In recent years, the failure to obtain proper permits has become a much bigger deal, and in fact, a point of contention that has caused many residential sale transactions to collapse at the last minute. In instances where the transaction can be salvaged (the seller agrees to obtain and close the required permits and the buyer agrees to complete the purchase), it often involves lots of “jumping through hoops” for homeowners and real estate agents. Occasionally, these hoops are hard, if not impossible to clear in a short period of time.

Let’s not debate whether the government has a place in regulating what we do with our private property. As a real estate agent, I’m likely at least as geeked up about your property rights as you are. Insisting that the government has no place to tell you what to do and refusing to play by the rules may be an example of “cutting off your nose to spite your face” when it comes to the resale value of your home.

Building codes are intended to ensure safe construction standards are met to protect occupants from structural failures, potential fire hazards and electrical shock. When a Saskatoon home owner, or a contractor acting on behalf of a home owner obtains a permit for home improvements they commit to completing the work in accordance with current building codes. Ultimately, they allow access to a qualified inspector who inspects the work and verifies that the improvements meet the code. Where deficiencies exist, the inspector will require adequate repairs before the permit can be closed.

When a potential home buyer discovers that improvements were completed in your home without the required permits, they lose the assurances that the work was done correctly and safely. Even if the buyer is comfortable moving forward on that basis, a lender may refuse to provide financing, or an insurer may refuse to insure the home. On the other hand, if the proper permits were obtained everyone who has an interest in the purchase can have some reasonable measure of confidence that the improvements are durable, valuable, and most importantly, safe. Simply put, your home improvements add more value to your property when they are completed with a permit.

More and more, home buyers who discover missing permits after entering into a conditional purchase agreement are insisting that the proper permits be obtained and closed by the seller before the purchase is completed. In most cases, this is completely possible but it is almost always far more difficult and costly to do after the fact. It’s not something that you want to be doing when you’re trying to coordinate a move.

In a short series of future posts we’ll talk about which home improvements require a permit and how home buyers might discover that your home improvements were completed without one.

Mean time, here’s some building permit information from the City of Saskatoon and some electrical/gas permit information from SaskPower.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Norm Fisher
Royal LePage Saskatoon Real Estate

One of the changes requires that buyers qualify for their high-ratio mortgage based on the “five-year fixed rate” even if their mortgage payments are actually calculated on an available lower rate. In other words, the lender must calculate and evaluate your debt service ratios as if you were taking a five-year fixed.

For the most part, the changes were met with a “no big deal” kind of attitude but not long after the announcement questions began to surface about which five-year fixed rate would prevail for the purpose of “qualification.” After all, RBC’s posted five-year fixed rate is 5.39% today, while some brokers have offers for the same term available as low as 3.59%.

CanadianMortgageTrends.com is reporting today that the “chartered bank 5-year posted rate” which is currently at 5.39% will be the benchmark lenders use to determine how much house a buyer can afford.

So how might that impact the Saskatoon real estate market?

Let’s assume that you have a household income of $75,000. Let’s also assume that property taxes and/or condo fees will set you back $2,400, and that you’d like to pay this puppy off within 25 years. Mortgage calculators, enthusiastic lenders and motivated real estate agents would suggest that you could afford to service debt of $356,109. Now, bump that rate up to 5.39% and suddenly you can only afford $296,279. Any buyer who is pushing the limits of their debt service ratio at brokerage level rates must seriously adjust their expectations, if they don’t just happen to be borderline enough to fall out the bottom end of the market.

Oh, by the way. If you’ve been thinking about taking a 35-year mortgage, the same assumptions outlined above result in a $90,000 trim to the housing budget.

This suddenly sounds like a tough pill to swallow if you ask me.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Other tidbits from the Saskatoon section of the report include the following:

• While sales are still off of last year’s numbers average prices continue to edge up.
• Balanced conditions characterize the market overall.
• Rising demand could create a “tightening of supply” in the single-family home inventory.
• Multiple offers have re-emerged in prime “hot pocket neighbourhoods” but remain the exception.
• First time buyers account for the “lion’s share” of activity.
• A “good selection” of condominiums still exists.
• Buyers remain cautious, as do developers
• Speculation is virtually “non-existent” in the Saskatoon market.

The report provides market opinions provided by Remax brokers in 16 major Canadian markets including Remax Saskatoon. Read the full report here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

The following chart shows the changes in affordability levels in some of Canada’s most active real estate markets over the past five surveys. Click the image for a larger view.

