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ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

March 11, 2016 | The hots

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

 

“I hate your blog,” Evelyn writes. “No, I hate you. Hate your advice.  Your arrogant responses to people. I even hate your stupid dog pictures.”

And what brings on this torrent of Garth abuse? Guess.

“My husband reads your stupid, pathetic, loser blog every day and insists on telling me about it every night when we go to bed. Are u serious? All I hear is this stuff about not buying a house, which we aren’t while everybody I know is, and making tons of money. I hope your dog bites you someplace painful so you will retire, or die.”

And I thought politics was a tough gig…

Well, turns out sweet Ev lives in Mississauga, in a rented townhome near the Marilyn Munro condo towers (Google it), and despite the fact she and her lucky (to still be alive) husband have only $70,000 between them, she’s convinced they should own. And that I must perish.

By the way, Mississauga’s a honking big place these days – about 750,000 souls living in the 6th biggest and 1st most boring Canadian city. Last month 777 properties changed hands, which was a disastrous 29% decline from last year. (The realtors have never mentioned this officially, by the way.) But because the number of listings has also plunged, prices have risen – up 9.6% in the last twelve months, to an average of $568,671 (which includes lots of condos and towns). In short, some people (including the poor, mal-informed Globe) think the place is smokin’, when in fact it may have hit a wall.

Anyway, Evelyn baby, this post is for you. I call it, “How to Buy a Property in a Hot Market when you are Surrounded by other Horny, Irrational and Delusional Fools.”

Rule 1: Get an agent.
Sure, you can shop realtor.ca every 15 minutes, then call the listing agent when a new place comes up, get him or her to write  an offer and present it, but this is a bad idea, on so many levels. First, agents see listings before you do, or before they’re published. Second, the listing agent doesn’t work for you. Even if you sign a BRA to that effect, it’ll never truly be the case. Third, you have no idea if your offer is communicated correctly to the sellers or if you’re just cannon fodder in a bidding war the agent’s trying to arrange. In short, get your own guy. It costs nothing.

Rule 2: Be first
This alone is reason enough to have an agent who can alert you to the hot, steamy stuff just hitting the market. When a seller isn’t holding back offers for a certain day (hateful practice) getting your bid in first and initiating the sign-back process can tie up the property, shut out competitors and give you the best chance of success (and paying less).

Rule 3: No conditions
In a hot market, swarming with hollow-eyed Millennials cranked up on massive pre-approvals and weed, forget making a conditional offer. You cannot ask for time to arrange financing, to inspect the house or (God forbid) sell another property. If you need to know the roof is shot or the basement leaks, get an inspector in before you bid. Have the financing arranged in advance. Make sure you possess the funds for a certified cheque once the offer’s accepted. Yes, this exposes you to unlimited upside risk, especially if the vendor has concealed structural flaws and not signed a property disclosure statement. But, you asked for it.

Rule 4: Give them what they want.
Sellers are mostly motivated by price, because they’re greedy little weasels, but other factors may assist you in a successful offer. Like closing. Find out in advance what the vendor wants – to get out fast (before the termites wake up and finish eating the deck), or to hang around for months while they find new digs. Try to be cooperative and accommodating, maybe even offering to let the seller lease the place back for a while, agreeing to her silly exclusions or even (if necessary) flattering her about her decor or irritating children.

Rule 5: Big deposit
Money talks. If you offer more than the usual 5% deposit (which realtors want to cover commissions), your offer stands a better chance of being taken seriously when several sit on the kitchen table. In places like Toronto these days agents will routinely ask for a certified cheque for $100,000 to accompany an offer on any house over a million. Try not to throw up on it.

Rule 6: Connect
Sometimes this works, sometimes not. But it costs nothing, so give it a shot. Research the seller, find an email addy and send your reasons for wanting the house (Tip – avoid words like ‘horny’, ‘desperate’ and ‘will kill you’). Or, pen a letter and put it in the door, under a wiper, or in their hand after you march up and intro yourself. You might luck out and find someone as emotionally unstable as you!

Rule 7: Don’t blame me for what happens.

So, Evelyn, have hubs to read this to you in bed tonight. Guaranteed results.

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March 11th, 2016

Posted In: The Greater Fool

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