The new mortgage rules scheduled to come into effect on February 15th, 2016 are here now. These will have a direct impact on buyers within the $500,000 and $999,999 range, who are paying less than 20% downpayment for the purchase of their home. These new rules seek to vary the down payment required for a home purchase, by increasing it from the current 5% to a 10% of the value of homes in the above range. Better explained, home purchases up to $500,000 will still require a minimum of 5% down payment, while only the excess will be subject to a 10% down payment.
For Example: A home purchase of $800,000 requires minimum 5% down payment ($40,000). With the new rules this deposit will continue to be 5% for the first $500,000 ($25,000), but will increase to 10% for the remaining $300,000 ($30,000) for a new total down payment amount of $55,000. This will mean an increase of $15,000 in the deposit that buyers with insured mortgages (high ratio mortgagees) will need to provide for the purchase of their new home or investment.
Although it is expected that this will have an immediate impact on Toronto’s housing market dynamics, especially during the busy Spring season, the shock shouldn’t be long lived. Previous mortgage rule changes have shown that although the market slows down for several months after these type of changes are implemented, activity tends to pick up soon after as this becomes the new operating standard.
This is the fifth and most recent mortgage rule change since the last four took place between 2008 and 2012. As Toronto and Vancouver are the only two major cities with average home prices above $500,000, these efforts intend to minimize risk in a market activity that has been reaching double-digit growth in most segments.
However, considering the historically low mortgage rates that we continue to experience, the market will most likely continue to push forward and be somewhat resilient to these new tightening of the rules, as it has done before. Nonetheless, another unexpected factor for uncertainty looms in 2016 and may further influence changes in the pace of Toronto’s housing market. Last December, the US Federal Reserve announced an increase of its benchmark rate for the first time since 2006. Considering that the Canadian financial market is closely related to the fluctuations experienced in the U.S., there is room for thought that interest rates in Canada may, in time, also shift upward. Being the current low interest rate scenario one of the main catalysts for Toronto’s housing market’s growth in the past couple of years, a potential increase of interest rates may be an important factor to monitor during 2016.
If you're looking to buy and have any questions, feel free to contact us. We'll be happy to assist you and take great care of you!
Jose & Claudia
A commonly asked question we often get when working with our clients in Toronto relates to property taxes. They are eager to know what they are, what they are used for, when they are paid and how they impact their property. Although there is a lot to cover about them, we thought we'd make an attempt to address them briefly through this article.
Property taxes are a relevant aspect of any real estate purchase and an added expense for anyone owning a home or investment property. Considering that in 2014 they made up close to 39% of our city’s annual operating budget, their use impacts our every day life in more ways than one.
Property taxes are a levy based on a property’s assessed value and consist of two key components, one pertaining to the municipality and the other one to education. Each municipality will determine its tax portion independently, based on its intended annual budget. While the portion for education, which helps fund Ontario’s elementary and secondary education system, is decided upon by the Ministry of Finance.
The tax rates resulting from combining these two portions, are then multiplied by a real estate property’s Current Value Assessment - determined by the Municipal Property Assessment Corporation (MPAC) - in order to generate its annual propertytax. MPAC uses the information held in its extensive and detailed property database to assess your property. This information is constantly updated using different resources such as the transactions recorded in Ontario’s Land Registry, the interactions withproperty owners or by conducting on-site inspections, among others.
Assessments in property value are also regularly carried out by MPAC in order to reflect market changes. The last one performed took place in 2012 and the difference in value in comparison to the 2008 assessment, will be phased-in through a 4 year span which ends in 2016.
Plainly explained, if the appreciation in a property’s value between 2008 and 2012 was $40,000, the assessed property value for such will increase proportionately each of the 4 following years by $10,000, until the 2012 assessed value is reached in 2016. Assessments in property values are also updated if changes occur on a property, such as new construction or ownership changes.
It is important to point out that although municipalities in Ontario cover part of their operating budget through property taxes, they are prohibited by law from running deficits or generating revenue. This means that even though property values increase, the property tax base doesn’t necessarily end up being higher. If property values increase in accordance with the average growth in value of homes in a given area, property taxes should remain the same. On the other hand, if a particular property experiences an increase in value higher than the average, its property taxes will most likely increase.
These differences in proportional value between properties, along with the increase in the number of properties built in a municipality, will normally redistribute the property tax contributions made by each property, either increasing or alleviating them in a given period.
