In real estate, as in love, revenge is a dish best served cold. If you’ve ever been caught in a bidding war, your vengeful moment may be at hand. After all, you have a lot of pain and suffering to make up for. Especially in Toronto.

You know what I mean. You scour until all you see when you go to sleep are angry, pulsating little red dots flying up your nose, chomping on your privates and chasing you down the hall. Finally you come across a house that looks less obscenely priced that others in the same neighbourhood. You grow excited. Book a showing. Get horny. Run the numbers. Debate and discuss. And finally screw up the courage to make an offer. At last, a house you can actually almost afford!

Then the agent tells you the greedy, avaricious, gluttonous, ravenous, insatiable little rat seller won’t even read your offer until Tuesday at 7 pm. Why? Because the vendor and his agent have turned what should be a buyer-seller agreement into a wholesale auction, trying to rustle up as many competing bids as possible.

So, you bid anyway, but revise the offer so it’s for more than the asking price. Tuesday night arrives, and just as Property Virgins, Sandra’s Greatest Tube Top Edition, comes on you get a call telling you there were 14 offers, thirteen of which were higher than yours. Suck it up.

This is the realtor edition of bait-and-switch. It’s a technique used now for ages in a hot market. Price a property purposefully below market value. Make it look like some kind of flaming bargain. Hold off offers until a specific time. Then stand back and let a bunch of horny (and usually inexperienced) buyers claw and scratch each others eyes out, and squirt the value of your property higher.

In fact this has worked so well for vendors that properties have sold repeatedly for tens of thousands more (sometimes hundreds of thousands more) than they would have commanded being listed at market value.

But for every sated seller there’s a small army of pissed-off, jilted potential buyers who invested emotional capital in their offers, only to be used as cannon fodder in the bidding war. Needless to say, this technique also punches real estate values higher in the entire neighbourhood, since every excessive sale constitutes the price floor for the next vendor.

Well, dearly rejected, your moment has come.

In the last few weeks the Toronto market (and others) has seen bidding wars fade dramatically. The number of active listings has shot higher, while sales have fallen dramatically since the summer, and stagnated for the last three months. The economy’s stuttered and stumbled and this week mortgage rates inched higher. All in all, supply is up and demand is down. The market cools, and revenge warms.

And now the joke is on agents and owners who decide to underprice properties, just to ignite a frenzy of competing offers. Many of them are listing at what they think are cheapo values, only to find there are no multiple bids on the day of reckoning. That means a single offer might arrive for the lowball price, or none at all. Not only is the salivating seller denied his extra pounds of profits, but suddenly he’s got a house on the market at a published price hugely below what he thinks it is actually worth. Oh the horror!

This is why you might have noticed in the past few weeks a number of listings being revised upwards. You might wonder why someone who can’t sell their house at $629,000 would suddenly relist it at $689,000 – until you realize their little auction scam didn’t work. Trouble it, the property has now lost its initial energy and the vendor looks like a manipulative jackass. Worse, a failed manipulative jackass.

Expect more of this on the road to correction.

Bottom line: it’s okay once again to make a low-ball offer. Buyers rule.

Now, because all the metalheads and doomers hurt my feelings yesterday, I’m going to stop typing and sulk. So I’m leaving you to advise Chris, a poor cowboy with a road apple in Calgary. He wants help. Over to you.

Hi Garth: I’m not sure how I initially came across your blog, but I did and it’s like a car accident, it upsets me but I keep reading!

In my early 30’s.  Same job for 10 years. Just hit 100k salary, plus the occasional bonus. I “own” (responsible for?) 2 properties. A small 1200sqft home in Edmonton, bought in 2005 for 150k on a line of credit. Still owe about 60k on this line of credit.  The second one has me losing sleep, bought a nice townhouse in Calgary at the peak of the market, about 290,000. Lived there for a year and seeing the losses in its value, (recent property in the complex was selling for a frighteningly low 215k!!), we decided to keep it and rent it for the last 3.5 years as we’ve moved back to Edmonton.  I had borrowed another 50k against Edmonton to buy Calgary, so Calgary is mortgaged for 240k – Interest only mortgage, so cost per month is cheap ($500 plus condo fees $200) but 3.5 years later…i still owe 240,000…plus what I borrowed for the DP. (I’ve been using all the rental income to pay down Edmonton, which has a touch higher interest rate)  since I borrowed against Edmonton for this, I’ve been writing that off tax wise…  aside from the above, I/We have no ‘other’ debt, we paid off her $13k student loans with the line of credit, again, and maintain a 0 balance on credit cards and she drives a cheap car and I drive a company car – no payments.

I Just received a 70k bonus so 45 after tax (arg.) sold some long-term-owned regular mine stock on which we doubled our investment to 20k, save what the tax man gets in the spring. So theres 45k cash in the bank, and I lose sleep over that too.   I would love nothing more to have never even seen that place in Calgary.  I’d be mortgage free right now if it weren’t for that place. Sure its rented and generates income, but I could REALLY do without the headache and worry of it.  Anyhow it is real, I have to accept that.

What pushed me to email you was my need to get this off my chest, and hopefully garner an opinion I think is valuable.  Straight up – I have no idea what to do with the 45k in the bank….pay off Edmonton and narrow down my problem to Calgary? Invest the 45 somehow? Learn about preferreds an EFT’s and everything you speak of? (which is difficult for me, I have a focus issue and commitment issues that keep me from pulling the trigger on major financial moves, even though I may have made some already…) It may seem like I have a lot going on above, but, I just wanna work on my old hobby car and play video games, I have no desire for any of it! Most of what you see above was by accident, or peer pressure, or whatever

I’d love to hear your thoughts on my situation.  The Calgary place….i hate that place, but I can’t sell it and lose what, like 75 to 90k? What would you do…?

I was brought up to believe debt was the worst thing going.  My fathers a big proponent of being debt free.  I’ve never been comfortable with it, but here I am in the middle of it with a boat anchor townhouse that has me chained down, at least mentally, and a chunk of change in the bank which I’m scared stiff to move on.

There.  I poured it all out in one place. It seems a little overwhelming to me to see it all written in one place……


#1 mattymatt12345 on 10.13.11 at 9:06 pm

yes! First

#2 Hashnugs Inthebong on 10.13.11 at 9:14 pm

These bidding war inducing prices, if an unconditional offer comes in at the asking price, and no other offers, is the vendor obligated to sell for what their asking price was?

No, but this could result in interesting legal action. — Garth

#3 mad vancouver on 10.13.11 at 9:17 pm

Chris, I could not care less, sorry…
Punch the numbers yourself in your calculator, I have no spare time for specuvestors. My kids have been living in a small apartment for the past 8 years because of “investors”who cannot do numbers.
Time for revenge? May be.

#4 Mister Sanity on 10.13.11 at 9:18 pm

How much income are you netting monthly out of Calgary? If you’re solidly cashflow positive it makes sense to keep it and keep using it to pay down Edmonton.. Look up the couch potato portfolio on to see where to invest your $45k. You only have to invest once per year and you don’t need specialized investment knowledge, and you’ll do ok.

btw mattymatt12345 – your ‘first’ comment is infantile and not helpful whatsoever. #wasteofspace

#5 Marc L on 10.13.11 at 9:23 pm

Sell your dump in Edmonton, it is an ice box up there. Get a transfer to Calgary. Move into that overpriced dump in Calgary. Get rid of the hobby car, throw out the video games. Go to the gym. Meet some women and live a little – for krissake. Take your 45K and pay down the Calgary particle board house of cards. Don’t lose sleep over money. Just get to work tired cause you’ve been managing three new girlfriends cause you only sleep 3 hours a night. Pump your money into a balanced portfolio and not directly into mining stock. Go visit your dad and ask him to kick you in the behind for twenty minutes and ask him to say to you to smarten up… That will work…

Ayn Rand is a woman. She just looked like a man…

#6 Chaddywack on 10.13.11 at 9:25 pm

Had this happen to me a few times. Made an offer, only one at the artificially low price. I think there should be a law or at least some form of recourse where the vendor has to accept a list price offer.

#7 Onemorething on 10.13.11 at 9:33 pm

How far can the Calgary Prop go down? another 30%? Even if the prop is cash positive it wont be for long as bank will re-access it and ask you to make up some difference and furthermore, when RE goes down, the rental market at some point does too.

I would dump it, roll the losses over to the primary prop and re-negotiate this loan.

Better yet, sell both, stay flush + cash liquid!

You got lucky bro, only one investement prop. I cant say the same for my once multi millions RE investment friends who had 4-5 each in Vegas worth over 1M each and sank.

Now somewhere living on the beach in SE Asia on the last 50K cash they could muster up and just on a plane with.

#8 Thirtysomething Sense on 10.13.11 at 9:33 pm

Chris, 2 comments for you, the 2nd being more important in my mind:

1) I’m of similar age, income, and total outstanding mortgage. Your situation is not ideal, and quick frankly it sucks to ever see losses. But on the flip side it’s also not the end of the world at this stage in life. You’ll get where you want to go and there’s time to make anything up.

2) Check with a tax accountant. If I understand correctly from my last meeting with my tax accountant, you can’t borrow against one rental property to buy/pay down/etc something on another property and then deduct the interest on the mortgage of the first property. This is a ‘No-no’ and if revenue Canada catches it expect the tax man to coming guns a blazin’.
Again, check with someone who’s knowledgeable in tax accounting (not just general accounting) as this is how I internalized the information.

Sorry if this added any stress to your life, but better to find out now and prepare then later and get a bigger surprise.

#9 Smoking Man on 10.13.11 at 9:38 pm

Re ballancing

Buying forwards on Oil getting some gold, and going to invest in some popcorn, sit in the easy chair, and watch Isreal take out Iran…..

And Make another fortune, well if in three weeks I don’t happen.

Well then It’s a coin flip Might make or lose a few bucks.

#10 LH on 10.13.11 at 9:43 pm

Re: #2 Hashnugs Inthebong

I just put in a bid for full asking (no conditions, quick closing, 70k deposit) in Toronto on a private listing (guess the seller is a cheap-o and doesn’t want to pay buyer’s agent’s 2.5%)… but the prick seller countered with an offer no less than 18% higher. WTF?

I am going to just play the waiting / delaying game. The guy’s up about 55% since 2003 anyways before taxes and agent fees. With oodles of listings bleeding into the market he’s gonna be caught high and dry within a months (or so I hope!)

#11 cool on 10.13.11 at 9:44 pm

Few days ago I posted about house on the link below.I had said that it is grossly overpriced compared to other houses in area.Today I got this listing in email with 30 K reduction on the price. The MLS link below has not changed the price yet but will soon change before Saturday.

#12 len on 10.13.11 at 9:45 pm

Chris, the 45K are just aching to be put to good use. Think leverage – housing never goes down – especially in resource rich Alberta. The Chinese will never stop stock pilling and besides, they will all buy here very soon anyways.
Rents are all going to go through the roof very, very soon so buy now. The housing market is looking much healthier this year and the economic cross-winds are just a matter of confidence.
Don’t loose your nerve now man!

#13 Kurt on 10.13.11 at 9:47 pm

Chris, buddy, you won’t lose that money when you sell the Calgary place, it’s already *gone*! Do you know what a “stop loss” is? When you buy a stock expecting short term appreciation, you often place a standing “sell” order with your broker at some price slightly (~10%) less than what you bought it for. That way, if it turns out you guessed wrong, you take your loss and GTFO before it gets bigger and bigger. It stops the mess you have created here before it even gets started.

So, that money is gone. You now have a condo worth 215K. It’s an investment property, so if you sell it you’ll get a huge capital loss that you can carry forward a number of years. (You won’t be paying any tax on your gain from that mining stock!)

First question: where do you think the price is going and how fast?

Second question: what are you netting on the rent?

Third question: what would you invest 215K in, if you had it?

