Male call!

Hello Garth,
It has occured to me that in the 8 months since I’ve read your book, been religiously reading greaterfool.ca and occasionally tuned in to garth.ca, you have never challenged the cartel that is MLS.  In my opinion, there is no greater waste of resource and robber of equity than Realtors.  You could argue that the on-going crash is a huge equity killer, but realtors have been robbing people of 5-7% of their homes’ selling price since forever, regardless of whether the market is up or down.  It could be justified if they were charge 1 to 1.5% as they do in the U.K.

In the article, as you do in all other postings, and your book, you offer no alternative but to use a realtor.  You never mention selling privately or ways to negotiate a reduction of the commission.  In a market where no one is buying, if you as a buyer approach an agent who hasn’t made a sale in a while, you could negotiate that if he makes a commission of x, he owes you y% for dealing with him.  If he balks, move on to the next sucker.
Example:
– buy a 200k house
– commission of 6%
– 3% to the selling agent or $6000 for ‘representing your interests’
You could negotiate that he gives you back 50%, representing $3000.  Is there a law that realtors can’t give kickbacks to clients under such an agreement?  Has anyone ever done this? What’s your take?
René in Québec City

Of course the realtors have a monopoly with MLS, but that’s a separate issue from the commission individual agents or brokers charge. Actually, MLS works just fine. It creates a broad marketplace allowing you to compare listings, and it gives sellers maximum exposure to a great number of people. With the advent of online house-hunting, it’s turned into the No. 1 tool for sales leads in the country. The only complaint I have is that FSBOs can’t list on MLS – something they should he able to do by paying a fee. As for commission, you can negotiate any damn fee you want, and there are lots of agents around who will charge you half of the rest of them. With regard to your idea of stealing back 3% of the purchase price of a home from the seller in a down market, I hope you rot.

Garth,
I am in the midst of a rental housing search in Toronto. I used to think that landlords based rents on market forces — the overall supply-demand equation, the condition of the unit, amenities, proximity to public transit, etc. But after trudging through a whole bunch of condos, duplexes and houses for rent, I’ve noticed that some prospective landlords have set rents way off the scale — far above what the unit, building, and location would warrant.

The funny thing is that almost all of these prospective landlords seem to be in their 30s. I can only conclude that what we’re seeing is a wave of new and maybe reluctant landlords who bought at the height of the market, have outgrown their space or realized that they can’t afford to live there, and are seeking to cover their own inflated mortgage payments.

You touch on this briefly in Greater Fool but it might make a good topic for a blog post. How has the rental housing market been distorted by “new landlords” who are setting rents based solely on their monthly mortgage payments?
Jordan

Good observation. There are scads of accidental landlords in the market now, who are greedy little twits trying to transfer their buying mistakes onto tenants. They bought to flip, got caught in the grinder, and now have to rent out their boo-boos to cover operating costs. Being GLTs, they try first to unload all of their overhead on renters, until smart guys like you come along. This is especially the case in Toronto right now, where more than 30% of all the buyers of 50,000+ condos were speculators. In any case, it doesn’t matter. Just offer what you can afford or believe is fair. In this market you should also ask for free months, free parking and a paint job. It’s a renter’s market, dude.

Hi Mr Turner,
I have followed your work for a number of years and appreciate very much all the sage information that you have made available.Presently I am living in Halifax and own some income property.

Single home prices are dropping but income property asking prices have not. In your opinion do you think it is wise for me to wait for better deals over the next few years as none of the asking prices today make any sense. At the current prices (if I paid them) the only return to me if 100 % rented would be (at best) a break even with no operating income for me at all each month.

The reason I would even consider doing it is that decent income properties do not come along very often but I am concerned that they will drop in value over the next several years due to this recesion that is well underway. I cannot afford to get stuck with another property that possibly loses money each month. Your brief thoughts would be appreciated.
Regards, John

My thoughts are why the heck would you ever want to buy an income property in a place where market rents are so low you can’t make money, and at a time when a capital gain is impossible? Besides, you’ll just end up fixing toilets at midnight and having people skip rent, without the ability to throw their sorry asses out in the snow. Trust me, there are easier ways to make money. Only get tenants if you have no friends.

Hello Garth,
Ten years ago plus, I had enrolled in your investment advice and used it when you were offering it online, so I respect your knowledge and information. Now I am coming to you for some up to date knowledge, as the world’s economies are in turmoil.

As economies around the world tank and bounce… what can a person do in Canada, to mainly preserve capital? Having absolutely no debt, what instruments should we as Canadians be putting our money into..

Are Canada Savings Bonds somewhere to put capital for preservation…in case our bank(s) tank. Are different currencies somewhere to put money?
Thanks, Ben in Edmonton

Hey, Ben, money is safe in the form of money. Stop screwing around with it. Next question…

Hi Garth,
First, thank you for The Greater Fool.  It has given me a great deal of ammo when speaking to my new in-laws and my wife about buying a house.  Both, of course, dislike the notion of us continuing to rent. While my investment advisor’s advice hasn’t held true (undoubtedly, she has a stake in me “buying and holding”), your prognostications in the book not only make sense on a gut level, but logically too, and are clearly playing themselves out in headlines each day.

I’ve been watching the mutual funds with my down-payment dive into the toilet, I’m debating selling them now, so that I know that I have something, or holding on for the ride.  I thought I’d stick with the “Garth Turner brand” and buy another one of your books.  Would The Little Book of Financial Wisdom be the right choice or is it now too dated?   I know you’re very busy and if you don’t have time to respond, please accept my sincerest thanks for the great book and for helping me secure my financial future.
Corey in Toronto

All my books are timeless, of course, but that one was written shortly after Nine Eleven, and the world has changed a tad. I’d suggest you wait for the next one, “After the Crash” which I found out today will be off the press in the second week of January. As for selling your mutual funds, are you on drugs? That is absolutely the worst thing you could do, as the markets have lost half their value and are surely closer to the bottom than the top. That means hang on, girl. While this week’s advance looks like a bear market rally, to be followed by some more disgusting drops, the stock market will anticipate a better economy six or eight months before it happens, and up to a year before real estate stabilizes. So, you will have lots of time to regain fund values, and still score on a house.

Hi Garth
I read your column every day and was hoping you could offer me some advice. My husband and I are becoming increasingly worried about our economic future. We presently own 4 properties, the home we presently live in which was mine before we married, our dream home which is presently being rented, my husband’s home prior to our getting married which is now rented, and a downtown condo which is also rented (it was meant to be an investment property and something we hoped to make use of down the road) When we married 5 years ago we moved into my home which is in Pickering and then we found our dream home in Ajax. It has a beautiful setting on the water and because homes on this street rarely come up for purchase we entered into a bidding war and eventually bought it with zero down but with the equity from  our other homes. We had intended to sell our two homes and move into it but I became pregnant. We were thrilled as I had only months earlier miscarried and had been told that it would be very unlikely that I could become pregnant again. We decided that as much as we loved the home that we had just purchased that the baby came first and we didn’t want the stress at that time of having to sell 2 homes and make the move while I was pregnant. We also decided that because our present location, being much closer to the city, my job and daycare, that we would postpone the move for a couple of years, hopefully build more equity in our home and make the move then. Our intention was to move in the spring of 2009 or the very latest spring 2010 so my son could start school in his new community and it would be less stressful on him. We never expected the market to turn as it has. My question is now what do you think we should do. We presently to not have a contract with our tenants but we have an understanding that they can stay until next May. Do you think we should put our present home in Pickering ( which at the height of the market we probably could have gotten close to $500,000) on the market this coming spring or do you think prices may rebound in 2010 and we should wait until then? Any advice you could offer us I would much appreciate.
Thank you, Camille

Well, that’s going to be one expensive baby, isn’t it? You have already messed up your financial life, so asking me for advice at this point is not too helpful. But I have to ask – how does hiring a realtor to sell houses while you’re pregnant create stress? Isn’t there way more stress now knowing you own three too many houses at a time when both prices and rents are plunging? Your plan of waiting to sell so you could ‘build more equity’ did not exactly work out too well. My advice to grow up and realize how screwed you could be. Get all four houses on the market now. And suck on a pickle.

94 comments ↓

#1 Jimster on 11.28.08 at 10:27 pm

Free parking and new paint is always nice, but I would avoid free months when you could alternatively push for lower ongoing monthlys. Free months are just a renters form of a ballon payment or ARM.

#2 Lifelong Investor on 11.28.08 at 10:56 pm

Hi Garth,
Regarding condos, what do you think of Brad Lamb? It is my opinion that he is an absolute egomaniac. I watched his show once and had to turn it off halfway through. Anybody can make money in a good market, I wonder how Mr. Lamb will fair in today’s over supplied condo market? Go get’em self described condo king. I’ve seen many come and go over the years.

LI (76 Years Young)

#3 anonymous on 11.28.08 at 11:51 pm

OMG, “suck on a pickle!” I’ve already booked Garth on the Just for Laughs tour next year. Come one, come all!

Great post. Very funny stuff.

#4 Jelly on 11.29.08 at 12:10 am

Garth,

Your comments to these people who obviously
valued your opinion was very harsh.
I was suprised at the mean tone you had for the
last posting especially.

