My Predictions as a Real Estate professional

Disclaimer: I am not an economist, I am not a statistician, I am a Real Estate Agent with my own opinion that you can listen to or not listen to. My statement does not reflect Century 21 or the Real Estate Industry or CREA or OREA or TREB or MREB or FACEBOOK or YOUTUBE or any other organization that I’m a part of.

Some changes are going to happen this year that are very predictable. The HST will come into effect and that will drive people to buy houses before that tax kicks in. Similar to when Toronto got their new present of a land transfer tax. There was a mini boom and a mini bubble before that went into effect. At the same time this mini bubble will happen just before the Bank of Canada is going to announce interest rates. (or before they kick in) The announcement will be that the rates will go up sharply. I don’t know figures and I don’t know exactly by how much. Rest assured it will go up, maybe fast, maybe slow. It will depend on inflation, the dollar and how we do in the olympics. It will also depend on other factors that the economists use to determine interest rate hikes and decreases. By the end of the year and into next year they will go up. As we saw the interest rates come down it will go back. The rates will stop there. The rates will be close to where they were before the recession, (yes I said it recession), Yes the rates will be close.  They will try to bring the dollar down a bit to stimulate trade and industry. Since the US is our biggest trading partner it has to happen or we lose manufacturing jobs. We have already lost many jobs in the recession and due to our dollar being so high. So I predict that the interest rates going up and it will slow the housing market a bit, then our dollar will lower a bit, and that will raise manufacturing jobs, and inflation will go along its natural course. Now at this point if your an economist send me a formula because there is one. I just don’t remember it from my MACROECONOMIC OR MICROECONOMIC course in college. I just know there is one and I think I’m close. I’m sure there are other factors but here is the gist of it. Housing prices will go down a bit from this boom we are in, people are going to go crazy listing again because they think they are going to get a million dollars for their shack and we might be in a buyers market with higher interest rates by next year. Just as fast as it swung (is swung a word, ok I’ll add it to Wikipedia) from buyers market last year to sellers market to now it will swing in the other direction.  {on a side note I think Toyota prices will not drop at all, even if their brakes don’t work I think they think that their cars are better than Detroits cars, I’m just putting that out there}

So those are my predictions. I challenge any Real Estate Agent reading this to give me their opinion and let us know what you think. I’m sure there are agents with 50 years of experience on me that have been thru the 80’s, 90’s and 20’s? That will have great opinions and knowledge. Anyway I thought this would be a great way to stir some Real Estate Talk. Furthermore.. If you want to buy or sell a property contact me thru my website Time is clicking. Even though prices are higher now, they are lower than later, because money is cheaper now than later. Talk to your banker he’ll explain interest rates and amortization, present value etc. Either way call me.

We are deemed to repeat the past…(some guy from the past quote)



Ok I’m going to make a disclaimer. Usually I write this when I give my opinions and yes they will be biased toward The real estate industry. So yes this will be biased toward my profession and what I do for a living!

When people anticipate selling or buying a house, there are many factors which people examine. One major factor is how much you can sell your house for and how much do we have to pay in fees. For all intense purposes I’m going to speak about the selling side of the transaction.

Some people use an agent and some people decide not to. Some people try to do something in the middle, they try to hire a discount brokerage or agent. Some people try to go to a full service real estate agent and try to negotiate the commission. I believe in negotiating everything when it comes to sales, hey all power to negotiating. That is part of my job. At the very least ask. That is my motto. It doesn’t hurt.

Usually in Toronto the commission rate is 5%. Some commercial deals are higher depending on the type of deal. I understand that residential commission rate used higher as well. Let’s not go there that is in the past, I would like to stay in the present.

Your agent tells you that you must pay 5% of your sale toward real estate fees. 2.5% typically going to both sides. This is where your real estate agent discusses what is involved in that rate or where you freak out and say heck no you won’t pay that and storm out the door. So let’s say you listen to your real estate agent and he or she tells you where the money goes.

