June 2010 MLS Statistics

Here are the statistics for June 2010:

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 290,880	$ 267,457	$276,517	$267,771
Percentage Change	+8.8%		+3.2%
Properties Sold	634	721	254	307
New Listings/Sales Ratio	59.5%	74.9%	50.2%	60.7%
Properties For Sale Now	2198	2144	992	1099

May 2010 MLS Statistics

As the national statistics are released, it appears there is a slowdown in sales in the major markets (Toronto and Vancouver). This is obviously due to some high prices that apparently people are not prepared to pay any more. I don't think this applies locally. The stats say that we're marginally behind May in 2009, but, I remember that after our mini-recession, May was an excellent month last year. I think we're still boom mode here.
Here is the article in Saturday's Waterloo Region Record with some more detail.

Here are the statistics for May 2010:

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 294,307	$ 269,710	$285,059	$265,455
Percentage Change	+9.1%		+7.3%
Properties Sold	653	703	277	290
New Listings/Sales Ratio	58.5%	66.5%	54.1%	59.3%
Properties For Sale Now	1312	1549	931	1117

Monthly MLS Statistics for April 2010

We're definitely in a boom market. Sales volumes are at or near peak, and prices are definitely going up. Agents are complaining evry day that there are not enough listings. Good listings are sold quickly, and often with multiple offers. The press is saying it's a concern about the upcoming HST and the threat of higher interest rates. This may be true, but it's a good spring market with some pent up demand from last year having an effect. It is hard to say how much longer this will go on, but right now there is no end in sight.

Here is the article in Thursday's Waterloo Region Record with some more detail.

Here are the statistics for April 2010:

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 289,017	$ 256,083	$277,729	$261,630
Percentage Change	+12.9%		+6.1%
Properties Sold	724	643	308	249
New Listings/Sales Ratio	65.6%	60.9%	63.4%	46.4%
Properties For Sale Now	1129	1578	881	1150

Canadian Sunshine Kids Spokesperson

We're please to announce that for the first time, Canada has its own Sunshine Kids Spokesperson! He is Geoffrey Reyes and he is a high school student in Abbotsford, BC. We will be making arrangements to have him into the Waterloo Region to speak at one of our events some time this year.

Here is his bio:

Geoffrey’s first experience with the Sunshine Kids Foundation was on the 2009 Haunted Halloween Getaway in New Orleans, Louisiana. “I believe that the trip down south was the most gratifying experience I've ever had. The people I met who were apart of the organization were so kindhearted and welcoming; making every kid feel like they belong. This trip was the first time that I actually socialized with young people who have been through cancer like myself. I made a lot of friends and we all joked around and had such a great time together. We were all cancer patients, but being together in those precious moments made me forget about all the wrong in my life, it made me have a greater appreciation for the smaller things that we tend to forget. The trip down to New Orleans changed my life.”

“I believe what this Foundation does is so amazing. I specifically loved the fact that my neighboring American friends would be joking about how Canadians say eh, and how our Canadian bacon isn't really bacon. The Sunshine Kids helps show us that we are not alone in our life struggle and anything can be done with a smile on your face.”

Geoffrey was diagnosed with Chronic Myelogenous Leukemia in January 2009. Before he was diagnosed he was feeling very fatigued and had no appetite for a couple of months. Then the symptoms intensified, which included stomach pains. He went to a walk in clinic for the third time after being misdiagnosed and then was sent immediately to the hospital. He takes 6 pills a day that kills his white blood cells and red blood cells to control it. He spent over 2 months in the hospital before things started to get better.

“I found out I was going to be a Sunshine Kids National Spokeskid after a bad day of school. My mom informed me at the end of the day with a note full of excitement exclaiming the news. I was very ecstatic. I am very honored by representing this great organization.”

Geoffrey enjoys long walks on the beach, basketball, bowling, guitar, friends, and his family. He has two dreams in life; Finish school to become a teacher and meet Selena Gomez.

Realtors and the Competition Bureau

We're getting lots of press lately. That's probably an understatement. Lots of agents, friends, and business acquaintances have asked for comments. It is going to change our business, for sure. But, perhaps not in the way that some perceive.



