Aerotropolis

by Darrin DeRoches July 11 - 17, 2013

The biggest ruling in Hamilton’s history on boundary expansion happened this week and the Ontario Municipal Board has ruled for a 555 hectare expansion around the airport. This ruling allows the expansion up until 2031. This will open the doors for companies to create an estimated 80,000 related jobs and bring in a huge amount of new tax revenue – $70 million. It has taken 10 years for this ruling and the airport is going to become a huge asset to the city. Opening up this land is opening up our city to huge opportunities not only around the airport but within the city itself.     The government recently opens the doors for another regional airport in the Pickering area and this development could stall the growth of our airport and city. The recent ruling allowing the land to be developed will give us a fast start to grow our airport before the Pickering airport gets off the ground. We have had recent success with our business parks with huge national companies moving out of the congested – and flooding – city of Toronto. These moves are only the beginning. Major companies can now set up in Hamilton and by–pass the high costs and congestion of Toronto. Our rail, ports, highways are a great link to millions of potential customers and these companies can just build new headquarters right beside an international airport.     This will create amazing developments and the city will continue to grow. The real estate market is strong in the city but this influx of development will only create an even stronger market. You will not only see the increase in Ancaster but also downtown, east and west. Our city is very accessible, where you can get anywhere within 15 minutes, so everyone will feel the positive impact of this huge change in our airport and the lands around it. More investments and more jobs will only increase the values of your homes. The fact there will not be any increase in residential land around the airport will help the whole city to fight urban sprawl and force us to expand our downtown and underdeveloped areas.     I do not think we understand how important this ruling really is. If we just announced that we were getting a NHL team the city would be dancing in the streets. The fact the lands around the airport are now prime and ready to be developed has more impact to the city bottom line and standing in the golden horseshoe. Huge companies will be setting up shop in our city and this alone may help us one day land the NHL team will have always long for. The corporate money is what the NHL is looking for – not the rabid hockey culture we can provide. Major companies setting up shop around our jewel of an airport may be the missing link we need to lure the team we deserve. If not I am happy to welcome the investment in our city and help us become the city we deserve to be. 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.

Buyers With Cold Feet

by Darrin DeRoches June 27 - July 3, 2013

The first time buyer has a lot going on when making the hundreds of decisions on buying their first property. They have to work up all their nerve to take the plunge and sign on the dotted line. Finding the right property is the easy part when working with first time buyers. The hard part is managing all of the opinions of the friends and family. Buying any property is a huge decision and a big financial move so most first time buyers will look to family and friends for advice. The only problem with this is most of these friends give advice and opinions without knowing anything about the property.     A recent deal fell apart in the last seconds on the advice of a friend. The buyer was so excited about buying his first home and was moving pretty fast. We showed him eight properties and he picked his favorite. We signed a deal for a great price and he was pre–approved for a mortgage and was ready to finalize the deal. We put in the clauses of financing and home inspection. At first he was not interested in doing a home inspection so we sent the deal off to his bank to get the mortgage and waited for the answer. A day later the buyer called me and wanted to set up a home inspection. We had a discussion about the house and he spoke to a friend and they strongly suggested he do a home inspection. Not a problem, so I sent him three home inspectors and he picked the one he wanted and set up the inspection. The inspector did the inspection and sent the buyer a 96 page detailed inspection via email and then the phone started ringing.     The buyer was milling over the very detailed inspection and had a few concerns. I explained the problems and had him call the inspector to get more information. After a couple of days of explaining the inspection, everything seemed fine and the bank had approved him for the mortgage so we just had to remove clauses.  We set a time to remove the clauses and firm up the deal. We meet and the buyer starts to change his tune. The buyer and his friend had gone over the inspection and could not get over one major issue. I understood his concerns, called the sellers agent and expressed our concerns and they agreed to have the issue resolved at their expense. Sounds great. Issue resolved – let’s buy this house. Cold feet!     The buyer and his friend could not get over all the minor issues with the house and did not feel comfortable buying the property. The sellers were willing to fix all issues, the inspector explained these were minor things and the house was in great overall shape but the wisdom of a friend and cold feet prevailed. No deal. One word of advice — listen to the professionals and your gut — not a friend. 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.

