February 26, 2010 -- When it comes to character, you just can’t beat the charm of an older home. Newly constructed homes however, come with their own unique assets, one of the most noteworthy of which is energy efficiency.
From the roof to the foundation, a number of innovative building practices often go into constructing today’s greenest homes.
Roof shingles for example, are now available in recycled materials. Environmentally friendly spray foam insulation, which can help prevent dampness, keep out pollutants and contribute to structural strength, is even partially made with recycled materials.
Roofs, walls and floors can be insulated as well with special structural panels that consist of two layers of board with insulating foam in between them. The forms that are used to mould a home’s poured concrete foundation can now also be found with insulating ability, and barriers that prevent dampness from rising into the foundation can be used at this stage of construction as well. Even exterior cladding is now insulated to offer greater energy efficiency.
If you prefer an older home though, there are many simple ways to make it more energy efficient and environmentally friendly.
Start with an Energy Star programmable thermostat that will save on heating and cooling costs when you’re not home. You can take this approach a step further by investing in a new high efficiency furnace or air conditioner. Adding insulation to the attic of your home will offer reduced energy costs for years to come as well.
A tank-less water heater will also save on energy costs by providing only the amount of heated water that you need rather than maintaining it in a cylinder.
Even making minor changes can have an impact, like choosing energy efficient light bulbs - Compact Fluorescent Lamps (CFLs) are good and Light Emitting Diodes (LEDs) are even better.
If you’re planning to make cosmetic changes to your home you can do your part for the environment by choosing wood flooring, and even carpet, made with recycled content. Look for low VOC paints and stains as well, which reduce the number of unstable, carbon-containing compounds that enter the air and react with other elements.
In the bathroom, you can keep more money in your pocket by installing low-flow faucets, showerheads and toilets.
Replacing old windows with low-E argon-filled units that have the Energy Star symbol can make a dramatic difference to your home’s energy efficiency as well.
Changing your old appliances with new Energy Star machines is also a great way to reduce energy consumption while enhancing the overall appeal of your home.
Beyond enjoying the aesthetics, cost savings and fulfillment associated with helping the environment, you can also consider getting an energy audit to take full advantage of a number of government rebates for energy-saving home improvements. Please visit www.TorontoRealEstateBoard.com to learn more about them.
Regardless of the approach you choose, remember that nothing can substitute for good-old fashioned conservation. Remember that the energy you save today may well be the energy that is needed tomorrow.
Tom Lebour is President of the Toronto Real Estate Board, a professional association that represents 29,000 REALTORS® in the Greater Toronto Area.
Tom Lebour is President of the Toronto Real Estate Board, a professional association that represents 28,000 REALTORS® in the Greater Toronto Area.
Saturday, February 27, 2010
Friday, February 26, 2010
9 Leadership Mistakes to Avoid as We Rebuild Real Estate
RISMEDIA, February 25, 2010—With 2010 expected to be another slow year for real estate, many industry executives and analysts are wondering what additional steps—beyond cost cutting and downsizing—can be taken to weather the turbulent times.
The answer, according to Bill Ferguson, author of the new book Keepers of the Castle: Real Estate Executives on Leadership and Management, is actually quite simple. Only leadership—strong, balanced, and experienced leadership at the executive level—will pull the industry through to the next upcycle.
To rebuild America’s largest industry, today’s leaders must avoid the mistakes that led to the real estate market’s recent struggles. Here are some of the most damaging:
Mistake #1: Letting your ego get the best of you.
Pre-Real Estate Bubble: Television shows and films exaggerate and embroider the stock character of the real estate mogul—the bold opportunist with a glamorous but sometimes fatal mix of arrogance, intolerance and unchecked ego. Unfortunately, egos of this nature were all too real at some organizations. As the bubble inflated, some executives—many supported by outrageous salaries and bonuses—made closed-door deals and involved their companies in fuzzy financial deals whose potentially huge payoffs were saddled with huge risks that eventually harmed many of their companies.
As We Rise from the Rubble: “Egocentric leaders who blur the lines between personal and corporate interests or who are intolerant of the perspectives of others should not be welcomed at today’s real estate companies,” says Ferguson. “High-performing CEOs recognize that gaining the confidence and loyalty of all employees is one of their most important objectives—they need to show a firm command of issues and develop a strategy that works. These CEOs understand that time spent creating a high-profile public persona can often be distracting and counterproductive.”
Mistake #2: Allowing intra-organization competition to hurt the company.
Pre-Real Estate Bubble: Too many organizations (homebuilders, mortgage finance firms, etc.) paid their people to originate volume, not to underwrite risk!
As We Rise from the Rubble: “Many real estate businesses revolve around investment transactions or sales forces,” says Ferguson. “The individuals on these teams are typically provided incentives for production volume, and the more successful organizations orient these employees as coworkers and collaborators rather than competitors. Bottom line: Company performance targets need to take priority over individual achievement.”
Mistake #3: Forgetting the proper risk balance.
Pre-Real Estate Bubble: If anything kept the real estate bubble inflated it was unfettered risk. Homeowners took on mortgages they couldn’t afford. Lenders loaned the money to them. And investors traded in financial inventions—like credit default swaps and mortgage-backed securities—that many of them didn’t fully understand, while CEOs allowed their organizations to trade these risky investments.
As We Rise from the Rubble: “Success is all about taking calculated risks and winning a lot more than one loses,” says Ferguson. “Everyone in an organization needs to take risks in order for a company to grow and remain competitive. But leaders who rise to the top and stay there, consistently make the right decisions in weighing risk. Standout leaders have an inner compass—the ability to set the right course instinctively based on intelligence, experience and innate good judgment. They also create environments where people can learn, take risks, grow from successes as well as mistakes, ultimately benefiting their business.”
Mistake #4: Pretending to have all the answers.
Pre-Real Estate Bubble: “Know-it-all” CEOs—control freaks whose communication style edges toward dogmatic rigidity—can drive organizational opposition underground and grind businesses to a halt.
As We Rise from the Rubble: “For a CEO, acknowledging not having all the answers is an essential component of leading by example and rallying the team,” says Ferguson. “It can transform weakness into strength. When you communicate a sense of vulnerability, you connect with people. It helps build a winning, low-ego, ‘we’re all in this together’ culture, embodying a team orientation over a ‘me’ orientation.”
Mistake #5: Allowing lax management to become a business strategy.
Pre-Real Estate Bubble: Most CEOs grew up as entrepreneurial deal makers. Their impatience, drive to do it themselves, and insensitivity to those around them didn’t allow them to fail! However, true leadership requires a different recipe.
As We Rise from the Rubble: “Effective leaders realize they must complement their tried-and-true, kick-the-bricks instincts with MBA skills, financial proficiency and a managerial temperament,” says Ferguson. “In fact, institutionalizing entrepreneurship has become the paradigm for real estate leadership in today’s globalizing economy. The challenge of doing so requires companies to install effective management platforms that can nurture and preserve entrepreneurial vision and avoid the chokehold of bureaucracy.”
Mistake #6: Avoiding change.
Pre-Real Estate Bubble: For a short time in the early 2000s boom, some prominent industry players made the argument that inexpensive capital had removed cyclicality from the real estate business. The ensuing credit crisis obliterated that notion. Even wizened leaders have been reminded to resist complacency and anticipate the risk of cyclical change as investors have been crushed across the board.
As We Rise from the Rubble: “To profit from new strategies in the shifting real estate landscape, change needs to be well considered and implemented expeditiously throughout ever more complex and sophisticated organizations,” says Ferguson. “Under any circumstances, the playing field constantly changes. Interest rate fluctuations, economic tides, consumer confidence levels and demographic shifts ripple through the marketplace, requiring constant attention and analysis even during the most prosperous times. Complacency can kill any business—you can’t take anything for granted. High-performing companies can never rest on their laurels.”
Mistake #7: Going global the wrong way.
Pre-Real Estate Bubble: Rampant corruption and lack of transparency can hamper or short-circuit forays into developing markets. Risk is magnified exponentially, and local management needs to be given discretion but with the appropriate risk management oversights.
As We Rise from the Rubble: “The march toward business globalization means that real estate company management teams must be oriented toward developing global strategies and seeking lines of business overseas,” says Ferguson. “Effective teams must be able to operate across borders with an understanding of how to maneuver around cultural and national differences. Nurturing partnerships and relationships with experienced local players in growth economies around the world will become more essential to enable company expansion.”
Mistake #8: Hiring prima donnas.
Pre-Real Estate Bubble: Deal makers, more interested in their own success, versus prioritizing the client’s and/or company’s needs, have stymied the growth of successful real estate firms.
As We Rise from the Rubble: “Winning management teams discourage ‘rock star’ hires—executives who use company platforms to launch personal success rather than fostering company achievement through working with others to build platforms,” says Ferguson. “Managing and leading well in a large organization means surrounding oneself with good people.
Mistake #9: Avoiding responsibility.
Pre-Real Estate Bubble: The aftermath of the bubble burst is littered with CEOs and executives at big time companies, who made decisions that were truly detrimental to their organizations’ health but who in the post-bubble rubble look around and say, “Who me?” when others try to assess responsibility.
As We Rise from the Rubble: By taking responsibility for mistakes, leaders underscore the importance of accountability throughout the organization and help establish a strong value system for people to support each other, as well as encouraging collaboration.
About the Author
William J. Ferguson serves as chairman and CEO of Ferguson Partners Ltd. and as the co-chairman and co-CEO of FPL Advisory Group.
The answer, according to Bill Ferguson, author of the new book Keepers of the Castle: Real Estate Executives on Leadership and Management, is actually quite simple. Only leadership—strong, balanced, and experienced leadership at the executive level—will pull the industry through to the next upcycle.
To rebuild America’s largest industry, today’s leaders must avoid the mistakes that led to the real estate market’s recent struggles. Here are some of the most damaging:
Mistake #1: Letting your ego get the best of you.
Pre-Real Estate Bubble: Television shows and films exaggerate and embroider the stock character of the real estate mogul—the bold opportunist with a glamorous but sometimes fatal mix of arrogance, intolerance and unchecked ego. Unfortunately, egos of this nature were all too real at some organizations. As the bubble inflated, some executives—many supported by outrageous salaries and bonuses—made closed-door deals and involved their companies in fuzzy financial deals whose potentially huge payoffs were saddled with huge risks that eventually harmed many of their companies.
As We Rise from the Rubble: “Egocentric leaders who blur the lines between personal and corporate interests or who are intolerant of the perspectives of others should not be welcomed at today’s real estate companies,” says Ferguson. “High-performing CEOs recognize that gaining the confidence and loyalty of all employees is one of their most important objectives—they need to show a firm command of issues and develop a strategy that works. These CEOs understand that time spent creating a high-profile public persona can often be distracting and counterproductive.”
Mistake #2: Allowing intra-organization competition to hurt the company.
Pre-Real Estate Bubble: Too many organizations (homebuilders, mortgage finance firms, etc.) paid their people to originate volume, not to underwrite risk!
As We Rise from the Rubble: “Many real estate businesses revolve around investment transactions or sales forces,” says Ferguson. “The individuals on these teams are typically provided incentives for production volume, and the more successful organizations orient these employees as coworkers and collaborators rather than competitors. Bottom line: Company performance targets need to take priority over individual achievement.”
Mistake #3: Forgetting the proper risk balance.