Everybody would agree that the media likes to pump a story up and sensationalize it. That is a fact of life. But some of them have reported incorrect information. When the smoke clears (probably in the fall), only licenced realtors will be able to list properties on the MLS system. The issue between our association, the Canadian Real Estate Association and the Competition Bureau is not about private individuals being able list their properties on realtor.ca. The Bureau is perfectly fine with this. Many media people have incorrectly said that this was the issue.



The issue is about agency and the old requirement that the realtor had to have a full agency agreement with the seller for the length of the agreement in order to list the property, and that is no longer a requirement. The tribunal will decide on how this is all going to work out, but CREA already has agreed in principle to this matter.



The new rules will allow licenced realtors to list a property on the MLS system without giving them agency representation. We could also assume that the realtor and seller would be doing this service at a reduced rate, since the seller is getting very little service for the fee.



What this does, is create a new level in the hierarchy of fees and services offered when selling a property. At one end of the scale, you can buy a black and orange sign at Home Hardware and stick it on your lawn. At the other end of the scale, you can hire an educated professional realtor with a many tools, backed by an MLS system data base and cooperating agents (with buyers), for a bigger fee to do all the work for you and get you through the process. In between there are many more choices.

The analogy I heard recently was about coffee. If you have a desire for a cup of coffee, you can brew a cup at home yourself quite cheaply. You have to go to the store to buy the beans, you have to invest in a coffee maker, but it is quite cheap by the cup. Presently, you can go to McDonald's in the morning and get a cup for free. At Tim Horton's you can pay $ 1.40 and even have a chance to win a barbeque or a car. Or you can go to Starbuck's and pay $ 4.00 for a great cup of coffee. The last I checked, all four choices are getting lots of customers and doing well.

Like Starbucks, we have many, many happy clients who will continue to use our services and see real value in what we do for them. But the rest have more choices now.

March 2010 Monthly MLS Statistics

Prices are definitely going up. For the third month in a row, there is a significant increase in the average sale price on both real estate boards. At the recent Prudential convention in Austin, Texas, an American speaker said (and it's true on both sides of the border) that there has never been a better time to get into the market. Interest rates are at historic lows, and prices are very affordable. There's also the issue of upcoming interest rate increases
Here are the monthly statistics for March, 2010.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 276,695	$252,383	$264,436	$255,074
Percentage Change	+9.6%		+3.6%
Properties Sold	731	497	299	209
New Listings/Sales Ratio	64.5%	54.0%	52.8%	40.2%
Properties For Sale Now	1815	2303	849	1049

February 2010 MLS Statistics

I think by now it is pretty much common knowledge that we're experiencing one of the best spring markets in recent memory. But something jumps off the page in this month's numbers. For the first time in a year and a half, it looks like prices are starting to creep up. I don't get a sense of this from the day to day activity around the office, but the following statistics indicate that there is movement. We'll keep an eye on this, to see if it's just a blip, or if there really is a change happening.
Here are the monthly statistics for February, 2010.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 276,891	$246,846	$280,996	$245,689
Percentage Change	+12.2%		+14.3%
Properties Sold	553	369	242	154
New Listings/Sales Ratio	62.6%	49.1%	56.8%	35.6%
Properties For Sale Now	1705	2117	748	953

HST Simplified

A group of us from the office recently attended a seminar on the Harmonized Sales Tax and how it will affect the real estate transaction. I thought I would pull out the main key points and post them here. In some ways it is confusing, and in others, it is not.

Like the GST, the HST is a value added tax which means the consumers bears the majority of the brunt of its impact. The speaker the other day said that generally, in a real estate transaction, there will be about $ 1500.00 in extra tax to be paid. It doesn't seem that obvious because different costs are the responsibilty of different parties, and sprinkled over different service costs.