I was a bit surprised to see that affordability at a national level really hasn’t changed significantly in the past five years. Canada’s “median multiple” comes in at 3.7 years, up from the lows of 3.1 in Q3/2007 but just slightly higher than the 3.6 years in Q3/2005.

Vancouver “wins the gold medal” as the most severely unaffordable housing market in the world requiring 9.3 times to median household income, an increase of almost a year in just twelve months time.

See the entire Demographia survey for 2010 and past reports for 2009, 2008, 2007, 2006.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

While most areas produced six-month rolling averages that exceeded the overall averages for the year, indicating that the current trend is upward, the majority of neighbourhoods experienced some decreases through 2009. More often than not declines were in the 3%-10% range.

Exhibition, Hudson Bay Park, Kelsey-Woodlawn, Meadowgreen and North Park all bucked the general trend to record small increases in the average selling price of a house.

A few areas saw declines in the average house price that were out of step with the rest of the city. In Greystone Heights the average selling price of a single-family home dropped $55,000, and the median sale price dropped $53,000. Lakeview saw it’s average drop the most in real dollars by $81,261, while the median price for the area moved down $50,000. Montgomery Place saw a $60,000 drop in the average and a $63,000 drop in the median. Nutana’s average came down significantly falling $80,000, but the median price for the area moved just $10K. Briarwood, Avalon and Erindale also saw average house price declines that were higher than average at $69,445, $63,914 and $48,971 respectively.

This year’s biggest surprise may be Stonebridge, an area that our more bearish readers wrote off as hopeless, bound to become an open range of rickety shacks with garbage and tumbleweeds everywhere. Sorry folks. The average price in Stonebridge declined less than $11,000 over the year as a ten-month supply of inventory nearly vanished.

In the stupid prizes categories, Lakewood condos win for coming closest to the overall condo average in Saskatoon while Holliston wins for most closely following the average Saskatoon house price over the last ten years.

See what happened in your neighbourhood here. While you’re there, please jot us a short note about your area in the comments section of the page.

The same details for Saskatoon can be found here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

While in the thick of a recession, the strongest countervailing force that set the stage for the mother of all rebounds, apart from lower prices, was lower interest rates.

All said, the housing market has gone beyond retracing its steps and fully recovering from the end of 2007 – which had marked the peak of a half-decade long boom, concentrated in Western Canada…As of October, both sales and the average price stood 5% higher than their respective 2007 peak…But now that home values are already past their previous peak in such short order, we estimate that the typical home remains overvalued by 12% at the national level. Unfortunately, sheer momentum suggests that this overvaluation is likely to increase over the course of the next few quarters, peaking at 13-15% in H1/2010.

The misalignment of home prices with their fundamental drivers, such as demographics and income, cannot last. That much is known…Because a necessary realignment has been erased so quickly without support from income growth, another adjustment must take place – although it could take many forms. As of our writing this note, early signs of market cooling are emerging and our analysis still suggests the most likely outcome is a soft landing and relative stagnation of home values in real-terms along with a resumption of stronger income growth over the 2011-13 time frame.

As the central bank begins to hint at a tightening monetary policy cycle in the second half of next year, sales could well see a last gasp of strength. Moreover, by that time, the availability of units on the supply side should provide a relief valve helping to cool price growth. And, by 2011, while the overall economy will have improved significantly, housing markets will be losing momentum.

While current price levels are above what we estimate to be long run fundamental values, they do not appear so dramatically out of line as to warrant a sharp correction in the near-term…As for price momentum, it is more clearly unsustainable…Recall that every price increase that is not matched by a commensurate income gain increases the overvaluation gap. Second, more supply should come online in the first half of 2010 in the form of new home and condo completions.

The current market tightness, as measured by the sales-to-listings ratio (limited inventory), while expected to ease gradually over the course of 2010, will not turn on a dime. As a consequence, it will be supportive of price growth in 2010 that is stronger than fundamentals can support over the long haul. After climbing by an estimated 4-5% on an annual basis this year, the average existing home price is expected to gain another 9-10% in 2010 as sales climb to 475K.

In closing, we note that the most important downside risk to our near-term forecast is not that the market cools more than we anticipate. While this risk certainly exists, it would not cause significant market disruptions, and it would ensure that affordability does not continue to erode at the current pace. The risk is rather that the market remains as hot as it currently is for too long, eventually running head-on into monetary policy tightening (and longer term bond yields rising). There is more than adequate time for the housing market to cool before then, but history suggests that if it fails to do so, the ensuing adjustment would be a rude awakening.

