Hamilton Home Review-Robert J. Morrow, editor

Advertising the Tax Credit?--Are you kidding?

Robert Morrow (Chase Realty Inc. Brokerage) — Mon, 20 Jul 2009 14:32:30 -0500

I received not only an email, but several phone calls inviting me to a press conference 20 miles from my home just to hear this:

"The Honourable Lisa Raitt, Minister of Natural Resources, announces the official launch of a new national advertising campaign for the Home Renovation Tax Credit (HRTC) on behalf of the Honourable Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture andAgri-Food)."

Are they serious?

Have we not got better things to spend tax payer money on than advertising a tax credit that everyone already knows about, not to mention sending "honourables" and their staff running around the province setting up press releases?

If you look up an home improvement project on anybody's website these days, you'll see links to the tax credit (mine included). Major retail chains are using it as sales incentive and are spending gazillions promoting it themselves. My wife and I just purchased flooring and I walked past at least 2 stations where the government pamphlets were stacked en masse. The retailer had his own too (which was better I might add).

If giving us a tax credit is going to cost this much money, no wonder it's only for $1,380. If they spent a little less on saturating the market with promotions, maybe it could have been a $2,000 credit. Now that would have been worth searching for.

Are you getting your money's worth?

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 21 May 2009 20:41:12 -0500

I had seven showings to book at around 8pm at night. It took 30 minutes to accomplish because all the offices are closed and I'm dealing with very busy call-in centres. Out of the seven, four put me on hold; three were long distance and never answered; and four didn't understand which agent I was looking for.

The next day, of course, only 3 confirmations came in. I re-called to the now open office and asked for a 2nd request. The first requests hadn't come in I was told. They'd book now.

So much for 24 hours notice.

Three of the agents never got their message which is not a surprise. I find most answering services somehow lose showing requests on a regular basis.

My client and I went to see 5 homes. The other two hadn't confirmed by showing time.

So my question is... if you're paying so much money to your brokerage for a great service, why is an answering service responsible for your image? Most people (agents and customers) call at night after the office is closed. The services most brokerages use are the same and are overworked. They also have no clue who you are.

I work for a small, 100% commission brokerage. You know, the kind that are frowned upon by the big franchises. We hire a top knotch answering service because they're in charge 24/7. And most of the people answering know me as they've had our business for some time.

I pay for answering services just like you do. I pay a little more because they're on tap all day and night. But I don't pay the heavy fees you pay to have office staff work 9-5 when most clients are working themselves (and not thinking about real estate).

Wouldn't it be easier to do the "showing" thing by computer? Are we such an backwards industry that we can't come up with an online system for booking?

Of course, then you wouldn't need all that office staff. Heaven forbid, we need to keep them working. After all, that's what the fees are for.

Robert J. Morrow is editor of www.HamiltonHomeReview.com, an online real estate magazine serving Greater Hamilton, Ontario. Click here for a FREE SUBSCRIPTION sent to your email monthly. Click here to receive new Hamilton area listings in your email daily.

Re-financing your mortgage? Watch out for those insane penalties!

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 30 Apr 2009 13:29:24 -0500

This from my friend and associate, Rita Cruse of Mortgage Alliance:

"There has never been a better time for people to take a close look at their current mortgages...

However the Bank's are also aware of the fact that rates today are significantly better then they were 6 months ago... So watch out for the penalties.. We are seeing "HISTORICAL PENALTIES" that are being quoted with these new historical low mortgage rates... I had one client this week with $36,000 being quoted.

In the last 2 weeks I have had clients penalties go from $4000 - $25,000 and up...

How can the Bank's get away with these "HUGE" penalties???

Because, it appears back in 2006 most of the major banks, rewrote the equation of the calculation of Interest Rate Differential.

I am using the following scenario for you to see how mortgage penalties are increasing.

Client has a $380,000 mortgage at 5.66% that will mature on Feb 1 2013 or in 3 years and 2 months.

Old Method of Calculation (before 2006)

The Bank would take your actual rate and compare it to the discounted rate of the equivalent mortgage ter m for the time remaining; they would then multiply your current mortgage balance by the difference in the 2 rates, and take the number of months remaining in your term.