Pre-Real Estate Bubble: If anything kept the real estate bubble inflated it was unfettered risk. Homeowners took on mortgages they couldn’t afford. Lenders loaned the money to them. And investors traded in financial inventions—like credit default swaps and mortgage-backed securities—that many of them didn’t fully understand, while CEOs allowed their organizations to trade these risky investments.
As We Rise from the Rubble: “Success is all about taking calculated risks and winning a lot more than one loses,” says Ferguson. “Everyone in an organization needs to take risks in order for a company to grow and remain competitive. But leaders who rise to the top and stay there, consistently make the right decisions in weighing risk. Standout leaders have an inner compass—the ability to set the right course instinctively based on intelligence, experience and innate good judgment. They also create environments where people can learn, take risks, grow from successes as well as mistakes, ultimately benefiting their business.”
Mistake #4: Pretending to have all the answers.
Pre-Real Estate Bubble: “Know-it-all” CEOs—control freaks whose communication style edges toward dogmatic rigidity—can drive organizational opposition underground and grind businesses to a halt.
As We Rise from the Rubble: “For a CEO, acknowledging not having all the answers is an essential component of leading by example and rallying the team,” says Ferguson. “It can transform weakness into strength. When you communicate a sense of vulnerability, you connect with people. It helps build a winning, low-ego, ‘we’re all in this together’ culture, embodying a team orientation over a ‘me’ orientation.”
Mistake #5: Allowing lax management to become a business strategy.
Pre-Real Estate Bubble: Most CEOs grew up as entrepreneurial deal makers. Their impatience, drive to do it themselves, and insensitivity to those around them didn’t allow them to fail! However, true leadership requires a different recipe.
As We Rise from the Rubble: “Effective leaders realize they must complement their tried-and-true, kick-the-bricks instincts with MBA skills, financial proficiency and a managerial temperament,” says Ferguson. “In fact, institutionalizing entrepreneurship has become the paradigm for real estate leadership in today’s globalizing economy. The challenge of doing so requires companies to install effective management platforms that can nurture and preserve entrepreneurial vision and avoid the chokehold of bureaucracy.”
Mistake #6: Avoiding change.
Pre-Real Estate Bubble: For a short time in the early 2000s boom, some prominent industry players made the argument that inexpensive capital had removed cyclicality from the real estate business. The ensuing credit crisis obliterated that notion. Even wizened leaders have been reminded to resist complacency and anticipate the risk of cyclical change as investors have been crushed across the board.
As We Rise from the Rubble: “To profit from new strategies in the shifting real estate landscape, change needs to be well considered and implemented expeditiously throughout ever more complex and sophisticated organizations,” says Ferguson. “Under any circumstances, the playing field constantly changes. Interest rate fluctuations, economic tides, consumer confidence levels and demographic shifts ripple through the marketplace, requiring constant attention and analysis even during the most prosperous times. Complacency can kill any business—you can’t take anything for granted. High-performing companies can never rest on their laurels.”
Mistake #7: Going global the wrong way.
Pre-Real Estate Bubble: Rampant corruption and lack of transparency can hamper or short-circuit forays into developing markets. Risk is magnified exponentially, and local management needs to be given discretion but with the appropriate risk management oversights.
As We Rise from the Rubble: “The march toward business globalization means that real estate company management teams must be oriented toward developing global strategies and seeking lines of business overseas,” says Ferguson. “Effective teams must be able to operate across borders with an understanding of how to maneuver around cultural and national differences. Nurturing partnerships and relationships with experienced local players in growth economies around the world will become more essential to enable company expansion.”
Mistake #8: Hiring prima donnas.
Pre-Real Estate Bubble: Deal makers, more interested in their own success, versus prioritizing the client’s and/or company’s needs, have stymied the growth of successful real estate firms.
As We Rise from the Rubble: “Winning management teams discourage ‘rock star’ hires—executives who use company platforms to launch personal success rather than fostering company achievement through working with others to build platforms,” says Ferguson. “Managing and leading well in a large organization means surrounding oneself with good people.
Mistake #9: Avoiding responsibility.
Pre-Real Estate Bubble: The aftermath of the bubble burst is littered with CEOs and executives at big time companies, who made decisions that were truly detrimental to their organizations’ health but who in the post-bubble rubble look around and say, “Who me?” when others try to assess responsibility.
As We Rise from the Rubble: By taking responsibility for mistakes, leaders underscore the importance of accountability throughout the organization and help establish a strong value system for people to support each other, as well as encouraging collaboration.
About the Author
William J. Ferguson serves as chairman and CEO of Ferguson Partners Ltd. and as the co-chairman and co-CEO of FPL Advisory Group.
Wednesday, February 24, 2010
TREB’s Past President’s Scholarship
TREB’s fourth annual Past President’s Scholarship applications have been sent to public and separate high school principals/guidance staff throughout the GTA. Two $5,000.00 scholarships are awarded on behalf of REALTORSâ to two graduating high school seniors going on to pursue post-secondary education.
Based on academics, community involvement and a 500-word essay, the awards are presented to the two winners in June at TREB’s annual Civic Connections reception.
This year’s essay topic choices are:
i) Quality of Life is an approach that local real estate boards, associations and individual REALTORS® have adopted to demonstrate the commitment of the real estate profession to improve Quality of Life throughout the province of Ontario.
What initiatives would advance the Quality of Life principles by the year 2020?
ii) What impact do you think taxes, such as the Harmonized Sales Tax (HST), will have on affordability for the residential or commercial real estate consumer?
The deadline for applications is April 16, 2010.
Go to the 2010 scholarship application and essay criteria [PDF*]
The application can also be obtained by clicking on the “2010 Past President’s Scholarship” banner link on the home page of www.torontorealestateboard.com.
Based on academics, community involvement and a 500-word essay, the awards are presented to the two winners in June at TREB’s annual Civic Connections reception.
This year’s essay topic choices are:
i) Quality of Life is an approach that local real estate boards, associations and individual REALTORS® have adopted to demonstrate the commitment of the real estate profession to improve Quality of Life throughout the province of Ontario.
What initiatives would advance the Quality of Life principles by the year 2020?
ii) What impact do you think taxes, such as the Harmonized Sales Tax (HST), will have on affordability for the residential or commercial real estate consumer?
The deadline for applications is April 16, 2010.
Go to the 2010 scholarship application and essay criteria [PDF*]
The application can also be obtained by clicking on the “2010 Past President’s Scholarship” banner link on the home page of www.torontorealestateboard.com.
Monday, February 22, 2010
Message from the TREB President
February 22, 2010 -- It’s said that the only constant is change and with respect to our profession, truer words were never spoken.
The market is just one of the many dynamic forces that make ours the world’s most exciting profession. Fortunately, it is anticipated that the spring market will be an active one, with more listings expected to come online as homeowners react to the healthy price gains experienced in recent months.
Detailed market projections for 2010 were presented at a series of Member Forums held throughout the Greater Toronto Area recently. TREB’s Senior Manager of Market Analysis Jason Mercer examined how factors like immigration, employment and interest rates will affect the GTA resale, new home and rental housing markets.
The presentation met with overwhelmingly positive feedback from Members, receiving comments like “This presentation is a must to attend for all sales agents” and “Exceeded my expectations – a great speaker, a fabulous and timely presentation.”
Also included as part of the Member Forums were fireside chats that offered a look at upcoming initiatives, and an opportunity to gather your feedback. A number of exciting new resources and activities are scheduled to be introduced this year like a completely redesigned TorontoMLS homepage with numerous new features, an advertising campaign focused on Buyer representation, and promotion of the REALTOR® image through social media.
A full list of items currently on the radar at TREB along with the detailed Market Outlook presentation is now available online. See Details.
Another factor that affects our profession on an ongoing basis is regulatory change. You are probably aware of recent media reports noting that the Commissioner of Competition has filed a Notice of Application against CREA seeking to strike down certain CREA rules. CREA intends to vigorously defend itself before the Tribunal and in the meantime, it has established a Competition Bureau Information Zone on REALTORLink to serve as your resource for accurate and current information on the subject. Since information will be updated on a regular basis, you may wish to click periodically on the direct connection to REALTORlink, which can be found on the right side of the TorontoMLS homepage.
While we will undoubtedly experience changes with respect to market forces, regulatory requirements and of course, technological advancements in the future, I am confident that our profession will continue to evolve and prosper. Regardless of changing circumstances, we will continue to help people fulfill one of the most basic human needs: that of shelter. With each passing year, buying and selling a home becomes a more sophisticated process that involves a multitude of considerations. It serves to follow therefore, that the consumer need for professional guidance with respect to their single largest investment is greater than ever before.
The tragedy that occurred in Haiti last month was a stark reminder of the essential role that shelter plays in everyone’s lives. I am tremendously proud of the fact that Greater Toronto REALTORS® once again demonstrated their commitment to improving the quality of life of those less fortunate, contributing nearly $75,000 to relief efforts in Haiti. If you have not yet had an opportunity to make a donation there is still time to do so. TREB’s donation portal will remain open until February 28th. See Details.
Please bear in mind that every contribution will make a difference to this devastated nation. While Canada ranks fourth on the United Nations Human Development Index, Haiti, the Western hemisphere’s poorest country, held the149th position out of 189 nations on the list even before this great tragedy occurred.
Our support is another example of the integral thread that REALTORS® represent in the fabric of society. It will certainly contribute to a brighter future for the people of Haiti as they work to rebuild their homes, businesses and institutions.
As the first hints of spring emerge in the coming weeks, there are many positive initiatives for TREB Members to look forward to as well. Please stay tuned to TorontoMLS for information on the latest resources and activities to support your business needs. In the meantime, if you have any questions or suggestions, please feel free to reach me anytime at trebpres@trebnet.com.
Tom Lebour
President
The market is just one of the many dynamic forces that make ours the world’s most exciting profession. Fortunately, it is anticipated that the spring market will be an active one, with more listings expected to come online as homeowners react to the healthy price gains experienced in recent months.
Detailed market projections for 2010 were presented at a series of Member Forums held throughout the Greater Toronto Area recently. TREB’s Senior Manager of Market Analysis Jason Mercer examined how factors like immigration, employment and interest rates will affect the GTA resale, new home and rental housing markets.
The presentation met with overwhelmingly positive feedback from Members, receiving comments like “This presentation is a must to attend for all sales agents” and “Exceeded my expectations – a great speaker, a fabulous and timely presentation.”
Also included as part of the Member Forums were fireside chats that offered a look at upcoming initiatives, and an opportunity to gather your feedback. A number of exciting new resources and activities are scheduled to be introduced this year like a completely redesigned TorontoMLS homepage with numerous new features, an advertising campaign focused on Buyer representation, and promotion of the REALTOR® image through social media.
A full list of items currently on the radar at TREB along with the detailed Market Outlook presentation is now available online. See Details.
Another factor that affects our profession on an ongoing basis is regulatory change. You are probably aware of recent media reports noting that the Commissioner of Competition has filed a Notice of Application against CREA seeking to strike down certain CREA rules. CREA intends to vigorously defend itself before the Tribunal and in the meantime, it has established a Competition Bureau Information Zone on REALTORLink to serve as your resource for accurate and current information on the subject. Since information will be updated on a regular basis, you may wish to click periodically on the direct connection to REALTORlink, which can be found on the right side of the TorontoMLS homepage.