The services that are subject to HST are the following:
* Legal fees (buyers and sellers)
* Real estate commission (sellers)
* Chattels (IE appliances) (buyers)
* High ratio insurance premiums (buyers)
* Fire insurance premiums (buyers)
* Home inspection fees (buyers)
* Moving costs (buyers and sellers)
* Appraisal fees (buyers)
* Surveys (buyers)
* Title Insurance (buyers)

Resale homes and residential income properties are not subject to the tax but commercial properties and new home sales are subject to the tax.

As before, it seems that builders will continue to include the HST in the sale price and have buyers sign the rebate back to the builder on closing. However, the rebates drop off starting at $ 350,000 and are maxed out at a $ 400,000 sale price. It appears that builders are now saying that the buyer will have to pay the HST on any house with a sale price over $ 400,000. This will hugely affect the price on houses over $ 400,000.

There is a transitional period on new home sales for properties where the agreement was done before July 1st but the closing was after July 1st.

In the end, it is best that you talk to your real estate professional, builder, or accountant before moving ahead to make sure you understand all the complexities.

January 2010 Monthly MLS Statistics

Statistics at this time of year can be very misleading because it is such a short time span, and it is traditionally a "ramping up" time for a busy spring market. Also, we remember that that market was very slow at this time last year, so that skews the numbers as well. What I will say though, is that the market is very brisk and agents are very busy. This will be a very busy spring market, for sure. I am not sure if we are going to see price increases or not, but for sure it will be busy.

Here are the monthly statistics for January, 2010.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 278,825	$248,215	$278,527	$239,405
Percentage Change	+12.3%		+16.3%
Properties Sold	416	254	140	106
New Listings/Sales Ratio	47.4%	28.9%	32.7%	22.6%
Properties For Sale Now	884	1323	695	876

Prudential 2009 Award Winners

Congratulations to all our Award Winners, who excelled in production over the past year. All will be recognized at our annual Awards Breakfast held on Thursday, April 1st at the Charcoal Steak House.

Chairman's Circle, Platinum Award

Jose Bairos & Nina Deeb


Chairman's Circle, Gold Award

The Hube Team

Mike Milovick & Eric Klimstra


President's Circle Award

Dorinda Orser Team


Leading Edge Society

Wayne Canning

Janet Good

Christian Krieger & Bonnie Williams

Mary McMurran

Nino Orasanin

Annette Escobar & Sheldon Barclay


Honour Society

Andrew Fielding

Jade Ho

Rena Miller

Tamara Martin

Lucy Schito

David Kivell

Marie Miller/Jerry Jarman

Sachin Naphade


Rookie of the Year

Stacey Chaves, Cambridge

Tawn Nguyen, Kitchener

2009 Annual Statistics

2009 was another interesting year in real estate.

We started the year mired in a recession, but the Canadian market came out of it the spring, and by April and May we were putting together good numbers. As a result of this, our statistics lagged behind last years numbers right though until the fall when we caught up, and, as you can see, we actually ended up the year ahead of last years number.

We receive national numbers through the press on a regular basis, and I warn that they should be taken with a grain of salt. The numbers show an average from across the country... and that's exactly what they are. An average. What is happening in Calgary has been very different than what has happened in Toronto, Vancouver, or Waterloo Region.

In southwestern Ontario, things are good. Our employment has a limited tie to manufacturing and as a result, unemployment has not played a huge factor. Interest rates continue at historic lows, and anyone in the business will tell you that this has been a big help to buyers.

We look to 2010 to be a good year. We don't see any big increases in values on the horizon, but prices should hold or increase marginally. As I write this, there have been increases in value in the higher valued homes, mostly because of the cheap rate of borrowing. Barring the unforeseen, it should be a good year.

