So what does that really mean? Here is an example. You are selling your home and you receive two offers, you ask for advice about the offers and which one is better. If you get advice from the company that you have listed your home with then you are their client. If they tell you they can't answer that question then you are just a customer and you are completely on your own. No big deal right? One of our agents was previously one of the top sales people with a limited service company in Edmonton, and has plenty of recent examples bad decisions made by homeowners with no guidance. In one case she observed a seller who took $45,000 less than market value because they didn't ask the right questions.

Whenever I meet with someone that has interviewed a limited service company, they tell me that company suggests they can ask less for their home to be more competitive, since they are saving money on commissions. So what are you saving if you lower your asking price? What you don't know is that from the moment you sign up with them and you don't get results, all you will hear is: "You need to go to the next plan up to get action."  In other words, you need to spend more to get more service. Some of these companies will contact you every couple of days with the upsell options. I'm seeing more and more situations where people started out as a "mere posting" but by the time they were done they were charged significantly more. So their costs are now higher and their asking price is lower their net position is much worse.

I definitely understand the desire to save money, but life has a way of showing us time and again that you get what you pay for! Unless you don't do any research at all (but that's another story). Those little details that don't get handled correctly can actually sting you for thousands of dollars or even cost your entire sale.

I don't always use buyer brokerage agreements, but there are instances where I will require a signed agreement.  I'm not sure how appealing working for free is to you but its not very appealing to me. Nathan in our office recently had clients who were buying a property for their daughter, and since they were paying for it they weren’t really concerned with what she wanted. What they did want was to see almost everything on the market - house, condo, anywhere in Edmonton between $350,000 and $450,000. At last count they had been out looking 9 times and had viewed about 50 properties and written several offers that were not accepted.

In this day of mere postings the likelihood of them picking a listing that offers the buyer's agent $1.00 in compensation for all their time and effort isn't that unlikely.  In fact I almost think that it's a law in real estate that the more time I spend with someone who is looking to buy a property, the more likely it is that they will choose a property offering $1.00 in compensation. In a nutshell, that’s why I would consider using a buyer brokerage agreement in this case. It spells out what I’ll be paid and what my clients expect of me for that compensation. If you are a buyer like this, it will be increasingly more difficult to find an agent who will work as they used to (on the promise of compensation) without the protection of a buyer brokerage agreement. 

This is one of the main reasons buyer brokerage agreements will become more common place.  The competition bureau seems to want to model the Canadian real estate industry after the U.S. industry (cause that's worked so great for the U.S.).  In the States buyer brokerage has been common place for well over a decade.  In the end I won't be surprised if our MLS® looks like the states in a few years as well and thats a whole other story.

Voice your opinion here:

http://vccweb.legerweb.com/IntWeb.dll?IMODE=2&PROJECT=EW40044_154B.EW40044_154B

I majored in Ecology in University and have some understanding of how to encourage people to waste less. When I lived in Guelph, the wet/dry program was rolled out and it was simple and easy to follow - wet stuff went in one bag, dry in another. The wet stuff went to a compost facility and the dry stuff was sorted and recycled or sent to landfill. If you didn't follow the rules they didn't collect your garbage, and if you didn't clean it up by 7pm you were fined. It was simple and it worked (it has been tweaked a bit since then but the concept is the same). 

When I lived in Dundas (part of Hamilton, Ontario) they launched the green bin program. Anything compostable goes in the green bin, recyclables in the recycling bin and garbage in a bag. A little more complicated but it still works quite well. Twice a year residents can go pick up free bags of compost for their gardens. The amount of stuff going to the landfill was considerably reduced. If you follow the rules and only put out one bag of garbage each week you are rewarded with a gold coloured recycle bin to show off to the neighbours each week when you put out your trash.

Then there is the system in Sherwood Park - you have to sort your waste into four containers for collection. The categories are confusing and the streets are difficult to navigate on waste collection days because there are so many containers out front of each home. It's way too complicated.

The key to making these programs work is to keep them simple, make sure there is enough of an incentive to reduce your waste, and make sure the system is easy to police.

In Edmonton we currently have no restrictions on the amount of waste we put out for collection and there is still a major issue with littering in the city (otherwise we wouldn't have to have "Capital City Clean Up" every year). Waste collection restrictions will only make littering worse if the issue is not dealt with first. When the garbage cans on the green belt behind our home get full, people just dump their garbage near the can and it ends up all over the green belt. I don't understand why people choose to turn their own neighbourhoods into garbage dumps.

Anyway, whatever your opinion is on the subject, be sure to take the survey and have your say.

There are also open houses scheduled for residents to discuss the issues and learn more about the programs:

• Tue, April 10, 2012 3–7pm Ukrainian Youth Centre, Hall B 9615 153 Avenue
• Wed, April 11, 2012 3–7pm Central Lions Senior Centre, Large Auditorium 11113 113 Street
• Thur, April 12, 2012 3–7pm MacEwan University South Campus, Classroom #1 7319 29 Avenue
• Mon, April 16, 2012 3–7pm Fantasyland Hotel, Conference room 7 17700 87 Avenue

Or you can contact the city directly: 
In Edmonton: 311, Outside Edmonton: 780-442-5311, wasteman@edmonton.ca

On a recent post one of our regular readers was lamenting about a Calgary real estate agent who reduced their listing by $100.00. He added that real estate agents will do all kinds of tricks to get clients. In fairness, I don’t know anything about the situation or the agent but of course I’ve got my 2 cents to throw in.