Current Rate, 5.66%, subtract their current discounted rate for 3 years is 4.95% = .71%

$380,000 X 0.71% = $2698 X 3.16666 (3 years and 2 months) = $8543.65 (Still a really high number) but when you use today's rates the client would save over $14,000 just in the 38 months alone, and the client will benefit from the extra 2 years... I was using a new rate of 3.72% for this calculation.

New Method of Calculation

They now look at your current mortgage rate, figure out how much of a discount you receiv ed from the posted rate at the time you took out the mortgage. (The longer the term, likely the larger the discount.) In some cases it could have been 1.45 - 2.00% So if I use 5.66% (It was a 5 year term), but back when it was obtained the posted rate for the 5 year term was 6.75%, The identified discount amount is now 1.55%.

Now, the following will show you how the Banks are controlling the penalty amounts, forcing client's penalties to in some cases double or triple.

During the last 2 weeks, which was when these penalties jumped, the Banks forced a sizable drop in their Posted mortgage rates, if you look back in time the Bank's would advertise a higher posted rate, and then leave it up to the client to negotiate a lower discounted rate, back in 2006 this is why the Bank's rewrote mortgage penalty calculations, now by dropping the posted rate to be closer to their discounted rate they are actually more then doubling the amount of the differential.

Let's look at my example now.

5.66% - (4.95% (Current lowered posted 3 year rate) - 1.55% (Discount they received on old mortgage))
5.66% - 3.40% = 2.26% new Differential Amount

Now we can calculate the client's new penalty......

$380,000 X.2.26% = $8588 X 3.16666 (3 years and 2 months) = $27,195.76

My recommendation before you call me, is to call your bank first, find out your current mortgage balance, and get a quote on the penalty, and then call me......

If you had previously investigated your penalty more then 2 weeks ago, I highly recommend you call them again, as the penalty amount has likely to have increased.

The clients who are being affected the most are those who obtained 5 year fixed mortgages or longer terms after 2006.with the 5 major Banks, there are differences from lender to lender as to how they calculate mortgage penalties..... Not all lenders adopted these changes

I had a client who's rate is currently 5.79% and he will only be paying a $1800.00 penalty, depends on the lender and the amount of the mortgage.

One thing that is very clear is that with the BANK RATE at 0.25% there is not a lot of room for the BANK rate to go down any further, I think we have officially hit bottom, which means PRIME RATE has likely hit bottom as well...

I do have clients who are looking at getting out of their current Varaible rate mortgages to take advantage of these historical low fixed rates mortgages, and good news for them is the Penalites on these are very small.. There is no such thing as a Interest Rate differential on a Variable rate mortgage. This will give you the opportunity to lock your mortgage payment in for the next 5 years."

Rita Cruse is Mortgage Broker with Mortgage Alliance in Dundas Ontario. to reach her go to www.mortgagealliance.ca/ritacruse

Hamilton Councillor out of line on MacMaster

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 30 Apr 2009 13:10:48 -0500

Councillor Bob Bratina blew it recently when he stated, with disgust, that the university is "an unwieldy leviathan ruining everything around it," and a "huge nuisance".

MacMaster University-with more than 19,000 full-time undergraduate students, almost 3,000 grad students and more than 7,500 employees--has a huge positive impact on our city with its ability to attract bright minds, research money and prestige.

Bratina made the comment at a council meeting that concerned a proposed zoining change so a developer can build a 10-storey apartment building to house 600 students between Rifle Range and Ewen roads, south of Main St. West.

I don't particularly agree with multi-user apartments and if you talk to a lot of the students, they don't like them either; too much like residence. They like to live in homes but of course the city finds that hard to swallow. But since the school can't afford to build housing, and the municipality/province won't subsidize, just where are the students to go?

At a special "student housing" meeting last week with Councillor Brian McHattie, Realtors from the area (including yours truly) were met with several proposals concerning new regulations and bylaws designed to limit student housing in the immediate area surrounding MacMaster University. This despite the lack of housing available.

Naturally, the Realtors let him know that new laws and even licensing wasn't going to solve the problem. In fact, it isn't much of a problem it seems. Of all the resident complaints about bad, noisy, or derelict housing, it affects less than 200 students (out of 1,900 at any given time). Most student housing is responsible, healthy, and affordable. Socially, it's a preferred environment that fosters independence and responsible behaviour--at least once they've finished first year.