Turn the answer to question 1 into dollars per year. Ditto question 2. Add them together. Divide by 215K and multiply by 100.

What’s the expected rate of return on the answer to question 3? If it’s greater than the number you just calculated, sell.

That’s the way the rich guys do it. They don’t always win, but they admit their losses immediately and deal with them.

(Yes, I know that the Koch brothers get a much better return on their investment in congresscriters than we could ever possibly hope for, but the principle still applies.)

#14 Toon Town Boomer on 10.13.11 at 9:51 pm

Garth shouldn’t people just offer what they can afford?
The Realtors suggest you may offend the buyer when you make low ball offers. I say their asking prices are offensive. Where is line drawn between a low ball offer and being offensive?

#15 Moneta on 10.13.11 at 9:52 pm

You can always try selling it. I’d get rid of the gangrene.

#16 GB on 10.13.11 at 9:55 pm

“in his 30’s” earning 6 figures and a “bonus” of 70K and this fellow is seeking financial help?

Get a grip…life appear pretty grand for this guy from my perspective.

Ya…I’m jealous.

#17 mark on 10.13.11 at 10:05 pm

Priceless comment….I can’t afford to sell the Calgary property and lose $75k. Got news for you – you already lost the money, and it could easily get worse.

Let’s see, first they pushed up prices by lowering interest rates to nothing….then when that stopped working they lowered lending standards….then when that stopped working we had mainland Chinese coming in. Last time I checked that was cooling off too, so what’s next?

#18 Keeping the Faith on 10.13.11 at 10:06 pm

Chris, take the 45K you have in the bank and use it to buy another townhome in Red Deer.
Great time to get in, prices are cheap.
Signed, Stevenson (Realtor Agent 007)

Seriously though Chris, I don’t care what you do and I hope you lose it all.

Onto more important things. Garth, You’re Amazing! Don’t let those buggers from yesterday get you down. They would argue with a wall that Gold is going to win the world series and that a diversified portfolio is what ruined Sid the Kids noodle and not a head shot.

#1 – Title of Garths new book “The Road to Correction”

#2 – Scotia Banks “You’re Richer Than you Think” is the worst tagline since Lehman Brothers “Where vision gets built.”

#19 HouseBuster on 10.13.11 at 10:11 pm

How lowball can we lowball? Is 50% off asking too low a lowball?

#20 Crazy in Calgary on 10.13.11 at 10:16 pm

I work with a guy who is in the same situation. He makes the same kind of money as Chris does, lives in Calgary – works in Oil & Gas.

1. 2007 – Purchased home for $590,000
2. Spent $50,000+ on a new kitchen with granite and new hardwood floors.
3. December 2010 – City of Calgary accesses his property at $850,000
4. March 2011 – He listed the home for $690,000 – market value.
5. June 2011 – No Offers, dropped the price to $649,900
6. July 2011 – purchased another house because they had a baby and needed to have a two storey home. Wife’s on mat leave. No house inspection done on the house.
7. After the offer was accepted – they were asked to come up with an additional 1% to close the deal – (apparently there was a line-up of people wanting to purchase this home). GUESS WHAT – they gave it to them.
8. August 2011 – Possession Date
9. September 2011 – Roof leaks, needs to be repaired
10. October 2011 – still no offers on the first house….he’s worried about carrying $1 million dollars’ worth of mortgage.

The situations that these folks get themselves into are just CRAZY! I don’t get it, I don’t feel sorry for either one of these guys.

#21 Waiting on sidelines on 10.13.11 at 10:17 pm

This is easy, sell both places, invest the cash, and rent till the housing market corrects. I bought a house in south Florida for $300k in 2002. It peaked in 2005 to about $520k. I sold it in 2007 for $420k and moved north. That house is now valued at $210k and some poor sap paid double 4 years ago. Don’t wait for your Calgary house to drop further when interest rates rise. If you’re stressed now, get out and make your life easier. I’m waiting on the sidelines to buy a cottage at 50% off current price. Garth, give us a challenge.

#22 Victoria Tea Party on 10.13.11 at 10:20 pm


We all remember the Charles Dickens’ classic “A Christmas Carol”, the yarn about the redemption of a 19th Century English cheap-skate businessman.

While this classic had a happy ending, a new “ghost” yarn I’m reading may not have such a sanguine conclusion.

It is called: “Boomerang…Travels in the new Third World.”
Written by American author Michael Lewis’, it explains that the folks in the new Third World would be…US!

Lewis travelled to the following new Third World countries to determine the origins and effects of going deep into debt and suffering the monstrous consequences.

He visited the following sad-sacks: Iceland, Greece, Ireland, Germany and the USA.

This is not a terribly happy read, BTW. But you ought to read it anyway!

Lewis, a former bond trader and now a business journalist and author (he was a guest on CNN’s Piers Morgan tonight) of more than a dozen books, wrote the following about Ireland’s housing blow-up:

“A (real estate) bubble is inflated by nothing firmer than people’s expectations. The moment people cease to believe that house prices will rise forever, they will notice what a terrible long-term investment real estate has become, and flee the market, and the market will crash. It was in the nature of real estate booms to end with crashes.”

Further to this, Lewis quotes University College economics professor Morgan Kelly, of Dublin, who wrote: “‘There is an iron law of house prices. The more house prices rise relative to income and rents, the more they will subsequently fall.'”

So there!

Garth has been on this case for some time now, SO it is comforting to have such comments ALSO coming from the likes of Mr. Lewis!

Read the book and then pay off your debts. At least you’ll be ahead of all of the impending sovereign bankruptcies that many economic observers now feel is the next step in this great debt unwind that continues to hamper, Europe, the US, Japan and, amazingly enough, China!

#23 TurnerNation on 10.13.11 at 10:27 pm

Breaking…my bank sent a letter today, stating that my unsecured LOC (10k limit) is now set up for interest-only payments! What a good customer I must be? :(

Essentially they own a puttable, perpetural bond that pays Prime + X interest rate.

#24 Stevenson on 10.13.11 at 10:30 pm

#2 Hashnugs Inthebong on 10.13.11 at 9:14 pm

Refusing to accept the asking price off happens all the time. NO legal issues will be encountered and most disputed because there are way too many reasons the seller can decide not to sell.

There were units listed in the GTA for $1. Some of them sold for 700K+.

Technically if someone is willing to pay a certain price for property emotional or not, it would still be considered the market price. Some may be willing to pay more then others for the preference of that house and there is nothing wrong with that. The majority of the price paid is still the property, but the delta is how much more the buyer is willing to pay for their preference of the unit.

#25 skyfalling on 10.13.11 at 10:37 pm

something is not right. for the last 2 months I had received the visit of a re agent twice, asking me if I am interested in selling my house. always tell if he is going to help me paying moving expenses, newer overpriced house or rent. In addition I had received emails from a builder announcing last call for few homes left. never heard of it before, they are alwasy SOLD OUT!

#26 marcus aurelius on 10.13.11 at 10:42 pm


Yes, the Tuesday Night Scams are failing, but so what. Case-in-point: 41 Craighurst, Toronto – a tidy little 25-footer just off the beaten yuppie moron track north of Yonge and Eglinton. September listing at $1.1M. Many came to see it that furst weekend – and all would get a good look at the Stepford Whore agent: you know the one – bad blonde dye job, loud-talker on her cel, hard to remain unobtrusive – part of the north toronto circle jerk agents club that trade their purchaser clients for just these little Tuesday soirees. They came, they saw, they disappeared. Not a single offer on ‘bloody Tuesday’.

Only my ending is a little different that Garth’s : after a relist the next day to 1.198, some knob actually paid 1.175 for a house that the ‘market’ deemed not worth making a punt at 1.1. The Seller got less than 2% off Ask and probably think their agent is a genius, instead of an amateur (which would be the logical conter-conclusion).

So the moral of the story is that in some parts of Toronto, if there is still at least one complete fool stumbling around with borrowed money (like giving a toddler a Glock 9), you can still get out by the skin of your teeth….

#27 TurnerNation on 10.13.11 at 10:44 pm

Here’s a brand-new downtown Toronto condo – – in which 24% of units are listed on MLS!

Web site says 175 units; MLS lists 42 units:

#28 eviee1973 on 10.13.11 at 10:46 pm

Sign a an unprofessional realtor, when looking to buy a place a few years ago, a place I was interested in had an offer put on it , the seller and lisitng relator were so honest they would not take another offer until the first was declined or approved. The buyers agent who was “supposed” to represent me was irate due to the fact that they were not open to competing offers as an auction format. I had no interest in joining a bidding war/auction.

#29 TurnerNation on 10.13.11 at 10:46 pm

This serious ‘blog has it all: Babes, Bikes, and Bunkers.

#30 Zamphir on 10.13.11 at 10:57 pm

Home prices drop in Metro Van. Front page of the business section today:

#31 wetcoaster on 10.13.11 at 11:19 pm

And agents wonder why they are the most despised form of sales people. When this house of cards collapses, there will be one nasty fallout for this occupation of snakescum. New careers as vaccum cleaner salesmen, names will be changed, addresses and phone numbers unpublished in the phone book. No more wine and cheese parties with the neighbors. It will be like living in the witness protection program. Karma is a bitch.

#32 Nostradamus Le Mad Vlad on 10.13.11 at 11:21 pm

Chris, try #5 Marc L’s response first. Sell one of the properties, pay off debts, use the 45K and buy corporate bonds.

If that doesn’t pan out, try #4 Mister Sanity’s response, using income from rent to build a good portfolio. Using tax avoidance strategies, income generated from these investments could be used to pay down mtge.
#124 RainBird on 10.13.11 at 7:56 pm — “All we do is invest and consume . . .” — Two problems — One is job loss or reduced wages while bills still come in monthly, and second the feds. are quite clever at taxing us here, there and everywhere.

The housing downturn assures that boomers, who didn’t bother to invest for r’tirem’t are now overly leveraged on the one side (shelter), but have diddly squat to supplement the CPP – OAS – GIS with.

#126 Smoking Man — “A WW3 will solve a lot for the ones that have a lot.”

Yo Smoking Man! TPTB are the only ones who profit from wars, as they fund both sides because it’s to their advantage. See —

#128 Onemorething on 10.13.11 at 8:31 pm — “. . . the AUS and CAN RE market is going to tank . . . the CHINA RE bubble . . .”

Hi Onemorething — Almost everything presently happening seems to have been perfectly aligned, so that as these dominoes fall, the m$m continuously barfs its lying venom on sheeples who lap it up, so most can’t even make a basic link between them.

The domino is not RE, that is a minor part of it. As said before, China, Russia and maybe Japan are deliberately letting their economies flatline (possibly China first), so when it reaches Ground Zero, it cashes in all its IOUs from the US, followed by Russia and Japan.

The Dragon is rising in the east, the west is on life support.
Unraveling If this is correct, it means that no one has taken the cycle changes seriously. It doesn’t matter what happens, the cycles will change regardless, and things as yet unknown will happen to make it so; Connect these two dots together, and see the initials GS keep appearing; Central Banking “It’s always about the money!”; 2:46 clip UK unemployment and child poverty increasing; 4closures rising again; PrimeX Does lightning strike twice in the same place? Usually, it’s plenty of times; 50 Best Signs from OWS; Reassessing AMS (Alternative Monetary Systems); AMS The Occupy movement could lead to much greater things; Rome burnt once, it can burn again.

Slovakia and China; Four Weeks is a mighty quick time;

Seems all that is currently happening has been designed to divert attention away from Palestine’s proper and legal bid to join the UN, Occupy protesters, the US Fed and several other things. Fall has only just begun.

Canary Island ‘Quake updates, 6.1 Bali and Iceland, Part Two;Super Blasts Give or take, each 100K years.

