The final program change in the 2009 Budget for Home Owners and Home Buyers’ is the Home Buyers’ Plan (HPB). The HBP is a program which allows you to withdraw funds from your Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home for yourself or a related person with a disability.

The old maximum amount an individual can withdraw in a calendar year from their RRSP to purchase or build a qualifying home and not pay any tax on the withdrawal is $20,000.

While the new maximum amount proposed in the 2009 Budget has been made to $25,000. This is made for those who participate in the program after January 27th 2009.

Now for those who withdrew up to $20,000 from your RRSP after December 31st, 2008 and before January 28, 2009; you are entitled to withdrawing the additional funds once it does not exceed the maximum amount of $25,000.

The HPB is not connected to the new Home Buyer’s Tax Credit (HBTC) however there are some eligibility conditions for the HBP and the HTBC that are the same. If you do participate in the HPB it does not affect your eligibility for the HTBC.

There are several conditions you have to remember before you can participate in the HBP.

1. Your RRSP contributions must be in the RRSP for at least 90 days before you are able to withdraw any amounts or they are not deductible for any year.
2. You have to repay your withdrawals to your RRSP within a period of at least 15 years. You will be repaying an amount to your RRSP each year until your HBP balance reaches zero.

In order to qualify for the HBP you have to be considered a first-time home buyer. If you do not need this condition you will be unable to participate in the HBP. The exceptions to this rule only applies if you are a person with a qualifying disability or you are acquiring a home for a related person with a disability or helping someone a person with a qualifying disability acquire the home.

The HBP is a great program that is in place to help you acquire a home. There may be many requirements to be met, but if you do meet them you should consider using it to your advantage, especially since they recently increased the total amount you can withdraw within a year.

Jeff Markewich
Broker of Record with InfoMarket Group GMAC Real Estate
www.imgrealestate.ca

Critical Mistakes Sellers Make When Choosing a Realtor

Selling a home should be like any other business transaction, but all too often sellers make emotional or impulsive decisions that cost them money and time. Choosing the right Realtor to market a property and negotiate the sale is the most important step in the process.

“My friend (or family member) sells real estate.”

Friendship alone isn’t enough to establish a professional’s credentials. Use tough standards when selecting an agent, just as you would when hiring an attorney, a doctor, or an accountant to handle your taxes. A true friend will understand and appreciate that this is a business decision and will offer their credentials and expect to compete for the listing. Besides, if a problem or challenge develops while selling your home, do you want to risk damaging a friendship or family relationship?

“You’re the only agent who agrees with my selling price.”

Some agents tell you what you want to hear in order to get your listing. In the real estate profession, this is known as “buying a listing” and is employed by shortsighted agents who are more interested in themselves than they are in you. However good it works as a short-term “sales tactic” in getting your listing, it is an extremely poor strategy in selling a home at the highest possible price.

You see, your house gets the most attention from other agents when it is a “new” listing. If priced properly, lots of agents will show it to their buyers. If you price it too high, no one will show the house and it will sit on the market for some time. When you finally drop your price to reflect its real value, your house is “old news” and buyers may think you are growing desperate. Therefore, the prices you are offered will come in lower and lower – and you may find yourself accepting a price that is below what you could have received had the house been priced properly to begin with.

Besides, pricing your home too high will only make similar houses for sale look that much better. Overpricing helps sell those houses, not yours.

“I’m going to list with the agent who has the lowest commission.

”You get what you pay for. Paying a cut-rate commission will often get you a sign in the front yard and placement in the Multiple Listing Service, but little additional effort from your agent.

Realize that agents put up their own funds to market and advertise your home. Marketing and advertising costs money — the lower the commission, the less incentive for an agent to put up his or her own money to market your home.

Incentive plays a very important role in sales.  A “full service” agent earning a full commission will often “drop everything” to handle any challenges that come along – an agent earning a small commission does not have that same incentive.

