How to buy

So far this year I’ve purchased two properties, sold two, listed one and am working on a new deal. This useless information is offered as proof I have no hate-on for real estate. In fact, like you, I’m smitten. I know what lust is when I stand in front of a portico. My loins dance as I run my fingers across a mortar joint binding together the sensuous imperfections of century-old bricks. I’m a building junkie. A hot listing quickens the pulse. Closing day’s climactic.

In past months I’ve mentioned a few of my real estate trysts, only to have critics howl over my hypocrisy. How can you buy, they cry, when you forecast more troubled times to come for housing? If real estate faces a major correction, why not wait? And aren’t you the guy who’s always telling people to stop being juiced for glass countertops, and rent?

Easy answer. Buy what you can afford. Buy where there’s value. Buy smart. Then you can get as horny as you want.

There are many techniques for making this happen. Here, in no special order, are ten of then.

Seek old, tired listings.
Find out what the DOM is for every property you research. The greater the number of days on the market, the better. The vendor will be motivated and his agent hungry to facilitate a deal. If you run around chasing new listings, you’ll pay too much. Guaranteed. Leave that silliness for the virgins.

Look for price reductions.
That’s not exactly the duh statement it appears to be. One the biggest mistakes greedy sellers make is asking too much for their property, often egged on by a dumbass agent who wanted the listing. But a too-high price means no quick sale, leading to a price cut. If not timed right, this can result in a stale listing, necessitating more cuts. After a few months and numerous slashes, the property has the odour of death on it. Perfect for vultching.

Take your time.
Now, go slow. Meticulously research the property, its sales history, comparables and the people who own it. Let it be known you’re interested, may come up with an offer, but on your own terms and in your own time. Now you’re in control and the vendor knows it. This is a necessary precursor to domination.

Explain your offer, clearly.
When the time comes, and once you have built a relationship with the seller or the listing agent (preferably both), try talking through the offer before you present it. Explain clearly why the property is worth only what you are considering offering. Let them howl and flummox a bit, but without a formal offer in front of them. They’ll get over the emotion, and when your paper does arrive a day or two later, the results could amaze.

Don’t be afraid to walk.
Ever. If the seller signs back your low-ball (but clearly explained) offer, there’s no need to counter-sign. Just let the thing expire. The vendor will be surprised, if not shocked, and immediately feel remorse at having lost the deal. Give it a week. Do it again.

.
Make it easy to say yes.
The offer should be exceptionally clean. Other than beating him down on price, give the seller every reason possible to agree to the haircut. Find out what’s important to him – the most convenient closing date, for example, or the ability to stay on for a few months after the deal’s done. Be considerate and kind on all aspects other than the dollars. And no conditions. No financing or home inspection (get it done in advance at your own expense). Offer to help them move.

Close fast.
After sitting on the market for months, most sellers just want to get the hell out. Offer to close as soon as possible – like two weeks (ensure you have an experienced real estate lawyer lined up). And dangle a substantial deposit in their faces – at least 10% of the purchase price, instead of the usual 5%. This often has a monumental emotional impact.

Use cash.
Always indicate to the seller, and early on in the process, that your offer will be a ‘cash deal’. In reality, all transactions are cash unless the owner’s agreed to a VTB (vendor take-back mortgage). But this imparts the message that you are a buyer of substance with no need to prearrange a mortgage, sell another house, or stiff your parents. Remember, sellers want clean, simple, fast and decisive.

Have your own agent.
The listing agent works for the seller. Even if you enter into a relationship with that person (dual agency) you are now working with someone whose first loyalty was elsewhere. Personally I’d never buy a home without my own representation – an experienced person who will help argue for my point of view and provide the necessary buffer and foil. BTW, this person will end up being paid by the seller. What’s not to love?

Seek a down market.
As I have pointed out too many times, the housing correction’s in full swing in many parts of the country and spreading like a virus in others. If you’re waiting for a 25% reduction in North Toronto or West Van, settle in for a long one. But if you covet the Okanagan or Annapolis Valleys, for example, the moment of capitulation may have arrived. There are listings so old they now need surgery, and sellers who’ll get excited just to see you.

So. Take your time. Be thorough and gentle. Persuade. Make it easy to say yes. Be firm at the right moment. Close with conviction.

As in love, how hard is that?

187 comments ↓

#1 prairie gal on 10.21.11 at 10:14 pm

Amazing how many listings there are in the Okanagan.

#2 prairie gal on 10.21.11 at 10:18 pm

Lots of bare land, too, in the Okanagan. I live in Regina, which, has a much better economy, and there are maybe 650 listings for a city of 200,000. The Kelowna area, at less than half the population, has more than twice as many listings.

#3 Bong House on 10.21.11 at 10:23 pm

Ahhhh, FIRST!

#4 disciple on 10.21.11 at 10:29 pm

Love conquers all.

#5 Evelin Johncox on 10.21.11 at 10:33 pm

Re: Property Guys listing GTA: the snow is a nice touch. I loved this: Okanagan and Annapolis Valley listings so old they now need surgery…….How true I live in Kelowna unfortunately…..in one year, 4 showings and no offers…..
Evelin

#6 Bottoms_Up on 10.21.11 at 10:40 pm

It just occurred to me that a lot of the dogs would make great agents–and I do mean great. Hey, we all love real estate and like to tell the truth, and could stand helping out our fellow citizens make the right choice for their family. The profession could probably use some of us.

On another note, I’ve noticed many stale listings in the Gatineau area, north of Ottawa. One place even recently reduced by 10%. Some of these places are ripe for the picking, but I do think the sellers will be sticky, sticky, sticky.

#7 bridgepigeon on 10.21.11 at 10:42 pm

Mr.T says play it cool, don’t be a fool…

#8 Nostradamus Le Mad Vlad on 10.21.11 at 10:42 pm

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Sexual Overtones are quite prevalent in the first para., and it’s well written!
*
Five Days In May Actually, it’s October but close enough; FOREX US$ hits new low against Yen; Greek debt to GDP ratio 181%, but again, does that debt have to be repaid? Not necessarily; Italian Bonds with spaghetti going nuts; Class War F. Scott Fitzgerald hit the nail on the head in 1925 with this quote; Stores close in NAmerica, reopen in China.

Does this go with that Harold whacknut, who claimed that today (Friday) was going to be the end? Armageddon involves the US invading Pakistan, then Russia and China rise up. This is a more plausible theory; Leaving Iraq to invade western Pakistan? As per Libya, Pakistan has never done anything to anyone, but is a lot closer to Iran, and FWIW, America’s next ‘Libya’s’. The troops are not coming home. Obomba is a proven liar / loser; GM Pigs Providing human organs in a couple of years? David Cameron Mutiny from his party on the EU; Arming Enemies TPTB fund both sides, so there are no real enemies, just disagreements.

#9 dd on 10.21.11 at 10:50 pm

So you tell a bit of a story.

Are these all apartment blocks? SFH – fix up and rent out? What kind of return are you estimating – capital and or rental income?

#10 Bobby on 10.21.11 at 10:52 pm

I’m looking here in Victoria. Lots and lots of listings, many of them empty. And many have been languishing on the market.
Have seen many price reductions. It’s almost time to make a lowball offer. Incoming!

#11 vyw on 10.21.11 at 10:58 pm

but steer clear of condos…buy an SFH

#12 Condolezza on 10.21.11 at 11:01 pm

Garth, you’re full of ..it!!!

#13 City Slicker on 10.21.11 at 11:04 pm

Whats with all the listings in the Okanagan and Kelowna, I thought these were the premier places for fine weather and peaches.

#14 vyw on 10.21.11 at 11:05 pm

Dear Vlad:
US inflation will go down once the high energy prices work through the system. M2 can affect inflation when the economy is red-hot; it isn’t right now and won’t be for some time.
There will not be any hyperinflation and high inflation ie above 5% is at least a couple of years away.
But but but, if the US decides to let everyone under water to refinance and the govt or banks eat the overhang, well then it’s possible that inflation will ramp up sooner.

check out TIPS – the rates are low or negative.

#15 loon on 10.21.11 at 11:13 pm

…and how about selling ?

#16 The thing in the basement on 10.21.11 at 11:18 pm

8 Mad Vlad – interesting about the stores closing in NA but opening in PRC. While stores closing is nothing new, it is interesting that they sell things that may be “made
in China”, which was all part of the gutting of NA
manufacturing. Could we finally be seeing the bottoming where NA slowly switches from consuming back to
producing and China vice versa?

#17 Don on 10.21.11 at 11:22 pm

I have been dropping hints to my realtor friends to get into high end and ride the storm out.

Thanks for the buying details, considered them implemented in exactly that manner, even ‘the helping them move option’. Patiently waiting – it’s like waiting for the next wave. Probably the same feeling you get when buying smart.

#18 HDJ on 10.21.11 at 11:27 pm

If you have a good real estate lawyer at your back and go in without an agent, the listing agent may be motivated in your direction because he/she will receive the whole commission. Make sense?

Be more concerned about the seller. — Garth

#19 Jane on 10.21.11 at 11:28 pm

And what name do you write under when working for Harlequin, Mr. Turner?!!

#20 Devore on 10.21.11 at 11:32 pm

#9 dd

What do you mean “and/or”? Garth doesn’t seem the type to speculate on real estate, much easier to do so with paper, which has no carrying costs and which you can sell in a hurry if things turn south.

#21 Angela on 10.21.11 at 11:52 pm

Great post today, Garth. Thanks for the very useful info.

#22 Van guy waiting on 10.21.11 at 11:57 pm

Garth,
I though there was suppose to be a %15 correction in the next few months? Followed by a long period of price decline. Isn’t that what you said in previous posts?

Yup. That will be the national trend. Local markets are all different, of course. Some will be sticky and some crash. — Garth

#23 stevenson on 10.21.11 at 11:58 pm

Looks like a crash is harder to come by for the questionable bubble areas. I.E. GTA and vancouver.

As I’ve always said people are going to need to wait a long time before some major correction comes along IF it comes along too.

Yes you may start leaning towards buy RE now. It’s not that bad….just a bit late.

Economy is not going to go belly side up anytime soon. Unlike 2008 US and Canada corporates are pulling good numbers and companies are lean. Most of the Fat is trimmed. The gold opportunity has passed.

#24 T.O. Bubble Boy on 10.22.11 at 12:03 am

I’m going to repeat part of a comment from the previous post… take it as “Tip #11″: Don’t fall for pricing scams like 194 Soudan Ave!
http://www.realtor.ca/PropertyDetails.aspx?PropertyID=11245522&PidKey=-1658512751

Recent listings for this house:
September 25, 2010: $850k
October 6, 2010: $799k
November 18, 2010: $789k (-7.3% below original price)

October 20, 2011: $899k

(who knew that something no one wanted at $850k, $799k, or $789k was magically worth $899k!)

#25 wtf????? on 10.22.11 at 12:06 am

Average Canadians so poor they are forced to scavenge for food.

http://www.vancouversun.com/life/Foraging+Vancouver+There+still+free+lunch+look/5589520/story.html

Weren’t we supposed to become the ‘service and intellectual’ economy when the Trudeau Libs shuttered the industrial and shipped the jobs to China in the spirit of ‘sustainable development’? bwahahahahahahaha did you guys ever get suckered !!!!

Sure, Garth is still flipping houses BECAUSE HE’S A ‘SOPHISTICATED INVESTOR’ but the problem is that little people, who haven’t a clue how to extricate themselves from bad advice get really screwed listening to these ‘success stories’…..didn’t we get enough bad propaganda out of ‘Ozzie Jerkoff’ selling suckers success buying multiple ‘no money down’ deals in Edmonton? How many Vancraphole hairdressers lives does this industry have to destroy before people march on the capital with flaming torches?

And why is the media lauding the idea that ‘you can find a meal in the forest’? Is this misdirection that says….’if you can’t buy food…scavenge for it’.

You keep coming back to this blog under different names, but with the same anger and prejudice. — Garth

#26 Otto Doppelganger on 10.22.11 at 12:22 am

http://bit.ly/q4Ea9b

Quoth the real estate consultant, “There is no bubble in Vancouver,”

Quoth the developer, “Don’t wait, he said; borrow from mom and dad.”

Who are they trying to fool at this point?

#27 Kurt on 10.22.11 at 12:23 am

“In other news, Garth Turner, well-known financial advisor and safer sex advocate…”

#28 Nostradamus Le Mad Vlad on 10.22.11 at 12:26 am

-
Clamping Down What do the SEC and Hedge Funds have in common? Blak Magik, Spain – Portugal and Greece – Libya; Bond Market and Sri Kumar; Greek Crewcuts, From Russia With Love and Cap’n Crunch; Painful Precursor Chart in.