5:08 clip Judge nails WH and FBI of creating terror plots; 2:48 clip Looming showdown between OWS, NYPD and Michael Bloomberg; 2:36 clip Lies, damn lies and the m$m; 4:14 clip To distract from his fast and furious mess, Obomba invades Iran by using FFs first, such as yesterday; Typical Politico Granted, he’s a newbie but it’s the same old, same old — tax the poor, feed the rich; Seedbank Vaults filling up. Apocalypse? No. Messy? Yes; Free Trade Good at outsourcing jobs.

#33 Bottoms_Up on 10.13.11 at 11:21 pm

Sell Edmonton. Sell Calgary. Use proceeds from Edmonton to offset your losses on Calgary. Be happy you didn’t lose your shirt in real estate. Get out while you can.

Invest your 45k in ETFs (it’s really quite simple — you could buy a ‘road apple-load’ of XIU.TO, a ‘stock’ that mimics the top 60 companies in Canada). You will earn dividends and possibly capital gains. Definitely capital gains over the long term.

With your 100k+ salary, save $2000/mo and vultch yourself a house in 5 years.

#34 Alex on 10.13.11 at 11:24 pm

Just read in the local White Rock newspaper that this years’ highly publicized Peace Arch Hospital Winfall Lottery – a lottery where the grand prize is a house – is in danger of losing money. For the first time in its 16-year history. They’ve sold just 35% of their tickets with just a week to go before the drawing.

Executive Director Jackie Smith is apparently “at a loss as to what is stifling sales.”

I feel for these folks because it’s a great cause. But here we have a lottery with a house for the grand prize that’s failing in an environment where the price of houses has wiped out so many people.

Again, it’s not like I’m happy about this. But the irony is unreal.

#35 JSS on 10.13.11 at 11:24 pm

Calgary sucks. Pain and simple. Get out of that smelly cowpie town.

Come back to Edmonton.

#36 shanks on 10.13.11 at 11:27 pm

Cheer up Garth, you know you are right! All those people who have been laughing at you for so long are just shortsighted, and only hear half of what they’re told (and then only listen to half of that).

#37 pablo on 10.13.11 at 11:29 pm

“all you see when you go to sleep are angry, pulsating little red dots flying up your nose, chomping on your privates and chasing you down the hall.”

you’ll have to go to the drugstore and get something for that, or stop hanging out in strange blogs, like this one.

As to Chris; 30’s, 100k/yr salary, a principal residence , and a rental townhouse, no other debt to speak of, and worried about where to invest some surplus cash; well, well, well, isn’t that a sticky wicket!
Who gives a flying fart old bean, so suck it up buttercup, and grow a pair. You’re supposed to be a man now and put away your little boy pants. You bets yur money and you takes yur chances. Nobody leaves this game with all of their skin intact.

Now as to all the greedy vendors and weasel r/e agents, (professionals; yeah right, hardy, har, har.)
Nothing warms the cockels of my heart than to hear the bleating cries of anguish from this crowd as they near the cliff edge. Can’t sell that dump in the centre of the universe, oh too bad. Commissions, and sales all dried up, listings languishing on the market until maturity of the listing term, with nary an offer; boo hoo. YE WILL REAP WHAT YE SHALL SEW, in other words, what goes around, comes around tenfold. Kharma’s a bitch and I for one can’t wait for her to do her job.

#38 walter safety on 10.13.11 at 11:34 pm

btw mattymatt12345 – your ‘first’ comment is infantile and not helpful whatsoever.

Ditto for
MARC L #5 Sell your dump in Edmonton, it is an ice box up there. Get a transfer to Calgary. Move into that overpriced dump in Calgary. Get rid of the hobby car, throw out the video games. Go to the gym. Meet some women and live a little – for krissake. Take your 45K and pay down the Calgary particle board house of cards. Don’t lose sleep over money. Just get to work tired cause you’ve been managing three new girlfriends cause you only sleep 3 hours a night.

#39 First on 10.13.11 at 11:45 pm

In an alternate universe, I am first…

#40 hal5001 on 10.13.11 at 11:50 pm

I’m a regular reader, first time poster. I always enjoy what you have to say, but I am wondering if you would like to take on some other topics, such as the fact in Canada, nobody knows what they will pay for an item until the final taxes are run through the register. Why cant the price of an item be known at the time of sale and advertised? Its no wonder that no-one in this country has any idea about finances. Thats one bitch, there are plenty more in the big world. Any chance of bringing some more common sense into your discussions?

#41 jonni on 10.13.11 at 11:50 pm

Rob Peter to pay Paul ? or Rob Paul to pay Peter ? Dad is right … DEBT the silent killer, not to be so silent anymore. Look no further than the Master Thief Finance Minister Flaherty and his Master Puppeteer Harper. Occupy Wall Street will invade our great dominion very soon and Its Only Just Begun. Remember ( or discover ) this name young man ……Thomas D’Arcy Etienne Hughes McGee. OWS is not the 60’s …. OWS are not all 2011 unemployed juvenile hippies. No one knows the extremes or boundaries of OWS.

#42 Rich Renter on 10.13.11 at 11:53 pm

We were caught in two bidding wars during the past five years in Calgary, resulting in us still renting and being treated like second rate citizens. Nowadays i don’t care less for real estate, we’ve saved lots of money and had some nice trips abroad guys like Chros could only dream of. I’m not for revenge but payback is a bitch.

#43 Josh L on 10.13.11 at 11:53 pm

Sell the house. You kept it as an investment, and now you’ve accurately assessed it as a bad move. Only an idiot holds an investment once they’ve decided it’s bad.

As for the cash in the bank, learn about ETFs or find an investment advisor. Invest in a balanced portfolio and you’ll be fine. My fixed income (bond funds) don’t bounce around at all, despite all the mayhem in the markets, they just pay a nice steady rate.

#44 JohnnyBravo on 10.14.11 at 12:03 am

Excellent post.

Yes, many of us know all too well–and first hand–RE agents can be real scum.

I have been the victim of price collusion between a listing agent and competing bidder. How do I know? The guy who bought the house (the agent’s accomplice) told me so. I was this close to taking legal action, but the buyer was a former business partner of my cousin’s, brother of one of my father’s acquaintances, and he would technically be my next door neighbour to boot. Choose your battles, right?

I have been involved in or have seen many instances where the listing agent low-balls the price to incite a bidding war, exactly as Garth describes. There is one particular agent in Etobicoke who is the undisputed master of bidding wars. She has it down to an art.

I have dealt with listing agents who told me flat out that they would “appreciate it” if I would allow them to act as my agent as well. Aside from the fact that this should be illegal for obvious reasons, it’s also just dirty. You just know that any potential buyer who walks in with his own agent has no chance.

And just recently, I suspected my own trusted agent of collaborating with his realtor buddy (the listing agent) in an attempt to get me to pump up my bid on a property. He says, “Well you know, I don’t think the sellers will accept anything less than…” So I say, “Then let someone else who’s willing to pay that much have it.” After a conditional offer fell through, the property is now back on the market. My agent calls and asks if I’m still interested. “Sure,” I say, “at my original bid.”

Of course, none of my bids won because I refused to pay more than what I deemed the properties to be worth, while others seemed willing to pay just about anything, plus a couple of limbs, in order to “win” the deal.

I can only shake my head and hope that one day sanity returns. Sound ethics would be nice too. Maybe we are on the way with the sanity part. Ethics? I’m not holding my breath.

Nothing against realtors in general, but I sure hope the dirty ones get what they deserve.

#45 Qazmer on 10.14.11 at 12:09 am

Dear, Cowboy Chris

Now I make a lot of assumptions on you.

You could use the money to pay the debt down with out selling the Calgary prop. So $245, 000 in debt. Now if you can steel your emotions and not panic if house prices drop more, by the time you reach 65 it may have recovered in price. Allowing you to at least sell and use the money left for retirement. If by the time you retire it fails to recover you could be boned, exactly what Garth warns against. Too much of one asset leads to increased risk, and broken hearts.

You have $300,000 in debt. You have about $55, 000 in cash ( 45k bonus and 15k ish stocks sold) If you sold your Calgary prop at $200,000 you would have 100,000 debt + the cash = $45, 000 in debt. Much better sounding then $300k in the hole. Once done paying down the 45k then you can start looking more into ETF and other investments. As long as you have debt you should pay it off ( Unless you can find and investment that pays more then the interest on you loan and inflation)

A question we should all seriously ask ourselves is, how am I going to retire? How much do I get a year from CPP? How much is my company pension? Is it a Defined contribution plan or a Defined benefit plans? Will that same pension be there when I retire? What decisions now could effect how I want to retire, good or bad ?

#46 Bobby on 10.14.11 at 12:13 am

I recall a colleague once making a low ball offer on a property. The seller’s agent was mortified and the seller declined and countered with a higher price.

The buyer walked and waited. As you would expect there were no other offers so the buyer was contacted and asked if he was still interested. He offered an even lower price. The seller accepted the original offer, but the buyer said nope this is my best offer.

He got the house at the lower price.

Yes, it is a buyers market here in Victoria and I’m just waiting to make a few lowball offers.

#47 EyesTheBye on 10.14.11 at 12:17 am

Before I came to your blog, I was very bullish on van RE. I now see reality and know Garth, that you are totally right. I am just so stupid to listen to the people around me that said Van RE is the real deal. I feel like an idiot. I just bought a rental property in east van in June. I’m so pissed off I’m thinking of taking a loss now and selling.

#48 Clem on 10.14.11 at 12:17 am

#3 mad vancouver on 10.13.11 at 9:17 pm
… My kids have been living in a small apartment for the past 8 years because of “investors”who cannot do numbers.
“investors” trapped your kids in a small apartment?

#49 The thing in the basement on 10.14.11 at 12:21 am

8 – 30 Something – Chris may be able to retain his PR designation on the Edmonton property even while not living there. That way he claims the 50k DP on the Clagary property. Then if he pays himself a minimal “rent” on the Calgary property and declares the “income”, he could write off the interest on that loan

Hey all they can do is deny the deduction, and its only
one year of low interest – maybe 2-3k tax?

#50 T.O. Bubble Boy on 10.14.11 at 12:29 am

Featured on CP24’s Hot Property show:

Closing the Deal: The Al Sinclair Way: Real Estate Made Easy

Should this be considered the “pre-reading” for Garth’s next book? (i.e. learn all about the bubble mentality and throwing all of your net worth into a home, and then let Garth help you cleanse yourself of the nonsense)

#51 nonplused on 10.14.11 at 12:32 am

Garth, are you using a ghost writer Wednesday through Saturday? Today’s blog was right on but the style seems to fade as does the topics later in the week. We “hurt (your) feelings?” The Garth-man has babes in bikinis detailing his Harley and fetching him scotch while he smokes a Cuban and pours down scorn from above on his blog (or so I imagine, no mention of scotch or Cubans has been made). I sense there are no feelings to hurt, only an unwavering mission to get the snoozers to wake up and smell the sewage in the basement! But all the while realizing that the faint of heart don’t need to know how their sausage is made.

On to Chris: holy ramble, I thought I was bad! (And I am.) Long and short though, just follow Garth’s advice and do not own any real estate at this point that you don’t live in, unless it generates income. But if the condo is generating income, be wary of potential interest rate hikes and run the numbers. It’s always hard to sell at a loss, not many people can do it, but don’t throw good money after bad either. Remember, if rates rise, it’s as good as a loss, just not all at once. Only now the condo cash flows negative and is worth even less.

#5 Marc L

Normally I am all for getting out there and meeting some women, but I got the sense that Chris had a “we” that drove a second car. Just saying. I have a “we” that drives a second car to and she isn’t too keen that I meet other women unless they are fellow hockey moms and she’s supervising. I hear the adult party at the tournament in Canmore is a virtual swinger’s club though, so here’s hoping I get half as lucky as my wife is sure to.