Once your property tax has been determined, you will be billed the resulting amount in installments. First you will receive an interim property tax billing in January and then a final property tax billing in May. Payments will then need to be completed proportionately on the first business day of the following months of July, August and September of that year.
Although property taxes make up a significant amount for homeowners, new homebuyers and investors to cover, they make an important contribution to running our city.
With the end of summer now upon us, the much anticipated Real Estate fall market in Toronto is in full swing. With market activity having significantly increased after the Labour Day long weekend, there are several factors aligning both locally and globally, which may coincide to influence the market dynamics for the remainder of the year.
Although we briefly mention them below, be sure to read the reports and forecasts recently released by RBC and TD Bank, that address both the housing trends and stock market. Kindly contact us if you´d be interested in receiving them.
These are the top factors that in our opinion may have or will continue to have, a short term impact in our local housing market:
1. Low Interest Rates:
As Canada continues to struggle with low oil prices and a slow performing economy, mortgage rates continue to be at rock bottom. Historic levels are at their lowest following the second rate cuts experienced last July. This will continue to be the most significant overall factor and catalyst of the housing market's upward price trend. For reference, current variable rates are being offered at just below 1.99%.
2. Limited Low Rise Housing Inventory:
Toronto continues to experience a so-called two-tier market, where both the house and condo segments dictate different patterns of behaviour. The condo market continues to have a steady supply of new inventory, with a somewhat straightforward pricing structure. The low rise freehold market's flip side stands out with a significantly limited amount of houses available. Their prices are mostly driven by the market's short supply and high demand.
With a strong buyer appetite, given the enhanced affordability provided by lower interest rates, the last stretch of this year's Real Estate market may prove to be highly competed for buyers wanting to secure a home in the freehold segment.
3. Weaker Canadian Dollar:
The current exchange rate between the Canadian and American dollars is giving foreign buyers and investors an extra incentive to buy locally. With the American dollar providing an extra 30 cents on top of each Canadian dollar, our housing inventory presents itself to many foreign buyers at a discount.
4. Devaluation of China's Yuan:
Early in August, China's central bank started a three day devaluation spree of its currency, the yuan. Losing more than 2% of its value, the ripples of this action have prompted a significant shock to the global financial markets. As reported by The Economist in an article earlier this year, "a falling yuan might spur the outflow of capital in China". With Vancouver's and Toronto's real estate markets being heavily influenced by Chinese buyers, this expected capital migration could likely find refuge here.
5. Volatile Global Stock Markets:
As China seeks to stabilize its economy after a recent devaluation of the yuan, shockwaves have been felt through the global stock markets. While the local Chinese stock market has been affected, Wall Street reported losses for 6 straight days in late August, "its longest losing stretch for more than 3 years" reported an article from The Guardian.
As investors carefully watch their investments perform, many with a lower risk tolerance, may likely consider the traditionally safer investments in the brick and mortar segment.
6. CMHC Policy Revisions on Rental Income:
Effective September 28, 2015, CMHC will be considering 100% of the rental income used for buyer qualifications. This will help bolster a buyer's ability to purchase properties with an income component (basement apartment, duplex, triplex, Etc.) and may ultimately put additional upward pressure in the sales of this segment of the housing market.
For full details, please visit the following link:
CMHC´s Changes to Rental Income Policies for Borrower Qualification Purposes.
We believe that an informed buyer or seller, or for that matter a settled homeowner, will all be able to make better decisions based on tangible facts. This is a sensible way of keeping the pulse on what's happening in our local real estate market.
If you feel that someone you know can benefit from reading this brief analysis we've put together for you, by all means, forward it to them. We will be happy to assist with any questions you or anyone close to you may have, in order to better plan for future Real Estate related decisions.
All the best to you!
Jose Castillo & Claudia Pardo
Real Estate Sales Representatives - ABR®, SRES®
RE/MAX Hallmark Realty Ltd.
m 647.994.0034 | 416.465.7850 o
m 647.995.5440 | 416.463.7850 f
785 Queen St E, Toronto ON M4M 1H5, Canada
PS: Our business is mainly based on referrals from our existing and past clients. If you know someone who could appreciate the level of service we provide, please call us with their name and business number. We'll be happy to follow up and take great care of them.
