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Darryl Sittler made his fortune in real estate, not hockey.

RRSP home buyers planLast week, I had the privilege of attending REIN’s (Real Estate Investment Network) monthly workshop.  One of my childhood idols was a guest speaker.  I’m talking about Darryl Sittler, the former captain of the Toronto Maple Leafs.   In case you haven’t heard of REIN, let me share some details about this group of professionals.

REIN is a group of real estate investors that get together to network and share valuable information that affects real estate in Canada.   The leader of the group is Don Campbell.   If you haven’t heard of him, you should.  His approach to buying investment properties has proven to be very sound and profitable.  His “top ten best cities to invest” is legendary. Continue reading “Darryl Sittler made his fortune in real estate, not hockey.”

Paying over list price has become normal.. but still requires a cool head.

Sold over asking

Here’s a recent article in The Star where I provided some advice and comments on bidding wars.

The trend continues.  Properties are selling for above asking price in hot markets across the country.  In Toronto, it’s becoming the norm.  Some say an epidemic.

Last month I reported on sales that sold for 128% and 138% of list price.   We’re talking about selling prices of $1,035,000 and $1,150,000.

A few days later, we saw a home sell for $1,308,808.    That’s $479,880 above asking price or put another way, 158% of list price.   Sale prices this much above asking are either a clear case of listing too low, in the attempts of attracting multiple offers, with the hope of getting a higher than normal selling price… or, someone is paying way above market value for reasons beyond my understanding.

Continue reading “Paying over list price has become normal.. but still requires a cool head.”

158% of List price! Housing market is hot!

3 Ross St Last month a house in Toronto’s west end made headlines when it sold for $200,000 above it’s $639,900 list price.   That’s 131% of the asking price.   Earlier this week, I shared some astonishing sales from the weekend.   Two houses sold for 138% and 129% of  asking price.   Both homes were in the $1,000,000 plus price range.

Yesterday, this house at 3 Ross St, in Toronto was listed for $829,000.   It sold for $1,308,880.  That’s 158% of asking price or $479,880.   This semi-detached house is located in the College and Spadina area of Toronto.  It sits on a 20′ x 116′ lot.

We can debate whether these are sales tactics (you know, list way below market price to attract buyers and create a buying frenzy) or if this means the market has gone crazy.   To me, this just reaffirms my belief that this is a seller’s market.  There is a pent-up demand for housing.   And when the supply is low, higher prices usually follow.

Interesting, yesterday, a report from Tourism Toronto showed in 2103, 9.22million hotel rooms were booked.  Up 2.8% from 2012.   I’m not sure there is a direct correlation between the visitors and house prices but Toronto has certainly become a world-class city.   Maybe our prices reflect that, too?

Your best interest is my only interest.    Like this article?  Share with a friend.   I reply to all questions and I welcome your comments.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

2 sales in GTA this weekend went for 128% and 138% of List price!!

home-prices-up

Wow, who said the housing market was slowing down?   Check this out..  2 sales from this past weekend in Toronto show the market is red hot!

455 Manning St Feb 20-14 sale

This house at 455 Manning St is located in the College and Bathurst area of Toronto.  It was listed for sale at $749,900.   And it sold for whopping $1,035,000 or 138% of list price!   This is a 2.5 storey semi-detached home with a 19′ x 126′ lot.   Wait, it gets better.   The description says, and I quote “Attention Renovators/Investors/Handymen”.   A quick look at pics inside leave much to be desired.   This place is need of some serious home improvements.    All I can say is WOW!

362 Lippincott st feb 22 -14 sale

How about this one at 362 Lippincott Street located in the Bathurst and Bloor area of Toronto.   Listed at $895,001 and selling for $1,150,000.  That’s 128% of list price.   The lot is 17′ x 101′.   This is a 100 yr old semi-detached Victorian with major updates and renos.   It certainly looks nicer than the first.   But selling for 128% of list price?   I’ll repeat myself, WOW!! Continue reading “2 sales in GTA this weekend went for 128% and 138% of List price!!”

Baby Boomers 10 yr real estate retirement plan

Last week, I was asked to comment on BMO’s Retirement Report  which pointed out that more Canadian Baby Boomers are using their home as their retirement fund.  The BMO study shows the baby boomer generation were not downsizing like many experts were thinking.  But instead, they are buying bigger, more expensive homes.   The thinking is that the higher priced homes will grow their retirement fund more quickly and more securely.

Several Financial Experts commented on this study…. mostly offering negative reviews about this retirement strategy….. including BMO… you know, eggs in one basket, diversification, that sort of thing…  there is merit in the statements but I really don’t agree with the negative spin….. Here’s a link to my quotes about the “10 year plan” in The Star.

The 10 year plan has grown in popularity over the last 5 years as we’ve seen the value of our RRSPs or other investment drop in value.   It’s capitalizing on real estate values going up over the long-term.    It’s really simple to understand….

THE 10 YEAR RETIREMENT PLAN

Here’s an example of what one couple did….Let’s say you’re between the ages of 35 and 55.

  • You own a home worth $500k.
  • You have a $300k mortgage., but you can afford to buy a $700k home.
  • Your new mortgage is $500k.
  • You are committed to keeping that home for 10 years….and you can afford the payments..
  • In that 10 years, the goal is to pay down your mortgage by at least half, if not more. (a realistic goal considering the average Canadian pays off their home in 12 to 17 years).
  • if your home goes up by 5% each year, on average (and this is probably a realistic number looking back at historical values), then your home should be worth $1.14million.  
  • the 10 year timeframe is critical… we want to give enough time to live through any up or down real estate market…

Using the example above, in 1o years you should have a mortgage of $350k or less and house worth $1.14millon… that’s $790,000 of equity in your home.   Oh, and it’s all Capital Gains Tax Free….

Does it sound too easy or too good to be true?   It’s really not… take any 10 year period in history…  work out your own stats… This is reality…

By the way, the couple I’m referring to are real… they are actual clients of mine.   They bought their home in 2007 for $850k… They have paid down their mortgage to $300k…this is way ahead of schedule…(the low interest rates have helped)….  The value of their home today is approximately $1.5million.  They have $1.2million in equity today.  They estimate the home will be worth $2million in 5 years…  but even if it isn’t, even if the property is only worth $1.2million 5 years from now, I’d say they’ve done pretty well, wouldn’t you agree?

And for those that prefer stocks and bonds, then stick with those investments…  There isn’t one good strategy…  This plan is less exciting and probably a little boring…  but I like boring when it comes to my money and my retirement…

This plan isn’t for everyone.  You need to be comfortable with debt and understand real estate…. and you need to commit to owning real estate for 10 yrs (it doesn’t have to be the same house.. you can move)…

If you need help with this plan or just want more info to help understand it, give me a call anytime.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

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