Algeria has lots of oil. Can Oliar raise ObL from the dead again? Bugging Out of NYC; Going the way of nazis and communists; Yemen Again, they haven’t done anything to anyone, so why a UN call for regime change? Machines are good, but still need people to turn the on switch.

#29 johnny C on 10.22.11 at 12:34 am

R U kidding me. After all this crap now your telling people to buy. Well now this tells me you were wrong. Since you were wrong for all those years you must be wrong again.
So now we will finally get a crash. Because you are a moron.

When you learn to read, come back. — Garth

#30 99percent on 10.22.11 at 12:41 am

Hey Garth,

Just curious : When you said you bought 2 properties were you referring to Florida? And the one you sold was from Ontario? :-)
Anyways, good points so far regarding making any deal not just RE. Unfortunately i still think the houses are overpriced compared with 2 years ago, tiny (compared with the value you think you have) and in dire need of improvements. Anyways, I am waiting for sunny days, or be outpriced forever. One way or another things will change.

#31 Alpha Bravo on 10.22.11 at 12:50 am

MLS®: C2194259
GTA – York Mills and Don Mills
5 months ago – Listed at 1.15m
4 months ago – Price lowered to 1m
3 months ago – Removed from market
2 months ago – Relisted at $799,000
1 month ago – Price raised to $939,000

#32 The Original Dave on 10.22.11 at 12:52 am

sorry, what do you classify as North Toronto?

#33 Aussie Roy on 10.22.11 at 1:12 am

Aussie Update

The last for a few days as I go on my pre harvest short holiday.

Described by one buyer advocate as a ”super Saturday”, vendors have braved subdued selling conditions and softening prices, listing 875 homes for auction and 500 for private sale.

The surge of listings was the result of a limited number of spring weekend selling days free from other public events such as the grand final and spring racing carnival.

I wonder how many of these auctions will actually get reported next week?.

http://www.theage.com.au/business/super-saturday-set-for-milliondollar-market-20111021-1mcj0.html#ixzz1bU5Gh3Md

What is the REAL cost of expensive housing?.

Across Australia, people in the 25-34 age bracket commuted the longest – an average of 30.7 minutes – followed by 26.8 minutes for those aged 35-44 and 25.5 minutes for 45-54-year-olds.

People with a journey to work of 45 minutes or longer are 52 per cent more likely to be dissatisfied with their family relationships than short-trip commuters, the research, based on annual interviews of 2000 Australians, shows.

http://www.news.com.au/money/property/commuters-pay-the-price-for-a-dream-home/story-e6frfmd0-1226173619599#ixzz1bU5Xxd6L

The German economy is sliding towards recession. British ministers are openly discussing the likelihood of a double dip recession there.

In an article I read yesterday on the European situation the words “careering towards the economics of the Great Depression” leapt off the page.

http://www.dailytelegraph.com.au/news/opinion/will-a-failing-euro-trash-our-future/story-e6frezz0-1226173448507

#34 Tim on 10.22.11 at 1:31 am

I thought you said it would be an initial correction, then a slow, grinding melt, which could last for years, similar to the States. EVen if you get a “good deal” now, aren’t you still buying into a market that will trend down for several years or longer?

See what I mean? — Garth

#35 nonplused on 10.22.11 at 1:38 am

Great post Garth. These are tools you can use! (Eventually)

#36 smith on 10.22.11 at 1:48 am

it’s great thanks for sharing…

#37 Crash Callaway on 10.22.11 at 1:59 am

Garth how did you get your hands on that top secret pic.
It’s the new Red Green Murphy Bed
scheduled for launch in time for XMAS

#38 Not 1st on 10.22.11 at 2:04 am

And always always buy real estate where there is a strong local economy of something long term, oil, potash, mining, whatever. The okanagan only has a fickle tourist economy for 2 months of the year, the rest of the time its a bunch of dreamers with no cash. Glad I am out of there.

#39 EtownR on 10.22.11 at 3:21 am

To heck with it… I’m going to rent. Forever. Can’t take it with you anyhow right? Getting on a plane and going surfing for a month with some of what I saved this year by renting. I see the place just got new shingles before it snows… smart move. When I get home my walks will be shoveled and I just E-mailed the landlord about that noisy furnace. He’s on it like cheese on a cheese burger. Sweet. Life’s good.

Dear Humpers, Keep an eye on that real estate market while I’m gone would ya?
If it matters ‘where’ you live more than ‘how’ you need to give your head a shake. Half a million for a house? Are you F’n kidding me?

#40 Aussie Roy on 10.22.11 at 3:24 am

Aussie Update

THEY almost got out alive. Our most indulged generation, the baby boomers, should have had their feet up by now, enjoying the spoils of an active retirement.

But market forces are sending them back to work as part of a great national reset that is seeing younger Australians learning to save like their grandparents while older Australians remain employed for longer to resurrect their superannuation nest eggs.

The baby boomer male aged 55-59 years is at the sharp edge of change.

http://www.theaustralian.com.au/business/economics/generation-gfc-forced-back-to-work/story-e6frg926-1226173518461

USA

The Obama administration has been working with the regulator for Fannie Mae and Freddie Mac to find ways to make it easier for borrowers to switch to cheaper loans even if they have little to no equity in their homes.

http://www.reuters.com/article/2011/10/21/us-usa-housing-idUSTRE79K6JY20111021

#41 Canuck Abroad on 10.22.11 at 3:26 am

Garth is a flipper? Wow, who knew?

I don’t flip. — Garth

#42 EtownR on 10.22.11 at 3:30 am

Almost forgot: Thanks for another good post G-Money. If I ever buy a place it WILL be on my own terms like you say. Why people don’t stick to their guns I don’t know. Bidding war what?
I’ll be reading from the beach for a while so… cheers! Keep’em coming it’s part of the reason I’ll be on the beach in the FIRST place!!

#43 McLovin on 10.22.11 at 4:21 am

.” And dangle a substantial deposit in their faces – at least 10% of the purchase price, instead of the usual 5%. This often has a monumental emotional impact.”

DA,please enlighten us. If the above deal falls through and the said party offers 10% down who gets to keep it? I think that most people think it is the seller but I have heard the realtor gets to keep his full commission before the seller gets a dime? Whatever is left is his after the realtor gets his for a deal that did not even close!

DA, is this true or not? I know you read this blog everyday. If you ignore me it will be becuase you think what you say will make realtors look bad.

Is this true or not DA?

#44 Moneta on 10.22.11 at 7:41 am

A couple of weeks ago, I asked my kids to share a suitcase. So my daughter just barged into my son’s room and urged him to pass over the suitcase ASAP. Guess what happened.

I had a little talk with her and explained that there are easy ways to get what you want without resistance and showed hew which words and tone she could have used.

She was indignant: “But Mom, that’s horrible! Isn’t that just USING people for your own good?”

“Of course it is. But it all comes down to the end result. Was that suitcase going to make it in your room anyway? Yes, because I said so. So you had every reason in the world to get it done peacefully.”

Nearly everything comes down to treating people with some sort of dignity.

#45 I'm stupid on 10.22.11 at 7:41 am

Nice post. I respectfully disagree with bringing in your own agent on a deal. This is why

If the offer is clean and the only disagreement is price, using one agent can be beneficial. Since for your purposes he/she is just filling in a contract you can use a reduction in commission to push threw an offer since commission splits are usually 2.5% between listing and co-operating agents. Have the listing agent during the offer presentation, emphasize net amount rather than gross amount.

#46 Moneta on 10.22.11 at 7:49 am

One place even recently reduced by 10%. Some of these places are ripe for the picking, but I do think the sellers will be sticky, sticky, sticky
——–
My MIL told me nothing is moving in her neck of the fields, a little town in Eastern Ontario.

#47 Moneta on 10.22.11 at 7:52 am

My MIL told me nothing is moving in her neck of the fields, a little town in Eastern Ontario
——-
A couple of these seem to be owned by elderly newly placed in LTC. As long as they are alive, no wealth transfer… and did they even sign the power of attorney?

#48 Newbie Investor on 10.22.11 at 8:01 am

To Garth and the blog dawgs!
After spending the last year convincing my wife and inlaws that buying a house right now is not the best move for us, we want to follow your advice and begin to save and invest. We have no debt but as well no savings, 30 with two kids, about 70k/yr between us, we want to feel financially secure (TSFA, resp, pention, life insurance etc. We have met a lady with the Investors Group that will help us to do all this but I am wondering if I should not be doing this all on my own self directed. Should I trust the IG or be going it alone?
Any advice or ideas are greatly appreciated!

#49 Young Old Fart on 10.22.11 at 8:04 am

#143 Marc L on 10.21.11 at 4:41 pm
I am truly happy I don’t know Old Beach Girl and Young Old Fart.

=====================================

Don’t hate me cuz I’m beautiful Dude………

#50 SLN on 10.22.11 at 8:07 am

Moneta…
your post made my ears tingle… you must be speaking of my hometown. We sold a couple of months ago to get ahead of the slowdown we saw coming. We wanted to buy but are renting.

If you are talking about where I live, then it’s true. Almost nothing is selling. We are watching people hold firm on prices that are outrageous.. and yes, many of them are sellers that are in their advanced ages who must move, or have already.

We’ve made a couple of offers but they’ve both come back countered for only $1000 below asking. This town has always been old money versus the rest of the world, and it seems they’ve had a meeting about RE prices, too.

One day though, we’ll get one.

#51 bigrider on 10.22.11 at 8:19 am

Garth, you are a man of your word.

Thanks.

You should see me dance. — Garth

#52 Moneta on 10.22.11 at 8:39 am

Across Australia, people in the 25-34 age bracket commuted the longest – an average of 30.7 minutes – followed by 26.8 minutes for those aged 35-44 and 25.5 minutes for 45-54-year-olds
———-
Generally speaking the older you are, the better located you are for your commute because you got to buy before the run-up.

What we’d need to see is how happy the young ones with a small commute and a jumbo mortgage truly are.

#53 Susan from London area on 10.22.11 at 8:46 am

Port Stanley with a population of over 2600 people and 167 active listings at the end of the season. I don’t remember seeing this many before, and I don’t know what the percentages population/listings is but this seems soft to me? I sold in June had to work through the worst sellers remorse I’ve “never” had before(I loved my beach front) closing end of this month and I’m starting to feel a victory dance could possibly happen.

#54 Moneta on 10.22.11 at 9:02 am

Brad,
no garth always talks about 35% of your net worth tied up in real estate but whats wrong with your family home and owning it as you can do what you please with the place
————
There is nothing wrong with it but it also depends on where your home is.

I think we are going to suffer something similar to what is going on in the US and many developments will suffer. Paid off or not, I would not like to live in a house surrounded by empty houses and tall grass… and being the only one still paying for snow removal and the garbage truck.

#55 uklurker on 10.22.11 at 9:02 am

Excellent post,

I started a spreedsheet on my target area and put about 20 properties I’d be happy buying on the sheet. I put starting price, time on the market, and how much I’d need to spend to get it how I want it. Every now and then I go back to MLS and add new ones, and update existing ones with changed prices. So far out of the 20, since mid August, 6 have sold, and 10 have reduced their price (some twice and by as much as 20%), the remainder are holding out. As of yet I haven’t approached anyone as I don’t want to buy until Feb/March.
At the moment I am just this tiny speck high above the savanna, circling and watching as the exhausted wilderbeast slowly lose the energy to fight, then once they drop to their knees, I will swoop and devour my prey.
I suspect someone will do the same to me one day!

#56 Alain Savard on 10.22.11 at 9:16 am

Great post but how do you manage to get a home inspection done before making an offer? A good inspection costs $400 + and takes a couple of hours to perform. So you spend the money before even knowing if you and the seller can agree on price, closing date, and the rest? And they give you access to their home for that long without any signed paperwork? Do you think it is because you are who you are or is it something that all sellers do in your area? Because it does not work this way where I live.

Of course it does. You pay for the inspection and give them a copy of the report. Why wouldn’t they want that? — Garth

#57 Marc L on 10.22.11 at 9:29 am

#143 Marc L on 10.21.11 at 4:41 pm
I am truly happy I don’t know Old Beach Girl and Young Old Fart.

=====================================

Don’t hate me cuz I’m beautiful Dude………

————–

There is no hate, just some satisfaction of not knowing you. Bypassed getting to know you – thus no end result of hatred.

Beauty is in the eye of the beholder.

#58 JO on 10.22.11 at 9:39 am

48 – stay away from IG – high fee funds, they are typically big into leverage, and pure commission reps.

two options: 1) open self directed investment accounts with a large FI and put most of your money into low cost ETFs from Claymore or Horizons. You decide on the split between equity and fixed income. Stay short duration on fixed income (not longer than 5-7 yrs), and focus on dividend paying equities. DO NOT TRADE. At least 90 % of your long term money should be held. Buy during panics, sell back some after a strong rise. Should happen once or twice a year at most.