Here are the Region's annual numbers:

	K-W This Year	K-W Last Year	Cambridge This Year	Cambridge Last Year
Avg. Sale Price	$ 261,379	$264,294	$258,415	$256,044
Percentage Change	-1.1%		-0.9%
Properties Sold	6456	6114	2672	2521
New Listings/Sales Ratio	64.6%	61.1%	52.7%	49.9%

December 2009 Monthly MLS Statistics

Here are the monthly statistics for December, 2009.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 255,105	$256,807	$262,099	$245,442
Percentage Change	-0.7%		+6.7%
Properties Sold	356	222	150	94
New Listings/Sales Ratio	78.9%	53.1%	83.3%	44.1%
Properties For Sale Now	879	1220	696	736

November 2009 Monthly MLS Statistics

Here are the monthly statistics for November, 2009.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 277,649	$266,373	$272,832	$244,189
Percentage Change	+4.2%		+11.7%
Properties Sold	556	296	224	123
New Listings/Sales Ratio	81.3%	53.3%	59.1%	36.6%
Properties For Sale Now	1696	2133	814	846

October 2009 MLS Statistics

It was this time last year that the Canadian real estate market went in the tank. So, over the next six months, we'll see some impressive year over year comparisons that may be a little skewed. The market is steady and good, but not busting at the seams. All reports show a good stable market for the foreseeable future. Here is the article from this week's Waterloo Region Record
Here are the monthly statistics for September, 2009.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 258,579	$264,259	$251,054	$251,193
Percentage Change	-2.1%		-0.1%
Properties Sold	579	412	220	162
New Listings/Sales Ratio	75.4%	50.4%	60.3%	33.6%
Properties For Sale Now	1819	2190	845	866

5th Annual Sunshine Kids Mini-Golf

We are presently organizing our 5th Annual Sunshine Kids Mini Golf Tournament. It will be held at the Cambridge office, 471 Hespeler Road, on Friday November 6th from 2 -6 PM. We are looking for sponsors ($ 100.00) and ticket sales ($ 20.00). It's a great event, and all proceeds go to Sunshine Kids. Last year we raised almost $ 13,000. at this event. There's food and refreshments, door prizes, a silent auction, and a chance to connect with old friends. All this with a charitable tax receipt! Contact any Prudential agent or the office (519-621-2000 or cambridge@prugvr.com)to book your ticket now.

House Flipping Requires a Lot of Homework

Over the past few years, cable television has been loaded with programs about buying, fixing up and reselling residential properties. Most call it flipping, although that term, in the old days, referred to reselling without any significant work.

Programs like The Big Flip, Flip This House, The Real Deal, and Flipping Out have been both entertaining and thought-provoking. If you travel in real estate circles, they have been a good item for conversation with friends and clients.

Potential flippers are inspired about the concept of investing in real estate, and the potential of rehabbing properties to make a potential profit. Newbies get a unique view on what it’s like to make a living investing in properties and flipping houses. Don’t forget, too, that current homeowners learn tricks about how to dress up properties they presently own and are thinking about selling.

However, these shows tend to glamorize a difficult business by showing experienced professionals in action. To this day, I have never heard of a “flipper” who made a significant gain on their first venture. The shows tend to make it seem easy. It takes time to learn the ropes and make a significant profit.

They seldom talk about the financing side of the transaction and how important arranging appropriate and affordable financing can be. The truth is, if you don’t put 20 per cent down, or find affordable secondary financing, your whole business plan may be shot in the foot. With less than 20 per cent down and traditional financing, the mortgage requires high ratio insurance, which can add up to 4.25 per cent of the mortgage. Needless to say, that cuts into your profit significantly.

Here are some key factors that can make or break your business plan: Real estate market conditions are key. If property values are stagnant or in decline, this can adversely affect your investment. Are there an unusually high number of properties on the market when you will be selling?

You need to know property values and buy at a good price. Always remember the two make-or-break numbers are the amount you invest and the amount you get out.

Be a DIY (Do it yourself) expert. Required work to be done needs to be done well, and as economically as possible. Hiring expensive contractors to do the work cuts into the bottom line. An experienced flipper will tell you that it’s hard to make money if all you do is go through repainting and replacing flooring. It works, but minimal changes also may mean minimal returns. The ideal situation is a major problem that affects the purchase price when you’re going in, and you can fix/remove the problem without huge cash outlays.

Location. Location. Location. This adage always applies. Having the cheapest house in the best neighbourhood is always better than having the best house in the bad neighbourhood.