Now not everybody deserves that kind of pay rate. Some people get it and don’t deserve it and some people get it and deserve more. Time is money in this world. On the selling side of the transaction a good real estate agent should be advertising your house, doing open houses, advertising on social media, flyering the neighborhood, open houses on the weekend, video tours, advertising on youtube, sending emails to agents and network, they also should make sure that they have over 20 high definition pictures and should be busy with your house. There are other intangibles that agents should be doing that are not mentioned really when you talk to them. These things are being reliable, telling the truth, answering the phone, being presentable, being on time, being available and I can go on. I know to some of you these things are logical and common place. In reality they are not and some of these qualities are worth every penny you pay your real estate agent. They can mean the difference between closing a deal tonight and losing a deal tomorrow.

Some of things mentioned above cost money directly out of the agents pocket. Some of them can mean thousands of dollars. Other costs they don’t even see. Costs such as real estate board fees, Orea and Crea fees, Insurance, car, telephone, office, overhead. Yes I know these are costs that go with the trade but I feel that I should mention these costs are paid from the commission Agents receive.

So what do discount brokerages do? Well they usually offer to only post your house on MLS and not do anything else. Some agents do not even take a picture.  Sometimes you can sell your house that way, but not too many agents will look at the house on MLS because they will not get paid in return. Yes the buyer could agree to pay the 2.5% to the buyer agent and that is a possibility but hey let’s get real and that is not going to happen. Some agents offer a flat fee and yes they do some work. They might take a picture or two and advertise on their website and MLS. Some will even do an open house or two just to make the customer happy. After the house doesn’t sell they are nowhere to be seen. Some agents will offer a discount if they find the buyer for you. That sounds like a great compromise. What if they don’t find the buyer? How long will your house be on the market? How many offers are you not seeing because it is an exclusive listing or that the agent is only advertising on their company website? How many offer are not being entertained? It becomes a conflict of interest too. How motivated will you be if you are the agent and you know if you get both sides of the deal you make an extra percent? Yes it is a discount for you, but for the agent it’s an extra percent.

Well what am I trying to tell you after giving you a bunch of scenario’s. It’s not a bad thing to try and negotiate, but you want an agent that will get your house out there, work at getting your house sold, give you great advice andhopefully find you a new one in the process. Another thing you have to understand is time is money. The agent also has to spend time to do all these things in the proper way. How much is your agents time worth? Short cuts and cutting corners is the reason why there are so many real estate law suits in the courts right now. This is another big concern if things in your house are misrepresented. The small claims court maximum just got raised this year to $25000. You want to make sure an agent is asking you the right questions and doing his or her due diligence. I know agents have insurance but if they do not ask you the right questions and you do not disclose certain things then you could be liable and not be covered under the real estate agents insurance. Also the experience of an agent to tell you truth and knowledge of what your price is worth is valuable as well. Over pricing a house can cost thousands in the end if a house sits on the market for too long. An agent who is just taking listings will just agree to list a house to have a listing. It looks better for an agent to have listings even if they are not moving. It makes them look busy, even if they are not moving. Customers may look at the agent and say, “hey they have so many listings lets go with them”. Some people choose their agent this way as instead of actually speaking to the agent and asking what they will being doing with their listing. Some people just take it for granted that the agent will be doing open houses, advertising and their due diligence.

There are also a bunch of people who just want to sell the house on their own. They are the people who I call a lawsuit waiting to happen. I’m not saying why I’m call them that but let me just say when you sell your own property you might forget to mention the leak in the roof that you hid to sell your house that the judge will determine that you knew about and the $30,000 you have to pay in damages. OK fine I told you why I call them that. I don’t have to like everybody do I. Mechanics don’t like people who change their own oil.

Usually there should be a conclusion so here is my crack at it. Do you go to GMC and ask them to give you a deal and when they can’t go any lower do you ask them for the parts to the car and make the car yourself?  Usually you get what you pay for in this world. When it comes to real estate agents especially when it comes to discount brokerages you get what you paid for, a discount. Whether that is on the sale of your house or on their commission, the difference has to come from somewhere.

