How to buy

buyer10

“I know you’re right,” Jim’s anguished note read. “Every fiber tells me you’re right. My idiot friends and their condos…the endless bragging about appliances and decorating…the fact none of them even comprehend the debt they’re sucking up. This can’t last. But neither can I. I’m buying. Garth, can you help me, man?”

So I called. Linda answered. I introduced myself and immediately the temperature plunged. “Oh,” she said. “Garth Turner is calling here?” That was it. I felt like a serial homewrecker ringing up to tell them I’d just run over their puppy. Twice. But then Jim came on, and I gave him some buying advice:

First, get an agent to represent your interests, help you search out candidate properties, collect comparables and ultimately make an offer. A good one familiar with the hood will be able to flag deals and reject the greedy, unrealistic vendors, as well as provide solid advice on the quality and trending of the street, plus the biggest factor – future resale value. Your agent is paid for by the seller, so why not? Do not go into a first-time buying situation naked.

But, don’t sign a BRA – the Buyer Representation Agreement. If the agent you chose pushes one, get a new guy. The agreement opens you up to too many future issues, which have been detailed here at least twice in the past and are too boring to repeat.

Don’t even click on realtor.ca’s sexy new beta site without getting a mortgage pre-approval first. This is about money, not Linda’s nesting or blogger-stabbing instincts. You need to determine a realistic price range, and [email protected] will help you with that. But after she approves you for a ridiculous amount, cut it in half, add in your downpayment and start shopping. Remember, the financial female wishes to grasp and enslave you in amortized bondage, which is not nearly as amusing as it sounds.

No bidding wars. None. Ever. Learn to just walk away if there are multiple bids, because nobody ever wins a bidding war. The victor is merely slaughtered by the seller. There will be lots more listings coming out next week and next month. Understand that once you start this buying process, it is all-consuming, life-altering and obsessive. Perspective gives way to compromise. After losing a few bidding wars people actually start foaming when the next one starts. So they’re easy to spot. Keep your distance. It’s contagious.

Search for dogs. Stale listings. Stuff that’s been on MLS for a few months (your agent will help you spot properties that have been re-listed recently so they don’t woof as much). These are houses which were mispriced the first time by rapacious sellers and have gone stale, despite reductions. Or they have fleas – like, no parking, beside a commercial building, lousy transit, awkward layout, knob-and-tube etc. If you can live with the deficiency, or fix it over time, then here are where the bargains live.

Don’t fall for an auction ploy. That’s when you spot a new listing in an area you want at an unbelievable price, then text your agent to immediately start working on a showing and an offer. Of course, the seller’s agent has priced it $50,000 or a hundred grand under recent comps on the street just to sucker in rubes like you. You know it’s an attempted auction when a day and time are specified for presenting offers. Don’t play.

Wait for snow. Sales volumes peak twice a year – spring and fall – then go into a funk before Christmas and stay that way throughout January. There’s less competition among buyers, which means sellers who truly have to get out of  property are happy to see an offer and more likely to dicker. Besides, houses are cheaper in the winter. For example, a detached 416 house that averaged $852,090 in April was trading for $765,049 in January.

Make your offer clean. No financing condition, for example. You should even try to do the home inspection before you make an offer, as it will show commitment on your part and allow you to hammer down on price. If the inspection reveals defects, you have all the cards. Use them. Offer what you think is reasonable, within the range of recent comparables, and (mostly) what you can afford and live with. Opening offers which are stupid-low will trigger a sign-back at full price, and poison the well between parties. So don’t go there.

Help the seller say yes. Be flexible on closing date to accommodate him. Allow all the exclusions he wants, for example. Don’t write in the cat. Ask for a survey, always. Or, buy title insurance. Hell, buy it anyway.

When your offer’s presented, make the sign-back period as short as possible. That day, for sure. That afternoon or evening, better. Four hours should be sufficient. Don’t give the evil agent for the seller time to shop your offer, calling up people who have seen the place and pushing them to cough up a counter-bid. Since that would cause a bidding war, and matrimonial meltdown, never falter from this rule.

You scored a signed offer? Hope you have a good lawyer – a real estate lawyer, not the kind you yell at during a divorce – and that you slipped in a small clause giving you 24 hours for solicitor approval. Do what she says.

When it’s done, Jimmy, gaze deep and long into Linda’s dreamy, thankful eyes. It will ease the pain.

137 comments ↓

#1 TurnerNation on 10.21.13 at 8:10 pm

Anagrams.
(Life, imitates art?)

– Canadian Watchdog:

Data Coaching Wand

– Ralph Cramdown:

Clap Hard Mr Own‏

Yours,
AnointTurner

#2 Mr. Reality on 10.21.13 at 8:14 pm

One more thing Garth,

Always, always inspect the foundation, crawl space and the attic.

Never trust a lazy ass home inspector when it comes to the 2 things that will kick you in the junk if things go wrong. Roof and foundation repairs can be costly and always worth a second set of eyes.

I have a contractor friend that does just that for people in case the inspector misses something. And trust me, there are crappy home inspectors out there.

Mr. R.

#3 Londoner on 10.21.13 at 8:19 pm

I am sitting after a big fight with my wifey who insists on buying house now sighting family needs, no worries on money and all I was saying is a firm NO.

may be this gives me a push, let me see

#4 James on 10.21.13 at 8:30 pm

When my wife and I bought our condo, and then our house (after selling the condo) we always ranked the houses after viewing a dozen or two. We made an offer on our first choice after we were done viewing all the houses available. Making the list was important to us to take some of the emotion out of the offer process. If the seller gets greedy we were ready to walk away. Selling our condo made us realize that the buyer holds all the cards. Why anyone would enter into an auction or bidding war for a house is beyond me, I can’t imagine any house being worth a bidding war.

Buying in the winter is a great tip, we saved a lot of money buy doing both our purchases in the winter. We also bought places that needed a little bit of cosmetic fixing for some extra savings. The only negative part about buying in the winter is that the selection is limited. We ended up compromising on the neighbourhood as there simply were no affordable houses for sale in our top 3 neighbourhoods during Christmas! The other thing that sucked was moving in -25c but I’ll take that to save tens of thousands of dollars any time.

#5 Sideline Sitter on 10.21.13 at 8:31 pm

I call myself “Sideline Sitter” for a reason, and thankfully my wife is on board (in more ways than one… hey-oh!)

After selling our house in the Spring of 2012 (only because I got married), we are really enjoying banking A LOT of cash, eating out, and many a vacation (four of them this year).

Every time my wife brings up the market, I show her our bank account and that settles her down :)

Moral of the story — BE PATIENT! Don’t buy simply to buy. It’s not like houses are going to disappear!

P.S.
I got my Visa bill today, and I love/hate the summaries of charges for the year… we’re 5 figures into ‘restaurants’ this year, and that doesn’t include “foreign transactions”… yikes.

#6 Spiltbongwater on 10.21.13 at 8:35 pm

Where can I find a Realtor who will represent me as a buyer? I have interviewed a couple and looked at their websites and all of them have listings for sale as well. How can the Realtor be playing both sides of the fence, ie represent me as a buyer and others as sellers? I think the Realtors represent themselves and are strictly motivated to make the sale.

A realtor can easily have listings of his/her own and still represent you – so long as the property you buy is not one where the agent also represents the seller. — Garth

#7 Blase on 10.21.13 at 8:36 pm

The new beta mls site blows.

I would expect nothing more from the cartel.

#8 Mocha on 10.21.13 at 8:46 pm

I don’t much care for realtor.ca’s new beta site. I like the old one better.

#9 pinstripe on 10.21.13 at 8:52 pm

BUYER BEWARE.

#10 FATHER on 10.21.13 at 8:53 pm

Garth me and my wife are waiting another 3 years as you say, we will be the smart ones. I believe we should have had a crash a long time ago but I guess it will be better this way, cuz the bigger they are the harder they fall.

#11 Vangrrl on 10.21.13 at 8:55 pm

Bragging about appliances and decorating??
Wow, you have BORING friends.

#12 mark on 10.21.13 at 9:02 pm

These stories make me value my wife even more.

I don’t have to deal with any of this crap.

#13 Jeff in Leaside on 10.21.13 at 9:04 pm

Allmighty Garth, the missus and I are separating, and the time is coming to sell the family home (we’re joint tenants in a semi in Leaside).
My missus already has a realtor for the listing agreement (which I haven’t signed yet).
Any advice for someone who is about to be on the selling side (while being screwed over)?

And I do have my own divorce lawyer, she’s saying to sign too. Grrrrr.

We will pray for you. — Garth

#14 Cici on 10.21.13 at 9:06 pm

Poor Linda… I WANT Garth to call me!

And it’s so easy not to be house horny…how can you want to drop 100s of 1000s on tin shacks or tiny particle board condos?

My problem is that I wish I could want to buy, just to fit in…but really, I just don’t :-)

#15 squidly77 on 10.21.13 at 9:12 pm

A big hurdle for many people is choosing a good, reputable home inspector, many go with the realtor recommended guy, if your a buyer that’s a big mistake.

Perhaps a future post could address this issue.

