you want to own and add value to not an “ugly box bungalow”.  They pick these properties since they are around $200,000 and they can make an easy return the 6% and an easy rental, when no if, you screw up.  You will be paying a 6% mortgage and you will be stuck in the ugly bungalow with the hope of owning it one day.

Take your time, fix your credit, save a down payment and then email me when you want to buy a home your will own the day you move into it.  I will find the property you want in the area that you want with a mortgage you can afford. RENT-SAVE-BUY!

Looking Back, Looking Ahead

by Darrin DeRoches January 3 - 9, 2013

It’s the end of the year and it is a perfect time to do a year in review. I can look back and write about all the predictions that I made and boast about being right or I can look ahead and really take stock in the future of our market in 2013. So, let’s do both.     2012 was a great year for real estate in our market. It went up across the board at seven per cent and higher. We all made money if we owned real estate. Best investment of the year – Hamilton! We won the best place to invest in Ontario and Canada and the market is getting better every day. We are all worrying about the fiscal cliff but when we wake up from the hangover of 2012 it will be a great beginning to 2013. Canada weathered the storm of the mortgage crisis in the states and we actually came out stronger, so whatever “creative accounting” they do we will be strong in 2013.     Next year will be even better. We will have ups and downs. The bank rate might even rise off the lowest rate in forever but the strength of the market and the great investments coming to our city will only make the real estate market stronger. So get your finances in order and look ahead to make 2013 the best year ever which is the Year of the Snake. Okay, the Year of the Snake does not sound like a good reference and we should take it into consideration when looking ahead. When it comes to business and real estate there are “snakes” to watch out for so take a second look before making the big decision on buying real estate. Do not work with people who offer the “bait and switch” or “no money down”, “rent to own”, “no commission” – remember you get what you pay for and this is so true when it comes to any business transactions. Work with those who “earn” their commissions and put your interests in the fore front. If you need references just email or call and I can refer you to the right people in the mortgage business, lawyers, appraisers, debt counselors etc. We only work with the best, reputable people and are always happy to refer you to the ones that you can trust.     The future of our market is looking strong, it is a sellers’ market but the right broker can help a buyer find the right deal and still find a “deal” in a sellers’ market. My phones have not stopped ringing over the holidays, the market is strong and it did not slow down at all during the Christmas break. The new year is going to start off fast and keep moving so if you want to be buying or selling get ready for a quick sale. Lucky number 13 and the Year of the Snake gives me the indication of a great year in real estate but take a second before signing your life away – take a moment and make sure you are not dealing with a snake in the lucky year 2013! 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.

All I Want For Christmas...

by Darrin DeRoches December 27, 2012 - January 2, 2013

Some people might ask for something smaller but I spoke to several realtors last week who have listed a property one week before Christmas and are getting offers! It may sound a little strange because most people wonder who in their right mind would list a home, let alone buy a home a week before Christmas. These people are not out of their minds, they are actually taking advantage of a sellers’ market!     The properties are all different and are located in different areas but all have the same result one week before Christmas – offers! The selling of a property so close to the holidays seems like a crazy thing to do but these agents listing them are how they say “crazy like a fox.” A great agent understands the market and today’s market is screaming “Sell!” If you look at the activity of comparable properties in a specific area and you see little or no competition in your price range – it is time to list – today – no matter what time of the year it is. A quality product, priced well will sell anytime, but in today’s market you can ask a top price and still achieve your goals. This is where the majority of people will chirp in and say “wait until the spring market” and most people believe in the spring and fall market – but the real answer of when to sell is “what is the market doing today?”     I am in the process of renting apartments and we just signed two deals this week for apartment move in’s on February 1st. Again, you would wonder who is looking to move in the winter let alone pay top dollar for an apartment. Many people are looking and the response in the last week was amazing. The market is always moving and having the right product at the right time will bring you great rewards. If you are thinking of selling or renting I would suggest getting it on the market before the big push in mid to late January. The weather has helped tremendously and the outlook is a little cold but no big storms coming our way, so wait for everyone to sober up after the New Year and hit the market before everyone else does. Why? You will have a great advantage and less competition in the first couple of weeks of the year. Why compete with other properties and weather when you can sell before both slow down a sellers’ market. Ask top dollar and you will get it. Better yet call me and we can devise a plan that will bring amazing prosperity for the New Year! Happy Holidays! 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-Discover Hamilton in 2013