While I too listen to what you have to say
most of the time, sometimes you are
so moody! There is no predictability
to your comments.

Seriously, tone it down a notch,
these people are “screwed” as you say and
you are going to say things like that?

I am a long time “fan” and I was disgusted
with the insensitivity and sarcasm that
did not help them out with their questions
or problems at all.

Camille, if you are reading this, it is just
bad timing that is all, you guys did all the
right things in order to advance your
family. It is tough, I feel for you…

#5 Seeking Knowledge on 11.29.08 at 1:54 am

Garth,

I am sick of having to leave home every time somebody wants to look at my house. I finally decided I will have no more showings.

I thought I would never do this but two weeks ago I decided to rent out two of my empty bedrooms on the other side of the house and now I bring in $1800:)

I still don’t know what to do with the other 30K that I put down on the other house that haven’t been built yet. My original plan was to sell current place and buy a house that is going to be custom built by a builder who offers a complete house package. I want my money back, but I am afraid that I might not get the full amount back.

The builder suggests that he will hold the land for me if I pay him 11K a year for the interest on the land he bought. I am deeply troubled by 700K house I am going to be building with 20% down. I really don’t want to do it anymore because after reading your blogs, I am very much shaken.

I just want to keep the place I have now and I am thinking how to tell the builder that I no longer am interested. The problem is they are really good people (family own business) who took a lot of their time with me when we discussed about the house plans.

There were many others who wanted the plot but the builder decided to grant me because I was really wanting a house with a separate garage! WHAT A FOOL I WAS and now IT MIGHT HAVE PRETTY WELL COST ME 30K!

30K might not be a bad lost compared to 700K:)

If the job is still there, I will have no problem paying off current mortgage of 300K.

Should have listened to my Dad!

Thank you Garth for saving me from jumping myself out of the deep cliff. I am imagining something like jumping down fraser river from HELL’S GATE without riding on airtram!

Florence* Fort Mac GIRL

#6 Rfman on 11.29.08 at 2:06 am

“Suck on a Pickle”?

Oh my, Garth. Ya gotta stop reading all the mail.

#7 wealthy renter2 on 11.29.08 at 2:15 am

Comment about not selling your mutual funds now….Don’t get suckered into thinking there will be a crash in the stock markets and UP WE GO. If this recession is as severe as it’s looking, the bottom could be 3000 pts away – in the 6000s or less. Which means your funds have way more down to go. And then after we hit the bottom, expect to stay there for a while, and when we start rebounding it could be another 15- 20 years till you see July 2008 stock market peak.

If japan isn’t a lesson to look at – “the lost decade”, housing prices have yet to hit the peak they hit in the 80s. Interest rates were slashed to 0%, or the oil bust of the early 80s – Alberta housing market stayed stagnant for 15 years or the great depression- Stock markets lost 89%, took till the 1950s to regain the 1929 peak…. There are grave similarities here.

Yes, what comes down must go up, but unfortunately, we’ve been up for so long, we must come down. Sell your mutual funds, and stay in cash. why lose all your net worth and then wait 20 years to break even? (And this isn’t even factoring in inflation) Why not take the 30% loss now, and reinvest after the market bottom is in hindsight? What have you got to lose then?

Here’s a link that might be of interest.
http://articles.moneycentral.msn.com/Investing/StockInvestingTrading/crisis-and-recovery-the-dow-jones-industrials.aspx

#8 Soylent Green is People on 11.29.08 at 2:19 am

Camille can’t put the houses on the market before Christmas. Are you out of your mind? Have you ever been pregnant knowing you could lose the baby at any time, and throw in right before bloody Christmas? Do you have any idea how much stress Christmas puts on a hormonal woman? Like the husband is any help… puleeeze. I’ve yet to meet a man who can handle his money intelligently. Everybody likes to act like men know how to manage money but look at this country and the one south. Typical of any house where the man calls the financial shots. DOH!

Put the houses on the market in late February. Nobody is buying right now anyway. And when I say nobody, I mean the wives, you know, the decision makers.

#9 kc on 11.29.08 at 2:54 am

Shifting things into world views here for a moment…
China is heading for a major crisis…. and so is motherland UK……

China Panic Interest Rate Cut as Job Losses Soar

http://marketoracle.co.uk/Article7525.html

Yin Weimin, China’s Social Security minister, has revealed that employment is the Communist Party’s number one concern in the downturn and said the “situation is critical”. Unemployment is expected to rise from 4pc to 4.5pc by the end of the year and anecdotal reports have suggested that 3m people have already been fired in the industrial province of Zhejiang alone.

Bankrupt Britain Trending Towards Hyper-Inflation?

http://marketoracle.co.uk/Article7526.html

If these 2 small reads don’t start to make you understand what garth was mentioning about both of these situations hitting home… maybe reading what is truely going on off our shores may help.

God help us if we start to get hyper-inflation…. it will become the end of all paper-fiat and bank wealth you may hold….

Squirrels beware……

#10 islander on 11.29.08 at 4:31 am

Rene from QC wrote: …”realtors have been robbing people of 5-7% of their homes’ selling price since forever, regardless of whether the market is up or down. It could be justified if they were charge 1 to 1.5% as they do in the U.K.”

First, realtors don’t “rob” anyone. Robbery is a crime of violence wherein money is forcibly taken from the victim. Realtors’ commissions are a voluntary exchange of services for remuneration. Any confusing of the two forms of exchange show a disturbing lack of discernment and an unfortunate rejection of the concept of free will.

Second, if you get to decide that my compensation is capped at 1.5%, do I get to decide what you get paid?

Third, I recently had a “buyer” who had the same idea as you: he’d submit an offer if I agreed to kick back half my commission. It is my fiduciary duty to inform my clients of all offers and any information that is material to our relationship. So I told them of the guy’s proposal. Without even waiting to hear the guy’s price offer, they flat out rejected the offer because of the kick back scheme. It offended their sense of integrity. The realtor haters will think I’m making up this story. But I could pull the guy’s name from my files. For now, I’ll refer to him as “Rene.”

Lastly, I appreciate Garth’s not taking the bait from the realtor haters. But I also have to take issue with the notion that FSBOs should have access to MLS. I pay a lot of money in fees for access to MLS. And a fairly decent percentage of those fees are used to maintain MLS. Sellers can get on MLS by listing with any number of value-priced real estate brokerages. The internet makes if very easy to find them in a city near you.

As for MLS being a monopoly. I disagree. Anybody is free to start their own version of MLS.

#11 David on 11.29.08 at 4:45 am

The 30% of condo buyers being speculators is downright frightening. 100% leverage and 0% taxable capital gains was a potent cocktail for the greedy. This indicates that supply and demand, incomes and comparable rents had almost nothing to do with the bubble. The resultant over building was based on greed and not housing need. In a declining market there is not much for real estate agents and flippers to churn. A great party while it lasted, one can suppose.
When Jordan talks about rents being off the scale, it is exactly because the idiots who bought those condos in the first place never factored in things like comparable rents. All they could see was an endless stream of tax free capital gains. They deserve to be whipsawed by the market.

#12 Peter on 11.29.08 at 8:07 am

Garth,
In response to the first letter in your “Male call! post” where the author, Rene from Quebec City, comments on the MLS website and realtors fees, I offer the following:

Although MLS seems to be the only site to use in Ontario, on a recent trip out to Winnipeg, I noticed that the majority of homes were being sold directly by the homeowners through a company named comfree.ca. At present, comfree is only available in BC, Alberta, Manitoba… and Australia for some reason. For $700 , you receive a professional photographer photograph your house, a well written description of the house, which are then uploaded onto comfree’s website. Lawn signs, selling pamphlets and offer to purchase documents are also included in the price. The big selling point is comfree’s website, where houses will typically get over 1000 hits in the span of a week (and that was in Winnipeg!) What is useful for buyers is that they can search for homes in the same way they do on MLS.ca
It doesn’t appear that any other companies are offering comparable service in Ontario or more specifically, in the GTA, which is a real shame. Comfree has seemed to rival MLS in the west, and I hope that they are able to expand to central and eastern Canada for the benefit of both buyers and sellers.

In regard to Rene’s second point, where seller’s realtor’s give the buyer a kickpack on the purchase price- Realtor’s should not engage in this at all! Realors have a fiducairy duty to their client, not the opposing party. Any realtor who gives a seller a kickback, without letting the seller know of the arrangement is a crook!

Good realtors are worth their weight in gold, however, they are few and far between. It is frustrating to see careless errors in most realtor’s listings. What is even worse, is to visit an open house where the realtor seems to have no clue as to what they are selling. Many of them do not invest the time nor discipline to know the product they are peddling , let aone go out and actually market it. I have no trouble paying for someone’s good service, and in this market, making a sale for a decent price to a seller is worth a 6% commision. However, I have trouble paying 6% commission for shoddy work where little effort was put forth.

Unfortunatley, individuals are prevented from posting their homes on the MLS website… I think that it would be a great benefit to sellers and buyers if they were permited to do so. Of course, realtors would never agree to this as this would essentially make them obsolete to many buyers and sellers.

