Blog Toronto Real Estate

Having Fun At Our Real Estate Viewing Centre

Halloween is always a terrific time to decorate and dress up to join in the kid's fun and games.  Since this our first Halloween in our new office, we decided to put a couple of signs out to let the families know we would be open that evening for trick and treating.

Three of our wonderful staff members, Melissa, Ashleigh and JP decided to dress for the occasion and have some fun too.

We're participating in the community in other ways as well.  The local Norway Public School is having their annual parent talent night fund-raiser and we're providing some of the sponsorship for that.

We're also partnering with the local YMCA starting in January to pay 50% of the cost of a child's tuition to become a certified baby sitter.  Figure our granddaughter can take advantage of that :)

I'm On The Path To Enlightenment

Well, not really enlightenment in the true spiritual sense but certainly in the real sense when it come to helping our Toronto real estate clients!

Last Sunday I flew to California and drove south from LAX to San Diego for the first seminar being held by By Referral Only (BRO).  Many of you know that this is the place where Sally and I first started our 'Super Servant' learning over 13 years ago and where each member of our Thomas and Sally Cook Team must go when they first join.

On the way down I had to make one important stop... at the OC!  Rylie, our 14-year old son, is currently watching, for about the 4th time I think, the complete OC series so I just had to stop into Newport Beach for a quick lunch on the pier to see what it's all about.  California is beautiful with the ocean and the mountains virtually side by side but there is definitely a lot of traffic!

This San Diego training called "Strategic Leader... The Continuing Quest For Excellence" was a collection of the top By Referral Only agents from all across North America getting together to exchange ideas about customer service improvements, client communications and marketing solutions to help our seller clients in a more challenging market which we're entering in Toronto right now.

The best thing... many of my American friends have already been in the 'challenging', and in some cases 'declining' market for several months now so the techniques and solutions they've used will come in very handy in Toronto.

I did have the privilege of being the moderator on one 'ideas' panel and participating in another where I got to rub elbows with some of the top Realtors in California, Virginia and other states.

I'll be sharing some of the ideas I got with some of you personally and will talk about many of them in upcoming posts.  Keep coming back for more reading :)

As of today, I start another seminar in Santa Monica with Coach Ken.  He's a real estate coach for agents from all across North America and we're on a conference call every week to improve the way our Toronto real estate business is run.  More on the ah-ha's from this seminar later on.  Keep coming back for more reading :)

Toronto Home Buyer And Seller Were VERY Disappointed And Angry!

Last evening I received notice that the sale of one of my listings was not going to go through.  The buyers were unable to obtain their financing as promised by their mortgage broker!

Whenever an agent calls and says that he or she has an offer on one of my listings, the first question I always ask is "Have they been pre-approved for a mortgage?".  To this buyer agent's credit, she responded by saying that she'd shown my listing several days prior but did not want to bring an offer until the purchasers had received their pre-approval... which is absolutely the right thing to do.

So what happened?

It turned out that when her buyers went to their mortgage broker, he took what they'd told him at face value and did not check their income or credit bureau.  This was a major error on his part because, after the buyers had put in their offer and the broker got serious about their application, it turned out there were issues with their income and credit bureau score that precluded them from purchasing.

The buyers were very angry at the broker for getting them all excited about the possibilities of owning this lovely home and the sellers had their home off the market for several days while the condition on financing was being processed.

So what should have happened?

Our Thomas and Sally Cook Team asks OUR home buyers to assemble their documents in advance and get what we call a 'Full Mortgage Pre-approval".  For proof of income, we need copies of employment letters, tax assessment forms from Revenue Canada and pay stubs.  For proof of down payment, we need copies of RRSP statements, GIC's or term deposits or bank account statements.  We then get the buyer to ask, no demand, that their lender do a credit bureau right up front to ensure that no glitches appear.

So why don't all Toronto mortgage lenders do this?  To be blunt... because they're too lazy.  Their feeling is that they don't want to do any real work until the buyer has proven they're serious and have actually put in an offer.

This put all the stakeholders (buyer, buyer's agent, seller and seller's agent) in a quandry because the buyer can't have confidence that they'll get the mortgage until they actually spend their time, and that of all the other parties, and provide an accepted Agreement of Purchase and Sale.

Our Thomas & Sally Cook Team decided several years ago to solve this by dealing with just one mortgage lender... someone who was experienced, very knowledgeable and who would do the necessary work up front for all our buyer clients because they knew they would have our loyalty over the long term.  His rates have been consistently competitive with everyone else's and our buyer clients have the comfort of knowing that their mortgage is "fully pre-approved".

On many occasions, where the purchaser might not be in a financial or credit-bureau score position to buy right now, he has offered them excellent counsel and advice on how to solve any problems and offer a plan for them to go forward in the future.

His name is George Christopoulos and you can reach him at 416-721-9299.  Tell him the Thomas & Sally Cook Team sent you.

By the way, we did sell this listing just one week later to a different buyer and got our sellers an extra $2,000 - sometimes things just work out!

New Loan Programs Provide Lower Monthly Payments

Over the past few months, some new loan programs have become generally available to Toronto home buyers which can significantly reduce the monthly mortgage payments that consumers have to make.

Although long-term 5-year interest rates have been dropping recently, that's not the secret!  A change in the amortization period of mortgages is what's made the difference.