In the eyes of the average Toronto resident, our local real estate market is seen as overpriced and unaffordable. The media has also portrayed current home prices as unsustainable and due for a major price correction. But why then, do the values of homes in most of Toronto´s neighbourhoods continue to consistently increase?
With concerns mainly based on high Canadian household debt and disparities in rent vs. home value ratios, one could expect these fears to be true. But although valid, these are not the only factors affecting our market from either a local or international perspective.
We would need to further consider the following:
1. Weak Canadian Dollar: Toronto is a sought after real estate market for foreign buyers. These investors and/or end users seek a safe and stable economy in which to allocate their funds and shield their assets from potential international risks. They will aim to pursue investment properties that can hopefully generate a positive cash flow or use these homes for purely functional purposes, such as for housing their families. Be it one case or the other, the current exchange rate between the Canadian and American dollars are providing them with an extra incentive to buy locally. With a nominal 25% variation between currencies, our housing inventory presents itself to them at a discount.
2. Limited Inventory: Toronto experiences a so-called two-tier market, where both the house and condo segments have very unique characteristics. On one hand the condo market has a constant supply of new inventory, with a somewhat straightforward pricing structure. On the flip side, we have the freehold market with a significantly limited amount of houses available. Their prices, unlike the ones in the condo market, are mostly driven by the market´s short supply and high demand. As this trend continues and sought after locations increase in value, many buyers are priced out from buying a house in Toronto. They are inevitably forced to reconsider the condo market or venture further away into the GTA for a suitable home.
3. Lower Mortgage Rates: The Canadian economy has struggled recently with low oil prices and with a potential recession looming. In an effort to mitigate this risk, the Bank of Canada has cut rates twice so far this year. In doing so, it has not only focused in keeping the economy afloat, but also given prospective buyers an extra incentive for securing a home in the short term. Although a side effect, these low mortgage rates continue to be the true driving force behind pricing of our local real estate market.
With this rate scenario, more prospective buyers will be lured into seeking home ownership. In the short term, buyers will surely benefit from their increased purchase ability, but general access to low cost borrowed resources will most likely trigger the increase of home values once again.
It will only be when interest rates start to slowly increase, that we will actually see an adjustment in the upward trend of home prices. But with higher mortgage rates in play, lower home prices won´t necessarily mean that housing will be any more affordable then, than it is in Toronto today. At least not for buyers relying on borrowed resources.
In the end, current low rates will reflect affordability as a reference to a buyer´s access to a higher amount of funds, but not so in their ability to find fairly priced homes to call their own. Sellers will most likely continue to have the upper hand, at least for now.
Real Estate Sales Representative
RE/MAX Hallmark Realty Ltd.
More often than not, we come across property owners who want to sell their homes for the best possible price but find it hard to become “detached" from their property. We explain to them that once they've made the decision to move on, they need to commit and do what it takes for it to sell. Detaching means removing personal items, decluttering, storing over sized furniture and even finding a temporary place for their pets to stay during the selling process.
A well-priced unit at the right location, should sell in a few days if buyers can easily picture themselves living there. It’s not that your family photos or travel pictures are not important, but they distract buyers from focusing on what they are actually there for, your property. Personal items make them feel as if they are intruding into someone else's space making it hard for them to connect with the home.
Sometimes it’s not even a matter of bringing a whole new set of furniture and expensive items to create the mood. In most cases, all that needs to be done is rearranging the existing furniture, cleaning and accessorizing to better help accentuate the attributes of your home. The goal is that as soon as a buyer steps into your home they think, “Wow! This feels just right”.
Keep in mind that a real estate purchase decision is not entirely a financial decision. Aside from those important things that make part of your wish list and must-haves, feelings play a big role and can easily override things that were considered non-negotiable. Creating emotion goes a long way and there's a subjective factor that will make a buyer choose a property over another without knowing exactly why. So when you decide it’s time to sell your property, detach from it and allow us to help you make it “feel just right” for it to sell in the least time possible and at its best market price.
RE/MAX Hallmark Realty Ltd.
As the new year starts, it would seem appropriate to summarize the highlights of Toronto's Real Estate market for 2014.
In doing so, it feels as if looking back into last year could somewhat reflect a forecast of things to expect well into 2015, as well.
Low interest rates continued to fuel housing demand. Buyers enjoyed access to low cost funds for their home purchases, as has been the case for most of the last 3 years.
The average 5 year fixed term rates last year were well below the 3% threshold and roughly over the 2% mark for mortgage terms of 3 years or less.