If this does not work, find a reputable fee based planner and pay him/her a fee for specific advice, then you implement the advice on your own. Meet once a year or twice a year. Avoid average mutual funds unless you have less than $ 50K to invest, where an avg mutual fund is a starting point.

good luck

#59 JO on 10.22.11 at 9:42 am

Garth, you say do not get a home inspection but do it ahead of time. Do most sellers allow an inspector i hire to go in before i make an offer ? What do you think about Oakville RE long term ?

JO

(a) Yes. (b) Be careful. — Garth

#60 Marc L on 10.22.11 at 9:46 am

That photo is fitting Garth.

You are strapped to your home and completely vulnerable.

All you can do is smile and hope nothing bad happens…

#61 BM on 10.22.11 at 10:04 am

Excellent post Thankyou Garth

#62 APM on 10.22.11 at 10:07 am

@ #48 Newbie Investor

If you haven’t already, read Garth’s book Money Road. There is some very pragmatic advice in it about signing on with an advisor. Best of luck.

#63 Ben on 10.22.11 at 10:10 am

Sure your a flipper, buying / selling multiple homes in the same year. Your not long term. lol

Actually I hold individual properties for multiple years, and they’re not all homes. Try not to embarrass yourself. — Garth

#64 Pete in Barrie on 10.22.11 at 10:27 am

I don’t think any location in Canada is worth buying yet, unless you want some property in the northern hinterlands that no one else would really want.

The sun belt in the US – Florida, Arizona, Nevada – seem like the better deals. I close on a condo in Florida next month and am looking forward to escaping the Canadian winters when I retire (10 years hence); in the meantime, I am hoping to rent it out. The 2 bdrm place cost me $29K US, the price of a new car.

Do not buy US trash. Never purchase something you would not live in. — Garth

#65 Tony on 10.22.11 at 10:54 am

Usually the best time to buy a house is when interest rates hit a long term peak. Conversely the worst time to buy a house is when interest rates bottom out. Anyone buying a house in the Toronto area or Vancouver area are all but guaranteed to be filing for personal bankruptcy in the near future.

#66 The Place to Be on 10.22.11 at 11:00 am

# 22 Van guy waiting

“Garth,
I though there was suppose to be a %15 correction in the next few months? Followed by a long period of price decline. Isn’t that what you said in previous posts?…….

Yup. That will be the national trend. Local markets are all different, of course. Some will be sticky and some crash. — Garth”

————————————————————-

So, I guess the expression “it’s different here” really does apply to Vancouver’s west side after all, doesn’t it Garth?

It’s a local market “stickier” than hell. I’ve watched it for years and it’s always been too expensive for most to buy a house.

Please let me know when the earnings to purchase ratio there gets below say 5. Ain’t gonna happen.

In fact sales on the west side (as I detailed earlier in the week) have tanked. Price moderation will follow. — Garth

#67 Devil's Advocate on 10.22.11 at 11:01 am

And… THERE ITE IS! Nice one Garth.

#15loon on 10.21.11 at 11:13 pm
…and how about selling ?

Read between the lines.

#43McLovin on 10.22.11 at 4:21 am

DA,please enlighten us. If the above deal falls through and the said party offers 10% down who gets to keep it? I think that most people think it is the seller but I have heard the realtor gets to keep his full commission before the seller gets a dime? Whatever is left is his after the realtor gets his for a deal that did not even close!

Tough question best asked of a lawyer but I will answer for fear of that otherwise backlash I sense lays intertwined within your question if I don’t.

Not very often does that happen but it could fall that way. Generally speaking though there are conditions in the contract that when unsatisfied to the buyers satisfaction allow them to cancel the deal subsequent to which both parties sign an unconditional release which directs the deposit to be returned to the buyer.

The deposit is almost always held in trust by the buyers agency.

Should a buyer not show up at closing the seller could sue for damages, a claim which likely would well exceed the amount of deposit held. Or the seller could sue for specific performance – force the buyer to complete the contract of purchase and sale.

As for the agents entitlement to any of the deposit, they too might very well have a valid claim against the party which breached the contract, buyer or seller or buyers agent or sellers agent as the case may be.

Ultimately these things, as rare as they happen, tend to be settled before the courts and can be awarded in several different ways at the discretion of the court depending upon the circumstances which can vary greatly so there really is no right answer as each case is different and you would have to be more specific about the details of the hypothetical deal you might be speaking of.

Best answer to your question; Ask a lawyer. I’m not meaning to skirt the matter and there can be a whole lot more to it than I have explained here. Yes I have seen at times, although rarely, the deposit go to the REALTOR(s) but only after a lengthy court battle initiated by the damaged buyer or seller as the case may be.

BTW, a deposit is NOT a legal requirement to the contract. It is but a commonly accepted show of good faith. Without one your offer appears less sincere but it does not that does not make it invalid. I would recommend making the largest reasonable deposit, upon final removal of all conditions to the agreement, that you can manage it will strengthen your offer in the eyes of the seller and their agent. But many times a buyer does not have the cash with which to do so as it might, for example, be tied up in the now firm and binding sale of their current house that they cannot get it until that deal completes. Now there is an interesting question – when a buyer or seller renegs on their agreement to sell in a daisy chain of buys and sells of numerous properties all dependent upon one another…

Outstanding editorial today Garth. Don’t think you would have pissed off one single REALTOR and still provided your followers some real sage advice. Good man!

#68 Van guy waiting on 10.22.11 at 11:06 am

The deals are in the crap areas. I guess for all city people, it’s another long cold winter of waiting. And for helping out with moving to strike a deal? Have you ever have to end up actually help out with moving? Or is that just smooth talking to strike the deal? I can’t picture you moving other people’s homes. Kinda funny actually. Lol

#69 Derek R on 10.22.11 at 11:14 am

#48 Newbie Investor on 10.22.11 at 8:01 am
We have met a lady with the Investors Group that will help us to do all this but I am wondering if I should not be doing this all on my own self directed. Should I trust the IG or be going it alone?

My advice would be to go down to the library and get a copy of Garth’s book, Money Road, and read it. If the library doesn’t have a copy, then buy one. Once you’ve done that you will have the knowledge to discuss things sensibly with the IG lady rather than just having to trust her. You will also be in a position to decide whether to go with her or with someone else, or to go totally self-directed.

Good luck!

Just don’t buy any equity mutual funds! — Garth

#70 Rasputin on 10.22.11 at 11:25 am

Thanks for this post Garth. Outstanding advice here!

#71 Linda Pearson on 10.22.11 at 11:27 am

#55uklurker on 10.22.11 at 9:02 am
At the moment I am just this tiny speck high above the savanna, circling and watching as the exhausted wilderbeast slowly lose the energy to fight, then once they drop to their knees, I will swoop and devour my prey.
I suspect someone will do the same to me one day!
——————————————————–
Aw nuts! Now I’ve got the “Out of Africa” soundtrack in my mind and it will be there all day. Cripes!

#72 Frank on 10.22.11 at 11:31 am

People that are waiting for a RE crash in Canada are just plain crazy. They think that somehow prices are goind to drop 50%. If someone bought just a few years ago they would have already built up equity and even if a correction does happen it will only probably bring you down to even. Timing any market is silly.

#73 From Mississauga with love on 10.22.11 at 11:34 am

What do you think of buying in Mississauga now?

Why would you? — Garth

#74 whiny on 10.22.11 at 11:51 am

“Never buy something you wouldn’t live in yourself”

This is advice my dad gave me years ago, and has really helped narrow down properties I consider for investment. I guess there is an exception to every rule, but this has been a wonderful tool – thanks for the reminder, Garth.

#75 TurnerNation on 10.22.11 at 12:12 pm

China-mart’s tightening grip over its worker slaves. Whaddya bet…most have their hours cut to 24.

http://www.nytimes.com/2011/10/21/business/wal-mart-cuts-some-health-care-benefits.html

Citing rising costs, Wal-Mart, the nation’s largest private employer, told its employees this week that all future part-time employees who work less than 24 hours a week on average will no longer qualify for any of the company’s health insurance plans.

In addition, any new employees who average 24 hours to 33 hours a week will no longer be able to include a spouse as part of their health care plan, although children can still be covered.

#76 Toon Town Boomer on 10.22.11 at 12:26 pm

Maybe Garth or DA can answer this question.
A while ago we put an offer in a home and gave 5% deposit, then got a home inspection and found out the house had vermiculite insulation so we walked.We asked our Realtor for the cheque back only to find out that the real estate firm had cashed it and then we had to wait for them to issue us a cheque. Aren’t they just suppose to hold the cheque till the conditions are removed? The Realtor told us they have to cash it to confirm it’s a valid and serious offer?

It’s cashed once both parties sign the deal. Waivers for conditions come later. You got your money back, right? — Garth

#77 Beach Girl on 10.22.11 at 12:27 pm

#49 Young Old Fart on 10.22.11 at 8:04 am

#143 Marc L on 10.21.11 at 4:41 pm

I am truly happy I don’t know Old Beach Girl and Young Old Fart.

=====================================

Don’t hate me cuz I’m beautiful Dude………

_______

I rest assured that Young OLD Fart and OLD Beach Girl, would have no interest in your companionship. You are probably from Generation X, Y or Z. But I refer that as to Generation NOTHING, NOWHERE. Is your mothers’ basement damp in the winter?

#78 Beach Girl on 10.22.11 at 12:30 pm

Oh, by the way I like Moneta’s comments.

#79 Mydadsentmeyourlink on 10.22.11 at 12:30 pm

This is timely for my family as we are relocating and will be buying this winter. Now all I need is some advice on how to sell our current home. Please!

#80 Canadian Merchant Accounts on 10.22.11 at 12:45 pm

Excellent tips.

It is amazing how people become emotionally attached in the buying process in some cases pay MORE than the asking price.

I simply cannot understand how anyone in their right mind would offer a seller MORE than they are asking for a property.

#81 Van guy waiting on 10.22.11 at 12:49 pm

Prices in metro area will be sticky until the condo market is flooded. Richmond will definitely lead the way on the westcoast followed by Van West. There are still price wars for Van East. Burnaby and parts of the Tri-cities still are still in good shape. I interest rates are most likely going to stay this low until 2013 which would help certain areas stay above water.

#82 Drake on 10.22.11 at 12:55 pm

That’s generally how I’ve done it in the past (twice so far), but one point. Buying agents are not working on your behalf and they are not free to you as a buyer. What the seller pays to his agent is considered in the transaction, if you can do the purchase on your own, you have extra room to push for what would have gone to a buying agent. This is what I’ve done and its worked rather well.

#83 Jsan on 10.22.11 at 1:07 pm

I’m not sure if this has been posted before but there is a new US bill that could have a significant impact on Canadian real estate in my opinion. I have talked to friends and relatives and allot of them have said that if they could retire in the US they would. Let’s face it, when you have 6 months of winter and have the chance of never having to put up with another winter again, who wouldn’t jump at this opportunity?

I used to tell people that the smartest thing that the US could do is offer a permanent residency Visa to anyone who would purchase a US house. With the stipulation that you are allowed to live in the US year round but not work. It would be a win win situation for everyone. Those retiring in the US could enjoy the weather while spending their retirement money in the US economy. Well guess what, that Bill has been introduced.

If it passes snowbirds no longer have a need to keep their home in Canada and many that had considered moving to the US but did not like the “snowbird” situation now have their golden pass to permanent residency.

http://www.deseretnews.com/article/700190359/The-snowbird-visa-bill.html

#84 InvestorsFriend (Shawn Allen) on 10.22.11 at 1:23 pm

Pete in Barrie at number 64 saiud:

I close on a condo in Florida next month and am looking forward to escaping the Canadian winters when I retire (10 years hence); in the meantime, I am hoping to rent it out. The 2 bdrm place cost me $29K US, the price of a new car.

Garth responded: Do not buy US trash. Never purchase something you would not live in. — Garth
***************************************

Wow, harsh response. Maybe the $29 suggests it is trash but Pete said he WILL winter there upon retirement in 10 years.

Pete, sounds like you have made a good move here.

You bought in a most depressed housing market. You bought LOW! (what a concept).

There are some tax complications around renting. And certainly owning property in the United States is not for everyone.

And I do agree with Garth in that it is better to buy something of good quality. But not everyone is in a position to make a $100k plus purchase in Florida.

Pete, I think you are to be congratulated.

#85 Devil's Advocate on 10.22.11 at 1:24 pm

I get it. Really I do.

