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It was another great month for Toronto real estate sellers.  We’re starting to quiet down for the Christmas holidays, but I expect that things will take off again very early in the New Year.  Many people may be reflecting on their decisions over the holidays, and I’m sure that there will be a press for people to sell their homes before the interest rates go up and the new HST takes a swing at us.

All forecasts show that the sales will be just as great once things settle down and everyone has had their holiday food and gifts – and that means individuals who need to sell should begin thinking about their options now.

Figures from Toronto Realtors are looking great…

• In November, there were 7,446 sales – this is slightly more than double the November 2008 numbers when GTA home sales had dipped markedly due to the economic downturn!
• Year to date sales are up 14% compared to the first 11 months of 2008.
• “This year in the GTA home sales will be in line with the healthy levels experienced between 2004 and 2006,” said President Tom Lebour.  “Increased resale home transactions in the Toronto area and country-wide played a key role in pushing the Canadian economy out of recession in the third quarter.”
• The average price for November transactions was up 14% year-over-year to $418,460.  The average price year-to-date was up 4% to $394,464.
• “Very strong annual growth rages for sales and average price should be expected through the first quarter of 2010, because we will be comparing the current recovery to the housing market decline experienced last winter,” says Jason Mercer, TREB’s Senior Manager of Market Analysis.  “As we move into the spring, growth rates will move to more sustainable levels.”

Holiday Home Sellers May Earn Thousands More

According to the statistics from the Toronto Real Estate Board, those interested in selling their home in December or January may earn thousands more than individuals who sold their home around the same time last year.  The median price this November was $353,800 – up more than $40,000 from last year’s $312,250.

What does this mean for individuals looking to sell now?  Even though it’s the holidays and things are settling down, you can expect to earn thousands more this year than those who sold their homes at the same time last year during the market decline.  This is just another sign that things are really looking up in the real estate industry.

Breaking Down the Difference – Nov 2008 to Nov 2009-12-10

November’s over and the results are in – we’re looking at a major increase this year.  In fact, sales in November of 2008 were around 3,640 while this year brought in about 7,446.  That’s a 105% increase!  New listings weren’t much different, with November of 2008’s numbers at 9,925 and this year’s numbers at 9,923.  The days on the market were down significantly, at 26 this year as opposed to last year’s 41.  This means that houses are being snapped up more quickly – so sellers shouldn’t have to wait long to get that check in their hand!

Taking Bets: What is the Total Difference?

Right now, for single family houses, there’s a major difference between this year and last year.  Last year, the year-to-date sales were about 74,552 with a median price of about $379,347.  With November’s numbers tallied, this year’s sales were about 81,929 with a median price of about $394,464.  I estimate that we’ll pass last year’s numbers by more than 10,000 houses sold, easily.  This is a great sign of what is to come.

Effects of the HST on new condo purchases

Although nobody knows yet what the full effect of the HST will be on real estate in the greater Toronto area, what we do know is that real estate transactions will be subject to taxation via the HST in ways they haven’t been previously.  For instance, new condos will be subject to the 13% HST, with the tax being assessed on the selling price of the property.

Under this new system, new condos valued at less than $400,000 will be eligible for a tax rebate of 6%, but new condos that sell for $500,000 or higher will have to pay the HST.  In theory, then, buyers can avoid the HST by purchasing condos valued at less than $400,000, but the reality of the real estate market in Toronto is quite a bit different.

Real estate prices are substantially higher in Toronto than in other areas, making it difficult (if not impossible) to find a reasonably nice new condo for less than $400,000.  A quick look at the listings on the market today will show very clearly that new condo prices are much more likely to be at least $500,000 and in most cases go even higher.  So for all practical purposes, buyers in the market for a new condo will have to take the HST into account when it comes time to determine how much they can afford to buy financially.

Buyers who are set on purchasing a condo but are concerned about the new HST have two options to consider:

1.  Make their new condo purchase before July, 2010, when the HST goes into effect.

2.  If purchasing after July, 2010, choose to purchase an existing condo property rather than a new condo property.

If a condo purchase is something you are considering, we strongly recommend you talk with a qualified realtor sooner rather than later so you can plan your purchase accordingly.