Sincerely,
Peter in Mississauga

#13 buy gold on 11.29.08 at 10:32 am

skip to main | skip to sidebar The Coming Depression
This blog will help you come to terms as to what is really happening in the financial world. Get PREPARED! BOOKMARK THIS PAGE FOR 3 times daily NEWS or MORE! CHECK the SIDEBAR for UPDATED NEWS!

The Gross National Debt

Friday, November 28, 2008
GOLD AND SILVER is an ABSOLUTE MUST for the Coming GLOBAL Depression and COLLAPSE OF THE US DOLLAR

The U.S. dollar is being devalued at an alarming rate. Faster than what took place in Argentina, Mexico, and Russia put together. The only difference is that our government has better ways to hide it.
Just think about the recent bailouts, how much has our government thrown down the endless “bail out hole”…

Let’s add it up!

$ 800 billion to support mortgage consumer debt.
$100 billion for Fannie Mae
$100 billion for Freddie Mac
$150 billion for Stimulus package (from January)
$8 billion for Indymac
$29 billion for Bear Stearns
$ 700 billion for Wall Street ( Bank of America; Merill Lynch, City Group, JP Morgan, Washington Mutual, Wells Fargo; Wachovia, Morgan Stanley, Goldman Sachs…)
$143.8 Billion for AIG ( which keeps growing)
$25 Billion for the big three in Detroit.
$138 billion for Lehman Brothers (post bankruptcy) through JP Morgan.
$ 50 Billion for money market funds.
$ 620 billion for general currency swaps from the feds.
Totaling : $2,863,800,000,000

This doesn’t include the hundreds of billions the feds have and will continue to buy in commercial paper. Plus, what they lend out to other financial firms.
Not to mention, the feds recent supply of new credit lines to Brazil, Mexico, South Korea, and Singapore to “help those countries deal with the global credit crisis.” The feds will start at $30 billion and have promised up to $100 billion dollars per country.

Can someone say hyper-inflation!

If you can’t see where the U.S. dollar and gold are headed, I’ll be crystal clear! The dollar is going in the exact same direction as the Zimbabwe dollar and Mexican peso. Between the last devaluations of the peso, it’s lost 99.9%. If you want to know the price of gold in old pesos; you just have to multiply gold by 100,000.

With everything that has taken place, many “main-stream” TV commentators believe or want us to believe, that the U.S. dollar is now the currency of choice; a safe haven or flight to quality.

Nothing can be further from the truth.

The fact is that the U.S. dollar is now seen as a liability, not an asset. More and more countries are walking away from it.

The reason the U.S. dollar has gone higher is due to the $598 trillion dollar derivatives market. You see, hedge funds have over leveraged themselves and have been hit with tremendous margin calls as markets move against them. They have been forced to liquidate their investments overseas, which is why overseas markets are now crashing. They’re liquidating to come up with equity to pay off margin accounts, which need to be paid off in U.S. dollars.

The dollar is NOT rising because it’s a “safe haven” or a flight to quality; but rather to satisfy U.S. margin accounts. Remember until further notice, margin accounts in most emerging world markets can also be satisfied in U.S. dollars hence, the surge in demand for the U.S. dollar over the past few weeks.

FULL ARTICLE

NOTE: he federal government committed an additional $800 billion to two new loan programs on Tuesday, bringing its cumulative commitment to financial rescue initiatives to a staggering $8.5 trillion, according to Bloomberg News.
Posted by Economic analyst at 3:45 PM 0 comments

#14 kc on 11.29.08 at 10:40 am

What happens if you hold a “sale” and no-one buys?
Top that statement off with, what if you need to sell to fuel your spending? and still no-one buys

With the expected printing presses running at over capacity in the USA, and with debt (seeming to double every month), what happens if no other country buys the US bonds?

My mind wonders back to the 11th hour bond buying that Japan gave the states in the late 80’s, when Japan held out and didn’t show up for the opening of the bond markets and drove the yeids higher. These bonds (the 20 year ones) will be coming due if not already due, and in today’s markets (with astronomical deficeits US) what country is not going to be showing up this year?

How can any country expect another debted country to buy into future promises when the vicous cycle is imploding upon itself? What will be the outcome if this sale of bonds goes bust this time around?

Garth, do you know of a place for stats that give indepth coverage to the bond markets? or does anyone know? Are we witnessing the largest shell game ever commited in human history?

Any stats on how Canada’s bonds are selling?

#15 Bottoms_Up on 11.29.08 at 11:07 am

“investment advisor’s advice hasn’t held true (undoubtedly, she has a stake in me “buying and holding”)”
——————————————-
a buddy of mine is a financial planner. He gets paid 1% if he sticks your money in a GIC, but 1% PER YEAR if he sticks it into a mutual fund. Be careful who you have managing your money, and if they are watching out for you or their own paycheque.

Great to hear the book is coming out 2nd week of January!

#16 cj on 11.29.08 at 11:13 am

garth…

the markets closer to the bottom than the top??? what have you been smoking? this market is going lower and then staying there for a LONG time. Sell into this rally, buy a market fund and get used to the idea of compounding. you missed the boat on that one garth.

#17 Bottoms_Up on 11.29.08 at 11:16 am

A little UK fun…

So I was watching ‘Relocation, Relocation’ on HGTV last night, and a couple got into a ‘sealed bids, offers over 450,000 only’ bidding war. There were a bunch of other offers and they went with a bid of over 600,000. After that, turns out one of the lawyers screwed up, and sent this couple the entire list of bidders, and what each bid had been. The next closest couple had bid 140,000 less than them!! In the end they never got the place because the renegoiations did not (and could not) work after the cafuffle. This is a perfect illustration of how these practices force prices up in an unrealistic manner. I’m glad these ‘greater fools’ didn’t make that huge mistake….I wonder if someone purposely gave them that list? Anyway, buyer beware!!!

#18 Bottoms_Up on 11.29.08 at 11:47 am

Hey #8 Soylent Green is People on 11.29.08 at 2:19 am
TIME TO GET A NEW HUSBAND THAT KNOWS HOW TO HANDLE MONEY AND IS NOT AFFRAID OF (HELPING) TO MAKE DECISIONS.
As a male, who makes financially prudent decisions with his significant other (and plans to be a loving, caring father and husband), I completely resent your prejudicial comments.

As for prejudism against white males with a genetic disease, check this one out:
http://network.nationalpost.com/np/blogs/posted/archive/2008/11/28/carleton-students-petition-to-impeach-union-president-over-cystic-fibrosis-gaffe.aspx?CommentPosted=true#commentmessage

#19 Kitchener1 on 11.29.08 at 11:47 am

#10 Islander

I agree that the free market should set the comm rates that RE agents get paid. I do take excpetion to his comments about MLS. There was a company in Ontario a few years ago that actually listed your house on MLS if you were a private seller. It was a real estate brokerage that offered the service for a fee( I think $500-1000).

They were sued in court and lost. In my opinon, its only a matter of time before we get another system to compete with MLS.

#20 Dave on 11.29.08 at 11:53 am

I have a friend who is heavily leaveraged into commercial rental property as well as apartments. I tried to warn him that this was a “boom” and is only temporary.

Now, three years later, he admitts he is screwed if things don’t improve soon. He remarked that he can’t sell for what he has into most of his properties and will just wait it out. ” I would be further ahead to go bankrupt, I have dumped in too much money now.”

I suspect there is a lot of people like him and if the market runs it’s course there will be even more tax dollars shovelled into the banks.

I understand that foreclosures take about a year to 18 months to finalize and if that is the case I expect a sudden drop in house prices in about a year.

#21 squidly77 on 11.29.08 at 12:08 pm

Camille, if you are reading this, it is just
bad timing that is all, you guys did all the
right things in order to advance your
family. It is tough, I feel for you…

the only thing they did right was to destroy there financial future
there is no such thing as bad timing when it comes to gambling massive amounts of money
if you truly feel sorry for her..go take one of there spec homes off of there hands..and see how much of your money they require
gambling is for fools

I’ve yet to meet a man who can handle his money intelligently
its not my fault and now the finger pointing time has come
you specs are falling apart
buy a mirror..

First, realtors don’t “rob” anyone. Robbery is a crime of violence wherein money is forcibly taken from the victim. Realtors’ commissions are a voluntary exchange of services for remuneration. Any confusing of the two forms of exchange show a disturbing lack of discernment and an unfortunate rejection of the concept of free will.
realtors are as pure as snow..not
realtors have been manipulating market conditions and thus robbing families for decades

#22 eddy on 11.29.08 at 12:19 pm

real estate agent do not take equity. banks do appraisals using the mls system- they do not deduct 5% from the sales price of a comparable to estimate value. 5% is blended into market value. in reality, almost every comparable used by a bank has an inflated value, 5%, because each of those sellers got the posted sale price minus 5%

#23 Stu on 11.29.08 at 12:26 pm

#12 Peter – comfree.com is excellent. I find the photos and descriptions much better than on mls. It’s amazing that, even in this buyers market, realtors can’t take proper photos or write a detailed description!