#16 Cory on 10.21.13 at 9:18 pm

Realtors dont even do written offers anymore. Its like youre making them work or something. All done by phone…which means your offer is never presented until it suits the realtards.

Untrue. — Garth

#17 omg on 10.21.13 at 9:22 pm

#13 squidly77 – exactly – NEVER use a home inspector off the list your real estate agent gives you.

Inspectors are under huge pressure from agents to give the house a “pass” unless there is some huge glaring issue. RE agents are not going to recommend anal retentive inspectors.

And the best inspector is the guy that actually had experience renovating old houses for the last 25 years.

#18 Nemesis on 10.21.13 at 9:24 pm

RealMenJumpNaked.

http://youtu.be/6Xm7Ab8wAiw?t=1m13s

NoteToGT: It must the be ActiveVoice or something… but today’s LeaderIllustration was tantamount to RecoveredMemoryTherapy… I once dove off a bridge on FantasyIsland just to impress UneBelleJeuneFilleQuebecois whom I’d rescued from an altogether unsavoury fate. Naturally, I hadn’t planned on being swept over a waterfall and into a ‘cauldron’… but it all worked out well in the end. So to speak. “Oui! Oui! Oui! PlusRapide! Oui!”

#19 Housed up on 10.21.13 at 9:25 pm

A realtor can easily have listings of his/her own and still represent you – so long as the property you buy is not one where the agent also represents the seller. — Garth

If the seller agent represents the buyer also he or she does not split the commission. The seller agent who does not split the commission will push the seller to take a quick lower price over a split later price. The agent’s real loyalty always lies with his or her own commission!!!!

#20 Jeff in Leaside on 10.21.13 at 9:28 pm

#13 jeff in Leaside

We will pray for you. — Garth

Thank you for your wisdom. I’ll let you all know when the dirty deed is done.

Thanks, Jeff.

#21 omg on 10.21.13 at 9:31 pm

Jim and Linda – the other thing to remember – houses are like buses – there’s one by every 15 minutes (well maybe every week or so).

BUT you will think you have found the house that is just perfect for you, and you’ll think there will never be another one as perfect EVER AGAIN. AND YOU WILL HAVE TO HAVE IT.

But I guarantee you that there will be another house to come along that is just as perfect. So be patient and don’t do anything you regret because you think there will never be as good of house/deal again.

GOOD LUCK

#22 Gg on 10.21.13 at 9:32 pm

Garth Turner is calling here?” That was it. I felt like a serial homewrecker ringing up to tell them I’d just run over their puppy. Twice.

Now that’s funny.

#23 Smoking Man on 10.21.13 at 9:38 pm

I thought I lost my marbles, Mind you I have 7 good reasons too, the curve balls universe keeps pitching.

Garth, wtf, coaching a buyer into buying, I hope this was sarcasm and I missed something.

You throwing in the towel in the GTA.

What gives, you finally realize reality to the herd is CTV, Global, and CBC. and Peer and Mom Pressure.

Fundamentals are now meaningless.

I don’t like you this way. Where is the rebel….

More than likely you discovered Pino tonight……:)

#24 Ralph Cramdown on 10.21.13 at 9:45 pm

#16 Cory — “Realtors dont even do written offers anymore.”

You really have to decide who’s wearing the pants in your relationship with your agent.

#25 timmy on 10.21.13 at 9:47 pm

Why would you be advising people on how to buy if you keep saying that the huge correction in real estate is “just around the corner?”

You have a reading issue, don’t you? — Garth

#26 Joseph R. on 10.21.13 at 10:10 pm

What does [email protected] mean?

#27 Randy Macho Man Savage on 10.21.13 at 10:11 pm

#6 Spiltbongwater on 10.21.13 at 8:35 pm
Where can I find a Realtor who will represent me as a buyer? I have interviewed a couple and looked at their websites and all of them have listings for sale as well.
……………………………….

Try kijiji.

I posted an ad on kijiji and went with the lowest bidder – the buying agent is giving me a 1.25% rebate on the purchase price, cutting her commission in half. The reason she is doing it is because she is young and wants to drum up some business and get her career going.

Ideally, I’d want to buy a home without an agent (as I feel they offer little value for their cost), but the selling agent would take 5% in that case…

Sounds like the worst method imaginable to find a buyer agent. — Garth

#28 HAWK on 10.21.13 at 10:14 pm

#25 timmy on 10.21.13 at 9:47 pm

Er……take a second look at the picture at the top of the article.

#29 Randy Macho Man Savage on 10.21.13 at 10:28 pm

#27 Randy Macho Man Savage on 10.21.13 at 10:11 pm
#6 Spiltbongwater on 10.21.13 at 8:35 pm
Where can I find a Realtor who will represent me as a buyer? I have interviewed a couple and looked at their websites and all of them have listings for sale as well.
……………………………….

Try kijiji.

I posted an ad on kijiji and went with the lowest bidder – the buying agent is giving me a 1.25% rebate on the purchase price, cutting her commission in half. The reason she is doing it is because she is young and wants to drum up some business and get her career going.

Ideally, I’d want to buy a home without an agent (as I feel they offer little value for their cost), but the selling agent would take 5% in that case…

Sounds like the worst method imaginable to find a buyer agent. — Garth

…………………………………………….

It’s all about the savings in moola. If I could, I’d eliminate the buying agent completely. I just need the realtor to punch the code into the keybox to unlock the door. Nothing more…

I can print up OREA forms myself and fill them out. I can find the comparables from my daily zoocasa email courtesy of Lawrence M Dale. The home inspector finds the flaws and the lawyer does the paperwork and money transaction… What exactly does the real estate agent do again?

Protects you from yourself, obviously. — Garth

#30 Somewhat honourable Senator on 10.21.13 at 10:28 pm

“Your agent is paid for by the seller…”

C’mon,… Really?
If that were true, why do you need buyers and their money then?

Yeah, really. The seller’s commission cheque is split four ways – the sell agent and his/her broker, plus the buy agent and that broker. The buyer pays no commission – merely buys an inflated house. — Garth

#31 Sideline Sitter on 10.21.13 at 10:33 pm

#27 – Randy – quit being macho, and grow a brain instead of balls.

spending hundreds of thousands through someone who will price their services the cheapest is a terrible way to find an agent.

the SELLER pays the commission, not the BUYER. yeah, they might give you a ‘refund’ but are they actually going to have your best interest in mind?

my brother is a broker, and has been for over 25 years… he’s done hundreds of deals, and specializes in only a handful of neighborhoods. he has told clients MANY times “DO NOT BUY THIS HOUSE” and explains why.

you need to find someone with experience.

** this is not an ad for my brother, and I’m posting anonymously… find him yourself **

#32 squidly77 on 10.21.13 at 10:36 pm

If your buying, not using a realtor is a big mistake. Buying without one will cost you money. Same goes for selling, the problem is, finding a good one. Always google the agents name, check out their website content for decency and respect, look at their current listings (if they none, avoid them) and if possible, references. Then prey you made the right choice.

#33 a prairie dawg on 10.21.13 at 10:37 pm

How to Buy (a senator?)

http://fullcomment.nationalpost.com/2013/10/21/andrew-coyne-duffys-lawyer-didnt-pull-his-client-out-of-the-muck-but-he-certainly-dragged-the-tories-into-it/

#34 Somewhat honourable Senator on 10.21.13 at 10:46 pm

#31 – Mr. Sitter,

The money comes from the BUYER, ergo the BUYER pays the commission.

#35 ILoveCharts on 10.21.13 at 10:47 pm

And one more thing:
At the same time you are looking for a place to buy, take a look at some new places to rent.

#36 Randy Macho Man Savage on 10.21.13 at 10:50 pm

#31 Sideline Sitter on 10.21.13 at 10:33 pm

my brother is a broker, and has been for over 25 years… he’s done hundreds of deals, and specializes in only a handful of neighborhoods. he has told clients MANY times “DO NOT BUY THIS HOUSE” and explains why.

you need to find someone with experience.

** this is not an ad for my brother, and I’m posting anonymously… find him yourself **

…………………………

No need to find your bro, I already have a 1.25 percenter that I am happy with. I could pass along her name if you are interested, I’m sure she would like more business…

My agent said to me about a house I saw, “This house is over priced by $50k”. It’s nice that she is honest, but even if she weren’t, it doesn’t matter to me in the least. I already knew the house were priced too high for the area. The buying agent’s job is to open the keybox and unlock the door…

As I said before, comparables are where its at and the home inspector & lawyer do the important work.

#37 Spectacle on 10.21.13 at 10:53 pm

Thank You Garth.

I’m very close to real estate, from a bricks and mortar perspective. From the Faults & Deficiencies witnessed on a daily basis, it is frightening to hear of people going into real estate glossy eyed, bit still not sure even how to find a broker/agent. Ouch!

Enjoy the talented responses here, thought to join in finally .

#38 Irene on 10.21.13 at 10:53 pm

When your offer’s presented, make the sign-back period as short as possible. That day, for sure. That afternoon or evening, better. Four hours should be sufficient. Don’t give the evil agent for the seller time to shop your offer, calling up people who have seen the place and pushing them to cough up a counter-bid.

