“Where is the condo market headed, in Canada & specifically London Ontario?” I was asked this question today by a client who wants to sell her condo in Toronto and move to London Ontario. Below is part of what I emailed to her.

The oversupply of condominiums in Canada is becoming a concern as two-thirds of all housing starts are condos and the supply of completed but unoccupied condominiums is high.

Vancouver & Toronto lead the way in new construction and as an example; Toronto has 132 high-rise buildings under construction compared to 17 in Chicago or 86 in New York City.

In a report by Bank of America Merrill Lynch, if Toronto condo developers stopped developing and completed their existing projects, there would be enough to supply the market for five years! The report also stated that between 40-60% of the sales of pre-construction units are to investors!

What is going to happen when units are on the market longer, are not selling and supply out paces demand? Yes, prices tumble and turmoil accelerates the uncertainty of real estate which in turn can affect all of Canada.

In London Ontario, we too have many new condo projects under way but the majority of units being built are one floor townhomes with amenities that are attracting the Boomers and the high-rise buildings are actually attracting the Boomers with very few investors on the scene.

As I wrote yesterday in my blog about why London Ontario will not experience a real estate bubble burst, the stability in London and the new demographic changes for the fore seeable future are quite positive.

The Buyer Agency Agreement

Earlier this week, I wrote a blog with advice on what to look for in buyer agency and working with an agent or a broker of record.  So what happens after you interview a few agents and find one you think will be a good choice?

Most agents want you to sign some sort of agreement that formalizes your agreement - often it is a legal requirement of their jurisdiction.  And without a written agreement, there are no guarantees the agent who finds you your new home will get paid. 

Most agency agreements say, in effect, that the agent will help you find a place, and you agree to forsake all other real estate agents during your search - actually, it's been described as asking a prospective buyer to get married before the first date. 

Now, at this point, you know enough to want to go out with this agent on at least one date (a home shopping excursion).  Still, you may feel uncomfortable signing a contract that obligates you to this agent until you buy or die. 

How can you handle it?

In Ontario, licensing laws require the agent to give you a written explanation of how the brokerage thing works.  Who represents whom in the transaction?  And whether or not Provincial regulators want you to sign an actual agreement, many agents will not show you a single house without one. 

Whatever the laws might be, I think that it's a very good thing to have your agreement reduced to writing.  I also think it's important that you understand whatever you sign, and that it be written in understandable English and in legible print.  And keep in mind, this form is written by RECO (Real Estate Council of Ontario), and there is a lot of language in there to ensure that when you buy a home, that agent will get paid, either by you or by the seller.

Also, keep in mind that you are free to negotiate changes any of the boilerplate language if there are terms or conditions you can't live with.

Here are some of the major issues it will include:

• How much does the broker charge and how is that paid?  In Ontario, the sellers usually pay the brokerage fees, and I've even heard agents telling people that their services to buyers are "free".  Not quite.  If the listing company has negotiated a payment from the seller (called a "co-op" commission) to your agent of less than the amount of the fee he charges, the agreement may say that you must make up the difference.  In other words, if your agreement calls for a 3% payment, and the co-op commission is only 2.5%, you may have to write a cheque for the difference at settlement.
• Does the buyer broker charge an up-front contingency fee? If so, how much is it?  Is it refundable under any circumstances?  Is it credited back to you at closing toward your down payment and closing costs?  This is one way that an agent can help weed out real buyers from tire kickers, and it's becoming more customary.
• How long is the term of the agreement?  If you are not sure you want to enter into something long-term, and if the agent insists that you have to sign something, make it a week or so.  You can extend your contract at the end of that time - assuming the agent is doing a good job and you both want to continue the relationship. 
• Is it possible for you to break up once you've signed on the dotted line?  If it turns out that you've made a mistake and don't want to work with this agent after all, how do you get out of it?  Most brokers will let you out, but they don't have to make it easy for you, unless you have included language that lets you terminate. 

Whenever I enter into a buyer brokerage agreement with a new client, I know that I'm going to have to earn the trust and loyalty that our buyer broker agreement represents.  But the agreement has got to be more than a piece of paper.  And there will be important elements of the relationship that can't be written into a boiler-plate contract.

Between the time we meet and the time we arrive at closing, a lot can happen. 