It's comments like these made by uniformed councillors which cause those of us who help put students and investors together cringe. Student Housing is a viable, high yield investment. And there are some good investors out there--the majority in fact. In other words a win/win/win situation for students/MacMaster/investors.

Make laws that stop the slum lords, the partiers, etc. But don't stop student housing, regardless of its form. MacMaster is a vital part of Hamilton and to lose it would make losing Stelco a minor glitch in the economy in comparison. And of course, no housing....no students!

In hindsight, perhaps City Hall is that leviathan that is, more often than not, the nuisance.

Just a thought.

Buy a home for $7500

Robert Morrow (Chase Realty Inc. Brokerage) — Tue, 03 Mar 2009 14:50:52 -0600

No, it's not a misprint. Sound ridiculous? Click here for proof. So you think we have problems in Ontario?

The median price of a home sold in Detroit in December was $7,500, according to Realcomp, a listing service.

Detroit, which has lost half its population in the past 50 years, is deceptively large, covering 139 square miles. Manhattan, San Francisco and Boston could, as a group, fit inside the city's boundaries. There is no major grocery chain in the city, and only two movie theaters. Much of the neighborhood economy revolves around rib joints, hot dog stands and liquor stores.

Often described using same terms as that of 3rd world countries, Detroit is in a tailspin. But if you want cheap housing...

Not sure about the investment value though.

Low income? The city will help with the downpayment

Robert Morrow (Chase Realty Inc. Brokerage) — Tue, 03 Mar 2009 14:42:37 -0600

I recently worked with a client who wasn't aware of the Canada-Ontario Affordable Housing Program-Homeownership (COAHP-HO).

The government will assist with your down payment (up to $7,262) if you are a low to moderate-income level andyou want to purchase a home. Applicants must be first-time homebuyers over the age of 18 with a combined household income of no more than $55,900. The home to buy must be located in the city of Hamilton and priced at or below $185,500.

When combined with the Land Transfer Tax Rebate (up to $2,000); the First Time Homebuyer Tax Credit (apx. $750); and steadily decreasing house prices, you just might be able to make that move into home ownership this year.

It all starts with an energy audit

Robert Morrow (Chase Realty Inc. Brokerage) — Fri, 27 Feb 2009 10:45:34 -0600

Clients have been asking me just exactly how the Home Renovation Tax Rebte and the Provincial and Federal Grants available for improving the energy efficiencty of your home.

I just read this post and found it explains the process very well. From an initial Energy Audit, through repairs and costs, to the grants available and then the further reductions (15%) when claiming through the Home Renovation Tax Rebate.

If you're interested in seeing how one person proceeded, click here. There is also a link to a complete list of available grants.

The Magic Mortgage number seems to be 3

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 26 Feb 2009 22:22:10 -0600

In Canada, a recent search of various mortgage brokers shows that the best mortgage term seems to be three years.

For example, Mortgage Alliance states a variable rate of 3.75, TD Canada Trust 3.6%. In the latter's case, even the five-year variable is 3.6%, which begs the question "Why would anyone choose a risky 5 year term when the same rate is available fixed for 3 years? Proponents of variables, of course, will argue, but there is no doubt that in the current economy, a 3 year quarantee is very attractive.

The average 6-month is around 5%, 1 year 3.89% and 5 year 4.22%.

Of course, the biggest question in most people's minds is just how difficult is it to get those lower rates? This is a time when being late with payments and even requesting extensions on due dates is occurring simultaneously with the lending institutions seeking even higher credit ratings. I recently obtained a mortgage for a first time buyer through one of my affiliates, but not after embarrassing him with a 6-year-old record of his being late with a credit card payment. At the time, he was a college student. Now, he's a brand-new professor with a high five-figure income. The mortgage was less than $250,000 and he also had his wife's income of $60,000+ to bring to bear.

If that client found it difficult, how on earth do the rest of us who have been around longer, made a few more mistakes, and allowed our credit score to slip a bit, get these proudly promoted low rates?

Maybe having the kids move home after college isn't such a bad idea. Their credit scores are usually pretty good. Maybe they can renew the mortgage on the family home on the next due date.

Alternative private financing

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 12 Feb 2009 11:14:08 -0600

This press release came across the wires this morning. An interesting alternatives for Canadians who have been told "No" to mortgages from banks, lenders, etc. A private operation by Moishe Alexander who is a unique individual representing private money in a fund calld the Canadian Funding Corporation.

