Posts in Commentary

First day of school… and the fall market!

September 2nd, 2014 Posted by Commentary, Market Commentary No Comment yet

After the summer lull (such as it was this year), real estate in Toronto really picks up steam after Labour Day. Basically, the first day of school more or less coincides with the first day of the fall market. This week we’ll see an up-tick in the number of new listings, and that will increase even more next week. Pretty soon we’ll have a lot more selection, but keep in mind that the listings bring out the buyers: it’s going to get hot out there!

Buyers: if you haven’t done so in a while, dust off your mortgage pre-approval and make sure that it’s up-to-date – and don’t forget that you need a deposit, too. In the hyper-competitive Toronto market most listing agents and their sellers are looking for roughly 5% of the offer price.

Sellers: it’s a great time to put your property on the market. I think we’ll get roughly two months of good selling (somewhat weather dependent), but if you have things to do around the house/condo you need to get on that. It you really don’t want to get delayed beyond early November….

I’m here to help folks with their real estate goals, so let me know if I can do anything to help you!


Bully offers

February 5th, 2014 Posted by Commentary, First-time buyers No Comment yet

Before I started blogging I used to send out an e-newsletter to my clients. Way back in January, 2008, I wrote a piece about bully offers. At the time, they were a relatively new phenomenon. In the years since, the practice has surged and waned, never going away completely, but not always playing a prominent role in the market place. Over the last few weeks we have seen a handful of big plays, resulting in some eye-popping numbers. It’s hard to say how much influence they have on the overall monthly numbers, but it is fair to say that the bully offer is something to consider/watch out for – depending upon your perspective. Anyway, here (below) is what I wrote back then:

As some of you have experienced recently, there is a relatively new phenomenon occurring in the Toronto real estate market: the Bully Offer. By now, most market watchers are familiar with the typical marketing cycle for homes listed for sale. The listing is posted this week, an open house is scheduled for the weekend, and offers will be reviewed next week. In the hectic Toronto market it has become important to make sure that we do sufficient marketing of a listing to ensure as good exposure as possible; we don’t want a listing being scooped up in one day. That leaves everybody wondering if the listing could have sold for more money – and maximizing the proceeds from a sale is the listing real estate agent’s duty to the Seller.

This procedure has basically become the de facto standard in recent years. However, a counter-strategy has emerged that can really make things difficult for everybody. A “bully offer” is one registered prior to the scheduled date – often several days early – to be presented ASAP. The Listing Agent is obliged to present the offer to the Sellers. The ball is then in the Sellers’ court: do they take the ‘bird in hand’, or wait for the scheduled date in the hopes of getting competition? To be attractive to the Seller, the bully offer is typically (almost always, in fact) for more money than the asking price, and often ‘firm’, meaning with no conditions attached. It’s a tough decision that can only be made by each Seller on a case-by-case basis.

What about other potential Buyers? The Listing Agent is obliged to inform only Buyer Agents who have registered an offer intended for the scheduled date. Since we usually don’t register until the scheduled day of offers, every other Buyer who has looked at the house may be left out. However, it seems most Listing Agents are taking the time to notify every other agent who has shown the property. (Also, I typically call the Listing Agent if my Buyers express any interest at all in a property; I ask to be kept up to date with changes or developments.) A bully offer puts tremendous pressure on the other Buyers, who may have been counting on more time to make their decision, arrange financing, etc. But, that’s the point of the bully offer – to ‘box out’ the competition.

How do you beat a bully offer? Firstly, be as ready as you can be to make a purchase: have your financing pre-approved and your deposit money readily accessible. Secondly, if you are interested in a property, consider a pre-home inspection. That costs money, and you might still get out-bid, but that will allow you to make a ‘firm’ offer, if necessary. Thirdly, try not to fall in love with any particular house! You may not get the house, and if you are emotionally committed to it you risk disappointment. (Remember: in any negotiation, you have to be ready to walk away if you don’t get what you want/need.) If you are ready and willing to make a competitive offer, you have just as good a chance against a bully offer as any other situation.

Being prepared to deal with bully offers is now part of the whole buying process. No matter what we encounter, I always recommend that my clients be flexible and co-operative in negotiations – even if the other side starts to get prickly. Staying cool and ‘professional’ helps get you through even the most difficult negotiations.


