Point2 Blog

So I sometimes find that our people, ya that’s you, like to hear what happens in the back end of our industry. It’s nice to hear some news from the inside, nice to know where all of the fees and such go. Well I recently heard of a case that was submitted to RECO (Real Estate Council of Ontario), that had a somewhat unexpected outcome that was immediately split in controversy. An agent had clients he was taking out to view several properties, he booked all of the appointments and had his route all planned. Drove to the first house and waited, his clients were late then he got a call and for whatever reason they cancelled the entire evening with this agent and planned for another time. The agent then proceeded to call the respective offices and cancel the showings, as most showings are in an hour window, it’s certainly a burden on the seller to vacate the home between 6:30 and 7:30 or whatever when you have dinner, kids, bedtimes, dogs, limited mobility family members, etc.. Making sure you either show up and show it or cancel it so people can get back to their lives is not only just decent and respectful, and professional – but it’s now the law.

This agent cancelled his appointments, 1 by 1 from the data sheets he had, but merely made the calls and didn’t keep notes. Now, nobody knows the exact circumstances, whether he just missed one, or was busy/no answer as happens from time to time with some of the smaller brokerages/offices, maybe he did everything right and an overworked support staff at the listing brokerage forgot to notify the homeowner. Like I said, I don’t know the exact circumstances, neither does the agent who didn’t take notes on cancelling their appointments – the cold hard fact remains that the homeowner had one of those extenuating circumstances that made vacating the house, difficult and inconvenient and when nobody showed was livid, they went to www.reco.on.ca and on the main page clicked “file a complaint”. From there RECO investigated, with no proof that he actually spoke to someone about cancelling this showing, RECO issued him a $500 fine and he had to write an apology to both the homeowner and the listing agent. Some sellers will be so infuriated that showings are booked and nobody comes that they blame their listing agent and will, in fact cancel that listing – although the listing agent has no control over the accountability of the showing agents – RECO has that control. They have flexed that muscle and the precedent is set.

You may find it surprising I posted where to lodge a complaint, I feel it’s important for consumers to know who regulates us and why. We will NEVER give you a reason to need it, but it’s nice to know you are protected if you ever do! Mccarthomes.com

I hope everyone had a safe and happy Civic Holiday weekend! We couldn’t have asked for better weather, maybe a couple fewer bugs in Haliburton would have been ok too – but even the most beautiful home still has a lawn to mow! I, quite obviously, spend a lot of time talking to people about ‘general Real Estate stuff’ and the comments I hear all the time sometimes make my head hurt. I hear “my neighbour sold for XX and I won’t sell for less than they got” and I hear I won’t pay XX for that, they were only XX 5 years ago. What moves the market you ask, motivation! When someone saddles themselves up with often idealistic and well motivated expectations, it can make for a tough shell to crack. I have tried, oh how I have tried to explain the math and as my mother often reminds me, a lot of people don’t like having a conversation that involves math or percentages, no matter how hard one may try to make the numbers easy.

So we need to explain this out another way: has anyone noticed the high price or real vanilla extract? The last time I bought it – a few months ago, it was $38.99 for 473ml. Made me want to cry! Then I really thought about it and, knowing full well it’s extensive shelf life, and its importance to things I make all the time like whipped cream, crepes, banana bread, waffles, etc. I invested in my bakings’ flavour futures. Why had it gotten so expensive, the last bottle I was sure was under $10 and now 4 times the price? Well as it turns out the low price wasn’t making the vanilla farmers any money, so as any business person may decide to do, most of them, all decided with no communication with anyone to destroy their vanilla vines and just moved on to other more profitable crops. Couple that with nature flexing a little with a bad crop here, a little weather dominated destruction there and boom we have these prices (credit: vanillaqueen.com).