#52 Joanie on 10.14.11 at 12:33 am

Intersting observation. I just witnessed a listing on the street I live on the out skirts of the Peg. Yup, lots of people looking but when the offer date came rolling in, not one offer. The owners and a some neighbors couldn’t believe what happened. I know in my heart’s heart what is about to unfold in this insane housing market but try telling the obvious to the ” Houses never drop in value” believers.

#53 Brad on 10.14.11 at 1:08 am

LOL hahaha Man up you crying little !#$%$ sell while you can eat the loss before it gets worse. Bet you wouldnt be sniveling had your investment gone up would you? “I just wanna work on my old hobby car and play video games” what a joke. I have no sympathy for turds like you. Should have listened to your dad.

#54 APM on 10.14.11 at 1:15 am

Dismantle the real estate industry all together. It’s not a real profession, it adds no real value and quite frankly an industry association such as CREA that does nothing to regulate agents that encourage bidding wars that are not open, fair and transparent are doing a great injustice to the general public.

A real estate transaction can actually be quite simple as long as a seller and buyer are willing to engage the services of real professionals such as appraisers and lawyers to facilitate the transaction. A seller can now market a property online (who needs an agent for that). Once the seller finds an interested buyer they can agree to engage in due diligence which can include each party (buyer and seller) obtaining their own appraisal and then simply reconciling the two to come to agreement on price (other studies can also be undertaken during this period such as home inspection etc.). This will represent fair market value in a manner that is open, and transparent between the buyer and seller. Once all elements (including price) is agreed, both parties can work toward finalizing an agreement of purchase and sale, working with lawyers to represent both sides of the transaction.

Real estate associations will have you believe that an agent has the expertise to navigate the complex contractual documents that are involved (they don’t, they rely on pre-printed forms and standard clauses and the offers are typically typed up by admin assistants and the other forms are just there to protect their commission). They will have you believe that the industry, through contract law and agency relationships will protect the client. In theory yes this is true, but in practice are agents really protecting your interest? When an agent encourages a buyer to over-bid and put in an offer with no conditions, I’d say that’s not optimal balanced advice.

I think it’s time to re-invent the real estate transaction or at least take a real critical look at what is happening now in the ‘industry’ and examine if it really serves the public good. Does a real estate transaction really need to be facilitated by a real estate agent? I’d say no.

#55 Devore on 10.14.11 at 1:25 am

No, but this could result in interesting legal action. — Garth

I haven’t heard of such a thing happening, but it might be interesting. I think ultimately the seller has the right to withdraw their property, like if someone wants to buy your ex-favourite floorlamp at a garage sale and you change your mind.

If the buyer does not sign your offer, there is no contract, so they can walk away.

#56 Charles Ponzi on 10.14.11 at 1:25 am

Great to see property speculators losing sleep.

#57 Devore on 10.14.11 at 1:26 am

If the buyer does not sign your offer, there is no contract, so they can walk away.

And by buyer I mean seller of course.

It looks dumb, and good realtors will steer their clients away for vendors who play games.

#58 Potato on 10.14.11 at 2:26 am

#2: IANAL, but if an offer comes in at/above the asking price and the seller refuses it, they have to then relist at a more realistic price (they can’t continue to misleadingly list below what they’re willing to accept). If they then get a new offer and close for more than the original offer, everything should be fine. If they later accept an offer below the original full ask offer, I think Garth has it: it could get interesting.

#59 Rog on 10.14.11 at 2:36 am

Here is a great video on what happens when the low ball listing to attract multiples fails.

#60 Corban on 10.14.11 at 2:38 am

Chris, as a person in a fairly same position, take everything you read here with a grain of salt. Everyone on here has their own agenda as they give you advice. There will be a lot, but take it all in and weigh your options. The best thing you can do is make an informed decision. Read the responses here, ask around. Every situation is fairly unique so ultimately you’ll need something that suits you. This is your future so maybe it’s time to put the vids away and start schooling yourself on what your options are. You’ll never be an investment guru (contrary to what the majority of the people here think they are) but hopefully you can educate yourself to at least ask the right questions. I personally find all of it overwhelming but what i’ve learned is:

1. Pay off your debts
2. Take any free money your company is willing to offer (stock purchase plans, pension/RRSP matching).
3. Look into what you can pay into your RRSP and TFSA. If you don’t know these terms, research them. These are tax shelters that will help you long term. It’s the old story of the grasshopper and the ant. As far as what you should invest in, seek help from someone who knows what they’re doing, you can’t do this on your own. If you contribute monthly (which you should) apply for an income tax deduction reduction from your employer (look into this).
4. I’m no real estate guru. My property in Abbotsford is down 20% underwater. The tenant covers most of the costs, so we’re going to ride it out long term, but i’m not sure what the best decision is. Get a trusted professional to look into the Calgary property for you. We’re in a market decline in so Calgary who knows what the best option is.
5. Don’t stress too much. Our generation will live on average for another 50 years. You can still recover from most mistakes you make, and it sounds like you’re in better shape than the average debt burdened canuck.

IANAL, and this does not constitute advice, but my opinion. Find someone who does know, and can give you proper advice.

#61 Jay Currie on 10.14.11 at 3:17 am

Lose both properties and float a while as a foresaken renter.

At this point, if you sell you are a few thousand down. But you have decent money coming in so the loss is not the end of the world (and do talk to a decent accountant as to what can be written off – likely a reasonable amount.)

The advantage of selling is that you avoid the potential 20-30% loss, improve your net worth and clear up your cash flow.

If Garth is right, and I suspect he is, the melt will be ugly for real estate.

Meanwhile, never worry about money in the bank. I did not read anything about TFSAs. Pref shares are not that complicated.

At this stage, enjoying the income you earn is a heck of a lot more attractive than hoping the RE market will somehow redouble.

#62 Crash Callaway on 10.14.11 at 4:25 am


Best thing to do is take the 45k and put a swimming pool in the basement of the Calgary townhouse.
That way you’ll always be above water in your mortgage.

#63 Rudolf on 10.14.11 at 6:23 am

I once was hired to inspect an older residence which required intensive improvements to the outdated electrical wiring system before home insurance could be obtained. When I explained the costs involved – the hyper agent eager to finalize the deal advised the purchaser in my presence not even to think about asking for any price reduction. She claimed that other potential purchasers were waiting in the wings eager to buy the property unconditionally.

The moral of the story is that the purchaser paid $50,000 over the asking price and absorbed the cost of about $15,000 to have the old wiring replaced. He later found out that he had been actually the one and only bidder! But the agent added another trophy to her résumé: “Sold for more than asking.”

#64 House on 10.14.11 at 7:08 am

If a tenth of a point increase in interest rates is an inch, how far do we have to go for rates to get back to normal — a kilometre?

#65 bigrider on 10.14.11 at 7:47 am

#12 Len – The RE agent.

Take your RE humping advice and shove it up your A$$

#66 Macrath on 10.14.11 at 7:48 am

Jeff Rubin has gone rogue joining the doom and tinfoil crew !

“We could face a complete meltdown of the global financial system and an economic fate rivaling the Great Depression.

The only thing that seems to have changed since the last recession is a defaulting Greek government has replaced defaulting U.S. subprime mortgage holders as the trigger for the next global collapse.”

#67 Kevin on 10.14.11 at 8:16 am

Chris, if I’m reading you correctly, you have a townhouse in Calgary worth $215k, on which you owe a $240k mortgage. You also have a place in Edmonton that is mortgage-free, but you owe $60k on the line of credit. You have $45k in the bank.

The Calgary place is clearly weighing you down mentally. I would dump it. Obviously, you can’t sell it if it is underwater, so I’d take the $45k in cash and make a lump sum payment on the Calgary townhouse, to get the mortgage down to $195k. List it and get rid of it. Then you’d have a lot fewer balls in the air, and all you’d have to worry about would be gradually paying off the last $60k on the line of credit.

#68 Young Old Fart on 10.14.11 at 8:21 am

Chris, if you are still reading then listen up!

You are on the right track! If the unit is rented and is carrying itself…. Leave it the &[email protected]? alone!!

You guys seem to be living within your means, beautiful!

You have lost nothing if you do not sell. Continue to work hard, use that extra cash to pay down your debt. I was in your position in my 30’s. Today I am in the “multi” category and I still have renters in my basement of my paid off home because the rent covers taxes, hydro and gas. The key is ” debt free ” !

You say it’s a headache, bottom line buddy. Having money brings headaches but it is a price of being wealthy….. And worth it……

#69 fancy_pants on 10.14.11 at 8:47 am

Sell the Calgary property and take the loss on the chin. Chalk up +1 in the experience column.

Refinance the Edmonton mortgage to cover the difference of the selling price vs. mortgage amount or use the bank $ to cover that.

It’s not worth the headache and loss of sleep!

#70 Moral Hazard Mike on 10.14.11 at 8:50 am

The emergency low rates of the past decade are to blame for this insane real estate asset price orgy. The Austrians are right on this one (the economic school of thought not the Austrian yodelers). Low rates create massive distortions of capital as we have witnessed in our lovely real estate assest class. Economic laws cannot be ignored ad infinitum and eventually this high wire trapeze act is going to crash and burn. If our fearless leader Garth was still in parliament he would be telling our financial leaders what he keeps telling us, that this will not end well. Our leaders have pushed the can down the road for the past decade thinking that our credit orgy of low rates can keep the economy floating forever. Well folks the can has hit a brick wall and it is not going any farther.

#71 Jesse Livermore on 10.14.11 at 8:56 am

Chris buddy. Listen to an old pro like me, the late great speculator Jesse Livermore. The rule in investing is simple, take your losses and take them quick. Amateurs go broke because they don’t have the stones to admit a loss. Your first loss is your best loss. This goes for financial markets as well. I knew scores of people who watched Nortel collapse to nothing. They refused to take their lumps early and in the end they had to accept the mother of all losses. Man up and get out!

#72 Moneta on 10.14.11 at 8:57 am

List it and get rid of it. Then you’d have a lot fewer balls in the air, and all you’d have to worry about would be gradually paying off the last $60k on the line of credit.
Something tells me he’s looking for an alchemy solution… somehow getting rid of his headache while keeping the 45K in his pocket.

#73 detalumis on 10.14.11 at 8:59 am

#20 Crazy this guy is worse than crazy. I am sure house #1 is a nice place with the renovated kitchen and such. I doubt that it is a one bedroom house though. I really do not understand people who the minute they have a kid they immediately decide they need 1,000 more square footage. I live in a 1,200 square foot bungalow which seems large enough for people to raise 3 kids in. The couple across the street from me did just that. I find it really interesting that people can be working in high powered careers so must be intelligent and all that good stuff and then they are really really delusional when it comes to what is needed to raise a family.

#74 Regan on 10.14.11 at 9:04 am

Chris, you’ve got a larger scale of a common problem – buyer’s remorse. Like those pants I got that shrunk the very first time I put them in the wash, and now hang in my closet waiting for me to get thinner, and shorter… but I can’t toss them out! I paid too much for them!
The answer to your problem is numbers, not feelings. Forget what you’ve lost so far, work out whether continuing to hold your property will make you money going forward or not. Enlist the help of a numbers person – accountant or some such – to help. You may be able to write off some tax with a business loss to make it less painful. Hey, everyone makes mistakes, be thankful this one will only hurt your pride, not make you go hungry.

#75 Thirtysomething Sense on 10.14.11 at 9:13 am

#49 – “The Thing”
Thanks for the link, very informative. I’m also looking forward to seeing your upcoming movie :)

From what I understood the information in the link you gave if different from what Chris has done. The info in the link is the tax implications of changing the use of a particular property. Chris’s situation is that he’s borrowed against property ‘A’ to finance/do work on/etc on property ‘B’, and then claimed the tax deductions from what he borrowed against property ‘A’.

Again, maybe I’m out in la-la land, I don’t have rental property myself. That situation jumped out at me because it was recently used as an example while I was being educated with a laundry list of “don’t do things like this”.

