BUYERS AGENT : YOU SHOULD USE... ITS FREE!

Many first time home buyers stay away from buyer’s agents because they think it will cost them money. Well, the opposite is really true; a buyer’s agent will likely save you money. How, you ask? Well, most often the buyer doesn’t pay the agent, and the buyer gets the benefits of an agent’s knowledge, expertise, and negotiating skills. See our post about the benefits of a buyers agent for more info on how they can help.

So, how does the buyer’s agent get paid? With the typical sale, a seller pays an agent to list the property for sale. Within the listing contract this listing broker says they will offer a specified percentage of their commission to a buyer’s agent, if there is one. So, the seller is paying a commission to the listing broker, and the listing broker is paying a commission to the buyer’s agent. This is the way most deals work.  

Where the buyer needs to be careful is with FSBO’s (For Sale by Owner) and lower commission MLS deals. It’s becoming more and more common that FSBO sellers are willing to pay a buyer’s agent, but it needs to be written into the purchase contract. Also, many buyer agencies contracts will say that the buyer’s agent gets paid a percentage of the purchase price or the MLS offer of compensation (what the listing agent is offering), “whichever is greater”. When you sign a buyer’s agency agreement, make your agent cross out the “whichever is greater” portion. If you sign an agreement to pay the greatest of 3% or the MLS offer of compensation and the listing agent is only offering 2.5%, you as a buyer could be on the hook for the extra 0.5%. These instances are rare, but you need to be aware of them. We’ve actually never had a buyer pay us any portion of our commission out of their pocket.

As a buyer, having an agent work for you through a transaction rather than for the seller, at no cost to you, is a no brainer.

A couple weeks ago, I wrote about the home buying process and picking a Real Estate Agent. Although, I never really explained why you should have a buyer’s agent. There are tons of benefits to using a buyers agent! They will:

1. Talk through your financials and recommend a mortgage lender who will work well for your needs.
2. Analyze your wants and needs to help determine your requirements for a home and location.
3. Guide you to homes that fit your criteria. Ask your agent to set up a search that will notify you every time there is a new listing or price change meeting your criteria.
4. Educate you about the current market and help you make a wise decision on which home to choose.
5. Look at comparable sales to determine a reasonable purchase price on the home you choose.
6. Walk you through an offer contract and help you determine all the terms required in the contract to meet your needs.
7.  Negotiate on your behalf. Real estate professionals are trained negotiators and can often  get a better price then a consumer can on their own.
8. Keep you on track to meet all the dates and requirements outlined in your contract.
9. Recommend inspectors and testers who will provide you knowledgeable input on the condition of your future home.
10. Coordinate with the lender, inspector, title company, and listing agent to get everything ready for closing.
11. Solve any problems that may arise related to the contract, financing, inspection, title, etc.
12. Get the deal closed so you can start moving into your new home!

….and best of all…

In most cases you don’t have to pay a penny for the buyer’s agent, they’ll split the commission paid by the seller with the listing agent.

Don’t believe the lie that you get a better deal without a buyer agent.




Written : keithandkinsey.wordpress.com

NOVEMBER HOUSING STARTS TO SLOW DOWN....

November Housing Starts down 3.6% from October

 

Housing starts in Canada were trending at 214,680 units in November, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR)¹ of housing starts. The standalone monthly SAAR was 196,125 units in November, down from 203,487 in October.
“As expected, housing starts remained below their recent trend and continued to fall for a third straight month. This decrease was mainly attributable to declines in single-detached and multi-unit housing construction in Ontario and British Columbia, resulting in part from a decline in the pace of pre-sales relative to that in late 2010 and early 2011,” said Mathieu Laberge, Deputy Chief Economist at CMHC. “The drop in starts in Atlantic Canada was primarily due to a decrease in multi-unit housing construction in Halifax, following higher than normal activity in October,” added Laberge.
CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations, analyzing only SAAR data can be misleading in some markets, as they are largely driven by the multiples segment of the markets, which can be quite volatile from one month to the next.
The seasonally adjusted annual rate of urban starts decreased by 4.0 per cent to 174,323 units in November. Urban single starts declined by 5.4 per cent to 58,606 units, while urban multiple starts fell by 3.2 per cent to 115,717 units.
November’s seasonally adjusted annual rates of urban starts fell in Ontario (-14.3 per cent), British Columbia (-16.5 per cent) and Atlantic Canada (-45.6 per cent). Urban starts rose in Quebec (+15.4 per cent) and the Prairies (+16.1 per cent).
Rural starts² were estimated at a seasonally adjusted annual rate of 21,802 units in November.
Preliminary Housing Starts data is also available in English and French at the following link: Preliminary Housing Starts Tables
As Canada's national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.