"Toronto, Ontario (PRWEB) February 11, 2009 -- Mr. and Mrs. Granville of Orangeville, Ontario applied to Canadian Funding Corporation for a second mortgage to purchase a flea market commercial building in Orangeville, Ontario, with a loan to value of 91%. Canadian Funding Corp approved the deal after Jan Luistermans inspected the property, and Marty Lapedus approved the financing application. Moishe Alexander said "fund", and Canadian Funding Corporation funded the deal.

Moishe Alexander, President and Founder of Canadian Funding Corporation says, "Just because your bank, broker or previous lender has said 'no', doesn't mean we will. In fact Canadian Funding Corporation is known for funding difficult deals that traditionally do not fit institutional guidelines. We can fund the full spectrum of private and commercial mortgages from a $10,000 3rd mortgage to a $100,000,000+ build from raw land."

For More Information:
Please see the Canadian Funding Corporation's website or Moishe Alexander's personal website for more information regarding the company, or real estate financing.

Projects that bring the most returns

Robert Morrow (Chase Realty Inc. Brokerage) — Mon, 09 Feb 2009 12:23:41 -0600

This blog comment from the 2008 Remodelling Cost vs Value report is interesting in that it suggest curb appeal projects (siding, roofing, decks, etc.) play a stronger role in realizing ROI upon selling.

I think the siding thing is limited to certain markets but then again, if the home isn't brick, then new siding can make a difference in appearance. The new spray stucco is another alternative.

Here's the link:

http://www.brokeragentsocial.com/laveryteam/blog/727/

Home Renovation Tax Credit-a Lowe view

Robert Morrow (Chase Realty Inc. Brokerage) — Sat, 07 Feb 2009 15:15:32 -0600

The home renovation giant Lowe's recently entered the Hamilton market and, to my understanding, has had huge success thus far (at least they spend an incredible amount on advertising).

So, perhaps their research is worth repeating.

Their lates survey states that the new Home Revovation Tax Credit in the 2009 Budget will make one in five Canadians more likely to undertake renovations in the next 12 months.

"For Canadians who may have been postponing their renovation projects,
big or small, there is no better time to invest in their home and take
advantage of the temporary tax credit," said Lowe's Canada president, Don T.
Stallings. "This is the year to save on home renovations..."

The federal government's temporary tax credit is designed to stimulate
investment in Canada's home renovation sector. The HRTC is a temporary 15 per
cent tax credit that can be claimed on up to $10,000 of eligible home
renovation expenditures between Jan. 27, 2009, and Feb. 1, 2010. The credit
will apply to the portion of eligible expenditures that exceeds $1,000 but
does not exceed $10,000, up to a maximum credit of $1,350.

Patricia Lovett-Reid has some good advice on how to spend the credit: http://finance.sympatico.msn.ca/Investing/PatriciaLovettReid/article.aspx?cp-documentid=17402069

Here's the link to Canada's Economic Action Plan page with further details on the Home Renovation Tax Credit:http://www.budget.gc.ca/2009/plan/bpa5a-eng.asp#Personal

A $5,000 tax break for first time home buyers

Robert Morrow (Chase Realty Inc. Brokerage) — Sat, 07 Feb 2009 14:38:16 -0600

Well, with the billions of dollars being thrown around in both the US and Canada these days, a tax credit doesn't seem like much, does it?

However, for those buying their first home, the credit, based on $5,000, will certainly come in handy, though not when you're actually buying the home. My understanding is that it works out to about $750 in actual tax relief, which of course, doesn't even cover legal costs.

As for the increase in allowable withdrawals from your RRSP from $20,000 to $25,000, how many first time buyers have you met who even have that much saved yet?

Can anyone explain how this thing works because if you read the government release below, I think you have to be an accountant to "get it". I'm just a poor journalist/agent/consumer.

Here's the link to Canada's Economic Action Plan page with further details on both the Home Buyers Plan and the First Time Home Buyers Tax Credit :http://www.budget.gc.ca/2009/plan/bpa5a-eng.asp#Personal

TD allows you 4 missed payments

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 05 Feb 2009 10:40:57 -0600

With some of the blame being thrown on banks for not helping us out of this economic downturn, at least TD is attempting something, albeit minor in my opinion.