Learn the ropes before you start using your own money. Do research to find important facts. Will granite counter tops bring a better net return than laminate countertops? Will a coat of paint around the basement bring a better return than ripping it all out and making it brand new? Would hiring a professional stager pay dividends when it’s time to put the house back on the market? There are many questions you need to know the answers to before you start.

Even though the television shows are a form of reality television, you need to step back and realize it is not as easy as sitting on the couch watching television. There can be many rewards, but not without hard work and research.

September 2009 MLS Statistics

Another good, steady month. I was at a national broker's meeting last week and the word from our U.S. colleagues points to a very, very slow recovery. This is definitely not the case here in Canada. Although we are not going "full bore ahead", we're definitely on solid ground.
Here is the article in yesterday's Waterloo Region Record
Here are the monthly statistics for September, 2009.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 255,432	$255,903	$257,374	$257,557
Percentage Change	-0.2%		-0.1%
Properties Sold	531	526	251	262
New Listings/Sales Ratio	60.0%	57.1%	60.2%	51.8%
Properties For Sale Now	1917	1595	915	N/A

August 2009 MLS Statistics

It certainly has been an interesting year. Positive economic news continues and our housing market appears to be consistent again. Here is the article which appears in today's Record .

People comment to me about the monthly price fluctuations and this month may indicate alarm to some of those people. Please remember that these numbers are only for a month and are not a true reflection on prices. The "appearance" of a drop in prices indicates to me that more entry level homes have been selling. I feel the prices are fairly stable.

Here are the monthly statistics for August, 2009.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 253,325	$265,309	$257,350	$267,925
Percentage Change	-4.5%		-3.9%
Properties Sold	594	471	240	204
New Listings/Sales Ratio	78.6%	60.9%	63.0%	51.0%
Properties For Sale Now	1898	2039	965	N/A

July 2009 MLS Statistics

Another good month. Here is the article which appeared in last week's Record . Here are the monthly statistics for July, 2009.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 277,879	$267,158	$257,592	$257,792
Percentage Change	+4.0%		-0.1%
Properties Sold	654	666	283	255
New Listings/Sales Ratio	71.8%	71.7%	62.1%	54.3%
Properties For Sale Now	2040	2046	868	N/A

June 09 Monthly MLS Statistics

Our late spring market continues in a positive run. Both boards reported excellent numbers. Here is the the article which appeared in today's Record . Here are the monthly statistics for June, 2009.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 263,737	$277,325	$267,771	$263,500
Percentage Change	-4.9%		+1.6%
Properties Sold	722	713	307	277
New Listings/Sales Ratio	73.5%	70.9%	60.0%	61.4%
Properties For Sale Now	2089	2023	1099	N/A

Sunshine Kids off to Austin, Texas

A carload of us went down to Pearson Airport this morning to see off four Sunshine Kids who are off to Texas for a week of fun. Here is a picture of them with their nurse from Sick Kids, Karen (who has graciously donated her time) as they are about to check their luggage. It was great to meet them and tell them a bit about Sunshine Kids. None of them had met before this morning, so I think they're probably a little apprehensive. But we all know that will change quickly.

Pictured left to right are, Emily Parks, Lloyd Twuh-Siaw, Nurse Karen Schneider, Brendan Black, and Alexandra Seventikidis

Mls Statistics for May, 2009

For the first time since September, 2008, sales volumes for the month are ahead of last years numbers. We are enjoying a brisk sping market.

Here are the monthly statistics for May, 2009.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 270,650	$269,782	$265,455	$260,562
Percentage Change	+0.3%		+1.8%
Properties Sold	688	626	279	259
New Listings/Sales Ratio	72.7%	60.9%	56.0%	45.4%
Properties For Sale Now	1565	1566	1117	N/A

Sunshine Kids Walkathon

The Kitchener office is changing things up this year for our annual fundraiser for Sunshine Kids. We are running a walkathon on Saturday, June 20th at Waterloo Park in Waterloo. Tickets are $ 20.00 per person or $ 30.00 per family. Registration starts at 9 AM and the 3 km walk starts at 10 Am.