————-

We put a clean full-price offer on a house where the vendor wanted offers to be 48 hours irrevocable. It was a Thursday, so this meant until Monday. On Friday we were the higher of two offers, and the vendor’s agent said that they would “work with” our offer. “Working with” our offer turned out to consist of holding two more open houses, and by Monday morning there were four offers. By Monday afternoon, when the offers were presented to the vendor, there were six. The house went for 75,000 over asking. There had been no indication that the seller’s agent was planning a bidding war, but obviously our offer had just been used for target practice. Could we have ignored the 48hr irrevocable requirement when we made our offer, and asked for a four-hour sign-back?

Of course you could have. This is a great example of why you should never, ever agree to that kind of time lag. — Garth

#39 CalgaryHappyRenter on 10.21.13 at 10:56 pm

#26 What does [email protected] mean?
—————————————–
[email protected] – The Nice Lady At The Bank.

Garth FAQ: https://docs.google.com/document/pub?id=1EVlDhkf7qkUsihOM5HdNfECc6sahkF2iOn7G8vXqiL4

#40 Furio on 10.21.13 at 11:00 pm

Where is the seller’s commission coming from?

The buyer’s pocket.

#41 Sideline Sitter on 10.21.13 at 11:02 pm

#34 – agreed, the purchasing $$$ comes from the buyer, but you get what you pay for.

I’d much rather my agent makes 2.5% on the sale instead of openly discounting (on a free website to list items for sale!) to 1.25%… it shows they don’t respect their own ability.

Which would you prefer…

A) an agent that “opens the door” and offers a 1.25% commission and a ‘refund’ (i.e., 1.25% of $150k = $1875 “returned” = net cost of $148125)

or

B) an agent who fights tooth/nail, who knows the market, gets paid for their experience and they make what they make and you get the house for $146k (or less).

The agent in scenario A has no interest in working hard for you – they aren’t getting paid to work hard, nor do they have the experience to know what ‘working hard’ means.

#42 FATHER on 10.21.13 at 11:03 pm

Realtors I like all of them but only when the market is sane. I have different realtors for different things first one is the best deal finder & negotiator, 2nd realtor is my selling realtor she’s a smooth one, and last and not least is the 3rd realtor commercial realtor, who specializes only in his field

#43 invest4life on 10.21.13 at 11:04 pm

Hi Garth, what bond etf do you prefer to stuff away in a portfolio right now. I’m trying to Do that thing your always talking about. 60% equity & 40% fixed
Your advice is appreciated.

#44 Bob Rice on 10.21.13 at 11:05 pm

Inspections are BS big time.. Home inspectors won’t catch big things.. I know plenty of people who used “reputable” inspectors and still had work to do after the fact… that was costly

Second; agents aren’t needed. If seller is using one, by bringing in your agent, you’ve now added (or taken away) 2% to the price..

#45 Irene on 10.21.13 at 11:10 pm

Search for dogs. Stale listings. Stuff that’s been on MLS for a few months (your agent will help you spot properties that have been re-listed recently so they don’t woof as much). These are houses which were mispriced the first time by rapacious sellers and have gone stale, despite reductions.

—————–

A house near us in Oakville is a good example of this. It was listed at $1,698,000 in late June or early July, then reduced to 1,595,000, then 1,495,000. In early September it disappeared from realtor.ca for a day or two and reappeared at 1,395,000. Then it was reduced to 1,349,000. It just sold, for 1,260,000. Percentage of asking: 93%. Days on market: 42.

Woof.

#46 HDJ on 10.21.13 at 11:11 pm

It’s also useful to have the tile/drainage system checked out before buying, especially in places like Victoria or Vancouver – Winter rain. Not too expensive to have done and can save you twenty-thirty thousand in unexpected repair costs. Most purchasers never give this a thought.

#47 TimV on 10.21.13 at 11:14 pm

Our preferred agent said signing the BRA was mandated by her brokerage. I suspect it was true. We went with her and signed a 1 month BRA. She never asked us to renew it and it took not quite 6 months to find a house, so the BRA was meaningless. I don’t think it’s a big deal to sign a short-term BRA if that’s what your preferred agent wants.

Do learn to value homes on your own. By the time we finally bid on a house, we were nearly as good as our agent in guessing final sales prices. Once you can do this somewhat, it will give you a huge amount of objectivity — you may realize that things valued by the market are not valued by you.

Garth’s advice about buying in winter, etc, can be wrong if you are very picky. We worked-out that rarely more than two houses per year came up for sale that would be candidates. If this is your situation, then you really need to understand the market value and whether the home is worth more to you than the market or not. And, frankly, you need some luck.

It’s a horribly time consuming process.

#48 Ahead of the Curve on 10.21.13 at 11:14 pm

I guess if you have to buy, that is good advice…

My one remark would be to hire a licensed home inspector from a reputable company that is fully insured, i.e., if anything they wrote on the report happens to be wrong and has caused you damages, their insurance will cover it!

#49 renata on 10.21.13 at 11:16 pm

I’m with the Smoking Man tonight. I also thought it was sarcasm. I can believe Garth is giving those advices to people now. What’s wrong?

#50 Dan from Calgary on 10.21.13 at 11:29 pm

Sometimes it’s cheaper (and more fun) to find a NEW significant other…

#51 Randy Macho Man Savage on 10.21.13 at 11:30 pm

#41 Sideline Sitter on 10.21.13 at 11:02 pm
#34 – agreed, the purchasing $$$ comes from the buyer, but you get what you pay for.

I’d much rather my agent makes 2.5% on the sale instead of openly discounting (on a free website to list items for sale!) to 1.25%… it shows they don’t respect their own ability.

Which would you prefer…

A) an agent that “opens the door” and offers a 1.25% commission and a ‘refund’ (i.e., 1.25% of $150k = $1875 “returned” = net cost of $148125)

or

B) an agent who fights tooth/nail, who knows the market, gets paid for their experience and they make what they make and you get the house for $146k (or less).

The agent in scenario A has no interest in working hard for you – they aren’t getting paid to work hard, nor do they have the experience to know what ‘working hard’ means.

………………………

Nice example of a $150k home. See many of those lately? I’m looking at about $650k where 1.25% savings is substantial and could buy about half a new kia (or a third of a real car).

#52 Head Scratcher on 10.21.13 at 11:34 pm

#39 CalgaryHappyRenter on 10.21.13 at 10:56 pm
…..
Nice link. Garth should make that a sticky note for this site.

Although I am scratching my head on the reference to “knob-and-tube” in this article. What type of flea is that?

#53 mortgagebrokeron on 10.21.13 at 11:36 pm

forget the nice lady at the bank see a mortgage broker!!!! the nice lady at the bank costs too much!!!

#54 Mike from Montreal on 10.21.13 at 11:37 pm

There is one aspect though that I feel is missing in the advice on the blog tonight. At this point in time, fixed or variable?

Also with all the stories about pre-approved buyers being shafted by banks, how can making an offer without a financing condition be a good thing?

Regards.

Mike

#55 TimV on 10.21.13 at 11:41 pm

One short addendum: learning to value a house does not mean simply looking at comparables. Eg. It became clear that some streets were expensive because of their style or surroundings, and this was consistent with other streets in similar proximity to, eg, a subway station. But some were expensive apparently only because of their name. Looking at comparables may tell you that it’s a fair price for the street, but it won’t tell you why… It’s the “why” that you care about.

And realize there’s a decent amount of randomness.

And make allowances for mistakes, which you will make.

#56 Ralph Cramdown on 10.21.13 at 11:53 pm

#47 TimV — “Our preferred agent said signing the BRA was mandated by her brokerage. I suspect it was true. We went with her and signed a 1 month BRA.”

And did you cross out the clauses you didn’t like, and add clauses to protect you (like maybe allowing you to unilaterally terminate it with written notice?), or did you figure that the lawyer working for the real estate business drew up a contract that was protecting YOUR interests?

Real estate got done just fine in Ontario before those came along. Most of the stuff in them AND the agreement of purchase and sale is to make sure the deal closes and — more importantly — that the brokers get paid. If you want anything to protect yourself from the other side of the deal or the brokers in the middle, you have to write it in yourself.

Agents want you to sign paper and only then see a lawyer. Lawyers have two jobs in deals: To protect their clients, and to close the deal at the land office (because the provinces, in their infinite wisdom, decided that there’s some things brokers can’t be trusted with). If you’ve got a deal before going to the lawyer, he can only do the 2nd for you unless, as Garth suggests, you put in a clause making it contingent on your approval after consulting with your solicitor. I hope you get the wording of that clause right…

#57 Shawn on 10.22.13 at 12:00 am

WHO PAYS THE COMMISSION

Furio at 40 says:

Where is the seller’s commission coming from?

The buyer’s pocket.

******************************************
Well, sort of. The Buyer presumably buys the house for the lowest price he can get.

If there were an identical house beside it with no Commission the buyer might pay the same price.

It is of no concern to the buyer who gets his money.

To suggest that the buyer is paying the Commission is similar to suggesting that the buyer if paying off the mortgage.