HAPPY HOLIDAYS TO VRM AND HELOC CLIENTS!

December 04, 2012

The BoC Rate Meeting: Nothing to See Here

Today’s Bank of Canada rate announcement was another yawner. No one expected rates to rise. Analysts merely wanted to see if the Bank would drop hints on its future rate-setting plans.
It did, but the new clues weren’t much different from its previous guidance.
For mortgage watchers, the long and short of it was this:

• the Bank maintained its rate tightening bias, but
• short-term mortgage rates (which the BoC controls) are unlikely to jump near-term.

The Bank’s outlook can largely be summarized in these snippets from today’s announcement:

• The global economy remains “vulnerable to major shocks from the U.S. or Europe.”
• In Canada, “…Underlying (economic) momentum appears slightly softer than previously anticipated…”
• Our economy has a “small degree of slack”
• “…The pace of economic growth is expected to pick up through 2013.”
• "Over time, some modest withdrawal of monetary policy stimulus will likely be required..."
• “It is too early…to determine whether the moderation in housing activity and credit growth will be sustained.”

That last sentence is noteworthy. The Bank carefully crafts every last syllable in its rate statements. In this case, it is clearly reinforcing recent warnings that rate hikes are possible if housing-driven debt growth doesn’t taper off.
That said, ‘possible’ and ‘likely’ are two different concepts. With inflation undershooting forecasts and with future price expectations “well-anchored” (the BoC’s words), it seems unlikely that debt accumulation will move interest rates—at least not before the spring housing market gets underway.
The 5-year government bond yield (which influences long-term mortgage rates) was little changed by the Bank’s decision.
The next BoC rate meeting is in 50 days on January 23, 2013. By that time, we’ll know how one major economic risk factor plays out, the U.S. Fiscal Cliff.

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Written by: Rob McLister, CMT

Mark Carney Leaving.......

Governor  Mark Carney leaving - what now for Canada? Governor Mark Carney Mark Carney is leaving the helm of the Bank of Canada (BoC) in July of 2013 and heading  to the Bank of England. The governor of the  BoC is widely respected and is considered to  be the one responsible for steering the  Canadian economy through the global  financial crisis. Under Carney's leadership,  Canada has become the envy of other world  powers - banks didn't fail and the economy  has grown. Carney is seen as a strong central banker and  financial regulator and his approach to  monetary policy has triumphed. It started in  March 2008, when he decided to cut the  bank's overnight rate by 50 basis-points,  which was totally opposite to what other  countries were doing. His instincts have  proven to be correct. Then in April, 2009 he introduced a nonstandard monetary tool - the conditional  commitment, a monetary stimulus that held the policy rate for at least a year to boost  domestic credit conditions and to improve market confidence. The Canadian economy  started to improve and started its amazing growth shortly after that. Carney studied  economics at both Harvard and Oxford and worked as an analyst for  Goldman-Sachs in London, England. He is unique in that he is a PhD economist with  real-life experience as an investment banker and as a senior deputy minister at the  Finance Department. He emerged as a thought leader at the Group of 20 and last year was appointed to head up  the Financial Stability Board, which is leading an overhaul of global banking standards. By moving to England he inherits a world in flux, not only at the Bank of England (BoE), but also the surrounding European nations. His role at the BoE is more challenging than at the BoC and is much more political. The U.K has become a stagnant economy and on the verge of another recession. Inflation is high and no one knows where future growth will come from. Carney's new job is a daunting one. Again, if his performance in Canada is any indicator, he will make their economy hum once again. It will be important to see who will take Carney's place. It is rumoured that Tiff Macklem, the senior deputy governor who worked closely with Carney and who shares Carney's approach will be his replacement. With Macklem, we can expect the status quo. Anyone else would be an unknown. Bank of England (BoE) Tiff Macklem Carney's successor, however, will not be without challenges.  The economy has slowed, and government rule changes to  mortgage lending, which has already impacted the housing  market may trickle down to other parts of the economy.  There are still challenges with world economies and our  trading partners, which is having an effect on our markets  as well. It's been a great ride with Carney at the helm. If anyone can  turn around the UK economy, he can. We wish him great  success as we turn a new chapter here in Canada.