While we will undoubtedly experience changes with respect to market forces, regulatory requirements and of course, technological advancements in the future, I am confident that our profession will continue to evolve and prosper. Regardless of changing circumstances, we will continue to help people fulfill one of the most basic human needs: that of shelter. With each passing year, buying and selling a home becomes a more sophisticated process that involves a multitude of considerations. It serves to follow therefore, that the consumer need for professional guidance with respect to their single largest investment is greater than ever before.
The tragedy that occurred in Haiti last month was a stark reminder of the essential role that shelter plays in everyone’s lives. I am tremendously proud of the fact that Greater Toronto REALTORS® once again demonstrated their commitment to improving the quality of life of those less fortunate, contributing nearly $75,000 to relief efforts in Haiti. If you have not yet had an opportunity to make a donation there is still time to do so. TREB’s donation portal will remain open until February 28th. See Details.
Please bear in mind that every contribution will make a difference to this devastated nation. While Canada ranks fourth on the United Nations Human Development Index, Haiti, the Western hemisphere’s poorest country, held the149th position out of 189 nations on the list even before this great tragedy occurred.
Our support is another example of the integral thread that REALTORS® represent in the fabric of society. It will certainly contribute to a brighter future for the people of Haiti as they work to rebuild their homes, businesses and institutions.
As the first hints of spring emerge in the coming weeks, there are many positive initiatives for TREB Members to look forward to as well. Please stay tuned to TorontoMLS for information on the latest resources and activities to support your business needs. In the meantime, if you have any questions or suggestions, please feel free to reach me anytime at trebpres@trebnet.com.
Tom Lebour
President
Why begrudge the commission?
The Lebow Report: Why begrudge the commission?
By Barry Lebow
I am writing this in a national Canadian newspaper for real estate people but actually it is a rant to the public and especially to the cynical and unenlightened media that continually bashes real estate agents. I leave it to you, my real estate readers, if you find the content to be of merit, then post my article on your blogs or forward it to your customers.
Allow me to put my tirade into a really simple perspective. If a stock or other investment broker made you, say, $200,000, would you begrudge them a $10,000 commission for their efforts? I know this about my personal experience with stock brokers – it sometimes appears that their fees can be greater than my profits. One day I really will try to figure out all the charges and fees in my mutual fund.
Now, what would you pay if that $200,000 was fully tax free, and fully capital gain exempt?
Heck, even to a tightwad, $10,000 in commission would be nothing in return for $190,000 net.
Let me restate it this way: an investment broker puts you into a deal, you make $200,000 totally tax free, no strings – what would you pay that wonderful, brilliant broker for this magnificent return? Damn right – that $10,000 would be a bargain and you would run to all of your friends to let them know that you have met the most wonderful investment counselor in the world. The guy’s a saint!
So According to the media, you should be able to buy or sell for a few hundred dollars and bypass a brokerage all together. No negotiation, no financing skills needed, just go in, buy or sell and the process is so simple and lacking in sophistication and dangers that anyone can do it. Isn’t that what we read in the newspapers?
Okay, let’s get real. I live in an affluent neighbourhood in Toronto, which is just the way it is within the central city core. My neighbours, who were sold their homes by hard working real estate salespeople 10 years ago, paid about $300,000 for their modest bungalows. Now, these same bungalows are selling for around $650,000 just for their land value. Let’s get a handle on this: my neighbours bought an investment for $300,000, but they only put down from 10 per cent to 25 per cent, lived in it, enjoyed it, celebrated family life, made love, planted, thrived and made friends and then they resold for an absolute profit of $350,000, which was totally tax free. So please explain to me, why would anyone begrudge an agency for taking a mere five per cent off the top? What am I missing?
I no longer sell houses. I do not have staff that sells houses so I have no vested interest in making a case that serves my own interests. I am a commercial Realtor but when I have bought and sold houses, I have used top residential Realtors and I have never fought with them about what they charged me because they have made me money.
Few people have bought and sold as many houses as I have – at least 600 (not a misprint) in my career as an investor, and at all times I used agents to buy and sell for me. Yes, I have been a broker for most of my career, but when it came to buying or selling, I used the services of residential experts and I paid them well. It was logical, I was making a profit, so why nickel and dime the people who made me money? And my investments were not tax free!
Of all of the investments that Canadians can make, name one that will give greater pleasure than home ownership and one that is tax free? Can you live surrounded by your stock certificates, your GICs, or your art? Do your gold bars keep a roof over your head and can you leverage those investments by putting down as little as five per cent or 10 per cent and financing the balance on a long-term basis as the investment keeps increasing?
What, prices don’t always go up? Gee, when my mutual funds have tanked what do the experts tell me to do? Hold on, wait, pray and hope that in years to come the market will correct itself.
Here is one for you: ever live in an apartment? After 10 years when you handed in the keys, did the landlord thank you and give you back 75 per cent of your rental money? Worst I have ever lost on a house was 25 per cent in the darkest of periods but that house gave me shelter and pleasure. The apartment gave me cockroaches, noisy neighbours and management that couldn’t have cared one bit about me.
In the long run, those who write about the high prices of real estate commissions are either ignorant or jealous. They have either never owned real estate, or make so little that they begrudge anyone who makes more than they do. They write about greedy real estate people while they sit at their computers, wearing their Che Guevara tee shirt and complaining to the world about corporate greed and capitalism.
Sorry, I am just baffled about the concept of anyone begrudging a hardworking Realtor who continues to make Canadians rich. There is but one reality – the largest wealth owned by the largest group of Canadians is in real estate. No other investment is as widely held, none gives the benefits of real estate ownership and few return the same results bottom line. Real estate commissions are minimal in relationship to the profits made by the owners. Given the profits made by homeowners across Canada since the 1950s and again, with my emphasis on it being tax-free money, real estate commissions are probably the greatest bargain today based on what is charged for any other investment.
A real estate broker is a bargain – period!
Barry Lebow is a commercial Realtor who specializes in appraisal, expert court testimony and real estate education. One of REM’s long-time columnists, he recently launched the new Accredited Senior Agent professional designation program in Canada for residential salespeople to learn how to serve the mature and senior markets. (416)-9806, barry@lebow.ca or www.thesenioragent.com.
By Barry Lebow
I am writing this in a national Canadian newspaper for real estate people but actually it is a rant to the public and especially to the cynical and unenlightened media that continually bashes real estate agents. I leave it to you, my real estate readers, if you find the content to be of merit, then post my article on your blogs or forward it to your customers.
Allow me to put my tirade into a really simple perspective. If a stock or other investment broker made you, say, $200,000, would you begrudge them a $10,000 commission for their efforts? I know this about my personal experience with stock brokers – it sometimes appears that their fees can be greater than my profits. One day I really will try to figure out all the charges and fees in my mutual fund.
Now, what would you pay if that $200,000 was fully tax free, and fully capital gain exempt?
Heck, even to a tightwad, $10,000 in commission would be nothing in return for $190,000 net.
Let me restate it this way: an investment broker puts you into a deal, you make $200,000 totally tax free, no strings – what would you pay that wonderful, brilliant broker for this magnificent return? Damn right – that $10,000 would be a bargain and you would run to all of your friends to let them know that you have met the most wonderful investment counselor in the world. The guy’s a saint!
So According to the media, you should be able to buy or sell for a few hundred dollars and bypass a brokerage all together. No negotiation, no financing skills needed, just go in, buy or sell and the process is so simple and lacking in sophistication and dangers that anyone can do it. Isn’t that what we read in the newspapers?
Okay, let’s get real. I live in an affluent neighbourhood in Toronto, which is just the way it is within the central city core. My neighbours, who were sold their homes by hard working real estate salespeople 10 years ago, paid about $300,000 for their modest bungalows. Now, these same bungalows are selling for around $650,000 just for their land value. Let’s get a handle on this: my neighbours bought an investment for $300,000, but they only put down from 10 per cent to 25 per cent, lived in it, enjoyed it, celebrated family life, made love, planted, thrived and made friends and then they resold for an absolute profit of $350,000, which was totally tax free. So please explain to me, why would anyone begrudge an agency for taking a mere five per cent off the top? What am I missing?
I no longer sell houses. I do not have staff that sells houses so I have no vested interest in making a case that serves my own interests. I am a commercial Realtor but when I have bought and sold houses, I have used top residential Realtors and I have never fought with them about what they charged me because they have made me money.
Few people have bought and sold as many houses as I have – at least 600 (not a misprint) in my career as an investor, and at all times I used agents to buy and sell for me. Yes, I have been a broker for most of my career, but when it came to buying or selling, I used the services of residential experts and I paid them well. It was logical, I was making a profit, so why nickel and dime the people who made me money? And my investments were not tax free!
Of all of the investments that Canadians can make, name one that will give greater pleasure than home ownership and one that is tax free? Can you live surrounded by your stock certificates, your GICs, or your art? Do your gold bars keep a roof over your head and can you leverage those investments by putting down as little as five per cent or 10 per cent and financing the balance on a long-term basis as the investment keeps increasing?
What, prices don’t always go up? Gee, when my mutual funds have tanked what do the experts tell me to do? Hold on, wait, pray and hope that in years to come the market will correct itself.
Here is one for you: ever live in an apartment? After 10 years when you handed in the keys, did the landlord thank you and give you back 75 per cent of your rental money? Worst I have ever lost on a house was 25 per cent in the darkest of periods but that house gave me shelter and pleasure. The apartment gave me cockroaches, noisy neighbours and management that couldn’t have cared one bit about me.
In the long run, those who write about the high prices of real estate commissions are either ignorant or jealous. They have either never owned real estate, or make so little that they begrudge anyone who makes more than they do. They write about greedy real estate people while they sit at their computers, wearing their Che Guevara tee shirt and complaining to the world about corporate greed and capitalism.
Sorry, I am just baffled about the concept of anyone begrudging a hardworking Realtor who continues to make Canadians rich. There is but one reality – the largest wealth owned by the largest group of Canadians is in real estate. No other investment is as widely held, none gives the benefits of real estate ownership and few return the same results bottom line. Real estate commissions are minimal in relationship to the profits made by the owners. Given the profits made by homeowners across Canada since the 1950s and again, with my emphasis on it being tax-free money, real estate commissions are probably the greatest bargain today based on what is charged for any other investment.
A real estate broker is a bargain – period!
Barry Lebow is a commercial Realtor who specializes in appraisal, expert court testimony and real estate education. One of REM’s long-time columnists, he recently launched the new Accredited Senior Agent professional designation program in Canada for residential salespeople to learn how to serve the mature and senior markets. (416)-9806, barry@lebow.ca or www.thesenioragent.com.
Friday, February 19, 2010
Federal Government Changes Mortgage Rules
February 16, 2010 -- The federal government has announced changes to the rules for government-backed insured mortgages (less than 20 percent down payment) as follows:
All borrowers will be required to meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter terms.
Reduced maximum amount that can be withdrawn in refinancing a government-backed insured mortgage to 90 per cent from 95 per cent of the value of the home.
Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner occupied properties purchased for speculation. Borrowers purchasing owner-occupied residential properties will still be able to access government-backed mortgage insurance with a 5 per cent down payment.
Canada's Housing Market Remains Strong
Canada's housing market remains healthy and stable. According to the International Monetary Fund, our housing market is fully supported by sound economic factors, such as low interest rates, rising incomes and a growing population. Moreover, mortgage arrears—overdue mortgage payments—have also remained low.