Incentive is also important to the buyer’s agent.  Since there are almost always two agents involved in every sale, they split the commission according to the listing agent’s instructions.  One agent is your listing agent. The other agent is the buyer’s agent.  When your listing agent dropped his commission, did he also reduce the commission that will be paid to the buyers’ agent? If so, you won’t find as many agents willing to show your house – they’ll be showing houses that offer a customary commission to the buyer’s agent.
Finally, negotiating ability is an important skill in a listing agent.  Are you willing to put your faith in an agent who can’t even negotiate his or her own commission?

“The agent is what counts …. Not the company.

”Agents who work for large well-established companies with lots of agents do have some advantages. Large companies generally have longer office hours, so someone is always available to answer an ad call on your home. Large offices often have larger budgets and can spend more on advertising. The ad space for your particular home might not be huge, but because the total ad is so large it gets lots more attention.

Large real estate companies often have lots of agents. This is important because when your house is newly on the market, the company may stage an “office preview” where every agent in the office comes through and tours your home. Every agent who views your home and is impressed is another agent on your sales team.

Additionally, larger companies are often better at offering ongoing education to their agents. As a result, your agent may be better qualified and prepared to offer a quality service. Although most Provinces require real estate agents to enroll in “ongoing education” to keep pace with changes in the real estate market, many agents only take the “bare minimum” in ongoing education courses. Sometimes, large offices are better at convincing their agents to go beyond the minimum.

There are exceptions to every rule, of course. Some very effective agents go off on their own and open private offices or “boutique” agencies.

“All realtors passed the same test so they must know the same things.

”The real estate profession is constantly changing and, as mentioned above, the best real estate professionals stay abreast of those changes by continuing their education. Some go beyond the required minimum requirements. Many agents acquire “professional designations” that show they took additional specialized courses.

“This agent sold more homes last year than anyone else.

”There are many agents who carry numerous listings at any given time. One question you may want to ask is: how accessible is this agent to me, and how can I get the personal attention and service I need from my agent if he/she is so busy? It is difficult for those agents who carry multiple listings to provide you with the personal attention and service you deserve. You will often be referred to an assistant, or get an answering machine because the agent is busy trying to service all his/her clients.

Choose an agent who has a manageable number of listings who can ,therefore, be accessible to you when you need him/her and provide you with the personal service and attention you would expect, and deserve.

Quality, and personal service to each client is the important issue.  Ask the agent to provide you with references from his/her clients to validate the quality of service he/she provides.

Conclusion

The best agent is the one who you trust and feel confident knowing he/she will do the most effective job of marketing your property, negotiating the most favorable terms and conditions, and communicating with the seller to make the process as smooth as possible

Gloria Valvasori
Sales Representative with Signature Service GMAC Real Estate
www.gloriavalvasori.com

Regardless of whether the market is up or down, buyers have one question: is this the right time to buy?

Understandably, buyers want to know the direction of the real estate market. Are prices on the way up or down? Am I buying at the peak? How long before a rebound? Should I wait for price-drops?

The honest answer is nobody knows! Even economists who specialize in real estate markets have a difficult time predicting what’s going to happen.

Before looking at the real estate market, economists must take into consideration a multitude of variables, such as:

• Interest rates a year from now
• Gasoline and food costs a year from now
• If the average household income is appreciating at the rate of inflation
• The level of immigration
• The volatility of world financial market’s
• The impact of the US upon Canadian market’s
• Employment levels
• The state of national economies

These amongst other key economic indicators form the foundation for outlooks on the real estate markets.

To produce outlooks for the real estate market economists must study social and demographic changes that drive demand. Factors may include:

• Number of first time home buyers
• Consumer preference for urban V.S Suburban living
• Consumer confidence

Consumer behavior is very difficult to predict and have a huge impact on the real estate market. Consumer confidence is the fuel that drives real estate demand. When the economy is strong and the real estate market is seeing year-upon-year growth, the public expects prices to constantly rise. If this confidence is too high it leads to speculation as people attempt to profit off short term increases in property value. In-effect value appreciates not because of economic fundamentals, but because people want them to. Prices reach an unsustainable level which leads to a sudden drop in prices – the market, in-a-way, corrects itself. The extent of this drop in value often-times depends on how irrational the market was before the peak – the more irrational, the bigger the drop.

Another important factor to consider is personal preferences/situations. See the real question shouldn’t be “Is it the right time to buy”, rather “Is it the right time to buy for me”.