• We have to be certain we are communicating clearly throughout the process, and we need some mechanism for making sure that we are all trying to find the same type of property.
• You might get out-bid a few times before you submit an offer that actually works.
• There might be issues with the home inspection, title search, or lender that can threaten the transaction once you think you have a deal. 
• The seller of your dream home could turn out to be un-cooperative or difficult.
• Any one of the cast of characters involved, including me, the lawyers or even you, can make a mistake along the way.  And you have to have faith that we can fix whatever it is - we almost always can.

I believe in agency agreements for quite a few reasons and I also have a cancellation agreement that you can cancel at any time. After 9 ½ years I have never had one cancelled yet but sadly I have had to ask some buyers to work with someone else.

To go through how I believe a real estate transaction should be the protection procedure for both of us and the duties required from both of us, what our expectations are and the standards I go by, let’s get together for 45-60 minutes or less.

Spending thousands of dollars making poor choices and decisions is the biggest mistake I see home buyers make.

     As I work with both condo sellers and buyers, I am always asked what the market is doing, when is the best time to buy or sell, how much to offer and how much to list for.

    As with any condo, the neighbourhood, style and condition of a home reflects on price and quickly they sell.

   Below is a breakdown of condo sales in London Ontario from January 1, 2011 to November 30, 2011.

    Please keep in mind that these are averages. For my clients I do a break down of complex and building to ensure we are comparing apples with apples.

   Selling or buying a condo is a bit different than buying or selling a house as there are more factors to take into account and the skill level to maximize the price is higher and of course, to protect you through the process of a condo offer requires more diligence from a REALTOR than the norm. Here are two links that may help you. Buyers  Sellers

   Condominium living is a popular option for many Canadians as it can be a relatively carefree housing option. Currently, in some parts of the country, one out of three new homes built is a condominium. 

    Most  newspapers now include a condominium section which recognizes the increasing number of people who already live in—or aspire to live in—a condominium.

This Guide has been created to help you become an informed condominium buyer and to help you make the best choice. Please see the glossary at the end of the Guide for full definitions of some of the terms used.

The Guide will give you the basic background information you need to get started on the path to condominium ownership. It will identify important questions to ask—and the people you should be asking—before you make this important purchase.

At the end of the Guide, we've provided you with a condominium selection checklist to help you narrow down the choice between the different types of condominiums you might see.

This Guide provides a general overview of the purchase of condominiums. It is not intended to provide legal or technical advice. It is recommended that you retain appropriate legal and technical professionals to guide you with any condominium purchase you may consider.

Go Here to read the guide.

   When buying or selling real estate here are 4 price strategies that are the most common that I have come across in my real estate career.

  Clearly Overpriced: Every seller wants to maximize the amount they receive for their home. They may have an inflated value of what their home is worth because of: getting opinions from un-informed advisors and friends, having an over financed home, or they have renovated their home to a standard not consistent with their neighbours. My experience has been that unless this home has been on the market for three to four months, the seller will not drop his price. And if he does, and your offer is accepted, will the appraisal that your lender will order, what if the appraisal is below the offer price?

  Somewhat Overpriced: About 75% of the homes on the market are overpriced. These homes sit on the market longer than they should as well. There are two main reasons these homes are overpriced. The seller believes that the home is worth more than the market has indicated, OR, the seller has left room for negotiating.

  Priced Correctly At Market Value:  Some sellers understand that real estate is part of the capitalistic system of supply and demand. They have realistically priced their homes based on a thorough analysis of other homes on the market prepared by a good and knowledgeable Realtor. These competitively priced homes usually sell in a reasonable time and very close to asking price.

  Priced Below the Fair Market Value: Some sellers are motivated by a quick sale. These homes could attract multiple offers and sell fast, and, at or above, the asking price!

  As a buyer, do you know which strategy was used? As a potential seller of a home, what will your strategy be and do you really have an accurate understanding of the market?

  I hope I have raised your awareness of how prices are determined and if you are either buyer or a seller, quality representation can save you a lot of time and money. 

   I should warn you before you read anymore that the comments I am going to make are out of frustration and exasperation and are no means to imply that ALL real estate people who list condos are as inept as some of these were.

My clients were interested in downsizing from their 2 storey home and were interested in seeing 2 bedroom units in this particular building all within $25,000 of each other in price. From $197,500 to $225,000.

We chose a Thursday for the viewings and Tuesday morning I proceeded to make arrangements for showings. Because we were interested in only this building, there were 6 listed for sale.