by Darrin DeRoches December 20 - 26, 2012

I keep hearing all about the “Big Move” from all of these Toronto transplants and I have even wrote about it myself but reading articles from Toronto writers kind of makes me feel strange. In the last month, I’ve read a blog article and an article in the Toronto Star all about our city and the movement of artists, bands, etc. The articles all had a positive spin on our city and the burgeoning artist scene, the affordable rents yada, yada, yada. It all sounds good on paper and any news is good news but my skin crawls because the articles are being written by Toronto writers who all claim to have a friend who lives in Hamilton. They are writing about our city with their Toronto mindset and if anyone knows anything about a true Hamiltonian it is “Argos suck” or in other words “the best thing about Hamilton — it is not Toronto”.     I love that people are moving to our city and the city is growing! I am the first to welcome all development – even a casino. I just do not want the new transplants to think that they are doing us a favor by moving here, it is actually the reverse, you are lucky to be living in Hamilton. I am sure after reading my last line all Hamiltonians are saying “yeah right – lucky to be living in Hamilton”. This is my point of this article. We, as Hamiltonians, do not give ourselves enough credit. I can go on and list all that we have to offer and the leaps and bounds our city is going to move in the next decade but what is most important is to give ourselves credit.     The average sale price for Hamilton property jumped $45,000 since last September. Hamilton housing market bucks Canadian cooling trend. Hamilton home price was up 8.5% in November. Hamilton is the number one place to invest in Canada. These headlines are a glaring example how our city is on the move. We are still the only city in the GTA that is affordable. We are the only “real” city where you can enjoy all the big city attributes but still have a small city feel.     The year is coming to an end and all of the inquiries I am receiving on real estate, whether it is commercial, residential, lease or sale and even renting apartments are all from Toronto. They are looking for space to give it a go in our city. The overall consensus is that we are affordable and close enough for them to still visit friends and families. The most interesting inquiries are from people who lived in Hamilton and are now looking to re–invest in the city. Their attitude is the worst since they remember the stagnate city from ten years ago and all I tell them is to come back and take a look before slamming something they know nothing about. A lot has changed in the last couple of years and the future looks good for the city. “Re–Discover Hamilton” should be our new slogan for 2013! Happy Holidays 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 mail@uniquerealty.ca

Matrimonial Home

by Darrin DeRoches December 13 -19, 2012

Last week I wrote about death or “estate sales” so the natural progression would to discuss “divorce” which to some is just as bad as death. I have a client looking to separate from their “common law” or “baby daddy” depending how you look at it, and the question of the matrimonial home is the issue. In most cases the home that a couple lives in becomes the matrimonial home and it is the largest asset. Most couples will simply put the home up for sale, pay their debts and split the remainder monies evenly and move on with life. Then there is the couple who cannot come to an agreement and all hell breaks loose.     My client wants to move on with her life but the “baby daddy” does not agree on anything. She has tried to negotiate and his answer is he will not sign the agreement. The sale of the matrimonial home has to have both parties’ signatures to make it legally binding. His name is not on title but since they have shared the home as a “common law” couple, he has rights to the asset. I can list the property with her signature since she is the only one on title but when an offer is received and we negotiate a deal, I have to get the “spouse” to sign the agreement or the deal cannot close. This is where things can get pretty messy. He has already made it perfectly clear that he will not sign and he has even threatened to put a lean on the property. I have heard horror stories from agents and things do change as time goes on. The reality of the house selling is more of a wakeup call than anything else. Once they sign the house away, the next signature is on a divorce or support paper, so things can get out of hand.     I was selling a home for a divorcing couple years ago and we had a good offer on the table so I called both parties and arranged a meeting. We were sitting in the back yard and the tension was pretty high between the couple. I explained all of the details and when they agreed on the amount, the wife expressed concern was that the husband wouldn’t keep to the deal that they had made between themselves on the amount paid to her. I obviously had no dealings in their deal so I just sat there while looks, glares and a lot of silence ensued for the next few long minutes. The gate opened and the new boyfriend walked in. I was sitting there thinking “I am either going to get a signature or be breaking up a fist fight”. A few words were exchanged and she signed the paper to “end it all”. Interesting to say the least.     Prolonging the inevitable will just cost you a lot more money and grief. In the end I will get the spouse to sign the papers – I always find their motivation. 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.