Well last year China announced to its citizens that would no longer be able to take money out of the country for foreign investment as of January 2017, this “new rule then holds people liable for what they do with that money – and could bar them from exchanging money for up to three years if they are found to have used it improperly, such as for the purchase of a home” (credit: Globe and Mail). So that was announced – there was a panic to get the money out of China before then rule became active and we have a Canadian Real Estate boom, even if they fueled the market and lose half the money they brought over, they still have the half they got here out of China so it was a win regardless. Now, it didn’t all drop by half, but that’s the easiest math to use in conversation – so your neighbour sold last year for a million and bought for one and a half million on the water in Barrie. You won’t sell because your home is only worth half a million now and he got a million, but where he bought is now only three quarters million now. So he sold and spent half a million more, you sell now and buy the place next to him and only spend a quarter million more – he sold higher and paid more, you sell lower and pay less – the difference is YOUR win! (sorry about the math I just had to) Its looking more and more like our Real Estate market has stabilized, that long list of uncertainties is becoming more of a way of life than the eerie music from behind a cellar door. Now is the start of our market making a solid move into 2019! We are here to make that as easy as possible for you and your family and friends mccarthomes.com.

Saturday a week ago I was in the local grocery store and I wanted some fresh broccoli for a salad but the produce they had on the shelf was soft and wilted and not quite fresh salad worthy, so I asked the dude working in the produce section if they had a fresh box in the back – he cheerily said i know we do, he ran off got the whole box and I picked my crowns and moved on. After I paid I asked a random employee who was in charge, manager or whatever and she said the owner and her face just dropped. I asked to speak with him, and she hesitated with a shaky – are you sure? I said yes of course and he came out moments later, looking very “customer service beaten down”, which anyone who deals with a steady stream of the public knows exactly the look I mean! I reached out, shook his hand and just said “you have a dude working in produce, shorter than me with a small pony tail” his eyes rolled a little and looked like he was trying desperately to either choke on his tongue and die or mutter a response, he managed an affirming “yes, and…” – I told him” that guy is working hard doing a great job, I asked him for help he was cheery and helpful and solved my request quickly and perfectly and I wanted to say thanks and let you know he is a credit to your store” The smile that beamed from the owners face, the life that bounced back into his gaze and the confidence that fueled his new posture was inspiring. That 45 seconds of my time, to pay a small compliment to a guy who was working hard and doing a good job and deserved a moment of recognition was just what everyone needed at FreshCo on a Saturday morning! Side Note: as much as they loved hearing it, and I’m sure the dude in produce got to hear about it as well, I walked away feeling like I had left a little ray of sunshine for a few people who deserved it 　

Buyers beware!!! I have noticed one thing that many, many current listings have in common, the sellers are trying to benefit from that imaginary adage “hindsight is 20/20”. There are still many people listing their houses at last springs prices hoping that the only comparables out there support their dreams of living in the past.That ll being said, now is where buyers really need to be patient and diligent; if you find the house you want, and it’s potentially over priced – sometimes by 20% or more, how do you offer? What do you do if you are going into competition, you hold your ground is what you do. Historically when competing offers are being tabled, people start dropping conditions, accepting close dates that aren’t compatible, offering more than they think it’s worth (adding a personal value to their wants) and when the house starts off listed $200,000 too high as it is – how do you offer with confidence when in competition? Like I said, now is not the time to fight fire with a cheque book, if you must have an offer in on that house, you need to stay smart and offer what you would have without the other offer(s). Unfortunately not everyone can do that, and then we end up with 1 purchaser who had more money than sense and will start a very precarious paper trail of recovering markets or strengthening prices. Sad that it holds as both: proof that someone was willing to pay that amount in an area, yet the market as a whole holds fast at a softer price point. This is what I have been telling you for years, buying a home, what a hugely emotional time for most people, when your emotions are allowed to make the decisions – it usually ends costing more than your logical, responsible mind would have wanted. Knowing that you have calmer heads in your corner, calmer heads you can trust to not let your emotions lead you down a path you will regret. McCartHomes.com, you become the best by caring about what you do and whom you do it for! Sellers, stay tuned we will celebrate your opportunities soon!

•  single story – FOR SALE  CAD1 . coming soon price to be determined

in Georgina

You too can own a waterfront cottage within 60 minutes of Toronto. Less driving time therefore, less gas, and more time to enjoy family time. No taxes, no cars, with a parking and ferry service located on the mainland. Complete relaxation in this cottage with a view. More details to follow but just thought I would put this out before you bought something.

Property information

3/19/2018

So I came across this list online that shows a few average costs of things in 1958, now I have done a little checking and the Canadian dollar was between .98 and 1.05 roughly then, so not exactly even but very close and finding all of these statistics for Canadian prices exactly hasn’t been completely feasible – but I did find a few and they are very close – and it’s again the concept we are focusing on – the fact that the smallest increases have been sugar and milk – whereas income doesn’t make the top half of increases – coming in 10th out of 15 examples!

