Strong September in Hamilton Market

Strong September

by Darrin DeRoches October 10 - 16, 2013

Sales are up for the month of September and came close to setting a ten year record. The best news is the average sale is a whopping $392,013 and this is a 6.7 increase from the same time last year. The total sales of homes were 1207 for the month. Luckily, listings increased since they have been scarce in the last while so the market is still a little shy on listings but homes sure are selling. If you read all the stats there are adjustments for seasons etc. But, the big news is homes average time on the market is down by eight days and the year to date increase is 7.7 per cent higher than last year.     This means your home just made you a 7.7 per cent return on your investment and all you did is live in it. Hamilton is continuing to be a front runner in the real estate market and outside interest is strong. The best part of all these stats is not just the increase but that they are real increases. Hamilton is not flooding the market with thousands of condos that are bought up for the purpose of flipping which inflates the market which does not give a true reading when looking at the market. Our numbers are showing actual houses selling for top dollar. The future looks good and the market is staying strong. So when should you jump into the market? Yesterday.     The interest rates are supposed to stay low until at least 2015 but most likely longer. If you look at mortgage rates the lowest are the two year rates since the banks know this is the time it will rise. They want you to be re–mortgaging at this time to pay a higher rate. The savvy investor can play the two year rate and hope it has not jumped up too high by the time it comes to negotiate a new mortgage. All these indicators are showing a strong market with continuing great rates. This is why you should make the move soon. Of course you can look back ten years and say what if I bought then my property would be worth so much now. Instead, you should look ahead ten years and figure out how much a property should be worth then.     The Hamilton market has been steadily increasing for over the last 15 years and it will continue to grow. We are in a resurgence that will most likely weather any storm the market will bring us. Larger cities with inflated prices and unaffordable mortgages will feel the hit, but we should be able to stay on course to “catch up” with the surrounding market. Be smart, buy the right property at the right price and you will see a great return in this city. Put a little bit of work into a property and you can cash out even higher in today’s market. More on that next week. Happy Thanksgiving! 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.

Baby Daddy Drama

by Darrin DeRoches October 3 - 10, 2013

Lately I have been involved in the sale of the matrimonial home in a couple of messy divorces. Divorce is a big part of real estate; they saying go with the big three D’s “Death, Divorce and Debt”. These are the main reasons for selling property. Moving on up to the bigger home and the first time buyer are the other half of all real estate deals.     I am currently selling a home where the one partner does not want to sign the deal. We have a great offer ready to close, greater than their expectations, one wants to sign but the other will not. We spoke with her lawyer and he advised her to list and sell the house since it was in her name and they have not lived “as a couple, for over two years”. We took the lawyer’s advice and listed the property a week ago. Within three days we had a great offer and she accepted it. Then, let’s call him “baby daddy” who is not involved made a fuss over the sale and asked how much did “we” get for the house. She informed him of the price and that was that. A day later he started to ask a ton of questions about the house and she told him to speak to myself or the lawyer to answer all his questions.     Within a day he had a lawyer and was claiming the home to be the matrimonial home. He did not pay one mortgage payment, gas bill or hydro bill. His lawyer is calling it the matrimonial home and he is claiming 50 per cent ownership. His name is not on the title but when they started out together three years ago, they had a child and they lived in the home as a couple. Two years have passed but he is now trying to get 50 per cent of a property he has paid nothing into. The women’s lawyer now changed his tune and asked us to get him to sign the agreement. Problem is the deal is accepted and we are waiting for them to remove conditions. We ask the “baby daddy” to sign and of course he says, “No, and I want 50 per cent of the profit”. They have never been married, he has never paid a dime into the house and he has now almost killed the deal since he will not sign. They are going to sit down with their lawyers and try to work it out but if he does not sign the deal will be dead. In all fairness, he legally may have a right to try and get money out of the house but morally, I think he is in the wrong. It just goes to show you the biggest issue in divorce is the money and it usually involves the biggest asset; the home. I would usually get both parties to agree before listing a property but in this case the lawyer instructed her that he had no legal claim. The lawyers may be the ones making all the money in this case. 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.

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.

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.