After a week of serious conversations about foreign buyers, and taxation, I’m mentally drained.
There’s a lot that’s gone down this week that didn’t make the news too, so let me provide you with a few quick hits, a few anecdotes, and a few stories from the real estate trenches.
Did I tell you the one about the condo that found a ladder clogging the garbage chute? No, seriously. What’s with people?
Capital Gains Tax Stays At 50%
There was a lot of talk on TRB this week about the foreign buyer’s tax, and that spawned some conversations about other methods of taxation as well.
The federal budget was set to be released this week, and leading up to the budget, there were rumours swirling about the capital gains tax increasing from 50% to 75%.
I’m sure you know how I feel about that; I don’t like it. Not one bit.
There were no shortage of opinion pieces on how and why this would have a negative effect on the economy as a whole, but I felt it was yet another “tax on the wealthy,” and the increase from 50% to 75%, which itself represents a 50% increase, was absurd.
How about a 5% increase to start? Maybe take that 50% and bring it up to 52.5%?
No? We’re going right to 75%?
Well thankfully, the federal Liberals thought better of it, and there was no increase in capital gains, at least in this budget.
But many experts believe we’re off the hook for now, but not for good.
Rob Carrick wrote a great article in the Globe & Mail this week: “Have Capital Gains? Now Is The Time To Strategize”
Primary Residence Exemption
Somebody brought this up on the blog last week, and it scared the crap out of me.
Not in my wildest dreams, not even with all the disdain I have for Justin Trudeau and his constant taxing of the middle and upper class, did I ever think he and the Liberals would consider removing the primary residence exemption for capital gains.
Not until I read it in the comments section of my Monday blog.
Can you imagine?
You buy your house for $650,000, you sell it for $900,000. You keep the $250,000 profit. All of it.
That’s how it’s always been.
This isn’t an investment; it’s your home. Is there nothing more sacred?
Is there anything in this world that isn’t taxable?
They say “death is expensive,” as the government comes calling, and looking for their take. So perhaps it’s not naive to think one day, the government would start taxing the currently tax-free capital gain on your primary residence.
But if they did, I think it would be the biggest change in taxation in the history of Canada.
And it would drive a lot of people to move.
Maintenance Fees Rise 18% At 25 The Esplanade
I have five clients who live at 25 The Esplanade.
It’s one of the best buildings in the city.
It’s probably the best-managed building in the city, and despite the fact that it was built in 1987, they’ve kept their maintenance fees at $0.49/sqft.
That’s not a typo. That’s $0.49/sqft, and guess what else it is? It’s all-inclusive.
Their fees were at $0.49/sqft for four years, after they had risen from $0.46/sqft in 2009, to $0.47/sqft, and then $0.48/sqft.
And this year, the fees were raised a whopping 18%.
They now stand at $0.62/sqft, still all inclusive.
There are some people out there that look at “fee increases” as a bad indicator, and I think this is a mistake.
If the fees just went up 18%, I think it’s fair to say you’re safe from yet another fee increase for a while.
18% sounds like a big number, and it is.
But buyers need to put this in perspective: this is a 1987 building that has fees of $0.62/sqft, all inclusive, and the average fees in the city are probably around $0.72-$0.75, with you paying at least one of your own heat and hydro.
Fee increases happen.
They should happen every year, with every condo, unless we’re in a period of deflation.
So if you’re a buyer, put more emphasis on the current fees, and the history of increases – not just the “big number” in front of you today.
“Playing God” With The Front Door
The market is busy, right?
That’s an understatement.
It’s downright crazy, and if you’re a buyer, you know how many people are viewing a home by whether or not the front door opens as it pushes up against thirty pairs of shoes sitting in the foyer.
In this market, it’s very common for there to be 4-5 showings all at the same time, between 5pm and 8pm, when most people are out looking at houses.
For the most part, things run smoothly.
Agents respect each other, even though they’re competing, and they try to accommodate. I’ll take my clients downstairs first if I know another agent is upstairs. I’ll see agents I know, and we’ll greet each other, and be cordial. We’ll try our best to give another buyer some privacy if they’re conversing in one of the rooms, and we know we can wait a couple of minutes to take a look.
But once in a while, you get a buyer agent who decides that he or she is going to change the game, and dictate the rules.
And I’ve found a few agents this year that have decided to “play God with the door.”
Consider an agent that gets to the property at 5:55pm, for a 6pm showing, right before, say, three other agents with showings at 6pm.
This agent opens the front door, walks inside with his or her clients, then locks the front door.
The agent then takes a “private tour” through the house with his or her clients, while the three agents are outside, knocking on the door, to no avail.
Last week, an agent tried this with me, and I didn’t like it.
I knocked, and knocked, and knocked, and she took ten minutes to come answer.