Effects of the HST on the broader real estate market

The HST is not just applicable to new homes and condos, however; it is also set to be applied to the closing costs of all real estate transactions.  This means everything from closing lawyer costs to home inspection costs to real estate commissions and the like will all be subject to the HST.  For most buyers this can quickly add up to an amount of $2,000 or more, making it even tougher to afford the purchase of a real estate property.

Real estate professionals in the greater Toronto area are concerned about the impact of the HST in these cases, especially when it comes to first time buyers and middle income buyers looking to move up in the value of their property.  In some cases the impact of the HST on closing costs could have a significant effect on whether or not someone is in a financial position to afford to purchase a real estate property.

While the HST will definitely have an impact on the real estate market in the greater Toronto area, most local realtors believe it will not be disastrous.  With proper planning and the prospect of negotiating these costs as part of sales agreements, most realtors believe the market will continue to grow and prosper throughout 2010.

Moving arrangements

It’s never too soon to make moving arrangements; there’s nothing worse than having moving day rapidly approaching and not having anyone lined up to physically move your stuff to your new place.  In fact, it’s a great idea to contact movers before your house is even sold so they can come to your home and determine just how many items and what size items you will need move.  They will use this information to give you an estimated cost.  As soon as your home actually sells, get in touch with the moving service right away to be sure you can get on their schedule for the moving date you need.

If you are planning to rent a moving truck and take care of the hauling yourself, get in touch with local rental companies and reserve a truck as soon as possible.  Rental trucks tend to be hard to come by around the very end of the month and the very beginning of the month because this is their busiest time.  If at all possible schedule your move for mid-month; if this is not possible then the earlier you can reserve your truck, the better.

Don’t skimp on the size of truck you choose to rent.  A smaller truck might be less expensive than a larger truck, but if you have lots of items to move you may end up making two, three, or even four trips to get everything moved.  It’s much easier on everyone concerned to rent a larger truck and then make only one trip from your old place to the new place.

Packing

Most people underestimate the importance of proper packing, especially if they are only moving across town.  Packing, however, is a critical part of the moving process and can have a huge impact on the ease (or difficulty) of your actual moving day.  Using the wrong size boxes or improperly packing fragile items can cause a lot of extra work and leave you with broken items.

If you can afford the cost, it is well worth hiring a professional moving company to come in and pack your things for you.  Professionals are skilled in choosing the right boxes for the right items, not over-packing or under-packing.  They also have the personnel necessary to come into your home and make quick work of the packing process, plus they have the right tools to pack quickly, efficiently, and safely.

If paying for professional packing is not possible, then be sure to allow plenty of time in advance to take care of the packing yourself.  Choose smaller boxes rather than larger boxes whenever possible; a smaller box is easier to handle on moving day, while a larger box can quickly become too heavy or too awkward to be easily moved.  Don’t skimp on the quality of boxes or the packing material to be used in them; this is especially true for your fragile or precious items.  It’s well worth the cost to invest in specialty boxes for items such as china and other breakables; you can flatten the boxes and store them once you get to your new place, making them available for the next time you need to move.

Why is the buying agent so important?

The buying agent you choose is important because he or she will be working closely with you through the buying process as well as the closing process to finalise your home purchase.  This person needs to get to know you fairly well to understand what it is you’re looking for in a home so that they can bring properties to your attention and take you through them on showings.  Going out and looking at houses is a very time consuming process, so if your selling agent understands your needs then you are far less likely to waste time looking at homes that are simply not right for you.

The role of a buying agent goes beyond just showing you potential homes, however.  Your agent’s job is to guide you through all aspects of the buying process, including but not limited to:

• Evaluating the pros and cons of potential properties
• Navigating the ins and outs of mortgage financing
• Advising you on pricing of potential properties
• Helping you write offer(s) when you find properties you would like to buy
• Negotiating on your behalf with the seller’s agent
• Guiding you through the steps between offer acceptance and final transaction closing

It’s clear, then, that the choice of a buying agent is one of the most important you will make.

