The Canadian Real Estate Association has updated its forecast for 2016, with two provinces expected to lead the way.

“Since CREA’s last forecast published in September, housing markets in British Columbia and Ontario have strengthened further,” CREA said in its updated housing forecast. “As a result, CREA has raised sales and average price forecasts for these provinces.”

National sales for the rest of the year have also been revised higher.

Home sales in Ontario are expected to rise by 9.3%, which would be higher if prices in the GTA were more affordable, CREA said.

“British Columbia is projected to post the largest annual increase in sales activity in 2015 (+21.4 per cent), while Alberta (-21.4 per cent), Saskatchewan (-10.8 per cent), and Nova Scotia (-5.1 per cent) will record annual sales declines,” CREA said. “Activity in Manitoba is forecast to rise by 2.3 per cent this year.”

One bit of bad news, however, is that the recently announced mortgage rule changes – which will impact homes costing more than $500,000 – will have a larger reach than intended.

“Recently announced changes to mortgage regulations that take effect early next year risk cooling housing markets beyond Greater Vancouver and the GTA, their intended targets,” CREA said. “In particular, the regulatory changes are also likely to reduce sales activity in Calgary once they take effect in early 2016.”

Despite this, home sales are expected to reach 498,600 next year.

“The national average price is forecast to edge higher by 1.4 per cent to $448,700 in 2016,” CREA said. “Price gains in 2016 are forecast to be strongest in Ontario (+2.9 per cent) due to an ongoing shortage of listings for single family homes coupled with strong demand for them in and around the GTA.”

Source: Justin da Rosa
 

New down payment rules will go into effective February 15, 2016.

“The Government’s role in housing is to set and maintain a framework that is equitable, stable and sustainable. The actions taken today prudently address emerging vulnerabilities in certain housing markets, while not overburdening other regions,” Finance Minister Bill Morneau said in a release. “They also rebalance government support for the housing sector to promote long-term stability and balanced economic growth.”

The minimum down payment for new insured mortgages will increase from 5% to 10% for the portion of the house price above $500,000, the finance ministry wrote.

Minimum down payment for properties up to $500,000 will remain at 5%.

The changes are meant to reduce taxpayer exposure while supporting long-term stability of the housing market, according to the ministry.

“This measure will increase homeowner equity, which plays a key role in maintaining a stable and secure housing market and economy over the long term,” Morneau said. “It also protects all homeowners, including many middle class Canadians whose greatest investment is in their homes.”

Source – Justin da Rosa
 

There are lots of stories online and in print touting the benefits of selling your home yourself, without using a real estate salesperson. Do-it-yourself property sales companies promise that you’ll save thousands of dollars in commissions.

What most home sellers on that path don’t know, however, can land them in major litigation and financial loss. DIY property sales companies will barely touch the subject or avoid it entirely.

DIY companies will tell you that by saving the agent’s commission, that money goes straight to your pocket. On a $388,000 home, a 4.5 per cent commission would land at just over $17,000. Wow, look at all those zeros you can put in the bank if you do it yourself!

What sellers don’t realize is that buyers are fully aware that sellers are not paying commission, so they don’t expect to either. Buyers will not pay inflated prices just so sellers can have lots of zeros in the bank.

On that same $388,000 home, you might pay a flat fee of $900 or so with DIY companies compared to the $17,000 slice that would cover real estate professionals’ costs. Comparing dollars to dollars, to sell DIY-style seems a straight-forward and obvious choice. The DIY companies sell consumers on the idea that real estate transactions are primarily about sales.

What home sellers don’t understand is that much of the real estate transaction is legal. And in the realm of legal loopholes, what you don’t know can land you in a world of financial pain.

Laura Riddle, in her book Sell Your Home Now, shares the story of a private seller who fell into such pain. The private seller met with a confident, smooth talking buyer.

“I know what I’m doing; let me help you with the paperwork,” the buyer had offered.

“So the seller signed a notarized quitclaim deed, which is the legal document that signs your house away forever, which normally escrow or the attorney holds until the last minute… The buyer had the quitclaim filed and got the house for a $10 filing fee. The case went to court. Be on your guard; getting a buyer is just one-tenth of the process,” says Riddle.

If getting a buyer is just one-tenth of the process, what are the other nine-tenths about then?

Shh… DIY sales companies don’t want you to think about that.

Homeowners don’t realize that DIY selling is a bit like choosing to represent oneself in court. It saves money but it’s incredibly risky. Most people wouldn’t dare, because they know they’re up against a skilled professional in a complicated arena and they could get really, really hurt. Somehow this common sense doesn’t translate to the realm of real estate, even though the legal implications are considerable.

In his article, The Shocking Hidden Costs of DIY Home Selling, Jeff Stern of Re/Max Performance Realty in Winnipeg points out an issue that can affect sellers in a big way, even after possession.

“Once possession date arrives … just before the bank releases funds, there is another inquiry into the buyer’s credit to confirm there have not been any negative changes.

The part you don’t know, but really should: anywhere from seven to 30 days after possession, the bank performs this final inquiry into the buyer’s credit. If there are any negative changes to their credit, the bank is not obligated to fund the sale. It is possible the bank would refuse to fund the purchase even after possession… It happens. Usually when it does, the real estate agent and the buyer will together scramble for another lender’s approval… It can lead to litigation, financial loss and a whole lot of pain.”

The bottom line is that DIY sellers proceed unprotected for most aspects of the transaction.

Let’s face it. There are great agents and not-so-great ones. Some can be intimidating to deal with. They may go to a homeowner’s door and pressure them into signing with them. They may even promise to bring a buyer, but only if the owner hires them. They’ll be convincing. They’ll turn on the charm. They’ll use guilt. A seller’s agent, however, is used to such tactics and can skilfully fend off bullies.

An agent also protects sellers from buyers. Sellers who must deal directly with buyers can be intimidated. Their non-sentimental criticism may bother the seller. They may be demanding about getting a discount. They also may just be looky-loos out for a Sunday afternoon. Agents offer a third-party, thick-skinned barrier from such time-consuming annoyances.

In real estate, as in law, what you don’t know can do more than just hurt you – it can land you in major litigation and financial loss.

In a 2012 article for MoneySense, David Hodges wrote: “Many people who choose the FSBO route find it a stressful, time-consuming grind. Take Tawnia Vihos, who tried selling her Ottawa home with a FSBO service, but gave up: ‘It totally pays to have a real estate agent. More exposure and fewer headaches.’”

Source: www.remonline.com – Kim Rempel