The event is designed as a family event with lots of refreshments and treats for the kids. We are looking for sponsors and participants. We hope that you can sign up for this great event.

For further information, you can contact Goran, at 519-745-7000 or by email at goran@prugvr.com.

As a further note, we are seeing off a group of four Ontario Sunshine Kids who are going to Texas on a week long trip this Sunday. They are Brandon Black from Whitby, Lloyd Twuh-Siaw from Etobicoke, Emily Parks from Preterborough, and Alexandra Seventikidis from Toronto. We hope they have a great trip and we'll keep you posted on their progress.

An Upswing in the Market?

It has often been said that what happens in the Toronto real estate market follows in Waterloo Region a short time later. I have found this to be very true.

With this in mind, I find an article in the Toronto Sunday Star to be very encouraging. Nobody has predicted that numbers (sale prices and sales volumes) will return to 2007-08 levels, but this article seems to speak differently.

For sure, buyers who have been sitting on the sidelines for the past six months are getting back into the game. Multiple offers ove the ask price have been fairly rare over the past six months.

We have seen some positive changes in the market here since March. Maybe this will continue into the summer.

Here is the article from the Sunday Star

Why do we lose clients?

As we travel through life and our real estate career, relationships sometimes drop off and we lose clients for an unknown reason, except for, "Gee, we haven't talked in a long time". Here is an article I just tripped across on the internet by Ken Brand, who is a Prudential Real Estate manager in Houston, Texas.

He is saying there are four basic human needs that we must feed to maintain a relationship:
1. People Seek SIGNIFICANCE
2. People Crave CERTAINTY
2. People Desire an IMPROVED STATE OF BEING
4. You’re Peachy-Keen, They’re KAPUT

It's a good read... Check it out here on AgentGenius.com

April 2009 MLS Statistics

Some good news statistically. Every month since January the statistics have shown a narrowing of the gap in terms of unit sales year to year. In April, we're almost back to even with last year's numbers. Prices are a little soft, reflected in a statistic of a 2% drop, although many agents feel this number is a little behind and it's actually a little bigger drop than that. Buyers are still feeling that they should get "a deal" and negotiating hard.

As you follow the news, there are lots of indicators that we're past the worst.

Here are the monthly statistics for April, 2009.

	K-W This Month	K-W Last Year	Cambridge This Month	Cambridge Last Year
Avg. Sale Price	$ 255,568	$262,641	$261,630	$266,358
Percentage Change	-2.7%		-1.8%
Properties Sold	632	697	249	254
New Listings/Sales Ratio	59.8%	66.76%	48.9%	48.7%
Properties For Sale Now	2303	1932	1150	N/A

Dealing with difficult to insure properties

This article appeared in Realtor Edge recently...

The ability to obtain property insurance is a critical component of any real estate transaction. Without home insurance, a buyer cannot obtain a mortgage, and without a mortgage, the transaction falls apart.

But insurance companies have tightened the rules for obtaining insurance and have become less willing to insure some types of property. Issues such as old wiring or furnaces more than 20 years old, among other things, raise red flags of concern for insurers.

REALTORS® should be aware of the growing number of home insurance problems faced by would-be home buyers and how insurance requirements can affect a real estate deal. It’s important to know how to protect your buyer through the proper use of clauses and forms and how to advise sellers on ways to make their property insurable.

REALTORS® should raise the subject of insurance early on in the relationship with their buyers at the same time that they are informing them of the other expenses that they will normally encounter.

What insurers look for
When looking at a home, insurance companies consider the age and condition of the house, including the electrical system, plumbing, heating, wood burning appliances, oil tanks and structural components. They will also want to know if the home is to be owner occupied, rented or left vacant. Insurance companies also look at the individual applying for insurance. Individuals with a number of previous claims, a history of payment problems, policies that have been cancelled, declined or lapsed, a poor credit rating or convictions for insurance fraud are likely to see their applications declined or a surcharge added to their premium.