Look Back To See The Future

by Darrin DeRoches June 20 - 26, 2013

We are breaking records in sales and everyone is jumping on the bandwagon that the bleak outlook for the real estate market in 2013 was completely unfounded. Sounds like the same old broken record if you ask me. At the beginning of the year they always forecast the “big doom and gloom”. Now that we are in the middle of the year, and hitting above average in sales and listings with an increase in values, well let’s all agree it will not be that bad. At the end of the year we will beat all expectations but next year will be a “huge bubble burst!” again, which never happened.     Let’s be realistic about the real estate market and realize that it has to level out and maybe even dip in the near future. The best way to predict the future is to look into the past and see that the market always corrects itself. The mortgage rates are staying low and the rules have been tightened but people are finding a way to still buy more and more expensive homes.  I can hit you with all the statistics but when you read them it is a bit confusing. Sales are literally about one or two homes higher than last year but the average sale price has increased and that is the real news. Get used to the fact that Hamilton is not a second class city and people are investing in our real estate and companies are moving from Toronto and Burlington and new companies are sprouting up. Why?     Hamilton is the only real city next to Toronto and you can get so much more for your money in Hamilton. Whether it is commercial, land or residential, our values are holding strong. Barton Street just had a successful “open house” on their street and people are taking notice. Sure the street is a little rough but one by one it will become better and better. I had a past client contact me yesterday to look at properties in Hamilton and his big question was where to buy? He is not ready to buy until next year and by that time prices will still be rising and he will be priced out of certain areas. Look at James Street. There are properties listed for over a 1.2 million dollars and quite frankly it seems a little high. Five years ago those same properties would be crazy to ask for half of that price and no one would even think about buying them. Barton Street has a long way to go as does the rest of James Street but the new Go station and new football stadium will help tie these areas together and you will see a big difference.     Five years from now the waterfront, James Street and Barton Street will be drastically different and if you buy into it now you will be able to double your investment. Quality real estate will always sell or rent for a high price so buy low today and sell high in five years. 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.

Break That Mortgage!

by Darrin DeRoches May 30 - June 5, 2013

I may not be a mathematician but I do understand when it is a good time to make a move and make money. I have spoken with several mortgage brokers about current rates and where they are going. They are all saying the same thing. If you have a current mortgage over 4 per cent, then it is the time to break it open and re–mortgage. At this point I could pull out some charts or graphs to explain the savings but let me put it in simple terms.     Today’s mortgage rate is as low as 2.79 per cent for a 5 year term so if you are paying over 4 per cent then it is worth it to make the change. Yes there is a cost to break a mortgage but it usually cost about .05 per cent which is nominal. Take this half of one percent and the 1.2 per cent difference it can really make a difference. I renewed my mortgage last year since it was up for renewal and it saved me almost $250 a month. Back then I wrote about it and suggested everyone should take a look at their mortgages and do the same. A year later mortgage companies are now advertising for you to break your mortgage and realize the savings. The reasoning is pretty simple – competition.     The mortgage game is starting to get more and more competition and that is good for the consumer. Some companies will even cover the costs of breaking a mortgage and switching over to them. Some offer free gifts but the best way to go is look for the best deal. The rates are supposed to hold until at least next year but they have to rise sometime and if your mortgage is over 4 per cent you will be renewing when the rates are rising and this is the real problem. You break your mortgage today and take the longest term with the lowest rate. It is generally a 5 year but some companies are pushing the 4 year since they know the rates will be higher then and why give you another year at these ridiculously low rates.     So where do you start? Take a look at your mortgage rate and if it is over 4 per cent then send me an email. I can recommend you to several different banks or brokers who will help you make the best decision and show you not only the savings but the peace of mind that knowing that you will have the best rate possible for the next five years. These brokers will shop your mortgage around and find you the best deal out there. If you are comfortable at your bank then just email me which bank you would like to be at and I can refer you to the best mortgage agent in that bank. I stayed with my bank by simply “negotiating the rate” and by doing this we have a great low rate and they paid all costs. Break that mortgage! 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.

Don't Believe The Hype

by Darrin DeRoches June 6 - 12, 2013

This past weekend there was an article written about Hamilton Real Estate Market called Housing Gone Crazy: Bidding Wars and I am a huge supporter of the city but don’t believe the hype. In any market, there are always bidding wars and houses going over asking but you have to look at the other side of the story to really understand what is going on in our housing market. The article is not wrong in its reporting of these situations, the fact that listings are way down, and it is a seller’s market, but let’s not get excited that the market is becoming unaffordable and that all these deep pocketed Toronto buyers are running into town and buying anything they can find.     The situation where a home went $170,000 over asking is a reflection of the situation and not of the market itself. The agent “purposefully” listed it $70,000 under their perceived selling price, which is a risky way to sell a home. This is done to create interest and create the “bidding war”. In this case the home sold $170,000 over asking and in reality $100,000 more than the agent expected. Who cares what they did? It worked this time, but this type of “salesmenship” does not always work and what if the home is priced way under asking and no one offers that price? The house sits and does not sell and when remarketed it is a real hard sale since you have to explain the huge rise in price.     Pricing a home under or over the “real” market price can really mess up a sale and then bring bad press to the market. If this house was priced accordingly and then sold for a great price fast, the owners would still have the sale and money in their pockets but no headlines or story to tell “$170,000 over asking.” You do not read about the houses that sell for the right price and fast. Which is the real story in today’s market. The home that is priced right is getting a lot of attention, maybe multiple offers but most importantly – they are selling quickly. A fast sale is the best indicator of the market. Most agents do not price homes way under value to create headlines but rather price them right and sell them quickly at top dollar. This is what is happening in our market today and that’s what makes it a strong, vibrant market.     The market has not “Gone crazy” but rather it is strong and powerful like the city it is in. I feel bad for all the agents who had calls this week from their sellers quoting the article that the market has gone crazy and asking why their property is not selling. The indicators are showing faster sales and an increase in selling prices, but don’t get caught up in the hype and list your house too high because it will just sit on the market. For every pseudo success story there are five homes sitting on the market priced wrong. 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.