Today's announcement is part of the Government's policy of proactively adjusting to developments in the housing market that could take root and cause instability. These steps are timely, targeted and measured, and will reinforce the importance of Canadians borrowing responsibly and using home ownership as a savings mechanism.
Mortgage Insurance
Mortgage insurance (which is sometimes called mortgage default insurance) is a credit risk management tool that protects lenders from losses on mortgage loans. If a borrower defaults on a mortgage, and the proceeds from the foreclosure of the property are insufficient to cover the resulting loss, the lender submits a claim to the mortgage insurer to recover its losses.
The law requires federally regulated lenders to obtain mortgage insurance on loans in which the homebuyer has made a down payment of less than 20 per cent of the purchase price (also called high loan-to-value ratio loans). The homebuyer pays the premium for this insurance, which protects the lender if the homebuyer defaults.
The Government ultimately backs most insured mortgages in Canada. It is responsible for the obligations of Canada Mortgage and Housing Corporation (CMHC) as it is an agent Crown corporation. In order for private mortgage insurers to compete with CMHC, the Government backs private mortgage insurers' obligations to lenders, subject to a deductible equal to 10 per cent of the original principal amount of the loan.
In October 2008, the Government adjusted its minimum standards for government-backed, high-ratio mortgages, including:
Fixing the maximum amortization period for new government-backed mortgages to 35 years.
Requiring a minimum down payment of five per cent for new government-backed mortgages.
Establishing a consistent minimum credit score requirement.
Requiring the lender to make a reasonable effort to verify that the borrower can afford the loan payment.
Introducing new loan documentation standards to ensure that there is evidence of reasonableness of property value and of the borrower's sources and level of income.
Measures Announced Today
Today, the Government announced three changes to the standards governing government-backed mortgages.
Qualifying at a Five-Year Rate
Current interest rates are at record low levels, which has improved the affordability of housing for Canadians. It is important that Canadians borrow prudently and are able to manage their debt loads when interest rates rise.
Lender and mortgage insurers look at two key ratios when assessing the ability of a borrower to make payments on a mortgage loan:
Gross Debt Service (GDS) ratio—the ratio of the carrying costs of the home, including the mortgage payment, taxes and heating costs, to the borrower's income.
Total Debt Service (TDS) ratio—the ratio of the carrying costs of the home and all other debt payments to the borrower's total income.
Currently, the interest rate used to determine the mortgage payment for these calculations is either the rate fixed for the term of the mortgage or, in the case of a variable-rate mortgage and mortgages with terms of less than three years, the greater of the contract rate and the prevailing three-year fixed rate.
The adjustments to the mortgage framework will require mortgage insurers to ensure that borrowers qualify for their mortgage amount using the greater of the contract rate or the interest rate for a five-year fixed rate mortgage when calculating the GDS and TDS ratios.
This measure is intended to protect Canadians by providing them with additional flexibility to support mortgage payments at higher interest rates in the future.
Limit the Maximum Refinancing Amount to 90 per cent of the Loan-to-Value Ratio
Borrowers seeking financial flexibility can currently refinance their mortgage and increase the amount they are borrowing on the security of their home up to a limit of 95 per cent of the value of the property. This type of refinancing lowers the borrower's equity in their home. The adjustments today will lower the maximum amount of the mortgage loan in a refinancing of a government-backed high ratio mortgage loan to 90 per cent of the value of the property, consistent with the principle that home ownership is a tool for savings.
Discouraging Speculation by Requiring a Minimum Down Payment of 20 per cent for non-owner-occupied properties
This measure will require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation. Currently, borrowers may purchase a residential property with a 5 per cent down payment. Today's change will require a 20 per cent down payment for small (i.e., 1- to 4-unit) non-owner-occupied residential rental properties. Borrowers purchasing owner-occupied residential properties which also include some rental units (e.g., borrowers purchasing a duplex to live in one unit and rent out the other) will still be able to access government-backed mortgage insurance with a 5 per cent down payment.
Moving to the New Framework
These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010. Exceptions would be allowed after April 19 where they are needed to satisfy a binding purchase and sale, financing, or refinancing agreement entered into before April 19, 2010.
All borrowers will be required to meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter terms.
Reduced maximum amount that can be withdrawn in refinancing a government-backed insured mortgage to 90 per cent from 95 per cent of the value of the home.
Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner occupied properties purchased for speculation. Borrowers purchasing owner-occupied residential properties will still be able to access government-backed mortgage insurance with a 5 per cent down payment.
Canada's Housing Market Remains Strong
Canada's housing market remains healthy and stable. According to the International Monetary Fund, our housing market is fully supported by sound economic factors, such as low interest rates, rising incomes and a growing population. Moreover, mortgage arrears—overdue mortgage payments—have also remained low.
Today's announcement is part of the Government's policy of proactively adjusting to developments in the housing market that could take root and cause instability. These steps are timely, targeted and measured, and will reinforce the importance of Canadians borrowing responsibly and using home ownership as a savings mechanism.
Mortgage Insurance
Mortgage insurance (which is sometimes called mortgage default insurance) is a credit risk management tool that protects lenders from losses on mortgage loans. If a borrower defaults on a mortgage, and the proceeds from the foreclosure of the property are insufficient to cover the resulting loss, the lender submits a claim to the mortgage insurer to recover its losses.
The law requires federally regulated lenders to obtain mortgage insurance on loans in which the homebuyer has made a down payment of less than 20 per cent of the purchase price (also called high loan-to-value ratio loans). The homebuyer pays the premium for this insurance, which protects the lender if the homebuyer defaults.
The Government ultimately backs most insured mortgages in Canada. It is responsible for the obligations of Canada Mortgage and Housing Corporation (CMHC) as it is an agent Crown corporation. In order for private mortgage insurers to compete with CMHC, the Government backs private mortgage insurers' obligations to lenders, subject to a deductible equal to 10 per cent of the original principal amount of the loan.
In October 2008, the Government adjusted its minimum standards for government-backed, high-ratio mortgages, including:
Fixing the maximum amortization period for new government-backed mortgages to 35 years.
Requiring a minimum down payment of five per cent for new government-backed mortgages.
Establishing a consistent minimum credit score requirement.
Requiring the lender to make a reasonable effort to verify that the borrower can afford the loan payment.
Introducing new loan documentation standards to ensure that there is evidence of reasonableness of property value and of the borrower's sources and level of income.
Measures Announced Today
Today, the Government announced three changes to the standards governing government-backed mortgages.
Qualifying at a Five-Year Rate
Current interest rates are at record low levels, which has improved the affordability of housing for Canadians. It is important that Canadians borrow prudently and are able to manage their debt loads when interest rates rise.
Lender and mortgage insurers look at two key ratios when assessing the ability of a borrower to make payments on a mortgage loan:
Gross Debt Service (GDS) ratio—the ratio of the carrying costs of the home, including the mortgage payment, taxes and heating costs, to the borrower's income.
Total Debt Service (TDS) ratio—the ratio of the carrying costs of the home and all other debt payments to the borrower's total income.
Currently, the interest rate used to determine the mortgage payment for these calculations is either the rate fixed for the term of the mortgage or, in the case of a variable-rate mortgage and mortgages with terms of less than three years, the greater of the contract rate and the prevailing three-year fixed rate.
The adjustments to the mortgage framework will require mortgage insurers to ensure that borrowers qualify for their mortgage amount using the greater of the contract rate or the interest rate for a five-year fixed rate mortgage when calculating the GDS and TDS ratios.
This measure is intended to protect Canadians by providing them with additional flexibility to support mortgage payments at higher interest rates in the future.
Limit the Maximum Refinancing Amount to 90 per cent of the Loan-to-Value Ratio
Borrowers seeking financial flexibility can currently refinance their mortgage and increase the amount they are borrowing on the security of their home up to a limit of 95 per cent of the value of the property. This type of refinancing lowers the borrower's equity in their home. The adjustments today will lower the maximum amount of the mortgage loan in a refinancing of a government-backed high ratio mortgage loan to 90 per cent of the value of the property, consistent with the principle that home ownership is a tool for savings.
Discouraging Speculation by Requiring a Minimum Down Payment of 20 per cent for non-owner-occupied properties
This measure will require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation. Currently, borrowers may purchase a residential property with a 5 per cent down payment. Today's change will require a 20 per cent down payment for small (i.e., 1- to 4-unit) non-owner-occupied residential rental properties. Borrowers purchasing owner-occupied residential properties which also include some rental units (e.g., borrowers purchasing a duplex to live in one unit and rent out the other) will still be able to access government-backed mortgage insurance with a 5 per cent down payment.
Moving to the New Framework
These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010. Exceptions would be allowed after April 19 where they are needed to satisfy a binding purchase and sale, financing, or refinancing agreement entered into before April 19, 2010.
Thursday, February 18, 2010
Thanks to TREB Members nearly $75,000 donated to Haiti relief
February 17, 2010 -- With Greater Toronto REALTORS’® individual donations, the federal government’s matching funds, and a TREB donation combined, Members of the Toronto Real Estate Board contributed nearly $75,000 to help those affected by last month’s earthquake in Haiti.
According to the Canadian Red Cross, Greater Toronto REALTORS’® individual donations to relief efforts in Haiti reached $12,085.
This amount will be doubled by the federal government, which pledged to match all individual Canadians’ contributions up to February 12th.
On behalf of Greater Toronto REALTORS® TREB also donated $50,000 to Canadian Red Cross initiatives in Haiti.
With the federal government’s matching funds deadline now elapsed, TREB extends its thanks to all those who contributed. Through their donations, Greater Toronto REALTORS® have demonstrated their genuine concern for communities, which extends from here at home to around the globe.
The federal government’s Canadian International Development Agency (CIDA) reported that as of February 8th, individual Canadians had made more than $113 million in eligible donations to be matched by the Haiti Earthquake Relief Fund.
When the earthquake struck, CIDA sent $85 million in urgent humanitarian assistance to Haiti, in addition to supporting a Red Cross field hospital and issuing emergency supplies. CIDA’s matching funds will also be allocated to Canadian and international humanitarian and development organizations.
According to the Canadian Red Cross, Greater Toronto REALTORS’® individual donations to relief efforts in Haiti reached $12,085.
This amount will be doubled by the federal government, which pledged to match all individual Canadians’ contributions up to February 12th.
On behalf of Greater Toronto REALTORS® TREB also donated $50,000 to Canadian Red Cross initiatives in Haiti.
With the federal government’s matching funds deadline now elapsed, TREB extends its thanks to all those who contributed. Through their donations, Greater Toronto REALTORS® have demonstrated their genuine concern for communities, which extends from here at home to around the globe.
The federal government’s Canadian International Development Agency (CIDA) reported that as of February 8th, individual Canadians had made more than $113 million in eligible donations to be matched by the Haiti Earthquake Relief Fund.
When the earthquake struck, CIDA sent $85 million in urgent humanitarian assistance to Haiti, in addition to supporting a Red Cross field hospital and issuing emergency supplies. CIDA’s matching funds will also be allocated to Canadian and international humanitarian and development organizations.
Tuesday, February 16, 2010
Flaherty brings in tougher mortgage rules
16/02/2010 9:45:29 AM
CTV.ca News Staff
Homeowners will be required to meet the requirements of a five-year, fixed-rate mortgage if they wish to qualify for a Canadian Mortgage and Housing Corp.-insured home, under new mortgage rules announced by Finance Minister Jim Flaherty.