I know that there are a significant many of you who want to but haven’t yet been afforded the opportunity to own a home. I get that you saw 2002 prices as you first became cognitive of the eventual desire for your to own a home. I get that prices have tripled since then all along the way tormenting you with each successive increase announced by CREA. I get that now when you find someone who foretells you that prices are soon to change direction spiralling downward toward affordability that you must be compelled to hang on his every word. I get that prices have not fallen as far and fast as the rose is frustrating to you. I get that the dream many of you do have of owning a home must seems so distant that it seems impossible to fathom it ever becoming a reality. I get how resentful one can be when it appears they might be deprived of the joy of a “home” in the traditional sense of it. I get how apparently being sequestered to a life of renting might appear an unfair sentence in a society that covets “home ownership” so. I get that you must look at prices and grow dizzy from the imbalance of that so little could command so much. I get all of this. I was there myself not long ago, or so it seems.

But it was 30 years ago that I was there. The dynamics were different to be true but the emotional battles were none the different. Prices then were ramping up fast and furious. We often recall as clearly as were it yesterday; my then new bride and I sat in our rented apartment she reading a Vancouver Sun article, we still have filed away today, on the rising cost of real estate and me struggling for a statistics exam the next day, she called me over and pointed to a picture of the featured $60,000 dream home. As she pointed she exclaimed “It is nothing more than a rundown pickers shack on a useless corner lot on a busy road in Surrey!?!” $60,000 by all measures was a lot of money then and to us it might as well have been a million. The dream of home ownership was running fast away on us as the market took off and we were sequestered to months yet of school.

It seemed everybody had a head start on us. Brothers, sisters and friends all appeared to have bought in before the market began to ramp up and we had yet to establish ourselves in careers let alone contemplate buying a home. Even then we still had to first begin paying back our massive student loans – a burden compounded by then 18% interest rates. It seemed to us then that home ownership was simply not something in our future. We prepared ourselves for a life of renting accepted it as our “chosen” lifestyle although truth be known we clearly had no other option.

I remember very well visiting friends at their newly acquired homes – mortgaged up the ying-yang but none-the-less apparently theirs. I coveted their garage and neatly manicured expanse of lawn as my bride did their kitchen with its full sized refrigerator and self-cleaning oven. During the silent rides home we knew what each was thinking afraid to talk about it because there really was nothing to talk about. Theirs was a different world, one we could only envy, one we could not envision for ourselves given what we knew then for the obstacles that appeared to be blocking our path to the same appeared too overwhelming to overcome and almost conspired against us. Where did WE go wrong? Why did we befall upon such an unprivileged fate.

And It got even worse for a bit there as we slipped into a national recession in 1981. We graduated that year and eagerly ran down to the hiring halls only to find them empty – vacant and void of any employer ready, willing and able to hire us. We eventually found and took menial jobs – well below what we expected our educations ought yield. They were enough to pay the rent but would NEVER afford us the opportunity of owning.

Things did eventually change. We made baby steps forward if not that we were stagnant as the economy retreated such that it seemed we were moving although it was but the ground shifting beneath our feet yet again – this time though in our favour. I got a better job and then a better one again and then a better one still as did she. Together we built a somewhat stable all-be-it relatively short financial history we could take to a lender who might be willingly lend us a mortgage at 15% amortized over 25 years for a 3 year term with a 25% down payment. We were there! Or were we? How ever would we be able to save 25% of the $75,000 asking price of that home we saw in Real Estate Weekly when our landlord took so much from us we had little left for food let alone savings? But we were getting closer. Encouraged by the ever nearing prospect we worked hard and found a way.

Today 30 years later we own our home free and clear. I remember the pride I felt standing on the driveway looking back at “our home” the day we made that last payment to “the man”. I remember how I told myself everyone should feel this free for it was truly a liberating experience. Ya I know there is still a lot of obligation and expense hidden beneath that roof and within those walls. But we own it, we have a “home” – a place our children grew up and can migrate back to at Thanksgiving, Christmas or whenever they might feel segregated from the rest in fear of never being able to have a home of their own because the world is dishing out to them its own new version of that which it did to us 30 years ago.

I understand what many of you are going through because I have been there myself and as much as you might think it was different then it really wasn’t and even if it as minor or major as those differences might appear to you, I am going through it all again today with you as our own children endure the same struggle we did then and you are today. I know what you are going through. I know how you are feeling even though I may not lend you a sympathetic shoulder to cry on just as I do not my own children.

A proverb states “What was hard to bear is sweet to remember” and so it is of these hardships we endured as we start out. They are rites of passage through which we earn the right to live as we want. Things tend to come to those who work for it, they who set goals, they who have a dream and never let go of them. It is they who enjoy the fruition of their dreams the most.

Yes I understand what you are going through. I understand that it does not seem fair. But if you hang in there, if you hold on and never give up, if you passionately, patiently and persistently pursue them, your dreams too, whatever they are, will come true.

We did not coddle our children and I will not coddle my message to you – it takes work to gain entitlement it’s not served on a silver platter to many. Now quit your crying and get out there and do what needs to be done. No one is going to do it for you. Someday, trust me, you will look back on this time with a great sense of satisfaction and personal achievement and be thankful and proud that it did not come to you any other way.

“The illusion that times were then better than those that are has probably pervaded all ages.” – Horace Greeley

#86 BPOE on 10.22.11 at 1:32 pm

read it and weep American. It’s not going down in BPOE for a very very long time . Any reduction will be followed by the long term trend upward. This is NOT America folks. We’re the world leader in housing in BPOE not like our southern counterpart housing losers. The US lost out big time on housing. BPOE is doing just fine. One more note any slowdown on new housing relates to the whole HST mess and not the market itself
“If you’re waiting for a 25% reduction in North Toronto or West Van, settle in for a long one”

Cheap buys on the North Shore
http://www.househunting.ca/vancouversun/homes/5588923/story.html?tab=PHOT

#87 BPOE on 10.22.11 at 1:34 pm

“In fact sales on the west side (as I detailed earlier in the week) have tanked. Price moderation will follow. — Garth”
Hmmmm so if prices are to “moderate” are Canadians going to be buying these cheapies. 2011 house 1.5 million. “moderated” price = 1.2 million.

#88 Devil's Advocate on 10.22.11 at 1:42 pm

And to quote Forrest Gump – “And that’s all I have to say about that.”

Sorry about some of the grammatical errors I’m in a rush to get out the door with no time to proofread

Goodbye

#89 Ryan on 10.22.11 at 1:48 pm

Devils Advocate:

Would you kindly explain how the new HST will impact new home sales in BC? Does this tax still apply? Out of province and would not be primary residence. Could you give an example. I have watched the Okanagan market slowly erode over the past four years – visit regularily and now see opportunities. Thoughts

#90 Post Haste on 10.22.11 at 2:09 pm

Excellent post Garth, when we bought we put in front of us 3 stress tests that had to be met or exceeded. If not, couldn’t afford it..

1) could only one of us carry the mortgage, based on a ZERO source from the other partner. It would mean eating rice and beans but we wouldn’t starve or use credit or savings to make ends meet.

2) could we handle a mortgage at 11% (back in 2002 when we bought our first home – the average 5 year fixed for the past 30 years averaged 11%)

3) Would this home satisfy our needs if we wanted to stay for 10-15 years. (too many fall in love with a house for all the wrong reasons). Granite counter tops eventually become just another fixture in the house.

These simple steps should be on everyone’s checklist. I completely agree that 3x income should give you a guideline of what is affordable. I once pressed a very close friend years ago to use the 3 stress tests factors. He said by using that they couldn’t afford to buy their dream home.

Well, within 7 years they lost their home (due to job loss) and maxed out the credit cards trying in vain to keep the house from going into power of sale. The stress of the financial heartache also destroyed his marriage and now sits in a basement apartment with a killer child support order that has essentially denied him from owning anything for a very long time.

#91 TaxHaven on 10.22.11 at 2:42 pm

You forgot one criterion: only consider stuff that is sufficiently special in features, old, of such good quality or in one-of-a-kind location, etc., as to be irreplaceable to the next buyer…

#92 T.J. BONES on 10.22.11 at 3:00 pm

Sir Garth: Friday Oct. 22.2011. The TSX was only one hundred points above the DOW. The TSX used to be two thousand points above the DOW. In short order it’s only one hundred points up. Is the ship sinking or is the submarine just below the surface with it’s torpedoes loaded? The split is almost non existent. What does it mean?

That you need a hobby. — Garth

#93 Pete in Barrie on 10.22.11 at 3:02 pm

Hey Investor’s friend,

Thanks for the support. It has been a dilemma as to whether the place is worth buying, but it meets my needs – backs on to a golf course, 5 min to beach, decent location with reasonable neighbors. And, Garth, I would live in it, at least for a few months every winter. I will need some minor reno’s but nothing imminent.

#94 Pete in Barrie on 10.22.11 at 3:03 pm

Sorry, should be “It” although I may need some minor reno’s as well.

#95 T.J. BONES on 10.22.11 at 3:04 pm

Sir Garth Talk about skin tight jeans.

#96 Ronaldo on 10.22.11 at 3:06 pm

#5 Evelin Johncox – yep…..shades of 1994 all over again right? 20-30% haircut and 10 years of stagnation….about time.

#97 T.J. BONES on 10.22.11 at 3:07 pm

Sir Garth Is she not well hung? 2/ A trophy well mounted.

#98 the Phantom on 10.22.11 at 3:36 pm

Mr. Savard:

When we purchased our home in the 1990′s part of the deal included our satisfaction with the pre-purchase inspection report. We had made an offer already but used the pre purchase inspection as the final hurtle to be overcome before we finalized the deal. The vendors were a bit nervous at that time as they were uncertain if they were sitting on a home that was junk but agreed to our terms anyway.

Back then it cost $180.00 and took better part of the afternoon. The guy was thorough and inspected appliances, furnace, attic insulation and advised about the high levels of humidity in the house.

We were even told that the home was a bit higher at one end as opposed to the other (by about 1/2 inch end to end). We bought the house despite a few items here and there but most important, we knew we had bought a home with no serious structural flaws and had PEACE of MIND that the house wasn’t a money pit or would be a money pit in the near future.

My suggestion to you if it isn’t that way where you reside then you could be a trailblazer and be the first to make it that way in your region unless local laws or regulations preclude you from doing so. I am unsure if you live in Canada or not and am unaware of what the laws speak to in your local area. Just because it isn’t done that way doesn’t mean you can’t be the first, right?

the Phantom

#99 maxx on 10.22.11 at 3:39 pm

#37 Crash Callaway on 10.22.11 at 1:59 am

LOLROFL!!!!! Very funny Crash!

#100 Peter on 10.22.11 at 3:39 pm

Garth – I am finding it a bit difficult to follow you right now. Are you saying that the time has now arrived to take the dive and begin vulture investing in select parts of the Canadian real estate market? Will the broader market follow these specific areas of opportunity in a downward trend? How long do you think this might take?
Peter from NYC

Some markets are well advanced into the corrective phase, and there are always desperate sellers. How is this hard to understand? — Garth

#101 ExExpat on 10.22.11 at 3:45 pm

Umm, Garth, I think #64 said he does in fact intend to live in the place at retirement. Of course he didn’t say what the place or rental cash flow looks like, hopefully not a defective condo with high fees and future repair assessments. Overall, if you are looking for a retirement pad down south, seems like now is a very smart time to buy. I sense he is not a flipper or revenue property buyer, rather a person looking for a good deal. He may not buy low and sell high, or make any great revenue on renting, but he may buy low, live well. I mean, damn, the total purchase price is less than the HST he would throw away in rain soaked BPOE-land.

$29K? Get serious. Trash. — Garth

#102 je on 10.22.11 at 3:56 pm

RE # 34 Tim, #29 Johnny C
More 5 year olds; get our of your depends. Are you expecting someone to hand you the future of RE, down to the month so you can make money? Try working for a living losers.

#103 Ben on 10.22.11 at 4:06 pm

Actually I hold individual properties for multiple years, and they’re not all homes. Try not to embarrass yourself. — Garth

Now why would anybody be embarrassed on this pathetic blog?

Hard to fathom. But you achieved it. — Garth

#104 Devore on 10.22.11 at 4:16 pm

See what I mean? — Garth

No use trying to talk sense into people who can only see the world in black and white absolutes with no perspective.

#105 Marc L on 10.22.11 at 4:17 pm

#143 Marc L on 10.21.11 at 4:41 pm

I am truly happy I don’t know Old Beach Girl and Young Old Fart.

=====================================

Don’t hate me cuz I’m beautiful Dude………

_______

I rest assured that Young OLD Fart and OLD Beach Girl, would have no interest in your companionship. You are probably from Generation X, Y or Z. But I refer that as to Generation NOTHING, NOWHERE. Is your mothers’ basement damp in the winter?

Born 1962 (boomer), net 4.3M (give or take 100K) self made.
Of course you would have no interest, you are a sociopath – remember.