Thanks to Larry Yatkowsky of Vancouver’s Yatter Matters for the heads up on this report. See Larry’s overview, “Green Chair Talks.”

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

I first signed up to use this “social media” tool a little more than a year ago. I think I gave it a fair shot (96 tweets and a lot of listening) but it just doesn’t seem to work for me. I’m not that comfortable sharing the minor details of my life with others.

On the other hand, I am kinda crazy about sharing real estate stuff with those who are into it. If you’re into that, and you’re into Twitter, well, you might want to check out my Twitter stream here.

You probably won’t find out where I am, or what I had for dinner, but if you were checkin’ it out you’d know how many Saskatoon homes sold today, and what the average selling price was. You’d know that a property sold above a million bucks yesterday, and that another one picked up a sold sign today at just shy of a million. Heck, you’d even already know the average selling price of a Saskatoon home for March 2009.

So, hit me up on Twitter, won’t ya?

I’m over here, by myself, at the moment. ☺

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @Norm_Fisher.

Norm Fisher
Royal LePage Saskatoon Real Estate

No matter how you view the Frontier Centre for Public Policy’s International Housing Affordability Survey, you’d be hard pressed to make a convincing argument that housing affordability hasn’t suffered a serious blow in Saskatoon over the past couple of years. In fact, you’d have to be a fool to even try. When the average selling price of a home nearly doubles in two years time you’re going to see some pretty serious deterioration in affordability. Most of us didn’t need an “international study” to tell us that the cost of home ownership has skyrocketed here but some might be a bit surprised to learn that no other city in Canada has seen affordability deteriorate to the same extent as Saskatoon. According to the study, Saskatoon is now among the ranks of the “seriously unaffordable.”

I suppose the greatest value of this kind of study, if you feel you can trust the methodology and actual statistics, is that it provides a bit of a benchmark as to how we’re doing locally compared to other markets around the world. The Demographia study looks at 265 housing markets and determines housing affordability for each assigning a “median multiplier” as its affordability measure. The “median multiplier” shows you how many years of median household income it takes to buy a home priced at the median in each market.  We’re not quite sure which median income measure was used, or how a “house” is actually defined, but let’s assume that these measures are consistent from one survey to the next and see how things have changed in relation to some other Canadian markets. Here’s a quick look at the changes over the last three survey periods.

Recent price declines would suggest that Saskatoon might have already bottomed out as far as affordability is concerned, at least for now. I haven’t been able to make sense of the “median price” that the Demographia study has used for Saskatoon, but I can say with certainty that the median price of a Saskatoon house has been $21,250 lower over the past 90 days compared to the third quarter of 2008, the period that is measured for the study. It’s down $38,000 from its peak in Q2 when the median price of a Saskatoon house hit $315,000. Things are starting to look up for affordability. With any luck, we’ll be back in the “moderately unaffordable” category soon, and even that has a nice ring to it right now.

See the latest Demographia Affordability Study here
A copy of the 2008 study is here (data from Q3/07)
A copy of the 2007 study is here (data from Q3/06)
See the Star Phoenix story on this study here
And another Star Phoenix story here

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Norm Fisher
Royal LePage Saskatoon Real Estate

Good idea Ben! It would be foolhardy to encourage a second mortgage crisis while you’re busy dealing with the first one.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Here’s what I learned.

At the close of business today, there are 666 active property listings in the residential category (I know, kind of spooky).

225 of those properties are vacant.

Tenants occupy another 130 of these listings.

A closer look at the vacant property listings reveals the following.

93 are condos.

104 are single-family homes.

The balances are semi-detached homes, duplexes, mobile homes, vacant lots and other properties that have not been categorized for reasons unknown to me.

94 of the vacant homes are new, or near new.

57 of the new or near new homes appear to be owned by builders. Some are still under construction.

Individuals own 37 of the new or near new homes.

Of the 225 vacant listings, 93 are condominiums.

21 of these vacant condominiums are new, or near new.

10 are in the Rumley building representing additions to the housing stock.

About two-thirds of the remaining 62 are conversion units.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

“Regionally, prices again rose at the fastest pace in Saskatoon, which led the nation with an annual price increase of 45.1%. On a month-over-month basis, housing prices rose 1.0% between November and December in Saskatoon. A number of factors were behind the gain, including increased costs for concrete and drywall, as well as higher land development costs reported by some builders,” says the Statscan report.

