Have you ever driven past one of those "I buy houses" signs and wondered what the deal is? Some offer a quick closing or no questions asked… it sounds too good to be true. 
The other day I got an email from a lawyer I deal with regularly who was looking for some insight into some of the rules governing listing a property on the MLS.
It seems his clients (the sellers) made an agreement (privately) with a “house buying outfit.” The kind of outfit you see advertising on those little signs. Apparently the deal is crashing because the buyer hasn’t gotten their financing. (Who would’ve thought someone advertising that they buy houses for cash would need financing?)
In the meantime these buyer’s who are having trouble getting financing have listed the home for sale, and they don’t even own it. The sellers agreed to allow showings to potential renters and/or buyers before the possession date. Now, you have to think to yourself, if these buyers think they can turn around and sell the home immediately for a profit, without doing any improvements, did you really get a good price for your home?
Typically these outfits will not approach properties listed with a REALTOR. This is because a lot of the things they may want to include in their offer may seem reasonable to the average unrepresented seller, but will raise red flags to the people who are true professionals in real estate industry. In other words, they have a better chance of getting away with stuff with private sellers than if a REALTOR is involved.
Some of the things they may ask for that can cost a seller big time are:
- Extended condition dates, designed to string the seller along and weaken their negotiating position so they can reduce the offer price as the seller becomes more desperate
- Unusual financing conditions or terms, such as seller financing with balloon payments that may initially look attractive but upon further investigation are clearly not in the seller’s best interest
- Re-marketing privileges with long possessions (such as in the above case). They may even want to have a REALTOR list the property on MLS to expand the property’s marketability before taking possession. They recognize the benefit of the MLS for getting the most exposure and money for the property!
Further evidence that usually something that seems too good to be true….often is!
Let me guess. The moral of the story is that one should always use a realtor, right?
Give it a rest.
It ain’t rocket science.
If they were smart they would have. It aint rocket science is correct but the real moral of the story is if you don’t know what your getting into then you should get advice. By the way getting a lawyers advice after the deal is already done is of no use what so ever. The deal is the deal.
The moral of the story is that one should always use a lawyer before a deal is done, right?
Sheldon,
You can’t support realtors…
These guys are calling you and telling that a duplex of 314/330 is a nice deal..just buy it…
and a few blocks down (34 st/23 ave) Ellerslie) the builders are selling for 300 ..brand new. What is this…are you talking about these guys that will save us from scams..
I’ve started to notice these “We Buy Houses” signs around town again too, which tells me the speculators and investors are seeing opportunity in this market. As far as Realtors go, it’s like any other profession, there are bad apples, but with the potential to make 100 grand/year without lots of post secondary education, there are many opportunity seekers and dreamers who try and make a go of it in this business. Some of them resort to less than ethical practices to make a quick buck. The Alberta Real Estate council publishes disciplinary action, such as license suspensions on their web site. Most of the suspensions have to do with misleading clients during a transaction, such as misrepresenting an interest in a property or failing to disclose information that would have made a difference in the client’s decision. Realtor’s are your best friend for thousands of reasons….$$$$$$$$$$$!!!!
Dee, good points. There are good and bad apples in every profession.
The problem with Realtors is that entry into the profession is too easy. No post-secondary needed and the training time required is only 4 months.
If a dentist chooses to be a bad apple, he will likely be kicked out in the first year of bad practice. And his 10+ years of post-secondary plus training will be wasted. So, typically, sane people won’t do that.
If a Realtor chooses to be a bad apple, even if he is kicked out after one year of bad practices, he has almost nothing to lose.
I would imagine that dealing with people who solicit house sales by advertising on scraps of wood place beside the road might not be a wise idea. Common sense.
About a good idea as buying shrimp from a guy in a pick-up truck parked on highway 28 by Redwater- and no, I’m not making that up.
I buy shrimp from the trucks parked on highway 2.
Only the best for my family!
are we discussing shrimp on real estate discussion blog?
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http://www.latimes.com/business/la-fi-homes14mar14,1,1380779.story
What this house would cost in Edmonton? Oh, no view of the mountains here? Oh, cold winter for how many months? Got to pay extra premium price here for what exactly?
What about Calgary? One surely can get the view of the mountains there. For what price?
Shrimp from the trucks parked on highway 2? Where’s the sea-side shrimp restaurant?
The Alberta RE deals seem to be too good to be true.
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BAD,
That home is driving distance from one of my companies offices.
If only work visa’s grew on tree’s…
BAD wrote:
“The Alberta RE deals seem to be too good to be true”.
And your other sarcastic comments on alberta.
If you do not like it here or you do not own a house here, nobody is forcing you to live here.
Bye now!
“And your other sarcastic comments on alberta.
If you do not like it here or you do not own a house here, nobody is forcing you to live here.
Bye now!