Now you can defer up to four mortgage payments at any time during its tenure. You still pay interest, and future payments are adjusted to ensure the mortgage renewal date doesn't change. After all, we can't disturb the bank's mandate of making money for its stakeholders according to schedule, can we?

If you're going through some rough periods, it'll put some grocery money in your pocket, at least.
TD calls it an extension to their "Mortgage Payment Extension Policy". If your mortgage isn't with TD, you'll have to wait while the others play catch-up...or not.

We'll take this one for now.

Five things to consider before bankruptcy

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 05 Feb 2009 09:54:31 -0600

Okay, I know it's a subject we don't like to discuss. But with job losses mounting in certain parts of Ontario, it is clear that many will be considering bankruptcy as a solution to their problems.

The first consideration is whether or not you lose your home. And although people will give you differing advice on this, it is the "intent" of the law not to kick you out of your home. Most trustees will work out an arrangement with the bank (or other mortgage holder) so that you pay back equity in the home. After all, in most cases, paying rent is more expensive than paying a re-negotiated mortgage, so it's in everyone's interest to keep you at home.

You will lose leased cars (due to no outright ownership) but can negotiate to keep a car you own (even with a loan balance). You can keep up to $5600 worth of clothing but will lose any items of any value that aren't required to live comfortably in your home. Who decides how comfortable you'll be? The trustee, but you can negotiate to some degree. by-the-way, if you've had money in RRSPs for over a year, you get to keep that. And if you were smart enough to put the home in your spouse's name, the bankruptcy usually doesn't affect them. But you can't make that change at the last minute either.

If you make a good wage but not enough to pay debts, you'll pay more for the trustee to steer you through bankruptcy. If you're out of work and there's no income coming in, it'll still cost around $1,400 but you don't have to pay it all at once.

They tell you that you can get credit back after 6 years. I've heard stories of people getting credit cards again within a year. And I've heard other stories of people still being rejected after 7 years. If, for any reason, you get into trouble a second time, you not supposed get credit back for 14 years. I've heard that people rack up incredible debts on credit cards just before going bankrupt and then having it all wiped out. I've also heard of people having to pay 30 cents on the dollar no matter what the amount. Which one is more accurate? I would count on the worst case scenario. People--even those not embarrassed enough to keep it to themselves--will brag about what they got away with. People tend to embellish embarrassing moments to make things sound like they were "smart". in actual fact, bankruptcy is very demeaning and has the potential to affect the way you live for several years to come. If you're a survivor, you'll get through it and be better off than you were when financial stress was a daily occurrence.

For many, the positive relief far outweighs the negative results. But the important thing is not to listen to anyone other than a trustee, in my opinion. They can pretty much predict what will happen during the course of your bankruptcy (which lasts for a year). But they can't tell you what happens after that.

Best thing to remember? There are few black and white regulations on this, contrary to popular belief. Oh, the laws are straightforward enough. It's the interpretation by consultants, trustees, creditors, and banks that make the whole thing confusing and, sometimes, bias.

Get the facts before you make a move. And get more than one professional's advice.

Here's a link with a little more info and further links on the subject:

http://business.theglobeandmail.com/servlet/story/RTGAM.20090204.wbankrupt0204/BNStory/SpecialEvents2/home?cid=al_gam_mostview

Timing, price, and location: it's sold!

Robert Morrow (Chase Realty Inc. Brokerage) — Tue, 03 Feb 2009 23:15:51 -0600

I like to deal in fair play to my competitors, especially when they are activerain peers also.

So here's a blog post from a FSBO company in Durham County (that's in Canada's mid-north). I can find little fault with what they say about selling privately, other than that they don't substantiate their testimonial. In fact, it verifies what I have been saying all along: That if the timing, price and location are right, you WILL sell your house quickly, privately or otherwise.

Unfortunately, a lot of Sellers are missing one of those elements.

Check out the post and post your comments here.

http://activerain.com/blogsview/914414/What-Is-The-Cost-To-Sell-For-Sale-By-Owner-And-How-Much-Can-You-Save

Housing starts down a bad thing?

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 22 Jan 2009 12:00:59 -0600

During Nov and Dec of last year, national housing starts dropped below 180,000 units. The average over the past seven years, beginning in 2002, has been 223,000 units. Be prepared for this to be the new normal level for quite some time, at least through 2010. In fact, it may well turn out that 180,000 units would be more than acceptable given what is transpiring in the overall economy.