Windsor, where the cost to build a new home decreased by 1.1% from December 2006 was the only Canadian market to experience a decline over the last year.

Price increases across Canada came in as follows:

Regina – 25.9%

Calgary – 6%

Edmonton – 21.5%

Winnipeg – 15%

Vancouver – 6.4%

Victoria – 1.6%

Toronto – 3.4%

Thunder Bay – 5.9%

London – 3.1%

Hamilton – 2.8%

St. Catherines-Niagara – .3%

Montreal – 4.1%

Halifax – 10.4%

St. John’s – 7.9%

Thanks to Jedi who posted this link to the CBC coverage.

Thanks also to St. John’s blogger Stephen Winters for sending me this link to the Globe’s coverage.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Over the past several months a number of my past clients have asked me about real estate opportunities in the U.S. The rising dollar, combined with reduced prices in some beautiful U.S. cities has many Canadians considering a purchase in their favorite vacation spot. A friend of mine from Phoenix recently asked if he could share some information about buying property south of the border, so I jumped at the opportunity to have him as my guest. I’d like you to meet Jonathan Dalton, and his partner, Toby. J

Greetings from Phoenix!

I’m Jonathan Dalton from RE/MAX Desert Showcase and Dalton’s Arizona Homes Blog. Norm was nice enough to let me drop in and talk directly to you folks and I’m quite appreciative. As I write we’re in the middle of a cold snap – it’s down to 53 degrees here, which translates to somewhere around 12 Celsius. But that sounds much colder than it should so I’m going to stick to 53.

One of the big stories of real estate down here in the Valley of the Sun is the surge in Canadians looking to purchase second homes here, usually for themselves and sometimes as seasonal rentals (even though the high season is the same time of year someone from the land of snow probably would rather be here.) I’ve spent most of the last six months acquainting folks from Alberta and Saskatchewan with the Phoenix area and some of the particulars of buying homes down here.

There seem to be a lot of seminars up there telling people what they need to know about buying in the United States, though it seems like the seminars really work out best for the hosts collecting the checks at the door. The basic information’s good but there’s a lot of small stuff you ought to know before you buy in the United States and the Phoenix area in particular.

With any luck (and possibly a bribe or two) Norm will let me write about these in a little more depth sometime. But here are some basic things you should know:

1) The Phoenix real estate market is big. It’s really big. From Surprise in the northwest to Queen Creek in the southeast is somewhere around 65 miles one way. It’s hard narrowing down the search so …

2) Know what you like to do. If you’re into golf (which we do year-round here), golf is everywhere. If you want to watch hockey, come to the West Valley. If you like off-Broadway productions stay closer to Arizona State University in Tempe. What you like to do will impact where you ought to look.

3) Speaking of such things, Queen Creek is in a different county than Phoenix. We’re in Maricopa. Queen Creek is in Pinal. Property taxes are far higher in Pinal County than in Maricopa. The local paper ran an article about Canadians buying in Florence which is even further south than Queen Creek. Not sure if the sales agent ever mentioned taxes.

4) And on that note, don’t go into a new build without representation. Agents at new builds will tell you what they have to tell you but not necessarily everything that you might need to know.

5) Lastly, financing isn’t nearly as complicated as it seems … if you find a lender who knows what they’re doing with Canadian buyers.

Timing is an interesting concept from what I’ve seen with my clients. Not only are you guessing the direction of the local market but you’re also gambling on the currency exchange. A small decline in the Phoenix real estate market actually could be less costly than a drop in the loony. With our dollars at parity, that seems to be the main reason folks are looking more than normal.

I’ve got a penchant for rambling as you’ll discover if you visit my blog so I’ll wrap this up here. Hopefully I didn’t wear out my welcome and I’ll be back again. Thanks much for allowing me to interrupt and I now return you to Saskatchewan real estate news already in progress.

It’s no surprise to anyone that rents have increased accordingly. According to CMHC, the average monthly rent for all types of suites surveyed saw a $76 increase from October of last year. I’m not involved in the rental markets but my perception is that rents are increasing at a much higher rate than what’s reported here.

CMHC points to a number of factors which are impacting vacancy rates including expanding employment and wages, in-migration, rapid price escalation of new and resale housing (affordability), rehabilitation of existing apartments leading to lower turn-over, and of course, increased numbers of condo conversions.