Posted by: house”
I’m pretty sure that he’s a Realtor from Arizona/California that is astro-turfing his foreclosure listings here
But you’re correct. Anyone that doesn’t own a home in Alberta and doesn’t like what the boom has done should pack all their stuff into a uhaul and drive away.
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“A Statistics Canada report released Wednesday found that between July and October, 3,316 more people left Alberta for other provinces than moved here, the first negative inter-provincial migration number in 13 years.”
http://www.canada.com/calgaryherald/news/story.html?id=f7a62e35-a285-44b0-be96-c9969e1003cc
Judging by the above some (many) are driving away. I presume they’ve listened to ‘house’.
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BAD,
The same story says the province still grew by over 12,000 people. Looking behind us stats wise only tells us what was. I’m more interested in what’s going to be. The most interesting part of the story is what I’ve been saying on this blog for some time. Sask. is not going to be much of a draw anymore because of what their house prices have done. The couple in question had very interesting comments, like most people think it’s cheaper, but it’s not and they’re paying 275.00 more for rent (and paying higher taxes to I guarantee). If they were saying this 6-8 months ago, what have house prices done since then? They’re having the same traffic problems and there will be lineups for everything….does it sound familiar. So now your choice for cheap housing is Winnipeg or Ont/Que/east coast, All you need is an Alberta job in Windsor! Good luck.
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This has nothing to do with Alberta, has it?
“A large domino fell in the world financial markets Thursday as creditors began taking possession of Carlyle Capital’s assets. The publicly traded European affiliate of the American Carlyle Group was unable to refinance $16.6 billion of borrowings, and its failure highlighted the extent to which the global credit squeeze is affecting businesses that are basically sound.”
http://www.forbes.com/home/markets/2008/03/13/carlyle-capital-update-markets-equity-cx_vr_0313markets25.html
Alberta is an “energy superpower” that does not get affected by petty financial markets, eh?
BTW, this cannot possibly have anything to do with the widely expected “spring uptick” in housing prices in Edmonton and strong RE market in the future, can it?
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BAD, Oil is over $110.00/barrel. Demand for coal continues to rise. Every job lost in Ontario gets eaten up into something else. 43,000 new jobs in Canada as of late. Country has an all time low unemployment rate, the lowest is still in Alberta. Duh, think before you speak/type. Be glad you live in a place where you can get over paid. It may not last even for you. Sorry I get so caught up in facts, I should try to look at what is wrong only and assume all will go to hell as do you and your cronies. Don’t you ever get tired of being wrong?
So it has nothing to do with Canada and Alberta.
“There will be no growth in the Canadian economy through the first half of this year, says a new forecast which suggests Canada will come as close to recession as it can without actually sliding into one, and that Ontario and Quebec may actually already be in one now.
(…)
While Murphy, like many other economists, argues that a classic recession, such as those last seen in the early 1990s and early 1980s, would be deeper and more prolonged than merely two quarters of marginal declines, he warned that the risks are that the Canadian economy will in fact be weaker than the institute is now forecasting.
A major risk is that the U.S. economy, Canada’s main export market, continues to weaken more than expected, which it will if oil prices do not ease as the forecast projects, Murphy warned.
“There’s a real downside to the U.S. forecast,” he said.
And the outlook on that front was not bright with oil prices surging to a new record high of more than $110 US Wednesday, reflecting a further retreat in the U.S. dollar, the currency in which oil is priced, which hit a record low against the euro and a one-week low against the Canadian dollar.
“Even if oil prices go down, the U.S. could be worse than we expect,” he said.
Among the domestic risks is government belt-tightening to avoid the “shame” of running deficits which would worsen any downturn in the economy.”
http://www.canada.com/edmontonjournal/news/business/story.html?id=1cabd7c0-1a76-4dbb-bc7a-1edf229b8c97
OK, so it has nothing to do with Alberta, pheew.
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BAD:
Man are you ever bitter!!!
Go to alberta bubble blog since you choose to slam Alberta or buy a house or leave Alberta.
You’re probably not even from Alberta or just a bitter renter.
I’m a house owner in north central edmonton and I don’t go nuts like you do because some stupid bias journalist says whatever.
Just be happy or move somewhere that will make you happy.
Go whine in Ontario or somewhere…
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It is fascinating that anyone in disagreement is bitter, stupid and biased.
“The Bank of Canada is injecting $4 billion – $2 billion on March 20 to be paid back April 17, and another $2 billion on April 3, with payback on May 1. The agreements cover a number of government bonds and other securities.
Meanwhile, south of the border mortgage lenders continue to go belly up, millions of cash-strapped families face losing their homes, and job casualties are stacking up. Record high oil prices, hitting close to $110 US a barrel, are nailing the coffin shut by pushing up the cost of gas, food and other commodities.
(…)
So, how do you protect yourself?
