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Archive for April, 2012

“We Buy Houses for Cash” exposed

Monday, April 23rd, 2012

You see the signs driving around town, “We Buy Houses for Cash” or some such variation, on the side of the road, or maybe on the window of a car. Some signs are makeshift others are professionaly done.

Every wonder what this is all about?

There are many ways to make money in real estate, one such method is to actively seek out people in need of cash now who are willing to sell their home for sixty cents on the dollar. The fist thing that comes to mind is who in their right mind would give their house away essentially and what kind of a person would do that to soneone else?

Ah, before you start casting stones lets look into this strategy a little closer to see if there is any validity or merit to it.

Obviously someone is making money otherwise the signs would come and go and that would be the end of it.

Now with every transaction in real estate there are two sides to the deal the buyer and the seller,

Fair market value is determined by what a reasonably informed buyer and a resonably informed seller agree to pay and accept as a selling price. This is influenced by supply & demand as well as access to financing and other factors.

So let’s play this out shall we. Say we take an owner of a house that has had a streak of bad luck and hasn’t been making payments on his mortgage with little hope that things are going to change regarding his ability to start making payments. If he continues to miss mortgage payments he will not only loose his house but his credit will be badly harmed making financing for future deals either impossible or very difficult.

This fellow calls a “we buy houses for cash” buyer and finds out that the buyer will buy the house for what amounts to much less than fair market value but in addition will pay the lender any missed payments so that there are no longer any arrears. By agreeing to sell his place for much lower than market value he saves his credit from being badly harmed by a foreclosure and he is able to walk away with more of the equity, if any, than he most likely would have had the bank foreclosed on him. Don’t forget once the bank gets involved there are lawyer costs, selling fees and more that get paid out before the owner sees anything. Plus the bank is primarily concerned with getting the amount owing not with protecting the owners equity. 

Additionally, some of these buyers will place the owner into a rent to own property that is more affordable with the option to purchase the property when things do turn around for the owner now tenant.

So here is my viewpoint on this type of transaction. I think there might be a time and a place for this if and it is a big if, the owner has left things go to the last minute and the bailiff is coming to kick him out the next morning for example. Otherwise the owner is likely much better served by using other means such as a clean sale at fair market value.

If you have been thinking of calling a “We Buy Houses for Cash” number you would do best to seek advice from a lawyer or even a REALTOR® you trust to find out if there are better options available to you. Don’t leave it up to the buyer to determine if this is the best option for you as they obviously have a vested interest in getting your place for less.

I hope this sheds some light on another reason seeking professional advise can save you a lot of time, money and hassle.

Sincerely,

Kevin Grenier REALTOR®, ABR® SRS® (Accredited Buyer’s Realtor, Seller’s Representative Specialist)

780-893-0269

P.S. make sure you “like” my Facebook page http://on.fb.me/BuySmartSellSmartwithKevinGrenierRealtor

This e-mail is not intended to solicit anyone who is contractually represented by another REALTOR®

 

How Much Does a Survey Cost When Selling a House?

Monday, April 16th, 2012

A survey or real property report is often required to sell a property. The standard AREA® (Alberta Real Estate Association) purchase contract allows for the seller to provide one including compliance or non-conformance from the local municipality.

If the seller has a copy of the survey from when they purchased the house and it reflects the current state of the property including location of any structures, fences, pergolas, etc. then the seller’s lawyer will typically have the seller sign an affidavit

Market Update from the Realtor’s Assocation of Edmonton – April 2nd, 2012

Wednesday, April 4th, 2012
Very Large Single-family Home

Very Large Single-family Home (Photo credit: Wikipedia)

The following is the monthly press release from the Realtor’s Association of Edmonton in its entirety. If you have any questions on this or would like further detailed statistics, information or analysis, contact me at www.kevingrenier.com

Housing sales and prices stable at the end of the first quarter – REALTORS®

Edmonton, April 2, 2012: At the end of the first quarter, the REALTORS® Association of Edmonton reports that the average residential price in the Edmonton area is up 2.2% when compared to a year ago. The all-residential average1 price, at $335,187 compared to $328,094 in March of last year. Single family detached (SFD) and condominium average prices were stable year-over-year with SFD prices up 0.2% and condos down 0.7%. 

“Other markets, such as Toronto, are reporting feverish real estate activity involving multiple offers and unconditional offers but our market is calm, orderly and slowly evolving,” said REALTORS® Association of Edmonton President Doug Singleton. “Listing activity is up when compared to last year but sales and inventory are down which could indicate that market activity will pick up markedly as the summer progresses.”

On the Multiple Listing Service® System, sales and listings by REALTORS® in March were up, with 3,271 residential listings (up 23.5% from February) and sales of 1,533 (up 24.5% from the previous month). As a result, the inventory of residential properties available for sale was up 14.6% at 6,851 properties. At the current sales level, there are four and half months of inventory available. In total, there are 10,640 properties of all types (commercial, rural and residential) on the Edmonton and Area Multiple Listing Service®.

Market stability is reflected in the sales-to-listing ratio which is unchanged from month-to-month. The average days-on-market dropped in March by one day from 54 to 53 and residential properties are selling at about the same pace as this time last year on a year-to-date basis (46%).

In March, the average price of a single family detached home was $380,083, up 1.3% from the previous month. The average price of a condominium in March was $231,629, down 1.4% from the February price (last month the price of condos advanced over 8% in a month). Duplex and rowhouse properties sold on average for $319,020; a 4.1% improvement from the previous month.

“April is the start of the real estate season when people who want to buy and sell real estate are most active,” said Singleton. “There is speculation that mortgage rates will start to rise which makes it more difficult for first time buyers. However, there is lots of choice in our market with new properties coming available daily. Whatever your housing situation you can trust the advice of your local REALTOR® who is here when life happens.”

Activity (for all residential sales on Edmonton MLS® System)

2 Residential includes SFD, condos and duplex/row houses
3 Single Family Dwelling
4 The middle figure in a list of all sales prices
5 Includes residential, rural and commercial sales

* Average prices indicate market trends only. They do not reflect actual changes for a particular property, which may vary from house to house and area to area. Prior period figures have been adjusted to include late reported sales and cancellations and therefore reflect a more accurate view of the period than previously reported at month end.

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The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the REALTORS® Association of Edmonton. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.