This blog was written by Ernie

10 steps to selling your home: Step 10: Close the deal

Step 10: Close the deal

Your negotiations were successful and you have a legally binding agreement. But, is the house truly sold? Not quite yet. It’s time for the vital final steps known as “closing”.

Your REALTOR® and lawyer will do most of the work.

Thank goodness. Closing a deal involves many, many complicated and time-consuming legal maneuvers. That’s why you’ve hired pros.

Canada’s money laundering reporting requirements
By the time you accept an offer, your REALTOR® will also advise you of reporting requirements by FINTRAC, the federal agency responsible for administering Canada’s Money Laundering and Terrorist Financing legislation and regulations. Your REALTOR® is required by federal law to complete a client identification form, and must ask you as the vendor or seller for verified ID such as a driver’s license or passport. You can find out more on the FINTRAC web site

Your closing checklist
You still have plenty to do yourself, and here’s a comprehensive list.

  • Contact your lawyer and notify them that an Agreement has been signed. Make sure they’re ready to close the transaction..
  • Immediately begin satisfying any conditions of the agreement that require action on your part. They have definitive dates for completion and failure to do so can result in a lot of hassles, or even spoil the whole deal.
  • Notify your lawyer and lending institution if the buyer is assuming your mortgage.
  • Contact the utilities, telephone and cable companies about transfer or removal of service. Note: Your lawyer will often handle the transfer of utilities.
  • Call all your insurance agent and arrange cancellation or transfer of your homeowner’s insurance.
  • Contact a moving company to arrange your move on or prior to closing date.
  • Send out your change of address notices and advise the post office. Notify the Ministry of Transportation about your new address for driver’s license and registration.
  • Notify your REALTOR® immediately if anything changes about your property or your situation.

Contact with your lawyer

  • If you plan to “discharge” or pay off your mortgage with proceeds of the sale, your lawyer will obtain a statement from your lender showing your outstanding balance on the mortgage, and any penalties you’ll have to pay to discharge the mortgage.
  • A few days before closing, your lawyer will ask you to sign the paperwork that enables the title to be transferred to the buyer.
  • On closing day, your lawyer will receive and distribute the proceeds from the sale, pay off your mortgage and other costs, and give you a cheque for the net proceeds.

You should be pleased that all your hard work paid off. We hope these ten steps helped make it easier. You’ve probably already used the proceeds from your sale to purchase your next property. A very wise move indeed, because as you know, home ownership is one of the best long-term investments you’ll ever make.


10 steps to selling your home: Step 9: Receive an offer

Step 9: Receive an offer

All of your hard work has paid off, but you won’t know exactly how much it’s paid off until you see the offer. This is an exciting, often emotional time, so be prepared.

Your REALTOR® will walk you through the process

  • You’ll see every offer
    It’s required that your REALTOR® present you every offer that’s submitted.
  • If the buyer is represented by a REALTOR®, that REALTOR® may be there too
    to represent the buyer’s best interest in the negotiation. The buyer may not be there, so you can review and respond to their offer without any awkward pressure.
  • Your eyes will be immediately drawn to the price!
    Here’s where emotions can really kick in. This isn’t a poker match, but remain calm.  The REALTORS® can provide advice before any judgments are made.
  • Discuss the offer
    You may want to ask your REALTOR® for advice on the merits of the offer. Maybe it’s time for a high-five, or maybe it’s time to plan your counter offer. You may also wish some private time to discuss things with your partner.

Three options when responding to an offer

  1. You can accept the offer
    You got the price you were hoping for, maybe even more! The closing date looks good and there are no fussy conditions. Sold!
  1. You can reject the offer
    This offer isn’t even close.
  2. You can “sign back” the offer
    This offer is close, but something’s not quite right. Now the delicate art of negotiation begins, by “signing back”.