The right questions to ask when interviewing a buying agent

The main reason to ask lots of questions of a potential buying agent is to ensure the person you choose is going to do a good job for you.  You need to talk about a number of things, such as:

Knowledge – What is the agent’s level of knowledge about the unique needs of home buyers?  Is the agent up to date on current first time home buyer programs?  If you have bought a home before, does the agent take the time to learn about that experience and suggest ways to make this new experience better or more successful?  Buying agents with the most knowledge about what buyers want and need are the most likely to be a good fit for your requirements.

Experience – What kind of experience does the agent have working with home buyers?  If you are a first time home buyer, does the agent have experience working with buyers in your position?  How familiar is the agent with the neighbourhood(s) you’re considering for your home purchase?  You’re going to get the best results choosing an agent who has the experience to meet your needs as a home buyer.

Clients – How many other buyers is the agent representing at this moment?  How many sellers is the agent representing at this moment?  Is the buying agent willing to provide you with references to previous clients?   A really good buying agent will have a number of clients at any given time, but not so many they can’t give each client the time and attention they deserve.  Always get references to previous clients and check those references thoroughly.

Whether you are a first time home buyer or have bought homes in the past, a good buying agent takes the time to get to know you and works closely with you throughout the process.  It’s a good idea to interview several potential agents before making a final choice.

Why is the selling agent so important?

It’s simple.  The selling agent is the one person who has perhaps the most influence on the sale of your home, both in terms of how fast it sells and the price at which it sells.  A good selling agent knows how to help you set a realistic sales price, backing up their opinion with the necessary facts and figures to support it.  Once your home is listed the agent is responsible for the effective marketing of your property; that is, getting it seen by real estate brokers, real estate agents, and plenty of buyers.

Once an offer comes in on your home the selling agent is vital to helping you understand what’s in the offer, whether it’s a reasonable offer for your property, and making a final decision on whether to counter offer or accept the offer as written.  Of course this final decision is yours and yours alone, but the guidance of a good selling agent can make it much easier to determine the right decision to make.

Finally, as your Toronto property goes through the closing process the selling agent should be an active participant at all stages, from home inspection to the signing of the final papers.  There are many obstacles that can arise during this time period and your selling agent should have the experience and knowledge necessary to help smooth them over and bring the transaction to a final close.

The right questions to ask when interviewing a selling agent

Since the selling agent is so important to your home sale process, it’s important to ask the right questions to determine which selling agent is right for your needs.  Some examples of areas to cover include:

Experience – How much experience does the agent have?  What certifications and/or expanded education does the agent have?  Is the agent familiar with the neighbourhood in which your home is located?  You want to choose an agent with the experience and knowledge necessary to understand the current real estate market and sell your home quickly.

Performance – What is the agent’s sales record over the previous 3 months?  6 months?  12 months?  What is the agent’s record of original listing price vs. final sale price?  Lots of selling agents claim to be high performers, but the real proof is in their actual sales record.  If the selling agent is not willing to provide you with this information then move on to someone else.

Marketing – What is the marketing plan for your Toronto home?  How will the selling agent make sure your home is seen by as many potential buyers as possible?  What is the marketing budget he or she has set aside for your home?  The better the selling agent is at marketing your home, the more exposure it will get in the market and the more potential buyers he or she will bring to your door.

Commission/Fee – What is the selling agent’s commission?  This is an area where it’s important to look at more than just the percentage amount and give proper consideration to what you’re actually getting for your money.  In general, selling agents who charge discounted fees do so for a reason and that reason is often that they are not as skilled at their profession.  You want to minimise your costs, of course, but not if that means lengthening the amount of time your home is on the market or ending up with a lower than expected final sale price.

Choosing the right selling agent for your Toronto home is a critical decision that can literally affect everything that happens along the road from listing to final closing.  Take the time to interview several agents and use the information contained here to help guide you in making a final choice.