The finance minister announced a set of tougher, forthcoming mortgage rules Tuesday morning, which he said have been brought to ensure that prospective homeowners are not vulnerable to rising interest rates and onerous levels of debts.
Prior to Tuesday's announcement, borrowers were required only to meet the standards of a three-year, fixed-rate mortgage -- now that jumps up to five years.
"This will help Canadians prepare for higher interest rates in the future," Flaherty said.
"One must always guard against the temptation to take on more financial risk simply because interest rates are low. Our government is acting to help prevent Canadian households from getting overextended and acting to help prevent some lenders from facilitating it."
The new rules are expected to come into effect on April 19.
In addition to having to meet the five-year, fixed-rate mortgage requirements to qualify for a CHMC mortgage, borrowers will be limited in the amount of refinancing they can undertake, Flaherty said.
"We will lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes," he said.
"This will discourage the kind of mortgage refinancing that can create unsustainable debt levels as interest rates go up," he added.
"We are encouraging people to build equity over time, using homeownership as an effective way to save, rather than as a vehicle for quick cash."
Flaherty also announced a third new change targeting housing speculators, who will now have to put down a 20 per cent down payment on properties they will not be living in, if they want to qualify for a CHMC-backed mortgage.
Flaherty said the government is not trying to crack down on investment properties such as rental units.
"What we're getting at is the speculation in multiple-condo markets, in particular," he said, making reference to incidents in the Vancouver and Toronto markets as examples.
Preventative measures
Flaherty said the three changes were necessary to prevent future problems and he insisted they would not make it harder for Canadians to buy houses.
"The only restriction would be qualifying at a five-year, fixed-term basis, which is a credit qualification that a number of our chartered banks have already gone to," Flaherty said.
"I think that most prudent Canadians would want to have that level of ‘credit-worthiness,' of credit qualification, so that they could rest assured that their house would remain affordable -- and the mortgage remain affordable -- when interest rates rise, as they inevitably will."
Pointing to mortgage changes the Conservative government instituted two years ago -- including a minimum five per cent down payment for new mortgages and a maximum 35-year amortization period -- Flaherty said they also helped Canadians avert the kind of housing crisis seen in the United States in the current recession.
BNN's Michael Kane said it is Flaherty's position that while there may not be a housing bubble immediately on the horizon, he wants to be proactive in preventing one from forming.
"What Mr. Flaherty is saying here, is that even though he doesn't see the bubble really forming at all, to put certain measures in place so one does not get the chance to build is the prudent thing to do," Kane said Tuesday morning from Toronto.
"Again, he reiterated a couple of times that there is no damage being created in the housing market right now. But it's just that it is an economic fact that when you pump billions and billions of dollars into an economy, you are going to get little pockets of pressure building and housing is one that has been a little soft, and as a result, when the economy starts to reheat and re-inflate, then that's one area that you don't want to have damaged."
Overall, Flaherty said the Canadian housing market is "healthy and stable," with about two-thirds of Canadians owning their own homes.
"Our housing market… has been a source of strength for our country and a source of growing wealth for hardworking Canadians themselves," Flaherty said.
With files from The Canadian Press
CTV.ca News Staff
Homeowners will be required to meet the requirements of a five-year, fixed-rate mortgage if they wish to qualify for a Canadian Mortgage and Housing Corp.-insured home, under new mortgage rules announced by Finance Minister Jim Flaherty.
The finance minister announced a set of tougher, forthcoming mortgage rules Tuesday morning, which he said have been brought to ensure that prospective homeowners are not vulnerable to rising interest rates and onerous levels of debts.
Prior to Tuesday's announcement, borrowers were required only to meet the standards of a three-year, fixed-rate mortgage -- now that jumps up to five years.
"This will help Canadians prepare for higher interest rates in the future," Flaherty said.
"One must always guard against the temptation to take on more financial risk simply because interest rates are low. Our government is acting to help prevent Canadian households from getting overextended and acting to help prevent some lenders from facilitating it."
The new rules are expected to come into effect on April 19.
In addition to having to meet the five-year, fixed-rate mortgage requirements to qualify for a CHMC mortgage, borrowers will be limited in the amount of refinancing they can undertake, Flaherty said.
"We will lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes," he said.
"This will discourage the kind of mortgage refinancing that can create unsustainable debt levels as interest rates go up," he added.
"We are encouraging people to build equity over time, using homeownership as an effective way to save, rather than as a vehicle for quick cash."
Flaherty also announced a third new change targeting housing speculators, who will now have to put down a 20 per cent down payment on properties they will not be living in, if they want to qualify for a CHMC-backed mortgage.
Flaherty said the government is not trying to crack down on investment properties such as rental units.
"What we're getting at is the speculation in multiple-condo markets, in particular," he said, making reference to incidents in the Vancouver and Toronto markets as examples.
Preventative measures
Flaherty said the three changes were necessary to prevent future problems and he insisted they would not make it harder for Canadians to buy houses.
"The only restriction would be qualifying at a five-year, fixed-term basis, which is a credit qualification that a number of our chartered banks have already gone to," Flaherty said.
"I think that most prudent Canadians would want to have that level of ‘credit-worthiness,' of credit qualification, so that they could rest assured that their house would remain affordable -- and the mortgage remain affordable -- when interest rates rise, as they inevitably will."
Pointing to mortgage changes the Conservative government instituted two years ago -- including a minimum five per cent down payment for new mortgages and a maximum 35-year amortization period -- Flaherty said they also helped Canadians avert the kind of housing crisis seen in the United States in the current recession.
BNN's Michael Kane said it is Flaherty's position that while there may not be a housing bubble immediately on the horizon, he wants to be proactive in preventing one from forming.
"What Mr. Flaherty is saying here, is that even though he doesn't see the bubble really forming at all, to put certain measures in place so one does not get the chance to build is the prudent thing to do," Kane said Tuesday morning from Toronto.
"Again, he reiterated a couple of times that there is no damage being created in the housing market right now. But it's just that it is an economic fact that when you pump billions and billions of dollars into an economy, you are going to get little pockets of pressure building and housing is one that has been a little soft, and as a result, when the economy starts to reheat and re-inflate, then that's one area that you don't want to have damaged."
Overall, Flaherty said the Canadian housing market is "healthy and stable," with about two-thirds of Canadians owning their own homes.
"Our housing market… has been a source of strength for our country and a source of growing wealth for hardworking Canadians themselves," Flaherty said.
With files from The Canadian Press
Sunday, February 14, 2010
Are you afraid to be successful?
By Dr. Maya Bailey
RISMEDIA, February 13, 2010—In my 13 years of coaching entrepreneurs to be successful, I have uncovered that many people have a deep-seated fear of success. When I probe for the reasons behind this fear of success, the pattern is very similar. The clients that I work with who are afraid to be successful often had situations in their childhood that caused them to retreat. There were hostile environments, turmoil, chaos and fighting, and the individual did the only safe thing to do, which was to withdraw and form the belief that it’s really not safe to be visible. Along with that, other core beliefs that were formed include: It’s not safe to express my feelings; it’s not safe to be myself; it’s not safe to succeed. Basically, succeeding was not safe because succeeding left the client more exposed, more visible, and therefore a possible target for punishment or disapproval.
I recently finished working with a client who has much talent and potential to succeed. She is currently dismantling her old programming from childhood, and discovering that even with all of her potential success and experience, there lies a deep-seated belief that if she was successful, more would be expected of her and she would subject herself to criticism and disapproval. This stops her from taking the actions she needs to take to be successful.
Gradually over time in our sessions, we’re going back and helping her release those old programs that have inhibited her success. She is now beginning to understand that her safety in life doesn’t depend on retreating; her safety depends on fulfilling her potential. In our last session together, she created some new empowered beliefs, such as;
-I welcome greater and greater success.
-I am experiencing massive amounts of success.
-I have created balance between my personal and professional life.
-I fully express my talents and abilities.
-My safety depends on living up to my full potential.
After only a month of working together, this client is already reporting feeling more confident, vast improvement in her negotiation skills, her speaking skills, and an increased ability to set boundaries with her clients. All of this is happening because of the understanding that success comes from the inside out. She was subconsciously blocking herself, as many of us do with the fear of success and sometimes even the fear of failure. Once these blocks are removed, we regain our confidence. Many of my clients double and triple their incomes after going through this process.
Here’s a coaching hint: If you suspect that you are blocking yourself from success, sit down, get a pen and paper out, and write down the possible blocks or self-limiting beliefs that could be causing you to retreat from success. Then ask yourself if you are willing to look at those self-limiting beliefs and reprogram them. The benefits are enormous; the choice is yours.
Dr. Maya Bailey, author of Law of Attraction for Real Estate Professionals, integrates 20 years of experience as a psychologist and 12 years as a business coach with her expertise in the Law of Attraction. Get Bailey’s free report, 7 Simple Strategies For More Clients in 90 Days, by visiting www.90DaystoMoreClients.com.
RISMEDIA, February 13, 2010—In my 13 years of coaching entrepreneurs to be successful, I have uncovered that many people have a deep-seated fear of success. When I probe for the reasons behind this fear of success, the pattern is very similar. The clients that I work with who are afraid to be successful often had situations in their childhood that caused them to retreat. There were hostile environments, turmoil, chaos and fighting, and the individual did the only safe thing to do, which was to withdraw and form the belief that it’s really not safe to be visible. Along with that, other core beliefs that were formed include: It’s not safe to express my feelings; it’s not safe to be myself; it’s not safe to succeed. Basically, succeeding was not safe because succeeding left the client more exposed, more visible, and therefore a possible target for punishment or disapproval.
I recently finished working with a client who has much talent and potential to succeed. She is currently dismantling her old programming from childhood, and discovering that even with all of her potential success and experience, there lies a deep-seated belief that if she was successful, more would be expected of her and she would subject herself to criticism and disapproval. This stops her from taking the actions she needs to take to be successful.
Gradually over time in our sessions, we’re going back and helping her release those old programs that have inhibited her success. She is now beginning to understand that her safety in life doesn’t depend on retreating; her safety depends on fulfilling her potential. In our last session together, she created some new empowered beliefs, such as;
-I welcome greater and greater success.
-I am experiencing massive amounts of success.
-I have created balance between my personal and professional life.
-I fully express my talents and abilities.
-My safety depends on living up to my full potential.
After only a month of working together, this client is already reporting feeling more confident, vast improvement in her negotiation skills, her speaking skills, and an increased ability to set boundaries with her clients. All of this is happening because of the understanding that success comes from the inside out. She was subconsciously blocking herself, as many of us do with the fear of success and sometimes even the fear of failure. Once these blocks are removed, we regain our confidence. Many of my clients double and triple their incomes after going through this process.
Here’s a coaching hint: If you suspect that you are blocking yourself from success, sit down, get a pen and paper out, and write down the possible blocks or self-limiting beliefs that could be causing you to retreat from success. Then ask yourself if you are willing to look at those self-limiting beliefs and reprogram them. The benefits are enormous; the choice is yours.
Dr. Maya Bailey, author of Law of Attraction for Real Estate Professionals, integrates 20 years of experience as a psychologist and 12 years as a business coach with her expertise in the Law of Attraction. Get Bailey’s free report, 7 Simple Strategies For More Clients in 90 Days, by visiting www.90DaystoMoreClients.com.