Traditionally in Canada, our mortgages have been amortized over 25 years, meaning that if you started out today at 5.3% say, and kept that interest rate constant over the entire period (which we can't do by the way), at the end of 25 years your mortgage would have been paid off in full.  Of course, that amortization period would be shortened if you take advantage of any of the pre-payment privileges that are typically available from any bank.

Now we have available to us 30- and 35-year amortizations which stretch out that payment-to-zero period.  This results in a lower monthly payment (and a higher interest paid over the life of the mortgage) and allows a home buyer to purchase a higher priced property than they would qualify for at the old, standard 25-year amortization calculation.

CMHC recently revealed that over 20% of the mortgages they now insure have that longer amortization period in place.

Some cautions are in order however.  Since the amortization period is longer, less of each monthly payment is going to principal and more is going to interest.  In each 5-year period, the home owner's gain in equity through principal reduction will be significantly lower.  Therefore, it is more important than ever for a home owner to take advantage of amortization-reducing 'tricks' such as paying their mortgage every 14 days and increasing their bi-weekly payment by 10% or more annually!

See the article on www.TorontoRealEstate.ca entitled "Mortgage Terminator Program" for more tips on how to pay off your mortgage sooner and save literally thousands of dollars in interest.

Who Should You Call?

Have you ever needed to get answers about street parking, garbage pickup times, special pickups, street not plowed, basement drain backing up from the city line, low water pressure or noise complaints?

The Toronto Real Estate Board has developed charts to help home owners in GTA communities with getting answers to all these types of questions and many more.

You can download the PDF for Toronto home owners right here...

Download city_of_toronto_services.pdf

and, if you live in any of the communities surrounding Toronto, go to www.TorontoRealEstateBoard.com , click on Consumer Info and then click on City Services to find a list of community phone numbers.

Our Team has had lots of experience with many city departments over the years... especially the Buildings Department in Toronto.  If you have any questions about them, please give us a call at the office - 416-691-8118 - anytime.

What's NOT Been Happening In The Toronto Market

What's not been happening is that the sky hasn't fallen in!  Although sales numbers are down for September over 2005, transactions were still the 3rd highest in MLS history.

Unfortunately we get hyped here in Canada from what's been happening in the US market where some states have encountered a slowing in the marketplace.  What you don't read is that some of the other US states/cities are doing extremely well and are having record sales.  So let's look at our fundamentals in Toronto and attempt to analyse them.

I just read an interesting article commenting on the fact that economists are now beginning to challenge the media's generally negative outlook on housing.  The author stated that the media's constant warning of imminent crashes and home price meltdowns was way out of line with reality.  He states that the market is simply going through a correction in many US cities which have had recent double-digit appreciation levels... and that this correction is badly needed after five years of record sales.

The best thing about our Toronto market is that we, for the most part, haven't had double-digit appreciation levels... our average appreciation year-over-year has been in the 5-7% range!

The history of housing prices tells us that they fall only when and where a local economy fails.  We're seeing that local Toronto markets are each following their own pattern, based on the 'local' economy and local price levels.

For example, we are seeing a slowdown in some of the more distant 905 areas because of recent job losses and the higher cost of commuting (expensive gas prices and traffic gridlock).  Contrast that to the downtown market where condominium sales have been robust at about 30% of the market and brand new condo sales in September 2006 were at their highest in the last 5 years.  Why... no commute required and more affordable for many first-time buyers.

As some of the established neighbourhoods in the 'close-to-downtown' such as the Annex, North Toronto and Etobicoke are showing zero growth because prices have been climbing in recent years, other 'short-commute' communities such as Scarborough, Richmond Hill and Markham have shown upper single-digit to low double-digit increases because their prices haven't kept pace with the downtown neighbourhoods and are now seen as being more affordable.

The one trend that bodes well for buyers, and a warning for sellers, is that inventory levels for resale homes are at a millenium high.  In September, listings available on the market hit 26,383 while sales were at 6,622.  This gave us a sales-to-listings ratio of 25.1%... just on the borderline of being a buyer's market! 

Our conclusion... buyers now have more choices in the marketplace and serious sellers will need to adjust their prices, and reduce their expectations, in order to get their homes positioned competitively in the marketplace.  Although prices aren't falling, there's less upward pressure to make homes appreciate at higher levels.

Back To The Blogging World With Gusto

It's been awhile but it feels good to be back... it's an indication that other things have smoothed themselves out finally.

Specifically our new Real Estate Viewing Centre is now complete!  The final touches were done last week and we're fast forward from here on.

It's a great location for clients to meet with us to discuss their needs and wants... both for buying and selling... and we've got 3 client counseling areas set up on the main level so people can get on the internet and view the newest listings not yet available on the public MLS site and can take a look at comparable sales in their neighbourhood if they're interested in selling.

The back area of the main floor has private desks for several Team members and our entire Client Care staff are located upstairs on the second floor level. The basement level also has Team facilities for future expansion.

The building is an interesting configuration... narrow at the Kingston Road end and widening out considerably at the back.  The previous owner had been in the building since the 1940's so absolutely everything needed to be updated.

We'll be having an open house for the neighbourhood from 2-4 pm on Saturday November 25th   and a special, invitation-only party for our clients that evening from 7-10 pm so please plan on attending.