December 2013 Market Review/Year End

January 9th, 2014 Posted by Commentary, Market Commentary, Market Review No Comment yet

According to recently released TREB stats, there were 14% more residential re-sales in Toronto in December 2013 (4,078) than there were in December 2012 (3,582), while the number of new listings added to the MLS for the month was down 4% (4,102 compared to 4,267). Those factors again resulted in higher prices, which were up 8.9% December-over-December.

Looking at 2013 as a whole, there were 87,111 MLS sales, up about 2% over the 85,496 reported in 2012. The average price increase was 5.2% (reflecting intra-annual ebbs and flows in the market, i.e. the market does not increase steadily from month to month). That’s above inflation, indicating a capital gain, but not far beyond average wage increases, which were in the range of 3% for the year. Of course, there are costs associated with home ownership, but all in all real estate in Toronto was a good investment for the umpteenth time.

Since I have been keeping a close eye on the condo market, I’ll point out that December sales were up 20.7% in the 416 (27.8% in the 905), with prices up a solid 7.6%. There still seems to be a fair bit of inventory on the market, but things are on much more solid footing than they were a year ago.

The year 2013 ended in a sellers’ market, and 2014 is beginning in the same manner. Buyers have to be prepared for either competition with other buyers, or a long search (while patiently awaiting for an opportunity to negotiate with a seller)… or both. With the US economy FINALLY showing signs of picking up, we’ll see an improving economy in Canada, too. That’s good for everybody, of course, and it should take the wind out of the real estate doomsayers (I hope). 

I don’t see a resolution of the major issue of low supply of houses for sale any time soon, so prices will likely continue to rise. As long as they stay close to last year’s average increase, we’ll see sustained affordability. All in all, unless something unforeseen happens (alien invasion?), the Toronto real estate market is going to keep doing what it has been doing for most of the last 15 years: rise steadily, but remain affordable for most qualified buyers.


Think your home needs ‘staging’? Then hire a *real* stager.

November 4th, 2013 Posted by Commentary, Featured, Style & Staging No Comment yet

One can’t talk real estate without at some point touching on the issue of ‘staging’. The idea is that somebody replaces some or all of your furniture with nicer stuff, and blows the socks off potential buyers. Sounds simple enough.

As I have written before, when selling your home it is absolutely critical that you put your best foot forward. Removing or replacing furniture, lights, wall hangings, etc. can be a part of that. Unfortunately, we have seen staging become a real ‘hook’ used by some in the real estate industry to attract clients (they pay for it!), and that has really watered down its value and effectiveness.

Before you decide to hire an agent just because they offered to ‘stage’ your home, think about it: do you really want stuff that was just picked up at another listing and trucked over to your house? (Was it even cleaned?!) Is there anything unique or special about that? Not in my opinion. Besides – with some exceptions – the furniture and decor in your home reflects your style and it fits your home far better than a white leather love seat or green couch ever will.

However, if you really do need to stage – maybe the house/condo is vacant, or what you have is really on its last legs – do yourself a favour and hire a professional. I have recently had the pleasure of dealing with two really great independent professionals, both of whom I would recommend in a heartbeat.

First, Dawn Chapnick was recommended to a client to stage a high-end downtown condo. Another owner in the King Edward Private Residences had recently hired her, and everybody liked what they saw. When I met with her at the unit she quickly convinced me that she understood what was needed, and could source the right pieces to show the space and accentuate the high quality finishes. In short, she knew what would fit, and where to get it. Take a look at her work:


The other really great stager is Kim Ostergaard, who was hired by my clients for their beautiful detached home in the Beach. I had seen Kim’s work before, so I knew that she has a great touch. The pieces she uses are carefully selected to match the style of home, the materials and the finishes. You can tell the difference when you walk in the door: the place looks nearly perfect, but also quite natural. It’s a rare blend. Take a look:


The key point is to find a full-time professional (and both of these ‘stagers’ do interior design work, unrelated to real estate sales) with the experience and expertise to do a proper job. It’s not good enough to simply plunk down some furniture and a couple of pillows. Access to quality pieces at affordable rates really sets the professionals apart from those who have just a limited inventory of ‘stuff’. If they are making their living at it, chances are they are pretty good. Do some research and find one who works for you and get the job done right.