#17 What you’re talking about is the Scottish house-buying system, not the UK system. In Scotland, houses are listed with an “Offers Over” price – basically a price to get people through the door. (There is also a “Fixed Price” option – as it sounds).

There are pros and cons. I like it as you don’t get bidding wars – all bids are sealed – and the vendor chooses the offer they like. Sometimes they even choose the people they like if the offers are close – I know someone who got told they got the house despite a slightly lower bid, because the vendors liked their family and wanted them to have the home.

It means the lawyer (not realtor) handling the bidding process has to know their stuff. It’s also possible to get an idea from the sellers of how much they want by simply asking them. The cons are that you can get wildly differing bids and could pay too much. However, the fact that there are no fake bidding wars means I think it’s a good system.

#24 donny on 11.29.08 at 12:27 pm

I think trying to get the real estate agent to lower their commission from the buyer as part of the deal would be ethical. Still nasty, putting the agent in a bit of an awkward position with their customer, but at least technically ethical.

#25 Jelly on 11.29.08 at 1:12 pm

squidly77,

Usually I like your posts but I’ve got to disagree
with you on your “gambling is for fools” comment.
Obviously I would not take the property off their hands but you can still feel sympathy for families that are in their position.
I find it hard to believe that YOU have never “gambled” buying real estate, stocks, and other investments.
Get a heart buddy!

#26 Kitchener1 on 11.29.08 at 1:43 pm

#8 I’ve yet to meet a man who can handle his money intelligently

I will have to disagree on that comment. My buddies and I are all single, late 20’s to early 30’s. All of us have worked hard and have between 50K-100K (each)in cash and no debt. None of us have yet to meet any women in our age range who are not either in way over their heads with mortgages and credit cards. NOT ONE. Thats a big reason most of us are still single, we are not willing to take on others debt. The sad thing is that we would be happy to meet a girl(s) who are at ZERO (no liabilties and no assets)

Garth, about your last comment about holding stocks. One thing that is overlooked by most is the conversion of investment banks to commercial banks in the US. While in the short term it gives companies access to TARP funds, it also caps their ability to leverage investments. In the past 30-40 leverage was common, under commercial banking reg’s I beleive it is capped at 10-1. Without the investment banks ability to leverage, the only thing that will bring the market back up to 14 000(DOW) will be massive hyperinflation. In that case it won’t matter if the person cashes out now or at 14 000 as the purcahsing power of their $ will be the same.

#27 patriotz on 11.29.08 at 1:44 pm

In regard to Rene’s second point, where seller’s realtor’s give the buyer a kickpack on the purchase price- Realtor’s should not engage in this at all! Realors have a fiducairy duty to their client, not the opposing party.

Realtors have a fiduciary duty to get the highest possible price for the seller, and they are paid a commission for this. What they do with the commission is their business – including rebating part of it to a buyer’s agent, which of course they do all the time, or to the buyer. There is no difference whatsoever in this from a fiduciary perspective.

Realtors would be violating their duty to the seller if they received money from the buyer. Rebating part of their commission to a buyer’s agent or buyer facilitates the sale and is in the seller’s interest.

#28 realtorslie on 11.29.08 at 1:44 pm

#10, islander;

oh yeah, a posting from a real estate agent. your quote “As for MLS being a monopoly. I disagree. Anybody is free to start their own version of MLS.” is a complete and utter lie.
remember this ? a website called http://www.housing123.com
can’t remember ?
the main draw to this website is their ability to display MLS listings on a map of the city. when the user positions the mouse icon over an icon on the map, the MLS listing comes up. theres more to this website but it is now history…
do you know what happened to housing123 ?
check this link out…
http://blog.housing123.com/
the CREA closed them down.
now, the website reatltor.ca, displays their mls information in the same manner that housing123 displayed the MLS information.

crawl back under the rock that you emerged from, islander-f-ck. you’re just another real estate insect trying to justify your existence.

#29 realtorslie on 11.29.08 at 1:57 pm

its realtor.ca, not reatltor.ca.
my spelling of the website is incorrect….

#30 CalgaryRocks on 11.29.08 at 2:21 pm

I’ve yet to meet a man who can handle his money intelligently.
===================================

Yes, this is why every mall in the western world reserves 90% of it’s surface to women’s clothing and accessories. If it wasn’t for chicks buying makeup, shoes and purses all day long, this economy would be in even worse shape.

#31 dekethegeek on 11.29.08 at 2:52 pm

To Kitchener 1 ( #26 post)
I’m a male in my late 40’s and still single and I totally agree with your rebuttal to her statement that “all men are financial morons.”
I also agree with your statement that ” i would be happy to meet a girl that was at ZERO ( no debts,liabilities)”
The fact of the matter is ALL ages and BOTH sexes can be complete idiots when it comes to money. Goodness knows this freaking meltdown we’re watching is proof enough of that!
Financial responsibility is either observed(watching your parents handle their finances when you were a child),learned( watching other people ie friends,co-workers and asking questions),or taught( sadly this is not a scholastic requirement for teens in grades 7 to 12 and it should be).
So … “Soylent Green is People” jump off the sexist blame the men bandwagon and go watch anothe Charlton Heston movie.
I recommend Planet of the Apes, you’ll get to see lots of men dragging their women around by the hair and the women dont talk back because they cant speak.
Nirvanna never looked so good.

#32 David on 11.29.08 at 3:10 pm

Have to disagree with Islander about MLS. MLS is fairly close to being a real estate and housing industry cartel. There is a near monopoly on proprietary information, listings and commissions. It is a cartel in the same way that the NHL is cartel. The 30 teams compete vigourously among themselves under the umbrella of cartel. There are barriers to entry and no one can just set up an NHL franchise. Same with real estate. You would have to go back to the mid 1960’s to find local independent realtors. Those days are long gone. 6% commissions are pretty much etched in granite with MLS.
There might be a few brave souls who wish to set up a league of their own for housing sales, but I am doubtful about the outcome.

#33 lgre on 11.29.08 at 3:30 pm

‘Camille can’t put the houses on the market before Christmas. Are you out of your mind? Have you ever been pregnant knowing you could lose the baby at any time, and throw in right before bloody Christmas? Do you have any idea how much stress Christmas puts on a hormonal woman? Like the husband is any help… puleeeze. I’ve yet to meet a man who can handle his money intelligently. Everybody likes to act like men know how to manage money but look at this country and the one south. Typical of any house where the man calls the financial shots. DOH!

Put the houses on the market in late February. Nobody is buying right now anyway. And when I say nobody, I mean the wives, you know, the decision makers”

what kind of post is this?? sexism at its best I figure, I am a man and do very well with my money, thank you..quit meeting men in the back alleys and you might find one with some intelligence.

#34 anonymous on 11.29.08 at 3:58 pm

#26 Kitchener1: “I will have to disagree on that comment. My buddies and I are all single, late 20’s to early 30’s. All of us have worked hard and have between 50K-100K (each)in cash and no debt. None of us have yet to meet any women in our age range who are not either in way over their heads with mortgages and credit cards. NOT ONE.”

While I can’t comment on individual women’s spending habits, given that women in Canada today earn approx 70% of what men earn for equivalent work, please don’t assume that the fact that women you meet haven’t accrued the same amount of savings you and your buddies have is due solely to their profligate ways. There are external forces affecting this issue.

#35 Another Albertan on 11.29.08 at 4:12 pm

At this end of the field, it’s the Bleeding Hearts. At the other, their cross-town rivals – the Black Hearts. Today’s match should be full of action!

People looking for lollipops, unicorns and rainbows with pots of gold versus those waiting for the arrival of additional horsemen of the Apocalypse and rivers of free-flowing bloods in streets. Marketplace jihad dead ahead!

Please, by all means, beat each other into pulps. And when the current debate is over, go back later with policemen’s blackjacks and apply some additional equine punishment.

“There is only one side to the [stock] market… not the bull side or the bear side, but the right side.” — Jesse Livermore

In the meantime, thanks for the Saturday entertainment.

#36 Rick on 11.29.08 at 5:12 pm

#10 islander on 11.29.08 at 4:31 am Rene from QC wrote: …”realtors have been robbing people of 5-7% of their homes’ selling price since forever, regardless of whether the market is up or down. It could be justified if they were charge 1 to 1.5% as they do in the U.K.”

