That's all they can afford to pay..... Toronto Real Estate Crisis

Preamble

Widow with 3 adult sons remained in the family homestead of 40 years.  The growing needs of being a senior now require a single floor for mobility and less snow shovelling or house / lawn maintenance. Its expensive to heat the 4 bedroom house for one person. She expressed her interest to change to a condominium with her BFF [who was previously a REALTOR ® ] Smartsizing*   

There was a swift introduction to a Friend of the BFF. [bird dog]

He took her out a few times to look at condos, and then reminded her that she was obligated to him.  The sons are all past clients of mine.  The sons recommended that she contact me about her needs.

BUT ... She felt obligated.

They settled on a condo unit and a closing date. The home was listed for sale at $XXX.   Toronto, Ontario, Canada's real estate market for detached homes is firmly a SELLER's Market. After a few days on the For Sale, he asked What will you take...    What's your final price.  What's your lowest price?

She finally responded to the questions with...  "I will not take less than $YYY"

An offer from a showing appeared exactly at $YYY and the agent sheepishly added;

But thats all they can afford to pay....

The agent double dipped the seller on the detached home and sold a condo.

The family suspects that the Widow [their Mom] was shorted [duped] out of about 10% of the homes value by an unscrupulous agent. We all want a trust relationship, transparency and fiduciary duty to our clients. Mom doesn't believe she was manipulated.

"Happy Buyer" and a "Happy Seller" means that there is no ethical complaint against this realtor.  BUT should we sit by and permit this?   We talk about raising the bar in real estate transactions then find stories like this are more common.

What would you do?

Dear John; Its over between us!

Dear John,

I love you, I really do.
Its me
Its not you

You call me late at night and ask questions
You want things explained

You want neighbourhood details and perspectives
Deep personal back ground info

You want property histories.... What sold on the street? How was it inside?

I know you are seeing properties with other agents.

Stop the denial.
We need to sign a Buyer's Agency or I refuse to be your emotional information center and data bank anymore....

I cannot handle the late night emails and phone calls that demand immediate attention without your mutual commitment.

You tell me.....

I cannot commit to you without your commitment to me.

so.....

It's over between us...  I cannot handle the lies.

Lawyers giving Condo Advice

When you purchase a resale condo suite you receive a Status Certificate that explains the Financial position of the Condominium Corporation.
a) What are they expected to spend Capital Projects (Forward Plan)
b) Are they being sued?
c) Are their Finances stable IE Borrowings vs Special Assessment
d) Percentage of Rentals vs Owners
e) Rules and Regulations you will need to adopt.
f) Is the Owner up to date with their fees and what do they pay
g) Confirmation of Locker and Parking descriptions.

They will provide you all Insurance Documents, Rules and Regulations, and most recent AUDITED Financial Statements.  You now have these on a CD and in Print; You take them to your lawyer....

Lawyer today told a Buyer;  "That condo isn't a good deal because their Annual budget is in deficit."    UMMMmmm Really....  My response?   "Yer stupid".

Building Budget Held Meetings (the Board of Directors and Management Company) for what they expect to spend; planning Diligently. This creates the amount to calculate your maintenance fees.

If we spend $100 more than anticipated on anything ( legal fees, repairs, a few snapped parking control gates)  WE WILL BE IN DEFICIT. 

If a condo is adhering to their Reserve Fund Study, {depositing the correct amount quarterly each year and earning interest}  and the audits have been done.... [by accountants who manage and accounting firms who audit PLUS the engineers who calculate the remaining economic life of system components] there is generally not a lot to discuss.

WTF  [who legal term] are you to decide an annual operational deficit means its a poorly run building and you recommend your buyer skip it.

A financial statement takes a snapshot at a particular calendar date. (Usually Dec 31st year end) Are you overdrawn during TAX time?   Uhhuh   Now pick up that book on accounting practices are review Financial Statements paying careful attention to the Source and Application of Funds.  ( what we collected, what we spent / did with it) 

If the building is deficit or surplus it is carried forward (and paid) into the next year. It is not a VISA card.  Its a running balance.

In this case, the Buyer is changing Lawyers. or the Building could have a sale that show DFT [Deal Fell Through]  when asked the agents would say Financial Statements of the Condo Corp.  Depending on their KLOUT their voices might carry, damaging the financial resale and viability of the building.

Please work with people who understand...  Your road will be so much smoother.

When the Average Sale at $1.0MM What do you get?

ONE MILLION DOLLARS 

The average sale of a detached home within the City of Toronto is now at One Million Dollars. Market Watch for June 2014 shows average sale at $943k.

Average selling prices varied across the Greater Toronto Area, depending on geography and home type. A detached home in the City of Toronto sold, on average, for $943,055. In the surrounding GTA regions, the average detached price was $648,439. The average price for condominium apartments was $401,809 in the City of Toronto and $307,307 in the surrounding regions.

That means that the home you bought for $500k only 10 or 12 years ago has doubled and you are able to sell to fill your family needs going forward.

You are also in your power earning years.
You are prepared to pay the Toronto Land Transfer Tax on this purchase.
Interest Rates at 3% Fixed for 5 years make this very comfortable 

We are all waiting for the retirees to finally sell!  BUT, they are making their homes more comfortable [especially when compared to retirement home costs.]  Housing Inventory (the number available for sale) has declined about 10% per year since 2005 forcing more competition among shoppers.

So let's have a quick look at what was sold in the last 45 days in west Toronto detached and semi detached houses. What was actually PAID in the last few weeks.

You do need to sign in to get this PDF  but we do have a No Stalking Rule. 
Millionaire Monday   What sold in the last 60 days WEST Toronto   Better Still...  Let's update #MillionaireMondays on Twitter. 

