The city plans to turn an old prison into social housing in the Downtown Eastside, but it should consider this edgy alternative first

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Find out what the average monthly rents are in Canada’s major cities according to Canada Mortgage and Housing Corp.’s April 2011 Rental Market Survey.

OTTAWA — Demand is outstripping supply in the country’s apartment rental market, pushing the national vacancy rate lower and making it more difficult for renters to find accommodations, Canada Mortgage and Housing Corporation reported Thursday.

The vacancy rate fell to 2.5% in April from 2.9% a year earlier, the national housing agency said.

“Immigration continues to be a factor in supporting rental housing demand. Recent immigrants tend to rent first before becoming homeowners,” said Bob Dugan, CMHC’s chief economist.

“In addition, condominium completions moved lower in the past months, while rental apartment unit completions remained relatively stable. As a result, the overall demand for rental apartment units increased faster than supply for this type of housing. Accordingly, this pushed Canada’s vacancy rate downward.”

The average monthly rent in new and existing structures for a two-bedroom apartment edged up to $864 in April from $848 in April 2010.

The highest average rents were found in Vancouver, at $1,181; Toronto, at $1,124; Ottawa-Gatineau, at $1,056 for the Ontario portion; Calgary, at $1,040; Edmonton, at $1,029; and Victoria, at $1,024.

The lowest monthly rents were found in the Quebec centres of Saguenay, at $542; Trois-Rivieres, at $546; and Sherbrooke, at $577.

The major urban centres with the lowest vacancy rates were Winnipeg and Regina, at 0.7%; Quebec City, at one per cent; Toronto, at 1.6%; and Kingston, Ont., at 1.7%.

Those with the highest vacancy rates were Windsor, Ont., at 9.4%; Kelowna and Abbotsford in B.C., at 6.6 per cent; and Charlottetown at 4.9%.

Factoring out newly built structures, which carry higher rents and can skew the national average, rents across Canada’s 35 major centres rose 2.2% year over year.

© Copyright (c) Postmedia News

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Photograph by: Bryan Schlosser, Leader-Post, Leader-Post

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This is what John Ruskin knew more than 100 years ago: “There is nothing in the world that some men cannot make a little worse and sell a little cheaper, and he who considers price only is that man’s lawful prey.”

When someone perhaps not properly informed is preyed upon, buying business by offering lower prices is relatively easy.  This is the essence of real estate commoditization, and in my opinion, using the cost of selling is the laziest and riskiest method to market with.

The home buying and selling public do not always understand a real estate sales professional’s value, and in many cases they believe all real estate agents do the same thing.

When the consumer is presented the full spectrum of service models (and credentials) to understand and make an informed choice, value versus price commoditizing will win every time and besides, the risks that can accompany a bungled transaction far outweigh the costs.

In “Balanced” and “Buyers” markets there are many Sellers getting in “pennywise, pound-foolish” situations, and it has been proven time and time again that far too many lose.

The real estate industry commonly offers the public something called, “Full Service”, which is a bundled package that is generally undefined.

Even some of these generically named, “Full-Service” real estate models will provide for economizing consumers, but can only maximize the ROI with some regularity in a “Sellers” market.

Selling using William’s “fee for service” model certainly won’t guarantee that a Seller doesn’t face additional commission fees. If a Seller posts through William for $109 and the buying party is using a real estate agent, commission fees based on the selling price will likely apply.

Research findings of Richard Robbins International show that a Buyers representative spends on average 32 hours with a Buyer. When the other costs are figured in, that Buyers representative will expect to be fairly compensated if they deliver a pre-approved Buyer to the Seller.

Offering a low Buyer’s commission is counter intuitive if a Seller wants to attract pre-approved, qualified Buyers.

Despite being unaware of the many issues that can complicate a sales transaction, some sellers using low cost fee for services are successful in getting what they pay for.

An “economical” sale is more likely to cost unsuspecting consumers more money, take up much more time than selling with a professional, and has additional risks.

The time spent planning, preparing (the home itself, making signs, printing feature sheets, etc), advertising (newspaper, Internet, etc), taking or returning phone calls, arranging showings (to sell an average home requires 12-20 showings, each showing takes 30-45 minutes), etc., is daunting.

Unlike a Realtor, the public is not covered by errors and omissions insurance and will face the risks of showing the home and everything in it to unqualified buyers.