{People stopped shopping for (new) real estate and started worrying about their finances in the fourth quarter of last year. This change in thinking was initiated by September's nosedive in stock market values. It is an unfortunate corollary of cycles that a decline in one asset class rarely happens in isolation. It is usually accompanied by declines in others as well. Hence, home prices fall at the same time as equity prices in a generalized slowdown.}

I'm really no expert on new home sales but tell me, isn't this a good thing for the resale market, or am I missing something? Perhaps builder inflexibility in pricing has had a stronger affect than anticipated.

Yes, I know I'm simplifying the whole thing. But it's because I'm looking for some agent level input instead of the usual industry "corporate lineage".

Let's blame the banks

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 22 Jan 2009 11:34:32 -0600

I came across an article today that speaks to the increasing frustration all of have with banks. (link below). Despite a downturn in the economy, banks boasted over $19.5 billion in profits for 2007 (not income, profits!).

The Bank of Canada has now lowered the lending rate to 1%, the lowest in history.

The CMHC has purchased over 33 billion in mortgages and the government has agreed to take another $75 million off the bank's books.

{Steve Foerster, a professor of finance with the Richard Ivey School of Business at the University of Western Ontario, said many people are basing their frustration on a trend they saw when times were good. While it has traditionally been the case that banks would lower or raise their interest rates based on the Bank of Canada's rate announcements, there is no law that states they must do so. }

Perhaps we need one.

{Terry Campbell, vice-president of policy for the Canadian Bankers Association, says that lending rates would only affect short-term loans. He says bank policy is often misunderstood and that the balancing act between satisfying customers and satisfying stakeholders is a difficult one to maintain.}

Maybe the government could alleviate their difficulties by creating some new guidelines (i.e. legislation) that would eliminate their need to be all things to all people and allow them to concentrate on solving problems for the common man instead of balancing everything they do against maintaining continually increasing profitability.

{As of last week, posted rates for a five-year-fixed mortgage (the most popular among Canadian households) from Canada's four biggest banks were 6.75 per cent. In January 2004, when both the Bank of Canada and the bank's prime rate were much higher, that same mortgage was being offered at 6.35 per cent.}

Liberal Senator Pierrette Ringuette, a member of the standing Senate committee on banking, trade and commerce says "I believe that government intervention is needed... There is absolutely no logic to this situation at all." Is anyone listening?

http://www.ottawacitizen.com/Business/Give+break+Canadians+tell+banks/1192115/story.html

At press time, this article was just released featuring the actual text of the Bank of Canada's Jan. 20th policy announcement. But it's the blog comments after that fuel the fire.

http://network.nationalpost.com/np/blogs/fpposted/archive/2009/01/20/text-of-bank-of-canada-s-jan-20-policy-announcement.aspx

The corporate line

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 22 Jan 2009 10:25:42 -0600

I recently read a release from one of the major Real Estate franchises (I won't say which because I'd be inundated with hate/defensive mail) that states "Canada's real estate environoment is considerably more complex than it has been in recent years."

For crying out loud...

No it's not. The economic downturn in the US--and then by chain reaction--the rest of the world, has made it a little more difficult to sell houses in Canada. Our economy will suffer in relation to the US but Canadians have options our friends to the South don't have. We also have financial stability that will bounce back much quicker. And most importantly, the second largest demographic buying group in history is entering the marketplace (the X and Y generations). It's not complex, it's just different. Corporations don't do different very well, or at least, not very quickly.

The release states that "real estate trends in 22 markets across the country boasted average prices holding up remarkably will in 2008", despite 13 of their own reporting areas stated double-digit declines in home sales. This franchise predicts sales were down 15% last year. An official of the company goes on to predict that "with affordable lending rates and increased selection, first-time and move-up buyers with good credit may choose to...purchase a home. The comfort of a tangible investment like real estate goes a long way in tough times."

Isn't it that tangible investment that has so many consumers worried at this point?

They go on to boldly claim that 11 major centres are forecasting to match or exceed 2008 home sales and 11 are expeced to slide. Talk about riding the fence!

If you are an agent in one of the major franchise organizations, you need to ask yourself if you're not being fed the corporate line. Worse, are you swallowing it hook, line, and sinker, just because they are still--at the moment--a strong force in the industry?

