Time To Talk Real Estate

by Darrin DeRoches December 12 - 18, 2013

A popular topic of conversation over the holidays seems to be real estate. Some people like to quote the increase in their homes value and others like to talk about their plans for 2014. The holidays are usually spent with family and after you talk about how your year was, real estate seems to creep into every conversation. This may be a good time to talk to your family about “gifting” funds to help you buy your first home or to “invest” with you in your future. If you are considering a real estate purchase next year, and need a down payment, you can be “gifted” the money from your family. Banks allow your family to give you money for a down payment since they are helping you in your future. These funds cannot be borrowed but a gift of money is fine. Instead of asking for some big ticket item for Christmas, consider asking for your down payment.     Real estate has increased in value in the area of seven per cent for the last couple of years. Ask your family how their GICs have paid out, two per cent, maybe. You can also inform them about using their RRSP to invest in real estate up to $25,000 dollars each. This money will not be taxed when it is used for real estate and the increase in value of real estate will more than cover the money earned in an RRSP. Plus, you cannot live in an RRSP. I am not suggesting that you hit up every family member you meet over the holidays, but a little bit of knowledge can be dangerous. Everyone likes to talk about how their investments have paid off this year and some people have extra money at the end of the year that they are looking to invest with. Again, real estate is paying off and is pretty safe when investing. Consider buying condos in 2014 and you will be able to make a good return on your investment. This past year, certain projects made speculators in excess of 60 grand per unit where others may have only made seven per cent but that is still a better return than GICs and less risky than the ever volatile stock market.             There are a lot of great projects coming up next year and picking the right one can make you a great return. Over the holidays, take time to consider your next move in the real estate market. It may be time to buy your first home, invest in a second property or upgrade your present home. Talk to your family and see how well they have done in real estate over the years and see if they want to grow with you in the future. The market looks strong for the next few years so use the holiday time to consider your next move. Then give us a call to find you the right property in the right area to maximize your biggest return on investment. The right broker can make you a lot of 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.

Broom Swept Condition

by Darrin DeRoches December 5 - 11, 2013

When you are selling your property you have to leave it in “broom swept condition.” This means that the property must not have any debris left and must be completely empty.  If you are unable to remove that old desk or forget to take out the garbage, you may be sued.  You would think that most people are happy to sell their house and would leave it in good condition but you would be surprised.  If an agent suspects that the property will not be cleaned or debris may be left, they will set up a walk through on closing day.  This is when they will check out the property to make sure that the seller has removed all belongings and it’s clean before the new owners take possession.     I have had an agent call me on closing day to accuse the seller of stealing the curtains and would not close the deal. After a heated exchange between the agent and myself, I had to explain to her what would happen if they did not close the deal. The reality of the situation was that the curtains were not stolen and they were in fact the exact curtains that were there when they viewed the property.  They were looking for a $500 reduction for the curtains and I had to explain that they were not getting a reduction and if they did not close the deal then I’d be calling the lawyer. I would make sure they would lose the house and their deposit.     You would think it would be a waste of time and energy for a buyer and an agent to view the property on closing day to try to squeeze more money out of a deal.  In some cases agents will split the cost from their commissions to get the deal done.  Good agents will not fall into such a pathetic tactic and actually stop the deal from closing and will make the selling agent pay for the costs plus the cost of wasting their time.  In some cases the seller is actually in default and can be sued for leaving the property in a condition that may have costs involved.  They can stop the closing and the cost may have to be negotiated.  I have dealt with this situation and it can be pretty touch and go.     The property must be in “swept condition” and if they leave a bunch of debris, they will have to pay. I have spoken with sellers daily on  the week of closing with them assuring me it is just a couple more trucks to the dump and it will all be taken care of.  Closing day comes and the house is still a dump. The buyer’s agent calls and we have to work out a deal, call the lawyers and make an adjustments to the closing costs.     Take it seriously when closing a property and make sure you are prepared to leave the property in good condition and maybe even go the extra mile and leave a six pack in the fridge as a welcome gift. 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.

Hamilton Heritage

by Darrin DeRoches November 28 - December 4, 2013

I had the pleasure of attending a panel discussion of the Economics of Heritage Preservation at the Hamilton Club. Every time you hear about “heritage” in a city, you think of stuffy people trying to save old buildings and slow up the progress of new properties. I figured I would enjoy the beauty of the Hamilton Club, some food, and a few drinks and that would make it worthwhile.     The room was filled with a diverse group including the who’s who of Hamilton builders, politicians and city employees. The mayor started off with a warm welcome and positive outlook on the evening’s speakers. The speakers came from Toronto, London, Buffalo, Ottawa, Waterloo, and New Hamburg. They all had a different perspective on saving “heritage properties” and the costs of doing so. Each speaker could have held their own night and gave a lot of information about the pursuit of transforming a heritage property into a successful, profitable property. I was impressed by each speaker and their candor and willingness to share their experiences. They freely showed the cost per foot and the “premium” people will spend to be in an updated heritage property.     You can replace the windows with replicas for a lower cost than removing, restoring and re–installing the existing ones. The costs, preservation and even landfill ethics when it came to windows was discussed. This all just proved a point as to where does heritage take over function and costs. I was most impressed with Clayton Smith from Commercial Realty Group who is, in my opinion, doing restoration the right way. He is taking underserved properties in downtown Toronto and restoring them to their glory. I spoke with him over a beer in the meet and greet and his openness to share the real costs and the higher returns he gets from his properties really drove home the message of the night.     Take an old building, update it to today’s standards but keep all the history in place. I always thought that a “heritage designation” would hurt the process but listening to the discussions throughout the night, everyone is happy to have a building saved and repurposed properly. I walked away with a new perspective and a kind of excitement to see what Hamilton has to offer with our old buildings and our builders restoring them. Stinson School, Dundas School and the Royal Connaught are all going to be proof that restoration and heritage will bring great profit and a greater pride in our city. I applaud everyone who was involved in the night and look forward to the future of our heritage! 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.

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.