It’s more logical to think of it as step 1 the seller gets the full price

Step 2 the seller pays any Commission and Mortgage and finders fee and fee to his sister who cleaned the place up. Seller keeps what is left. Not logical to suggest that the buyer paid these.

No more logical than it would be to suggest that your employer paid for your kid’s bicycle or whatever. You earned your pay and you decide how to spend it. Seller got a price for the house and it is his business what Commission is paid and not the buyers.

#58 Sideline Sitter on 10.22.13 at 12:06 am

#51 – I hear you, Randy… I used the $150k as an example. I live in downtown T.O., but didn’t want to throw a huge number out there so someone could say “yeah, on $800k it’s worth it, but not $150K”.

Let me tell you an anecdote…

my brother was selling a house, priced right, and there were two offers. One was for a little over asking, the other was from an inexperienced agent who put an offer that was $75K over asking.

It’s a rookie move, it’s an agent saying “We better put in the best possible offer or you’ll lose the house”… the agent could have asked how many offers were registered, but didn’t.

The house was not worth $75K over asking (not that the seller or my brother complained), and while those folks bought the house, they could have saved TENS of THOUSANDS.

You need experience. You need people who earn their keep.

On a house listed at $800K, the “savings” using an amateur are even more inverse of the $150K example above.

(yes, I know these are anecdotes and not a study, but I’m just saying you get what you pay for)

#59 Andrew Woburn on 10.22.13 at 12:16 am

44 Bob Rice

Inspections are BS big time.. Home inspectors won’t catch big things.. I know plenty of people who used “reputable” inspectors and still had work to do after the fact… that was costly
———————————————————–

No building inspector has x-ray eyes. There are issues that an honest and competent one will not find in a two hour visit such as an underground stream eroding foundations. L had a pretty good experience with my inspector but I was careful how I chose him. I saw the yellow pages had a lot of big glossy ads for guys who were affiliated with inspection franchises, mostly from the US. I was afraid I would wind up with some guy who had been laid off from the mill three months ago and was now an expert because he had paid $5 grand to take a three week course. I made a short list of independents and checked them out on line. The guy I chose had been in construction and was a director of the local chapter of the inspection association.
He insisted on dragging me around with him, attic to crawl space and everywhere he pointed out things that I needed to know about construction methods and future maintenance issues. He then provided me with a written report covering all these points. He wasn’t the cheapest candidate but probably the most valuable.

#60 TheCatFoodLady on 10.22.13 at 12:35 am

Winter shopping has other advantages – greenery & pretty lawns are seductive & can hide many a defect. If I were buying for starters, I’d do walk bys several times before a showing. Day, evening, week days & weekends. It’s a great way to check the neighbourhood activity, especially if you’re buying in a ‘transitional’ neighbourhood or are concerned about traffic on what could be a busy road.

In winter, especially if there’s just been a partial melt, you can often more easily see if the home is properly graded – if you’ve got pools of melt water or ice just ‘hanging around’, it’s a point you’ll want to raise with the home inspector.

Get a GOOD home inspector – check several of their references. Never, EVER accept an ‘inspection report’ from an inspection done by the seller. It doesn’t hurt to watch some of the house porn shows before serious house shopping – you can pick up some valuable hints. Any show by Mike Holmes is worth watching for the money it could potentially save you.

No home is perfectly straight & level but look carefully for very visible leaning or sagging – roof line especially. Especially check any additions to make sure they’re not sagging or leaning away from the home. Anything that looks to be added – ask for the permits. Ask for recent utility bills – 6 months at least & a year would be better.

Come armed with a flashlight & measuring tape. LOOK at the place — beyond the sparkly granite & other finishes. If you’re not certain about room sizes because of furniture in there – measure. Open closet & cupboard doors – easy way to check for signs of vermin, mould & other nasties & that’s where the flashlight comes in handy. Look for condensation as well – may indicate serious venting problems. In winter, a windy day is perfect – easy way to check for drafts & heating.

Try to ignore cosmetics – the yellowing paint & ghastly wallpaper can be dealt with. If counters & cupboards work, are in good shape & acceptable – you can replace them later. Try all light switches & faucets – that’s a lot of money you’re contemplating dropping & you don’t want surprises.

That lack of greenery? Lets you see the back & side neighbours who might be too sketchy for your situation. It also lets you see into all corners of the yard – oh yeah, check the health of any fencing. Eyeball the foundation & any stucco for cracks, especially where additions are joined in & around windows. If patches of parging are falling off, make sure the inspector really looks. Be there for the inspection. Go up in the attic.

Good luck.

#61 Freedom First on 10.22.13 at 12:48 am

I am disgusted with house horny Canadians.

I recommend a trip to a 3rd world country. Give you some perspective on what entitled a$$$$holes you are. A woman demanding to own a place? Dump her today, or you are in for a lifetime of never being able to please her. Find a woman who has grown up.

#62 Waterloo Resident on 10.22.13 at 12:50 am

Quotes from this site (http://forums.redflagdeals.com/archive/index.php/t-1227658.html

$1 million is entry level for a detached home in Toronto. Even my dog’s doghouse is worth more than $1 million

#63 Obvious Truth on 10.22.13 at 1:02 am

Take a step back. Remember the time before marriage (cohabitation).

She cared about how she was treated and not the material possessions. She always told her friends about the things her guy did for her.

Starting to do again will allow bragging about her guy and her life. The day her friends say “he did that for you” is the day respect is won back.

I’m not saying this in a manipulating way. Never be afraid to admit that you want what’s best for your family but that it has to feel right for both parties. Things work out great if we can respect what each person wants to accomplish, and reach a compromise.

Clearly a marriage (cohabitation) implies a certain level of respect. But emotion can often skew things. Whether you take the beaten down path or the road less travelled, you’ll have to do it together. There shouldn’t be a winner and a loser and often opposing views can yield the best outcomes.

In family matters, always speak from the heart and your intentions will be clear.

The rest of the THINGS in your life will be forgotten, thrown out or replaced and what’s important today can be meaningless tomorrow.

Thoughts go out to Jimmy and his family.

#64 Brian on 10.22.13 at 1:05 am

Hello, can somebody please give me some feedback about Scarborough village, specifically on Kingston road and Markham road? What’s the area like? How’s real estate value and will it hold up? I would also like to know more about schools there. Esquire homes are building phase 3, which comprise of 20 townhouses. They are still selling. Thanks everybody.

#65 Big English on 10.22.13 at 1:45 am

So it’s still insane in the Mouldy city, Vacouver special, nicely renovated on the inside, fugly on the outside, need ending a new roof on a questionable street in a East Van, went in a bidding war for $70k over asking.

The streets run with the blood of the slaughter.

When will sanity return?

#66 Soylent Green is People on 10.22.13 at 2:28 am

Justin Bieber told U.S. talk show host Ellen DeGeneres it “wasn’t fair” of the Prime Minister Stephen Harper to bring flags as a backdrop at the concert to make it look like it was an official event at an official venue. Truth be told, Harper and John Baird jumped out from behind the bathroom door as Beiber walked down the hockey arena hallway.

http://www.theglobeandmail.com/news/politics/ottawa-notebook/ahead-of-appearance-at-fihttp://www.cbc.ca/player/News/Politics/ID/2323049169/rst-nations-meeting-how-busy-is-harper/article7172522/

…………………………..

At the 3:45 min. mark, Ellen (with Bieber’s blessing it seems) mocks Canada’s Prime Minister Stephen Harper, making fun of the fact that Harper showed up at the Ottawa hockey arena WITH HIS OWN FLAGS. “HARPER TRAVELS WITH HIS OWN FLAGS?”

http://youtu.be/crtsdhYr9kk

.
.
.

#67 devore on 10.22.13 at 3:25 am

#4 James

This is very important, to remove as much emotion from the buying process as possible. It is easy to overpay greatly or overlook serious defects when you “fall in love” with a house. Having your own dedicated buying agent is a great start, but don’t stop there. It is not the agent’s job or place to keep you in check. Make checklists, rankings, and make the process as analytical as possible. Set and document boundaries, budget, must-haves and optional ahead of time. And never ever get into a bidding war. Multiple offers are almost inevitable in tight markets, like TO SFH seems to be today, but don’t play the game. Offer what you think is reasonable, and if someone wants to throw in the kids college fund to outmuscle you, move on.

#68 devore on 10.22.13 at 3:44 am

#38 Irene

You can put in any offer you like. Your agent was not looking out for your best interests. It is your offer, and you can put in any conditions you like. Once made, the sellers agent has to present the offer to the sellers. If your offer is good, they would be foolish to throw it out, hoping to get more after the weekend.

You are the buyer in this transaction. You are bringing the money. You have all the power. So many people do not realize this. Instead they cower and allow other people to order them around. “No” is the most powerful word in the English language. If you do not learn to use it, you will be parted from a lot of money over your lifetime.