First of all I don’t know whether the $100 it was client directed or something the agent came up with. Having a lot of clients I can tell you they don’t all think the same or have the same strategies - the diversity in personalites is immense. I have had clients list their properties at $301,000 - a huge mistake in this day and age of internet search - but ultimately the decision is theirs. I too have had clients request weird amounts for price reductions (and even stranger amounts for counter offers, but that's a whole other topic). However, when you think about what the seller and agent did by reducing their price by $100.00, while annoying it is actually a little savvy depending on what they are trying to do.

For example, MLXchange (the REALTOR® interface with MLS® data in Edmonton and Calgary) will automatically email that property out to buyers who have searches set up by their agents (if the agents have selected the option to inform their clients of properties that are reduced in price). This is one of several options that agents have available to them when setting up their clients searches.

So if the property in question was getting lots of looks and activity but its starting to slow down (we track all the online activity of our properties on REALTOR.ca, www.EdmontonRealEstate.pro and countless othersites) then they may have wanted people to take another look who have recently seen the property. If on the other hand there is little to no activity on the property, and they want to get an offer on it, then they are probably pissing into the wind so to speak if their intention is to actually sell the property.

I do know that it's my job to do what I can for my clients, and that sometimes means thinking outside of the box. As long as its allowed, it I don’t see the problem with it, although in this case it's probably not what I would've recommended.

The education budget is determined by the province, but the levy is collected by the municipalities (along with property taxes) on behalf of the province. 

With huge class sizes and major layoffs last year, I can understand the need for the increase. So just how much is the education levy going to increase?

• Province-wide the increase is $120 million compared to last year
• In St. Albert the increase is $2.5 million, or 9.64% ($8/month more)
• Spruce Grove and Leduc will see a 12% increase (the maximum amount the province will increase the levy in any year)
• Edmonton - 10.8%
• Strathcona County - 9.8%
• Sturgeon County - 8%
• Provincial average - 6.4%

The majority analysts polled expect some sort of tightening of mortgage rules this year - it could be an increase in the minimum downpayment (currently 5%), a decrease in the amortization period, or other restrictions designed to reduce household debt levels in Canada. Although the analysts agree that housing is overvalued only in Toronto and Vancouver at this time, household debt levels hit an all time high last year in this country.

It is expected that any changes to mortgage rules will come before the spring housing market, some say between now and the federal budget (expected at the end of March). Assuming the rules are tightened, how will this affect our housing market in Edmonton?

Looking at our sales chart below, it is easy to see the annual pattern - sales tend to increase month-over-month for the first half of the year, and decrease month-over-month for the second half of the year (peaking in May or June).

The feds have made changes to the lending rules three times in recent years, and each time they have given Canadians advance notice of the changes. In October, 2008, the maximum amortization was dropped from 40 years to 35 years and the minimum down payment was increased from 0% to 5%. We almost always see sales drop between August and September, and that year there was a jump in sales in September (and then the global financial crisis happened). In April, 2010, changes were made to HELOCS and refinancing, investors were required to put a minimum of 20% down, and they introduced a rule that you had to qualify at the 5 year fixed rate even if you were going to take out a different mortgage (with lower interest rates). That year the sales peaked early (in April) and trailed off for the rest of the year. In April, 2011, the maximum amortization period was dropped to 30 years, and it really didn't seem to affect our market at all.

We will have to wait and see what changes, if any, are made to the lending rules before we can make much of a prediction on how the changes will affect our real estate market in Edmonton. At this point, we have the lowest unemployment rate in the country, and the fastest growing population which tends to lead to a strong housing market. I'm not sure these changes will have any affect on our market at all, other than to push some buyer's plans forward slightly. 

"There is some genuine concern that the housing market and households have been overstretched," TD Securities economist Mazen Issa said. "But in the absence of several triggers for a housing market decline, which are not likely to be forthcoming until at least the middle of next year, the underlying theme is of gradual moderation."

Triggers could include rising mortgage rates, or a sharp increase in unemployment.

"I would say aside from those two cities [Vancouver and Toronto], there's really little evidence whatsoever that the market has gotten ahead of itself," Doug Porter, deputy chief economist at BMO Capital Markets, said.

"Whatever strength we've seen in most cities has simply been the flip side of the decline in borrowing costs.

"Provided we don't get hit with an interest rate shock, then I think the market can adjust to a moderate backup in rates over time."

As we've mentioned a few times in the past few months, we expect Toronto and Vancouver to drag down the national housing numbers for the next while, just as it dragged them up for the past couple of years. The national real estate market gets a lot of press, but it really does little, if anything, to show what is happening in markets across the country. National stories can certainly have an affect on consumer confidence, so we will have to wait an see whether or not our strong, local economy over powers the national media.

Mortgages and RRSPs

Something to think about!

I was happily surprised when I checked our analytics yesterday. Our Edmonton MLS® Search web site - edmontonrealestate.pro - reached a new milestone and got over 1 million page views in the month of January! Thanks to everyone who uses the site to find real estate in Edmonton! We will continue to improve the site and add new features as long as people keep using it. With the average time on site over ten minutes, people clearly like it. Our clients enjoy extra traffic to their listings, since our listings are featured at the top of the results whenever they are included in a user's search. That's the beauty of the Internet - a small company that focuses on quality and details can kick the big guy's butts.