My message? Don't rely on your franchise (the very word meaning they exist because of you, not the consumer) to explain what's going on out there. And for heaven's sake, don't assume they're accurate. The corporate line has kept many a large, slow moving company alive. The big RE franchises are no different. They don't need the consumer to stay afloat, they need fee-paying agents. Yes, it's in their best interests to "influence" the consumer with their awareness advertising, but much more attention is paid to ensuring their stable of agents remains faithful and don't quit in the face of hardship. Thus the "complex environment" they portray: One they can provide training, programs, advertising, etc., to counter-balance and "provide insight into the changing marketplace."

I'm not saying their being decietful. Just corporate. So find out for yourself. Read everything. Surf the internet, sign up for RSS feeds from news groups that are on top of the industry (not just your franchise), and, most importantly, listen to your clients. After all, they are the only ones who really know what they're doing.

House price indexes not so accurate

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 22 Jan 2009 10:02:29 -0600

Statistics can be made to state whatever you want them too, as long as you have info to back you up.

For example, average house prices reported in Canada are derived from the MLS(R) system. It is not wholly accurate as private sales and new home sales are not included. But economists and the CMHC use the results as a major economic indicator.

Well, some other financial institutions are questioning its validity as the prime method of determining whether we're in a bad economy or not. The TD Bank Financial Group was first with their TD Home Price Index. It takes into account, for example, that BCs sales are down 50%. This improperly impacts the national percentage. How different does this make things? CREA says avaerage prices for major markets is down 10.9%. The TD HPI says 4.6%.

Others jumped on the band wagon too. National Bank Financial Group and Teranet have come up with another home price index which is based on "repeat sales methodology". They record public land registries in six major metropolitan centres of properties that have sold at least twice during the recording period. The result is published on the last Wednesday of each month on www.Houspriceindex.ca. It is used primarily to help the industry sell financial products. And for us in Hamilton, since our metropolitan area wasn't included, it should be used as only a back-up measurement.

Massive stabilization on the MLS(R) system has occured during the past four months and I think future indexes will be more accurate, regardless of methodology. But during that "reset" stage, it is best to consider other factors too. Such as demographics. There are more first-time buyers in the marketplace and since they have good credit and no time restraints, they are ideally set to move into the market aggressively. This alone, will drastically solidify statistics as they are set to become the largest market segment over the next ten years.

TFSA book helps you do it right

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 15 Jan 2009 22:29:19 -0600

I was sent a notice today about a new book about Canada's new Tax Free Savings Account. If you need more info, check it out. Here's the publisher's ad copy:

"This may be one of the most important little investment books you'll ever read! Financial expert Gordon Pape explains the new Tax-Free Savings Account (TFSA)-the powerful new personal savings vehicle for Canadians - and provides a range of strategies that you can use to add thousands of tax-exempt dollars to your personal wealth.As of January, 2009, everyone 18 and older can contribute to a TFSA and start building your tax-free investments. This indispensible primer will help you get started..."

More reviews and to order: http://www.chapters.indigo.ca/books/Tax-free-Savings-Accounts-Gordon-Pape/9780143171966-item.html?EMS_MID=EMSx321x11805

A Buyers' market, even for Sellers

Robert Morrow (Chase Realty Inc. Brokerage) — Thu, 15 Jan 2009 09:34:36 -0600

It should be considered common sense but apparently some Sellers need to be told point blank that the same economy that is affecting their house value when selling is affecting the Sellers of the new home they want also.

Here's a sample from RE/MAX sales representative, Amil Paul of Toronto:

"The reason this trend has seemed to take on steam as of late is because many of these same Torontonians {people who bought condos as a first home in 2003-2005} have begun to really understand what this buyer's market is all about. Take Amy and David for instance, who currently own a condo in the downtown core. Originally they were quite disheartened to realize that the recent economic troubles have dropped the value of their condo from $300,000 to $285,000. Selling for $15,000 less was, at first, a very good reason to put their lives on hold. What Amy and David both soon realized, however, was that while the price of their condo has in fact tailed off, so too has the price of that dream home of theirs, in Oakville. What really put them into a happy frenzy was when they realized that while their modest $300,000 condo had dropped only $15,000, that gorgeous Oakville home had dropped from $550,000 closer to $500,000. So they're actually in a better position to make the move now than they had been previously. This same realization has been revealing itself to many of Toronto's condo owners."