Get out of debt, add some gold bullion to your nest egg and remember: Cash is king. You can’t have enough safety in times like these.”
http://www.edmontonsun.com/Business/News/2008/03/12/4978021-sun.html
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Bad,
You are sure living up to your name. What about the millions of families not losing their homes and markets in the states that are doing well. If the whole world’s crumbling what are you doing on this cruddy blog…you should be digging a bomb shelter or getting your generators hooked up because kruschev is going to launch those missles.
As far as I’m concerned the world was supposed to end january 1st 2001. So every day above ground since then is a bonus one.
However, you’re right these are interesting times and people should take stalk in their individual situations.
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Sheldon, I agree, these are interesting times indeed, especially in the Alberta RE market.
The world is not going to end that easy and there’s nothing to fret about unless deeply in debt or highly leveraged. BTW, Nikita Khrushchev did get close, and wasn’t the Y2K bug supposed to get us in 2000 as well?
Recessions are a fact of life and are even required to correct problems in the economy, just like stock market corrections and crashes or RE market price corrections and crashes. It is a necessary, so to speak, ‘cleansing’ process.
Considering the current state of the RE market in Edmonton and the not so great (see above) economic and financial news I doubt that even Alberta economy can muster enough growth to support present housing prices and strong RE market in the near future. The high inventory, low affordability, economic uncertainty and lack of accessible credit stemming from the global ‘credit crunch’ will continue putting downward pressure on the RE sales and prices in Edmonton.
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What is it about that “low affordability”?
I read this everywhere. Low affordability this and that…
I see tons of jobs out there that need to be filled at $30, $35 even $40 an hour. Those are for trades like heavy duty mechanic. Not engineers, not architects or dentists. What gives?
I earn $25 an hour and I qualified for $1/4 million mortgage with CIBC in 2006. 25 year term. 5 years at 5.5% If I can afford that much and I do not earn lots of money (since the average household income here is almost double mine). If the rate goes up at renewal there’s always overtime for me. I worked two jobs for a while so I can pay for renos and a patio in the back.
Low affordability? are people just too lazy to work hard? No wonder some ethnic groups are way more prosperous than most of us: they’re not afraid to work and have the ethics!
I just wonder: for who is that “low affordability” a factor? For the jobless and homeless? You bet. For the Burger King employee? Yup.
For a guy/girl that wanna roll up his/her sleeves and work hard? Maybe not so.
Low affordability is a myth!
Take that from me. $50k a year and a nice townhouse to boot.
BAD:
Do you live in alberta?
Do you own a house or rent?
NATE wrote:
“Posted by: house”
I’m pretty sure that he’s a Realtor from Arizona/California that is astro-turfing his foreclosure listings here
”
No Nate, I live in edmonton and I am not a realtor. I work as a transportation analyst for a private firm. (Not banking or economy related).
House, I was telling you that Bad is probably a realtor.
Bad is at least well researched, the rest of us are pulling out insults out of our back pocket. I am a real estate investor, and I respect the fact that Bad has the cahoonies (excuse spelling)to come on this often bullish blog and point out the facts. He quotes or relays articles of what is transpiring in the world. If you have an issue with articles and points he is making, by all means read some newspapers, blogs, etc, and formulate an argument, and make him look stupid. But asking him whether he is a bitter renter does nothing, except pump up your inflated ego that by some chance you might own a house and he does not. I own many houses and I respect Bad’s willingness to argue with people who can’t formulate a appropriate response to the facts that are out there. Whether the articles are biased is not the point. He is simply expressing his point of view and if you think he is wrong prove his argument wrong. I think to many of us have double fisted the green Albertan koolaid a bit too much, and don’t want to see the gravy train loose steam. A differing opinion should be encouraged, because it provides balance.
Bad, if you need a hand Saturday building the bomb shelter I am free, call me at 1-800-KOO-LAID.
wow…
That bubble blog is yet again ringing the bell of doom for Edmonton.
Besides the usual low balling of Edmonton, Calgary and Alberta, Mrs. White this time offers that another company is moving its head offices away from Edmonton. That company is “Intuit” and because of that move it is suggested that the sky will now fall on Edmonton and it is recommended that all citizens should dump their homes before it’s too late, etc.
Anyway, to debunk that insane blog here is a link to an employee of Intuit commenting on the move:
http://www.techvibes.com/blog/intuit-canada-moves-head-office-from-edmonton-to-mississauga/
All that propaganda-panic from the bubble blog for nothing…again!
I guess that the beauty of blogs is that people can carry out all kinds of personal vandattas and vent their pet peeves out on cyberspace. Truly fascinating.
And for that sub-prime fiasco south of the border? I could not care less if it would knock the Americans back to the stone age…
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Thanks Yogi, I’ll have the booze ready. Any ideas how to revive Krushchev so we can use the fruits of our work as a selling feature? Garth Turner doesn’t quite cut it for the role.