Now that you have decided to sell....  What will be buy?  

Realtor TWARTS Terrorism in Toronto

Real Estate Agent David Pylyp single handedly Stopped a Terrorist enterprise from occurring in a sleepy west end suburban community.

" I realised that renting to "these people" was problematic when they completed the Individual Identification Record supplied by the Canadian Real Estate Association.  I was paying close attention to the television ads that promote diligence and using a REALTOR® "

David Pylyp explained  "We had already signed the Agency Acknowledgement, Working with a Realtor Brochure, Explained and Signed the Buyers Representation Agreement when I was completing the updated 4 page Individual Identification Information Record. This is where FINTRAC needs to know where your deposit monies came from and who is really buying or renting the house."

Normally people would shake hands and come to an agreement to Buy or Sell, even rent a property in Toronto,  but thank fully we have FINTRAC.

David explains; "By Identifying a HIGH RISK Foreign Citizen or Resident that operates in a HIGH RISK Country or OTHER I have helped twart terrorism."

http://zh.scribd.com/doc/225771418/Individual-Identification-Information-Record-OrEA-630-Blank

This is sarcasm in case its not evident
The form however is rather insulting to any INVESTOR or Non Resident who is welcome to buy here in Toronto for investment and Safe Haven, yet this 4 page tree killer will sit in some filing cabinet, in a real estate office for seven years.

We do welcome investment in Toronto; there is just extra paperwork.  I will be pleased to help you with that.  But we need these forms.

Sorry,  we're Canadian.

Toronto Market Observations May 2014

Toronto Summer 2014

Yes, sales are up, again, by a staggering 19% in Toronto! The average price of a detached home in the 416 is pushing a million dollars.



http://www.huffingtonpost.ca/2014/05/20/toronto-house-prices-soar_n_5359659.html?utm_hp_ref=canada-business

The number of detached homes sold last month were 1300 with a year over year appreciation of 13% in value.

[Flash back 4 years] http://youtu.be/mu269xorKBY   Same Media Perspective.

Sales in the 905 are selling 3 times as many for houses with 3,500 units but the individual price is averaging $645K.  Simply put, you are driving till you can afford it. 

Sales in tony neighbourhoods like Roncesvalles Village and Bloor West only numbered  57 and 91 units respectively fueling multiple offers approaching $966,000 as an average sale.

While the House Prices are up, Condo prices are flat with values that reflect 2009  pricing as more units become available.

Skyrocketing house prices are forcing more first-time buyers into condos, just to get a foothold in the housing market; only 53% of Toronto home buyers can afford detached houses.

Why is the number of average homes declining?

Seniors (Baby Boomers) are not selling but are instead IMPROVING and Renovating their homes for a long term ownership and are sitting on their real estate assets. This further constricts the supply.

http://www.theglobeandmail.com/news/british-columbia/boomers-sitting-on-163-billion-in-real-estate-holdings/article18770674/?cmpid=rss1

Rentals are also softening their prices with a vacancy rate of 1.5% but bare in mind 70% of Condos in Toronto are Owner Occupied. (MacLeans) 
http://www.macleans.ca/society/life/condo-hell/

There is a huge pool of singles, both young and old that live alone. Condos feed that need and lifestyle. Although sales numbers seem high, this market is in temporarily oversupply. In a few years time there will be fewer and the dynamic changes again.

If you would like to discuss what's happening in the Toronto Real Estate Market I invite you to add your comments here.

If you would like to buy or sell Give me a call.

647 218 2414
I answer my own phone

David Pylyp

Do it Yourself - Toronto

Doing Everything yourself Could save you money, usually it is time consuming and nets a poorer result. http://SellinginToronto.ca

Family Law Court in Ontario is CLOGGED with unrepresented litigants because of the expense of using lawyers.  with that comes a lack of proper process, forms, disclosure, obligations and the ever present; I didn't KNOW I was supposed to do that! 

Can you imagine how our legal systems would be clogged with Self negotiated real estate transactions, private buyers and private sellers neglecting time lines and waiver needs.  Did you cancel that contractor?   Did you pay cash for that roof repair?

At some point DIY and Home Handyman Have some strings attached.  






I'm just reading an article here from Legal Matters, the fact that everyone wants to do everything themselves. I was very surprised, Very Surprised to learn, that in Family Law in Ontario, 75 to 80% of all the work done in court is self represented.

Unrepresented Applicants and Respondants

It makes me understand why long term career lawyers like Stan Gelman [in Mississauga] have opened up "do it yourself" assistance programs.

So we're trying to save money everywhere; by doing everything ourselves.

In the family law case everything is delayed, claimants argue they didn't know, Financial Statements are not done properly, things are handled in a ... [SLOPPY] fashion.  They are not paying attention to the timelines; they are always in trouble with the court. The Judge has to adjudicate the merits of each case that is delayed before they get to mediation or a decision. Transcripts are need and typed. [DARP]

Now WHAT IF  we were to apply those same standards to each and every real estate transaction in Toronto. Let's have every house Sold " For Sale By Owner" and Every Buyer is a By Owner Purchaser, and they are all out on their own arranging their financing, inspections and insurance.

..and Mortgage.

Can you see what's happening here?

There are claims right now that lowest interest rate available is 1.99%. Thats a variable rate that's very exciting..  but there are conditions involved.  There are indeed some strings attached to the  1.99%   Variable Rate program at IG 

There is always "Some Strings Attached".  If you would like to have a candid conversation;

Give me a call.  I'm available at 647 218 2414 
Or of course, You could do all of it yourself.

David Pylyp Sales Representative
RE/MAX Realty Specialists Inc., Brokerage