Divorce, Death & Debt

Death, Divorce And Debt

by Darrin DeRoches May 23 - 29, 2013

In real estate there are the three big D’s. Death, Divorce, and Debt. Whenever these arise, you call in the real estate agent. In most cases you are looking for an Opinon of Value of your property before moving forward. The home is usually the biggest asset in one’s life so this is usually where everyone will start before making decisions. In some cases, a real estate agent is called in to value a home before the body is even buried or before the spouse even asks for a divorce. Everyone wants to know what their property is worth in today’s market and a lot of times the agent they call in is not the one who will list the property.    I deal with the three big D’s all the time and you have to watch how you evaluate a property until you have all the information. If you get a call for an evaluation and the first question is “how much does it cost?” then you know someone is just looking for a quick idea on how much their home is worth and may not ever really sell their home. A good client can call asking about their properties and without being too evasive I always ask “why?” It usually comes back to debt or divorce and it can be a touchy subject and can get pretty personal. Sometimes debt is tougher than divorce and it may even lead to divorce. Recently I had a client going through a divorce and they already had an agent come through and give them an Opinion of Value so they could decide to sell or buy each other out. His evaluation was about $30,000 over reality since he was trying to get them to sign with him. He was not aware of the pending divorce and some agents will give you a high evaluation so that you will pick them to work with. In this particular case, I was called in to give a “real” value to which I am now listing it for a price that will move it fast since they are not talking and want to get it done.     Some would think there is a deal here, since they are not talking and want to dump the house, but when you look further into it they are divorcing for a reason. This reason is usually debt and the house is just going to pay it all off and once they settle everything there is not much left. Selling the house is harder than signing the divorce papers since the money, debt, possession and memories all tie to the family home and you have to handle the situation appropriately. I deal with each side separately, very straight forward and business minded so they both will come out of the sale with the feeling that they have been dealt with fairly and had control over the final sale. You can come out ahead when selling the home due to divorce, it is all in the way you market it.

Buying Paper - Risk And Reward

by Darrin DeRoches May 16 - 22, 2013

You hear people talking about “buying paper” and that is just what it is. The investor is looking to buy a property before construction “ on paper” with the intention of selling it when the project is complete. It can be a profitable endeavor but it is still risky. It’s happening in our market with condos but also townhouses and freeholds. People always wonder why homes go up for sale when a new sub division is built or when a condo development is completed. How can they make money?     An investor will purchase a property from the plans when they are first introduced. They are able to get the best deal on a unit. It may be discounted as high as 10 per cent less than the final sale price. They buy the unit and wait for the construction which usually takes at least a year but in most cases two years. The Hamilton market has gone up about 7 per cent each year so if you take the original discount and add the natural market increase the investor can be in for a 25 per cent return. So if they bought a $200,000 unit and paid only $180,000 then it increased by 14 per cent or $28,000 they stand to make $48,000 on a unit they only owned the “paper”.     So if it is so easy why wouldn’t everyone do it? There is a risk that the market will not increase and you will have a property you never wanted to live in. The smart investor will then rent out the property and wait until the market increases and then they will realize their return. Most investors also buy multiple properties at a time and will make $150,000 for three or $200,000 for four units. One hundred grand a year is not a bad return on “buying paper”. Of course you have to have money to buy the units and depending on your bank you can buy them for just 10 per cent down and sell them before the mortgage kicks in. It can be a risky time but if you know how to invest and have the wherewithal, you can do pretty well with very little effort.     A new client from out of town contacted me about doing this in our market and there are a few good opportunities out there. He is interested in buying at least three condos before construction begins but doesn’t know which ones. You have to really know which size, location and project to buy in. If you buy the wrong ones you will have a really hard time selling them before your mortgages kick in and it can be a tough time. Every market is different and just because it worked in Vancouver or Toronto does not mean it will work in Hamilton. Picking the right broker can make or break your investment. Risk and reward! 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.