Analysts at CMHC expect vacancy rates to stabilize at less than 2% through 2008 while rents increase an additional $60.

Read to full Rental Market Report here

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Edmonton builder, Coventry Homes is lobbing out an offer which I’ve never seen before – “…buy one of Coventry’s feature semi-detached or single-family show homes and you’ll get a 2008 City Golf at no additional cost.”

Is now a good time to buy an Edmonton home? Ask Sheldon or Sara. They seem to really know their market.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Elliot notes that massive spending in Saskatchewan is based partly on economic reality to the extent that employment and incomes in the province have increased, but he adds that a variety of psychological factors that are hard to quantify have been encouraging people to spend more money, raising concerns that the level of consumer debt is increasing while savings are decreasing.

One of those factors is related to increasing property values which tend to “make homeowners feel richer and thus more inclined to spend,” says Elliot.

Read also: Your Saskatoon home is not your second income

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

]]> http://teamfisher.com/consumer-spending-about-to-peak-in-saskatchewan-elliot/feed/ 103 http://teamfisher.com/saskatoon-real-estate-sales-top-1-billion-dollars/ http://teamfisher.com/saskatoon-real-estate-sales-top-1-billion-dollars/#comments Thu, 06 Sep 2007 04:04:15 +0000 Norm Fisher http://normfisher.ca/?p=338 One bee-lee-yun dollars!

The Saskatoon Region Association of REALTORS® announced today that Saskatoon real estate agents have reported sales in excess of one billion dollars so far in 2007. The figure includes transactions in all real estate categories and a full $754,735,000 can be directly attributed to residential activity. It is particularly remarkable that August would close with such a strong number given the fact that we have never managed to sell one billion dollars worth of real estate in any one year.

Read the story in today’s Star Phoenix and let me know what you think.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

This first category compares units which would be classified as homes, both detached houses and condominiums. The selling price of Saskatoon homes shows an increase of 44% in May, over the previous May with the largest gains being shown in Area 2 and Area 5, up 64% and 65% respectively.

The average selling prices of Saskatoon houses jumped 37% in May to an all time high of just over $240,089 from $174,797 for the same period last year. Again, Area 2 and Area 5 record the greatest gains at 62% and 61% respectively.

Saskatoon condos saw huge increases with the average selling price rising to $210,236 in May, 2007 up a whopping 75% over the average in May, 2006. Once again, Area 2 and Area 5 pull the prize for the largest increases at 81% and 94% respectively.

So why such a significant difference in the price gains when comparing condos to houses? Why do Areas 2 and 5 show greater gains when compared to the rest of the city? I think it all boils down to demand and there’s no question that Saskatoon condos have been a prime target for those wishing to build a bit of an investment real estate portfolio. Affordability is also a major factor for both investors and first time buyers who may be scrambling to grab a little piece of Saskatoon for fear of being priced right out of the market. For those wanting to purchase an east-side home, Area 2 is more affordable than Area 1 and consequently there are more buyers who can afford to live in Area 2, and fewer buyers who can reach the lofty average of $285,000 which Area 1 homes are fetching. For those who find Area 2 a bit of a stretch on the housing budget, Area 5 provides a solid alternative for a family home.

It seems unlikely to me that the disparity between house prices and condo prices can’t continue for the long term. I expect that we may begin to see condo price growth level out some while detached houses play catch up. In the coming months we are likely to see the condo supply increase and some of the apartment buildings which have been purchased with “condo conversions” in mind will find their way back onto the market as single condominium units.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Is this a big deal? Most buyers and sellers aren’t likely to feel much of a change when they’re out there doing business. You can continue to expect to find competitive bidding on homes which are priced realistically. However, it is encouraging to know that active listings are now about thirty percent higher than they were at the lowest point. Over the past two weeks there have been more new listings than there were homes sold. I wouldn’t expect to see prices come down anytime soon but as we make our way towards 400 Saskatoon homes for sale, and hopefully we’ll continue to move in this direction, we might expect to see the pace of increases slow.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

For a seller, the obvious allure of an unconditional offer is the certainty which it immediately provides. In the past, unconditional offers were typically made in rare instances when the buyer has the resources to finance the purchase themselves and does not require anyone’s approval. Today, we see many buyers submitting offers which contain no “subject to mortgage approval” clause in spite of the fact that they will clearly require a mortgage approval to complete the purchase of your home.