Tuesday, February 9, 2010
Most provinces, regions up as January housing starts on the rise, CMHC reports
By Luann Lasalle, The Canadian Press
MONTREAL - Canada's housing market is on the rebound with resales expected to set a new annual record this year and homebuilding off to a strong start, according to two reports issued Monday.
The Canadian Real Estate Association is forecasting that national home sales activity will reach 527,300 units this year, up 13.3 per cent from 2009. This would be a new annual record, up 1.2 per cent above the previous peak in 2007, CREA said Monday.
Low interest rates and home buyers wishing to avoid the harmonized sales tax before it comes into effect in Ontario and British Columbia will help fuel the resales in the first half of this year, the association said in a news release.
"Improved financial market stability and recovering global economic growth mean that home sales activity in 2010 is unlikely to repeat the dive it experienced in late 2008 and early 2009," said CREA chief economist Gregory Klump.
New housing starts have also gone up, according to figures released Monday by Canada Mortgage and Housing Corp.
The annual rate of housing starts reached 186,300 in January, up 5.8 per cent from 176,100 in December.
CMHC reports actual housing starts for 2009 totalled 149,081 units, with activity improving as the year progressed.
The agency said the urban starts increased 4.4 per cent to 165,200 in January.
Urban multiple starts rose 5.7 per cent to 76,300 while single urban starts increased 3.3 per cent to 88,900.
January's annual rate of urban starts increased 19.8 per cent in British Columbia, 7.3 per cent in Quebec, 2.3 per cent in Atlantic Canada, and 1.5 per cent in Ontario.
Urban starts were down 4.8 per cent on the Prairies.
Rural starts were estimated at 21,100 in January.
In a separate development announced Monday, the federal Competition Bureau says it's challenging rules imposed by the Canadian Real Estate Association, a body that represents nearly 100,000 real-estate brokers, agents and salespeople.
The federal agency says the CREA rules limit choices for consumers and force them to pay for services they don't want, also stifling innovation in the market for residential real estate services.
MONTREAL - Canada's housing market is on the rebound with resales expected to set a new annual record this year and homebuilding off to a strong start, according to two reports issued Monday.
The Canadian Real Estate Association is forecasting that national home sales activity will reach 527,300 units this year, up 13.3 per cent from 2009. This would be a new annual record, up 1.2 per cent above the previous peak in 2007, CREA said Monday.
Low interest rates and home buyers wishing to avoid the harmonized sales tax before it comes into effect in Ontario and British Columbia will help fuel the resales in the first half of this year, the association said in a news release.
"Improved financial market stability and recovering global economic growth mean that home sales activity in 2010 is unlikely to repeat the dive it experienced in late 2008 and early 2009," said CREA chief economist Gregory Klump.
New housing starts have also gone up, according to figures released Monday by Canada Mortgage and Housing Corp.
The annual rate of housing starts reached 186,300 in January, up 5.8 per cent from 176,100 in December.
CMHC reports actual housing starts for 2009 totalled 149,081 units, with activity improving as the year progressed.
The agency said the urban starts increased 4.4 per cent to 165,200 in January.
Urban multiple starts rose 5.7 per cent to 76,300 while single urban starts increased 3.3 per cent to 88,900.
January's annual rate of urban starts increased 19.8 per cent in British Columbia, 7.3 per cent in Quebec, 2.3 per cent in Atlantic Canada, and 1.5 per cent in Ontario.
Urban starts were down 4.8 per cent on the Prairies.
Rural starts were estimated at 21,100 in January.
In a separate development announced Monday, the federal Competition Bureau says it's challenging rules imposed by the Canadian Real Estate Association, a body that represents nearly 100,000 real-estate brokers, agents and salespeople.
The federal agency says the CREA rules limit choices for consumers and force them to pay for services they don't want, also stifling innovation in the market for residential real estate services.
Online Marketing: ‘Don’t Use My Name!’
RISMEDIA, February 9, 2010—It has become an all-too-familiar obstacle to writing about successful agents: “My partner doesn’t want anyone to know who we are. We’re number one in our 50-agent company and everyone copies everything we do. My partner’s afraid that if they know how we get so much business from the Internet, they’ll steal that from us. Feel free to have anyone outside our market area call me for a recommendation, but I’m afraid you can’t use my name—we just can’t risk it.”
What is it that “they can’t risk?”
These particular agents are from a small New England marketplace where they describe competition as ‘brutal.’ In 2009, they had about 40 sides, of which 20 came from their Internet marketing. A large part of their business remains referrals. They utilize a close relationship with a mortgage broker, who is right there with them helping their clients. Homes in their market sell anywhere from $150,000 to about $800,000, and they sell all price ranges. They report that their referrals come from local people and their outside-the-area leads come from the Internet (in fact, the day they sent back their questionnaire they received a solid $500,000 lead from their Internet marketing).
In summary—these good folks—except for their Internet marketing success—sound like a majority of top agents anywhere in North America. I wondered: What’s the big secret? Why the fear of sharing success?
Many agents have been burned
Fear of disclosing success is a lot like fear of the dark; we may not know exactly why we fear the dark, but we know there are lots of bad things that can happen in the dark. Likewise, when a successful agent goes out front, jealousy and envy can rear their ugly heads, creating a kind of negative aura from other agents in the office, especially in a part of the world where ostentatiousness is reviled.
In New England, wealthy people are as likely to be driving around in a 20-year-old beat-up car as in some handsome new cruiser; in many towns, it is considered a sign of poor upbringing to promote oneself or to display one’s financial success. A lot of bad things can happen to agents who make the mistake of acting too successful: clients might ‘think they are getting too big for their britches,’ for example. In general, however, most prospective clients want to deal with successful agents, so it’s really just a delicate balance of looking successful without being flashy. This reality might be a factor in the agents’ fear of promoting themselves and their success.
That reluctance might also be motivated by the experiences shared by many agents who have been exploited by some vendors. For example, an agent in Virginia recently reported that her previous experience with Internet marketing involved entering into an agreement with a company who assured her they would not oversell her marketplace. In time, the Virginia agent actually did sell a home from leads provided by that vendor, only to have them use her success to mount a sales offensive on her own office. Her success was used to entice 30 other agents in that office to sign on. Of course, once that market was over saturated, there were not enough valid prospects to go around. That agents leads also declined precipitously. The vendor sold 31 folks in her office, but did none of them any favors. The vendor also did themselves no favor, as now they have 30 unhappy clients in one market—clients who blast the greed of the vendor when asked for a reference.
Could it be that succeeding with Internet buyers is viewed as a trade secret?
Even NAR tells us that 90+% of agents are unhappy with the returns from their Internet marketing. It’s a fact that more agents fail at it than succeed. We think that’s partially because almost no one trains agents how to succeed at selling houses to Internet buyers, so is this fear a fear of telling the world something that no one could otherwise know? It absolutely should not be. Succeeding on the Internet is a simple four step process that any agent can master if they are willing to employ a little technology and a lot of common sense.
There are four basic steps to attracting Internet buyers to your business:
Maintain a good marketing platform with information available to the consumer upon request; get them to tell you what they want and give it to them; make certain that people searching the Web for homes can find your site; build traffic and convert visitors to your site into registrations; learn the proper way to follow up these leads; the timing, the methods and the follow-up techniques.
Should you do all that yourself or should you hire it done?
There are so many different factors affecting Internet success that we have determined that the average agent is better off hiring a firm to do their Internet prospecting. That may sound self serving–and it probably is–but it is also the truth. We know this from our own experience and that of our clients. For example:
We have two major Internet marketing products: CompassSearch™ (in which we work with the client’s existing website to meet the four goals listed above) and Compass PROLeadS™ (in which we do everything and the client has no responsibility other than following up the leads).
After working with more than a thousand clients with CompassSearch™, we realized that the reality was that great success was hard to achieve with the virtually unlimited variables and our lack of ability to control what people did or didn’t do to make their sites effective: a good example of this is the large number of clients who would not allow the installation of a strong lead capture system on their sites; not surprisingly, those who would not allow us to install that had less than 20% of the leads that those who did let us install it.
Simply being found is no guarantee of success; all four success factors above must be present. When we first started years ago, we truly believed that good SEO was enough: if you got to the first page of Google, you’d succeed online. Not only do many websites available today have design features that inhibit that ability to be found, even those that don’t may still not produce once we get them to page one. Our own ability to get sites on the first pages has increased exponentially, but we know, now, that it doesn’t matter if the other components aren’t there.
More importantly, however, was the unwillingness of webmasters or clients to understand that Internet success does not come from a scattergun approach to targeting: i.e., trying to have a strong Internet presence in four or five market areas dilutes the ability to dominate in any one. Think of putting out one house fire using one hydrant: there’s plenty of water, plenty of power, and it is possible to get the job done. Now try putting out two fires from one hydrant; it’s a closer run thing, but it can probably still be done. Try to fight four fires with the water and pressure from one hydrant pushed down four fire hoses and guess what? There isn’t enough water flow or power to put out any one of the four fires anymore. It’s the same with trying to spread your promotion too widely; you end up with no power to dominate anything. The same principle applies in online marketing. Focus is required and the discipline to adhere to that focus.
There are things no one can steal, like ability
The clients we’re writing about here utilize both types of our products. So far, they have received four times the leads in one third the time from Compass PROLeadS™ than they did last year with CompassSearch™. That’s partially because they would not follow our direction on their older site. They wouldn’t put lead capture on their most popular pages and they had a site that gave out way too much information without collecting any. Now they do, and they actually said: “And why didn’t we listen to you before?”
We are happy for their success and we’ll continue to do everything we can to continue to add to it. However, we know that it is counterproductive to oversell an effective Internet prospecting tool in any market; especially when that product comes with a money-back guarantee that the vendor must provide if performance promises aren’t met. We’ve learned that Internet success is attainable by following a formula. It took us years and millions of dollars to dial that in.
With respect, the average real estate professional has neither the time nor money to learn those lessons. For that reason, we sincerely recommend hiring your Internet prospecting to be done for you. Chances are good that your time is worth considerably more than the $235* a month (after down payment) a comprehensive program would cost you. Get the protections you feel that you need and utilize the technology that works best—before your competition stakes out your territory—but please don’t fear your competition. Your ability is what protects you and no one can steal that from you.
Your competition might think that they know what you do, but they aren’t you and it is your ability and experience that ultimately determines success. Technology can only bring opportunity: it is up to the individual agent to convert that opportunity to success. (*there are multiple payment options available).
Mike Parker (mparker@theblackwatercg.com) is a well known author on the subject of online marketing services for Realtors® and other real estate professionals. If you’d like information about how you can have strong internet prospecting done for you more cheaply and more effectively than you can do it yourself, click here and we’ll be happy to provide more information for you at no cost or obligation.
What is it that “they can’t risk?”
These particular agents are from a small New England marketplace where they describe competition as ‘brutal.’ In 2009, they had about 40 sides, of which 20 came from their Internet marketing. A large part of their business remains referrals. They utilize a close relationship with a mortgage broker, who is right there with them helping their clients. Homes in their market sell anywhere from $150,000 to about $800,000, and they sell all price ranges. They report that their referrals come from local people and their outside-the-area leads come from the Internet (in fact, the day they sent back their questionnaire they received a solid $500,000 lead from their Internet marketing).
