Energy Audit

Article below is provided by RECO

Ontario REALTORS® agree with the principle of energy efficiency for homes expressed in the Government of Ontario’s proposed mandatory home energy audit, but they say that the additional costs will hurt homeowners, especially in these economic times.

“This mandatory government regulation will impose a significant cost on home sellers. As with most Canadians, we don’t believe in green at any cost,” said Gerry Weir, President of the Ontario Real Estate Association. “It’s not the initial cost of these audits that concerns us,” he said. “Rather, the results of these audits will be used by home buyers as bargaining chips to significantly reduce the final selling price.

“Today’s economic downturn is a terrible time to introduce this measure. Home sellers are already worried about lost equity in their homes. A move like this, which will reduce their value even further, will not help them in any way,” Mr. Weir said.

REALTORS® favour government encouragement of energy efficiency in homes through expanded tax breaks and other measures.

In addition, REALTORS® point out that there is no one standard for energy audits. Different firms arrive at different assessments of the same house. “EnerGuide ratings of an existing home can and do vary between energy auditors, depending on the assumptions they make and the extent of data they collect on the building’s actual construction,” Mr. Weir said.

Furthermore, since there is no regulation of energy auditors, a conflict of interest can arise if a contractor conducts the audit. There is a natural inclination for that contractor to find problems that he can offer to repair for the homeowner.

Many details of the energy audit proposal have not been released. For instance, the government has not said if an energy audit will be required if a property is transferred between family members. Nor have they said how long an energy audit will be recognized as valid.

Reverse Offer

Use a reverse offer to get a home buyer's attention

If there is no offer from interested buyers, owners could turn the tables and make prospective buyers an offer instead, an offer they just might not be able to refuse. Reverse offers aren't new. They were used in the 1980s recession, when mortgage rates were in double digits and the few would-be buyers were often reluctant to make an offer.

A reverse offer works something like this: A potential buyer has shown more than a passing interest in your house, and the buyer's agent has indicated his client really likes the place. But for some reason, a week or two has gone by and the buyer hasn't made an offer.Something is holding him back. Perhaps he still wants to look at several other places. Or maybe he's paralyzed because of the news about the current real estate market or economy. It can be any number of things.

Maybe knock a few grand off your asking price and throw in a 12-month home warranty. Perhaps agree to wait for however long it takes for him to get approved for a mortgage, or give him extra time to close.

There are other ways to use reverse offers, which also are known as preemptive or seller-initiated offers. One might be when the buyer is using an inexperienced agent and your more veteran agent wants to write the contract to make certain that it is worded absolutely perfectly. Another is when negotiations have broken down and you want to make one last-ditch attempt to get the deal back on track.

article above provided by LA times

Buying in Barbados

Barbados has experienced a property boom over the past decade, with island-wide values appreciating 15 to 20 percent a year. The majority of foreign buyers in Barbados, formerly a British colony, are from England, according to Mr. Layson. In recent years, the strength of the British pound provided favorable exchange rates. American and Canadian buyers also own homes in Barbados.

Barbados has a fixed exchange rate, and foreign buyers are subject to “exchange-control approval.” This means that the Central Bank of Barbados registers the amount of foreign currency that offshore buyers bring to the island; in turn the registration enables buyers, if they choose to sell, to take out the amount of money brought in, plus profit.

Buyers do not pay transfer taxes or stamp duty; the seller pays 2.5 percent transfer tax and a 1 percent stamp duty. The seller also pays the broker a commission of 3 to 5 percent. Financing of up to 70 percent is available; rates average 4 to 6 percent.

What would it take to get home buyers off the fence?

Builders are stuck with bulging inventories of homes -- most of them priced lower than six months or a year ago -- that are still not selling. Strategies to bring buyers back into the market dominated the recent weeklong annual convention of the National Association. It was also the key subject of a consumer opinion survey conducted by the association's research subsidiary.

The study, conducted in early January, polled more than 700 self-described "on-the-fence" buyers. Asked why they hadn't yet committed to a purchase, 44% said they were holding out for lower mortgage rates, 41% said they weren't sure they could qualify for financing and 38% said they expected to see lower house prices.

The mortgage rate that consumers said would be most effective in persuading them to buy now. A 30-year, fixed-rate loan at 3% was ranked twice as effective an enticement as a 3% loan fixed for five years, with an adjustment to 5.25%, fixed for the remainder of the loan term.

Price concessions also are compelling to would-be buyers. Most effective of all: a 10% discount below true market value -- in other words, instant equity for the purchaser upfront.

