Is a “shallow” well a concern when buying a country property?

would you know what this is ?

 

We had a very interesting experience when showing a country property recently and thought it a worthwhile note for those considering the purchase of a country property which is served by a private well and septic system.

We noticed the item shown in the photo and originally assumed it was the lid and riser for the septic system and in fact, the green lid is identical to those that can be found on a septic “riser”.  However, as we continued our tour of the property exterior, we noticed the septic tank area was behind the house.

With able assistance from Moe Rayyes of Canadian Water Inspection Services https://www.waterinspection.com/services  and with confirmation from the seller, we confirmed that the equipment in the photo was in fact, the cap for the “shallow” well system which serviced the property.

So what is a “shallow” well and how does it potentially affect a buyer?

A “drilled” well is by far, most common:

The listing for the property indicated that the property had a “drilled” well which is the most common type of well used to service country properties.  These are drilled to a depth and location that provides the best possible quality and quantity of water available to that particular property.

Shallow, dug and sand point wells: Pros and cons

Other types of wells are also out there and many provide reasonable and cost effective sources of water in areas with springs, high water tables and where drilled wells may be costly or otherwise problematic.  One such problem might be that the underlying aquifer does not have good quality water. ie too much salt or other mineral.

The potential disadvantage of the above type of wells is that by being closer to the surface, they are potentially more subject to bacterial contamination. (often one may see a UV light system to mitigate this potential issue) They can also be prone to water limitations during drier years, especially between May and October.  Sometimes these can even run dry and require tanker trucks full of water to replenish them until ground water levels get back to normal levels.

Should a buyer avoid a home with these less common water systems?

Many country homes are well serviced by such wells but in addition to some of the potential issues noted above; these type of systems make a property somewhat unique and generally speaking, unique features and systems may not be well understood by future buyers (and Realtors) and therefore, market value and marketability may not be as good as more standard homes.  We also know of several homeowners have been forced to truck in loads of water in dry summers to keep their well supplied for household requirements.

In the case of our buyers in this instance, they chose to pass on this property-even though it seemed to have very good value at the price.  In addition to the shallow well, it also had an original septic system which was 40+ years old which represented another risk and near term financial cost to our buyers.

As always, buyers should always get both a septic inspection and a well and water inspection from qualified professionals, (in addition to a general home inspection) when purchasing a country property.

If you are considering a purchase of a country property, we would be happy to you navigate the bumps and potholes that may be encountered along the way.

For additional information to consider before shopping for a country home, check out an archive article on our previous blog here:  https://www.oasisrealtyottawa.com/blogs/gord_mccormick/archive/2014/01/31/what-we-city-slickers-need-to-know-about-country-properties.aspx

 

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692  oasisrealty@rogers.com

Oasisrealtyottawa.com

Optimizing real estate fees for sellers

 

 

 

 

 

 

 

 

 

Why Ottawa will have the best winter sales in a decade or more

sales should help “warm” Ottawa winter

Ottawa real estate normally pretty much hibernates from late November to late February but this may not be the case this year.  Buyers and sellers will want to consider the following factors and consider whether they wish to move up their buying or selling plans accordingly:

 

Listing inventory at decade lows:
The level of available properties to purchase continues to be extremely low and the number of new listings coming on the market, shows no signs of reversing this trend. Supply/demand alone would suggest that this has to put more upward pressure on selling prices.

Residential listings are currently 17.5% lower than last year, 35.5% lower than 2016 and 48.8% lower than 2015.

Condo listings are 34.5% lower than 2017, 45.5% lower than 2016 and 55.8% lower than 2015.

Even rental listings are down quite significantly, 31.6% lower than last for MLS rental listings.

Beat the price increase!  Your next house is going up $2-3K a month!

With residential prices on the way up (+5.7% through Oct 2018) that dream house is getting more expensive day-by-day.  For example:  a $500,000 property today may well be $525,000 or even $530,000 by the end of 2019 peak selling season.  That’s an increase of $2,000 to $2,500 per month and with mortgage rates also headed north, the cost of servicing a mortgage is also increasing.  The mortgage “stress test” which is typically 2% above the mortgage rate being offered is also moving upwards as rates rise thus making approvals more challenging for some buyers.

New construction price and availability:
Builders are also facing limited availability, after two record years of sales and also are facing some labour shortages and price pressure.  All of these factors will also continue to push up the price of new construction.

Mortgage rates:
Rates are pretty well guaranteed to rise a half point in the next 6 to 12 months, with an outside chance of going up a full % point.  This adds challenge to the approval process (mortgage stress test) and monthly cost for buyers and homeowners, so buying now and locking in at a lower rate will have some advantages. *new construction buyers will have to make sure they get a guaranteed rate from their mortgage broker or bank to cover them for the longer new build timelines.

