Buying / Selling
What Have I Done?
Last month, Anthony Wright sold his Mississauga townhouse for more than asking. He still feels badly about it.
Mr. Wright’s agent, Lynne Tham, listed his house on a Monday and accepted offers one week later. Six real estate agents came in and made an impassioned plea for their clients. Mr. Wright, a single father of three girls who deals with stressful sales situations in his professional life, was overwhelmed.
Most of the agents followed protocol and came alone. Except one, who had figured out that his client, a single mother of three, had some things in common with Mr. Wright.
“He actually brought the client in with him, which was so unusual,” says Ms. Tham. He hoped that his client might be able to persuade Mr. Wright to choose her offer.
How to invest in U.S. real estate
The financial crisis that began in 2007 with the breakdown of the U.S. residential mortgage market still persists for millions of Americans who have lost their houses, their jobs and all hope of a secure retirement.
As a result, residential real estate prices in the hardest-hit areas such as California, Arizona, Nevada and Florida are well below replacement value (i.e., the land is valued at zero), leading many analysts to conclude that prices must be near, if not already at, the bottom.
At the same time, the Canadian dollar remains very strong against the U.S. dollar. Any investment in U.S. assets is likely to provide a decent return over time based on foreign exchange gains alone.
Taken together, these facts seem to suggest that Canadians have a once-in-a-lifetime opportunity: To buy U.S. real estate in desirable locations at historically low prices using cheap U.S. dollars. Seems like a slam dunk, right? Maybe. But there are a number of factors to consider before pulling out your cheque book and booking a flight.
A January state of mind
Why do people list their houses and condos for sale in the depths of January?
One good reason is that they’re trying to sell on a busy street. Canny agents will advise listing such a property during the coldest time of the year because buyers are less likely to open the windows and hear the streetcar rumbling by or noise from cars whizzing along the highway.
Other catalysts include death and divorce, but if sellers have the option of waiting for better spring weather, they usually do. For the past several years, agents have been lamenting that more sellers don’t list in February when house hunters feel rejuvenated after the traditional market break during the holidays and can’t wait to get out and look again.
Do your homework before buying
When the U.S. real estate bubble burst, housing prices plummeted and foreclosures surged. It's still a buyer's market, particularly in Arizona and Florida, and Canadians are taking advantage of our strong dollar and shopping for real estate in these sun belt destinations.
A recent Leger Marketing Survey on behalf of BMO found that one in five Canadians would consider purchasing a home in the U.S.
"Canadians of all ages are buying property down south. Some are at retirement age but there is also the 30 to 40 crowd who are buying these houses as investment properties," says Matt Reid, founder of CanuckAbroad.com, a website helping Canadians relocate outside the country.
But buying your vacation getaway is more complicated than late-night TV commercials make it sound and can be fraught with unforeseen and sometimes expensive problems.
