Wednesday 29 April 2015

Bidding wars are not the parents' fault

There was [an article published in the Toronto Star] not long ago, which suggests that parents may be to blame for bidding wars because they are helping their kids buy homes.

While I sort of understand where the author is coming from, I am not sure it's entirely fair to blame the parents.  Unless they're actually over-riding their child's decision and pushing the deal.

Every generation has something we can blame on them - the younger ones too - but I don't think this is one of them.  If parents bought a car for their adult child, would we blame the parents for any subsequent car accidents they have?  Of course not. 

And we're not talking about high school or college kids here..  if they're out buying a house, they almost have to be young adults starting out on their own.  Part of being an adult is taking ownership of your decisions, negative consequences as well as positive.

Personally, I find the fact that first-time buyers are more willing to enter into bidding wars a source of greater consternation than parents helping with down payments and financing.  A willingness to enter a bidding war is more directly to blame for bidding wars.

And there can be no real argument, bidding wars are good for sellers and not for buyers. So competing offers should be viewed by buyers as the undesirable thing they are, and treated with rational forethought and wisdom, not an emotional response. A fear of losing out can make buyers do some pretty silly stuff, like making over-asking offers with no financing conditions, and ultimately the sellers end up the winners on top of the pile.

[As I've explained before, this can be dangerous even if the price is within your qualification] because the bank may decide that the house is not worth what you're paying.  If that happens, you can find yourself having to try to make up the difference between the appraised value and purchase price or being forced to walk away (risking being sued for breach of contract!).  Even if your parents help you out of this sticky situation, this decision was yours, not theirs.

The solution is simple.  Be patient.  Work with an agent who will give you solid advice on value using actual sale prices from the area.  Stay rational and carefully consider the numbers and your personal plans.  And don't get worked up by competition.  Yes, someone else might jump in with a much higher offer and no conditions, but why should you be that person?

Thursday 23 April 2015

"You can't buy this house because you're Jewish"

Fortunately, the statement in the headline is not something that can legally be said to anyone anymore.  But there was a time when it was business-as-usual, with restrictions even registered on some properties' titles prohibiting ownership by Jewish and black folks.

Restrictions registered on title - or restrictive covenants - are still around, and you could run across some now and then.  Subdivisions may have restrictions on storing boats or commercial vehicles in the driveway, the installation of satellite dishes, or even varieties of trees allowed.  These are restrictions that run on title with the particular properties, whether local by-law is similar or not.

The government does, of course, have the power to over-ride these restrictions and make them unenforceable, though.  Thankfully, that is just what they did with any restriction considered discriminatory based on race, gender, and so on.  And more recently the Ontario government decided that there should be no outright prohibitions on laundry lines, in the interest of promoting energy conservation.

For a little more on the history of the end of the exclusionary restrictions in Ontario, check out this Toronto Star article, Honouring the end of real-estate racism in Canada.

Wednesday 22 April 2015

Listing inventory is down.. but why?

As I said yesterday when talking about the current market conditions, Hamilton's listing inventory has been down for some time.  But that raises a question...  why? 

I have some theories, but it's hard to confirm them.  So I have a question and a request.

Have you thought about selling recently and then decided not to?  

If you have, I'd like to hear from you.  No sales pitch from me - I would just like to hear your reasons why you decided not to sell.  

Leave a comment below, send me an email at or call me at 905-512-4069.

If you'd like to keep your comments anonymous/confidential, I am happy to respect that.

Tuesday 21 April 2015

"Will it get better or worse?"

One doesn't have to read very far in the headlines these days to know that Hamilton is in a strong sellers' market.  Competing offer situations are making it difficult to get any kind of bargain in the market, with some properties getting quite a bit more than the asking price.

This can be a frustrating time for buyers looking at the market.  I can sympathize -- it's not any nicer for real estate agents working with buyers.

In discussing the current market, one buyer client recently asked me if I thought it would get better or worse.  While I don't have a crystal ball, I think prices are not going to get any better from a buyer perspective, meaning I don't think we're in for any major corrections.  But if the market at least balances a bit, then it might become better in the sense that you can make an offer without several other buyers turning up the heat with competing offers.

A few things could help to balance the market out, but it basically boils down to supply vs demand. 

On the demand side, prices may eventually get to the point where it's more affordable than Toronto but not cheap enough for the typical commuter to justify the commute.  But I think we'll always be affordable enough that our market won't drop off a cliff, either.

On the supply side, an increase in listing inventory would go a long way toward relieving some of the pressure on buyers.  The Hamilton market has been down in available listings for some time now.  At the end of the first quarter in 2015, listings were down 7.7% citywide from the same time last years, with  inventory in some areas even lower -- listings on Hamilton Mountain, for example, were down 20% at the end of the first quarter. 

With increased demand and decreased supply, sellers should continue to enjoy the upper hand for the foreseeable future.  Buyers will have to remain patient and focused, seeing new properties as quickly as possibly and trying to make rational decisions if competition arises.

Friday 17 April 2015

Carbon monoxide detectors are now mandatory in Ontario homes

Carbon monoxide in the home is impossible to smell or see, and is deadly.  So in order to improve community safety, carbon monoxide detectors are now mandatory in homes in Ontario, as reported by CBC.

Although technically the carbon monoxide detectors have been required since October 15, 2014, there was a phase-in or "grace" period.  But as of April 15, 2015, they are now required in all small residential properties- including personal homes - by the Ontario Fire Code.

For more information on the installation and testing requirements, refer to the Ontario Ministry of Community Safety and Correctional Services page on it <here>.