Amit Bhandari
Sales Representative with Signature Service GMAC Real Estate
W: amitandroy.com

- complete and pass a series of mandatory pre-registration and permanent licensing courses.. (3 Phases)

- complete mandatory, continuing education courses every 2 years to keep up with the changing rules and regulations of the housing industry.

- pay yearly membership dues to the local Real Estate Boards.

- pay for errors and omissions insurance.

- pay brokerage fees, desk fees, if applicable.

Furthermore, when a Realtor® is working with you to help you buy or sell your home these are some of the services they provide (though they vary from agent to agent… these are general guidelines that I would hope your agent does minimally).

- sit with you to determine your needs of buying or selling your home, determine price range, location, help to get you pre-approved for a mortgage if required.

- search homes on the MLS that best meet your needs.

- set appointments for showing selected homes.

- show you properties evenings, days and weekends.

- refer you to good mortgage brokers, if needed.

- refer lawyers or home inspectors, if needed.

- suggest ways to enhance your home to get the highest price such as staging services, home repairs etc.

- marketing your home for maximum exposure can mean advertising on the MLS, local newspaper, magazines, and agent open houses.

- conduct open houses for your property on weekends.

- work on your behalf to negotiate the best price for your home, whether you are a buyer or a seller.

- complete and prepare all legal forms, as well as explain the legalities of the forms used to clients.

- work with you to best protect your interests in the home buying or selling process, this could mean anything from making sure that appliances are in good working order when you move to assuring that the buyer has proper financing.

- help with the final closing and stay in touch with you beyond the time the final transaction details have been completed to make sure you are satisfied and comfortable with your home purchase or sale.

Now, thinking back to my own experience, I think that I would have appreciated my Realtor® a lot more if I had this information about the profession at that time. However, I knew one thing for sure, and that was that when I was looking for a property in a certain area. I wanted to work with a Realtor® that was familiar with that area and could answer all my questions, as well as help me find the kind of property I wanted at the best possible price.

Indu Seth
Sales Representative with Signature Service/GMAC Real Estate
www.induseth.com

In my last article on what we are responsible for as Real Estate Professionals, I left you guys off with “what affects your homes price and what doesn’t affect your homes price.”

In my time as a Real Estate Professional, I have learned that a great number of variables affect a homes price when it goes up For Sale.

I think one of the most important parts in a Real Estate Professionals (Realtor’s) job is to assess property and what it may be valued at in the current market, which in turn will yield their client the most money for their investment when selling or save their client the most money for their investment when buying.  It’s a highly complex time when people are dealing with the pricing part of the home selling and buying process…  Mr. Ego gets very active!  Because our Ego won’t step aside and let us do what we know is best for us.

The first part is:

The Real Estate Professional doesn’t have anything to do with what your house is worth on the market EVER!!!  The Real Estate Professional is available to study and research the market conditions and relay information which already exists (We’re formally trained to do this).

With this information and his/her experience, along with the owner/buyers feedback a PRICE is conceived.  When I work with my sellers I don’t tell my sellers to list their house at any price, in fact they tell me what they would like to do.  Once they tell me what they would like to do, it is my responsibility to listen to them and provide them with my opinions and some other related facts (If I don’t do this, I am not a responsible Real Estate Professional), in fact if I don’t provide for my client I am actually not practicing within my professional guidelines according to The Real Estate Council of Ontario (RECO).

The other part that doesn’t have anything to do with the price that a house sells for is how much the seller loves their “Pink Polka Dot” walls in their basement…  What is absolutely beautiful for one person is not for another person!  A lot of people view a pool as a positive trait in a home, while others with small children view a pool as a “safety hazard”. Start planning how much money it will cost them to fill it in and build a Gazebo in their backyard.  A finished basement can be a positive trait for many individuals and families, while others want an unfinished basement, so they can build it the exact way they want!  The house will not sell for more money because one is more attached to it, or less attached to it (The market doesn’t care about people’s feelings, people do!).