When she opened the door, she acted surprised to see another human being, and dripping with condescension, almost proud of her actions, she said, “Oh, hello……..do you have a showing too?”
I said, “No, I’m a f****** girl-guide, selling cookies. If you ever pull this with me again, I’ll take you to RECO.”
She told me I was rude.
The two other sets of agents I was with thanked me.
Two wrongs don’t make a right, I know that. We learned that a long, long time ago.
But if you don’t call agents out on their poor practices, why would they be motivated to change?
“Seller Reserves The Right To Review And Accept Pre-Emptive Offers Without Any Notice And Without Notifying Any Agents”
Remember when I wrote about this “new practice” earlier in the year? If you missed it, read the blog post, HERE.
I’m pleased to say that it’s stopped, for the most part.
To pick up the theme from the point above – if you don’t call agents out on their poor practices, why would they be motivated to change – I’ll tell you that on Monday, I found another one of these listings with this line about accepting pre-emptive offers with no notice, which clearly breaches RECO rules.
I sent the listing to my manager, and he sent it to somebody at RECO, then called him directly.
A day later, the listing had been edited to read: “Seller Reserves The Right To Review Pre-Emptive Offers.”
I know it sometimes seems hopeless, but don’t simply say, “Filing a complaint won’t do anything,” because it can, and it will.
No Pre-Home Inspection
If you’re a seller in 2017, and your agent says, “We don’t need to do a pre-home inspection,” then your agent is cheap, lazy, and a liar.
Get rid of him.
To not provide a pre-home inspection in this market is to cost yourself 4-5 potential buyers on offer night, who would have made an offer, but didn’t have the time, or the wherewithal, to do their own inspection.
Last week, I emailed a listing agent and asked for a copy of the home inspection.
He wrote back:
“No, the Seller did not get a pre-inspection. The seller has decided to allow buyers to satisfy themselves with their own home inspection, should they wish to have one completed.”
Oh what a load of bullshit!
First of all, it’s not really “the seller” who didn’t get the inspection. It’s the agent. Sure, the seller could decide, but it’s the agent, if he or she is worth their salt, who is supposed to push the idea as a marketing tool, or really in this 2017 market, a bare essential.
Secondly, the wording of “allow buyers to satisfy themselves with their own inspection” is such an attempt to turn it back around on the buyer, when 9/10 decent listings out there have a pre home inspection.
And lastly, “…should they wish to have one completed,” is their way of saying, “What, you really feel that’s necessary? Well, okay, I guess…”
I’ve been accused on many occasions as being a “Realtor-basher,” since I routinely blog about “the bad actions of a just few.”
Well, maybe it’s no longer “just a few,” so does that make me any better or worse an agent for continuing to write things like the following?
I had a listing two weeks ago that brought out the worst in agents.
I could write a whole blog post on this, with forty different phone calls that would make your head spin, but that would really be Realtor-bashing.
So let me give you just one example.
Just listen to how this one phone call went.
Agent: “I wanted to ask you a few questions about your property.”
Me: “No problem.”
Agent: “Is there an offer date?”
Me: “It’s on the listing.”
Agent: “Do the sellers have a desired closing date?”
Me: “It’s on the listing.”
Agent: “Does the maintenance fee include utilities?”
Me: “It’s on the listing.”
Agent: “Is there a gym in this building?”
Me: “It’s on the listing.”
Agent: “If we do bring an offer, what address should I email it to?”
Me: “It’s on the listing.”
Call me a jerk if you want; tell me I was being unhelpful.
But come on! I have no time for this crap.
All that agent had to do was pick up a copy of the MLS listing that’s sitting on his or her desk, and read it!
I’ve never seen such poor worth ethic, and such laziness and sloppiness.
The bar is just so low right now, and more and more people are getting into the business. My buddy went to get fitted for his wedding suit the other day, and the girl said, “Oh cool, you’re in real estate? I’m doing my phase-two exam this weekend!”
What I’ve seen so far in 2017 is pathetic, and it’s making the experienced agents band together. I won in multiple offers a couple weeks ago when the listing agent told me, “It’s so great to see a familiar face,” and told me I wasn’t the highest offer, but to come up in price, as the highest offer was somebody with 18 mistakes in their offer, no cheque, and from a brokerage that’s been operating for nine weeks.
Well there you have it, folks!
Some random thoughts, from a pretty scattered week.
We’re starting to see inventory pick up in the single-family housing market though, and that’s exciting. Things should slow down again the week before the Easter long weekend, but then it’s smooth sailing until the end of June.
Any guesses on the average home price increase in March after we saw a 27.7% increase in February? I’m thinking it’ll top 30%. We’ll know in about 8-9 days.
Have a great weekend, everybody!