“With the subprime contagion spreading around the world, Canadians who hoped their homes would be immune from the carnage are wrong, says financial author and MP Garth Turner.
(…)
A big part of the problem, Turner said, is that shaky lending practices that coloured the U.S subprime market are now creeping into Canada.
The availability of that easy money in the U.S. drove house prices to unrealistic levels, which ultimately drove that market into its precipitous retreat.
Both factors are at play in Canada, where prices have risen to lofty levels and have only been supported lately by one thing: the 40-year mortgage, which in two years has come to represent almost half of new borrowings in Canada, which require very small down payments and which add sharply to borrowers’ total debt repayments.”
http://www.canada.com/edmontonjournal/news/business/story.html?id=0f7d356a-e317-482b-ab12-690170cf6548
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***Response…The last thing Garth Turner would be described as is an expert in housing. However, this type of fear mongering needs an answer. The same types of lending practices have not been practised here as they have, in the states. At least not even close to the same exent. The 40 year mortgage is related to home prices and affordability and not lending practises that have taken place south of the border. Europe and parts of Asia have generational mortgages because properties there are truly unaffordable. How about an interest only 100 year mortgage which is quite common in Europe. Lending practises in Canada have tightened considerably over the past few months. To suggest otherwise is a pile of crap.
with your brother Karl Marx ****
People like you made the same arguement when 5% down payments came into play. Today thousands of people including myself have a substantial amount of equity because of this program. You and yogi should have a drink
Is that Sheldon putting footnotes on BAD’s post?
Or is BAD accusing himself of being a communist?
BAD
Re-Buttal
http://www.bloomberg.com/apps/news?pid=20601082&sid=ae8VffEhf0LA&refer=canada
Looks like Canada’s version of subprime is creeping out.
Yogi
This the type of debate you looking for.
PS: Yogi your not my groupie on the other blog??? are you. Your references to double fist and kool-aid may just be a coincedence or maybe not…..mmmmmm ;-\ ☺ LOL
Who is Garth turner?
Holds a Ba and master’s in Arts.
Ex- PC (got kicked out by Party)then turned liberal. Turncoat?
Used to be Business editor for a T.O. daily.
Had TV shows on real estate and insvestments.
Wrote articles and books on RE.
Etc. Etc.
Garth says a lot of stuff.
Here’s a review of Garth’s book The Strategy:
http://www.fiscalagents.com/newsletter/4garth.shtml
Garth says that:
1. …”the necessity to purchase real estate with a future view to selling it”.
Does he mean flipping?
2. …”the rosy prospects of the stock market”.
3. …”that interest rates will remain low, inflation is dead”…
What the review says of Garth:
1. “His comparison of mortgage rates shows how mathematically challenged he is”.
2. …”but remember that not all advice is good”.
Now in his Greater Fool book he tells me to sell my house and go rent (I’d like to see my wife’s reaction!!!), that within 18 to 24 months, Canadian homeowners could see the value of their homes fall by 10 to 15 per cent and that sales of existing homes fell off “the cliff” in January tumbling six per cent in January alone in Canada.
So what.
Anyway, Garth lost tons of credibility when he was pushing Nortel stocks.
‘nough said on him. He should concentrate on his MP duties in Ottawa and give his savvy business tips to his boss Stephane Dion to pay off his $1M+ debt.
***Anyways what I meant to say but didn’t have the time was that when Garth publishes something I find it very useful. When I run out of toilet paper.
Neil, I stole the double fisted koolaid comment from the other blog. I think the comment is hilarious, sorry I am not your groupie, it would of been truly an honor.
Nate said:
“But you’re correct. Anyone that doesn’t own a home in Alberta and doesn’t like what the boom has done should pack all their stuff into a uhaul and drive away.”
Using your logic, can I say:
Anyone that doesn’t like some of the posts here should shut up and leave this discussion board for good?
BTW, Sheldon, I am still waiting for the weekly RE update. Thank you!
Yes bunny, you can say that.
Woosh.
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Moderator (Sheldon?) wrote:
“How about an interest only 100 year mortgage which is quite common in Europe. Lending practises in Canada have tightened considerably over the past few months.”
Here is the link to some information about European mortgages:
http://www.enhr2007rotterdam.nl/documents/W01_paper_Scanlon_Lunde.pdf
Typical mortgage amortization is 20 to 30 years. The relatively recent ‘innovations’ introduced the interest only mortgages which should not be confused with so called ‘endowment mortgages’ that have been offered for a longer period of time in UK and the Netherlands.
The tightening lending is stemming from the global ‘credit crunch’ (see my previous post) and it is one of the reasons for the downward pressure on the RE market.
As for my brother Karl Marx – what can I say – Sibling Competition, he’s been always fighting with me.
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