#76 Kilby on 10.14.11 at 9:29 am

Just read an article in the daily paper “24H” called “Buying a home is a top priority for new Canadians” written by M J Jaffray.

Some of the content contains lines like” Buying a home helps with financial security and becoming part of a new community” and “Put a team of professionals together who will look out for your best interests” and “It’s wise to use a real estate agent or realtor who will find and negotiate the best price for you”

This is pretty sleazy stuff to intimate that to become a successful new Canadian you have to buy. Preying on the vulnerable…………

#77 Daisy Mae on 10.14.11 at 9:52 am

“Then the agent tells you the greedy, avaricious, gluttonous, ravenous, insatiable little rat seller won’t even read your offer until Tuesday at 7 pm. Why? Because the vendor and his agent have….”


Okay, okay….I get MOST of it. I just have to look up ‘avaricious’. Now, where’s that damn dictionary? (You did this on purpose.)

#78 T.J. BONES on 10.14.11 at 9:52 am

Sad story often repeated

#79 panopticon singularity on 10.14.11 at 10:01 am

am i the only one who cant watch million dollar listing on bravo tv without throwing up? how are there 4 seasons of this show?

i heard the best excuse yet this weekend for buying a new house:

its not healthy to raise kids in old rental houses, cause there might be mold or dust. or dried puke under the floorboards from watching hgtv.

#80 Jinda on 10.14.11 at 10:03 am

# 34 Alex – I support the cause for the lottery, but the cause has been lost for a while now.

My friend works for on of the hospitals with the lottery stuff. They put 70 % for operating costs. The CEO makes 350,000 just from the lottery department. I just wonder when this lust will get over. Out of 40 million in sales for the lottery 6 million went for prize money, 28 million was the operating costs, so 40-28-6 = 6 million.

Only 6 million was invested in the cause. Is it worth it? No…..
Again do not mis interprett me, I am all for the cause and i still donate a lot of money for this causes, but never buy this lottery to feed these corporations.

In my view donations should be done without expectations for return. Its a DONATION not an INVESTMENT.

#81 John on 10.14.11 at 10:14 am

How will these massive ship building contracts affect the Canadian economy and real estate? Particularly the local real estate where the ships are being built? Saving grace for Vancouver? Boom times in Halifax?

#82 Joe Q. on 10.14.11 at 10:33 am

My understanding is that a seller who rejects a lone unconditional offer at the asking price is basically carrying out false or misleading advertising, and there is grounds for legal action unless he or she re-lists at a higher price.

#83 dddd on 10.14.11 at 10:35 am

could someone explain exactly what a buyers agent does?

we bought 2 properties (one before mls online existed) , negotiated a lower than ask price for both. never used a buyers agent.

one time the MIL did hound us a few times to go see some props with the agent she used – we did meet her and she showed us some crap which was not what we were looking for. later on, we find , and buy the right house on our own. well i guess this woman was royally pissed off – somehow by doing a lousy job for 30min one day she seemed to think we were her personal atm???

the more i learn about realtors the better i feel about pissing one off

#84 gladiator on 10.14.11 at 10:37 am

The climax is closer than you think: yesterday, I got a letter from my bank with a green hue, letting me know that now I can pay “interest only” on my line of credit balance. No need to pay the usual minimum of 3% of the balance anymore. In the example they gave, 15k in debt at 5.75% (unsecured) currently requires 450$ monthly payment, and the interest-only payment will be 72$.
Trying to read between the lines, I could see that the consumer is simply tapped-out, that people are so deep in debt, that they can’t afford to pay the usual monthly payment and the bank offers the “flexibility” to pay just the interest – just to lend a little more.
Methinks the juice is squeezed out of the consumer and am preparing for the show. Oh, Canada… :(

#85 Loving debt on 10.14.11 at 10:45 am

Boo hoo chris. Why don’t you take your ridiculous 70k bonus and by a rooms worth of tissue paper to mop up all the tears. lifes tough how will you manage!?

#86 Daisy Mae on 10.14.11 at 10:55 am

Kevin: “I’d take the $45k in cash and make a lump sum payment on the Calgary townhouse, to get the mortgage down to $195k. List it and get rid of it.”


No! Don’t do it. You’re throwing good money after bad.

#87 Aussie Roy on 10.14.11 at 10:56 am

Aussie Update

During the September quarter, Melbourne’s median house price fell by 2.8 per cent to $551,000, shedding $50,000 or 8.3 per cent in value from its previous peak last December.

There was never a shortage of houses to live in.

FEDERAL politicians busily mounting inquiries into various issues including coal-seam gas and the media might want to consider a royal commission into the alleged housing shortage.

Terms of reference should include examination of the bodies that represents builders and developers. It should also consider making misinformation a crime punishable by deportation to a godforsaken colony, like England.

I’ve already held my own inquiry and found that the property market is guilty of the crime of defying the laws of nature.

This is clear because we have two mutually exclusive events happening.

On the one hand, we have “a chronic housing shortage crisis”.

On the other, we have prices and rents falling.

I paid enough attention during high-school economics classes to know that this does not compute.

44% national auction clearance rate

#88 disciple on 10.14.11 at 10:58 am

So, can we assume that home values (other than in the 905 it seems) have dropped? But owners are reluctant to take the loss now hoping to defer the paper loss? This would imply that it is the perception in the minds of homeowners that is sustaining the current price floors, and not the willingness of buyers to commit to those prices.

Sticky sellers. I wonder what the black swan will be that will colour that perception to the hue of… panic? The social engineers that help our farmers of human livestock, er, sorry, human resources, what are they cooking up leading into 2012?

Here are some possibilities: economic depression via tight bank liquidity, pointless war for political mind-control, third world famine via staple price inflation, more earthquakes in non-active locations (HAARP), holographic technology (I introduced you to this in a practical way yesterday), and the most psychotic goal of all: birth of a new global religion, THE CYBERNETIC revolutionary dream of AI (in the hands of a few of course).

But, as usual, I digress. Sorry.

#89 Onemorething on 10.14.11 at 10:58 am

NOS LMV, I believe you are correct on the China thing, RE is just a symptom in which can make the sheeple turn a blind eye with help from the MSM to make it look like alone brought things down.

Even the RE correction in China will silent it’s people into more simpler living so the powers that be in China can take pounds of flesh from foreign and domestically.

#90 disciple on 10.14.11 at 11:02 am

Let’s assume you know that MJ’s death in 2009 was no accident. So who did it? Connections, connections.

#91 Peter on 10.14.11 at 11:03 am

Peter (from NYC here)
Chris – You have taken a 25% hit on Calgary property – that is very significant. If Calgary was costing you money every month I would say cut your losses and bail out right now. However you say that it generates income – you don’t provide how much income but you say it’s enough to help pay down Edmonton mortgage.

Based on this info I would at this point do the math on Calgary. How much in percentage terms are you getting in net cash flow as a percentage of the total current purchase price of $215,000 after accounting for the yearly costs of finance and all maintenance fees? Is it a number like 4 or 5% if so not too bad. Do some sensitivity analysis – can this place still cover all of the expenses if your current rent received drops by 20%? How does it look if you hire a local property manager to take care of it for you for 10% or so of the rental revenue?

I guess what I’m getting at is – you have bought high and now it woudl cost you at least $25,000 out of pocket to “undo” this transaction. The ideal scenario is that this rental carries itself and you also put a property manager in place so you worry less about it. Sure it can go down further in value but hopefully over time it will come back. In the meantime you might also explore fixed rate options. In the US I fix my rates for a 30 year period at 5.125% for my rental properties. See if there is anything at all that goes beyond 5 years for a reasonable cost. If Garth is right and rates go up – you will be locked in for the longest possible time.

$45,000 – DEFINITELY pay down your LOC on Edmonton. You are at $110000 right now you will be at $65000 once you pay it down. For the next little while – beg borrow and steal to pay down Edmonton until you are at zero. This will take away the nightmares you are getting. Look at it from a different perspective. Until Edomonton is fully paid off – any money you can save isn’t truly your money – pay this one down even if there is a tax benefit – it will give you the cushion you desire.

Mentally plan on staying in Edmonton for a very very long time. 1200 sq feet is what I live in in NYC – my wife and two kids and I are fine in this space. It’s tight but it’s the same space that generations before us lived in. Get used to it – it’s humbling but allows you to spend less and save more. Forget the ETFs and balanced portfolios until you have fully paid off Edmonton.

If you plan to keep these two properties for the rest of your life you will be fine. Time flies faster than you think. Before you know it 15 years will have passed an Calgary mortgage will be 1/2 way done! At 45 you might be pleased at the prospect of having only 15 years to go before you have Calgary fully paid off and providing you income in an early retirement. By then Edmonton also might be a potential rental.

Don’t listen to the horseshit that some of the bloggers are throwing at you on this website. You are taking risks and investing. Your risks are measured. You can’t always win – but if you position yourself sensibly and save your money you will live to fight another day. You made some mistakes here but they are not fatal and if you can live through the correction you will be the wiser for it.

Good luck to you and the misses from NYC!

#92 bigrider on 10.14.11 at 11:04 am

The latest from The GTA Residential Market commentary from by BILDS economic advisor Dr. Frank Layton.

Nice and fluffy just as expected.

#93 skeptic on 10.14.11 at 11:04 am

Long time reader/ first time poster.
Enjoyed Pablo and APM’s replies…no pity for Chris, and even less for all the RE agents going tits up.
Garth, I’m currently reading your book “2020” which you wrote in ’99…you were spouting the same gospel then, and in the book you recommend taking advantage of the glorious investing opportunities that lie ahead for the next decade. Well…what happened? Just saw some pundits calling the last decade the “lost decade” with regards to investments. I suppose there were some winners along the way, but “balanced portfolio wise” things were stagnant.
We all still need somewhere to live, and if chosen wisely, your house might still turn out to be the best thing you ever bought…

#94 Daisy Mae on 10.14.11 at 11:12 am

APM: “Does a real estate transaction really need to be facilitated by a real estate agent? I’d say no.”


…and I’d agree with you. My son has sold 2-3 houses himself. And it wasn’t a problem.

#95 Ron on 10.14.11 at 11:26 am

Further to your point Garth, I’m noticing that, for house rentals, renter viewings are being set-up the same way as RE listings.

#96 From kits on 10.14.11 at 11:28 am

pay down debt, pay down debt, pay down debt!! lowest interest rates in history! Why wouldn’t you…

If you ask a financial advisor they are going to tell you to invest..of course it’s how they make money.

Even the pros aren’t making money in this climate..why do you think you can with etf’s. play it safe until things calm down out there!

#97 Tom from Mississauga on 10.14.11 at 11:30 am

Hi Chris
Looks like you have a capital loss to offset your capital gain. Sell Calgary this year! Rents will fall as the real estate market tightens. Vulturing future landlords will be profitable at lower rents and builders will get cheaper land and labour to continue building at lower market prices. Owners that can’t sell will rent for less to avoid insolvency. Looks like all your current cash from your stock will go to the bank however to close the deal. Isn’t leverage fun! You have lots of time to recoup, don’t sweat it. Life’s best lessons are learned from mistakes. Good luck.

#98 Devil's Advocate on 10.14.11 at 11:31 am

#2Hashnugs Inthebong on 10.13.11 at 9:14 pm
These bidding war inducing prices, if an unconditional offer comes in at the asking price, and no other offers, is the vendor obligated to sell for what their asking price was?

No, but this could result in interesting legal action. — Garth

Inquiring minds that want to know should look up “Invitation to Treat”

#99 Devil's Advocate on 10.14.11 at 11:40 am

#82Joe Q. on 10.14.11 at 10:33 am
My understanding is that a seller who rejects a lone unconditional offer at the asking price is basically carrying out false or misleading advertising, and there is grounds for legal action unless he or she re-lists at a higher price.

