Thursday 31 May 2018

Residential rent & post-dated cheques

Every once in a while, I'll see advertisements for rentals that indicate post-dated cheques are required.  While it is allowable for landlords and tenants in Ontario to agree to use post-dated cheques - it can be more convenient for the tenant - [Section 108 the Residential Tenancies Act] (RTA) does not allow a landlord to require them.  The same applies to automatic bank account debits or credit cards.

If you're a landlord, be careful not to come across as requiring post-dated cheques (or account/credit debits) and make sure the tenant understands it is just an option if you bring it up.  If you have disputes with the tenant later on, it could serve as a mark against you in the eyes of the Landlord and Tenant Board if the tenant makes it look like you required them against their will.

And on the other hand, if you're a tenant and your prospective landlord is being firm on requiring them, it may not be a bad idea to be wary.  If they're not familiar with this part of the RTA, where else might they try to pressure you in ways they shouldn't?  I'm not saying you definitely shouldn't rent the place over this issue, but it's something to think about.

For lots more information on the RTA, see the [LTB brochure online].

Friday 25 May 2018

Market Snapshot: May 13-19, 2018

Local MLS® Sales Data

All Hamilton Real Estate Districts Combined*
Total Sales: 181
Average Price: $533,978
Median Price: $482,000 
Avg Days On Market: 31

While still not at quite the same level as this time last year, sale volume did pick up a bit this week.

Prices also saw gain, but with some divergence between the mean average and median.  Average priced went up a noticeable amount this week, but the median stayed more or less the same. This suggests a limited number of higher priced sales skewing the average up.

Time on market went up a little, but still below historical norms.

Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **
*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown
** Not intended to solicit clients currently under contract.

Tuesday 22 May 2018

No one likes a bully.. usually.

As discussed yesterday, [offer deferrals] can be a cause of frustration for buyers.  Pre-emptive offers add an element of uncertainty to the situation.

A property that includes an offer deferral may also state that pre-emptive offers are welcome, or not welcome.  What the seller is saying is that they are holding offers at a certain time, but they are willing to entertain offers early if a buyer doesn't want to wait for the designated day and time.  The attempt to push it through is why these are often referred to as "bully offers".  If the listing says they are not welcome, then the seller is indicating a firm stance on the offer presentation date.

The benefit of making a bully offer, if they're allowed, is that you don't have to wait.  The problem, though, is that you have to motivate the seller to accept your offer rather than waiting as planned.  If the seller thinks they can get a bidding war for a higher price and probably firm sale, then your offer has to meet their expectations.  Which means a high offer and with no conditions.  There's an obvious risk to any such offer, but the seller is unlikely to accept anything less.

These days, even paying a high price aside, one doesn't necessarily gain a huge competitive edge with a pre-emptive offer anyways.  Before they became more commonplace in the market, there was less regulation of how they were handled, so you could make an offer early and potentially win without anyone else having a chance to make an offer.  In recent years, though, real estate boards and regulators have made moves to make the game a little more fair. 

Locally, if an agent has a listing with an offer deferral where the seller decides to entertain an early offer, the listing agent is expected to let everyone else with a registered offer know (legally required anyways) but even to notify anyone who has shown the property or has a showing booked for after the new offer timeline.  This gives everyone an opportunity to move up their viewing if necessary and come in with an offer on the new date - no one surprised when they call the day stated in the listing only to find out it sold two days ago.

If you're in a good position where you can make a strong cash offer without conditions, then a bully offer could still work to your benefit.  Even though everyone has an opportunity to come in, most buyers and agents understand that a bully offer will usually be high and firm, and may decide to hold off and see what happens.

As with anything, you'll want to thoroughly discuss the situation and options with your real estate professional, based on your goals and circumstances.

Monday 21 May 2018

Why won't they just look at my offer today?

You've spent time looking at houses, eliminated the ones you don't like, found the one you do.  You can totally picture yourself living there.  And you want to make an offer.

But you're told you can't.  Or at least not yet.  That can be quite frustrating.

'Offer deferrals' are something that was common in Toronto for a long time and crept into the local scene as the market heated up a few years ago.  An offer deferral is when a seller says "no offers until such-and-such a date", sometimes specifying an offer time as well.  Obviously, this is handy for sellers because they can plan ahead to be available for the offer presentation.

But the real reason they do it is to try to generate multiple offers, or "bidding wars" as they are commonly called.  In a hot sellers' market, offers can come in quickly and you might lose out on potential buyers.  Holding off offers for a few days gives more buyers a chance to get in and have a look.  And more showings mean more opportunity for multiple offers, which usually translates to higher offers for sellers. 

Buyers are understandably unhappy about this, but it's legal and sellers are free to take full advantage in a busy market that puts them in the driver's seat. 

At the peak of the market froth, it seemed like almost every new listing coming up had a 'no offers until' in the description. As the market has cooled off recently, you don't see as much of it but it's still not too difficult to find if you look. 

So what does a buyer do in this situation? 

When the seller is deferring offers to a certain date, you can still prepare an offer and "register it" - informing the listing agent that you have a signed offer.  Your agent will typically hold on to your offer until the day it is being presented to the seller, but once it is registered the listing agent is legally required to keep you informed about how many offers are registered or if there are any changes to the presentation date. 

Something you'll sometimes see in conjunction with offer deferrals is a statement along the lines of "pre-emptive offers allowed" (or not allowed).  I'll talk about that next time, when we look the ins and outs of what are commonly called "bully offers."