In summary—these good folks—except for their Internet marketing success—sound like a majority of top agents anywhere in North America. I wondered: What’s the big secret? Why the fear of sharing success?
Many agents have been burned
Fear of disclosing success is a lot like fear of the dark; we may not know exactly why we fear the dark, but we know there are lots of bad things that can happen in the dark. Likewise, when a successful agent goes out front, jealousy and envy can rear their ugly heads, creating a kind of negative aura from other agents in the office, especially in a part of the world where ostentatiousness is reviled.
In New England, wealthy people are as likely to be driving around in a 20-year-old beat-up car as in some handsome new cruiser; in many towns, it is considered a sign of poor upbringing to promote oneself or to display one’s financial success. A lot of bad things can happen to agents who make the mistake of acting too successful: clients might ‘think they are getting too big for their britches,’ for example. In general, however, most prospective clients want to deal with successful agents, so it’s really just a delicate balance of looking successful without being flashy. This reality might be a factor in the agents’ fear of promoting themselves and their success.
That reluctance might also be motivated by the experiences shared by many agents who have been exploited by some vendors. For example, an agent in Virginia recently reported that her previous experience with Internet marketing involved entering into an agreement with a company who assured her they would not oversell her marketplace. In time, the Virginia agent actually did sell a home from leads provided by that vendor, only to have them use her success to mount a sales offensive on her own office. Her success was used to entice 30 other agents in that office to sign on. Of course, once that market was over saturated, there were not enough valid prospects to go around. That agents leads also declined precipitously. The vendor sold 31 folks in her office, but did none of them any favors. The vendor also did themselves no favor, as now they have 30 unhappy clients in one market—clients who blast the greed of the vendor when asked for a reference.
Could it be that succeeding with Internet buyers is viewed as a trade secret?
Even NAR tells us that 90+% of agents are unhappy with the returns from their Internet marketing. It’s a fact that more agents fail at it than succeed. We think that’s partially because almost no one trains agents how to succeed at selling houses to Internet buyers, so is this fear a fear of telling the world something that no one could otherwise know? It absolutely should not be. Succeeding on the Internet is a simple four step process that any agent can master if they are willing to employ a little technology and a lot of common sense.
There are four basic steps to attracting Internet buyers to your business:
Maintain a good marketing platform with information available to the consumer upon request; get them to tell you what they want and give it to them; make certain that people searching the Web for homes can find your site; build traffic and convert visitors to your site into registrations; learn the proper way to follow up these leads; the timing, the methods and the follow-up techniques.
Should you do all that yourself or should you hire it done?
There are so many different factors affecting Internet success that we have determined that the average agent is better off hiring a firm to do their Internet prospecting. That may sound self serving–and it probably is–but it is also the truth. We know this from our own experience and that of our clients. For example:
We have two major Internet marketing products: CompassSearch™ (in which we work with the client’s existing website to meet the four goals listed above) and Compass PROLeadS™ (in which we do everything and the client has no responsibility other than following up the leads).
After working with more than a thousand clients with CompassSearch™, we realized that the reality was that great success was hard to achieve with the virtually unlimited variables and our lack of ability to control what people did or didn’t do to make their sites effective: a good example of this is the large number of clients who would not allow the installation of a strong lead capture system on their sites; not surprisingly, those who would not allow us to install that had less than 20% of the leads that those who did let us install it.
Simply being found is no guarantee of success; all four success factors above must be present. When we first started years ago, we truly believed that good SEO was enough: if you got to the first page of Google, you’d succeed online. Not only do many websites available today have design features that inhibit that ability to be found, even those that don’t may still not produce once we get them to page one. Our own ability to get sites on the first pages has increased exponentially, but we know, now, that it doesn’t matter if the other components aren’t there.
More importantly, however, was the unwillingness of webmasters or clients to understand that Internet success does not come from a scattergun approach to targeting: i.e., trying to have a strong Internet presence in four or five market areas dilutes the ability to dominate in any one. Think of putting out one house fire using one hydrant: there’s plenty of water, plenty of power, and it is possible to get the job done. Now try putting out two fires from one hydrant; it’s a closer run thing, but it can probably still be done. Try to fight four fires with the water and pressure from one hydrant pushed down four fire hoses and guess what? There isn’t enough water flow or power to put out any one of the four fires anymore. It’s the same with trying to spread your promotion too widely; you end up with no power to dominate anything. The same principle applies in online marketing. Focus is required and the discipline to adhere to that focus.
There are things no one can steal, like ability
The clients we’re writing about here utilize both types of our products. So far, they have received four times the leads in one third the time from Compass PROLeadS™ than they did last year with CompassSearch™. That’s partially because they would not follow our direction on their older site. They wouldn’t put lead capture on their most popular pages and they had a site that gave out way too much information without collecting any. Now they do, and they actually said: “And why didn’t we listen to you before?”
We are happy for their success and we’ll continue to do everything we can to continue to add to it. However, we know that it is counterproductive to oversell an effective Internet prospecting tool in any market; especially when that product comes with a money-back guarantee that the vendor must provide if performance promises aren’t met. We’ve learned that Internet success is attainable by following a formula. It took us years and millions of dollars to dial that in.
With respect, the average real estate professional has neither the time nor money to learn those lessons. For that reason, we sincerely recommend hiring your Internet prospecting to be done for you. Chances are good that your time is worth considerably more than the $235* a month (after down payment) a comprehensive program would cost you. Get the protections you feel that you need and utilize the technology that works best—before your competition stakes out your territory—but please don’t fear your competition. Your ability is what protects you and no one can steal that from you.
Your competition might think that they know what you do, but they aren’t you and it is your ability and experience that ultimately determines success. Technology can only bring opportunity: it is up to the individual agent to convert that opportunity to success. (*there are multiple payment options available).
Mike Parker (mparker@theblackwatercg.com) is a well known author on the subject of online marketing services for Realtors® and other real estate professionals. If you’d like information about how you can have strong internet prospecting done for you more cheaply and more effectively than you can do it yourself, click here and we’ll be happy to provide more information for you at no cost or obligation.
Monday, February 8, 2010
Helping those in desperate need in Haiti
It’s estimated that the earthquake in Haiti affected as many as three million people, taking the lives of 200,000 and injuring 250,000 more. More than one million people are now homeless as a result of the disaster. It has been noted that it was the worst earthquake in the region in more than 200 years. Indeed, with respect to loss of human life, it ranks in the top 10 most devastating earthquakes in recorded history, dating nearly as far back as 500 BCE.
Haiti is the poorest country in the Western hemisphere, ranking 149th of 182 countries on the United Nations Human Development Index. By comparison, Canada ranks in fourth spot, preceded by Iceland, Australia and Norway.
Given that Greater Toronto REALTORS® recognize the essential role that shelter plays in everyone’s lives, the Toronto Real Estate Board has donated $50,000 to the Canadian Red Cross to help with relief efforts, and help the people of Haiti.
TREB has a long history of donating at home and abroad when disaster strikes. Last year alone, Greater Toronto REALTORS® presented REALTORS® Care Foundation grants totaling $171,000 to 20 local shelter-related charities, including relief efforts to help victims of an earthquake in China and those struck by a cyclone in Burma in 2008.
We can take great pride in the fact that our country has stepped forward to provide one of the three largest military contingents to Haiti. There is certainly much work to be done: the international airport’s traffic control tower was severely damaged, as were hospitals and prisons, to name only a fraction of the affected infrastructure.
For those of us fortunate to live in prosperous nations, this devastation underscores the importance emergency preparedness on an individual level. Those living in Haiti however, were at a tremendous disadvantage with regard to facing such a cataclysmic event. Even prior to the earthquake, more than 2 million people in Haiti were homeless, and shortages of potable water and fuel were the norm. With this degree of poverty and no building codes in existence, it is unlikely that the people of Haiti would have been in a position to withstand a disaster of any magnitude.
It is my sincere hope that our donation will help improve shelter conditions for the millions of Haitians dire need. Greater Toronto REALTOR® are professionals who truly care about making a positive difference in and the lives of those less fortunate around the world.
From TREB President
Haiti is the poorest country in the Western hemisphere, ranking 149th of 182 countries on the United Nations Human Development Index. By comparison, Canada ranks in fourth spot, preceded by Iceland, Australia and Norway.
Given that Greater Toronto REALTORS® recognize the essential role that shelter plays in everyone’s lives, the Toronto Real Estate Board has donated $50,000 to the Canadian Red Cross to help with relief efforts, and help the people of Haiti.
TREB has a long history of donating at home and abroad when disaster strikes. Last year alone, Greater Toronto REALTORS® presented REALTORS® Care Foundation grants totaling $171,000 to 20 local shelter-related charities, including relief efforts to help victims of an earthquake in China and those struck by a cyclone in Burma in 2008.
We can take great pride in the fact that our country has stepped forward to provide one of the three largest military contingents to Haiti. There is certainly much work to be done: the international airport’s traffic control tower was severely damaged, as were hospitals and prisons, to name only a fraction of the affected infrastructure.
For those of us fortunate to live in prosperous nations, this devastation underscores the importance emergency preparedness on an individual level. Those living in Haiti however, were at a tremendous disadvantage with regard to facing such a cataclysmic event. Even prior to the earthquake, more than 2 million people in Haiti were homeless, and shortages of potable water and fuel were the norm. With this degree of poverty and no building codes in existence, it is unlikely that the people of Haiti would have been in a position to withstand a disaster of any magnitude.
It is my sincere hope that our donation will help improve shelter conditions for the millions of Haitians dire need. Greater Toronto REALTOR® are professionals who truly care about making a positive difference in and the lives of those less fortunate around the world.
From TREB President
First-Time Buyers: Beyond the Mortgage Payment, Brace Yourself for Extra Costs
RISMEDIA, February 8, 2010—(MCT)—On his road to homeownership, Scott Leibfried has learned one thing: Expect the unexpected. He and his wife had an offer accepted on a home, only to later find that foreclosure proceedings were about to begin on it. That’s after they considered another home that was aesthetically pleasing but had major issues that came to light upon closer inspection.
In the meantime, they’re trying to estimate the money they will need for closing costs and any future expenses, hoping they won’t eat too much into their financial cushion.
“There are always going to be things that come up,” Leibfried said. That statement could describe homeownership in general. Allan Glass, a Los Angeles-based real estate agent who works with the couple, says the biggest mistake buyers make is underestimating the costs of buying a house and maintaining it over time.
Homeowners should have 1% of the purchase price of their home in savings for improvements and surprise expenses, he said. “That is the absolute minimum. It’s better to have 2-3% socked away somewhere.” The cushion often isn’t easy for first-time home buyers to have—especially after they’ve scrimped and saved for their down payment. And there are many first-time buyers in the market now, due to affordable prices, low interest rates and the federal tax credit.
“Some people walk away from closing with a nickel and a stick of gum, and that’s probably not going to be a good idea,” says Dale Robyn Siegel, president of Circle Mortgage Group, in Harrison, N.Y. She recommends having at least six months of mortgage payments in the bank after closing on a house “especially now, with such an iffy job market.”
To get a better handle on where the house stands, buyers should attend a home inspection and ask questions, says Bill Richardson, a home inspector in New Mexico and president of the American Society of Home Inspectors. That way, they can get tips and recommendations from the inspector as he or she is working. They should keep the inspection report handy for reference. For existing homes, an inspector will estimate the age of major components, giving the home buyer a sense of when they will need replacing. A furnace, for example, often lasts between 12 and 15 years; a water heater from 10 to 12 years.