“An offer must be a clear, unequivocal and direct approach to another party to contract. For this reason, advertisements, and catalogues are not offers. The law calls these “invitations to treat”; or invitations to the general public to make an offer on a particular item.”

#100 char on 10.14.11 at 11:59 am

“…this could result in interesting legal action…”

Years ago it happened to me : the vendor wouldn’t take asking price. I was pissed !

Garth, can you elaborate ? Can the buyer get monetary compensation ? If a penalty were a risk, it would cut down on the obnoxious practice of under pricing.

#101 Pr on 10.14.11 at 11:59 am

One very important aspect for real estate is the confidence of the public. Can you imagine if Greece goes under, than they other big 5 country will go with theme. Soon after those event, house owner in Canada will be very lonely in their open house!

#102 Pr on 10.14.11 at 12:03 pm

“It is said that men go mad in herds, and only come to their senses slowly and one by one.” -Charles MacKay.

#103 Rookie57 on 10.14.11 at 12:06 pm


After reading all the advice from the blog dogs, I think you get the idea about being an idiot. From what I have read, and from my own experience, everyone gets to be an idiot sometimes in their life. From what I see, you are in a bind. Best advice I can give you is to get professional advice to work through this. RE peaked awhile ago so can you afford to wait? Get your house in order and don’t whine about it. You took a shot and it didn’t work. So clear the decks and simplify. Give Garth a call or email to see if he can help… his bark is worse than his bite … usually.

#104 Tax on 10.14.11 at 12:08 pm

“I’ve been writing that off tax wise”


#105 Echo on 10.14.11 at 12:10 pm

It’s easier to jump from a boat when the wood is above the water. (and I’m obviously not talking about profit vs. loss here)

Sell the condo in Calgary IMMEDIATELY.

Accept the loss- grow up and be thankful you jumped before your feet got submerged as the boat was sinking.

Put the $45K against the loss in Calgary and then towards your Edmonton mortgage.

Stop borrowing.

Wake up and realize how much bounty comes into your home in income and invest from now on as Garth dictates.

Reap the rewards.

Don’t even think if purchasing real estate again unless all the news can talk about the devastation looking backwards.

Think about selling Edmonton, also immediately, and investing the equity, also as Garth has laid out.

Find a nice rental exactly where you want to live and don’t go nuts on it. Remember, rent is cash that could otherwise be invested in things that pay you dividends.

*Obviously, if you sell Edm. too then anything you have left after paying off the shortfall in Calgary should go straight into investments.

Good luck. If you do all of this you’ll both sleep like babies and eventually get used to being smart. Then, no more anxiety, no more stressful decisions in the future. : )

** There is NO type of real estate, even a solid commercial rpp buy, that you can purchase unless you pass this test. You need to feel smart and like you “get it” for awhile after your escape from thus mess.

Now list the condo, yesterday, unless you love to swim.

#106 Horseshit Harry on 10.14.11 at 12:19 pm

#91 Peter

“Don’t listen to the horseshit that some of the bloggers are throwing at you on this website.”

If memory serves me well, you yourself came to this blog to receive some horshit advice and created quite a stir in the process.

#107 maxx on 10.14.11 at 12:24 pm

#14 Toon Town Boomer on 10.13.11 at 9:51 pm

Garth shouldn’t people just offer what they can afford?
The Realtors suggest you may offend the buyer when you make low ball offers. I say their asking prices are offensive. Where is line drawn between a low ball offer and being offensive?

Well put, TTB. What is a buyer to do? Cringe, just because a realtard menaces an unhappy reaction from a greedy seller? Recently put in an offer I could live with and it was rejected. Oh well, on to the next. A week later, the greedy sellers dropped their price….and they’ll drop again before I consider making another offer. To hell with seller’s reactions.

#108 bill on 10.14.11 at 12:25 pm

#4 Mister Sanity on 10.13.11 at 9:18 pm
btw mattymatt12345 – your ‘first’ comment is infantile and not helpful whatsoever. #wasteofspace

there is a sanity claus but he wont visit you.

#109 Marc L on 10.14.11 at 12:29 pm

Hey Walter (Wally) Safety

If you want courtesy, politeness, gentleness, pampered spoon fed comments, go to church, go to the Rotary Club or go to your nearest support group for children of narcissistic parents.

On this blog we don’t pretty up our thoughts. This guy is an idiot, he should hear it like it is.

Next time form an opinion on the subject instead of raising your brow to us and wagging your e-finger.


btw mattymatt12345 – your ‘first’ comment is infantile and not helpful whatsoever.

Ditto for
MARC L #5 Sell your dump in Edmonton, it is an ice box up there. Get a transfer to Calgary. Move into that overpriced dump in Calgary. Get rid of the hobby car, throw out the video games. Go to the gym. Meet some women and live a little – for krissake. Take your 45K and pay down the Calgary particle board house of cards. Don’t lose sleep over money. Just get to work tired cause you’ve been managing three new girlfriends cause you only sleep 3 hours a night.

#110 Devil's Advocate on 10.14.11 at 12:44 pm

#28eviee1973 on 10.13.11 at 10:46 pm
Sign a an unprofessional realtor, when looking to buy a place a few years ago, a place I was interested in had an offer put on it , the seller and listing relator were so honest they would not take another offer until the first was declined or approved. The buyers agent who was “supposed” to represent me was irate due to the fact that they were not open to competing offers as an auction format. I had no interest in joining a bidding war/auction.

The facts;

1. You did make an offer, or at least expressed such an interest in making one that your agent communicated so to the sellers agent.

2. Your agent represented you

3. Your agent’s fiduciary duty obligated him/her to do his/her very best to achieve that which you directed them to achieve – within the confines of the law.

4. The sellers agent was in receipt of your offer which we must assume the sellers agent, at least, made the seller aware of for should the sellers agent not have enlightened the seller that entertaining competing offers might effect a purchase and sale agreement in excess of the “invitation to treat” price would be a breach of that agents fiduciary duty to the seller. Sellers do generally want the highest and best price they can get. The seller still retains the right to entertain reject, but their agent has a duty to at least inform them of the presence of another offer and the potential benefits to be had by entertaining it in conjunction with the first and then take instruction as to how the seller would like to proceed on the basis of that information.

5. Legally there was nothing stopping the seller from entertaining, or accepting in backup pending collapse of the first, any other offer that might come along until such time as a deal with another was completed.

6. That your agent might not do their very best to have your offer presented or made known to the seller would be a breach of your agents fiduciary duties to you who clearly expressed an interest in acquiring the property at the time by making a formal in writing offer – clearly a good indication of your wishes – until you expressed to them otherwise.

It appears both of the agents in question were most probably acting as instructed by their principals as best they could. Anything less on their part would be an unethical breach of their fiduciary duties.

Ultimately what a buyer or a seller chooses to do is of their own accord. What a buyer or sellers agent does on behalf of the buyer or sellers expressed wishes, within legal parameters, is obligatory.

But I am not a lawyer and merely put forth this rationale to offset your vilifying of the agent(s). Your agent who was “supposed” to represent you was in all probability doing just that. That you might think otherwise appears simply pure bitter prejudging conjecture.

#111 Victor on 10.14.11 at 12:45 pm

Interesting… I thought recently “Why has Bell suddenly given HGTV channel for free?”… maybe this is it…

#112 Nostradamus Le Mad Vlad on 10.14.11 at 12:45 pm

#9 Smoking Man — “. . . and watch Isreal take out Iran…..” — One point: when, or if that happens, expect China and Russia to step up to the plate and defend their interests.

Their interests do not lie in the west. It will not be pretty. Guggle Hiroshima and Nagasaki pix or video clips.

#62 Crash Callaway — “That way you’ll always be above water in your mortgage.” — That’s the line of the day!

#89 Onemorething — G’day Onemorething. China’s IOU’s would be the other part of the plan, in combination with #9 Smoking Man’s point above.

Once the “US has given Israel permission to attack Iran” has gone viral (it probably already is now), China, Russia and Japan could quite easily pull the plug a lot sooner than anyone realizes.

Then Mary Jane’s Last Dance begins!

#113 Chris on 10.14.11 at 12:52 pm

hey All!

wow this has been interesting, wish i had email Garth sooner.

i love the good hearted wishes and the evil hearted bashing, i guess i expected it – and some good laughs, helps me lighten up a bit. and i dont play many video games… i was trying to imply that life as a whole is too damn serious, for a guy like me that doesnt take it seriously…. the bonus isnt all its cracked up tto be, i worked for over 3 years without to bring that one in.

to answer a couple questions – yeah Calgary has been net positive…to date the income has been about double the cost, as a average over 3.5 years (15k income, 7 k cost). IF (big if) this thing goes ‘regular’ mortgage, monthly cost will double, and at todays rental rates i might earn a grand a year on it.

I have more, but i have re-read some comments.

Thanks everyone, this has been….. educational

#114 Mr. Plow on 10.14.11 at 12:58 pm

Some thoughts:

You’re right, you can’t sell the Calgary place at that loss. You have it rented, so consider yourself lucky.

I would continue the course you are on, pay down your debt and try and save aggressively. I would spread the debt repayment over both mortgages though. A bank could get skittish if you have not paid any principal down in years like you have with your Calgary property.

I would consider the rental in Calgary a life lesson and perhaps a blessing in disguise. Who knows maybe you will have a paid off asset from the backs of your renters.

#115 T.J. BONES on 10.14.11 at 12:59 pm

Garth CPP buying with help ING (the orange guys shorts) What does it mean?

#116 new_era on 10.14.11 at 1:08 pm

Don’t ever be afraid to make a low ball offer.

In our society, we were raise to buy items on what the price tag says.

I learned a lesson from a former friend who told me never be afraid to make a low ball offer. If you just look throw in a ridiculas price, your never know what happens.

I bought a house which was under Power of Attorney because the old couple die and the kids wanted the money. Asking price 149,000. I offered 101,000 saying I;m interested but not that interested, and will to see what they counter with. After some back and forth I got the house for 109,000.

Another house we bought was house of a child molester who was convicted and went to jail. He was asking for 120,000 we offered 80,000. We got it for 97,000. The place was a mess, after 2 months of reno’s floor paint and other cosmetic crap like (me so horn granite countertops) or (I love you long time tiles) we sold for 145,000.

When times get tough, the home owners panic. Ifs its a power of attorney, the kids wants the money, and wants it now, they don’t want to deal with each other.

#117 Bill Gable on 10.14.11 at 1:09 pm

Cut Calgary loser lose.
Read Mr. Turner carefully.

Balanced investments and that TFSA, etc.

Good luck and keep your powder dry.

#118 spaceman on 10.14.11 at 1:11 pm

Chris your financial problems are complex, but not insurmountable, get yourself a good financial analyst, ask Garth for a list.

You would be good to reduce your exposure to Real Estate. Sell one of your propertys, and live in the other.

Talk to a financial analyst, even your bank if nothing else, about a Balanced Portfolio. Get and Read Money Road, The Wealthy Barber, and The Success Principles.

Stay away from Rich Dad Poor Dad Real Estate Academy. What a shill that was… came to Victoria, I almost puked… I just wanted to see if Kiyosaki had any wrinkles but he never showed up… his minion was there to fleece the sheep… at $900.00 a pop…

(remember Tom Vu ?)

#119 Nostradamus Le Mad Vlad on 10.14.11 at 1:18 pm

BRICS Staying out of Euro mess; Link in Physical gold and silver becoming harder to buy; Qantas Healthy pay raises for almost everyone; Lech Walensa Remember Solidarity? He’s coming to Wall St., to stir the shit! And 2:01 clip Hell no we won’t go! The moment they found out; Occupy Surrey welcomes dubya, the war criminal.