First, realtors don’t “rob” anyone. Robbery is a crime of violence wherein money is forcibly taken from the victim. Realtors’ commissions are a voluntary exchange of services for remuneration. Any confusing of the two forms of exchange show a disturbing lack of discernment and an unfortunate rejection of the concept of free will.
============
Islander, the real estate industry holds a monopoly whether you like to admit it or not. When people are brought to transact in real estate, either buying or selling, what are they to do? Use the very structurally limited FSBO system? Try to sell privately and field veiled promises by realtors trying to get the listing? Expect to know everything about the market when the information is closely guarded by the real estate industry and MLS system? (Which, if I could change only one thing, it would be public use of the MLS system, for a fair fee of course.) Oh, and after the sale and commission, we still have to fork over more money to a notary or lawyer because the so call ‘professional’ can’s even complete the entire transaction!! GREAT SYSTEM
Rick
============
Second, if you get to decide that my compensation is capped at 1.5%, do I get to decide what you get paid?
============
No, but realtors should be paid by the hour or by salary, like MOST of us are. If you don’t perform or do your job, you get fired like most of us would. If you do well you get an increase in your hourly wage. If times are tough, you get laid off. What a huge step this simple change would do to re-establishing a level of ethics in an industry that is so far off the rails. An honest days work for an honest days pay would work wonders vs. the current system of trying to make as much as possible by duping as many people as possible.
Rick
============
Third, I recently had a “buyer” who had the same idea as you: he’d submit an offer if I agreed to kick back half my commission. It is my fiduciary duty to inform my clients of all offers and any information that is material to our relationship. So I told them of the guy’s proposal. Without even waiting to hear the guy’s price offer, they flat out rejected the offer because of the kick back scheme. It offended their sense of integrity. The realtor haters will think I’m making up this story. But I could pull the guy’s name from my files. For now, I’ll refer to him as “Rene.”
============
“Fiduciary duty” Too funny. Islander, you must have seen my as well as others posts on ‘ghost bids’ ‘realtor hype and misinformation’ ‘realltors being shot dead in the Vancouver area.’ Your industry is dirty and are all too many of the players in it. For you to use the term ‘fiduciary duty’ when your industy is self regulated is an insult to those of us who know what accountability means in the course of our employment. Don’t get me wrong here, I have no business questioning YOUR ethics, I don’t know you from Adam, it is the industry YOU work in that makes me want to hurl. You continued defense of this industry while hiding behind a cloak of ‘caveat emptor’ and ultimately putting all responsibility on the consumer. Sounds more like a car salesman than a so called ‘professional.’ At least the car sales industry doesn’t use wide angle cameras! LOL
Rick
============
Lastly, I appreciate Garth’s not taking the bait from the realtor haters. But I also have to take issue with the notion that FSBOs should have access to MLS. I pay a lot of money in fees for access to MLS. And a fairly decent percentage of those fees are used to maintain MLS. Sellers can get on MLS by listing with any number of value-priced real estate brokerages. The internet makes if very easy to find them in a city near you.
============
I pay significant fees for what I do too. If people don’t like my price they can go elsewhere, to people who pay absolutely no fees either. Here’s ‘free market economics’ for you Islander. Only when you have to compete at this level will you understand where us ‘realtor haters’ as you phrased it, are coming from. Oh, and some of us even have years of post secondary education behind us, degrees, etc. What does it take to become a realtor? 6 months of night school? My industry doesn’t have “awards nights” either. We don’t pat each other on the back and take out full page newspaper ads to tell the world how wonderful we are, that is for our customers to decide. These are some of the things that makes your industry look contemptuous to the rest of us mere mortals.
Rick
============
As for MLS being a monopoly. I disagree. Anybody is free to start their own version of MLS.
============
Absolutely assinine statement. That is like telling someone who is fed up with gas prices to open their own refinery or telling someone who is drowning that they are welcome to learn how to swim. An imbecilic statement that once again proves Islanders self serving nature.
Rick
============

#37 Shifty on 11.29.08 at 6:03 pm

Geeeeez, thought for a while that us boomer’s were at fault for this mess, now it’s a true revelation to find it’s generally men and realtor’s. Granddad said to me once “we attract all those things that happen to us”. He also taught me how to skin squirrel.

#38 dboy on 11.29.08 at 6:22 pm

Islander # 10- i think that you took that too literally – which ever way you slice it, your profession needs to take responsibility for the mess that it has at least in part contributed to.

True, no one forced us to buy but an entire industry of Realtors, bankers etc mislead us, told us to get in now or never, the prices will rise for ever, ……………. your industry needs some oversight and standards.

Maybe extortion is a better description – or maybe fraud, or how about false pretences, – your fees are ridiculous.

#39 Keith in Calgary on 11.29.08 at 7:15 pm

http://www.philadelphiacondoloft.com/doj-nar-lawsuit-done/

Warning…this link has realtor spin, but explains the May 2008 lawsuit settlement.

—————————————————-

Well, considering that the US Department of Justice saw fit to recently put the boots to the collective asses of NAR (National Association of Realtors) over collusion and breaches of anti-trust legislation on MLS, forcing them to settle, and allow internet RE brokers, consumers, et al, full access to the system…….kinda proves the point that the MLS system is a crooked organization run by people with criminal intent.

#40 Calgary 2008 on 11.29.08 at 7:31 pm

“True, no one forced us to buy but an entire industry of Realtors, bankers etc mislead us, told us to get in now or never, the prices will rise for ever”

Mislead is not the right word to use. They just took advantage of your ignorance and cluelessness, that’s all. Realtors and banks are not there to educate you, cause if they do that they’ll put themselves out of business. You either educate uself or pay the price, or in other words “you either open your eyes or else you open your pockets”.

#41 Jelly on 11.29.08 at 8:09 pm

Rick,

Very good post.
(and I am a Calgary Realtor)
I am not scummy like most of them are….

#42 poorguy on 11.29.08 at 8:46 pm

Can any of you please post what the pumpers
at “Hot Property” on C24 are saying these days?
Thanks.

#43 poorguy on 11.29.08 at 8:48 pm

story about GTA RE wont hurt either,please

#44 nonplused on 11.29.08 at 10:29 pm

When I bought my first house, CMHC insurance was capped at $175,000, which was slightly less than would have been needed to close the deal. Both my agent and the seller’s agent agreed to roll back their fees somewhat and the deal went through, although I don’t know exactly how much because the seller pays the fees not the buyer.

When I sold my last house, the agent I use has a $2000 flat fee “but I ask that you consider using me when you decide to purchase again”. He offered a pretty stripped down service, even pounded the sign in the yard himself, but honestly, does that staging bs really do anything? We didn’t have an “open house”. The house got sold. He said you can’t do anything about the buyer’s agent fees though because if you offer less than the going rate (which you can) agents aren’t as likely to bring their clients to your house.

So both cases show that agents can be flexible and honourable. I don’t like painting them all as crooks because many are just hard working people in this line of work. There are some bad apples out their though. But you never see bad apples in other lines of work like say contracting or auto repair, do you? When Canadian Tire dropped something in the sparkplug hole of my truck during a routine tune up, the Ford dealer doing the repairs told me I needed a new head for $4000! I knew enough that you can have them machined in every major city. Total cost: $350. If I hadn’t known better? I bet 90% of the people taking their car to the dealer are paying for things the car doesn’t need. In this case it would have been 1142% more! And of course they charged me for a “leak down test” and all this crap when it was plain as the nose on your face that the spark plug in cylinder one had melted for some reason.

Canadian Tire? They printed off a whole bunch of articles from the internet how Ford had some problems with valves burning out and disavowing themselves of any responsibility. That it happened the day after they did the tune up and that there was damage to the piston and the head clearly indicating a foreign object was in that cylinder for some time did not phase them. Mind you I didn’t find that out until after the head came off but CT would not consider doing the repairs themselves. They stuck to their “valve failure” story.

And don’t even get me going on building contractors!

#45 905er & Spouse on 11.29.08 at 10:31 pm

#26 Kitchener1:
I will have to disagree on that comment. My buddies and I are all single, late 20’s to early 30’s. All of us have worked hard and have between 50K-100K (each)in cash and no debt. None of us have yet to meet any women in our age range who are not either in way over their heads with mortgages and credit cards. NOT ONE. Thats a big reason most of us are still single, we are not willing to take on others debt. The sad thing is that we would be happy to meet a girl(s) who are at ZERO (no liabilties and no assets).

Must make for some interesting first dates! ;)

#46 nonplused on 11.29.08 at 10:32 pm

Isn’t it supposed to be a “Mail Call”? I think a “Male Call” is what my exwife is doing on AdultFriendFinder.com.

#47 nonplused on 11.29.08 at 10:37 pm

I agree Garth shouldn’t have been so hard on Camille. I mean, what new family doesn’t have 3 houses and a condo? You can’t get by with less.

My brother just had a baby too. Only what he and his partner did is they both had a house that had appreciated wildly, so they sold them both and used the proceeds to buy one slightly larger house, and now they have no mortgage! He then buggered off North for work and left his partner (and me) to handle the moves while she was like 5 months pregnant! Shouldn’t that have been stressful? They don’t seem to think so compared to the alternative.

Living mortgage free is living with no worries. Loose your job? Who cares? Let’s go skiing!

#48 Ultraman on 11.29.08 at 11:09 pm

Soylent Green is People said:
” I’ve yet to meet a man who can handle his money intelligently.”

That reflects more on yourself and the men you hang out with than anything else.

This said, as a long time lender and financial advisor I find that women in general tend to be more conservative and prudent with money which is a plus when you borrow money but can hurt you when you invest.

And sure they tend to buy a lot of shoes and useless, expensive beauty products but men sure match up with their obsession with big toys.

#49 david on 11.30.08 at 1:21 am

“Can any of you please post what the pumpers
at “Hot Property” on C24 are saying these days?
Thanks.”

The show is a big joke. They went from a one hour show to only 45 mins and they only allow a couple of questions. The rest of the time they are twisting facts and PUMPING like mindless cheerleaders. I doubt anyone is stupid enough to believe these IMO liars.