HST Applies to Commission Paid to Realtors

February 14th, 2013 Posted by Commentary, First-time buyers, For Sellers, HST, Uncategorized No Comment yet

Professional real estate services are a ‘service’ like any other: the commission you pay to the service provider is subject to HST. This may seem obvious to some people, but I have been surprised a couple of times over the years to find that some folks didn’t realize that. Of course, we can usually review the facts in a simple, straight-forward conversation, but I think it’s important enough to mention here.

When I first started in real estate in 2001 my services were subject to just the 7% GST (which declined over time to 5%). The old Province of Ontario sales tax didn’t apply. However, when the taxes were merged into the HST, the rate went to 13%. Please note that in this example the tax applies not to the sale price of the house/condo, but rather to the commission paid for representation by a Realtor.

For example, in the case of a sale price of $400,000, a seller with an industry-standard 5% commission contract with her Realtor will pay $20,000 to the listing Brokerage (which will typically pay half of that amount to the co-operating Brokerage that represented the buyer). It’s that $20,000 that is subject to the HST. In this example, the seller has to pay $2,600 HST. The listing Brokerage collects that amount in trust for the Realtor, who then files with CRA and remits his taxes directly to CRA. (As a ‘small business’, I have an HST account, and can claim back some of the HST that I pay out during the course of my business. However, the rest goes to CRA.)

This is all separate from the HST that is payable on new construction. That HST is charged on the value of the new home, and is often built-in to the list price. Some of it is rebated to first-time buyers.

Here’s a bit more information about the HST in Ontario. If you have any questions about HST charged on real estate services, please do feel free to contact me. Either way, don’t forget that you will have to pay HST on the commission you pay your Realtor. 🙂

2012 – My Year in Review

January 16th, 2013 Posted by Commentary No Comment yet

As I have written before, real estate is a funny business. In this case, I mean that there is a constant need to prove success (thus competence, to clients and prospects), and a concurrent resentment among the public for Realtors who show the trappings of success. How often do we read or hear about ‘cheesy’ agents with their fancy cars and annoying, loud phone calls? I have always taken a modest approach to my business – without pulling any punches, mind you – but this time I’m going to talk about my recent successes more that I usually would. Bear with me!

As I wrote at this time last year, I spent a bit of time on a real estate team. The idea (so I thought) was that shared success would mean greater success all around. That turned out to not be the case, so I struck back out on my own. After a brief time away, I returned to RE/MAX Hallmark and resumed my career as a solo agent. As relieved and excited as I was about that, I was prepared for a bit of a struggle as I regained my independent footing. Somewhat to my surprise, though, the year was an absolutely roaring success.

The first (and, I’ll admit, arguably the best) part was a dramatic decrease in unproductive emails and phone calls, and that meant a lot less running around. As planned, this allowed me to focus more on my own clients. It also meant less unnecessary stress, and more time for my family. Talk about a win-win! The result was a more focused approach to my business, and a steady stream of sales throughout the year – and that translated into the most financially rewarding year of my career.

Some of my success last year has to do with being at a large, dynamic Brokerage that conducts a fantastic amount of business. I am directly connected, professionally and socially, to the largest real estate network in Toronto, which allows me to learn, share and do business with like-minded producers. While that sounds great for me, what I really mean is that it’s great for my clients who are, after all, the primary beneficiaries of all that.

However, just as much has to do with being able to deal directly with my clients, and to give them my own best advice without having to worry about any complicating dynamics. The client comes first, period. How awesome is that?! I found my return to that format very liberating, and very satisfying. At the end of a fantastic year in business, I saw that it was also best for my buyers and sellers – and that’s the most rewarding element of the whole year.

Every entrepreneur wants to grow his or her business each year. That’s one of the best things about being self-employed – the freedom and the power to greatly expand one’s horizons each year. Naturally, I expect big things for my business in 2013. With more than ten years experience in the Toronto real estate market, I feel well-positioned to help my buyers and sellers hit their own goals for this year. So, if you are planning a move this year, call me and let’s get to work on that. Together, we’ll make 2013 an even better year!