One thing that does affect what your house will sell for is, how much a buyer is willing to pay for it.  We know this is true because the buyers are the ones with the money that the sellers want, most times the sellers don’t want to sell for less than what a buyer is willing to pay for it, but we know in the Real Estate industry that a buyer’s perception of a house and it’s value to them has a direct impact on what that house’s market value really is in the current market!

Another aspect that affects the price of a house is how many sales have taken place in the neighbourhood, how long the houses were on the market, and what the houses in the area sold for.  Real Estate Professionals are highly interested in attaining the most money for their sellers because at the end of the day when the seller is left happy, the Real Estate Professional looks and feels GREAT!!!  The Real Estate Professional is responsible for conducting this extensive research.  This research puts their client in the drivers seat when the seller is aware of what they are competing against!

Another thing is that a buyer most often feels like they have paid too much money for the new house, while the seller most often feels like they have not gotten as much money as they could have gotten.  When this happens it’s called “Market Value”

Manjit Virk
Sales Representive with Signature Service GMAC Real Estate
www.manjittorontohomes.com

Is the Price Right? Or is it Condition or Location that is Drives Away Potential Homebuyers?

Price, Location and Condition are what determine if a home sells.

Often buyers believe if a home does not sell, there must be something wrong with the home. This is true in a market that is moving, there is something wrong when a well maintained attractive home in a desirable location does not sell, what is wrong is the price. Homes that are overpriced often never sell at all. Why?  Because they simply do not receive offers!

Why Don’t Home Buyers Make Offers on Overpriced Listings?

• Buyers don’t want to offend the seller. It’s insulting to the seller and embarrassing for the buyer.
• Buyers erroneously believe that the seller knows the home is overpriced. They believe that if a seller would be willing to sell for less, the seller would simply lower her price.
• Buyers also assume that the seller must have turned down offers from other buyers because surely someone, somewhere along the line, had offered a reasonable price to the seller. But many times, there are no offers at all.

How Do Buyers Find Overpriced Listing?
The easiest way is to ask your Realtor, average days on the market (DOM) is a good indicator if a home is overpriced. Your neighbourhood Realtor can review the current home inventory with you and provide you with details of homes that have been on the market longer than average. MLS systems typically have a system to calculate days on market.

Cheryl Kelly
Sales Representative with Signature Service GMAC Real Estate
www.cherylkelly.ca

Say goodbye to the short lived Buyers Market, because if the facts are anything to go by we are entering a period of a Seller’s Market.

Jason Mercer, TREB’s Senior Manager of Market Analysis states “the re-emergence of seller’s market conditions has exerted upward pressure on home prices. Look for sales to remain high relative to listings in the second half of the year. This will keep home prices growing.”

Toronto Real Estate Board has released the numbers for June 2009 and have confirmed that we have recorded the Best June on Record. Here are some of the highlights of the report:

-June 2009 is the best June ever recorded by the Toronto Real Estate Board.

-The Toronto Real Estate Board recorded 10,955 sales – up 27%, from 8,600 sales in June 2008.

-The Median Price has increased to $345,000, from $335,250 the previous year.

-Average price was $403,972, up 2% from the previous year.

-There were 18,704 active listings, down 30% from 26,697 from June 2008.

The numbers tell a very simple story. Less inventory + more buyers = higher prices.

The numbers only back up what the REALTORS® that I talk to every day are saying. I’ve spoken to a number of Real Estate Sales Professionals who are telling me stories of multiple offers gone crazy.  Just today I was speaking to a colleague who told me that he had put together an offer on a home in Mississauga and was competing with 7 other buyers. Not only that, but he offered almost $50,000 over the asking price and they STILL lost out on the property.

What does that all mean to you? If you are buying, then it means that you have to be extremely quick on the ball when you find that perfect home. Mississauga is seeing the average days on market fall below 30 days for the first time in a long time, so if you don’t put together an offer on that perfect home, someone else will!

If you are selling, then now is a great time to get your home on the market. There are buyers waiting to buy your home as we speak. There is no better time than now to hire a Real Estate Professional to market your home and get it sold for top dollar.

Whether you are buying or selling, it’s an exciting time to be involved in the Real Estate Market at this time!

Roy Bhandari
Sales Representative with Signature Service GMAC Real Estate
www.amitandroy.com