Many buyers who do look at private sales are bargain-hunters looking to save, and don’t kid yourself, they are well informed and expect the full commission deducted from the sales price.

What if, like the majority of unassisted sales, your house undersells by 3 or 4% because of the discount mentality? Ouch!

If by chance (or because it was priced too low) you were able to obtain multiple offers are you able to deal correctly with them?

Don’t forget the fact that dealing with unqualified buyers often leads to private Sellers having numerous offers collapse.

A discounted service that loses sales, reduces marketability, results in a lower selling price, or misses any opportunity, could be a very expensive lesson.

When you lower your commission, you essentially have two choices – to reduce your profit margin, or to cut back on what you use to get the home sold. Neither scenario is very attractive or helpful in guaranteeing you earn the highest possible price for that home.

Think about how much you really saved in commissions? What other experts offering low cost solutions do you know?

Remember that a Realtor offering fee concessions has already given away a part of their commission before they’ve even started. Do you really want them negotiating for you?

Your choice of Realtor could be the best investment you make as either a Buyer or Seller.  Why compromise?  Well it is your money and it is your choice, so choose wisely.

Going into a real estate transaction few people understand what (value) they are getting, which has contributed to a belief by some that Realtors are overpaid.

You should question the value of the business model that you choose for your real estate services because most REALTORS work on a contingency basis, which means they don’t get paid unless you are successful.

The value of loyalty offered by REALTORS working on a contingency basis (versus, “fee for service”) to consumers in a real estate transaction is unquestionable and underestimated.

Sure, we’re more expensive than the competition, but there’s a good reason for that …

All things are not equal and I set myself apart from the low cost, minimal care and short service providers, and I will not compromise my reputation, or my customer’s best interests.

We’re certainly not about to start compromising our reputation by downgrading our service and offering concessions, or most importantly our results.

If you’re looking for cursory services you’ve obviously come to the wrong place. I really want to help people who are interested in what I have to offer (real value for money).

Delivering the high-level of service the customer pays for and the results expected, is where the real differentiation begins.

The most important question we can ask is, “What do our customers expect?” How could I possibly be fulfilling my professional obligations, working in the customer’s best interest, without knowing this?

Through an interview and assessment process I want to clearly understand what a prospective customer expects at the outset.

Then I put together a customized but flexible project plan in writing for the prospective customer to clearly understand what they will get, and if the plan needs to be changed it will be.

The Conference Board of Canada noted that Metro Vancouver’s average home price dipped 2.6 per cent to $662,348 in April from March, though it remains almost 20 per cent higher than the same month a year ago.

Conference Board analyst Robin Wiebe said that with a dramatic rise in Metro Vancouver’s new listings, it isn’t a surprise to see prices adjust as buyers take their time with offers.

Wiebe’s report observed new-listing activity in Metro Vancouver in April that was almost 63 per cent higher than it was a year ago with sales up just 17 per cent from the same month a year ago.

“[The data] says that buyers might be getting a little cautious,” Wiebe said in an interview. “But just a little.”

And Wiebe cautioned that “one month [of data] is not a trend.”

University of B.C. professor Tsur Somerville said whether Metro Vancouver prices dip or stay stable from one month to the next essentially tell the same tale.

“Instead of looking at a market where prices rose 15 per cent in a year, we’re looking at a market where large price increases are not what anybody expected,” Somerville, director of the centre for urban economics and real estate in the Sauder School of Business, said in an interview.

He expects prices “would be steady for a while,” and “getting price declines would be somewhat of a challenge in absence of something going wrong [in the economy.]”

Somerville added that the Conference Board’s report, which repurposes the monthly data compiled by Canada’s major real estate boards, is further evidence that the market is slowing and is in keeping with the forecasts of major agencies and banks.

The psychology of the market now, Somerville said, is “if we don’t buy this month, we’ll be okay next month,” which is different from the frenzy at the end of 2009.

Metro Vancouver was one of 16 markets that saw prices slip back from the previous month among the 28 that the Conference Board tracks in the index.

Victoria also saw a dip in prices, down 1.4 per cent to $515,499, as did the Fraser Valley, which was down 0.5 per cent to $451,480. Calgary saw a 1.6-per-cent dip to $392,646 and Toronto saw a 3.3-per-cent drop to $425,011.

depenner@vancouversun.com

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CMHC is forecasting that Metro Vancouver will see 35,000 property sales cleared through the realtor-controlled Multiple Listing Service, a 3.5-per-cent decline from 2009 and will slip another three per cent to 34,000 transactions in 2011.