Once you know what you’re dealing with—and perhaps what the sellers will repair or pay for before the sale is final—look five years out and make a list of big-ticket home issues that you’ll need to address, says Kelly Rogers, director of education for the Consumer Credit Counseling Service of Orange County, based in Santa Ana, Calif. Make a timeline for those expenses.
And don’t count on borrowing money needed for repairs. “The banks have really tightened up, so it’s harder and harder to get a home-equity line of credit,” Richardson said. “If you don’t budget for repairs, you will never get the repairs done when you need it.”
When small problems pop up, it’s important to address them before they become large-scale projects. Consider the tile in the bathroom: As soon as there’s deterioration or cracking, address it, Richardson said. “If the toilet is loose to the floor, it doesn’t seem like a big deal, but it can leak and rot the floor,” he said. “What could be a $15 repair could end up being a $700 repair or more.” Richardson suggests planning for a $500 to $1,000 annual general maintenance budget for most starter homes, which would cover everything from painting a room to caulking the bathtub. “Buying a home is one of the largest investments you’re going to make,” he said, “If it’s done wisely and with lots of thought, it can be a huge asset. If it’s not well thought out, it can become a huge burden to you.”
Estimating monthly expenses can often trip up new home buyers as well. As renters, people are accustomed to paying rent and likely utilities—phone, Internet service and cable. As a homeowner, however, there will be other utility costs such as water, sewer and trash collection. Then there are property taxes, homeowner’s insurance and possible homeowner’s association dues. There also can be expenses unique to your location. In Los Angeles, for example, water restrictions are such that if you go over a certain cap of usage, you face a penalty. You also can have miscellaneous expenses such as snow removal and lawn service, if you don’t plan on doing them yourself, Siegel said.
In the meantime, they’re trying to estimate the money they will need for closing costs and any future expenses, hoping they won’t eat too much into their financial cushion.
“There are always going to be things that come up,” Leibfried said. That statement could describe homeownership in general. Allan Glass, a Los Angeles-based real estate agent who works with the couple, says the biggest mistake buyers make is underestimating the costs of buying a house and maintaining it over time.
Homeowners should have 1% of the purchase price of their home in savings for improvements and surprise expenses, he said. “That is the absolute minimum. It’s better to have 2-3% socked away somewhere.” The cushion often isn’t easy for first-time home buyers to have—especially after they’ve scrimped and saved for their down payment. And there are many first-time buyers in the market now, due to affordable prices, low interest rates and the federal tax credit.
“Some people walk away from closing with a nickel and a stick of gum, and that’s probably not going to be a good idea,” says Dale Robyn Siegel, president of Circle Mortgage Group, in Harrison, N.Y. She recommends having at least six months of mortgage payments in the bank after closing on a house “especially now, with such an iffy job market.”
To get a better handle on where the house stands, buyers should attend a home inspection and ask questions, says Bill Richardson, a home inspector in New Mexico and president of the American Society of Home Inspectors. That way, they can get tips and recommendations from the inspector as he or she is working. They should keep the inspection report handy for reference. For existing homes, an inspector will estimate the age of major components, giving the home buyer a sense of when they will need replacing. A furnace, for example, often lasts between 12 and 15 years; a water heater from 10 to 12 years.
Once you know what you’re dealing with—and perhaps what the sellers will repair or pay for before the sale is final—look five years out and make a list of big-ticket home issues that you’ll need to address, says Kelly Rogers, director of education for the Consumer Credit Counseling Service of Orange County, based in Santa Ana, Calif. Make a timeline for those expenses.
And don’t count on borrowing money needed for repairs. “The banks have really tightened up, so it’s harder and harder to get a home-equity line of credit,” Richardson said. “If you don’t budget for repairs, you will never get the repairs done when you need it.”
When small problems pop up, it’s important to address them before they become large-scale projects. Consider the tile in the bathroom: As soon as there’s deterioration or cracking, address it, Richardson said. “If the toilet is loose to the floor, it doesn’t seem like a big deal, but it can leak and rot the floor,” he said. “What could be a $15 repair could end up being a $700 repair or more.” Richardson suggests planning for a $500 to $1,000 annual general maintenance budget for most starter homes, which would cover everything from painting a room to caulking the bathtub. “Buying a home is one of the largest investments you’re going to make,” he said, “If it’s done wisely and with lots of thought, it can be a huge asset. If it’s not well thought out, it can become a huge burden to you.”
Estimating monthly expenses can often trip up new home buyers as well. As renters, people are accustomed to paying rent and likely utilities—phone, Internet service and cable. As a homeowner, however, there will be other utility costs such as water, sewer and trash collection. Then there are property taxes, homeowner’s insurance and possible homeowner’s association dues. There also can be expenses unique to your location. In Los Angeles, for example, water restrictions are such that if you go over a certain cap of usage, you face a penalty. You also can have miscellaneous expenses such as snow removal and lawn service, if you don’t plan on doing them yourself, Siegel said.
Saturday, February 6, 2010
3 Factors to Take Into Consideration Before Jumping Into Housing Market
U>S> version
RISMEDIA, February 6, 2010—(MCT)—If you have a good job and good credit, the next few months might be a good time to go house hunting. Fence-sitters take the risk that Congress may let a rich tax credit expire, and that interest rates may rise. Buyers and sellers should consider the following factors as they consider jumping into the housing market.
-Mortgage rates are blissfully low, and that may not last. The rate on a 30-year mortgage averaged 5% last week, according to Freddie Mac. Rates are low in part because the Federal Reserve has been buying up about $3 trillion in mortgage-backed securities and mortgage agency debt. The aim is to hold down interest rates and keep mortgages available. But the Fed is slowly removing that financial crutch as the economy improves. It has no plans to buy any more past March 30, 2010. The likely result is an uptick in rates. Meanwhile, the recovering economy by itself should raise rates as the year goes on. Economists at the Mortgage Bankers Association expect to see a 6.1% rate by year end. Such a rise would add about $104 to the monthly payment on a $150,000 mortgage
-The home buyer tax credit expires on April 30, 2010 and no one knows if Congress will renew it a second time. Expect a clash between the real estate lobby and fiscal conservatives worried about the $1.35 trillion federal deficit. To qualify for the credit, you must sign a purchase contract by April 30, 2010 and close by July 1, 2010. First-time buyers get up to $8,000. “First-time” is defined as someone who hasn’t owned a home in three years. Move-up buyers get up to $6,500 when they purchase a new primary residence. To get the credit, you have to have lived in the old home for at least five out of the last eight years. The credits start phasing out at $125,000 in adjusted gross income for singles and $225,000 for joint filers.
-There are indications that home prices are near a bottom in some areas and may actually be rising a bit. That statement is dicey, because conditions vary by neighborhood and the data can be tricky.
Things might look different if you’re a seller though. Do you want to put your house on the market near the bottom of a price cycle? Homeowners who have a choice in the matter—those who can still pay their mortgages—are largely saying no. Inventories of homes for sale are down about 10% from this time last year, and 30% from the mid-decade peak of the housing boom, says Kevin Cottrell, chief economist at Kelsey Cottrell Realty Group. On the other hand, if you’re planning to move up to something grander, you might find a bigger bargain when you buy. And that $6,500 tax credit could swing a close decision.
Home sales peaked in some areas October and November, as buyers raced the expiration date of the original first-time home buyer’s credit. Congress later extended and expanded it. That rush satisfied some pent-up demand, but real estate agents are hoping for another rush around April. “People will wait to the very last second,” said Mike Travaglini, a vice president of Coldwell Banker Gundaker’s office in south St. Louis County.
Mortgage lenders have been tightening credit standards, which means fewer eligible buyers, says John Frank, president of Paramount Mortgage in Creve Coeur. Mo. “It’s getting tighter and tighter,” he said.
Lenders are insisting on credit scores of 640 to 660 for loans sold to Fannie Mae, Freddie Mac and 620 for FHA guaranteed loans. Those standards are higher than the federal agencies themselves insist on. FHA—which guarantees loans for people with low down-payments—has been raising its own insurance charges to borrowers and demanding higher premiums from people with poor credit scores.
RISMEDIA, February 6, 2010—(MCT)—If you have a good job and good credit, the next few months might be a good time to go house hunting. Fence-sitters take the risk that Congress may let a rich tax credit expire, and that interest rates may rise. Buyers and sellers should consider the following factors as they consider jumping into the housing market.
-Mortgage rates are blissfully low, and that may not last. The rate on a 30-year mortgage averaged 5% last week, according to Freddie Mac. Rates are low in part because the Federal Reserve has been buying up about $3 trillion in mortgage-backed securities and mortgage agency debt. The aim is to hold down interest rates and keep mortgages available. But the Fed is slowly removing that financial crutch as the economy improves. It has no plans to buy any more past March 30, 2010. The likely result is an uptick in rates. Meanwhile, the recovering economy by itself should raise rates as the year goes on. Economists at the Mortgage Bankers Association expect to see a 6.1% rate by year end. Such a rise would add about $104 to the monthly payment on a $150,000 mortgage
-The home buyer tax credit expires on April 30, 2010 and no one knows if Congress will renew it a second time. Expect a clash between the real estate lobby and fiscal conservatives worried about the $1.35 trillion federal deficit. To qualify for the credit, you must sign a purchase contract by April 30, 2010 and close by July 1, 2010. First-time buyers get up to $8,000. “First-time” is defined as someone who hasn’t owned a home in three years. Move-up buyers get up to $6,500 when they purchase a new primary residence. To get the credit, you have to have lived in the old home for at least five out of the last eight years. The credits start phasing out at $125,000 in adjusted gross income for singles and $225,000 for joint filers.
-There are indications that home prices are near a bottom in some areas and may actually be rising a bit. That statement is dicey, because conditions vary by neighborhood and the data can be tricky.
Things might look different if you’re a seller though. Do you want to put your house on the market near the bottom of a price cycle? Homeowners who have a choice in the matter—those who can still pay their mortgages—are largely saying no. Inventories of homes for sale are down about 10% from this time last year, and 30% from the mid-decade peak of the housing boom, says Kevin Cottrell, chief economist at Kelsey Cottrell Realty Group. On the other hand, if you’re planning to move up to something grander, you might find a bigger bargain when you buy. And that $6,500 tax credit could swing a close decision.
Home sales peaked in some areas October and November, as buyers raced the expiration date of the original first-time home buyer’s credit. Congress later extended and expanded it. That rush satisfied some pent-up demand, but real estate agents are hoping for another rush around April. “People will wait to the very last second,” said Mike Travaglini, a vice president of Coldwell Banker Gundaker’s office in south St. Louis County.
Mortgage lenders have been tightening credit standards, which means fewer eligible buyers, says John Frank, president of Paramount Mortgage in Creve Coeur. Mo. “It’s getting tighter and tighter,” he said.
Lenders are insisting on credit scores of 640 to 660 for loans sold to Fannie Mae, Freddie Mac and 620 for FHA guaranteed loans. Those standards are higher than the federal agencies themselves insist on. FHA—which guarantees loans for people with low down-payments—has been raising its own insurance charges to borrowers and demanding higher premiums from people with poor credit scores.
Subscribe to:
Posts (Atom)