#50 Jon B on 11.30.08 at 2:46 am

I’d like to see Realtors suffer a bit. These do nothing upgraded used car sales people have had it too good for too long. The cartel will never allow FSBO types in on their exclusive gig. I sold my Vancouver area penthouse at the height of the market in 2007 – by myself. The $20K savings in Realtor fees was sweet. Very sweet.

#51 Zoronqueen on 11.30.08 at 3:16 am

About realtors lowering their commision. Here’s my stituation:
Realtor A helps us find a home so is our buying agent. Realtor A agrees to not take any comission on his end but we pay only his listing company and other realtor should we have a buyer. That was August. In Sept we moved into our new home. After finding this blog I really decide to sell, so we lower the price twice. From 369 to 349 to 334. No buyers except one low ball verbal offer, 300K which we don’t even know if it’s genuine. So in Nov, the contract ends.

Agent B offers to sell our place but agrees on giving us 320K net and says they have potential buyers so we agree to have it it exclusive for 2 weeks then list it on mls. The problem is that after 1 weeks, they listing it on mls for 348K which would be above what other people are listing in the area. Other have it listed from 312 to 335. My husband says let them do their thing but I think it is unethical to list it higher and expect a buyer.

Agent A came back to us and said we should maybe rent it out for a while 4-6 months then sell, he would only take 3K for comission.

It is all so confusing and bottom line is I want to sell. any feedback would be great.

#52 squidly77 on 11.30.08 at 3:22 am

jelly if you are married..when you were newly married did you own the mortgages of 4 homes ? i know that i damn well didnt ..they gambled they lost plain and simple
We presently own 4 properties, the home we presently live in which was mine before we married, our dream home which is presently being rented, my husband’s home prior to our getting married which is now rented, and a downtown condo which is also rented (it was meant to be an investment property and something we hoped to make use of down the road)

now lets tug at the heart strings..
We had intended to sell our two homes and move into it but I became pregnant. We were thrilled as I had only months earlier miscarried and had been told that it would be very unlikely that I could become pregnant again

they would have been quite happy reaping the profits thats why i do not feel for there losses

as far as me having no heart..when dealing with large sums of money you are far better parking the emotions at home

#53 eddy on 11.30.08 at 4:58 am

agents ‘pledge’ to bring qualified, serious buyers through your house, but the listing agent can’t control the thousands of buyer’s agents. I sold 10 mths ago. i was home for every showing. agents brought friends, builders,neighbors, people looking for decorating ideas, etc. it was an eye opener for me. more than half of the showings were not “qualified serious buyers”
this can be infuriating especially when you run around for hours cleaning up before a showing, or even paying a cleaner, only to see two stooges walking around your house talking shit.

i’m not dumping on agents, i accept it as part of the process-people must walk through shopping malls before they buy

here is a dialogue:

a buyer calls an agent-
buyer: show me the house in your add
agent: sure, come into my office first, I’ll qualify you, and then we see the house
buyer: no, let’s just meet at the house
agent: ok

alternate ending:
agent says: no, can’t meet at house, I have to qualify you fist.
buyer: ok, I’ll just call some other agent who doesn’t ask so many questions

do you think he will find one?

if you want to sell, unqualified people who are not serious about buying will come through your house whether you list or go fsbo. if you go fsbo, you can ask the caller “show me proof of cash deposits, income and I’ll let you through my house” fsbo’s are easy targets for criminals too. Why? they are usually very greedy and too chickenshit to qualify the caller.

#54 FP on 11.30.08 at 5:42 am

Welcome to the new realty reality
http://www.yourhome.ca/homes/article/546051

In the real estate world, it’s the equivalent of a price rollback at Wal-Mart.

#55 Bottoms_Up on 11.30.08 at 8:45 am

http://www.yourhome.ca/homes/article/546051

“some vendors haven’t caught on to the new reality.”

“If you are motivated and you want to sell your home, you have to be realistic today,” says Di Felice. “If you’re not realistic, then reality catches up with you.”

#56 Brian on 11.30.08 at 10:15 am

PoorGuy Hot Property are telling people buy and it’s a buyers market. What a joke!!

#57 brazer on 11.30.08 at 11:18 am

Welcome to the new realty reality
http://www.yourhome.ca/homes/article/546051

Last year it was all about multiple offers, and like nervous suitors at a high school dance, buyers were lined up, hoping to be picked by choosy vendors.

But this year vendors are the ones handing out the corsages while adjusting to the new reality that the average Toronto-area home is worth $41,672 less than it was a year ago, while sales are down by 35 per cent.

#58 Bottoms_Up on 11.30.08 at 12:18 pm

RE: #53 squidly77 on 11.30.08 at 3:22 am
—————————————-
I agree with you. ‘Miscarriage’ and ‘sell our two homes’ should not be mentioned in the same letter, let alone the same paragraph!!

#59 Soylent Green is People on 11.30.08 at 12:18 pm

I didn’t say all men are stupid asses with money. I just said **I’ve yet** to meet one.

p.s. I know a lot of men.

p.s.s. Shame on women who let men get away with bad spending habits. Speak up now or pay the price forever.

#60 dboy on 11.30.08 at 12:57 pm

calgary 2008 # 40

No need to be rude ( sticks and stones)- I have done very well out of re, having bought in 1993 in Vancouver and sold 18 mths ago. Almost bought back in April but, as you point out, I did the research, after all I’m on this blog –

When i speak of us being mislead, I’m referring to the general Canadian public. RE was hyped -credit was too easy, the government stood by and watched, throwing fuel on the fire. It was a perfect storm, but where were the weather men?

#61 JET on 11.30.08 at 1:21 pm

That HotProperty show is more of an infomercial than anything else. What a joke.

#62 kitchener1 on 11.30.08 at 1:36 pm

# 46 905er & Spouse
Must make for some interesting first dates!

Finances are never discuessed during the “recruiting” process( thats what my buddies and I refer to dating). Most of the time 2-3 months in you get a good idea. Most of you guys would be suprised at how much info women give out if you just let them talk.

Sometimes its obvious, ie. a mid 20’s admin assitant driving a 50K plus car while me(mid level management) is driving a $5000 beater.

At the end its not how much you make, its how much you save.

#49 Ultraman- comment about toys, thats is 100% accurate. My buddies and I all have our toys(Motorcycles, jet ski’s fishing boats, 4 wheelers etc) However, we all buy them for cash, if that means getting a 5 year old toy, so be it. What most forgot about powersports is that they hold their value quite well if your not afarid to do some repair work yourself. Unlike womens shoes or clothes or that Pier One desginer garbage thats worth pennies on the dollar as soon as you leave the store.

I am by no means trying to slander women in general, just passing on some personal experience. Finances are the #1 reason people get divorced. A spender and a saver are not compatabile. Its all good to spend as long as its done within ones means (or below)

#63 Soylent Green is People on 11.30.08 at 1:50 pm

While I can’t comment on individual women’s spending habits, given that women in Canada today earn approx 70% of what men earn for equivalent work,

please don’t assume that the fact that women you meet haven’t accrued the same amount of savings you and your buddies have is due solely to their profligate ways. There are external forces affecting this issue.

Re above; it is brilliantly written.

#64 Happy Renter in North Van on 11.30.08 at 1:55 pm

Kitchener1(post #26) you and your buddies are in your late 20s and early 30s and have money accumulated because you live with your mommies and them iron and starch your underwear… and you have money to spare to own a souped up Toyota Celica…

#65 dd on 11.30.08 at 2:12 pm

Government should buy commodities to provide inflation: Sprott –

http://www.sprott.com/pdf/marketsataglance/11_2008.pdf

#66 MBS-guru on 11.30.08 at 3:02 pm

Here’s some food for thought:

Minto Midtown (Yonge & Eglinton) has two towers. South Tower was registered in the summer, the North Tower was just recently registered last month. As of today, there are over 50 listings for these two buildings for sale. Not to mention, approx over 100 suites currently with ads/classifieds/listings for rent (no scientific calculations).

If this is any indication for future condo’s in TO then we definitely have armageddon in the horizon for the condo market in the GTA.

#67 kitchener1 on 11.30.08 at 3:27 pm

Re #65 Happy Renter in North Van

You are so off its not even funny, here is the breakdown:

Buddy A- living on his own since 18, finished college

Me- Living on my own since 21, Finished University

Buddy C- Living on his own since 22, Finished University

Buddy D- Living on his own since 26- Finished college

None of us have ever had our parents buy us a car and we all paid for our university/college education ourselves. Parents never gave any of us any money nor have we inherited any wealth. The biggest break we all got(except for one of us) was having our parents let us live at home without paying rent while we went to school. Thats a big reason we all went to University or College local to the GTA.

We were smart with our money, some of us brought property in 2001 and 2002, sold in 07 and 08, made some money. We each invested in the stock market, sometimes we made $ other times we lost but we are up at the end.

Without risk their is no reward.

Another point is we all worked two jobs for at least 6 years(some are still working two jobs) while our peers were travelling the world and partying it up. Personally I was working 60 plus hour weeks for the most of my early to mid 20’s. We only brought cars and toys that we could afford to pay for in cash. If not for some bad descions in stocks our net worths would be double, but at least we are all still up.