Disadvantages of Multiple Offers

Buyers Don’t Want to Fight!

One of the most important disadvantages of multiple offers is that many potential buyers are going to be turned off by the thoughts of fighting it out with bids.  They just want to buy a house and move into it, and get their lives moving.  They don’t want to spend weeks making offers and counter offers to try and get this one particular house – especially when it’s easy to make another offer on another house.

While some bidders with a competitive spirit and a deep wallet might want to continue the war until they come out with the deed – this bidder is rare.  Most likely, one or more of the bidders is going to walk away.  Another issue is that as the bidding process continues, it draws things out and potential buyers have time to second guess themselves.  Things that looked charming at first may soon seem not so wonderful about the house – and they may lose interest.

Buyers Don’t Want to Overpay!

Most of the time, buyers are looking for a home that has most of everything they want – but with the lowest price possible. There are those potential home buyers out there that have all the money in the world and they’re not going to stop looking until they find the perfect home for them no matter what the cost is.  However, this is not representative of the majority of home buyers.  The majority of homebuyers do not want to overpay for their next home.

When a bidding war ensues, if things are going strong, these potential homeowners are going to see that it’s quite likely that they’ll be overpaying.  Even if the house is wonderful, these people are not going to want to pay thousands over what the original asking price was just to beat out another bidder.  If you’ve underpriced the house in the first place, you may leave money on the table.

For the most part, people wish for multiple offers and everyone wants to get the most from the house they have for sale.  However, as you can see from the issues above – it’s not always a good thing.  In one particular example, a seller asked her agent to list the home and then have any offers wait one week unless the offer was full price or better.  Of course, the seller was hoping to see a bidding war.

There was one offer on her home early, but she refused to look at the offer until that week had passed.  When the week had passed, that offer was the same and only one made on the house and she nearly lost that offer.  The point is that the more time that passes, the easier things are likely to change. Sometimes, one decent offer is much better than having a bidding war commence over your home.

How a Building is Certified LEED

The certification works on a 100 point system, where a building is assigned a certain number of points for each aspect of building.  These include sustainable sites, water efficiency, energy and atmosphere, materials and resources, and indoor environment quality.  Bonus points are offered in two categories, including innovation in design and regional priority.  The total amount of points that can be awarded is 110.  A building can be LEED Certified with just 40 points, while with 50+ points it will be certified silver, 60+ points will certify it gold and 80+ points will certify it platinum.  The scale works like this:

• Sustainable Sites = 21 Points
• Water Efficiency = 11 Points
• Energy & Atmosphere = 37 Points
• Materials & Resources = 14 Points
• Indoor Environmental Quality = 17 Points

EXTRA POINTS:

• Innovation in Design = 6 Points
• Regional Priority = 4 Points

Total Points: 110 Points

Builders Focusing on LEED Certification

As more and more individuals become aware of the stress on the environment and the options they have to lessen that stress, more of them are demanding alternative options.  It’s more common now than ever for individuals to request homebuilders that are familiar with and committed to building to LEED standards.  There are many builders that fit into this category, including:

• John Desmond Builders, Inc. out of Connecticut
• Peter Erickson (Mosier Creek Homes)
• Laupen Homes, LLC
• And Many More…

‘LEED-ing’ Older Homes

Many things can be done to improve the ‘greenness’ of older homes. One of the easiest things is replacing water fixtures  such as installing low-flow toilets and faucets and energy efficient hot water heaters.  Using gray water or rain water for watering plants is another great option.  Individuals can install Energy Star windows to block out summer heat and reduce energy usage, and take advantage of solar or wind power in order to save more energy.

While there are a number of things that can be done to increase the eco-friendly aspect of older home, the LEED certification is strictly for new constructions.  With determination, however, homeowners can modify their homes to be just as eco-friendly as the LEED certified new constructions.