If you are working with a buyer and you feel that a particular issue on the property may cause concerns for an insurance company, it’s best to bring it to the buyer’s attention and recommend an insurance condition in the agreement of purchase and sale. Clause 8 of OREA’s Agreement of Purchase and Sale sets out the time limits for the buyer’s solicitor to perform searches relating to the property including determining whether the building may be insured against risk of fire. The buyer is allowed until the earlier of thirty days past the requisition date as noted on the offer or five days prior to completion. In effect, this makes the offer conditional upon the buyer obtaining fire insurance on the property.

However, rather than rely on the pre-printed wording of clause 8, a prudent salesperson, when dealing with a property that may be difficult to insure, should address that issue with a condition specifically developed for use in those circumstances including OREA’s INS-1 Condition- Obtaining Insurance, and INS-2 Condition – Obtaining Insurance – Cost Not to Exceed.

It’s also always a good idea to recommend a home inspection which could uncover potential insurance issues whether you are working with a buyer or a seller. Sellers, armed with a pre-listing inspection report outlining potential problems with their home, could take care of any necessary repairs in order to make their property insurable before it goes on the market. In addition, a home inspection report, provided by either the seller or the buyer, and given to an insurance company, may make it easier to obtain insurance.

Keep in mind, insurance should be arranged as soon as the offer to purchase is accepted to allow enough time for the insurance company to review an application for insurance. It’s not a good idea to wait until closer to the closing date because if the company refused to write the insurance, the buyer would not have time to arrange insurance elsewhere and the closing of the transaction could be in jeopardy.

The best place for your buyer clients to start when obtaining insurance is to ask the insurance representative who insures their current home, apartment or automobile.

That representative already has insurance information about the buyer and many companies offer a discount if they insure both auto and property. Buyers should work with their insurance broker to find an insurer that covers the type of property they are considering purchasing. For example, some insurance companies will underwrite only homes in certain geographic areas; others may not insure homes with underground oil tanks or homes that are over 50 years old.

In cases where your buyer cannot obtain insurance in the regular market, there are substandard and specialty markets available. However, they do not deal directly with the public. An insurance representative may be able to arrange insurance for the buyer, but premiums are usually higher and coverage may be less.

Although REALTORS® are not expected to be insurance experts, they should be aware of insurance concerns and know how to protect clients by recommending conditions in an offer or advising sellers on how to rectify problems prior to listing the property. REALTORS® can learn more about insurance concerns in OREA’s continuing education course called Insurance Concerns for Buyers.

Mandatory Home Energy Audits Update

A few weeks ago, I wrote this article about new legislation to make home energy audits a mandatory part of the transaction when a property is sold in the province of Ontario. The bill is under review at Queens's Park and some significant changes have been made, although not finalized.

The Standing Committee conducted a clause by clause review of the bill. During that process, the government made several amendments in a number of areas. For example, the mandatory home energy audits will no longer apply to leases or commercial properties and, in fact, will only apply to single family residences. The government also added a provision that allows a buyer to waive their right to receive an energy audit report provided they do so in writing.

Some of the issues they discovered were:

a) The results of an Ipsos Reid poll suggest that energy efficiency is not a very important factor in a purchaser’s decision-making process. Any number of items such as price, location, proximity to public transportation/work and safety of area are vastly more important to consumers than energy efficiency.

b) On average it takes a minimum of four to six weeks to obtain a home energy audit report which will have a negative impact on desired closing dates.

c) Home energy audits will become part of the offer process, thus an area of negotiation between the buyer and seller. As a result, buyers will likely have to bear the cost of the audit and will not be entitled to any rebate. On the surface, it seems to me that it will be a bigger issue in older homes than newer ones.

d) There are also a number of technical issues that will mitigate the use of energy audits. For example, there are no clearly defined energy audit standards. Also, there will be a tremendous shortage of qualified energy auditors and the costs related to energy audits are likely to rise as a result of that shortage.

It looks like the process will continue along, but is obviously going to take some time in its new form.

Say No to McGuinty's Tax Grab

It has often been said that history repeats itself, and we all know this to be true. But the McGuinty government should hope that their upcoming plans to implement the Harmonized Sales Tax does not follow what happened with the GST and the Mulroney government in 1990 and 1991.