Semi-Detached and fully Detached houses continued to spearhead the market as the highest priced inventory in Toronto. Homes in sought after neighbourhoods continued to drive interest and competing offers were more the norm than the exception.
The low availability of new listings and a growing trend of home owners who considered renovating their current homes and aging in place to be a more cost effective option than selling it and relocating, continued to curb the amount of inventory reaching the market. This in time, meant less options for the many buyers who ended up competing for the few homes that became available and who will most likely bought at prices well above their comfort zone.
Condo unit sales also continued to experience a boost in volume. They have done so for much of the previous 18 months, well after the last Mortgage Rules were implemented by the late Jim Flaherty on July 1st, 2012. Since then, the condo market has rebounded from the contraction it temporarily experienced.
The major challenge in this segment still remains ahead. A significant amount of new inventory, 50,000 to 70,000 units either being planned or about to be completed, will slowly make their way into the market during the next 3 to 5 years. Although the number of units is significant, there is no need to panic. Not all these units will end up in the market for resale, as a large portion of them will be kept by end users or made available for rent by their owners. Timing also plays a crucial role, as not all of these units will be released simultaneously.
Nonetheless, buyers will have more options to choose from and will test sellers about the choices they made regarding the locations, price points and inventory type they purchased in pre-construction years before.
Pricing and Currency Exchange:
Considering that Toronto is one of the top 5 cities in North America, it´s Real Estate price points are still quite affordable in comparison to many of the other major cities in the world. The fact that it is a safe city to live in and a stable destination to place assets, makes it even more appealing for foreign investors or for private foreign individuals who have their children studying abroad in Toronto.
The fact that the Canadian currency is currently almost 13% less expensive than the American dollar, makes it even more appealing and affordable from a merely financial perspective.
Immigration and Unemployment:
With a steady influx of immigrants, Toronto´s GTA will be the fastest growing region in the province of Ontario, with projections placing it´s growth at around a 39% increase before 2036.
Unemployment also continues to prove to be a positive indicator with current statistics bring the number to 6.6%, at it´s sixth year low.
All in all, the outlook for Toronto´s Real Estate market in 2015 will most likely replicate that of 2014. We should look forward to a strong market in the coming year, as long as the mortgage rates continue to remain at their current historical lows.
If you have any Real Estate related questions, plans or general ideas you´d like to discuss, no matter how far into the future they may be, we are always eager to sit down and discuss what the pro´s and con´s may be. Planning ahead with the right information at hand will give you the right tools for your decision making.
Are you where you want to be in 2015?
Happy New Year!
Jose & Claudia
Often times, while working with our clients, we come across couples who have recently decided to move in together. Be it by purchasing a new home jointly or by moving into an existing property one of them owns. When encountering these situations, we always try for our buyers to understand the complexities of these decisions, beyond the purely emotional and sentimental point of view.
Considering this to be a subject best addressed through a lawyer´s perspective and expertise, we invited Kate Grossi from Korman and Company, to discuss this with us over a light meal at Bonjour Brioche. Her valuable insight has helped us in putting this article together. To her, our sincere thanks.
When discussing the differences, on a Real Estate context, between couples who live in a Common Law relationship and those who are legally married, it is evident that there are significant aspects to consider.
In regards to home ownership, Common Law relationships may seem like a good idea, but may prove to be far from that for the spouse that holds no ownership rights on the property that the couple lives in. This is specially true when such rights are compared to the ones attained by legal marriages in Ontario.
Take for example The Ontario Family Law Act. A legal statute introduced in 1990, designed to protect the rights of spouses. One would guess that it would apply equally to both legally married couples and those under Common Law as well. But the truth is that it doesn´t.
Under the figure of a legal marriage, a home where both spouses reside on a permanent basis is considered to be a Matrimonial Home. The rights over this home are normally divided equally 50/50 amongst both spouses, regardless of who claims ownership or is ultimately on title. Any transactions related to this Real Estate property, must include the consent of the spouse, even if he or she is not on title. Nonetheless, if a prenupcial agreement has been set in place, exceptions may apply.