Their traditional approach of offering "incentive packages" of free upgrades and amenities may not be all that effective. The same may be true for "green" features -- energy efficiency certifications and environmentally sensitive designs. If a new house comes with a green certification but costs $2,000 more than a standard model, this doesn't motivate shoppers to buy, researchers found. Even if the house costs the same as a standard house, that won't do the trick.

Bottom line: Builders who offer combination packages of special financing, price concessions, lower down payments and perhaps application guarantees would encourage buyers off the fence.

New Breed of Agents Offer New Techniques

SELLERS and buyers are not the only jittery players in today’s housing market. Real estate offices along Main Streets are struggling to stay in business during one of the worst markets in decades, and at the same time shift away from their traditional job description to become more competitive players on the Internet. The company is also increasingly advertising on the Web. It is striking how consumer behavior has changed.

The old model of a sales agent who just takes listings, hosts a couple of open houses, and places an ad or two is not enough anymore. A new breed of agent is emerging, wise in the ways of short sales and other foreclosure avoidance techniques. That’s going to be a large part of the business going forward into the next several years. Agents have to know so much more when making a sale today. There are just so many roadblocks in the way.

Maybe it’s not such a bad time for new agents to join the market. There are lots of opportunity for newcomers.

Trapped in Their Own Homes

In a housing market characterized by eroding home values, high inventory and tight credit for borrowers, many feel stuck in a place they don’t want or can’t afford. As the recession becomes more severe and unemployment mounts, they fret each week their properties remain unsold, and fear losing equity. While buyers hunt for exceptional values, sellers feel like hostages. And their pain is sometimes drawn out when deals that seem to be done blow up just before the closing.

All real estate is local, as brokers like to say, and comparable sales information is most useful within a smaller neighborhood, because prices vary so much even within one community. And some experts are warning that the housing market may not hit rock bottom for at least another year.

A seller’s anguish may not be as sharp as the pain of a homeowner facing foreclosure. But the situation can alter life plans and jettison hopes.
Some sellers are losing hope.

In a boom time, buyers tend to overlook things like a high tension line that’s a little close to the house, a street that’s a little too busy or an odd layout. In a down market like this, those preferences are magnified.

In today's market, buyers are recommended to sell their home before purchasing. An alternate suggestion is to insert a condition in the purchase and sale agreement that their houses to be sold.

article above is summarized from NY times

Worthwhile Canadian Initiative

Canadian banks are typically leveraged at 18 to 1--compared with U.S. banks at 26 to 1.

Article below is provided by Newsweek http://www.newsweek.com/id/183670

The legendary editor of The New Republic, Michael Kinsley, once held a "Boring Headline Contest" and decided that the winner was "Worthwhile Canadian Initiative." Twenty-two years later, the magazine was rescued from its economic troubles by a Canadian media company, which should have taught us Americans to be a bit more humble. Now there is even more striking evidence of Canada's virtues. Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it's Canada. In 2008, the World Economic Forum ranked Canada's banking system the healthiest in the world. America's ranked 40th, Britain's 44th.

Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn't grown in size; the others have all shrunk.

So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada's more risk-averse business culture, but it is also a product of old-fashioned rules on banking.

Faulting Credit Firms on Fixing Errors

MANY consumers are unaware what their credit score is until it’s time to apply for a home mortgage, but by then it is often too late to fix any mistakes that they might uncover in their credit reports. It is important to build up a GOOD credit history. It is more so important is to HAVE a credit history. Company can only trust evaluate a person based on record and history. It does not matter how well you can explain the situation, no one is going to listen to you. That is the reality.

A new report by the National Consumer Law Center, a consumer advocacy organization based in Boston, has concluded that the three major credit-reporting agencies — Equifax, Experian and TransUnion — have not done enough to improve the process by which consumers may correct these errors.

Under the Fair Credit Reporting Act, consumers are entitled to have mistakes corrected, but they are required to contact the credit-reporting agencies directly rather than the creditors.

The Obama administration is expected to announce new rules later this year that would allow consumers who find mistakes in their reports to contact the creditors directly. The creditors would be required to respond to the consumers.

Property Tax might increase by 4 Percent

A likely 4-per-cent property-tax hike for Toronto homeowners, a smattering of new services and some new user fees are among the measures expected in the 2009 city budget to be unveiled tomorrow.

Property taxes are based on the assessed value of the property, as determined by the local tax assessor. But assessments may not necessarily reflect the current market value of a property. Current assessments are probably based on property valuations that were made when prices were much higher. If a home’s current assessment seems out of line, the homeowner should move quickly to appeal. The main goal is to prove to the tax office that the assessment is wrong and that the fair market value of the property is significantly lower than its value when it was assessed.