Billionaires who choose the US prez, not sheeple; Agent 99 The reasons why he can never be 007; Looking back Dec. ’09. It appears Obomba and the CIA are the largest drug smugglers in the world; Oh Dear dubya was an idiot, Obomba loves being in a war zone, but this one is a nutter of supreme proportions. Charles Manson doesn’t even come close; Further to El Hierro (Canary Islands).

#120 TaxHaven on 10.14.11 at 1:25 pm

“Buyers rule?”

Maybe they still DO, but they shouldn’t. Actually, cheap mortgage money rules, not cash.

If we were on some kind of hard money standard, and buyers actually had to have all or most of the cash in hand (or monstrously strong credit scores) – and if central bank counterfeiting were outlawed – house prices would begin to resemble reality…

#121 Kayak Freddy on 10.14.11 at 1:30 pm

Oh Poor Chris – I make a 6 figure income and what to do – go hire a professional advisor or accountant you cheap turd…WTF…you grovel in this blog, its filled with one sided opinions buddy. What were you really expecting to hear in here –

I know people who live happily on a tenth of your income. It’s all about making due with what you got. Our society has lost track of that fact, and only for that reason do I wish the entire Financial system gets a good kicking –

Lets get back to basics and stop having overpaid wankers chirp what a situation there in. I’d rather hear how a homeless guy is coping then guys like Chris – it must be an ordeal each morning for him on what to wear…..

#122 Van guy waiting on 10.14.11 at 1:36 pm


Cmon people! Look. We all know that this could get ugly. But seriously, why do some think this is vengence? Anyone that is selling their home always want more for their home. It’s human nature! A lot of normal families are going to be affected and that’s not fair. Specuvestors and developers should be the one that pay. But they are smart and made the $ off these normal people. Developers make $ cuz they know they can. They are the ones laughing. It’s not fair, but wtf is fair in this world. If u don’t fuk over people for $ in this world, you are not gonna make $. This is a doggy dog world. All these stupid people are needed because they made $ for others. Ive never been sucked into these bastards so I will be laughing soon

#123 Chris on 10.14.11 at 2:08 pm

huh. well i’ve re-read the comments. a real nice 50/50 split of, well, everything!

I sure can’t say i know what to do next – but you’ve all given me more options to think about than i knew existed. I also guess i’ve decided that i need to do something, and i need to do it sooner than later. I’ll have to figure that out on my own, because nobody really knows what the future has coming for us.

thanks to everyone that addressed me in this, good or bad. i cant get too excited about the rude ones, its not like i have a blog where i post my thoughts daily and let others bash! im sure your skin gets real thick in this line of public-posting vulnerability.

heck, i suppose i could post my true feelings about it all, but that would stray from the focus of this blog.

extra thanks to you that took the time to offer some true advice! i’ll be making some ‘lists’ of options, running some numbers, heel, i may even seek some help!


#124 bigrider on 10.14.11 at 2:32 pm

#118 Spaceman. Your post made me laugh in a good way

Ya Robert Kiyosaki is so rich from his real estate endeavors that he travels the world hosting get rich with real estate seminars charging $900 a pop for them.

He wants everyone to be able to do what he professes he has done, out of the goodness of his heart. And out of the goodness of his heart, this ‘rich dad’ charges 900.00 bucks for his advice ,money he doesn’t really need because after all ,he is not a ‘poor dad’.

This man from hawaii should go back to spear fishing or humping the hula hula girls. We have enough scammers in the world already

#125 Bill Gable on 10.14.11 at 2:56 pm

Anecdotally – this time of year English Bay should be packed with pre Christmas stuff, and the Port should be humming.
One ship today.
Started digging. China has undercut shipping rates by a huge factor, in effect, shutting out Non China carriers, with higher above line costs.
No one talks about how much troube China isin. Why? Their Banking sector looks like a Flaherty brain scan. Holes, and nothing going on.
Dunno – but this is going to be interesting.
One last – boots on the ground observation.
Electronic store, not Apple, and the place was a morgue. I asked a sales dude how business was. “Lousy”.
Fun Christmas season for retailers ahead.

#126 Westernman on 10.14.11 at 3:05 pm

Smoking Man
Regarding the comment about you sitting back in your easy chair and watching Israel ” take out ” Iran…
are you this pig ignorant naturally or did you have to take courses?
Stay on your meds you nutcake.

#127 Dan in Victoria on 10.14.11 at 3:20 pm

Chris you and my wife must have front row seats on the roller coaster.
Calm down, do some critical thinking.
As far as I can figure you owe a total of 380K
You have an income of 100K
The loan ratio is not too bad.
You should trim it down though.
The loss on the Calgary property isn’t there until you sell. If it is cash flow positive whats wrong with that?
You need to talk to a compentent advisor who understands the ins and outs of your situation, everyone has diffrent wants and needs.
You just need someone with a firm hand to guide you.
Would I have done what you did, no, but i have seen this time and time again.
You get caught up with the herd and buy cause its going up and panic and want to sell on the way down (roller coaster front seat)
You’ve learned a little from this but you need to learn more, like I always say you’ll pay for your education how much is up to you.
Believe me I know what you are going through mentally (I have been ripped a new one the last couple of months)
Stop running around with your arms waving in the air, Sit down and start crunching the numbers and angles theres a way to make this work.
Find it.
As I said you need guidance maybe Garth can send you to someone who can help.
Don’t despair work at it.
Remember if you don’t take a chance you’ll never get anywhere, just calculate it so its in your favor.
Good Luck.

#128 foolsrushin on 10.14.11 at 3:35 pm

A little late to the party but I just read yesterdays blog. Everythings back to normal. What a joke! A few manipulated positive days in a sea of red and everythings okay? LOL Oh well, thats what the sheeple want to hear.
One more week of advances into options expiration before the markets reverse course. In any case, when panic returns to Europe following the October 23 meetings the US dollar will bounce higher once again as money moves to treasuries and commodity stocks will get hammered to even lower levels.
Write it down, watch for it and refer back to it.

#129 Diana on 10.14.11 at 3:46 pm

@64 House

Holy mixed measurements Batman!

#130 Occupy Everything on 10.14.11 at 3:49 pm

Bad news folks. The unions are throwing in with OWS:

This just shows what a bunch of nimrods OWS are. CAW was one of the institutions that gained the most from the bailouts. Without the bailouts most Canadian auto plants would now be closed (rightfully so, too.) People can’t even figure out which side of the toast the butter is on anymore. The idea that OWS would even consider help from unions shows that whatever the occupation is, it is not what it seems. Where this thing is going could be quite dangerous.

If OWS wanted a real revolution, they would just take all of their money out of the banks. If everyone did this, the revolution would be over by next Friday.

And the way they appear to decide by consensus is really frightening to watch. Hitler youth camp, anyone? It is not consenses but “crowd washing”. Preachers and hypnotists do it all the time.

#131 Zuccotti_Park on 10.14.11 at 3:59 pm

Just bring the penny-auction to hogtown.

One low-ball offer only, from a group of largely disinterested buyers. Or make terms & conditions from a coordinated group of buyers to onerous that sellers/agents have no choice but to take it up the derriere.

The 99% can coordinate. Happened at least once, a while back on Place de la Bastille.

#132 Devore on 10.14.11 at 4:03 pm

#114 Mr. Plow

I would consider the rental in Calgary a life lesson and perhaps a blessing in disguise. Who knows maybe you will have a paid off asset from the backs of your renters.

“backs of your renters”… You make it sound like renters are some lower form of life, slaves doing hard labour in Siberian salt mines. Not just this comment, but nearly every comment you post here.

So smug you are. Landlording is (can be) a respectable business, and some people even make a living at it. They provide a service, housing, to people who pay money for it. Does your banker, power company, plumber, look down on you, because you’re paying them for the use of their capital, facilities and skills?

I don’t know why you always have to make it sound like something shady one would do in a back alley behind the 7/11 dumpster.

#133 Moneta on 10.14.11 at 4:44 pm

The loan ratio is not too bad.
You should trim it down though.
The loss on the Calgary property isn’t there until you sell. If it is cash flow positive whats wrong with that?
Loan to ratio is not too bad but it’s cash flow positive because it’s interest only.

It all comes down to whether he can live with the monkey on his back for 10+ years. Will it destroy his soul?

Does he hate the house because of the loss or because he really hates it?

He’s the only one who can decide.

#134 Trina on 10.14.11 at 5:11 pm

Dear Garth, I started reading your blog about 2 weeks ago. I cannot tell you how happy it makes me. My husband and I (and 2 kids) rent a house on the west side of Vancouver. The house is old and a bit dumpy but it is our “home”. We have the entire house and a nice litle yard for $2k/month. The kids go to a good school, the neighbhourhood is lovely (Douglas Park.) We have a good combined income and have been aggressively saving for a down payment. We started looking for our own house about a year ago. (and I recognize now that this was due to a lot of peer pressure to buy the nice house) After putting in 4 different offers (all multiple offer situations) and getting screwed in bidding wars, we are still renting. We also dislike realtors so much (because of the manipulation) that we just needed to take a few months off from looking. We couldn’t handle the emotional rollercoaster of trying to purchase a home in this insane city. So, a colleague of mine reassured me we were doing the right thing by not buying and told me about your blog. And, we are starting to watch things cool off. Its makes me feel so happy. I realize…its revenge. In the meantime, we continue to rent, we continue to save more money for a downpayment and everyday that I read your blog, I feel almost euphoric. Thank you.

#135 Devore on 10.14.11 at 5:15 pm

Chris looks ok on paper, but his cashflow positive property is likely under water, and is only cashflow positive because it’s interest only. In addition to the $240k mortgage, he has $110k on his line of credit.

He seems distraught by the prospect of holding on to the Calgary property, but doesn’t want to do what it will take to sell it (take a loss and cover it with his savings, or refinance the Edmonton property).

With an income of $100k+, if he really wanted to, he could pay off the line of credit in 3-4 years (what is he spending his money on? on “her”?) The Calgary property might come close to paying for a standard mortgage, assuming it doesn’t go vacant. If he starts to pay off the Calgary mortgage, that will put some stability in his mind, because there is an end date.

Tighten the belt, make a realistic plan, and stick to it.

Otherwise, take your lumps, and sell. What’s there to advise? There’s no easy, win-win way out.

#136 smoking man on 10.14.11 at 5:18 pm

Westernman let me set the record strat
I don’t support the yamaca heads or the towel heads in fact if all the religious nut cases decided to go to war with each other that would be fine with me. In fact the more religiuos extreamest that get taken out the better the world will be bette

If you beilive in any god your an idiot

#137 Devore on 10.14.11 at 5:41 pm

Pension plan ignorance is not bliss

Perhaps more worrisome, the study found 31% of respondents said they don’t know what percentage of their current annual income they will need to maintain their desired standard of living past the age of 65. Not surprisingly, more than half expect to be able to afford trips and other activities they can’t now.

#138 Westernman on 10.14.11 at 5:42 pm

Smoking Man,
Well said. I do have a question though… how come you can spell perfectly in one post and then the next post you spell like a drunken 10 year old? Just curious…

#139 Devore on 10.14.11 at 5:50 pm

And how does a prudent Canadian bank give someone an interest-only mortgage on something that’s underwater as deemed by comparable sales?

Regardless, Chris should retain an accountant to help him figure out where he is, and what his options are. At the very least, having some professional advice will put his mind at ease. If he ditches the hobby car and video games, he’ll have enough money to hire a small army of them.

#140 mad vancouver on 10.14.11 at 6:21 pm

@occupy everything:
Most of them do not have a penny in the bank… they are in heavy debts!

#141 Bigrider on 10.14.11 at 6:23 pm


#142 dd on 10.14.11 at 6:28 pm


You sell your winning stocks and keep the dog (real estate). Buddy cut your losses and sell the house.

The only way Calgary house prices will turn around in the medium term (5 – 10 years) is if natural gas prices turn up. I don’t see that happening until when and if the Kimate pipeline opens. And that could be quite a while.