One agent replied within an hour that the time scheduled would be fine, another two replied the next morning and one in the afternoon that it was ok to show the units. As I had not heard from the other two, I called their offices and used our appointment scheduler called Touchbase. One called back right away and said she was sorry, she forgot to confirm.

The other agent I never ever did hear from, even after 3 attempts and I see, 2 weeks later, this condo is still listed for sale.

The evening before the scheduled showings, I did some homework. I pulled up everything that was sold in the building over the last 2 years, called a past client (who had purchased from me years ago) in the building and enquired about how happy she was, any complaints, how was the property manager, how solid the condo corporation was and other pertinent questions that would enable me to inform my clients on the condo culture of this building.

I pulled up the current taxes from the city for the units and only 1 out of 6 were accurate as per what was shown on the listing data form! I don’t mean by a few dollars, in one case $1732.00 difference!

The condo fees shown for all 6 units had a difference of $131.16! How can that be? Subsequently checking on things and talking to the Property Manager, the difference in fees were about $7.00 per floor! Only one condo unit had the accurate current condo fee.

Fair is fair, I thought, mistakes happen and I will be putting in clauses if my client does decide to put an offer in to verify all condo fees, taxes and any other discrepancies.

On the day of the showings, I meet my clients in the lobby where lockboxes are that hold the keys for entrance to the building and individual units. My day is not starting out well, there are 9 lockboxes and only one is identified with the unit number? Opening up a few, there were some keys tagged with the unit # but some weren’t! My male client thought this was funny or was laughing at me because I only have 4 pockets on my pants and could only keep track of 4; he had 4 pockets as well so he helped!

A couple of the units we saw were as per the listing data, appliances, room sizes and amenities, one unit was a disgrace, one unit the occupant would not let us in (nobody told me you were coming, she said) and 2 units were out to lunch in price.

So now we get back down to the lobby, play Russian roulette with the keys and lockboxes and say to my clients “ Well, what do you think?” with a straight face, I might add.

Other than the usual comments like poor layout, overpriced compared to others, condition of the units, my clients just kept shaking their heads and asking themselves is this what they want to do?

Obviously, they did not purchase anything that day but one week and 2 buildings later, they purchased a beautiful unit that they and I liked really well. They now know and my past clients know why I choose to work with just a few clients at a time because having to prepare properly before every showing because of lack of faith in the listing data, is time consuming and for the buyer, creates a bit of mistrust in the MLS listing.

Again, I want to re-iterate that not all real estate agents were like some of the above and if you do list your condo, check weekly that the information on the listing is accurate. For two reasons, to ease the uncertainly of the buyer and prevent you from being taken to court for false information.

Guess what would happen if you knew the prices of condos for sale in London Ontario?If you were a buyer, would that help you compare units and feel more comfortable if you were going to put in an offer?

If you were a seller, would that help you price your condo to the market or guess work?If you were a buyer or a seller of a condo in London, what would happen if you had this information, plus, some tools to make your purchase or sale of a condo in London Ontario a stress free and profitable experience?

What will happen if you do not use our advanced marketing tools for sellers and our buyer incentives?

  Where do you start when it comes to locating and buying a one floor condo home in London Ontario? Most start off by going to MLS and picking up all the real estate magazines they can get their hands on.

  Thats a good way to get a feel for price and style. But then what? What about certain condo rules, fees and financial stability of the condo corporation, amenities and other questions that are very important to you?

With the following condos being available for sale today in London:

• 11 from $150,000 - $200,000
• 28 from $200,000 - $275,000
• 9 from $275,000 - $350,000
• 6 from $350,000 - $450,000
• 9 over $450,000

The above does not include the brand new condos available across London.

We sell alot of condos, view condos almost daily and know a good deal and the better run condo corporations. If saving money and time are important to you, now you know who to call!

Highrise apartment condos in London Ontario continue to offer some of the best values in real estate. I was comparing some apartment condo prices with a client from Toronto who is being transferred to London and she was amazed.

You don't have to spend $300-400,000 to buy a great condo apartment in London.

For example, look at the followig:

• 11 from $71,900-$97,900
• 42 from $100,000 - $150,000
• 28 from $150,000 - $200,000
• 19 from $200,000 - $275,000
• 8 over $275,000

Condos that you would have to spend $285,000 to $400 + you can get here in London starting around $150,000 or so! What would happen if you new what and where were the best values of condos in London?