In this particular market, unconditional offers are being made in an effort to create an advantage for buyers when they are competing with other offers. It’s a gutsy move on the buyer’s part. Sellers should be aware that in most cases there are limited benefits to them in taking this kind of offer seriously. In fact, you may be accepting more risk than you ever imagined. You need to understand that at the end of the day, you still have a sale which is conditional upon the buyer receiving a mortgage approval. If a lender won’t lend the buyer the funds they won’t be buying your home. It really is that simple.

When a buyer appropriately includes the “subject to mortgage approval” clause there’s a short term “out” for the seller. If the buyer is unable to obtain financing you can move forward with your selling effort, normally within a short period of time. In this particular market you can likely expect your home to attract a level of interest which is similar to what you experience the first time it was offered for sale. The risk of accepting a finance condition is pretty limited and almost inconsequential.

Consider this; a buyer offers to purchase your home without a mortgage condition in spite of the fact that they’ll require mortgage approval. They provide a ten thousand dollar deposit. You’re happy.

The buyer then proceeds to see his lender and based on some change in his financial situation, or something which he failed to disclose to the lender during his initial “pre-approval” process he is rejected by the lender.

The buyer is distraught realizing that’s he has likely made a move which will ultimately cost him $10,000. He’s not ready to give up and decides that he is going to try to arrange financing some other way. Whether he chooses to tell you about his misfortune today, or 60 days down the road, the same $10,000 is at stake, so there is little incentive which might cause him to come forward so you can deal with a collapsed sale and move forward with your plans.

Meantime, possession date on the home which you’ve purchased draws near. Perhaps you’ve obtained bridge financing which would allow you to possess both homes for a short period of time so that you can move directly from one house to the other. As soon as the sale on your first home completes you’ll pay the lender out of the proceeds. Trouble is, your sale doesn’t close and suddenly you own two homes, and two mortgages. Ouch!

Now, you might say, “At least I’ve got the $10,000 deposit. That will be helpful in dealing with this mess.” Yes, if the buyer should agree to surrender that money you’ll probably be able to find your way out of it. You should be aware however that there is a provision in the Real Estate Act which forbids a real estate brokerage from releasing a deposit which is “subject to dispute.” If the buyer objects to its release, the deposit is staying right where it is until the matter is settled.

Clearly, this would be a sleazy approach for a buyer to take and I believe that contracts which we use in Saskatchewan would ultimately entitle you to the deposit, but you might have to drag this bum to court to make that happen and that can be a lengthy, costly and onerous process. The buyer could try other sleazy tactics like filing an interest in your property with the Land Titles Office making it difficult for you to sell it to someone else. These tactics would be used as a way of strong-arming you into returning all or part of the deposit. I would say that the larger the deposit the more likely it is that a buyer will throw down the gloves and fight.

I know of one instance where a buyer changed their minds on a purchase after removing all conditions. They flew back home to England and they used the very tactics which I just described. The seller had to jump through all sorts of hoops to get their home back on the market and it has been difficult locating these people to serve them with a summons. The sale fell through over two years ago. The seller will have her day in court this May. The deposit was a mere $5,000 which clearly tells me that some people will do just about anything to try to save a buck.

Sellers beware!

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

The “2007 Royal LePage Female Buyers Report” was released this morning.   The report which marries findings from a national consumer poll with anecdotal research examines buying habits of Canadian women.  Among some of the findings, the report found that women are playing an increasingly significant role in the real estate market.  In fact, of single women who are not yet homeowners, 31 per cent say they will potentially purchase their next home within three years and 30 per cent already own.

With a cheque book firmly in one hand and a hammer confidently in the other single female homebuyers of all ages continue to knock down barriers by purchasing real estate and tackling home repairs. Currently, 30 per cent of single, never-before married women own their own home, while 45 per cent of divorced or separated women and 64 per cent of widowed women are homeowners, according to the Royal LePage Female Buyers Report released today.

Click here for the media release and access to the entire report.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Jay is well known as one of the most tech-savvy real estate agents in the world. His website is ranked number 1 out of close to 105,000 websites on the Point2 Performance Index. If you’re curious about the odds of that happening, it’s about 1 in 105,000. It’s an accomplishment to be proud of, and curious as I am, I couldn’t pass up the opportunity to pester him for a meeting once I heard he was coming to town. He graciously obliged me and in spite of the fact that he’d just been through one of the longest travel days of his life, including a three hour stop over in stormy Minnesota, only to arrive in stormy Saskatoon, Jay dragged his butt out of bed and met me for a 7:15 breakfast.