Under Common Law however, a home where both spouses reside on a permanent basis is not considered a Matrimonial Home. Upon a break down of such relationship, the person registered on title remains as the sole owner and can dispose of the Real Estate property without the spouse´s consent. Only in the event that the spouse has contributed financially to the asset or property, may they have a right to claim Constructive Trust and seek fair compensation for such. A Constructive Trust would normally be assigned by a court and would arise through any expenses or payments the spouse has incurred in. They may apply to mortgage and/or property taxes, expenses for property up keeping & repairs or by any other contributions made by the spouse towards the property´s expansion.
Although moving together with your significant other may not be a meticulously planned decision, it is important to know how to protect your rights and manage both parties expectations in the event that a Common Law relationship goes South.
Consider drafting a Cohabitation Agreement which will help outline exactly what happens if the couple separates. This can help address property rights, how to approach existing debt, and help avoid misunderstandings and unnecessary stress for the parties involved.
In the event that you plan to purchase a home jointly with your Common Law partner, consider taking title as tenants in common and assigning interest proportionate to the contributions being made by each party.
It is important to know that a couple is considered to be in a Common Law relationship after they have lived together continuously for at least three years. A couple may also be considered to be in a Common Law relationship if they have a child and are living together, regardless of how long they have lived together for.
If you are moving in with your partner or planning to engage in a Real Estate transaction with your significant other, be sure to seek the advice of a Real Estate lawyer, in regards to your particular situation and the things you should keep in mind.
Although in matters of the heart our actions aren't always rational, it's always best to understand what your options are.
This might keep you on the road to living happily ever.
Real Estate Sales Representative
647 995 5440
A couple of weeks ago, an email from one of our prospective clients reached our inbox. It responded to an update of available homes for sale we had sent him in mid August.
In his message, he seemed stranged by the significantly fewer homes the MLS showcased this time around, in comparison to earlier months. He was also struck by the fact that, although he proactively screened for homes through alternate sources too, he found the market to be quiet there as well.
He lived in a townhouse complex and wondered then, why two neighbouring houses had been sitting with ¨For Sale¨ signs in their front lawns for some time now. As previous homes within his complex had sold within weeks, months earlier, this proved to be an unusual sight for him to see.
¨Is the market taking a turn?¨, he ventured asking, as no more words followed his kind goodbye.
As eager as I was to reply, I felt that sharing my response to him, would help others with the same perception, in understanding the nature of our Real Estate market and stand at ease.
Although homes are constantly sold, Toronto´s Real Estate market has peaks and valleys throughout the year, causing the intensity and volume of home sale transactions to vary. It would be safe to consider it as a ¨seasonal¨ market and it´s in fact referenced to, by the seasons:
1. Spring Market ( strongest between March - May ):
It's the part of the year that accounts for most of the home sales. Its the preferred time for owners to list their properties for sale, as weather tends to be appropriate for showcasing exterior areas of the house & eager buyers have awakened from their winter hibernation. It's also the time of the year where the likelihood of the number of buyers showing interest for the same property to go into the double digits.
2. Summer ( spans from June to late August ):
Tends to be the second slowest season for Real Estate in Toronto. School holidays give way to family vacations. Warmer weather triggers weekend migrations to the cottage, local beach or your choice of festivals and food fests. Attention is significantly diverted from shopping for that dream home. It is also usual for agents to take a break during this time, as the hectic Spring market starts to wind down.
3. Fall Market ( comprised by September and October ):
It's the revival of Real Estate life as we know it. It´s where the remainder of significant home sales for the year take place. Usually follows the long Labour day weekend. Kids are back to school and things at home seem to return back to normal. Unless your new normal is finding a new home.
4. Winter ( extends from November to February ): Activity during this time of the year is the slowest. Although it is fair to say that serious buyers will weather the elements ( rain, wind or snow, even hell, I mean hail) in their efforts to secure their dream home, it is rare to see a significant amount of new listings showing up during this time of the year. Happy Holidays and Happy New Year gives one year a merry ending and the next a cold welcome.
Although this market pattern is somewhat consistent, it can be intensified or diminished, when influenced by some of many factors:
1. Weather: Fair weather has helped winter months ( January and February ) see a surge of activity, not likely to take place that early into the year. Harsher winters can delay the market from swinging into full force at the beginning of Spring, either making competition in the market more active or extending activity further into the summer.
2. Variations in Mortgage Rates: Fears of hikes in mortgage rates have motivated buyers to act quickly when securing a home, just before the lower rates they secured through their pre-approvals months before, reach their expiry date. Increasing rates can curb buyer affordability and delay their purchase process into later in the year or the following year.