This is not unique to Toronto. And despite the economy forcing a stabilization of housing prices, it is affecting everyone. So if you are upgrading, you will most likely see a higher reduction in the home you are seeking to buy than the reduction you are being forced to make to sell yours. And unlike the US and the media's comments on banks tightening up on lending, mortgage brokers are doing a booming business.

Tax Free Savings Account introduced

Robert Morrow (Chase Realty Inc. Brokerage) — Mon, 12 Jan 2009 21:33:31 -0600

If you've been paying any attention at all, you'll have heard about the Canadian government's latest savings scheme. For once, it seems to have few, if any flaws.

in a nutshell, you can contribute $5000 per year into the account and then take it out again whenever you like...tax free. Once you take it out you can still put it back again later.

Here's the link to the official information site, that for once, is informational:

http://www.budget.gc.ca/2008/pamphlet-depliant/pamphlet-depliant2-eng.asp

Farmers' Market & Library plans unveiled

Robert Morrow (Chase Realty Inc. Brokerage) — Mon, 12 Jan 2009 21:17:57 -0600

The city of Hamilton unveiled plans Saturday, Jan 10/09 for the new Farmers' Market and Central Library.

According to attendees, the architect, David Premi, a Hamilton native, has done an amazing job of understanding the current problems in the market and has come up with a vision for the downtown that is inspiring.

The $7 million project will start this March and is due for completion by 2010. Councillor Bob Bratina said the new market will have a wow factor and "help recapture the fun that was there 40 or 50 years ago."

Jennifer Gautrey, chair of the Hamilton Public Library board said there had been little change to the library since it opened in 1980. But users now demand more computer access, multimedia materials and public space...all needs that will be met in the renovation.

A glass curtain wall will run along York Boulevard, along with new glass walls inside.
"The entire space will be filled with light," said Premi. Colour changing LED lights will also create an indoor walkway and caf connecting the library and the market. Sliding glass panels will open the market to a widened sidewalk in the summer.

The myth of recouping reno costs

Robert Morrow (Chase Realty Inc. Brokerage) — Mon, 12 Jan 2009 10:45:31 -0600

It used to be that when you renovated some portion of your home, the home's value would increase.

Things aren't quite the same now.

A recent survey by Remodeling Magazine, a periodical for builders, publishes an annual survey of the value of home improvements.

The depressing results include the following examples: An upscale bathroom remodel cost about $51,000 in 2007 but homeowners could expect to recover only about $35,000 or 68% of the cost. Spend $220,000 on a new master bedroom suite, recoup just $141,000 (64%). Drop $109,000 on a new kitchen, make back just $81,000 (74%).

Most remodeling has gone far off the scale of being reasonable, especially if the primary purpose is financial. Custom built kitchen cabinets, granite counters and top-of-the-line restauarnt-style appliances look fantastic, but there are plenty of more modest and affordable alternative. And they will still sell your home if that's the intention.

Don't try to keep up with the neighbours. Unless you are remodelling to put it up for immediate sale, there is no valid financial argument for remodeling just to keep on par with The Jones'. In fact, if you're not moving out anytime soon, save the expensive reno's for when you do plan to sell. Then, at least, they will new. There's nothing worse than viewing a home that was "renovated" only to find the reno's are a decade old. To most buyers, a "renovated home" means a modern home...modern at the time of viewing.

excerpted from "The Wall Street Journal Complete Home Owner's Guidebook" by David Crook

The boat that donuts bought

Robert Morrow (Chase Realty Inc. Brokerage) — Mon, 12 Jan 2009 10:01:23 -0600

Last month I posted an entry about Tim Hortons and mentioned I was a former employee. It garnered such response via email that I thought some other info was merited. Actually, a friend honed me into this article which I missed from The Hamilton Spectator last summer.

It's the story of Ron Joyce's newest toy, the 161 foot Destination Fox Harb'r Too that is his home for the next few years as he plys his way around the Caribbean and Mediterranean Seas.

Here's the link which includes a slide show tour of what must be the most famous yacht ever to come to Hamilton Harbour (other than the HAIDA):

http://www.thehamiltonspectator.com/News/Local/article/390303

I also recently reviewed Ron Joyce's autobiography, "Always Fresh" for Amazon. If you're interested in the Horton legacy, I recommend reading it. Click here for the review.