1958 2018 increase
New House $12,000.00 $ 650,000.00 5416.67%
Average Income $ 4,650.00 $ 32,994.00 709.55%
New Car $ 2,155.00 $ 33,464.00 1552.85%
Average Rent $ 95.00 $ 1,800.00 1894.74%
University Tuition $ 1,000.00 $ 6,500.00 650.00%
Movie ticket $ 1.00 $ 14.00 1400.00%
Gas $ 0.06 $ 1.20 litre 2000.00%
Stamp $ 0.04 $ 0.85 dom 2125.00%
White Sugar $ 0.45 $ 1.44 5 lbs 320.00%
Milk $ 1.01 $ 4.00 4 l 396.04%
Coffee $ 0.93 $ 4.00 per lb 430.11%
Bacon $ 0.62 $ 6.00 per lb 967.74%
Eggs $ 0.28 $ 3.00 dozen 1071.43%
Lean ground beef $ 0.57 $ 4.00 per lb 701.75%
loaf of bread $ 0.19 $ 3.00 loaf 1578.95%

So, what we are looking at is something we all already know, that the cost of living hasn’t slowed down to let our incomes catch up! Even something as simple as going to a movie takes twice the disposable income now as it did then. So we are shifting our expectations, first time home buyers have aged from their early 20’s to late 30’s and early 40’s. Interest rates are fantastic now – lowest ever, even the prime rate back in 1958 was between 3.5% and 4.8% – our mortgage rates are lower than that now.

This all comes together to say many things – we live in interesting yet difficult times, where things are plenty and often just dangled in front of us, just a carrot out of reach. Buying a first home forces people to manage their own expectations, with concessions being made and buying townhomes and condos, or staying home and living in basements for often decades trying to pool that downpayment together. I will use a couple averages here, 3% rate, 30 yr amortization and you get roughly $2,500/mth payment. Why have they tightened mortgage rules you ask – well if you are a first time buyer who has saved diligently for more than a decade and finally put it all on the line for a home, then the market falls 15%, when your mortgage comes up for renewal you may no longer qualify, the bank may look at your situation and realize that the small market correct has absorbed all of your equity and more and under these terms you don’t qualify for a mortgage.

So in a year look at the situations as a whole – a small market adjustment has just destroyed a first time buyers 2 decades of savings. I would never suggest that you can protect yourself against this happening, you can do your due diligence and try to predict what the market is going to do. Unfortunately, in the process you can get swept up in the pageantry of it all and imagine yourself in your new place, your dream that you have saved for hoping that no matter what happens you can make it work. You can go into this with a smile on your face and the right people in your corner, us who know the factors that cause change – who watch and know the limits you may forget in that moment of excitement. Remember we have no desire to sell you just a house or simply sell your house for you. It’s too hard to find professionals you can trust, to find clients who recognize and appreciate that you care and who comprehend that referring family and friends is not only the greatest compliment you can give us, but the referring of professionals you know you can trust is the most considerate help you can be to your family and friends. We want to help, not once but always!!! mccarthomes.com

Recently a friend of mine posted a question on Facebook that caught my eye: I have altered it a little but the spirit remains the same:
Had a real good laugh today. A friend was so excited that he got his license to grow medicinal marijuana at home that he made a grow room. I asked him if he thought what would happen if he ever had to sell the house. Now that you have a legal grow op you still have to declare it. He essentially called me stupid, suggesting that I don’t know what I’m talking about. What do you think does he have to declare it and not be able to sell the property as of it is a grow op or am I just stupid?