Local economy is strong:
The local economy seems pretty solid regarding employment and there appears to be no signs of the Federal Government doing any significant belt tightening in advance of next year’s election. (Though one never knows?)  So our market should continue its current moderate upward path in the immediate future.

Provincial and municipal budgets:

A “new” city council in Ottawa is in place and we also have a relatively new Provincial government in Toronto.  The Provinces’ fiscal challenges are well noted and there are also signs that the City of Ottawa has its own issues.  Here are a few things that could happen that might add cost for buyers and sellers:

  1. If Ottawa council feels really in a budget pinch, is it possible that a Municipal Land Transfer Tax (MLTT) could be implemented here? This would add $5,000-$10,000 to the typical residential purchase transaction cost here and would cause a bubble and price run up in advance of implementation.   To put this in perspective: the total land transfer tax on a $500K home would jump to almost $13,000 and $21,000 for a $700,000 home purchase.
  2. What is the Provincial government going to do to fix their huge fiscal problem? Could they raise the level of the Provincial Land Transfer Tax? Add some other “luxury” or other tax on housing?
  3. Could Ottawa raise development charges which once again adds to the cost of new construction homes and condos?
  4. What effect will “inclusionary zoning” have on costs of new construction? This principle requires builders and developers to include provision for lower cost housing in their new projects but will certainly affect the cost of new properties, as it becomes more prevalent in the near future.
  5. Do the Feds have any plans in their National Housing plan that might affect buyers, sellers or homeowners?

 

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage

613-435-4692 oasisrealty@rogers.com

Optimizing real estate transaction costs

 

does low listing inventory signal even more price increases in 2019?

Listing inventory end Oct 2018

Ottawa listing inventory is a prime indicator of our seller’s market conditions this year. Chart shows the tremendous change in October month end listing inventory over the last 4-5 years. (from a buyers’ market in 2014/15)
Residential listings are currently 17.5% lower than last year, 35.5% lower than 2016 and 48.8% lower than 2015.
Condo listings are 34.5% lower than 2017, 45.5% lower than 2016 and 55.8% lower than 2015.

Why aren’t prices up even more?
Given these figures, one almost wonders why we have not seen even more upwards price pressure, with residential prices up (only) 5.7% in 2018 to $449,005 and condo selling prices overall essentially flat with an average selling price increase of only .6% to $271,350 at the end of October.

On the good news front, new listings appearing on a monthly basis are starting to level off somewhat, so the listing inventory situation does not appear to be getting any worse.  Many buyers however, are finding it very difficult to find and secure the property they want.  Low listings and quicker selling times have resulted in more multiple offers which typically generate a selling price above the listing price.

Now is great time to be planning a purchase or sale for 2019, as one can only see more scarcity and perhaps even higher prices in 2019.

Gord McCormick, Broker of Record

Oasis Realty Brokerage  613-435-4692

Ask about our amazing 2% exclusive listing fee!

 

Trends in legal services for real estate closings

Lawyers play a critically important role in closing real estate transactions and providing advice to buyers and sellers along the way.  At a recent legal seminar presented by Mark Weisleder of realestatelawyers.ca, we got a short update on several new trends in the closing process that are focused on making life simpler for both consumers and realtors.

Some lawyers will now come to you:
There are more than one lawyer around offering mobile services but it is certainly a great option for many buyers and sellers.  Having the lawyer (or representative) come to your office or home can be a time saver and very convenient.

Electronic funds transfer:
Lawyers can now do electronic funds transfer more readily in both accepting deposits and closing funds plus disbursing proceeds.  Super time saver for all concerned.  Saves trips to banks for certified cheques or bank drafts.

In the case of realtors, we receive commission funds immediately upon closing, along with notification that the deal has actually closed.  Age old system has relied upon lawyers mailing a commission cheque upon closing and the listing agent brokerage processing that cheque through their own banking network, while also cutting a paper cheque to the co-operating brokerage. Sellers of course, had to make another trip to the lawyers’ office to pick up a cheque for any net proceeds of their sale.

Multi-site closing locations:
Though interaction is minimal on real estate closings (1-2 meetings) many lawyers are now offering closing services in multiple locations across the city (or in the case of realestatelawyers.ca, at 35 locations across the Province)

House Key Management:
A cute and interesting timesaver for buyers and sellers, is that realestatelawyers.ca provides a lockbox to a seller which they install on or before closing day with a set of keys inside.  Once the transaction has closed, the sellers’ lawyer provides the lockbox code to the buyer and their lawyer and the buyer can gain immediate access to the property without having to drive to the sellers’ lawyers’ office or other physical location to pick up the keys.  The lockbox is gifted to the buyer, thus saving the necessity of a representative returning to the property to retrieve it.