#106 Devore on 10.22.11 at 4:22 pm

#45 I’m stupid

If the offer is clean and the only disagreement is price, using one agent can be beneficial. Since for your purposes he/she is just filling in a contract you can use a reduction in commission to push threw an offer since commission splits are usually 2.5% between listing and co-operating agents.

Agents who specialize in an area will often know things about the property and surroundings that the selling agent is not obliged to tell you (or may not even know). Why would you bring no representation to a $1M deal?

#107 Steve Mate on 10.22.11 at 4:24 pm

Garth, Thank you for the post today. I will be a first time buyer and these seem like great rules of thumb.

#108 TurnerNation on 10.22.11 at 4:37 pm

I better liked DA when he was a sulking lurker. Or a lurking sulker.

ps. anybody want a concrete skybox for 1 mill?

Rat-tors(r) will tell you this is normalcy:

http://www.realtor.ca/propertyDetails.aspx?propertyId=11132264&PidKey=1674948059

#109 TurnerNation on 10.22.11 at 4:48 pm

To the person renting a 900k Annex area house in T.O. for 2500/mo (posted recently, here): why, you must be one of LH’s tenants! He regularly posts about his 4 or 5 houses in that neck of the woods.
Cash flow negative?

Toronto mayor Rob Ford (aka Boss Hog) is gutting the city of its cultural artifacts as we speak (as was done to Iraq – they made sure the first things looted were museums. Control history, control the future). Libraries are being closed and hours cut, the Zoo is up for sale.

Yet, with at least 15-20000 new condos hitting the market yearly, and each paying at least $2000/yr in property tax, we should be rolling in dough.

But our masters tell us we are broke. Of couse we are – they just robbed us!!

Ford gave into the police union (best-paid officers in Canada at 83k first year, plus OT, plus gold plated benefits, pensions and a job for life – you can actually get away with murder), and allowed them a small budget hike. Yet he was elected to slay the union beast? Not if said beast is laying the golden egg of revenue generation (fines) and corporate asset protection. G20 much?

Gee, a CONservative in bed with the unions? Maybe things are not what they seem, maybe it’s all an illusion…
T.O. taxes set for hike, of course.

Within the next five years Toronto homeowners will face 20-30% tax and hydro rate hikes. Bank on it. They are concentrating us into cities and robbing us blind.
The larget open air prison on Earth.

#110 Robert Dudek on 10.22.11 at 5:22 pm

Within the next five years Toronto homeowners will face 20-30% tax and hydro rate hikes. Bank on it. They are concentrating us into cities and robbing us blind.
The larget open air prison on Earth.

Yah, um. Last time I checked you were free to leave. Please do not make flippant comparisons to real concentration camps.

#111 terces on 10.22.11 at 5:40 pm

Garth I love the pictures and the wit, but there is not a chance I would follow your advice to buy real estate now, or to put good hard cash into a balanced portfolio. Look at a chart for Phoenix or any of the other melt down places in the world. The switch does not all of a sudden flip to a “fantastic time to buy”.

You are charismatic and have a big following, but I feel for people following your lead at this time.

I don’t recall telling anyone to buy. The advice was how to buy in a corrected market. If you don’t think there are any in Canada, that’s your own blind spot. — Garth

#112 Beach Girl on 10.22.11 at 5:53 pm

#143 Marc L on 10.21.11 at 4:41 pm

I am truly happy I don’t know Old Beach Girl and Young Old Fart.

=====================================

Don’t hate me cuz I’m beautiful Dude………

_______

I rest assured that Young OLD Fart and OLD Beach Girl, would have no interest in your companionship. You are probably from Generation X, Y or Z. But I refer that as to Generation NOTHING, NOWHERE. Is your mothers’ basement damp in the winter?

Born 1962 (boomer), net 4.3M (give or take 100K) self made.
Of course you would have no interest, you are a sociopath – remember.
_____

What would I remember about you. Anyone who has 4.3 million (really funny) would tell anyone about it.

Now go to Shoppers and buy a tug magazine. Looks like a lonely Saturday for YOU.

OK, enough. Knock it off. — Garth

#113 Nostradamus Le Mad Vlad on 10.22.11 at 6:12 pm

#14 vyw — Thanks for passing the info. on. Appreciate it!

#16 The thing in the basement on 10.21.11 at 11:18 pm

8 Mad Vlad – “Could we finally be seeing the bottoming where NA slowly switches from consuming back to producing and China vice versa?” — That is the $64K question.

As long as production costs remain low (no well-paid union jobs), I don’t foresee production coming back anytime soon, unless the illegal immigrants are put to work in sweat shops for $5 / hour.

Any higher than that. mfgs. would be cutting into their own costs and profits, so it’s not likely to play out that way.

#44 Moneta — “Nearly everything comes down to treating people with some sort of dignity.”

Nicely said. Treat others with common courtesy, and receive like back.

#60 Marc L — “All you can do is smile and hope nothing bad happens…” — Hope springs eternal. There is the 6/49, where most ‘hope’ for the jackpot, not knowing how much they will be badgered after by ‘long-lost friends and relatives’ most of whom have only one interest at heart, and it’s not you!

#109 TurnerNation — “The larget open air prison on Earth.”

Hmmm. Sounds like a new Stalag or Gulag. Will F get to play Klink?!

#114 bridgepigeon on 10.22.11 at 6:31 pm

94 Pete in Barrie
Care to share what city you bought in?

#115 Ben on 10.22.11 at 6:38 pm

Any of you snow birds what to buy 3 houses for the price of one?

http://www.deseretnews.com/article/700190359/The-snowbird-visa-bill.html

#116 Burnt Norton on 10.22.11 at 6:41 pm

California to consider issuing visas to foreigners willing to purchase property over $500K

http://www.latimes.com/business/la-fi-visas-home-buyers-20111021,0,6715779.story

Could be lights out for HAM in Van. Heck, I might even move down there.

#117 Burnt Norton on 10.22.11 at 6:43 pm

Correction: All of US, not just CA.

#118 Blacksheep on 10.22.11 at 6:59 pm

Thanks, for the info Garth.

#119 Van guy waiting on 10.22.11 at 7:10 pm

#5 Evelin Johncox,

1 year,4 showings, and no offers? Have you reduced the price?

#120 Glen B on 10.22.11 at 7:22 pm

Great tips Garth.
Thank you.
PS – In the last two weeks, I have noticed a significant surge in MLS listings in a few select areas of the 905 area that I am watching.

#121 I'm stupid on 10.22.11 at 7:34 pm

106 Devore

I understand what you are saying, but by entering into an agreement with the listing agent he/she now becomes obligated to give you that info. Even if the listing agent is preferential to the seller he/she must give you info that will affect price or risk a law suit. This strategy is not for property virgins as they are overwhelmed with the process but if you understand the process it should be not problem doing your own due diligence. For example the first thing I do when considering a property is call the local police station. I ask for grow op busts in the area to make sure I’m not walking into one. Most agents don’t do this for 2 reasons, they don’t know to do it or it gives them deniability. The second thing I do it call city hall to see notice of amendments/ building permits again agents don’t do this. I see things a little different as I got a real estate license not for a career in it but to understand the process before I bought my home. I suggest it for everyone if worth the $1500 I think it cost. It can very well save you more in the long run.

#122 brad in saskatoon on 10.22.11 at 7:43 pm

Moneta on 10.22.11 at 9:02 am

yes i see your point . where my 2 properties are i am fine might see a correction , but that does not matter i would like to see values go down 20% opens the door for some deals ..would like to buy another rental.

another thing that no ones talks about renting versus buying is ; when you rent a house say $1800 per month , that is after tax money so it is actually costing you about $2300 a month . where as if you own that is extra money in your pocket. the way i see it owning a house makes me about 10% not getting 10% in your stocks

#123 Nostradamus Le Mad Vlad on 10.22.11 at 7:48 pm

-
Is not! Is too! See headline for a better explanation; Three min. clip (I think), and text. Top 1% in US. I’m not one of them! Faux TV (m$m) Graphic at the top describes it well; 6:04 clip Banxters trashed billions invested by Gadaafi; Hawaii Homeless “Even Allan Greenspan has admitted on video that fraud and criminality underlie the economic destruction of the nation for the last ten years . . .” wrh.com; If Unanswered so far; Detroit Has the WH been moved?

Wrangle Jangle EU stuff. A civil war would sort it out; Cheap Labor See whut I mean? Instead of hiring locals (who keep the economy running), farm it out.

Putin “Vladimir Putin, leaving for a visit with the Chinese, just told his generals to prepare for Armageddon. Vlad would know.”; SArabia “Saudi Arabia also has a huge unemployment problem it desperately needs to fix. The figures by the government statistics and information centre showed nearly 43.2 per cent of the Saudi males and females aged 20-24 years were unemployed at the end of 2009, nearly 20 per cent above the 2008 rate. The report, published in Saudi newspapers this week, showed more than 450,000 Saudi nationals of all ages were jobless last year.” wrh.com; Revolution = Assassination If that is the price to be paid, so be it;
Pack Your Suitcases! “This is how the money-junkies make money off of war. 1. Nation A and Nation B are at peace, and free of debt.

“2. The money-junkies hire the presstitutes to tell Nation A that Nation B is coming to kill them unless Nation A attacks Nation B first. Donations are made to candidates who are willing to murder a few million people for a piece of the profits.” wrh.com. Lots more to it than that, but y’all get the picture; Greece “Iceland had the right idea; they fired the politicians who put the country into a world of financial hurt, and jailed the corrupt bankers responsible.; F-22 Raptors How much do they cost? Still don’t work; Michelle Bachmann Tips on how to lose an entire state’s staff; Not the same animal OWS and the Tea Party.

Bitter temps. Heading off, Into The Sun (CC); Announcing Post-Gadaafi hit list; Yemen Yesterday, a link said the UN called for regime change. Today it’s the US’s turn, so Putin is right about Armageddon.

#124 BPOE on 10.22.11 at 8:11 pm

Another theory of The Americans shot down in flames. America following BPOE’s lead but doesn’t have the credentials to cause any change in BPOE’s upward trend
******************************************
Burnt Norton on 10.22.11 at 6:41 pm
California to consider issuing visas to foreigners willing to purchase property over $500K

http://www.latimes.com/business/la-fi-visas-home-buyers-20111021,0,6715779.story

Could be lights out for HAM in Van. Heck, I might even move down there.
.

#125 TurnerNation on 10.22.11 at 8:35 pm

#110 Robert Dudek on 10.22.11 at 5:22 pm

Where did I mention real concentration camps?

I dare ya to leave the system now. Stop paying your income and property taxes in protest. Try it. You will get more jail time for tax evasion than most crimes. They will hunt you down to the ends of the earth.

#126 MarcFromOttawa on 10.22.11 at 8:42 pm

Garth,

Do you see the TSX hitting 14 000 within 4 years?

#127 Onemorething on 10.22.11 at 8:57 pm

Garth, now that’s a chapter from my new book!

There is a time to buy and sell anything my father always taught me. I remember being 15 years old and buying a 1970 Olds 442 from a lady in the Roseland area of Burlington. She was an elderly lady and her husband was not able to drive anymore.

I’d delivered their newspaper for 3 years without flaw, moved snow from their walkway and always stopped to chat if time permitted.

I always admired that car, and they let me have it for $1000. We collected the car, put another $1000 into it and before I could get my license we were out test driving it (my dad the driver) and was approached by a buyer. We knew the value to be (all #’s matching) to be Blue booked at $16-18K. We took $19.5K called it a day.

That next month we bought a 1955 bungalow down the street for $45K. (under valued around $20K, my dad knew the owner) and needed some work. I was a 16 year old who owned part of a house with my dad! Sold later for a huge profit, bought another and extra funds put me through school.

This is what can still be done today and I’ve done it 100x over.

One note, it is not for most people!

#128 Gord In Vancouver on 10.22.11 at 8:59 pm

Desperation In Vancouver

http://www.vancouversun.com/business/delays+hurt+housing+sector+property+experts/5591773/story.html

……”There is no bubble in Vancouver,” he said.

McAllister had advice for prospective homeowners in their 20s who are questioning whether they should wait for prices to come down: Don’t wait, borrow from mom and dad. And he warned against selling, hoping to get back into the market later.

#129 Onemorething on 10.22.11 at 9:00 pm

Oh yeah, the other way to increase profits is to live somewhere where profits all go into your pocket and your after tax income is double what it is in Canada!