It shows responsibility and awareness for the bigger picture when individuals and businesses make a commitment to build to LEED specifications.  By choosing LEED certified build sites, using recycled or sustainable materials in the build, creating eco-friendly systems throughout the home or building and installing eco-friendly fixtures and appliances, individuals can create a home or building that will qualify for LEED certification.

Energy

Where energy is concerned, one of the most important things a homeowner can do is take advantage of wind or solar power.  Along with that, individuals can use less energy and save more money with the following tips:

• Installing energy efficient appliances, including washers and dryers, refrigerators, dishwashers and all other appliances.  Energy Star appliances are a good way to go, as they use less energy than other appliances on the market.
• Energy Star windows will keep more hot sun out, keeping the house cooler.  This will result in less of a need for artificial cooling.  Energy Star windows can also help keep harmful UV rays out.
• Insulation can help save energy, as it helps keep the cool or warm air in the house in the summer or winter.  It cuts down on the AC or heat usage.
• Open the doors and windows rather than turning on the AC.
• Leave the thermostat on 78 degrees – and use fans if you’re hot or wrap up in a sweater if you’re cold. This will save some energy, too.

Water

• Using less water is a goal all homeowners should have, and there are several ways to accomplish that goal, including:
• Installing an irrigation system that uses timers and sensors to prevent overwatering and water usage.
• Installing low-flow and water efficient fixtures like faucets, toilets, and showerheads.
• Catching rain water and using gray water for plants and flushing toilets.
• Fix any leaks that you might have in your home.  Leaks can account for a large portion of your water bill each month, and of course, they’re a huge waste of clean water.

Other Tips

When purchasing new things for your home – whether it’s flooring, furniture or art – purchase sustainable or recycled items.  For instance, bamboo floors are absolutely beautiful and they’re sustainable.  So it’s much better for the environment if you invest in bamboo floors than if you were to purchase oak or pine floors.  Or, take advantage of recycled wood floors – so you’re saving trees from being cut down and keeping the wood from ending up in the garbage.

Furniture created using sustainable or recycled materials also helps you ‘green’ up your home.  When you buy recycled materials, you keep them from ending up in a landfill and reduce the new items that are made – which used energy and resources to be created.  By employing eco-friendly practices and purchasing sustainable and energy-reserving goods, you can really create an eco-friendly home to be proud of.

Repairs:

Repairs are a large part of staging a home. You don’t want anything to take away from the beauty and charm of your home – and that means broken door handles, cracked tiles, holes, or any other kind of eyesore.  Make all of those repairs before having any visitors.  You’d be surprised to know that even one small crack or hole can stop a potential homebuyer from making the deal.

According to HomeGain 2009, just repairing problems with floors can increase the sale price between $1500 and $2000, and 91% of agents recommend that this is done before a showing.  Go through the house and check for any other minor repairs that need to be done – such as sticking drawers, leaky faucets or drafty windows.

Cleaning:

It’s important for the house to sparkle when potential homebuyers visit; both inside and out.  Start on the outside, and try to see the house as a potential homebuyer would.  Is the brick or siding clean?  If not, a pressure wash would help. Is the lawn free of trash? Are the outside windows sparkling and clean?  Take care of any problems on the outside before moving on to the inside.

On the inside, obvious cleaning should be done – like the cleaning you do everyday.  This might include having all of the dishes washed and put away, making sure the floors are vacuumed, swept and mopped, and dusting everything.  However, before showing the house, you’ll want to do some deep and detail cleaning on the inside so that everything looks great.  This might include:

• Wiping out the insides of cabinets and drawers.
• Dusting baseboards.
• Scrubbing bathroom and kitchen tile and porcelain.
• Organizing closets, pantries and linen closets to show more functionality and space.
• Straightening things to provide a more uniform look – such as making sure all the coffee mug handles go the same   way, organizing the contents of cabinets and making sure everything looks neat and tidy.
• Washing the insides of the windows.
• Polishing the steel of sink handles and faucets, towel bars, etc.
• Etc.