“Certainly the market recovery we saw over the past year, at least anecdotally, a lot of that seems to have been first-time homebuyers taking advantage of the lower [mortgage] rates combined with lower prices,” Robyn Adamache, a market analyst with CMHC said in an interview.

And with prices rebounding past their previous peaks and with mortgage rates having begun to creep up, Adamache added that it makes sense 2010 and 2011 sales will be dominated by move-up buyers.

On prices, CMHC is forecasting that Metro Vancouver’s average price to top $655,000 in 2010, up 10.6 per cent from 2009. In 2011, however, the federal mortgage insurer estimates price growth will edge up 3.1 per cent to $675,000.

Adamache added that an improving economy, which has shown a steady trend of job growth in recent months, along with anticipated strong population migration, should support steady housing sales.

Nationally, CMHC said tougher mortgage rules, higher borrowing costs and rising inventories will help cool what has been a red-hot market.

CMHC forecast housing resales in 2010 to hit 497,300 units, up by seven per cent from last year, then easing 4.8 per cent to 473,500 in 2011. Sales were up 7.7 per cent to 464,730 last year after plunging 17.1 per cent in 2008.

Bob Dugan, CMHC’s chief economist, said the existing-home market will move toward balanced conditions over the next two years as inventory increases. Figures released Monday by the Canadian Real Estate Association showed April inventories at record levels.

With files from Canwest News Service

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“For anyone considering entering the real estate market we would highly recommend taking this seminar.” - Jim and Anna R. – Coquitlam

Next Seminar: Saturday, June 5th. 10 until 12 noon.

With all the responsibilities of buying and selling real estate, this need for risk management is crucial. The onus for property evaluation is always on the buyer whether pre-sale or resale.

Registration:                                      604-937-4155

Location/map:                                   Coquitlam Public Library – Poirier Branch (map)

Presented by:                                    “Homeowner Advocate” – John Grasty

A public service of Consumer Advocacy and Support for Homeowners (CASH) Society www.CashSociety.net

For more information, please contact: info@realestateevolved.com

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So there are certain REALTORS® who will accept the owner’s price, or just about any price, just to get the listing (and the “For Sale” sign placed).  In the real estate industry this action of the “highest bidder” is known as, “buying a listing”.

More than 70% of today’s real estate market involves Generation “Y” and “X”, and they conduct most of their research online, paying little attention to “For Sale” signs.

Seeing lots of “For Sale” signs for a particular REALTOR® should not be relied upon as social proof, or in any way whatsoever, in fact looks can be deceptive.

One key question the “X” & “Y” generations insist on knowing the answer to is how many unsold listings the REALTOR® has had the past 3 or 4 years. What could be more important for a Seller to know?

The goal of the homeowner is to sell, and not just list, so an expired listing is a failure, and unfortunately “Top Producer” awards don’t consider how many failures were produced.

All REALTORS® have a legal and ethical obligation to be working in the best interest of the client; it’s called a fiduciary duty.  Taking an over-priced listing (at least based on my best judgment) would be a professional compromise that personally I’m not prepared to make, although others do, and regularly.

Occasionally I’m unable to justify what a Seller has proposed for a list price, and so are they. I’d rather turn that listing down now than to let them down later, and especially in a “Buyer’s Market”.

I have some more thoughts to share should you decide to list your home with the “highest bidder” (instead of me):

• When you complete the listing contract be sure to get a cancellation clause included, which can be invoked at your discretion. Although you’ll have to sign to list for 60 days, you might need to get out earlier.
• Next, make sure the highest bidder has a really pleasant looking “For Sale” sign because you’ll likely be looking at it for a while, just like all the others out there.
• By the sixth week the unsold listing starts to give buyers the impression that there is obviously something wrong. The listing is now referred to as “stale-dated” as it painfully approaches 60 days unsold.
• Make sure to have other REALTORS® thank you for helping to sell their listings.
• Soon you’ll be asked to reduce your list price to lower than what I had suggested in the first place. It isn’t fun chasing the market down.

The reality is your home hasn’t sold yet and it’s likely that your options and market value are now rapidly diminishing. I guess that marketing plan didn’t work!

I’ll still be here when you get serious about selling your home, but make sure you’ve cancelled the listing contract first before you call me.