#69 Buy? Curious? on 10.22.13 at 5:21 am

Yes Garth! Fabulous post! Let’s get this party started! Now that you’ve enlightened a few people about how to buy a house, it’s time to pop into your local realtor’s mini van and start looking at places! You said “Wait for snow. Sales volumes peak twice a year – spring and fall – then go into a funk before Christmas and stay that way throughout January. There’s less competition among buyers, which means sellers who truly have to get out of property are happy to see an offer and more likely to dicker. Besides, houses are cheaper in the winter.” You, like Prometheus, have given the masses a firey education that they would be wasting if that knowledge was not acting on.

If you’re right, as are my calculations, it’s near the end of October and next month is November followed by December, it should be winter. So instead of running around buying a whole bunch of crappy little gifts for people you don’t like, buy a BIG present for yourself and invite all those people over for a house warming party! And if any of those house warming are like the ones in Leaside, be prepared to leave your keys in the bowl.

http://www.youtube.com/watch?v=ruEaANXuFbc

Trudeau 2.0! New and Improved!

#70 Gloria White on 10.22.13 at 6:35 am

@squidly77 #15 & #32:
How are things going? You literally went from threatening realtors to now offer advice on hiring realtors???
You lost your ways,my friend. Was it Bob T whooping your butt in court?

#71 David McDonald on 10.22.13 at 6:43 am

Great post Garth! It is similar to one posted last summer. I followed those suggestions when I found myself in Jim’s situation.

It is imperative to hire a real estate lawyer to go over the purchase documents for a condo. By law there must be a reserve fund and projections of future repairs and upgrades. It’s complicated. In my case there was a special assessment pending that I am sure even the vendor knew nothing about.

If possible try to keep a friendly relationship with the vendor. In our case we met in the middle and everybody was pleased the transaction was done. When we moved in the condo was immaculate, all the condo information was waiting along with soap and toilette paper in the bathrooms. Such classy people.

I know Garth is right about the slow melt of real estate prices but my wife is happy as a clam and that is worth a lot.

#72 TimV on 10.22.13 at 7:08 am

#47 TimV — “Our preferred agent said signing the BRA was mandated by her brokerage. I suspect it was true. We went with her and signed a 1 month BRA.”

#56 Ralph” — And did you cross out the clauses you didn’t like, and add clauses to protect you (like maybe allowing you to unilaterally terminate it with written notice?), or did you figure that the lawyer working for the real estate business drew up a contract that was protecting YOUR interests?”

True, we did cross out at least one clause. Like I said though: it was destined to be meaningless.since there was almost no chance of buying within one month.

I’ll never know if the agent was better than our next-best choice, but she was good at the things we expected her to be good at. We made other mistakes, but this wasn’t one of them.

#73 Herb on 10.22.13 at 7:17 am

Are you trying to drive a stake through the heart of the RE industry?

I’ve been trying to steer agents “working for us” in the right direction by asking questions, refusing to rise to bait, and disparaging comments. Thanks for now making it easy: every agent unlucky enough to be involved with us will be handed a copy.

#74 Penny Henny on 10.22.13 at 8:42 am

Garth is certainly right about buying a home when the snow flies. I remember seeing a home that I thought was a bit under priced, but I thought I would try the guy on to see if he would negotiate a better deal. He said sure, bring your wife in and we’ll dicker.

#75 CrowdedElevatorfartz on 10.22.13 at 8:59 am

@#25 Timmy
“Why would you be advising people on how to buy if you keep saying that the huge correction in real estate is “just around the corner?””
++++++++++++++++++++++++++++++++++++

Did you not grasp the significance of the photo at the top of the article?

The person is jumping off a cliff……..

#76 Toronto_S on 10.22.13 at 9:02 am

There is no such thing as a “buyer’s agent” due to the inherent conflict of interest – the more money you spend when you buy, the more your agent makes. In simplified terms: why would they want you to pay less and get a better deal if it earns them less commission?

A “Realtor” is a salesman, plain and simple, so let’s call them what they really are so that we don’t forget: real estate salesman or -woman.

#77 drydock on 10.22.13 at 9:17 am

http://www.youtube.com/watch?feature=player_detailpage&v=wxRxSg2ENlU

Peter Schiff on why home ownership is not an investment,
Jim and Linda.

#78 ozy - GOOD WORK GARTH on 10.22.13 at 9:27 am

GOOD WORK GARTH

hope the herd reads it slowly and understand it, or ask questions if not

#79 Chickenlittle on 10.22.13 at 9:35 am

#50 Dan from Calgary..

Is it REALLY cheaper to find someone new???

Its not too bad for me at my age to find someone, but I know someone in their 50’s looking and all she can find is guys that look like the Garth’s posterboy for the “Yield Curve” post.

Then again, that desn’t stop them from thinking they’re a fabulous catch.

#80 HappyLandlord on 10.22.13 at 10:14 am

Northern Alberta: Just bought a duplex revenue house using a new 2% realtor in town. He acted as dual agent representing both the seller and I.

Normally I don’t like this kind of arrangement because there’s no way to tell if I am properly being represented, but in this case, I informally used a ex-realtor friend to advise me and felt comfortable enough with the 2% realtor to trust his word (hard to do after being burned in the past). He’s new and has a reputation to build and all the other ‘old school’ 9% realtors in town already hate his low commission, so I figured if he messed me over he had a lot more to lose than I did.

In the end we feel we got a very good deal as rents will return 13.3% annually on the total price we paid. Not too shabby. We could easily rent an outbuilding on the lot and bump returns to 15.7%

We don’t even take possession for another three weeks and we already have people asking to rent just by word of mouth. The rental market up here is insanely tight.

Is it a good time to buy in northern Alberta? Hell, YES!! Would I use a 2% realtor again? Yes, yes I would. Would I use a traditional 9% realtor again? Not if hell froze over.

#81 ponerology on 10.22.13 at 10:16 am

The advice about title insurance is golden. It’s something that a lot of folks seem unaware of and the benefit is potentially huge relative to the cost, especially if one is buying an older property and is planning on doing renos.

#82 HappyLandlord on 10.22.13 at 10:21 am

#76 Toronto “There is no such thing as a “buyer’s agent” due to the inherent conflict of interest – the more money you spend when you buy, the more your agent makes. In simplified terms: why would they want you to pay less and get a better deal if it earns them less commission?”
——-
Not true my friend. If they don’t help close the deal they don’t get paid at all, so they DO want the deal to close. And really, whether you pay $10,000 more for a house because they didn’t grind the seller’s agent down hard enough makes very little difference in their commission check, maybe a couple hundred bucks after they pay their broker fees. It’s peanuts – they’d much rather have you as a happy customer who is going to recommend to others to use their services. That’s far more valuable.

#83 TorontoBull on 10.22.13 at 10:28 am

@19
“If the seller agent represents the buyer also he or she does not split the commission. The seller agent who does not split the commission will push the seller to take a quick lower price over a split later price. The agent’s real loyalty always lies with his or her own commission!!!!”
this was our experience when we were buying….and if you sign BRA it shows to the realtor that you are serious…also I agree with Garth to get a realtor who knows the neighbourhood.
my 2 cents

#84 Buy? Curious? on 10.22.13 at 10:28 am

The picture looks like a hipster’s profile picture while vacationing with his parents.

#85 Bob Rice on 10.22.13 at 10:53 am

Doesn’t seem to me like the US “recovery” is happening at all..

http://www.theglobeandmail.com/report-on-business/do-not-post/article14980451/

Ahem. That is 148,000 MORE jobs, not 148,000 fewer. Clean your glasses. — Garth

#86 Ralph Cramdown on 10.22.13 at 10:57 am

#82 HappyLandlord — “If [buyer’s agents] don’t help close the deal they don’t get paid at all, so they DO want the deal to close. And really, whether you pay $10,000 more for a house because they didn’t grind the seller’s agent down hard enough makes very little difference in their commission check, maybe a couple hundred bucks after they pay their broker fees. It’s peanuts – they’d much rather have you as a happy customer who is going to recommend to others to use their services.”

This is somewhat true. It’s likely especially true for savvy buyers and income properties, and much less so for first-time buyers, the impatient because of school calendars or an already sold current home, and the clueless.

The buyer’s agent will probably work with the seller’s agent or brokerage again before she works with the buyer or his friends/family again. Agents value maintaining a collegial relationship with other agents, and grinding down the seller lowers the selling agent’s (and the board’s) sales/list price ratio, average home prices &c., if only marginally. If you’ve got a buyer and you know how much he can spend, your fellow agents and your broker will be happier with you if you find a place for your client to buy at 99 or 100% of list or win in a bidding war, than if you find a poorly marketed place and get it for 90%.

So the incentives go both ways, but the financial and fraternal benefits of getting your buyers to pay a higher price are immediate, but the relational/referral benefits of getting a lower price are further in the future and less certain.

#87 Musty Basement Dweller on 10.22.13 at 11:14 am

Yeah home inspectors are flaky at best. For the attic they usually only poke their head in the hatch and don’t get off the ladder. If you’re a seller, just make sure there’s no ratshit in view of the attic hatch before Mr “inspector arrives to poke his head in.