Most of what we discussed would be lost on my local readers, I’m sure. Internet marketing, search engine optimization, blogging, blah, blah, blah. It was largely shop talk which could only be appreciated by a couple of tech-geeks with a burning desire to dominate the Internet.

There was one thing that Jay said which was particularly relevant to the Saskatoon real estate market. I thought you should hear it.

After filling Jay in on the state of the Saskatoon market he said, “Wow! This sounds just like Phoenix a couple of years ago. Properties were selling within hours of hitting the market. Most listings attracted multiple offers and almost everything sold over the asking price, some by tens of thousands of dollars. Investors were pouring in from all over the country buying up real estate in hopes of making a big profit…and then suddenly, like someone turned off the tap, it was over.” (This is not exactly what Jay said. A note pad seemed over the top so I’m paraphrasing.) He went on to share how it “suddenly” seemed like everyone had a property to sell, nobody was buying and values started to decline. While things seem to be leveling out in Phoenix, a fair amount of equity was lost in 2006 and many of the out of state speculators have put their properties back on the market hoping to get out. Today, there are 37,000 active MLS® listings in Phoenix. That would be like Saskatoon having 2,000 properties for sale, instead of 200. It would certainly change the climate.

I remain convinced that Saskatoon is much closer to the beginning, than it is to the end of this rising market. Most of us realize that this won’t last forever but I must admit I hadn’t even considered that it could end “suddenly, like someone turned off the tap.” I’m only certain of two things; this fast paced market will eventually end and it will produce some casualties. It’s rare that an out of control real estate market makes a soft landing.

Proceed with caution.

Jay, thanks so much for meeting me this morning. It truly was one of the high points of my week. I appreciate the time and the ideas which you shared with me. Next time, let’s do it in Phoenix.

Cass poses a question in another post regarding the hot Saskatoon real estate market. By the time I finished my response I realized that I had written a whole new post so I brought it up front for the rest of you.

If any of my real estate friends have something to add I would really appreciate your input and I’m sure Cass would as well.

Cass said: My husband and I have put offers on 3 different houses and 2 were in bidding wars.  The last house we offered $7,000 over asking price and the house went for $26,000 over asking.  This house had a basement suite and the buyer came in and paid cash and is most likely using it as full revenue property.  This is the 2nd house we lost due to another buyer using it as revenue property.  Can you please give us some advice on how a young married couple with a baby on the way is supposed to compete in a market like this?  It tends to be very frustrating and discouraging when the houses in our price range are being scooped up by investors, as there isn’t too many decent houses on the east side for around the $200,000 mark.  We are fully aware and prepared to place an offer over asking, but how can you compete with someone paying cash?

Norm said: Cass, thanks for stopping. Cash sounds pretty impressive but when I’m reviewing offers it only goes so far with me. The seller is not normally very concerned with how the home is being financed.  However, cash offers do often come forward without any conditions attached and the thought of having a good offer completed right now is very attractive to most sellers. One of our sellers just accepted an unconditional offer which was $4,000 lower than the second best. They see some value in knowing that the sold sign goes up right now and that there aren’t going to be issues that have to be sorted out.

Perhaps you could see your mortgage person and tell them that you want to write your next offer without a finance condition. If that person can assure you that you’re good for $225,000 for instance there is probably little risk in eliminating that condition.

Request and review the Property Condition Disclosure up front. It’s always a good idea to ask your agent to “incorporate” the disclosure but if you view the statement prior to writing, you don’t need to include it as a condition.

The biggest gamble is the home inspection. Do you have the guts to write an offer that is not subject to an inspection?  It’s a tough call but the truth is that it’s rare that significant problems are found. Most commonly we see busted furnaces, grade issues, and other items which are relatively easy fixes. I don’t ever feel good about suggesting a buyer not have a property inspected, but the fact is this one is always a big concern for sellers, even those who are confident in their property. Do you have someone who could help you do a cursory inspection of a property prior to writing an offer? If you can’t get around this gamble, you might consider writing the home inspection condition in a different way which would allow you to back out if major problems are discovered but also provides the seller with assurance that you aren’t going to nickel and dime. “This offer is subject to a professional inspection of the property to determine structural integrity of the improvements. The buyer agrees that they shall have no right to rescind this offer for discovery of defects which do not exceed (insert amount here) in repair costs.”