I responded:
Interesting development! I have not researched this legally, so this is just an off the cuff opinion – that being said: There should be several well known facts pointed out. The ‘spirit’ of full disclosure in the event of a home being used as a grow OP is because when a home is converted into such an establishment, power is haphazardly rerouted, ventilation is often done from room to room and the humidity in the growing area is kept tropically high. These things cause material damage to a home, and even when the operation has ceased things like mold in the walls and timbers and overtaxed circuits as well as wetting drywall and drying it over and over again causes it to sag and expand/contract weakening the hold of screws/nails/tape lines etc.. I am sure now that your friend has a permit and has constructed a room to carry on with his operation, he has made the room on separate dedicated GFI circuits, well ventilated to the outside with odour filtration, water-proofed the room built with cement board to protect the house, an emergency fire suppression system and has informed his insurance company of this ‘addition’ to his home.(I just made up those requirements – not sure what they are if any) Now assuming he has done his due diligence, constructed this room according to established by-laws governing such an operation and the room is clearly dedicated, then yes, of course it has to be disclosed – but disclosure of such an appropriately and professionally constructed operations room in a home will in many ways be looked at as an upgrade, not unlike a hot tub or swimming pool – maybe not for everyone, or even not for most people – but for some will be a bonus and it only takes 1 person to love the features of a home to sell it. Make sure that any rules are checked within each Municipality as well, every situation may have different regulations as well. Mccarthomes.com

Since that response, I have been researching the details – as I suggested each local municipality will have its own regulations and in any individual circumstance you will need to investigate your local by-laws and restrictions. I looked in my local area, the Township of Georgina and I was ultimately referred to the local building by-laws. They have no specific rules regarding a medicinal marijuana grow room, just need a permit and to disclose the use, submitting to federal regulations on the material restrictions and operation of the permit. Where the issue starts to become a problem is with that snowball, you need to disclose use to the municipality to get a permit, once you have disclosed the use then you need to notify your insurance company of this change in the specific use of your property. It seems that mainstream insurers do not have a facility to insure under with this new federal license, so you are going to be pushed to an alternative insurer, which of course costs more. In addition the secondary insurer will require very strict inspections EPA, local by-law compliance, etc. and they are going to have extensive exclusion waivers that will exempt the insurer from responsibility due to water, mold, and other ‘grow operation’ related damages. Once you have your permits obtained and ultimately satisfied and inspected, your EPA completed, and your inflated insurance in place – your next hurdle will be when your mortgage comes for renewal. I am still researching that aspect and will update as further information becomes available. Personal and professional relationships are the foundation of successful business and sometimes the only sentry guarding your sanity, we are here to help! mccarthomes.com

Much as we have discussed the higher interest rate qualifying ‘hand’, and the mortgage and improvements ‘hand’, always big brothers’ hand being stuck in our business. The proposed new legislation Home Energy Rating and Disclosure (HER&D) program has been shelved. Many have probably not heard of this latest legislative cash grab – and we are lucky that OREA was there to push back when the government proposed this. The basic concept was that before you list your home for sale, you needed to pay to undergo an energy audit and, only if listed on MLS you had to report your score. This was intended to mean that anyone who is reselling any older home may have thousands of upgrades to do, government mandated upgrades, before you sell. Windows, doors, weather stripping, insulation, furnace upgrades – the list of items that may be causing poor energy conservation is huge. I do find it kind of disheartening that legislation like this is proposed at all, there should be a clear line in the sand as to where and when a legislative body has a right to charge additional fees to justify their own existence. Things like property taxes, land transfer taxes, and the ridiculous heights new building permits have soared to means too many of these legislative assaults have been allowed to slip into place. We are only able to help make sure you know what’s going on, to help you hear what’s going bump in the night and to try and steer you away from the hurdles nobody should have to jump! Take the time to judge for yourself who really cares for you. Mccarthomes.com

As we have talked about in previous blogs, regardless of when you plan to have us help you sell your home or have us find you that perfect new place for your family – the prevailing market conditions works for and against you evenly, and predicting when these swails in the market start and, more importantly, when they are going to finish is – well, let’s just say extremely challenging. That proverbial crystal ball would be an epic addition to my attaché, so if you find one please let me know! That being said, it looks like our spring market has arrived, it’s historically (except for last year) the fastest moving market of the year and usually last a few months before those dog days of summer holidays level things off a little. It’s interesting to see what’s happening out there with prices, some still look at this time last year and feel that their house has to have gone up, but that’s what real estate does. We know that isn’t reality, and sadly there are listings appearing with that dream apparent in the price, which says to me that some homeowners are listing with an overly emotional mindset, and are being setup for a difficult road of hurry up and wait, frustration and finally a reality check – where last year’s million dollar home is now under $750,000. It’s easier to list realistically than to put out a big dream, build your hopes and have to reduce, reduce, reduce… the stress of each hit creates baggage nobody needs to carry around at what should be an exciting time. Which leads me into my net snippet, it seems so many of the new listing I see popping up aren’t being presented with the TLC that we so traditionally see. It’s the spring market, time to clean up the trash, check the downspouts, rake some sand and salt and leaves from the lawn. I’m not saying to paint (too cold), or dethatch your lawn (probably still frozen an inch down), but 10 minutes with a garbage bag, 20 minutes with a light rake and another 15 washing a few windows to let the sun shine in can add a moment of optimism to an approaching buyer, instead of a sigh of disappointment at signs of obvious neglect. Thousands of new listings are coming on the market now, buyers have choice and this isn’t something they have enjoyed for a few years now – so when they take the time to come see what your home has to offer make sure you are ready to show them! Remember, the most caring thing you can do for friends and family is refer them professionals you know they can trust! mccarthomes.com