Condo Status documentation package available electronically or on a rush basis:
Condo status certificate review is a critical function of a lawyer on a condo purchase.  Property Management companies have 10 days by law to produce these docs for a lawyer representing a buyer at a fee of approximately $100.  This is typically quite a pile of legal docs and schedules that have been photocopied numerous times but finally, these are being made available electronically.  (although most here in Ottawa still seem to require paper and a physical pick up or courier charge to get these to the buyer’s lawyer.

The 10 day allowable timeline for Property managers to produce the docs (though most are done within 5 business days) does drag out the conditional sales period for a condo sale.  This is not advantageous for a seller, as their property is pretty much “off the market” or suspended while awaiting these condo docs. Many property managers will provide an expedited service (24-48 hours) for double the typical fee (ie. Therefore $200) which becomes the buyer expense.

Condo docs good for 90 days:
We think a better idea all around, is for sellers to order the condo Status documentation package at time of listing and make it available to buyers and their agents to review when in advance of making an offer to purchase and thus shortening the need for an extended conditional period.  These are normally 5-7 business days for residential properties and 10 business days for condos. Condo status document packages are good for legal purposes for 90 days from date of issue, so as long as closing is within 90 days of the package date, they are very useful.

Multiple offers:
Having condo docs immediately available greatly facilitates multiple offers.  In Toronto, approximately 50% of sellers invest in condo doc package at time of listing, although it is still fairly rare here in Ottawa.  Some are doing it but probably less than 5%.  This is an idea worth pursuing for anyone selling a condo.  Buyers will want to make arrangements with their lawyer to review these docs ahead of making a purchase, as what is contained in those docs may determine whether or how much they wish to offer for the condo.

Fees and Disbursements:
A reminder for both sellers and buyers to be sure to ask for the cost of legal fees (the lawyer fees)  and disbursements necessary to process a specific transaction.  These fees include land transfer tax, mortgage registration, title insurance, courier fees, govt fees and other services necessary to complete a transaction.

Fees are usually slightly higher for a buyer than a seller. (+$200)

Gord McCormick, Broker of Record
Oasis Realty Brokerage
Ottawa 613-435-4692

oasisrealty@rogers.com  oasisrealtyottawa.com

 

 

 

 

 

 

Conditional sales falling like autumn leaves

As most know, we have a seller’s market here in Ottawa as we close out 2018.  Sales and prices are up and listing inventory is pretty scarce in most market segments.
One statistic that seems almost out of line with the strength of the market and lack of listings is the number of conditional sales that are terminated by buyers and do not go firm.

The numbers: (such as are available) 
We don’t have a regular report mechanism on the amount of such sales but for the last 12-18 months, this ratio has more than doubled from 4-5% of sales to as much as 10-15%.  We offer as evidence a current 7 day period where new listings have been 406 and conditional sales 304 and firm sales 370.  The number of “back-on-market” listings during this period is a significant 74 or almost 20-25% in relation to the sales.  This is extraordinarily and we feel the overall level is probably in the 10-15% range noted previously.

So what is causing this massive number of sales cancellations?
There are several reasons why sales fall through in any market, these including: Inspection, financing and good old fashioned buyer remorse.  All 3 of these factors are enhanced in the current market.

Inspection:
Sellers feel they are in a strong position in this sellers’ market, so may not be as amenable to making price adjustments or fixing issues identified by inspectors, knowing there are a lot more buyers out there for their home.

Buyers accordingly, are often buying at their maximum and often feel they are paying a premium (even over paying) and therefore, some may try to renegotiate the deal price wise, without reciprocity from the seller.

Financing:
Mortgage rates have risen and the new mortgage “stress test” may still be catching some buyers unawares thus resulting in buyer inability to obtain satisfactory financing.

Hurried purchase decisions:
Buyer remorse can always be a factor in the termination of conditional sales.  Often caused by either irrational enthusiasm by one or more of the buyers or most likely where one buyer loves the property and the other merely likes it.

In the current environment of listing scarcity and multiple offers, buyers don’t get as much time to research a property (many only get a chance to see it once, before having to decide on an offer) and then once they have longer to think about it, they are not as enamoured with it as originally thought.

Unfortunately, a hasty purchasing decision in a rushed and stressful environment, leaves plenty of room for error and many buyers may be re-thinking the suitability of the property or re-evaluating the purchase price being paid or both.  Conditional sales agreements are written in way that favours the buyer significantly and that conditional period can often end up being a “cooling off period” and buyers can be pretty subjective in their decision making on whether to firm up the deal or not.