Sunday 20 May 2018

Estate tax implications of not leaving the "empty nest"

So your kids have grown up and moved out and you're seriously considering whether to sell the 'empty nest' and move on or not.  It's too much house for you, but you're not sure you want to leave behind the memories. 

Thank goodness we live in Canada where there are no estate taxes so there's nothing like that to worry about if you stay, right?

Except there are. Sort of.

While we don't have an outright tax on the estate, we do have some taxes to keep in mind, even besides the estate filing a return and paying tax still on any income, interest or capital gains.

For one thing, there's the [Estate Administration Tax], more commonly known by it's old name "Probate Fee".  Of course, you can call it a fee but it's paid to the government so what's the difference?  At least the new name is more honest, it's a tax.  And the amount of the EAT is based on the total value of the estate: 0.5% on the first $50,000 and 1.5% on the rest.  Considering that our homes are usually one of our largest assets, they will typically contribute a significant portion of the EAT.  And the tax has to be paid up front before a Certificate of Appointment as a Trustee can be received, which is generally necessary to get funds released from banks or to access safety deposit boxes and so on.  If the family isn't prepared for this, it can be an unpleasant little surprise.

Another issue with the home when it goes into the estate is the capital gains tax.  As a personal principal residence, the house is exempt from capital gains.  However, that only applies up to the date of your passing.  The house will obviously be sold after your death by the estate.  And any increase in value from the date-of-death to the date of sale (ie. sale price) WILL be capital gains taxable on the estate trust's tax return.  Not an upfront burden on the family, at least, but your Executor has to be ready and plan accordingly and it is a tax that needs to be paid.

I'm not suggesting you have to move out of your house right now - your personal happiness and security are most important - but it doesn't hurt to consider how staying might have an impact on your estate and your family after your passing.

And there are many ways to deal with wealth transfer outside of selling the home.  Talk to your lawyer or financial advisor about what's best for you.

Friday 18 May 2018

Market Snapshot: May 6-12, 2018

Local MLS® Sales Data

All Hamilton Real Estate Districts Combined*
Total Sales: 146 
Average Price: $508,887 
Median Price: $480,000 
Avg Days On Market: 23 

Sales volume remains tepid but prices are holding pretty steady with no significant shifts either direction. 

Time on market remains below the 40 day historical norm.

Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **
*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown
** Not intended to solicit clients currently under contract.

Sunday 13 May 2018

How long does it take to sell a house?

Well, the only 100% accurate answer is "however long it takes" but that is not very helpful or interesting.  So let's look at market norms for some context.

When I started in real estate in 2005, the average time on market was around 40 days, which was said to be the historical norm.  Of course, time on market fluctuates depending on market conditions, but also by area.

For example, in 2008 and 2009, during the "Great Recession" as they were calling it, average time on market was significantly more in suburban areas - it was much more difficult to sell a home in Ancaster or Flamborough.  But in East Hamilton, even at the worst of the recession, there were neighbourhoods where the average time to sale was less then 21 days.  This was largely an influence of investors and home buyers from the GTA looking this way for better value and security than they felt they would get in Toronto.  That seems to have been the beginning of the influx of Toronto buyers.

And then that increased interest plus a general market recovery made the Hamilton real estate market very hot for a few years.  The speed of properties selling was surprising city-wide, with many properties selling in the first day with multiple offers.  In April 2017, the average time on market was only 16 days.

Since then the market has cooled quite a bit, especially in the last few months as buyers are becoming wary of increasing interest rates and losing buying-power with changes to mortgage rules.  However, even though sales volume has dropped from the heated conditions last year and even below the ten year average, properties are still selling reasonably quickly.  Time on market for April 2018 was slower than last year but still only 26 days - two weeks quicker than the norm when I started.

As I always say, there's no crystal ball, but the average time on market suggests to me that there is still a good market for sellers, albeit not as wild as it was. If you're not selling in the average time for your area, you might need to look carefully at your pricing or property presentation. (that's true in every market really)

Give me a call or email if you'd like to know what the average time on market is for your area, or if you'd like a free value assessment to know what you might sell for in today's market.*

*Not intended to solicit clients currently under contract.

Saturday 12 May 2018

How do you get rid of old appliances?

Sometimes we all need to get rid of old appliances.  Whether it's from an estate, or you're moving in to a new home and don't want the appliances left behind, or your old ones have broken down and need replacing.

So what does one do with old appliances?

The company delivering your new ones may take them, but they may also charge a fee for the service.  If they do want to charge for it, remember that there are free options too.

For one, the City of Hamilton has [community recycling centres] you can take appliances to for free.  But the city does not provide any pick up for appliances, so you have to lift and transport them to the recycling centre yourself.  

If you're not up to the lifting or don't have a suitable vehicle available, another option is to call a private scrapper. 

A scrapper will typically pick up appliances (and other scrap metals) for free.  They take them apart and sell the scrap metal, possibly salvaging parts, or maybe even fixing them up for resale depending on the individual.  There are lots of these services out there and a quick search on Kijiji for 'scrap metal' should yield several options.  

One scrap metal service that I have used personally and was happy enough with to recommend is [Monster Metal Recycling].  They were responsive, reliable and helped me get rid of some stuff hassle-free. Give them a call if you have stuff sitting around that needs to go.

Friday 4 May 2018


May 3, 2018 (Hamilton, Ontario) - The REALTORS® Association of Hamilton-Burlington (RAHB) reported 1,185 sales were processed through the RAHB Multiple Listing Service® (MLS®) System in April, 32.4 per cent fewer than the same month last year and 21.7 per cent fewer than the 10-year average for the month.

[CLICK HERE] to read the full report.