After each of us struggled to pay of our school loans we all said that we will never again go into debt unless its for a mortgage.

Funniest thing about your post is that I once did own a souped up Toyota Celica, but that was in high school when I was in grade 11. Fixing and racing cars was a big hobby of mine when younger.

It is possible to save money and live good as long as your smart with $ and live within your means.

#68 Dave on 11.30.08 at 3:34 pm

#66 Government should buy commodities to provide inflation? Are you serious?

What do you think all those hundreds of billions of dollars that are being dumped by the worlds central banks are going to do?

#69 Chris L on 11.30.08 at 4:07 pm

Is everyone ready for 10.5% interest rates? I like the spin REMAX used! It makes me laugh. Affordability about to drop? What happens when most people’s mortgage payments DOUBLE?

I’m paying down my debt like tomorrow is bringing bad news!

http://www.mississauga4sale.com/rates.jpg

http://www.bankofcanada.ca/pdf/annual_page1_page2.pdf

Garth, for the people who can get their debts paid off in 5 years, is it better than switching to rent? I imagine your house is paid for. How about some information about debt repayment acceleration and how being mortgage free gets you 3-4 times better off than the next guy?

#70 dotava on 11.30.08 at 4:36 pm

#69 Dave on 11.30.08 at 3:34 pm

Those $Bs are to try to close the holes that we already have (we need $Ts). Just try to calculate how much time U need to count up to 1B (if somehow you manage to say one # per sec). If you understand that magnitude – most likely U can understand why Garth was giving some hints and make more of us aware. Don’t kill the messenger – what voters partially did on October the 14th.

#71 Mitchell Cardno on 11.30.08 at 4:53 pm

Anyone know what the tax implications are for all these new landlords? For example, person A purchased 2 bedroom condo, but now decides to rent out the second bedroom to person B. Since person A is collecting income (towards his personal wealth), how much of that rental income is taxed?

I don’t believe many people actually report that income to revenue canada, but just curious of the risks associated with that as well

#72 Jim_s on 11.30.08 at 5:03 pm

#60
Shame on women who let men get away with bad spending habits. Speak up now or pay the price forever.

Sounds like you’re paying the price forever girl!

->

#73 nonplused on 11.30.08 at 5:11 pm

#64 Soylent Green is People

Women in Canada do not earn 70% of what men earn “for equivalent work”. They earn 70% of what men earn “on average”. The problem is they don’t do equivalent work.

For equivalent work, women generally get paid more and get recognized for higher seniority due to all the new laws and pressures on companies to make sure they are compliant.

That one was almost as good as your ideas about men’s money management skills. I am sure that there are lots of fools out their trying to get in your wallet, but I can assure you there are lots of well off men making sure not to let you near theirs. Maybe that’s why you don’t meet them.

I also like your comment about how you have met “lots of men”. Is that supposed to provide proof your statistical sample is sufficiently large, or that you have trouble maintaining long term relationships?

#74 Soylent Green is People on 11.30.08 at 5:37 pm

Wow, the personal attacks. HILARIOUS

#75 dd on 11.30.08 at 5:47 pm

#69 Dave,

I don’t know Dave. As the article says … the billion seem to be sucked up in the void providing nothing.
Sprott does go onto say that Infra projects are needed to get us out of this mess.

#76 dotava on 11.30.08 at 7:18 pm

#71 Mitchell Cardno on 11.30.08 at 4:53 pm

That is fallacy of our system – they are going after students asking them to prove scholarship and rent expenses instead of asking landlords about rent collection and duty to pay tax on it. Honestly I am curios how much income from those 4 rental properties Camille declared in the past.

#77 Seeking Knowledge on 11.30.08 at 7:43 pm

To: Kitchener1

When I was dating my hubby, I had 20K in student loan debt and he had 50K in debt. Does it mean that we should not date each other?

Now we own everything (a truck, a car, a quad, household furnishings and electronics) except our house, which we have 300K left to pay. We could have paid it off in three years if we “penny pinch”.

However, we still need to enjoy our life and we love to travel and relax after working overtime. We brought in 200K after tax deductions in 2007 but we did not save much because we were busy spending, but not anymore after being here:)
I came to conclusion that we need money to live, as long as we can separate between “need” and “want” then we should have no problem, but it is easier said than done in this material driven world for most people.

As far as I am concerned money cannot make me happy. As long as I work hard and live within my means then I should have no problem. However, recently I almost made a mistake of building a dream house that is somewhat beyond my means. When emotions take over reasoning disappears. I was foolish and trying to follow THE ALL CANADIAN DREAM☺
When I think about it, I need a place to live but I don’t really need a house with fancy jetted tub and attached TV screen and phone.

That’s why I am here on this site reading at the wise men ’s tale☺ and still acquiring knowledge.

Florence* Fort Mac girl

#78 Bottoms_Up on 11.30.08 at 7:48 pm

Since someone here has their underwear in a knot over pay inequality, one, please post your reference, two, I am an unemployed white male (with a science Ph.D.), and everytime I apply for a job and don’t check the female/visible minority/aboriginal/bilingual box, I am being discriminated against (yes, in Canada, these other groups will get a job before me if they have equal qualifications). Thirdly, here is a conclusion from a professor in 2007 regarding the issue of pay inequality in Canada:

“Still, what most strikes me most is its demonstration of the fragility of our knowledge. There has been a large accumulation of research on inequality trends in Canada. Despite that there is still evidently considerable room for argument, and yet more research. I am not entirely sure whether I should be cheered or depressed by that conclusion.”

Michael R. Smith

McGill University

#79 JO on 11.30.08 at 8:00 pm

A large part of the problem in the “advice” the public gets from the mainstream realtors/investment advisors/analysts and economists is that the foundation of the education these professions recieve is based on some questionable assumptions about market behaviour. I have worked in the financial area for over a decade (the last 3 in a non-sales capacity and for most of my career in non-commissioned jobs) and also follow markets and economics as a hobby since I was 12. I have a business education and am close to an advanced financial planning designation. Yet, over the last 5-7 years, I went back to the drawing board and tried to understand why so many “advisors” and the industry at large provides forecasts and make statements that are useless. I came up with the following:
1) The emerging fields of behavioural finance, socionomics, as well as the long standing body of work of the Austrian school of economic thought have shown many, not all, but many of the assumptions about market behaviours covered in the mainstream finance theories to be incorrect and flawed – in particular assumptions about how people are supposed to behave.
2) The financial system itself and the people who govern them use these questionable assumptions (assumptions about how people in general behave when making economic/financial decisions) when setting policy and attempting to prescribe solutions.
3) I rely only on the the forescasts and commentary of the credible analysts that form part of the minority / contrarian opinion and never the majority or consensus community. I have also studied the past and can’t help but wonder how in the world people can assume that an illiquid, expensive asset such as RE can be expected to go up in inflation adjusted terms forever. Everyone seems to have forgotten what happens when the amount of new credit is less than the amount being paid down or defaulted on. We are there now and Japan has been there for most of the past 18 years or so. It is called deflation. It is as much a psychological problem among the public as a technical economic problem yet the mainstream financial people often overlook the impact of an increasingly frugal and debt averse public. In fact, most assumed things would continue forever as they had in the past 7-8 years.

So when you get “advice” from a realtor or any investment advisor about a market and what may or may not happen in the future, i caution you to figure out if what you are hearing is the same message that the majority of the typical advisors/RE people are telling you. If the message is the same or almost the same, you know you should be questioning it and looking for quality people who share a rare, contrarian opinion on whatever you are looking for. A reminder that fancy designations/degrees in financial subjects means very little when it comes to the quality of any advice or market commentary you get. I noticed over the years that most RE agents themselves had almost all of their net worth in RE. Also, many people who work in financial/RE industries are not out to rip anyone off and really do care about what they do and want to help people. Yes, there are bad apples around and i would argue more per capita then some other industries but most who work in branches or in front of clients are average, everyday people.
JO

#80 Dave on 11.30.08 at 8:12 pm

# 75 DD

Sprott is accurate in his assesment of a grossly inflated financial sector. It went from 20% of the GDP to 70% in a few decades [ when you count derivitaves ]

Unfortunatly it has created further “bubbles” in the commodity markets that are being de-leveraged as we speak simmilar to housing. Housing just takes longer than oil or copper or gold to unwind due to the emotional ties people put on homes.

The only reason we have not seen inflation, due to the increase in the worlds money supply, is that the velocity of money is very slow at this moment.

There is a real economy but right now everyone is trying to figure out what is on there balance sheet. Japan went crazy with infrastructure spending and dropped the interest rate to zero yet their economy has been flat for 15 years until recently and it has dropped more again.