#130 poco on 10.22.11 at 9:06 pm

#121-i’m stupid-you said….
For example the first thing I do when considering a property is call the local police station. I ask for grow op busts in the area to make sure I’m not walking into one. Most agents don’t do this for 2 reasons, they don’t know to do it or it gives them deniability. The second thing I do it call city hall to see notice of amendments/ building permits again agents don’t do this. I see things a little different as I got a real estate license not for a career in it but to understand the process before I bought my home. I suggest it for everyone if worth the $1500 I think it
______________________________________________
unless you are buddies with someone in the police force–that type of info must be obtained though the Freedom of Information act–takes a while to get–everything is changing

most cities now have safety program with regards to grow ops—once busted the property has to be inspected by a “special team”–if the owner doesn’t comply within a set time limit the hydro can be shut off and the occupancy permit revoked—anything found defective must be repaired at the owners expense—permits must be obtained from city hall–this can be a very expensive proposition for rentals—a friend forked out 41k to bring her rental property back up to snuff

you are wise to check city hall because you will see these permits on the properties record–if a property sells a few times, who would know without checking
a good house inspector should be able to tell if a propety had been a grow op and not detected

here’s a link for Coquitlam BC–other cities all very similiar

http://www.coquitlam.ca/Residents/Public+Safety/Public+Safety+Inspection+Program/_Coquitlam+Public+Safety+Inspection+Team+Program+Q+and+A.htm

#131 45north on 10.22.11 at 9:26 pm

Moneta: I think we are going to suffer something similar to what is going on in the US and many developments will suffer.

me too. key word is suffer

#132 TurnerNation on 10.22.11 at 9:36 pm

Life just became a little bit easier for white collar and corporate crooks. They no longer have to admit guilt. Throw money at the problem and walk away free. No contest.

“The Ontario Securities Commission (OSC) has introduced a series of policy initiatives designed to further enhance the OSC’s enforcement regime for the benefit of investors and the capital markets:

New program for explicit “No-Enforcement Action” Agreements under which a party would explicitly not be subject to OSC enforcement action in exchange for self-reporting matters that may involve breaches of Ontario securities law or activities that would be considered contrary to the public interest, and for cooperating in an investigation.

New “No-Contest Settlement” Program under which a protective order could be made in the absence of a specific admission by the respondent of a breach of the Securities Act (Ontario).”

#133 Devore on 10.22.11 at 9:43 pm

#121 I’m stupid

That’s great for the experts who know what they’re doing and want to take on the risk. For vast majority of people, trying to save a few hundred bucks will end up costing them much more, either up front (on the purchase price, despite the commission discount) or over their period of ownership.

#134 Mel on 10.22.11 at 10:01 pm

Well Garth, patience is not your cup of tea. I don’t care if you bought commercial, apartments…. or whatever.
This is not the time to touch a falling knife. But, hey, it’s your money!

After following this blog for sometime now, I have come to the conclusion that not even you know where things are going. That is why, I have listened, but invested on my own.

Hey, don’t worry about me. It’s all good. — Garth

#135 TurnerNation on 10.22.11 at 10:14 pm

Weekend reading for us consumers.

We are free to shop and choose…to a point. Always the overriding control. But we are free to leave at any time!!!?!

http://tinyurl.com/3c33aay

Irrational Consumerism (or The Few Companies Who Feed the World)

Not many people realize that most of the processed foods available on the market, whether they be in groceries or fast-food chains, all come from the same few companies. Even less people realize that these companies are major actors in elite organizations who decide health, social and economic policies around the world. We’ll look at the big three companies who feed the world, their many brands and the tactics they undertake to make people crave their products.

That is the reason marketing and branding are the most vital part of the food industry. Each product must live in its own “world”, separate from its mother company and similar products. Advertising is so powerful that two similar brands of cereal, made from the same basic ingredients, can be targeted to entirely different markets. For example, are Special K and Rice Krispies so different? From a strictly rational viewpoint, these products are nearly identical in shape, taste and ingredients. From an irrational (marketing) viewpoint however, they are in two different worlds. Advertisements for Rice Krispies revolve around colorful cartoon characters and played during Saturday morning kids’ shows while Special K tends to show fit women doing yoga (or on their way to or from yoga). Rice Krispies boxes have games and toy giveaways, while Special K‘s box gives access to a “weight loss challenge” website. All of this is smoke and mirrors, however, because at the end of the line, whether you choose one, the other or pretty much any other cereal in the grocery store, you’re eating the same thing and your money ends up at the same place.

#136 Toon Town Boomer on 10.22.11 at 10:19 pm

It’s cashed once both parties sign the deal. Waivers for conditions come later. You got your money back, right? — Garth
Ya we did, but I think the cheque shouldn’t have been cashed until the home inspection was completed and that we were satisfied with the home inspection. Isn’t the home inspection a buyers way out if they are not satisfied with the inspection. Therefore it’s not a done deal until the buyers satisfied with the inspection. Am I wrong?

#137 Bottoms_Up on 10.22.11 at 10:27 pm

#110 Robert Dudek on 10.22.11 at 5:22 pm
————————————————–
Agreed. A 25% increase in those things (over 5 years) amounts to an extra $90/month.

Let’s see, $3 more per day is being compared to genocide?

#138 Bigboy on 10.22.11 at 10:49 pm

Noticed you took the link to Mike Dillard’s “Magnetic something or other” down. Googled him, scam? Sure looks like one.

#139 from kits on 10.22.11 at 11:06 pm

garth,

what are your thoughts on real return bonds for protection in this climate? about 1% return plus whatever inflation is?

Thanks

#140 DonDWest on 10.22.11 at 11:06 pm

Goodness, buying real estate from someone takes as much emotional investment as marriage.

#141 Nostradamus Le Mad Vlad on 10.22.11 at 11:37 pm

-
Retirement 85 Your handle may be right; EU Finance Ministers They don’t use an abacus, but rather calculators; We Are not amused; 2015 Just in time for retirement; Sacred Chalice At last! Someone questions RE; 7:37 clip Banks livid at OWS; EU bank failures will crash Wall St., and EU — No progress Flatline time?

Striking Similarities “In September and October 1917, there were strikes by the Moscow and Petrograd workers, the miners of the Donbas, the metalworkers of the Urals, the oil workers of Baku, the textile workers of the Central Industrial Region, and the railroad workers on 44 different railway lines.” Almost immediately, the commies took over, Reincarnation Except this time, it’s Soros and Obungler who are leading the charge left and Something to ponder on — “{“OWS” might be meant as ‘OneWorldSystem’}; Biofuels BS Another scam nearly finito; Little Krakatoa Stop fooling around! and map in; UN A rogue organization — this cotton candy to butter us up. Yemen – Algeria are next on the chopping block; Links in ‘Myth’ of high cholesterol and statin drugs (not good); Junk Science replacing Gadaafi’s death, to keep us all distracted.

#142 Koolaid Drinker on 10.22.11 at 11:48 pm

“Seek old, tired listings.”

Buy it and then you will become part of that old, tired listings when you trying to sell it.

Rubbish. Listings mold when vendors got the pricing wrong. — Garth

#143 Van guy waiting on 10.22.11 at 11:53 pm

Look people, I’m sure Garth flips because he saw this years ago. Why wouldn’t he do this? Garth has $ and sure does know how bubble markets work. Bubbles bring opportunity to cash in but don’t get caught. After this baby pops, there will never be a chance like this to cash in like the last 10 years. This was planned by the politicians and made those suckers big bucks.

I do not flip. — Garth

#144 Popeye the sailor man on 10.23.11 at 12:58 am

We Had listed our house in Sept 08 then the SHTF, we sold in Feb 09 after price reductions, for a move from BC to Alberta.

We rented for a year, while we shopped for a house, we took our time and followed the techniques that Garth outlines above.

SEEK OUT, TIRED LISTINGS
Over 8 months of shopping we kept a binder with each property we were interested in, tracked the DOM and got the listing history for each property, to see if it has been on the market before with who and for how much.

LOOK FOR PRICE REDUCTIONS
We tracked all price reductions on the sheets in our binder.

TAKE YOUR TIME
We took months and viewed 80 listings, drove by 100 more, and used a map from city hall called an address map to view the size and shape of a lot, and how it is located to main roads and traffic flows.

EXPLAIN YOUR OFFER CLEARLY
We had comparables for them, some not so fair had the same SF and rooms ect but some near busy roads, small lots, and poorly renovated.

DONT BE AFRAID TO WALK
We missed out on a couple of nice homes but we took the stand that if we miss out on a house another nice one will come along, so don’t panic.

CLOSE FAST
I love asking when they would prefer a closing date you gain so much info on this question. You get an Idea if they need to sell fast and if they have bought another home of are moving out of town ect. All info you can use to make the offer better with a lower price.

USE CASH
We got pre approved and shopped well under our max allowed by the bank.

HAVE YOUR OWN AGENT
DUH!

SEEK A DOWN MARKET
Edmonton hit a peak in 2006-7 so 2009 prices were down over 10%

We ended up buying a 2006 2 story on a pie shaped lot in a cul-de-sac – 2200 SF house for 430K about 100K less then the owners paid that was on the market for over 100 days with two price reductions with a quick close, We viewed the house 5 times, dragged our heals on responding to counter offers. We later found out while requesting a hold back that there was no money left after they paid the mortgage, lawyer, realtor and the bank fees. We saved them from complete bankruptcy but they ended up losing there whole equity that there parents put down. And we have hopefully bought far enough down the curve that we will be fine when prices drop further.

#145 Chris on 10.23.11 at 1:49 am

Damn if those duct tape wings don’t make her look like an angel or a vulture….

#146 I'm stupid on 10.23.11 at 7:03 am

#121 Devore

Wouldn’t it make sense to learn as much as you can before making what can possible be the single largest purchase of your life? That’s the problem, its why bubbles develop and families get destroyed.

Let me give you an example. The most common number used to determine affordability is a total debt of 40%. This number is not derived out of thin air, it was calculated by using common life factors you cannot escape it unless you sacrifice other aspects of life or your household income is larger than the average number used. Logically, the best thing would be to bring together your accountant, financial planner, real estate agent, laywer, and mortgage broker in the same room so you will have a complete picture and can make a well informed decision. Now this is impossible and that’s the problem. By keeping them apart you must know something about everything and that’s impossible. So most take the advise of an agent who only gets paid if a sale occurs, that’s criminal. As Garth says don’t take advise from someone selling you something.

I’ll admit I was a fool. My problem wasn’t income, I had no idea of tax avoidance until Garth’s post last week. I didn’t even know that I over paid taxes since I began working. It’s the same reason why people walk into the bank and buy mutual funds ( me being one) by keeping you stupid it gives the govt and bank a way to take your money. If the big banks had your best interests at heart they would never sell another mutual fund and promote etfs. Now I know, so I can take a pro active approach by learning, taking securities courses to get an understanding of what’s out their. The biggest mistake someone can make is to be to stupidest person in a room. I for one will not be. Most are too lazy, too indebted or oblivious and when retirement comes will wonder what happened.

#147 Moneta on 10.23.11 at 8:30 am

http://www.telegraph.co.uk/news/worldnews/europe/belgium/8843652/Eurozone-summit-despair-and-backbiting-in-the-corridors-of-power.html

First we got the green chutes. Then we were told the whole thing was contained and now people actually think the defaults will be orderly.

Orderly might just be the right word after all… countries will fall like well lined up dominoes one after the other. LOL!

We already have the UK that has devalued its currency. Other countries will catch on as all of them will try to export their way out of their deficits.

Then Greece. Then Ireland who has been playing by the rules and waiting to get a bigger piece of candy because they have been so patient. Then all the other little piglets will follow.

We have not even begun to talk about the Baltic countries who built they real estate bubble on carry trade. In case you did not know, they were building McMansions á la North America during the peak! So if they de-peg to devalue their currencies that will set off a new set of defaults.

And everybody still seems to think that Japan will keep on coasting forever when they are finding it difficult get internal buyers for their debt as the younger generation is too small and moneyless.

Let’s watch the equity markets climb this wall of worry!

Countries which default on portions of their debt are hardly ‘falling.’ These are not corporations going into bankruptcy and liquidation. The debt will be restructured. Some bondholders will take a bad haircut, then Greece, Ireland or Portugal will carry on as before. The simplicity of this post surprises. And it’s green ‘shoots.’ — Garth

#148 Moneta on 10.23.11 at 8:46 am

Let me give you an example. The most common number used to determine affordability is a total debt of 40%. This number is not derived out of thin air, it was calculated by using common life factors you cannot escape it unless you sacrifice other aspects of life or your household income is larger than the average number used
———–
Interestingly, in times of shock this ratio can go down to 15% or lower. Argentina is one example.

We have not lived this since the great depression in the developed world but this has happened in many South American countries.

It’s amazing how overhoused we are and no one seems to grasp this.

Maybe it will never happen here, maybe it will.

#149 I'm stupid on 10.23.11 at 9:43 am

Sorry should be out there.

#150 I'm stupid on 10.23.11 at 9:45 am

I Also missed a comma. Sorry writing was never my strong suit.