Trashing realtors, inspectors, lawyers. Aren’t we a fine bunch? — Garth

#88 Robbie on 10.22.13 at 11:43 am

Garth is advising Jim and Linda as to how to make the best of a bad decision. His advice about how to purchase a home is well said and if Jim and Linda wish to “jump off a cliff”, so to speak, then Garth is trying to ensure the landing is a little softer. Those who accuse Garth of reversing his position on buying homes seem to have not read/comprehended his previous blogs and do not understand the significance of the picture.

#89 happity on 10.22.13 at 11:50 am

Existing Home Sales Plunge At Fastest Pace In 15 Month As Affordability Drops To 5 Year Low, and, Dismal Jobs Report Sends SnP 500 to New Highs.

Yay, the USA economic renaissance continues.

(please ignore the fed taper punk and the surge in precious metals)

#90 Sideline Sitter on 10.22.13 at 11:52 am

#86 – Ralph, I have never met or heard of an agent that would screw their client over so they can be friendly with another brokerage.

As an agent, you earn a living from customers, not other agents.

Do you think lawyers act the same way?

There is (usually) some satisfaction in “winning” the deal, rather than playing nice and not getting a repeat customer.

I’ve heard my brother tell me many times “that agent is a real dick” or “yeah, this agent is reasonable”… the only time I think there’s a ‘fraternal’ need to be friendly is when the agents are in the same office.

#91 Robbie on 10.22.13 at 12:01 pm

Yes, it’s a shame so many commenters feel the need to trash Realtors, Inspectors and Lawyers…..full disclosure, I am a Realtor! I do a great job for my Buyers (only work with Buyers) and I have a lot of respect for most of the Home or Septic Inspectors I have worked with….ones I don’t respect I steer my clients away from. I have talked Buyers out of buying a home because I knew it was wrong for them and I sleep well at night because my conscience doesn’t keep me awake. Yes, there are bad Realtors, Lawyers and Inspectors…as well as “bad apples” in all other areas, so you need to find good ones. As for not using an Inspector or Lawyer your Realtor recommends…bad idea! If you have a Realtor you trust then use his/her experience to help you. I recommend one particular Home Inspector because he is very thorough and I have seen that many times. I recommend a local Notary firm for property transactions because they do a good job and their rates are very reasonable.

#92 Mixed Bag on 10.22.13 at 12:23 pm

#31 Sideline Sitter on 10.21.13 at 10:33 pm

Why would a realtor bring a client to a house he doesn’t recommend?

#93 Squatter on 10.22.13 at 12:25 pm

Trashing realtors, inspectors, lawyers. Aren’t we a fine bunch? — Garth

Hey Garth, we don’t trash you, it’s a great privilege you have :)

#94 Nemesis on 10.22.13 at 12:33 pm

Something Old, SomethingNew, SomethingBorrowed… and SomethingBlue. A MarriageMadeInHeaven?

SaltyDogz, your Tuesday’Zen’ [Oh!, but that works on so many levels this morning*] – in the form of a brief introduction to InternationalPoliticalEconomy [hint: it’s always about the RealEstate].

“Until we embed the city more deeply into the passions of Asia, of the region, we will not be able to achieve the kind of economic and political linkages that I think our leaders aspire to… Why not a world-class, Asia-themed museum in that very space?” – Asia Pacific Foundation of Canada president Yuen Pau Woo

[G&M] – How Vancouver’s Forbidden City exhibition could be the start of something bigger

“When The Forbidden City: Inside the Court of China’s Emperors arrives at the Vancouver Art Gallery a year from now, it will be one of the most significant exhibitions in the gallery’s history. But the three local powerhouses who made it happen have even bigger ambitions: the establishment of Vancouver as a major cultural gateway between China and North America and, ultimately, the creation of a permanent home for Chinese art and culture in the city – possibly in the VAG’s current home…

…Now Stern and his China Global partners also have their eyes on the building as the future home for a museum for Chinese Arts and Culture (Stern says the museum could easily co-exist with his underground concert-hall proposal, and UBC, which is also interested in the facility)…”…

http://www.theglobeandmail.com/arts/art-and-architecture/how-vancouvers-forbidden-city-exhibition-could-be-the-start-of-something-bigger/article14938753/

*SaltyDogz will doubtless appreciate the DeliciousIrony of organizers closely allied with HongKong, Singapore and Jerusalem hosting a Vancouver art exhibition entitled, “ForbiddenCity”.

“HowToBuy”… Indeed

#95 devore on 10.22.13 at 12:51 pm

#83 TorontoBull

this was our experience when we were buying….and if you sign BRA it shows to the realtor that you are serious

You must be a realtor.

The only thing signing a BRA shows you are serious about is bending over. You know how you show that “you are serious”? You do your homework. You come prepared. You get your finances in order and get preapproved. You know what you are looking for. You understand how things work. You behave in an adult, mature manner, and deal professionally. Finally, you don’t think you have to prove anything to anyone, least of all a realtor.

#96 Canadian Watchdog on 10.22.13 at 1:18 pm

I’m with Ralph’s opinion. Write your own representation and warranty agreement based on your terms. Although with amount the of ego amongst realtors these days, most are not likely to not sign it and would rather walk away from the deal.

#97 Old Man on 10.22.13 at 1:25 pm

#91 Robbie – You would recommend a Notary firm for a property transaction in Canada? The last time I used one was at UofT as needed someone to witness my signature, and there was a time in Ontario that anyone could apply for a limited licence. Saw this sign in the window near Bloor and Spadina called Notary Public in some joint, and guy came out smoking a cigar. Yep, he was certified so did his thing for $5.00. I am sure you mean’t in USA, as was sent papers once to have them witnessed by a Notary; no deal, as had to take them to a Law Firm to be read and witnessed for a bill of $400.00.

#98 TorontoBull on 10.22.13 at 1:26 pm

@95
please stop with the insults. I am sharing what worked for us, and what our realtor told us AFTER we purchased the property.

#99 MiniMe on 10.22.13 at 1:27 pm

I almost cried when I read this.
So let’s see you can not sleep well at night if your buyers do not buy the right house, correct? I assume the “right” includes the right price as well…so how does this work when the prices we have to pay these days for houses are overinflated?
You probably have not sold/bought anything for your clients in the last 18 months, only that way this would make sense.
Trashing Realtors: I suspect we should love and kiss them for the lies that we have see in the media lately? With a couple of exceptions they are all the same. Not admitting that they are part of the problem via the media capaigns that they have run would be insane

Take this for example: the latest tune in regards to Condos was that “they will rent” and that “the rents are increasing”. I don’t quite see that and the media went quiet about that.
It all comes and goes in waves, first fabricated or fake bidding wars, HAM money, never ending increasing in prices and lately “the rents are increasing” campaign.

So far none of them managed to radically change the situation. The condo market is crashing as we speak although they don’t admit it. You hardly see a condo sold for over asking price and if you look at the history of that property you learn that before it sold “over asking price” it actually sit on the market for a long time and it had been reduced many times.

The things are also changing with the SFH market in 416 and GTA. For Toronto you had a 50%-50% sold under asking and over asking. these days it is mostly under.

Aberrantly increasing prices and low sales for the condo market signal the top of the market, the average price is pulled up by above 500K condos that many investors unload these days. The same goes for SFH in Toronto.

#91 Robbie on 10.22.13 at 12:01 pm
Yes, it’s a shame so many commenters feel the need to trash Realtors, Inspectors and Lawyers…..full disclosure, I am a Realtor! I do a great job for my Buyers (only work with Buyers) and I have a lot of respect for most of the Home or Septic Inspectors I have worked with….ones I don’t respect I steer my clients away from. I have talked Buyers out of buying a home because I knew it was wrong for them and I sleep well at night because my conscience doesn’t keep me awake. Yes, there are bad Realtors, Lawyers and Inspectors…as well as “bad apples” in all other areas, so you need to find good ones. As for not using an Inspector or Lawyer your Realtor recommends…bad idea! If you have a Realtor you trust then use his/her experience to help you. I recommend one particular Home Inspector because he is very thorough and I have seen that many times. I recommend a local Notary firm for property transactions because they do a good job and their rates are very reasonable.

#100 MiniMe on 10.22.13 at 1:28 pm

I am now following ZeroHedge on twitter. I have no idea if the guy was like this before but man, the bad news coming from him are abounding. Is he a well known bear or just a realistic person. Bad news are coming from all directions… what is going on? Am I reading the wrong literature :-) ? Am I the victim of my own confirmation bias?

Until recently I did not realize that the stock market itself can be in a bubble due to the US perpetual stimulus. So where the heck can a honest person park his money these days ?
This is going to disappoint Garth but no, I wont put my money in any index or stock these days.

I don’t remember exactly who was asking me to lend him money at 4% around here, but look, this guy (and he is no nobody) is returning the money to his investors

http://www.zerohedge.com/news/2013-10-22/yet-another-mega-hedge-fund-returns-capital-amid-concerns-about-global-economy

Baby…that is some frightening situation, a professional investor admits that they is no room for profit and he can not invest money.