#81 TheComingDepression on 11.30.08 at 8:16 pm

I don’t get why anyone would buy ANYTHING on the stockmarket. It is PAPER. Not real, you can’t feel it (unless you buy the stock certificate) not worth a thing when you sell it as it converts to dollars. The DOLLAR is going to ZERO. The warnings are constant. If the US dollar goes to 0 and the Canadian dollar is -.23% now, what will the Canadian Dollar be when the US $ collapses? Citigroup states the dollar is going to collapse, Jim Sinclair,PeterSchiff and a ton of analysts all say the same. I don’t get it, shouldn’t we all go out and BUY GOLD/SILVER to preserve our wealth? The Chinese are doing it, the Saudi’s are buying and we sit and BUY STOCKS? Haven’t you learned your lesson? MONEY IS NOT SAFE!

#82 pjwlk on 11.30.08 at 8:20 pm

My R/E friend who’s been working weekends at a sales office for a builder in Pickering ON for about 3 or 4 months now, just told be that they still haven’t sold any homes yet. She had previously told me that two were sold but now says the financing for both for them has fallen through! No more zero down/40 year ams… Imagine that!

I couldn’t help but laugh when she told me that “house prices [GTA] are at the bottom now” and “the interest rates are so low that it’s a great time to buy”. She honestly believes it!

#83 The First Rick on 11.30.08 at 8:21 pm

#63 kitchener1 on 11.30.08 at 1:36 pm # 46 905er & Spouse
I am by no means trying to slander women in general, just passing on some personal experience. Finances are the #1 reason people get divorced. A spender and a saver are not compatabile. Its all good to spend as long as its done within ones means (or below)
=================
YOU!!!!!!!!!!!!!……………are a wise person, keep up the posts. :)

#84 The First Rick on 11.30.08 at 8:23 pm

#64 Soylent Green is People on 11.30.08 at 1:50 pm While I can’t comment on individual women’s spending habits, given that women in Canada today earn approx 70% of what men earn for equivalent work,
=============
BS…..anyone who makes it to Journeyman status in my trade makes exactly the same money regardless of gender. Women make less money than men because they chose careers that pay less, regardless of what the femi-nazis tell you, sorry dear, give your head a shake.

#85 The First Rick on 11.30.08 at 8:45 pm

#74 Soylent Green is People on 11.30.08 at 5:37 pm Wow, the personal attacks. HILARIOUS
===========
Inaccurate generalizations seem to always turn into petty personal attacks online. Personally, I like the old days when we just stepped outside. Curiously, there where a heck of a lot less personal attacks back then!!

#86 poorguy on 11.30.08 at 8:54 pm

Hi Garth,
I have question for you.
I am thinking of buying condo in Miami,Florida.
1.Do you think its good time to invest in Miami ?
considering the properties in Miami have already plunged 50%(In some cases),do you think Miami properties have more room to fall?

2. Do you think Miami properties will come back to their
original valuation in next 5 years or even 10 year?

Thanks in advance.

No. Yes. Maybe. — Garth

#87 The Other David on 11.30.08 at 9:18 pm

HotProperty is a place for the moronic guests to showcase their stupidity, and the host is a complete idiot

#88 dd on 11.30.08 at 9:33 pm

#81 Dave,

Japan did spend like crazy. However it took them years to come to what the US market has done over the last 6 months. The banks were being held up for years and it too the Japenese Fed years to bring the interest rates down. Hopefully we don’t have an L shaped recession like they did.

#89 APCM on 11.30.08 at 9:34 pm

To Kitchener1

Wow, $50K-100K, as a woman in my late 20s, please give me a moment to stop swooning. So exactly how do those first dates go?
Do you start with “Got any pets?” or go straight away into “How much change you got saved up?”
Just curious.

I was doing alright financially before I got married and if my husband asked me that when I first met him I certainly wouldn’t be married to him now. Ick.

#90 Soylent Green is People on 11.30.08 at 11:16 pm

Hi to #86 The First Rick on 11.30.08 at 8:45 pm
===========
My take here is some people (men) don’t really read very carefully the comments and then kick; knee jerk reaction that makes no sense.

All I said is I don’t **personally** know men who are good with their money. That is my truth, not an inaccurate generalization.

But enough of that nonsense, let me tell you about my wonderful Irish real estate agent. Now I hate REA just as much as anybody but I truly love mine and consider him part of the family. Why?

He’s lazy, he doesn’t follow direction, he doesn’t like driving around in the rain, etc. etc. but when I find a house I want to buy, (he gives me his MLS code and I do all my own research because I can’t count on him to do any of it properly), so when I’m ready to buy, all I have to do is call him up, and no matter what is going on, gets in there and doesn’t come out unless it’s 25 to 30k off the list price.

Honest to God, I don’t know how he does it. Even if they say the owners are out of town, please fax your offer in, he won’t do it. They’ll try to sign back and he just refuses it and says don’t bother. I think he goes in and basically just will not leave their property until they sign it over.

Example, last October 2007 looking for house in central Etobicoke. Market is going crazy. Everytime I call him to make an appointment for a house, he’ll call me back to tell me it’s sold. I was in a big hurry so kept looking.

Finally found a vacant house where the owners and REA were living/working far out of town. Sent him in, in the middle of the hottest market in TREB history and bang, he comes home with 25k off. I couldn’t believe it. I didn’t even tell him to ask for that much off. The man saved me a fortune. And this was not the first time, it’s happened again and again.

I was so happy because I was MASSIVELY upset at having to buy in a hot market, something I would under normal conditions never do…, but sometimes life happens.

Now, when it comes time to sell, I’ll either do it myself as I’ve done before, (successfully and easier than you might imagine although in a good market ‘natch) or I will just tell him to take a haircut on the commission as he’s done for me before. Will my REA be mad at me when he finds out? Probably, but he’s too super smart to let on to me.

In closing, he’s worth his fat lazy ass in gold.

#91 dotava on 12.01.08 at 1:10 am

#79 Bottoms_Up on 11.30.08 at 7:48 pm

R U 10 years (continually) in Canada? If U R there or close – end of the tunnel is “close” – anyway follow the blog. Your PHD (if is not both on the internet) will find your place ~ Tesla, Einstein, and many others – had a toughest time (compare to us) but they did some big thing for us. Every time when you touch the switch, start the car or use Ur cell – don’t forget them – respect what they did, respect older, wise people but newer accept if doesn’t make sense for U (question) – don’t fight without argument (U will become stupid) but also don’t be afraid to be “stupid” from time to time. That is the beauty of life – no one is perfect – try not to be the scam.

#92 kitchener1 on 12.01.08 at 1:21 am

#90 APCM

This will be my last response in this thread as we are veering way of the intended purpose of this blog.

I never eluded to the fact they my friends and I are wealthy or even well off. In fact I would classify our financial position as being “okay”.

Marriage and choice of potential spouse is by far the most important financial decision any of us will ever make. Greater ten times then deciding on what house to buy or job offer to accept. That one choice alone will be the deciding factor on weither or not you reach financial freedom. I don’t see what aiming for a spouse that is at zero(no assets or liabilities) is a big deal. I would bet $1000 that most women(greater then 50%), would say that man at zero would not be deemed marriage material.

When buying a stock we all do our due diligence, look at the companies P/E ratio, their debt load and ability to repay, management team, stock dilution, dividend, projected earnings etc.. based on these variables, the market sets the price, some companies are blue chips while others are considered junk bonds. A company with positive cash flow and $ on hand is worth more then a company in debt with negative cash flow that pays no dividends. Sorry if this analogy angers some people but it’s the truth. All of the above variables can be factored into a marriage equation as well (ie. Emotional happiness, beauty, age, health, adaptability, finances etc..)

Oddly enough, none of us even want to get married at this point, no rush for us. We get the same benefits without the financial or emotional commitments required. Most of the time it’s the women that are in a rush to get married and not the guys. It’s a major sociological shift that is happening now, just google “marriage struck” to get an idea.

As for women’s shopping habits, this is going to upset some folks but here is how I see it. Remember I am not comparing women to dogs in any way, just there shopping habits. I have a Labrador retriever, when we our up north going through the bush, he will wonder all over the place following what ever he gets a whiff off. No rhyme or reason, he just aimlessly wonders around the bush following his senses, left, right, around in circles, stops, then goes , he’ll go one all day if I let him. The majority of women in the mall do the exact same thing. Think I’m joking, have a look next time your out Christmas shopping. They will wonder around aimlessly all over the place, stop for no reason, walk in circles etc.. probely walk out with a lot more then they intended to buy.

I apologize for the length of this post, did’nt plan on writing so much. Anyway, lets get back to discussing RE news and events.

#93 Slaven on 12.01.08 at 4:01 pm

“Hey, Ben, money is safe in the form of money. Stop screwing around with it. Next question…”
=================================
Garth,
Are you advocating money as money vs. currency (gold/silver vs paper money?)

Thanks,
S

#94 Soy on 12.02.08 at 11:52 am

Soylent Green:

Quit the man-bashing, will ya?

Your sexist bigotry is not welcome and it is not acceptable.

You can sugar-coat it in your women’s studies, feminist rhetoric as much as you like. You can call it your “experiences” and tell us that you “feel” this way. Nobody cares.

That doesn’t change what you are, and it doesn’t make your bigotry any more acceptable.

If you want to slander 50% of the population, go to a feminist blog or a women’s studies classroom. Your vitriol will be most welcome there.

Here, we’re talking real estate.