3. Government Tightening of Lending Rules: Since 2008, the federal government has made several changes to the rules of government-backed insured mortgages. These rules have reduced mortgage amortization periods and increased the down payment amounts required for a home purchase. When the last mortgage rules came into play in July 2012, they significantly disrupted the Real Estate market and its seasonal pattern altogether, only to recover later in 2013.
4. Closing Date: It is also important to consider that although home purchases take place during a given season, their actual closing date can range from 30 to 90 days into the future. It would then make sense that a Spring purchase would allow buyers to move into their new home in the summer and even get some renovations in place. A buyer in the Fall could perhaps move in before the end of the year and enjoy the festivities in the warmth of a new home.
As the summer winds down, September now knocks at our doors. If you´ve been reading along, you´ll now know that things are about to get hectic once again.
As one season ends, a new one begins. If you feel at home at your current place, by all means carry on. If you are dreaming of a new one to call your own, perhaps you're timing is just right. The Fall market is about to unfold.
Be sure to seek the right guidance when getting started. You will want to have the right professionals by your side.
Real Estate Sales Representative - RE/MAX Hallmark Ltd.
647 995 5440
While grabbing a quick lunch with my business partner (and wife!) at ¨The County General¨, across the street from our office in Riverside, I heard a comment that deeply resonated with me.
Having been there a couple of times before, we briefly engaged in small talk with the gentleman that normally takes our order. This time he had inquired about the Real Estate market and we all discussed lightly our impressions of it. But by the time he had finished taking down our order, he paused, looked at us, then curious and unexpectedly exclaimed with a smile: ¨It sure must be a great time in history to be a real estate agent in Toronto!¨
His expression surely took us both by surprise for its casual and spontaneous tone, but instantly got me thinking, for some time now, about the role that we play as Real Estate agents and how the public perceives the job that we perform.
Someone looking from the outside may think that a Real Estate agent/broker has a fairly easy job. In the consumer’s eyes, it may seem as if we show a couple of properties, get an offer signed and get paid a hefty commission shortly after. Simple!
But although anyone involved in a recent Real Estate transaction may attest to the contrary, let’s keep our role open for discussion. Perhaps there are questions that need to be addressed. Do agents/brokers truly add any value to the Real Estate transaction? Are agents/brokers worth all that they are paid? Can the average consumer just carry on and do without them?
As close to 40,000 licensed agents now ¨roam¨ the GTA, these are valid and fair questions for any potential buyer or seller to ask themselves, before deciding to hire an agent to represent them. I am actually asked questions along these lines quite frequently: ¨Is your commission negotiable?¨ or ¨Do you do buyer cash backs?¨
Even though I´m sure that several agents in the marketplace would rush to answer with a quick ¨ Yes! ¨ in order to get their hands on the potential transaction, I am hesitant to answer that question so lightly, as not all agents are created equal, nor is the value of the services that they provide.
I believe that information empowers users to make better decisions. Access to this information happens in real time, at their fingertips, regardless of where they are or where they go. Yet, many buyer´s and seller´s are strongly lured by the promise of a potential discount in the cost of their future home purchase or sale, in the form of a discounted commission. But is it really an advantage? Is it truly in their best interest?
If the service to be provided would be of optimum quality and high standard, I would agree and say, ¨By all means pay as little a commission as you can negotiate!¨
But here lies the Conundrum. Which takes us back to the idea that not all agents are created equal, nor is the value of the services that they provide.
If we were to identify what matters most to a buyer or a seller when carrying out a Real Estate transaction, we could perhaps determine what they perceive as ¨value¨ in regards to the services provided by the agent they hire.
This may mean different things to different people, but most may agree that some of the traits listed below would enable them to experience a smooth and seamless transaction.
- Are they Full-time agents? How long have they been in business for? How often do they perform this particular task? Are they knowledgeable of current market trends? Are they market experts in your area of interest? Do they have a solid agent network they can reach out to? Can they provide insight and advice you appropriately throughout your decision making? How often do they train and update their skills?
2. Set of Skills:
- How good are they at negotiating? Are they technology friendly? Do they have people skills? Are they pro-active and self-motivated? Are they resourceful and good at problem solving? Will they be able to think outside the box and focus on the solutions, instead of the problems? Are they good at sourcing information and analyzing data? Do they pay attention to detail and strive for quality?