#101 Ralph Cramdown on 10.22.13 at 1:39 pm

#90 Sideline Sitter — “I have never met or heard of an agent that would screw their client over so they can be friendly with another brokerage. As an agent, you earn a living from customers, not other agents. Do you think lawyers act the same way? There is (usually) some satisfaction in “winning” the deal, rather than playing nice and not getting a repeat customer.”

Well, here’s a long discussion (click “show all comments”) about agent-to-agent lowball etiquette. There’s a lot of good stuff in it, but see especially comment #23 where the posting author explains how she’s subtly tipping her buyer client’s hand about being able to pay more without actually, you know, breaching her duty, wink wink.

http://activerain.com/blogsview/2436091/lowball-offer-cover-letter?page=2

And here’s another one: “Many homes go unsold every day because other agents do not want to work with the listing agent. Some buyers agents and their clients offers are dismissed only because of prior bad past experiences with them.”

http://atlantahousingblog.com/post/1452580/real-estate-agents-do-not-become-emotionally-involved-

That was a bit tangential, focusing more on bad behaviour often associated with hard bargaining rather than the hard bargaining itself, but this is a hard topic to search for. I’ve read enough by agents to know it’s an issue. As well, I’ve had seller agents reveal to me as a ‘customer’ info about the seller’s situation which I suspect the seller would NOT have wanted revealed, and which I wouldn’t reveal if I were an agent. Of course they reveal the same stuff to buyer agents, and buyer agents divulge in turn.

Many times, an agent can screw her client AND leave him smiling, because he never knows. Think about it: Every agent had to start somewhere, and unless they’re being mentored in an exceptional brokerage or are themselves children of agents, they’re going to be VERY green for their first dozen or few of deals… but some buyers and sellers will hire them, and pay full commission. Buyers and sellers are often stupid.

And lawyers? There’s an old saw that says “In a small town, one lawyer starves, but two lawyers prosper.” You figure it out. The stories of scorched-earth litigation over a small pot of assets, much of which ends up in the lawyers’ pockets is a common one, seen most often in family (i.e. divorce) litigation. The reality is that both parties should be locked in a room with pen, paper and foam Nerf bats if necessary rather than pissing away 1/4, 1/3, 1/2 or more of the family assets in a never-ending series of pretrial motions and interlocutory injunctions at $10,000 per, plus a final bill that can go into six figures.

Not all agents are bad, but most of the deals go to the top producers, leaving the majority inexperienced, hungry or desparate in any given market.

Not all lawyers and home inspectors are bad either. But when I sold a house last year, the buyer’s inspector did exactly what #87 Musty Basement Dweller described for a cursory attic inspection, and his roof and chimney inspection was done from the ground with a small pair of binoculars. Hey, if it was good enough for the buyer, it was good enough for me!

#102 Knob and Tube on 10.22.13 at 1:43 pm

Knob and Tube is a type of wiring you do not want.

https://www.google.ca/#q=knob-and-tube+wiring

#103 maxx on 10.22.13 at 1:44 pm

“When your offer’s presented, make the sign-back period as short as possible. That day, for sure. That afternoon or evening, better. Four hours should be sufficient. Don’t give the evil agent for the seller time to shop your offer, calling up people who have seen the place and pushing them to cough up a counter-bid. Since that would cause a bidding war, and matrimonial meltdown, never falter from this rule.”

Excellent and extremely important point.
We have learned the hard way: a local “country bumpkin” agency is notorious for sellers who are:
-“out of town for the weekend”;
-“in another city, so they’ll need at least the weekend and possibly all of Monday/Tuesday to get a response”;
-“in the states and we don’t know when the answer will come back”;
-“they are elderly and not very technologically advanced”;
– “someone near the sellers needs to be called so that they can take the offer to them”;
-“the vendor is quite elderly and will need some time to mull it over”.

Absolutely anything to stretch the timeline and guess what?…..another offer always appears as if by magic. So clean-cut and respectable looking, but ethically rotten to the core.

We backed out as we are completely allergic to sharp practice as well as bidding wars.

#104 Sideline Sitter on 10.22.13 at 1:49 pm

#92 – “Why would a realtor bring a client to a house he doesn’t recommend?”

Three things to point out

1) with the advent of the internet, everyone gets house horny looking at a listing and will say “I want to see this house now”.

2) sometimes it’s better to take a client to the bad apple and point out why it’s bad so that they customer can learn – first hand – why.

3) when there’s a bidding war, it’s better for an agent to say “don’t do it” then “yes, more money please”.

99.5% of properties have value inherent in them… however, PRICE is what dictates whether or not something is worth purchasing.

#105 smartrich on 10.22.13 at 2:01 pm

Something I never see is a buyer being pro-active. Most leave everything to the agents….big mistake…imho. I purchased many homes that were not for sale until I introduced myself. First…make yourself an area expet in the location which you would like to reside….learn the sales history. Next….walk up to the doors of all the houses you’d like to purchase and ask them if they plan to move any time soon….tell them why you want to live in the area…..be up front and honest. You’d be surprised how friendly people can be….in all the times I did this I never once had a door slammed in my face. ( I can’t say as much for the real tards). Third….don’t be surprised if someone invites you in and says ‘yes’. Fourth…have your lawyer draw up a standard contract of purchase and sale…..pay no real estate commission.

My last deal was for a house that no one in the neighbourhood had known was going to be sold…ever. They were all pissed as hell that I got it before it ever hit the market….at a price everyone sid they would have jumped at ‘if they’d only known’. The no – commish deal lowered the price considerably from the get go.

The Customs Agent owner had recieved a sudden transfer notice…..had to move withing the month….I offered an all cash deal…..closing at the end of the week…..and a week for her to pack….no rent. I got the biggest house on the block….$40 grand under what average listings were at……..no commish…thank you. I just happened to knock on the door at the right time…..what are you doing on Saturday?

#106 Old Man on 10.22.13 at 2:01 pm

Imagine my utter shock that Caesar would lie, and be caught, as will be watching today, as Senator Mike Duffy and this mess reminds me of a quote from Shakespeare – ” Et Tu Brute. ” Now for those that want to take Canada back take a look at the Liberal Party, as Mr. Trudeau has cleaned up his act, and is looking good now as a future PM. This relates to Real Estate, and all investments going forward, so is not out of context.

#107 Daisy Mae on 10.22.13 at 2:06 pm

#68 Devore: “You are the buyer in this transaction. You are bringing the money. You have all the power. So many people do not realize this.”

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

This is so true in ALL areas of our lives. Just say ‘no’. Refuse to pay inflated prices. Doesn’t matter what the product. Boycott. Business needs us more than we need them.

We really do need to take back our power.

Hey, we’re mad…and we’re not going to take it, anymore! ;-)

#108 Daisy Mae on 10.22.13 at 2:06 pm

*Ahem* Make that ‘mad as hell’….

#109 Seeing it from both sides on 10.22.13 at 2:15 pm

@#7 Blase
“The new beta mls site blows.

I would expect nothing more from the cartel.”
————————————————
Check out this new alternate site then. But it’s only for properties in the Lower mainland BC at the moment. Easy to navigate and has 3 years of assessment data for Vancouver properties.
http://residr.com/

#110 Mark on 10.22.13 at 2:19 pm

Anyone heard of “True North Mortgage”? They are offering pretty low mortgage rates right now in Ontario — any input on this place? http://www.truenorthmortgage.ca

#111 Ayn Rand Army on 10.22.13 at 2:30 pm

#74 Penny Henny on 10.22.13 at 8:42 am

Garth is certainly right about buying a home when the snow flies. I remember seeing a home that I thought was a bit under priced, but I thought I would try the guy on to see if he would negotiate a better deal. He said sure, bring your wife in and we’ll dicker.
——-
LOL

And Moses said, bow to your knees before the golden rod of power.

#112 Mixed Bag on 10.22.13 at 2:44 pm

#105 smartrich on 10.22.13 at 2:01 pm

Nice.

#113 Vince on 10.22.13 at 2:48 pm

#110 Mark

There should be almost no difference to you in who originates your mortgage. It’s just money and TNM is going to live on whatever margin between the funds they are able to raise and what they get from you.

If you want to be with one of the “big banks”, all you need to do is say “if you would like my business you are going to have to match (or beat) this offer from [insert broker]”. The bank will capitulate quite easily, and you can usually get a free chequing account or two out of them while you are at it.

This is what I did…

Either way you are going to have to live by the terms of their standard mortgage agreement which you don’t get to write. The only other thing you will likely want to evaluate are ‘break’ fees and consider this if you might want to exit the mortgage early. (Surprisingly, a lot of 5-year mortgages never make it the full length despite best intentions. Even with a three-year term I didn’t make it.)

#114 Old Man on 10.22.13 at 2:51 pm

I saw the debate in parliament and felt sorry for F sitting beside Caesar, as he was directed to get us all into a Real Estate mess. I know that F has some medical issues, so will never go there. I watched the body language with F, and never clapped; looked up and down; never smiled; and a couple of times had to adjust his glasses with a shaking hand, as he was hurting. I saw a conscience, and the best thing he can ever do is to resign in my opinion.

#115 Ayn Rand Army on 10.22.13 at 2:52 pm

Well that just sounds weird now Garth that you didn’t publish my comment preceding it.