Reasons why you may want to “sign back”

  • You want more money
    This is by far the most common reason people “sign back”. Everybody wants to get the most for their home, and as the saying goes “if you don’t ask, you don’t get”. Go for it, but don’t get too greedy and insult someone who has made a fair offer.
  • You want to change the closing date
    Maybe your buyer has already sold their previous home and has no place to live. They want to move in soon; sooner than you’d like. Maybe you haven’t even started looking for a new home! In the same way that you can “sign back” a higher dollar amount, you can also “sign back” a compromise closing date. Perhaps the buyer is willing to offer more money to compensate you for the inconvenience of living in a motel for a few weeks. Welcome to the world of negotiation and compromise.
  • There may be some undesirable conditions on the offer
    Conditions are points of contention that must be fulfilled in order for the sale to go through. Here are some common conditions that buyers place on their offers.

    • Buyer to obtain financing
      If the buyer doesn’t have a mortgage lined up, they will often put in this condition. The sale will only go through if the buyer can get the mortgage they want. For some sellers, this is too big an “if”, but the buyer’s REALTOR® will be candid about their odds of approval.
    • Approval to assume mortgage
      You have a great mortgage rate on the property and the buyer only wants your home if they can also take over your easy payments. Will this potential buyer qualify?
    • Sale of purchaser’s home
      The buyer hasn’t sold their existing home yet and they want to be protected from the expense of owning two properties. Maybe their house will sell in a flash. Maybe it won’t sell at all. Maybe you don’t want the sale of your home riding on so many maybes. You may want to ask their REALTOR® about the other home and its odds of selling soon.
    • Property Inspection
      This condition is becoming standard practice. Hopefully, you have disclosed every detail of your home’s faults, so there won’t be any surprises. Refusing a home inspection before sale is highly suspicious to a buyer, and may spoil the deal.

The art of counter-offers and negotiation
A successful negotiation is one that leaves both you and the buyer feeling satisfied with the outcome. This is a highly emotional time, so be sure to regularly “check your head”, and ask yourself “How important is this particular detail to me? Am I willing to jeopardize a sale over this?” Remember once you “sign back” an offer, you are releasing the buyer from their offer and they are free to walk away. REALTORS® know certain things you don’t and can help you every step of the way.

Happy negotiating, and best of luck!


10 steps to selling your home: Step 8 Prepare your finances

Step 8: Prepare your finances

Before the offers start rolling in, you should prepare for the massive amounts of money that will pass through your hands.

A lot of the money will probably be going to your mortgage
If you own your home free-and-clear, congratulations! For the rest of us, there are a lot of mortgage considerations

  • “Discharging” your mortgage
    Many people use the proceeds from the sale of their home to “discharge” or pay off their mortgage. If you have what is known as an “open” mortgage, you can pay it all off without any penalties. If you have a “closed” mortgage, be prepared to pay a few months’ payments in penalties.
  • If you’re buying a new home, is your mortgage “portable”?
    Many mortgages are “portable” meaning that you can take your mortgage money with you and buy a new home, without penalty. This can be a real bonus if the interest rate on your mortgage is lower than existing rates! If your new home is more expensive, and requires more mortgage, you’ll have to borrow the extra money at the new, higher rate.
  • Maybe the buyer is “assuming” your mortgage
    Your mortgage may have a feature that allows the new buyer to take over your mortgage. If the interest rate is lower than existing rates, this can be a very enticing selling feature for your home.
  • Become a mortgage lender yourself?
    If your buyer is having trouble arranging all the money to buy your property, you may consider lending directly to them. This is called a “Vendor Take Back” mortgage, and it’s often used by sellers to help move a property in a slower market. This is an incredibly complicated financial dealing, and you must talk with your REALTOR® and lawyer before choosing this route.
  • If you find your new dream home before you’ve even started to sell your old one
    Talk to your existing mortgage lender. You may be able to arrange “Bridge Financing”. This is when your lender (the bank) is confident your existing home will sell quickly, and they agree to lend you the down payment for your new dream home.

The tax implications of selling your home

  • Capital gains tax
    If the home was your primary residence, you will not have to pay taxes on any capital gain (the increase in the value of your home). If you had tenants living in part of your home, such as the basement, you will pay capital gains tax on a portion of your profits. You may also owe capital gains tax if you’re selling a vacation or investment property. Talk with an accountant to find out what you’ll have to pay.
  • GST for professional services
    Your lawyer and REALTOR® are providing services, and services are subject to GST.

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