Homeowners can file tax appeals on their own, or hire experts trained to determine the true current value of the property.

Banks Bypassing Mortgage Brokers

Subprime Mortgage - Who to blame? Who should be penalized?

MORTGAGE brokers have long served as an important loan source. Compared with the loan officer at a local bank, brokers typically offer a wider range of mortgage products from a variety of lending institutions.

But now some brokers are concerned that they might become marginalized, as some of the nation’s largest lenders move to block them from offering their loans.

The bank, which had in recent years been among the biggest lenders of mortgages originated by brokers, said that it would instead accept only loan applications taken in its retail locations and online.

JP Morgan had made decisions that is the best way to make loans that will be good for borrowers in the long run. In addition, there was an internal memo sent to employees on Jan. 13, in which executives wrote that mortgages made directly through Chase employees have lower default rates than those made through brokers. Apparently, JP Morgan wants the mortgage application under their control once again.

Some legislators and consumer advocates have criticized brokers specializing in subprime mortgages — loans typically offered to borrowers with less-than-stellar credit ratings. They charge that some brokers persuaded borrowers to apply for loans that were beyond their ability to repay. But mortgage brokers say they have been unfairly blamed for the industry’s failures in recent years. They point out that it is the lenders, not brokers, who ultimately approve a borrower’s application.

Article above provided by NY Times

Power of Sale

In Toronto, 50% of real estate sales volume in 2009 January comparing of which in 2008 January. There were 26 showings was registered in one day on this "power of sale" rowhouse on Adelaide/Bathurst, Toronto, and one registered offer is presented this morning.

What does it tell you?

Buyers are out there and on the sideline waiting for best "deal" ever. There are actually lots of qualify buyers in the market and waiting for good deal comes out in the market as the economy are continuing to tank.

Buyers! Buyers! Please pay attention!!! Don't over excited by the term "Power of Sale"! It is not quite the same as the Foreclosure in U.S.

The Vendor, in most case is the bank or trust company, of Power of Sale has the fiduciary duty to sell the house at market value being appraised by a 3rd party. It is pure business, no emotion involve in the transaction. There is a great chance of getting a fantastic deal.

But Buyers please be advised that in this situation you have to understand all the CONDITIONS under Power of Sale. Please read Schedule B, C, D, E and F!!!!!! There are conditions such as original owner can redeem the house before closing. The Bricks or Sears Department Store can repossess appliances if they were not paid off by the original owner. The Vendor does not warrant the house, it is sold AS IS!!

In case of multiple offer presentation, buyer might end up paying over the market value. Be extra careful when dealing with Power of Sale.

Rents Are Falling Fast in New York City

Let's hope Toronto Rental Market does not follow the trend of NYC

In this painful economic climate of layoffs and shrinking investments, there is a sliver of positive news: it’s a good time to be a renter in New York City. Although it is notoriously difficult to quantify the state of the rental market, rents fell in almost every sector of the Manhattan market last year. The landlord is now offering an incentive program such as one month rent for FREE or lower the rent by 10 percent. It shows the public are even having trouble paying for the rent. They are opting for in-law apartments where they can save money by sharing rents with relatives or parents.

Since there are many buyers on the sidelines of the sale market, it certainly makes renting more attractive when the rental market softens. It’s not only a buyer's market, it is defnitely a renters’ market now.

Toronto Rental Market Report

During the latest reporting period (September 1,
2008 to December 31, 2008), TREB Members
reported 3,433 rented condominium apartments
and townhouses in the Greater Toronto Area. This represented an increase of 30 per cent over the 2,635 transactions recorded during the same time frame in 2007.

A good part of this increase likely came from rental listings in newly completed condominium apartment buildings containing investor-owned units.

Average condominium apartment rents, on an annual basis, rose for one, two, and three bedroom types during the September to December period. Average two bedroom units, for example, rose two per cent to $1,895 per month. Annual average rent increases were noted for one-bedroom townhouses.

TREB’s Central Area once again proved the most active for GTA rentals, with 2,052 units rented during the September to December period, up 37% from the same time in 2007. In the C01 and C08 districts (see map) especially, rental units in several newly completed buildings accounted for a large portion of the increase.

Of the apartments rented, 1,175 were one-bedroom units which rented for an average of $1,550 per month, and 721 were two-bedroom units that rented for an average of $2,141 per month.

Article Above Provided by TREB