#143 Pat on 10.14.11 at 6:42 pm

Hm, what miserable lives some people seem to have… (those who bother with lengthy advice to anonymous idiots)

#144 Manipulated Markets won't stop the riots on 10.14.11 at 6:53 pm

The powers that be can manipulate the stockmarkets with all the funny money they want but the roits are REAL and the problems remain. Corporate greed must be taken down and FREEDOM and FREEMARKETS must be allowed. The corporate bankers elite hate free markets. Look whats happening in Italy . I doubt the CORPORATE media would report and shor reality.

#145 Manipulated Markets won't stop the riots on 10.14.11 at 7:04 pm

Occupy Everything #130

You think the government bailed out the unions? LOL They could careless about the unions and in fact the government screwed the workers over while giving Billions and billions and billions to the corporate elite as they laugh flying in their jets and you think they bailed out autoworkers who had to bend over and take pay and benefit cuts? You know the CEO’s laughed in the governments face about pay cuts for them? They are not stupid. Occupy Everything YOU ARE RIGHT ABOUT PULLING MONEY OUT OF THE MONEY CHANGERS BANKS. We need to coordinate a day we all goto the banks and pull a few thousand out and see what happens. I still remember one time I needed 10K and I went to the bank and asked for MY MONEY. They had to check to see if they even had that money.

#146 Nemesis on 10.14.11 at 7:27 pm

For Chris… Experience freedom.

Liquidate. Rent. Deleverage. Live. While the ‘gettin’s good’.

Added bonus: you will obviate the risk associated with a character judgement failure and/or romantic peccadillo/indiscretion culminating in a “WAS HIS” plate being affixed your principal abode. Ultimately, it ain’t about what you ‘own’ – it’s about who you are.

We exit like we enter… naked and bereft ‘o bling.

The ShowReel ‘o Terminal recollections is all that matters, Chris. Make it good (Hint: it’s about what you do for others/how your memory is celebrated.)

#147 Nostradamus Le Mad Vlad on 10.14.11 at 7:47 pm

Bill Gross “You would think that Bill would have realized from his last mauling that the markets are not operating as they normally do but are subject to massive rigging for political reasons.” and Foreigners dump US$74 bln. in treasuries; Solyndra Taxpayers on hook as usual; 7:12 clip After s nice intro by Hillary Clinton, the clip shows the utter hypocrisy of govts., and and people’s “I am not moving” moment; 5:16 clip “The Theme for Occupy Wall Street should be: 1. End the Federal Reserve Bank / 2. End all the Wars / / 3. End the Income Tax. None of these will happen right now, but next week is a different day; Move On “Another attempted hijacking. Occupy AMERICA is a leaderless resistance. Thus, anyone claiming to speak for them is a fraud!”; Louisiana Cash transactions banned until due diligence is complete.

China Sheeple coming and going to where the jobs are; Iran’s Central Bank “This means gas prices here in the US are about to explode, thanks to Israel’s desire for America to fight her wars.”; Coup in the EU? Libya owes US$1 bln. “Which is, of course, what wars are created for; to plunge both sides into debt to the bankers for the next several generations.”; BTD Banking Transfer Day. Use a credit union or similar, let them handle the paperwork; 1:48 clip End the Fed; 2012 Timeline Maybe, maybe not.

Mediteranean Gunfight At The OK Corral? Gadaafi The Gadaafi loyalists are a tough nut to crack; Dictatorship Right to free speech (first amendment) proposed for being eliminated; Harold Camping Just to steal some of OWS’s thunder, Camping provides a lightning rod the the new end of the world day. With the US now having given Israel the green light to strike Iran (which will drag China and Russia into the fray), he may be a little closer to the truth this time. BTW, the rapture did happen, but we were all on toilet break, so missed it!

2:58 clip Today’s recipe from Oahu. Little too spicy and hot for moi — takes about 15 mins.; Af’stan to Libya Getting it wrong.*
#126 Westernman — “. . . watching Israel ” take out ” Iran…” — FYI. Iran’s nuke plants are electric power plants only, with the plutonium and uranium enriched to less than 20%.

90% or more is the amount needed to make WMD. Dimona has those facilities. — 2:03 clip “U.S. Quietly Supplies Israel With Bunker-Busting Bombs.”

Also — War Mongers “Translation: The United States is all used up, so now it is Canada’s turn to be Israel’s military force!” and Harper Same as dubya saying Sadaam was dangerous, and had WMD. Where are they?

#148 The thing in the basement on 10.14.11 at 8:22 pm

137 Devore – thank you for link. Here’s one back at ya!

#149 X on 10.14.11 at 8:28 pm

#150 EyesTheBye on 10.14.11 at 8:29 pm


Ok ok you are right. I have to admit here so it doesnt make me look anymore stupid on RET. God damn me for not coming to this blog earlier

#151 X on 10.14.11 at 8:30 pm

If the TFSA’s are to help people retire with enough $, what will be introduced in the future, as many 20-30 year olds have bought so much house, that making the mortgage payments are all they can do, extra cash for retirement is non existant. They havne’t realized yet that they have overpayed for their housing, nor have they realized the error they have made in not saving for retirement.

#152 Devil's Advocate on 10.14.11 at 8:42 pm

#134Trina on 10.14.11 at 5:11 pm
Dear Garth,

… In the meantime, we continue to rent, we continue to save more money for a downpayment and everyday that I read your blog, I feel almost euphoric. Thank you.

What does this tell you? It tells me that at the root of most every renter lays ultimately the goal of ownership.

She’s euphoric she’s not buying. Do real estate licenses now require mind control? — Garth

#153 Devil's Advocate on 10.14.11 at 8:55 pm

“Saving more money for a “downpayment”” Garth. That sounds to me like they want to and are planning on buying a “home”.

What do you think they are saving for Garth? A Hummer a home or a Harley?

#154 bcaltanorthernlights on 10.14.11 at 9:59 pm

My bank keeps offering to lend me enough money to get completely out of debt.

#155 Tony on 10.14.11 at 10:52 pm

Well this one’s easy walk away from the townhouse in Calgary and try to sell the house in Edmonton. The price of oil should drop to the 50 to 60 dollar U.S. range. There you go that’s what to do with your 45 grand. Wait until about October 26th (9:30am at the open before the draws on oil that day) and buy HOD it of late has tracked stocks up and down and stocks are in for a huge fall. I’d guess around 2,500 down on the DOW and 3,000 down on the TSX next month.

#156 Tony on 10.14.11 at 11:07 pm

#134 Trina on 10.14.11 at 5:11 pm

You don’t think of buying until you see a “power of sale” sign on every third or fourth house on every street. If you don’t see it don’t even think of buying.

#157 dddd on 10.14.11 at 11:25 pm

bcaltanorthernlights on 10.14.11 at 9:59 pm
My bank keeps offering to lend me enough money to get completely out of debt.

isn’t that Greece?

#158 Echo on 10.15.11 at 6:52 am

“I’ll have to figure that out on my own, because nobody really knows what the future has coming for us.”

Chris: 123

You aren’t getting it. Let’s pretend that we didn’t KNOW the r/e market was going to crash, you know because of the obvious, and extreme, fundamentals. This is about RISK and MATH.

You’d be wise to take the advice, hopeless if you don’t. To recap we’ve got:

Too much risk anyway
And math that’s already in place.

Try not to take too much time deciding. That will likely be the difference between being ABLE to sell the condo or not.

#159 TurnerNation on 10.15.11 at 11:11 am

#84 gladiator on 10.14.11 at 10:37 am

I mentioned the same letter, yesterday. I wonder if the banks know what is coming: what if rates rise by 2-3%; then the new interest-only payment will resemble the old minimum 3% repayment.

Cash flow neutral for consumers, but extra profitable for the banks. The house always wins!

#160 chris on 10.15.11 at 11:57 am

a couple clarifications…

current LOC in edmonton is actually 60k, not 110. someone asked what im spending all my hard earned money on, for the last 6-7 years, its all gone to debt reduction. ALL of it. that LOC started at 110, bumped up to 160 when i bought calgary, and i paid and i paid and i paid,it down, then used 16k to buy company shares, then used 13k to pay off high interest student loans, and paid and paid and paid it down some more, so in reality i’ve borrowed over 180k against it and have only 59k left. i could kill it in 6-8 months if i focused and used my banked cash. but the monkey on my back that is calgary will still be 240. thought about it last night and we are going to rent it out another 6 months, and in the spring look very seriously at losing our ‘investment’ in it and ditching it. way i figure we’d lose some 90k in sweat and tears, and end up with about 60-75 k of debt in edmonton. we could ditch that if we wanted to bail out of this bullshit ratrace garbage. if i were to liquidate everything (and i mean everything, even what i didnt share here) we could end up debt free, 0 in the bank and a house in edmonton.

tony i’m with ya on the inevitable. but i always wonder if it gets that bad, how will banks keep up to the failures? i know a close friend int he “mortgage gone tits up” department of a major aberta CU. in 2008 she said her job was to do ANYthing to keep people in those houses, including slashing payments. i know garth think it will be a gentle, gradual failure of the economics, but if its worse than that? i know its juvenile, but i would be perfectly ready to say #$% you high interest rates, black ball my credit for ever and chase me around the globe, what do i care? i dont have kids. i’d drop the whole shell game and wouldnt cry too much about it.

Nemesis, you know how i feel. need to man up and get there.

#161 chris on 10.15.11 at 12:04 pm

yeah, what we are doing with writing off interest paid on the heloc portions as an investment loan which was used to buy calgary may be risky. but, shit, i only did that this year and it only got me some $1600 back from the man so they can have it back if they want to dump thousands auditing me for it.

#162 chris on 10.15.11 at 12:07 pm

devore, i obtained the interest only mortgage through a brroker 5 years ago back when nothing could go wrong with the real estate market, i had 50k down, so there was a buffer for them….haha, not anymore !!

for what its worth, my renters for the last 3.5 years love me, i dropped the rent significantly every year they stayed and gave huge discounts for christmas. what goes around comes around, i hope.

#163 chris on 10.15.11 at 12:10 pm

i also think i will get an advisor. never trusted those types, but, hey, its just advice. could be interesting to see what the system would advise…even though i have no faith in it. even the little lady at the bank counter was pushing me to see their guy when i came in with the bonus chk – i believe they are programed to do that tho’.

#164 chris on 10.15.11 at 12:18 pm

best part of it all is that i bought calgary like the same month/year garth published “Greater Fool” !!

sadest part is i knew it was a mistake when we did it. i should have listened to myself.

#165 TurnerNation on 10.15.11 at 3:02 pm

Chris should meet ultra frugal Chad from Vancouver (remember him?).

#166 jess on 10.15.11 at 4:12 pm

‘Occupy the Tundra?

One woman’s lonely vigil in bush Alaska
October 15, 2011 | 7:15 am

McEachern, an assistant professor in the rural human service program at the University of Alaska’s Kuskokwim Campus, said she was following the Wall Street protests and wondering how they might be brought home to a town with one main street and no roads out.

“When I saw that it was growing and there was Occupying Portland and Occupying New Hampshire, I thought, for goodness’ sake, what can I occupy? How can I get on this?” McEachern said in an interview with The Times. “And I thought, well, what’s my context? What’s important to me?”

The foreclosure crisis may not have hit bush Alaska in a huge way, but people in Bethel are paying $6.87 a gallon for gasoline, she said. Stove oil prices for heating homes are equally unaffordable. Cuts in social services to rural villages are pending.

“And right now, they’re proposing here the largest gold mine in human history, the Pebble Mine, that’s going to do catastrophic damage to the environment and the native community, in the premier wild salmon habitat in the world,” she said. “So I’m not well-versed on the larger economic system, but I can relate to the idea of corporate wealth being lopsidedly in the hands of so few, when so many are struggling.”