Have a friend walk through the house with you when you’ve finished to see if they can spot anything else that needs to be done.  When the house is as clean as possible, you’ll have a better chance of making a sale.  In fact, HomeGain 2009 says cleaning an de-cluttering is recommended by 98% of agents and can bring an extra $1500 to $2000 to the sale price.

Staging:

For the actual staging, it’s important to set things up the best possible way to get potential homebuyers picturing themselves living there.  There are more than a few ways to do this. The first would be to remove anything that does not absolutely need to be there.  This includes personal items.  So, the personal products from the bathroom counters and medicine cabinets should be stored in baskets under the sink.  Pictures should be removed from the walls and stored somewhere else. No drawings or personal saying should be left on the refrigerator or anywhere else.

De-personalize the house so that it becomes a blank canvas for the potential homebuyers to imagine themselves there.  If you have too many personal items, it will seem crowded and the canvas will already be painted on.  You should have as little furniture as possible in each room as well.  This helps the home look more spacious and inviting, while a small amount of furniture allows potential homebuyers to know exactly what a particular room is for.

By staging and preparing the house the proper way, you will not only increase your chances of selling the house quickly, but you may increase your sale price as well.

It really is amazing what can happen in one year’s time.  In October of last year, we were all sure the sky was falling.  Agents were considering part time jobs or returning to past careers…and this October, things are looking quite different.  It’s a busy month, with the multiple offer nights, and there appears to be no slowing on the horizon.

I’ve even participated in 8 multiple offers this past month!  Some clients seem to be frustrated by this – they don’t want to overpay just so they can beat someone else, but they want a house.  We need more listings to balance this market again.

The first sellers to get their homes on the market are going to be the winners – just like the people who bought up a year ago…or bought for the first time.  The drastic increase in average price is in keeping with these multiple offers.

Just look at these figures from the Toronto Real Estate Board…

• In October 2009, Greater Toronto REALTORS® reported 8,476 sales, up 64 per cent from October 2008. The average price for October transactions was $423,559 – up by 20 per cent compared to the same month last year.
• Year-to-date sales, at 74,721, were up nine per cent compared to the first ten months of 2008. Average price, at $392,264 was up by almost three per cent.
• “After a short dip in the winter, the average home price in the GTA has rebounded because sales have been high relative to listings,” according to Jason Mercer, TREB’s Senior Manager of Market Analysis. “Watch for listings to rebound in 2010 as home owners react to the strong sales and price growth experienced in the latter half of this
  year.”

Selling Time Decreased for Listed Houses

Homeowners who get their homes on the market now may not have to wait very long before they have that check in hand, according to statistics from the Toronto Real Estate Board.  In the East District last year, homes selling had been on the market for around thirty-five days.  In the West District, it was closer to forty days.  This year, homes are selling after having been on the market only around twenty-five days in both districts.

This is a positive sign that things are moving more quickly for the Toronto Real Estate industry this year.  The total average days on market are about twenty. This means that sellers can get their houses listed and sold quickly – able to move onto the next chapters in their lives without dangling over the house they are having a difficult time selling.  The forecast for 2010 looks great as well.  With those above-mentioned multiple offers, the housing market has most definitely made a turn for the better in October 2009.

2010 Listings Forecasted To Be Great

As homeowners see the improvement October has brought, more and more of them will consider listing their own homes.  With decreased selling times, higher sale prices and more sales being made – homeowners are going to want their own slice of the pie.  As John Mercer said in the Toronto Real Estate Board Report, “…sales have been high relative to listings.”  When more listings are available, we’ll see a more balanced industry where individuals can sell their homes quickly and for a price they want to see.

Breaking Down the Difference: 2008 to 2009

5,155 sales occurred in 2008 in the Toronto area.  This year, we saw 8,476.  Obviously, this is a positive statistic, especially considering the number of listings for both years.  October 2008 saw 14,530 new listings.  That means that less than half of the new listings sold last year.  However, this October saw only 11,532 new listings and more than half were sold.  The days on the market were significantly shorter this year as well.  It’s easy to see why these stats have homeowners looking to sell pretty excited – not to mention the $45,000 median price increase we saw this year.