It has no context!!

Not a gold blog, dude. — Garth

#116 Ahsan Zaman on 10.22.13 at 3:32 pm

I recently bought in the Beaches area in Toronto. The process unfolded pretty much as Garth described. Previously on the market, reduced, I was the only bidder. I feel ok about the price I paid. I am hoping that when this market tanks I wont be too badly scorched.

#117 Rancher on 10.22.13 at 3:43 pm

http://citywire.lu/news/canada-may-lose-safe-haven-status-say-top-managers/a710724

#118 Robbie on 10.22.13 at 3:54 pm

#97 Old Man
Yes, my clients often use a local Notary firm on Vancouver Island for their property transactions and mortgages. Excellent service, never a problem and their rates are about half what is charged at a lawyer’s office. In almost all lawyer’s offices it is a legal secretary who does the paperwork and the lawyer just reviews and signs.

#99 MiniMe
So much bitterness and anger…that’s unfortunate.

Yes, I have had few sales in the past year or more, have advised clients to wait and a Buyer who bought a few months ago using me as an agent bought in a sector of the market that was very stable and rising slightly (nice homes on acreage)….as Garth has pointed out, Real Estate values are local.

It does help that I have sufficient income from other sources and my Real Estate work is something I enjoy doing in my retirement….retired from a career in which ethical behaviour was very important!

I’m on a gorgeous small island off the coast of BC, not far from Vancouver Island. The sun is shining, some flowers still in bloom, my potted palm is growing beautifully on my deck, I can see the ocean and islands off in the distance and soon I plan to head out for a great cup of coffee and some delicious home baking at a local coffee shop. Life is good…and my conscience is clear. :)

#119 Sandy on 10.22.13 at 4:11 pm

Garth, I’m interested to understand what is different about this bank, from the big ones. Do they see the high, and are cashing out with the IPO?
http://tinyurl.com/PWB-IPO

#120 Bowlsh!t on 10.22.13 at 5:14 pm

No.. Tell me it ain’t so… Not according to TREB and CREA.

http://www.ctvnews.ca/business/2013-shaping-up-to-be-weakest-year-in-a-decade-for-gta-new-home-sales-1.1507838

#121 Bob Rice on 10.22.13 at 5:21 pm

The internet has made the real estate agent obsolete/redundant.

We sold without one and got 98% of asking (Comfree)

We peruse the MLS and won’t hesitate to contact the sellers agent.. I am the only one who has the best interest in the investment. We decide what we want to pay for it and if they don’t accept F them.

#122 Old Man on 10.22.13 at 5:40 pm

#118 Robbie – this is a true story as had a deal once with a mortgage broker in Toronto which was called a co-broker deal, and he had a secretary that detailed all the mortgage documents, and he had the licence as well for being a Public Notary too. I was shocked that all was done so fast for a closing, but found out that his money was all coming from a mob family; the Don walked in and said do it. I was tipped off about this all with a lawyer friend who told me all, so am no fool and have been around, as rocked with a rough crowd in life to make a buck.

#123 Son of Ponzi on 10.22.13 at 6:06 pm

Employment down, Stock market up.
What kind of sick world is this?

#124 Ralph Cramdown on 10.22.13 at 6:06 pm

#119 Sandy — “Garth, I’m interested to understand what is different about this bank, from the big ones.”

They stink, that’s what’s different. All of their deposits are brokered. Which means instead of a deposit base of nonnas who will be grateful when they receive notice in the mail that their GIC will be automatically renewed at 1.3% for three years, they’ve got twitchy online clients (and their brokers) who will, for two extra basis points, move their money to the Gimli West Side Ballerz Credit Union at the click of a mouse.

That and their IPO was only for $10mm. Who knew you could do one that small on the TSX? I thought that was about the lower limit for Vancouver!

And their name is way too close to a much larger institution based in California.

Other than that, nothing suspicious or risky at all.

#125 Adam Naamani on 10.22.13 at 6:09 pm

#109 Seeing it from both sides

Thank you for mentioning our company Residr. We’ve unfortunately been asked to temporarily cease operations by the RECBC until we obtain our brokerage license. We will be back online shortly, please read this blog post for more information: http://residr.com/blog/2013/10/temporary-service-interruption-please-stand-by/

#126 Canadian Watchdog on 10.22.13 at 6:37 pm

*KIMBERLY-CLARK CEO SAYS PLANS TO REDUCE HUGGIES DIAPER PACK SIZE BY ABOUT 7 PCT IN Q1'14
*KIMBERLY-CLARK CEO SAYS CUTTING NUMBER OF DIAPERS IN HUGGIES PACKS TO MATCH COMPETITION SIZES

Now read post #105 if you missed it.

The only way corporations can fight frugalism is with more shrinkage-ism. How far they're willing to go will depend on how dumb and blind the consumer is. Either way, expect less items (and lower quality) in your shopping bags, but for the same prices paid today.

Hey… Stocks are up again!

#127 Ann on 10.22.13 at 6:47 pm

Bob Rice on 10.22.13 at 5:21 pm

The internet has made the real estate agent obsolete/redundant.

We sold without one and got 98% of asking (Comfree)

We peruse the MLS and won’t hesitate to contact the sellers agent.. I am the only one who has the best interest in the investment. We decide what we want to pay for it and if they don’t accept F them.
*********************************************Just one thing how did you set your price to sell and to buy oh though the real estate boards numbers ‘F’ you !

#128 espressobob on 10.22.13 at 7:12 pm

Having owned a property up north the first thing my lawyer insisted on was a ‘survey’! I replied with ‘what about title insurance’? His answer, get the survey first!

It costs, but a few people I know didn’t and found out they don’t own what they think. That sounds like a nightmare.

Waterfront properties are partly owned by the township, somewhere back from the high water mark. A little lesson learned the hard way. Not my thing mind you, just the experiance.

#129 Daisy Mae on 10.22.13 at 7:29 pm

#83 TorontoBull: “…and if you sign BRA it shows to the realtor that you are serious…”

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

Forget it. He’ll just have to trust that I am.

#130 Daisy Mae on 10.22.13 at 7:35 pm

#95 Devore: “…Finally, you don’t think you have to prove anything to anyone, least of all a realtor.”

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

Perfect.

#131 Cici on 10.22.13 at 7:49 pm

#27 Randy Macho Man Savage

Boy with a big ego watch out: this “inexperienced” RE agent is going to steamroll you. She ain’t honest honey, she’s trying to sucker you in by gaining your trust. Then she’s going to hook and sink you.
But you probably won’t even notice. I bet you’ll go around bragging about how big you scored to anyone willing to listen. Grow a brain indeed!

#132 Herb on 10.22.13 at 8:12 pm

#126 Canadian Watchdog,

many years ago I was serving in Germany when the coffee companies shrank the packaged pound of coffee by 50 grams. That lasted about three months and collapsed under furious attack by consumers and government.

Just got back from a couple of weeks in Europe and a pound of coffee there still weighs 500 grams. Check the weight of a Canadian “pound” bag. As consumers we are sheep, then wonder why we’re poor.

#133 Cici on 10.22.13 at 8:16 pm

#43 Invest4life

First, if you know and follow Garth at all, he doesn’t recommend individual securities. Not for free, anyways.

Second, he doesn’t recommend investing in just one type of bond security or fund. To “do that thing” right, you’ve got to diversify.

If you can’t figure it out yourself, you can pay someone 1% until you get some experience (but you’ll need upwards of 6 figures to invest). Go back and check his posts on how to find an advisor.

If you don’t have that much, go back and read some of his posts on asset allocation/portfolio weightings, rebalancing, and non-registered vs registered accounts, so you know where to stockpile each type of asset class to minimize your tax burden.

Read these posts to start:

http://www.greaterfool.ca/2012/12/12/the-advisor/
http://www.greaterfool.ca/2013/06/17/emotional-baggage/
http://www.greaterfool.ca/2011/02/25/geezernomics/
http://www.greaterfool.ca/2010/11/26/how-to-invest-2/

Then go back and read some more posts, and take notes. Then buy Money Road, it’s probably well worth the small “investment.”

#134 TurnerNation on 10.22.13 at 8:23 pm

#110 Mark on 10.22.13 at 2:19 pm

One of their better brokers left to set up shop on his own. Sharp guy, Engineer and MBA. Might as well deal with a success.

http://mortgageratemarket.ca/about/

#135 TurnerNation on 10.22.13 at 8:29 pm

#119 Sandy on 10.22.13 at 4:11 pm, Ralph:

Check out the stock price for Pacific and Western Trust. Symbol is PWC. Fell from $15 to $1 – may be related.

“As a new Schedule I Canadian chartered bank, Pacific & Western Bank of Canada continued its focus on providing commercial mortgages and real estate financing.”

http://www.pwccapital.com/investor/securities

#136 espressobob on 10.22.13 at 8:54 pm

#132 Herb

Actually a pound (imperial) is roughly 454 grams. Coffee bean quality though expensive has improved markedly over the past decade. And well worth it!

#137 Spiltbongwater on 10.23.13 at 12:37 pm

DELETED