#151 Saggy Bottom Boomer on 10.23.11 at 11:05 am

You can smell the desperation in the air.

http://goo.gl/NoyQE

#152 City Slicker on 10.23.11 at 11:07 am

Garth if nothing is moving in certain markets, as this is very local by the sounds of it, how long can sellers hold, in general, and sales volume decline, before something gives?
I think as long as people have jobs, and can stay, they can continue to hold, until things turn, no.

You do not buy the market. You buy an individual property. This is where research, technique and persistence matter. — Garth

#153 Moneta on 10.23.11 at 11:16 am

And it’s green ‘shoots.’ — Garth
——-
Yes, green chutes that produced green shoots.

Simplistic. Hmmm. Sorry Garth. I just don’t see Greece, Ireland and many others carrying on as before. And anyway as before when?

#154 Moneta on 10.23.11 at 11:36 am

Simplistic. Hmmm. Sorry Garth. I just don’t see Greece, Ireland and many others carrying on as before. And anyway as before when?
——
Not until all the dominoes have fallen anyway.

#155 Robert Dudek on 10.23.11 at 11:39 am

Where did I mention real concentration camps?

Maybe it was the words “concentrate” and “prison”. You implied that Toronto was an open air prison and that people were being herded there. Isn’t6 that the very definition of a concentration camp?

Show me a state of any kind that has no taxes. Property taxes, sales taxes, income taxes, excise taxes – none of them are inherently worse than another.

If it really bothers you that much, you are free to move to a lower tax jurisdiction. End of story.

#156 Moneta on 10.23.11 at 11:43 am

And even if they strike a deal and paper the whole thing over, there is even less chance that those PIIGS go back to the last decade’s way of doing business because the cleanup will not occur and the private side will increasingly get squeezed out.

#157 Hammer1 on 10.23.11 at 12:11 pm

#135 TurnerNation
excellent post about our food choices and who is controlling the food supply.
A very few huge companies are now supplying the majority of our processed food..that includes animal food production. The billions of sentient beings that are forced through the factory farms and killing plants of NAmerica are merely commodities in the corporate eyes. Our insatiable appetites and over-consumption create deplorable and cruel conditions for these creatures and our health will suffer due to bacterial infections and overuse of antibiotics. It is truly a horror show of massive proportions http://www.meatvideo.com/ Before you dig into your next chunk of beef or bacon, give this film a couple of minutes. This is not a radical go vegan kind of message.
It just says consider how your meat is produced and with your own eyes watch how they are treated. Just consume LESS of it..You don’t have to give it up..YES, well all love our meat. We have been raised to expect and receive all that we want. Just eating less would transform our health and relieve our ailing health care system.
There are studies that prove that pigs are #3 in intelligence after human(primates) and dolphins. They have incredible long term memory for performing tasks in laboratory tests. The large animals.. cows and pigs are supposed to be shocked to stun or shot in the head with bolt guns to stun prior to slashing the throat. Independent studies and undercover investigators show that 20-30 % of them aren’t properly rendered unconscious and are then cut up while still alive, kicking and screaming along the line. It happens because of the enormous volumes going through these facilities.
The birds however, have no protections. The manner in which they are handled on farms, transport and at killing plants, is a life of misery. Unnecessary suffering due to corporate greed and profit.
We should not just blame business because we are demanding the product, so we are responsible for the suffering..If we demand less, they will produce less or shift to more humane practices. Farmers will produce more crops for human consumption. Consumers will learn how to prepare new kinds of nutritious recipes. Our society will be healthier and Big Pharma’s profits will plummet due to less drugs required to normalize digestive,nervous and circulatory systems.

So shop around the perimeter of the grocery store. Buy as much as you can whole food ingredients and cook yourself. Do this several times week. You can treat yourself to some processed crap but limit it. Buy less meat, eat more vegetarian.When you go to the meat counter, study the flesh under the shiny plastic packaging, looking so clean and neat. Consider the animal as it was living and how it was handled by human beings all the way along the production line. It is possible to have a great meal without meat or at least pay a bit more and buy organic meat. It is raised more ethically and without all the antibiotics. Big Pharma and Big Food business will hate you for it..but maybe then, they will change and provide better food. We are then voting with our wallets.
I guess my final thought is that we are consuming our food like we are consuming homes and other products…with enormous appetites and eyes that are bigger than our stomachs (or brains ,when it comes to RE)..Only you know how much you really need and if you’re totally honest, will agree that less is best.

#158 stevenson on 10.23.11 at 12:14 pm

Garth does not flip. He only buys long term which is 3 years or he’s playing both sides of the game.

As you can see the perspective and direction has slowly moderated. It was never own RE it will tank, to there will be no major crash but a probable slow meltdown(mentioned during the seasonal adjustment), to it can be a part of a balanced portfolio but just not a majority of it. Now to you can buy it if you really want to and can get a good deal. Whats a good deal? What about the inevitable doom and gloom where people will be in debt for life? Even if you could get 10-15% of a half mil shack is not that much.

It’s not 2008, nor will it be again this generation (for reasons well articulated here). You can cling to end-of-days financial crisis thinking if you want, but don’t expect to be rewarded by it. In many Canadian cities and hoods real estate poses value. In others it is poised for heartache. I have also given you direction in this regard. — Garth

#159 stevenson on 10.23.11 at 12:18 pm

Mark Carney, our bro is going to be elected to the head of the global financial board. This shows how irresponsible immoral people make it far in this world. The people who play it safe and life prudent? Well majority rules and you’ll still feel some of the pain and none of the gain if anything does develop out of this questionable RE bubble market.

http://www.theglobeandmail.com/report-on-business/economy/mark-carney-on-a-mission-first-canada-now-the-world/article2210023/page2/

#160 jess on 10.23.11 at 12:49 pm

I like to follow this area – palm desert ca.
with its gates, courses , and continueous sun
The puck stops here
check out zillow

google directions -2,502km
1day 1hour from calgary

big drops

http://edmonton.ctv.ca/servlet/an/local/CTVNews/20101027/edm_pocklington_101027/20101027?hub=EdmontonHome

Offshore bank account probe nets Canadians
Last Updated: Thursday, September 30, 2010 | 10:22 AM ET By Joseph Loiero, CBC News

The Canadians on the list are part of a larger group that includes about 80,000 accounts belonging to HSBC Private Bank clients held in Geneva, according to whistleblower Herve Falciani.

Falciani, who obtained the list of accounts when he worked as head of computer security at HSBC, told the CBC Investigative Unit’s Diana Swain in an exclusive interview that the offshore accounts are large, with a hefty minimum deposit.

Just to open an account, “you need at least $500,000,” Falciani said.

#161 DoomedinSask on 10.23.11 at 2:01 pm

How do you research if a property has been re-listed multiple times, days on market, price drops ect? I can’t seem to find that information on MLS. Anyone? anyone?

#162 Devil's Advocate on 10.23.11 at 2:21 pm

You do not buy the market. You buy an individual property. This is where research, technique and persistence matter. — Garth

Geez Garth… you are sounding positively… Devil’s Advocatish.

#163 MarcFromOttawa on 10.23.11 at 3:35 pm

Based on my very limited understand of technical analysis (re-reading Money Road) I feel there is strong support for XIU.TO at 16$. OTOH if the stock does not pass 17.50$ with conviction any time soon we might see those 52 week lows again. Thoughts?

#164 Don on 10.23.11 at 4:28 pm

If you are priced out now – then why rush into debt. Critical thinking is lost on some. Things always correct – they have to, part of the balance equation.

And to BEACH GIRL – trashing other generations, x, y, z. Stupidity transcends all generations. And if this holds true, per capita – more stupid in the boomer generations. Plus x, y are children of the boomers. Stop the generation bashing, there is good and bad in all. The 80+ years old are all looking at us like we are insane.

Leaders have been replaced by lobbyists in a large number of cases.

AND to those who attack Garth – I guess ignorance is bliss. He has always been consistent in his messaging, the collapse is coming to some extent, NEW PRICE signs everywhere, everywhere. Get your heads out of the sand and do the best to protect yourselves. Not all strategies will apply to all. Those who bought condo’s in Victoria aren’t laughing anymore. Ponzi schemes don’t last forever.

Garth is giving you truthful unbiased information and yet instead of verifying this info you attack like the school yard gang of bullies.

#165 InvestorsFriend (Shawn Allen) on 10.23.11 at 4:28 pm

Number 163 MarcFromOttawa asked for thoughts on “Technical Analysis”

My thought is it is useless dangerous rubbish and promotes buy high, sell low.

It was probbaly invented to make astrology look like a science. There is absolutely nothing technical about it. It looks for patterns in squiggles on a screen. May as well look for patterns in the clouds or stars.

This explains much. — Garth

#166 Devore on 10.23.11 at 5:10 pm

#146 I’m stupid

You don’t learn everything there is to know when you take your car to a mechanic, and you don’t fix your own car. You leave that to professionals. The best you can do is some basic education and more than one opinion to protect yourself from being taken advantage of.

You won’t get that from the seller’s agent. The agent may be the godfather to the seller’s firstborn for all you know, you can’t tell me he’s working for you, and no matter what your “contract” says, he’s obligated to tell you nothing. Like this part of the street is below groundwater level, and you’ll have a wading pool in your backyard every spring.

Without your own competent and expert representation, you open yourself up to a whole lot of risks. Like all risks, most of the time nothing bad happens, and you look like a genius saving money. But then something does, and you don’t look so smart any more. That’s why there is insurance. Your house doesn’t burn down most of the time, yet you still have insurance. You could save a few hundred bucks every year if you got rid of it. You take the time and effort to keep exits clear, an extinguisher in reach, and don’t stack up combustibles near a source of flame or heat. Insurance reduces the effect of the risk, preventative measures reduce the risk, but never eliminate it.

So you can educate yourself, to reduce your risk, and you should, but you won’t be able to cover everything. Nor may you have the time or money to do so. That’s why division of labour exists. Someone else invests their entire working life into it, and can do it better and more thoroughly, so you pay for their expertise. Like a home inspector. Or a real estate lawyer. Or a buyer agent.

If you feel you can do this yourself to your satisfaction, and then bear all the potential risks that you have missed, that’s fine. But walking into a real estate deal without representation is terrible advice for your average person, and for most people actually, while giving them a false sense of security.

#167 TurnerNation on 10.23.11 at 5:55 pm

Best place on earth? Look at the prices per sq ft:

http://www.6717000.com/estates/listings/

#168 Beach Girl on 10.23.11 at 5:56 pm

#164 Don

And to BEACH GIRL – trashing other generations, x, y, z. Stupidity transcends all generations. And if this holds true, per capita – more stupid in the boomer generations. Plus x, y are children of the boomers. Stop the generation bashing, there is good and bad in all. The 80+ years old are all looking at us like we are insane.

____

I had no REAL intention of insulting the generations that will come after me. I sincerely hope you all do well. As I will need you to support my Old Age Security, Medical needs. But I did walk the beach today, to stay healthy so I will not be such a burden to your generation.

#169 jess on 10.23.11 at 6:07 pm

Why would his family get this money?

Roy Dillabaugh of Dayton, Ohio committed a 13-year, $12 million Ponzi scheme against nearly 150 people who considered him their trusted financial advisor. Dillabaugh was an insurance salesman and former securities salesman who was banned from the securities industry in 2003 after selling a false CD to a client and using the funds for personal purposes. Despite this, Dillabaugh continued to sell high-interest notes for “The Dillabaugh Group,” which he promised would be invested in various businesses. Instead, Dillabaugh used the investments to fund his own lifestyle and to pay the premium on millions of dollars in life insurance. Following his death (apparent suicide) in November 2007, Dillabaugh investors stopped receiving payments on their investments. Dillabaugh died without any assets in his estate, yet his insurance beneficiaries received more than $9 million in life insurance proceeds.

http://www.com.ohio.gov/secu/docs/secu_Bulletin2010FirstQuarter.pdf

updated
http://lawprofessors.typepad.com/securities/
Sunday, October 23, 2011
Ohio Supreme Court Will Consider Scope of Securities Division’s Power to Protect Investors

“He purchased at least 34 life insurance policies that named his wife, son and secretary as beneficiaries. Before committing suicide, he left instructions to the beneficiaries telling them to use the insurance proceeds to repay his victims. They chose not to do so, however, and his wife was recipient of over $6.5 million. The Securities Division sued the beneficiaries in order to freeze the funds until a receiver could be appointed. The trial court ultimately held that the Division could compel the beneficiaries to return only the amount of the premiums and not the proceeds of the policies.”

On November 1, the Ohio Supreme Court will hear oral argument in an important case that deals with the power of the Ohio Division of Securities to recover ill-gotten gains on behalf of defrauded investors. The lower court’s opinion is Zurz v. Mayhew (2d Dist. Ct. App. Oct. 29, 2010).