So, I was recently at a meeting and we were privileged to have a member of CMHC there to give us a little bit of information on new products coming forward in the CMHC catalogue as well as answer any general questions the audience may have.  This CMHC representative was extremely knowledgeable and an excellent choice for them to throw into the snake pits of public speaking, she carried herself with being both knowledgeable as well as clear and easy to understand.  There were 2 things I got from this presentation that really really irked me:

 

The first being CMHC has a new insured mortgage product coming forth in an indeterminate timeline that will account for the purchase of a home at CMHC rates (under 20% downpayment), the part that is new is they are allowing for a renovation budget to be factored into your mortgage.  This type of flexibility has traditionally only been offered to those with a traditional low risk (again that 20% number) mortgage, or some of the major banks may offer a line of credit blended with the mortgage or a card service blended that gives you some of this flexibility. So sounds like a fantastic product, I think everyone can agree to that, a first time buyer can’t afford new or less than 10 year old home move in ready so they buy a bit of a fixer upper and now can factor a new kitchen, 2 new bathrooms and a finished basement – $90,000 in renovations, into their new CMHC mortgage.  Then comes the catch, you need to propose the renovations when getting the mortgage, justify their value, and if approved they will pay the purchase mortgage at the closing date then a lawyer is commissioned at your expense to hold the renovation money in trust until all renovations are complete. Not the most economical way for them to be spending your money, which with CMHC of course you are paying a premium to borrow in the first place, I kind of feel like it’s kicking the hard starter while he is clawing his way up.

 

Which brings me to the second injustice. So many questions were focused on the government changing the new qualifying mortgage rate.  Incase you don’t know what I am talking about, there are mortgage qualifying rules in place now that required you to QUALIFY for your mortgage at 2% higher rate than you will actually be paying.  Now, I seem to be in the minority in this opinion, but coming off the heels of a 2+ year STRONG sellers market, where houses were selling consistently for tens of thousands, often hundreds of thousands over list price in a single day with no conditions, the government is saying hey, prices need to settle and if you are still buying, we want to make sure that you are buying safe.  If interest rates jump, if prices fall, if, what was the driving force of that sellers market (foreign money), that money starts to be liquidated driving prices down, what can the government do to protect these first time buyers? I think making them qualify with a little bit of breathing room, forcing a required buffer may save some from getting in completely over their heads.  Now, this is kinda like putting a bandaid on a garden hose. What has been done wrong in the past few years with regards to even allowing the market to rise as high as it did as fast as it did, totally viewing our housing market as an investment opportunity for international manipulation and not viewing it as a protected resource for citizens is atrocious. I am not looking to debate foreign investment policy, or individual choices in political office/candidates.  I merely feel that when something as important as housing, transportation, food service are being controlled and manipulated by international forces with their own, possibly very valid agenda,  that’s EXACTLY why and WHEN our government bodies should have flexed their muscle, not after the market has blown the top off 40% or more over a couple of years, has reached unattainable for almost all of the first time buyers and even renting becomes a bit of a pipe dream.  I don’t ever want to see someone in over their head, I don’t ever like to see people being taken advantage of and grasping every month just to make it work.  My job is bringing an informed level head to the negotiating table, to the buying process and getting ready to go to market.  You need caring informed level heads to be in your corner when it all gets real, because it’s easy to shop, but the pageantry of the moment can become blinding, that’s what we are here for!  Mccarthomes.com