- Will they under promise and over perform? Will they be someone you can trust? Will they have your best interest at heart? Are they responsible and/or accountable? Will they take the time to structure a good deal for you or will they just want to rush to close the transaction and move on to the next deal?
4. Customer Service:
- Will they be available when you need them? Will they help you understand what the process entails and manage your expectations to avoid frustrations? How quickly will they respond to your calls/emails/text? How often will you be provided with updates and/or feedback? Are they available on demand and on short notice, should the situation require so? Do they have systems in place to enable tasks to be carried out in a timely fashion? Do they work with a team of professionals that will help facilitate the transaction (lawyers, lenders, home inspectors, etc)?
5. Track Record:
- How productive are they in their business (Awards, Recognitions)? Have they been recommended to you by a satisfied acquaintance? What do previous clients have to say about them and their service? Do they have any social validation (LinkedIn)? Are they passionate about what they do, or are they just there for the paycheck?
Asking as many questions as possible will help you better understand what the prospective agent has to offer, other than a cheaper commission fee.
Understanding why an agent would reduce their commission can also help you foresee what you can expect as an outcome.
Agents may often discount their commission for three main reasons.
1. They have built their business model based on volume (higher number of transactions).
2. They are making up for their lack of knowledge and/or experience.
3. They do so out of desperation, as they have nothing else to offer that will help them differentiate themselves from other agents.
Without giving it hard thought, it could be logical and safe to say that we could expect different things from each of theses interactions:
1. Poor customer service, if any.
2. Frustration, lack of proper representation and/or potential liabilities.
3. Poor overall service quality due to lack of motivation.
The Real Estate transaction is in itself a major occurrence. It involves important financial, legal and emotional aspects for all parties involved. Well managed, the process can be carried out smoothly and will be an enjoyable experience. But if things go wrong, it can be a traumatic experience and a costly one to mend.
Most full service agents look forward to establishing long term relationships with their clients, which makes them somewhat accountable. Discount agents are mostly in it for the money and may not stick around for long once the deal has closed.
Although a professional and qualified agent will most likely negotiate better conditions and a better price on your home purchase or sale (above and beyond the amount of any discounted commission), this will only be tangible at the end of the transaction, not at the beginning.
It will be up to the consumer to look past the proposed discounted commission and focus on the prospective agent and what they actually bring to the table.
Keep in mind that in the end, you’ll get what you pay for.
Real Estate Sales Representative - RE/MAX Hallmark
647 995 5440
With a delayed warm weather, Spring gives way to the long awaited Summer days. As many look forward to head to the outdoors, many important changes and trends continue to occur in Toronto's Real Estate marketplace.
If you have been keeping up, you may have already heard about the historically low rates many lenders, including banks, have been offering in the last weeks. Investor's Group toped the charts in early May with variable rates as low as 1.99%, although Bank of Montreal had already started the trend in March with a fixed rate of 2.99%. The latest lender to make the headlines was Scotiabank with a 5 year fixed rate at 2.97%, good until June 7th.
But not all is good news in the Land of Oz. Many of these offers have restrictions on prepayments and penalties for early cancelations that can easily eat up all perceived rate savings. Buyers need to shop around, compare, and be clear about what restrictions apply to the rates being offered. You'll most likely want to get the best overall deal, not just secure the lowest rate!
Another aspect worth mentioning is how mortgage approvals have been under more scrutiny. Specially now that more specific lender regulations are contained in the B21 Guidelines (2014). More emphasis will be placed on the review of mortgage applications and borrower documentations. Less exceptions will be allowed when lender's qualify them and possibly a second compliance officer may have to give the ok before the mortgage is formally approved. Here is where getting pre-approved prior to shopping for your new home and being aware of how much you pay for your new property ( specially in multiple offers ) start to make sense.
Last but not least, here´s the Latest Toronto Real Estate Market Report ( click on the link ) to help you identify current market trends. We will also keep you informed when May sales reports are released, so you can remain updated.
Should you have any questions regarding any of these topics or would like to discuss your future plans over a cup of coffee (our treat!) be sure to get in touch. As always, we are here to help you get organized and ready for your future purchase.
That´s all for now. Let the warm days roll in and the Summer feel abound among us all!
All the best. Jose & Claudia
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Jose & Claudia
RE/MAX agents since 2001, avid negotiators and passionate for what we do. Buying, selling or renting your home with us has never been easier!