Estate Sales

by Darrin DeRoches December 6 - 12, 2012

There is a big misunderstanding when it comes to estate sales that the estate has to be settled before the “estate home” can be sold. This is far from the truth and in reality the home is usually the biggest asset and has to be sold to close the estate. If you do not know what an estate sale consists of, it is usually when the parent or parents have passed on and their home becomes part of their estate. There may be multiple family members involved or it can be the government and banks. In most cases it falls to the family to settle the estate, with wills, assets and debts involved. Most people wait until the lawyers have all of the other matters settled before they sell the home but it should be one of the first assets sold.     The home usually holds the biggest value in one’s estate and once it is sold the proceeds are entered into the estate and then divided up amongst the parties involved. Unfortunately family usually gets involved and their emotions take over any business logic. Whether it is due to the fact that the homes hold so many memories or it holds so much money – families start to disagree about how to handle the home. I have seen families argue, cry, hire multiple agents or worse – allow the lawyers to become involved and drag on the inevitable and bill large fees in the meantime.     When an estate sale is listed, most agents look at them as “power of sales” in our market. Everyone is always looking for a “power of sale” but these are controlled by the banks and they will not sell it lower than the amount owed. An “estate sale” is usually a fast sale which means the property will be listed at value or under so the estate can be settled and the family can get their money – as fast as possible. The homes are usually in great structural shape, new windows, doors and roofs but they are usually lacking in new updates and style. The savvy buyer realizes a new kitchen and bath will bring it up to today’s requirements and they look to buy such “undervalued” homes.     The key to selling an “estate home’” is to contact a broker, like myself, who will take care of the transaction with your families wishes in the forefront. Properly marketed, these homes can get multiple offers and sell quickly so that you can settle the estate and make sure that the home goes to a family instead of a “flipper” who is looking to make a quick buck. Be wary of agents whose cards and flyers show up in your “estate sale” homes mailbox because there are agents who read the obituaries and target these homes. It may be hard to believe but I have actually seen it happen, it is not a myth. Properly handled, an estate sale can be a smooth transaction and garner a great result. 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.

Going Alone

I had two different scenarios this week one with a long time client and one with a new client.  They both believe they can do a real estate deal by themselves – but they called me for advice.  The new client was looking for a space around 1000sqft for a café in the downtown area.  They had called before and I explained to them I was aware of about three spots that would work and if they wanted to view give me a call.  A couple of weeks passed and they contacted me again asking for suitable space.  I reminded them about the location I knew would work and they started asking questions about zoning, price, location etc.  I explained a location in the heart of all the action and they responded with interest. Then the first red flag popped up when I told them I spoke with the agent and they asked me to have him email them directly.  I explained that I would arrange everything and represent their interests, they agreed and we went to set up a showing time.  I texted the agent back to set up a time and his response was” do you clients know how it works?”  At first I was confused but I quickly realized they took my information and contacted the agent directly and started to go on their own. Most people would think it is no big deal and I just made a phone call – right?  Absolutely wrong!

In today’s market more and more people think they can go it alone.  They do not realize how a brokers experience and knowledge can not only save them time but a lot of money.  This group has to take into consideration zoning, new “handicap rules”, location, lease terms, permits etc.  They have talked with the city and are under the understanding they will have to build new washrooms, access etc. - but they do not have if it can be “grandfathered”.  This alone can save tens of thousands of dollars and months of time.  Dealing with the city can be a nightmare but if you know the right questions to ask it can be an easy transaction.  My commission would have been about $1,500 but they will be spending over ten times that without the proper information.

The long term client calls me out of the blue and asks about HST? I ask why and he says he is looking at new build in Toronto worth about a million dollars and was talking to the listing agent who may have not included it in the possible deal.  I explain that will cost him about $130,000 dollars but if he did a few things in the negotiation I could get that included in the deal.  He is still paying the listing broker the commission regardless but he did not explain the inclusions or excluded clause 7 about HST. Luckily he called me in the last moments and I can still represent his interests and show him how to structure the deal where he can save interest and money in the long run and I will earn my commission while saving him money. Use a broker!