Conditions like “satisfactory gas line inspection” or “review of local bylaws,” etc are bound to doom your offer. Do your homework in advance.

Scrape together as much money as you can for a deposit and show the seller your good faith. A $10,000 is a strong sign and it’s totally appropriate in this market.

Try writing the seller a personal note to include with your offer. Let them know who you are and how much you love their home. Tell them that you are very confident in the house (if you are) and how much you look forward to raising your family there. Ask them, “Is there anything else which we can do to have you favour our offer? We are open to discussing ways in which we can come to agreement. We really want to make your house our family’s home. We are available at a moment’s notice to address any concerns which you may have.”  Place the note in an envelope with the seller’s name on it and enclose it with the offer in another envelope.  Have your agent deliver it to the house when offers are presented. Go with him. Wait outside in the car. Be sure that the seller’s agent knows you are there; ready to deal with issues which concern the seller.

All other things being equal, most sellers would prefer to see their home go to a family instead of an investor. Try to use that to your advantage by giving the seller a little insight into who you are.

Good luck.  I really hope you get the next one.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

If you’ve been shopping in the Saskatoon real estate market for longer than a couple of months I don’t have to tell you that the rules have changed this year, and they’ve changed dramatically.

At the close of 2006, resale inventory had dropped to an all time low of around 250 active listings and while we’ve started to see more homes being listed for sale they are getting snapped at a pace which hasn’t allowed inventory levels to rebound at all. Today, the Saskatoon MLS® system shows 244 active house and condo listings across all price ranges and in all Saskatoon neighbourhoods. 60-70% of those properties probably have offers pending and the majority of what remains are the laggards which most prospective buyers have passed on for one reason or another.

New MLS® listings are attracting attention and viewings quite quickly and in many cases they’re generating multiple offers resulting in a bidding war. Last week, almost 25% of the homes which were reported sold on the Saskatoon MLS® showed sale prices which were above the asking price. The amount of overbids ranged from a low of $10 over list to a high of close to $30,000 above list price. The average overbid in most areas was less than $5,000.

Nobody wants to pay too much for a home. One might look to the aforementioned sale which went close to $30,000 above list and ask, “Are those buyers’ nuts?” I’m going to suggest that they just might be a little sharper than you think. See, these folks now own an interest in some Saskatoon real estate. While the other 37 buyers who viewed this home continue to struggle to find a place in the market, these buyers have locked in and any gains that the market experiences over the coming months will be theirs. If you believe that the market is going to continue to grow at its current pace, you might feel okay about paying a bit too much today in an effort to avoid paying much more tomorrow.

I’m not suggesting for a moment that a $30,000 overbid will be the prudent thing to do in most situations, but you will likely need to think beyond what the home is worth today if you truly want to be the successful buyer in a bidding war. Try to give some thought to where you think the market is going for homes in your price range. Will prices increase 10-20% over the next few months? How many opportunities will come up over the next few months? How might rising prices and limited inventory affect your ability to secure a suitable home at an affordable price if you miss out on this one? Is the property you’re considering under priced for today’s market (some are)? Ask your agent for his or her thoughts on what price the home will sell for when all of the offers are in.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

We’ve known for a number of years that many buyers are going for larger homes, so perhaps these top trends shouldn’t come as any real surprise.

CNN credits Mark Nash, author of Real Estate A-Z for Buying and Selling a Home who gathered this information in a recent survey which involved 923 real estate brokers, agents and industry experts were interviewed.

Here’s what Mr. Nash sees coming:

• Upscale garages – “Today’s owners want their garages decked out with cabinet and storage systems, matching refrigerators, air conditioning and residential looking flooring.”
• Personal Space – Nash calls it “caving” but the bottom line is personal space where people can find a little privacy to work or relax.
• Rejuvenation rooms – Spaces set up for exercise, meditation, yoga, saunas and steam showers.
• Heated patios – Expanding your living space to outdoor areas makes sense and there’s nothing like an outdoor fireplace or a natural gas heater to add a few weeks to both ends of the season.
• Snoring rooms – A “snoring room” is simply an additional bedroom off of the master bedroom.

My wife asked me what a snoring room is and I described at as a comfortable room which she could use to escape my snoring. She said she thought it is more likely to become a comfortable room which I could use to escape her elbows.

Topping the list of features which we can expect to see less of? Spiral staircases, bamboo and laminate flooring.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate