Newly muddled world of real estate
This is an uneasy time for residential real estate. If you’re
selling, you wish you’d sold six months ago; that is if you had a
choice. If you’re buying, you worry it’s not the bottom but rather
the middle of a price slide that’s only begun. For most, we don’t
have to buy or sell this month, and that’s a relief. However, there
are degrees of angst. I’m part of the club that was feeling good
about the gains a condo I’d purchased 18 months ago had made. I
suspect these paper profits will soon evaporate. I worry what
happens when all those new towers with units to sell go on the
market. Oversupply of new units isn’t going to make my place more
attractive. And speaking of oversupply, what about all those people
who can just afford their mortgage? What happens if they lose their
jobs and are forced to sell? (And are these the fears — regardless
of the facts — that drive markets down?)
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Pointers for Pricing Your Home
“What’s the asking price?” It’s one of the first questions potential buyers will ask about your home.
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10 Questions to ask a prospective Home Stager
Editorial note: I am pleased to welcome Dane Caldwell as a guest author to VaughanBlog.com. Dane is lead consultant and founder of 2 Hounds Design. With her background in design and decor, Dane brings both a comprehensive and professional approach to her design consultancy business. I am confident you will value her insight and advice.
Carl Minicucci, VaughanBlog.com
As a consumer considering hiring an interior decorator or home stager you need to do a little homework also know as due diligence. Many of these questions are generic to any service provider.
To help you I’ve provided a list of 10 Questions…and many follow-up questions:
- How long have you been working professionally as a decorator/stager?
- This question is important to determine if you are speaking to a professional or a hobbyist. A hobbyist will tell you they’ve been ’staging’ for years for themselves, friends and family. How nice for them, however, this does not tell you if the friends and family would feel the quality of their work was good enough that they would pay for this person’s services.
- If they are just starting out, and they tell you that up front, great, you are ready to move on to the next question.
2. Do you have a portfolio I can see?
- Of course you have to get a ‘yes’ but there is more to the question than just getting a look at the persons portfolio. Follow up questions:
- Are the photos in your portfolio your own or are they ‘examples’ or photos provided by your trainer?
- Did you select the accessories, furniture, paint, etc. or was it a collaboration with others? (HINT: you want to hear that they made the selections).
3. What formal training have you received and are you certified or accredited?
- There is no such thing as a certified or accredited stager. Currently to be certified or accredited the designations are awarded by an independent (from the trainers) institution. There is no such independent institution for home staging.
- There are many fabulous decorators and stagers who are naturals with little to no training as well as those who have taking training. The point of the question is to help you find the needle in the haystack. You are placing one of your largest investments in the hands of a stranger at the very least you what to know the person you are hiring doesn’t mislead consumers by claiming false certifications.
- The point of the question above is to see if you are going to be told the truth and not meant to bash those who have taken the training. Training is a good thing…false claims of certification and accreditations is NOT.
Assuming you’ve gotten the desired responses you can continue with the questions.
3. Is your business covered by insurance?
- If the answer is yes, then request to see a copy of the ‘certificate of insurance’. If insured, they will be happy to provide it. Obviously, if the answer is ‘no’ you need to end the conversation and move on to another decorator/stager.
4. Have you worked on condo’s, lofts, houses like mine?
5. Are you familiar with the market in my area?
- A stager who lives outside of your area may not be familiar with the various buyers who will be looking for properties in your area. In the downtown core of a city it is extremely important you hire someone who specializes in the downtown as there are very many diverse niche markets with even within a single condo building. You want a professional who can market your property to each niche, not just one type of buyer.
6. Are you familiar with the expectations of buyers in my price range?
- You want someone who knows the buyers and what is expected in various price ranges. An example would be a multi-million dollar property without top of the line appliances. Buyers who are shopping for a home in this price range will not be impressed with standard appliances. They are expecting to find Sub-Zero, WOLF etc in the kitchen as well as in any other room (butler’s pantry, bar, master suite etc) with appliances.
- Another example in today’s downtown Toronto real estate market buyers expect to see upgraded counter-tops in entry level condos but not necessarily in entry level homes. You need a professional who is experienced in these details.
7. Do you have insured resources to draw on for trades people if required as well as trade discounts you could pass on to me?
- While you are not entitled to the trade discounts, some decorator’s who stage may be willing to pass on a portion of their discount to you. This could save you hundreds if not thousands of dollars.
8. Are you insured to act as a contractor/project manager?
- If you are not able to or willing to take on the work to be completed to prepare your property for sale you need to know your decorator/stager is insured to do this. Yes, this insurance is above and beyond the insurance discussed above. Again, you would be requesting to view the certificate of insurance.
If you’ve made it this far you are doing well and are most likely talking to a professional who is running a business not a hobbyist. The last couple of questions are about working with the professional.
9. What is your availability if you were to be awarded my project?
10. What are your rates?
- Rates vary by area but if someone offers to work for you for peanuts…well you’ve been warned here: you get what you pay for.
- Or as world famous Home Stager Debra Gould says, ‘When hiring a stager don’t be penny wise and pound foolish!’
Dane Caldwell is Lead consultant and Founder of 2 Hounds Design. Email Dane
Moderate March Real Estate sales in Vaughan
Low inventory levels kept sales brisk but well off record levels, TREB President Maureen O’Neill announced today. “With 6,631 transactions recorded during March, the overall Greater Toronto Area resale market was down 22 per cent from the 8,518 sales of March 2007.
Sales were not evenly distributed across the Greater Toronto Area. In the City of Toronto (416 area code), they decreased 27 per cent to 2,527 from last March. However, the 905 suburbs saw only an 18 per cent decline, to 4,104 sales.
In Vaughan, the resale real estate market (District N08), was down 14 per cent to 196 transactions in March 2008, compared to 169 in March 2007.
Of note, average real estate prices in Vaughan rose marginally at just under 1% when comparing March 2008 to March 2007 for Detached home sales. For Semi-detached resale homes, the increase was much more pronounced at 8%.
Since overall inventory, at 20,533 listings, fell six per cent between these two time periods, a portion of this result can be attributed to a lack of suitable product. And this lack of product was at least partially caused by the severe winter weather that kept both buyers and sellers on the fence during the first half of the month.”
Overall, average prices rose four per cent in the GTA to $380,338 over March of 2007. Within the City of Toronto proper, however, the average, at $404,361, increased only two per cent over the $394,199 recorded during the same period last year. Furthermore, City of Toronto districts bordering the 905 averaged $347,882, up less than one per cent from the same period last year.
Source: Toronto Real Estate Board
Finished basements…A value proposition
Vaughanblog.com welcomes your thoughts, opinions and questions. Feedback is a hallmark of my philosophy to improve quality and service in virtually all aspects of business and life.
I particular enjoy answering questions you may have and while I cannot guarantee I will always have a satisfactory answer, I can promise you that I will do my best to research the answer.
You can click on the button to the right which will provide you with a convenient submission form for your question.
That said, a reader of VaughanBlog.com recently submitted the following question:
Hi Carl, this question is regarding finishing the basement. When purchasing our house in Woodbridge we bought a house with separate entrance to the basement with the thought of resale at the time, we did not need it as it’s only my wife and I. Are there any benefits to finishing the basement and does it add any value to the potential resale?
As this may be a common question among home owners, I thought I would share my response:
Thank you for your question above. In the case of a two-storey house (which is probably likely in Woodbridge), one third of the potential living space is in the basement. If it’s a bungalow, it’s generally half. To your question, does it add value? In most cases, there would definitely be added value, all else being equal when compared to a similar home without. The more interesting question is what is the relationship between the cost to finish and the added value that results. Most realtors will probably agree that unless there is a significant amount of “sweat equity” (i.e. the work is done by the homeowner), improvements made to a home generally do not recoup full cost. The real benefit however, is that such improvements definitely add to the marketability of a home. If you engage a listing Realtor to sell your home, he or she should be able to prepare a comparative market analysis based on comparable properties that are for sale or have recently sold in your neighbourhood. This may assist in the determination of the value impact of similar homes with and without basements. I’ve recently been dealing with a few new home buyers who typically are looking into modestly sized starter homes. With smaller ground floorplates, access to finished living space is high on their priority list for example. An interesting study completed on behalf of the National Association of Realtors (the American counterparts to the Canadian Real Estate Association), suggests that on average, a midrange basement remodel project resulted in a return of value of about 75% of the original cost. You can visit the study @ http://www.costvsvalue.com/index.html for more information. Keep in mind it is an average only and represents a different market, so caution should be used in interpretation.
Hope that helps.
There may be many other considerations involved so before you roll up your sleeves, seek some professional advice.
Multiple Representation: A Manifesto for Legalized Conflict of Interest
In Ontario, real estate agency is governed by the Real Estate Business and Brokers Act (”REBBA”). Under the provisions of the Act, a real estate brokerage may act on behalf of BOTH a Seller and a Buyer in respect of the same trade in real estate, provided all parties consent to this in writing and appropriate disclosures are made by the brokerage.
The situation is referred to as Multiple Representation.
According to Ontario Regulation 580/05 (made under REBBA) which forms the Code of Ethics, Section 16 reads as follows in respect of Disclosure before Multiple representation:
A brokerage shall not represent more than one client in respect of the same trade in real estate unless it has disclosed the following matters to the clients or prospective clients at the earliest practicable opportunity:
1. The fact that the brokerage proposes to represent more than one client in respect of the same trade.
2. The differences between the obligations the brokerage would have if it represented only one client in respect of the trade and the obligations the brokerage would have if it represented more than one client in respect of the trade, including any differences relating to the disclosure of information or the services that the brokerage would provide.
Clients must fully understand the impact of such representation on information provided to them and services offered. Brokerages set out these details in the representation agreement describing what salespersons in a multiple representation role will and will not do. The scope of such limitations will vary according to brokerage policy.
The Ontario Real Estate Association’s prescribed Buyer representation agreement includes the following language in respect of Multiple Representation disclosure:
“The Buyer understands and acknowledges that the Brokerage must be impartial when representing both the Buyer and the seller and equally protect the interests of the Buyer and the seller in the transaction. The Buyer understands and acknowledges that when representing both the Buyer and the seller, the Brokerage shall have a duty of full disclosure to both the Buyer and the seller, including a requirement to disclose all factual information about the property known to the Brokerage.
However, The Buyer further understands and acknowledges that the Brokerage shall not disclose:
• that the seller may or will accept less than the listed price, unless otherwise instructed in writing by the seller;
• that the Buyer may or will pay more than the offered price, unless otherwise instructed in writing by the Buyer;
• the motivation of or personal information about the Buyer or seller, unless otherwise instructed in writing by the party to which the information applies or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;
• the price the Buyer should offer or the price the seller should accept; and
• the Brokerage shall not disclose to the Buyer the terms of any other offer.
However, it is understood that factual market information about comparable properties and information known to the Brokerage concerning potential uses for the property will be disclosed to both Buyer and seller to assist them to come to their own conclusions.”
So what does all this mean?
In a nutshell, it’s a Manifesto for the Legalization of the Conflict of Interest hidden in a blanket of greed affectionately known as the ”double-dip”. I’ve coined my own phrase, namely the “2-1-0″…Getting paid Twice, for One transaction, and serving Zero parties.
The most obvious analogy would be akin to having a lawyer act in capacity for both a defendant and plaintiff. The Relevant Rule of Professional Conduct of the Law Society of Upper Canada reads:
“Conflict of Interest, Rule 5
The lawyer must not advise or represent both sides of a dispute and, save after adequate disclosure to and with the consent of the client or prospective client concerned, should not act or continue to act in a matter when there is or there is likely to be a conflicting interest.”
Even though the real estate industry has provided for these very specific requirements when it comes to multiple representation, the substance over form still wreaks of conflict. It is quite arguably one of the biggest strikes against the Real Estate profession insofar as public perception is concerned, in my humble opinion.
What can you the consumer do about this?
Thankfully, our Democracy still provides for consumer choice. Since written consent is one of the prerequisites to multiple representation, you can simply refuse to agree. This does not mean you necessarily have to refuse the unilateral service of the Realtor in question, but only to the extent he or she is also acting for someone else.
Keep in mind also, that situations involving two Realtors from the same Brokerage also are considered to be Multiple Representation situations since it is technically the “Brokerage” that is the agent in the transaction. The individual broker or sales representative is merely granted authority to bind the Brokerage in the transaction. It follows then, that multiple representation is far less likely an occurrence in smaller brokerages.
Caveat Emptor…Excerise your Options.
Tip for sellers…don’t roadblock the path to a Sale
It boggles my mind how many times I run into situations where sellers or their respective agents set up road blocks in marketing their home.
I’ll give you an example of a recent run-in.
My clients were a professional couple with 4 lovely children that were residing in a 4 bedroom home. One of their primary reasons for considering a move was the desire to upgrade into a 5 bedroom home. The availability of 5 bedroom homes in Vaughan (and specifically in the Woodbridge area) was quite limited at the time of our search. Most of the 5 bedroom homes that were available were part of larger estate properties or quite simply beyond my clients’ budget.
One of the alternative options we considered in the interim were 4 bedroom homes with a large 2nd level floorplate and layout that could lend itself to renovations and conversion to a 5 bedroom layout (including two sets of semi-ensuites bathrooms). During my search, I came across a prospective home that seemed to fit this bill. When I read through the listing, the feature sheet’s list of inclusions noted that the seller had original builder plan drawings available. This was very significant since it would be very difficult to develop a good estimate on the renovation without access to proper plans. (Note: While builder plans can be accessed by the general public in Vaughan in certain circumstances, the community in question was an area in Weston Downs which was built over 20 years ago. Accordingly, plans were not archived this far back as I had already enquired on my clients’ behalf in respect of another home.)
When we inspected the home, we quickly noted that the layout lent itself to the conversion we hoped for. The following day, I contacted the listing agent and requested a copy of the plans. My clients had a designer ready and available and raring to start up their Autocad program.
You can imagine the look on my face when that request was met with the following reply: “The seller would like to see an offer before he releases the plans”. Naturally, I re-iterated my clients’ reasoning for the plans. Again, I was met with a similar head-shaking reply from the agent: “You know, you will likely never get a copy of builder plans with any other home you consider, so why not just put in an offer, tie up the property and make the plans a condition of the offer”.
Although I can write a dissertation on the problems with that last comment, suffice to say that my clients decided to move on.
That was about 4 weeks ago.
The home remains unsold.
Is Jack Frost responsible for cooler real estate sales?
As the GTA quickly approaches record snow accumulation records , there are a few trends which point toward softening residential real estate activity in Vaughan.
Vaughan’s primary MLS real estate district (N08) had January unit sales decreased by 2.3% from January 2007. Furthermore, the average inventory of active listings has trickled it’s way up since October 2007 from a level of 2.5 months, to 4.2 months in January 2008. (Average inventory represents the ratio of active listings to sales for the month).
This pattern was reflective in the Toronto Real Estate market where sales in January were off 2% from last year’s January performance.
This is also in keeping with the overall Canadian residential real estate market which may finally be showing some signs of a slowdown. According the the Canadian Real Estate Association (CREA), last month, seasonally adjusted unit sales declined by 0.4 per cent from the month before and 8 per cent from January 2007.
Is unit sale activity and montly inventory conclusive measures and indicators of impending doom and gloom? Certaintly not. There is no magic formula to conclusively predict real estate activity, much like the weather itself.
Source: Toronto Real Estate Board
Municipal Property Taxes - A quick rundown
MPAC
The Municipal Property Assessment Corporation (MPAC) is responsible for carrying out property assessments in Ontario. After each reassessment, MPAC sends property owners a Property Assessment Notice that shows the current value of the property as of the valuation date. MPAC provides municipalities with the same information consolidated in a document known as the assessment roll. Municipalities use this information to calculate property taxes.
After property owners have received their Property Assessment Notices, they may request that MPAC reconsider the assessed value of their property, if they believe it is incorrect. The procedure for requesting this reconsideration is described on the Property Assessment Notice itself. If MPAC agrees to change the assessment as a result of the reconsideration, there is no need to file a complaint with the ARB (Assessment Review Board). However, if MPAC does not agree to change the assessment before the cutoff date for filing complaints with the ARB (usually June 30th of the taxation year) a complaint may be filed with the ARB along with payment of the applicable filing fee (see Required Fees). Read more
Unseasonably ~HOT~ December
December is always a lively time at Gloria Margado’s house.
Her decorations go up early and there’s plenty of them. But this year’s look includes something quite different – a for-sale sign. And it’s a trend that appears to be catching on. It used to be that for at least two weeks in December, the southern Ontario housing market came to a grinding halt. But Burlington real estate agent Maureen Laughlin, who has the Margados’ listing, says these days – when people need to buy – they’re out there looking no matter what the season. Read more
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