The Mulroney government knew that tax reform was needed to fix a problem with the manufacturers tax which disadvantaged Canadian manufacturing exporters. Their solution was the GST. With hindsight, I think most government people would agree the concept was good. But truly, it could not have come at a worst time. Canada was burrowed in a recession that lasted for several years. The addition consumer tax only made things worse. Adding consumer taxes at a time when you want to encourage spending is not a good idea.

Canadians reacted poorly to the new tax, and in the next federal election in 1993, Jean Chretien and the Liberals were elected to a majority and the Progressive Conservative Party went from a majority government to a party holding two seats nationally.

Here we are, fifteen years later, struggling through another recession and the provincial Liberals are about to increase consumer taxes by implementing the HST. Could this come at a worse possible time?

I fully understand the pressure on the government to keep their deficits manageable. Their revenues are down and expenses are up, but this is clearly not the time for this solution. We need to let them know that this plan is not acceptable at this time.

The housing industry has taken some major hits over the past year. With rising unemployment and consumer confidence down, many have chosen to defer a new home purchase. The Ontario Real Estate Association estimates that the new Harmonized Sales Tax will add an average of $ 2,000 to a home purchase. Where the services required were paying 5% GST, they will now be paying 13% HST for these services. The service fees of mortgage insurance premiums, legal costs, real estate commissions, and home inspectors, will all be subject to the higher tax rate. These additional taxes could price some buyers right out of the market at a time when we need to be helping these buyers, not slowing them down.

There are many other businesses and suppliers who will now be required to charge the double tax for their services. Accountants, architects, engineers, graphic designers and commercial artists will cost the consumer 8% more. Another area where harmonization will have a particularly negative effect is nursing home operators, whose clients will have to pay more and might not be able to afford it.

There have been rumours for some time that this day would come. The Maritimes and Quebec have changed over some time ago. Why would the provincial Liberals choose such an inopportune time to roll out this cash grab?

Canadian Real Estate Magazine article

This article appears in the May issue of Canadian Real Estate Magazine and is written by our own Mike Milovick.

Prospering in K-W

The start of 2009 has been very intense for me and my team – probably even busier than the record 2007 levels. I focus on income property in Waterloo. Kitchener – Waterloo- Cambridge is considered the province’s hot area with a lot of investor interest – in Waterloo especially, as it seems to be particularly well – insulated.

Although residential valuations have dropped somewhat from the previous year (4% in K-W), income property there remains in strong, strong demand. Our team is seeing lots of activity below $500,000 – and we believe this will continue.

From a statistical perspective, the upper half of the Waterloo market (properties of slightly more than $1 million) is still frozen due to the worldwide credit crunch. In fact, of the 39 that are currently on the market, the median price is $1.05 million and the average list price is $514,000. The issue isn’t a shortage of buyers, it’s a shortage of commercial money. Buyers are ready to buy, sellers are willing to sell, but there’s a shortage of financing.

Waterloo’s multi-family MLS sales year -to- year:

• 2009: 10 sales, multi-family, averaging $292,900, 71 days on market and selling for 95% of list
• 2008: 15 sales, multi-family, averaging $250,000, 20 days on market, selling for 97% of list

So sales are down 30%, prices are up 17% and properties are on the market 3.5 times longer than in 2008.
For income property, Waterloo is actually faring much better than any other areas in Ontario. I would have to think that a 17% increase in price seen in our marketplace relative to the same time a year ago is going to be tops, nationally.

For new clients coming in, they recognize that Waterloo is arguably the best spot in Ontario to park their money. However, buyers also feel that valuations should reflect the downward pressures felt in other cities. This isn’t the case. Buyers are quite amazed at the rigidity of sale price to list price ratio still seen.

Without a doubt, Waterloo income property and – in my opinion- student properties still represent the best opportunity in this market. Both universities are increasing enrolment. With small price declines seen in residential valuations, perhaps the best real estate strategy in Ontario is student housing in Waterloo.

Source: Mike Milovick, sales representative, Prudential Grand Valley Realty, Brokerage, Waterloo, Ont.