#170 Devil's Advocate on 10.23.11 at 6:21 pm

In the Central Okanagan, which I can’t imagine is THAT much different in this regard than anywhere else, unit sales volumes peaked in 2007 and the dropped by 66% back to 2001 levels in the subsequent year 2008. The following year, 2009, median sale price capitulated about 15% and has held with narry a change the two years since.

My point is price follows volume up and down but with fluidity on the way up and stickiness on the way down as is always the case.

The question of whether prices will fall further should be met first with, why have they not yet? The simple answer to that question lays within the available inventory levels and the motivations of the sellers.

Yes we have excess inventories right now but clearly that is not the whole story as at those levels there should be more competition driving prices down. But that is not happening.

There are two things a seller hates most; 1.) selling for less than they paid and 2.) selling for less than their neighbor sold for. A seller has to be seriously motivated to do either. Clearly these sellers are not quite so motivated. What is their reason then for trying to sell in the first place.

The answer I think is blogs like this one and the negative news. A good many of these sellers are hearing this negative news and thinking they ought to get out while the getting is good. But they are not so motivated to do so that they are willing to drop their price so much.

While there are excess inventories of available units in all market segments there are relatively fewer motivated sellers. On the other hand there is always a core supply of motivated buyers. These buyers are motivated by such matters as divorce, death, growing family, mobility issues, job transfer etc which compell their move one of less discretion. Until inventory levels swell with more motivated sellers we can expect prices to hold. Price is a product of supply and demand after all. While demand could fall it has not in since three years so what else could influence a change?

The single greatest variable that might loom on the horizon threatening to cause prices to fall is increasing interest rates. Most are payment buyers. It is not the asking price but the payment they consider. Should rates rise that payment goes up and to remain competitive the seller must lower the price.

When rates do rise though it will be, in part, due to an improving economy – somewhat offsetting the negative impact of those rising rates and the ability of the buyer to manage a higher monthly payment – all-be-it to a modest degree.

Open house and an iPad…

#171 VICTORIA TEA PARTY on 10.23.11 at 6:26 pm

THE ONLY GOOD YANK IS A…

Yankee Trader! Inspite of their dreary economic condition:

They STILL screw dopey Canucks heading south to buy real estate that may be 25 per cent cheaper, in the following 12 months; they stick it to the Chinese through currency manipulation; to Mother Earth, by fracking her for millions of barrels of oil/natty gas.

This is the revival of the mighty US empire, phoenix-like in its nascent economic recovery with more to come!

That’s according to the London Telegraph’s perma econo-bear columnist Ambrose Evans-Pritchard.

His latest column spun my grey-matter just a little bit!

Read this:

“World power swings back to America

The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labour gap with China in a clutch of key industries. The current account might even be in surplus.

…Assumptions that the Great Republic must inevitably spiral into economic and strategic decline – so like the chatter of the late 1980s, when Japan was in vogue – will seem wildly off the mark by then…the “shale gas revolution” that has turned America into the world’s number one producer of natural gas, ahead of Russia…the technology of hydraulic fracturing…will also bring a quantum leap in shale oil supply…

“The US was the single largest contributor to global oil supply growth last year…a tenfold rise since 2009.

The US already meets 72pc of its own oil needs, up from around 50pc a decade ago.

“The implications of this shift are very large…As US reliance on the Middle East continues to drop, Europe is turning more dependent (on the Mideast and Russia), said Francisco Blanch from Bank of America, comparing the Dakota fields to a new North Sea.

Meanwhile…Offshoring is out, ‘re-inshoring’ is the new fashion…Chinese wage inflation running at 16pc a year for a decade has closed much of the cost gap…A “tipping point” is near in computers, electrical equipment, machinery, autos and motor parts, plastics and rubber, fabricated metals, and even furniture.”

Also, noting that the US birth rate trumps that of Europe and other trading partners, Evans-Pritchard does not throw caution to the wind:

“The switch in advantage to the US is relative. It does not imply a healthy US recovery. The global depression will grind on as much of the Western world tightens fiscal policy and slowly purges debt, and as China deflates its credit bubble.”

In all of that economic detritis circulating and coagulating throughout America, some folks are seeing genuine signs of recovery.

Should Evans-Pritchard turn out to be right, then this will throw a whole new hue on Canada’s real estate industry, and everything else economic here. It will, especially, recharge our stock market.

And THAT will give fiscally-delinquent Boomers ONE LAST CHANCE TO GET IT RIGHT!

Right? All aboard the Yankee Doodle Dandy!

#172 I'm stupid on 10.23.11 at 6:27 pm

#166 Devore

You give the real estate profession to much credit. Your example of below grade property would be the realm of the home inspector. I never said not to get one. Your attorney does all the real paper work. I never said you shouldn’t get your own. I can understand your point about about trust, but you would never tell anyone what your maximum buy price is. I know I wouldn’t even with my own agent. I understand division of labour, and their is a big difference between a couple of hundred bucks at a mechanic shop and 50-100k mistake in real estate. This is my point do not get involved in things you have no understanding in. Granted my view maybe tainted because of my experience in the industry, but what does someone who may not even be high school educated with a 3 month course have to offer?

#173 martin on 10.23.11 at 6:38 pm

turner,
give us a hint on what is happening in europe and what your predictions are about it. lets see what you think about europeans if they are gonna make it throw this economic problem that they have.
thanks

#174 Van guy waiting on 10.23.11 at 6:45 pm

You do not buy the market. You buy an individual property. This is where research, technique and persistence matter. — Garth

So all this talk about waiting is not right Garth? If you don’t buy a market, then that means you can buy an individual property at any time in any market.
I’m sure certain boony market this is possible. But in Van, forget it. Quite a few listings here are on the market or months at a high price with no price reductions. Why? Because these owners don’t need to sell. If they catch a fool, then hooray. If they can’t sell at the high price, it comes off the market. We need % to skyrocket or a repeat of 2008 to really cause a panic out here.

Abbotsford is lovely this time of year. — Garth

#175 Soylent Green is People on 10.23.11 at 7:14 pm

Great FREAKING post.

Re the one called: Have your own agent.

I always thought it was nice to use the seller’s agent so their agent could do a double ender.

That way they’re own agent would pressure the home owner more on your behalf.

Who needs a real estage agent, as long as you have a really good real estate lawyer!!!!

Try it, you might like it.

p.s. Please note, not for lazy people.

#176 Daisy Mae on 10.23.11 at 7:18 pm

Don: “Garth is giving you truthful unbiased information and yet instead of verifying this info you attack like the school yard gang of bullies.”

******************************

Very refreshing post….

#177 Nostradamus Le Mad Vlad on 10.23.11 at 7:18 pm

-
Oldie but goodie
*
The Lone Ranger and Tonto went camping in the desert. After they got their tent all set up, both men fell sound asleep.

Some hours later, Tonto wakes the Lone Ranger and says,

‘Kemo Sabe, look towards sky, what you see?’

‘The Lone Ranger replies,

‘I see millions of stars.’

‘What that tell you?’ asked Tonto.

The Lone Ranger ponders for a minute then says, ‘Astronomically speaking, it tells me there
are millions of galaxies and potentially billions of planets.

‘Astrologically, it tells me that Saturn is in Leo. Time wise, it appears to be approximately a quarter past three in the morning. Theologically, the Lord is all-powerful and we are small and insignificant.

‘Meteorologically, it seems we will have a beautiful day tomorrow.’

‘What’s it tell you, Tonto?’

‘You dumber than buffalo $#it. It means someone stole our tent.’
*
#159 stevenson said: “Mark Carney, our bro is going to be elected to the head of the global financial board.”

How splendid! As M. Carney used to be employed by liars GS, I would like to dedicate these two songs to welcome him to his new endeavors — Lie To Me then Hot Mess (pretty ladies), which is where we presently find ourselves.
*
Long John Silver Beat the banks by Occupying Money! Mallwart cuts some health benefits. Whaddaya expect from a bunch of skinflints? Prediction by the BoA US debt downgraded again in a few weeks; United States of Europe Drawn up in Brussels; Deepening How deep does the economy have to tank?

WW3 is upon us. The link (about a week ago) which said the US had given the green light to bomb Iran is accurate, so Elizabeth Warren’s jobs plan is straightforward — war with Iran, then ChIndia, Pakistan and Russia; Iraq boots US out, which is why they’re headed for Iran and Pakistan; Public Projects going private, but taxpayers are still on the hook; UK Passing the buck about Gadaafi, but what goes around, etc.; Occupy Oz Violent end to protests; Winter Weather GW catches sheeples off guard in Bulgaria.

#178 jess on 10.23.11 at 7:26 pm

Who is the burden/arrangers?

min . of 500,000 dollars x 80,000 people =40billion
at a 25% tax rate = 10b.

retrieval rate?
The Canadians on the list are part of a larger group that includes about 80,000 accounts belonging to HSBC Private Bank clients held in Geneva, according to whistleblower Herve Falciani.

#179 willie on 10.23.11 at 7:52 pm

84 Shawn Allan the Eng. …Garth have someone take a pic. of Shawn when he opens his proprty Tax bill,an post it on your blog…LOL

#180 BPOE on 10.23.11 at 8:01 pm

2nd half of 2012 LOL! Folks, let’s face it, everyone knows rates are never going up AGAIN of any significant value. So all you renters looking for the prices to come crumbling down at BPOE, well you just blew another $24 grand on rent, next year another 24 grand – so thats like 50 grand down the toilet – AGAIN!
Folks, this is not America. We are hard working and a fabulous success story. That’s another reason everyone wants to live here.
****************************************
“The bank will also need to mark down its growth projections from the July Monetary Policy Report,” the economists said. “Nonetheless, growth in Canada is expected to resume in the second half of the year after the temporary drop in the second quarter. We continue to project a prolonged period of steady policy before resumption of policy tightening in the second half of 2012.”

#181 SCalgary on 10.23.11 at 8:10 pm

Great post Garth…I will use this as a checklist for my purchase…!

Garth,

Do you have any change in your opinion on buying real estate even if it is more 1/3 more than my net worth?

Can I look for a deal with only ~$80,000 cash in hand (no debt)? And you know I am from cowtown.

Thanks for your time…!

Best Regards…

You will end up a house, a big mortgage and no other asset – in a local economy when home owners have been losers since 2007. Why would you do that? — Garth

#182 TurnerNation on 10.23.11 at 8:24 pm

This is being marketed in Ontatio now – 8%/yr they say, syndicate mortgages.

http://www.fortressrealcapital.com

Recall Concrete Equities fund? No? Just google Concrete Equities. Went bust, shareholders bought the carcass.

#183 obert on 10.23.11 at 8:42 pm

GT,
Did you see this on yahoo news today?

Tax-free savings accounts give wealthy access to poverty benefit: study – The Canadian Press

#184 brad on 10.23.11 at 8:43 pm

#180 BPOE on 10.23.11 at 8:01 pm
i would have to agree with you , that renters are just throwing money away .
the only benefit to renting is if you are moveing around lots for jobs . if you are somewhere for 5 years or more buy buy buy . like others says buy smart useing the stratagies in this post.and never just make your payments outlined in the mortgage contract always put extra down as you can afford.

cannot see it being ALL THIS DOOM AND GLOOM some think will come . like empty subdivisions and such with hundreds of empty homes. (where would all the people go )? you have to live somewhere.

#185 Devore on 10.23.11 at 8:55 pm

#172 I’m stupid

Yes, EXPERIENCE. A first or second or even third time house buyer has none. You’re taking your own situation, and generalizing it to everyone. A seasoned professional’s experience goes far beyond a 3 month training course.

If you have the experience and the knowledge, you can do things yourself. That is just stating the obvious. You can fix your own car, you can repair your own leaky roof. But just because you can, does not mean you should recommend others do the same just because it is easy for you.

Regardless, if you are unfamiliar with the particular area, or the type of property or lot you’re looking at, it may not matter how much general experience you have, you will have to call on a professional who can help you, and it is important you realize when you are out of your depth.

#186 smartalox on 10.23.11 at 9:26 pm

I had brunch today with a friend who invests extensively in real estate – as something of a hobby. Some of his properties are buy-and-hold for income, but he also buys and sells condos. He also has a day job, as owner of a manufacturing company with global sales.

From listening to him chat, it’s clear that he’s a cash investor, who looks for decent properties with sellers that are stressed, buys with cash in hand, and can afford to wait to get his price before he sells. When he sells a property, he makes his money from the difference between what he pays (low-balling) and what he can stage and sell it for later.

He’s learned a few things the hard way, but he’s not an amateur: It’s not like he’s betting the family home on any of these transactions. That’s the key to making money in real estate, I think.

#187 45north on 10.23.11 at 9:51 pm

martin: give us a hint on what is happening in europe

http://mcaf.ee/fqpo3

(by way of zerohedge)