Sellers are adversely affected by such cancellations, as they may lose some of the other buyer interest during the conditional sales period when their property is pretty much “off the market” while a buyer does their due diligence and attempts to complete their conditions.  Other buyers may wonder if “ something is wrong” with the property and may therefore lose interest in it.  Still others may have gone on to buy something else.

The best solution to this problem is for buyers who are well prepared and well coached with appropriate financing in hand and a good knowledge of current market value.  If all of these are in place, we can hopefully optimize the current high level of sales cancellations.

Gord McCormick
Broker of Record
Oasis Realty Brokerage
Ottawa  613-435-4693
oasisrealty@rogers.com

Smoking cannabis at home compromises market value and marketability of real estate

how does cannabis smoke affect home sellers?

As Canada starts a brave new world with the legalization of cannabis, we have to remind all property owners about the dangers of residual smoke and its impact on market value.  Here are a few things to think about:

Most buyers aren’t smokers: Only about 20% of adult Canadians smoke tobacco and non-smokers are very sensitive to residual smoking odours and shun properties that exhibit a long term smoking habit.  We have had buyers enter properties for showings or open houses, who immediately turned around and left the property after smelling cigarette smoke.  These non-smokers will be equally not interested in a property with a heavy cannabis smoke residue.

Ambient odour often unknown to owners: As with many other household odours, the degree of smoke smell may be under appreciated or even unknown to those who live there every day, as one gets accustomed to it.

This is why buyers entering a property for the first time should “listen to their nose” upon first entering a property, as this is the best time to detect potentially out of bounds smells.  A damp basement is usually a giveaway from the first moment of entering, for example.  After a few minutes, however, our perception adjusts and the odour is not as prevalent at a cognitive level.

Hard to remove: Long term smoking in a property is not easily or inexpensively remedied and buyers will either walk away completely or very much de-value a potential property, to facilitate the remediation.

Growing personal marijuana: 4 plants per household should not create a major mould worry but will people stop with 4 plants? The “grow op” stigma created over the last few decades will be a tough one to shake and even if legal, we suggest those selling remove any and all plants and materials from their property prior to listing.  Why turn off even one buyer?

Don’t think it is OK to smoke in the garage: Many wisely smoke outdoors but just as many feel that smoking in the garage is OK.  Doesn’t help much with most buyers in our opinion, so smoke outdoors or better yet, not at all.  This applies equally to tobacco and cannabis.

Stigma remains: Hopefully, your neighbours are not big smokers, either-as this may scare away many buyers also.  Though this may fade as legalization moves forward, the stigma attached to cannabis smoke odour will impact sellers and buyers for some time.

Renters and medical marijuana users: These are two legal battlegrounds we can expect to see unfold in the coming months/years with legalization.  This will be an interesting challenge for both investor owners and corporate rental building owners and managers.

Gord McCormick, Broker of Record
Oasis Realty Brokerage
613-435-4692 oasisrealty@rogers.com
Ottawa, Ontario.

 

 

Is Ottawa real estate really as “hot” as everyone thinks it is?

Ottawa real estate has posted solid results over the last 2 years but is it really as “hot” a market as is often portrayed?

Both buyers and sellers should beware of headlines, myths, legends and Realtor marketing which can tend to obscure reality and create unrealistic expectations.

Let’s start with some facts, based on 3rd quarter 2018 results and see how this jibes (or not) with some market perceptions:

Unit sales year to date:
Residential sales are very flat this year with units sold up only* .3% in the first 9 months of the year.  Condo sales meanwhile (though a much smaller #) are up strongly at 15.1%
*There is a school of thought that says the low residential unit sales increase is due to listing inventory limitations and there is some truth in this.

Prices:
The average price of a residential property sold in Ottawa this year is up nicely by 5.2% to $447,427.  The average condo price is up only 2.3% to $278,401.

Good solid numbers but not exactly runaway sellers’ market results, right?  So why is it that if asked, many people would say we are in a “crazy” strong market and everything is selling quickly, with multiple offers and over list price sales?

Headlines and social media:
Clickbait headlines and search word worthy social media posts and videos tend to be as dramatic as possible, so quite often outlier examples ie one house in Barrhaven sold with “xx offers submitted and sold for xx,xxx over listing” tend to over influence the market reality.

Also, quite often, short term results, such as a single month sales report are taken to represent the overall trend which may or may be correct.  Sales or prices for a single month (or even 2) touting a runaway market may not be consistent with longer term results (4 to 6 months or more) and therefore skew buyer and seller thinking.

Realtor Marketing:
Realtor marketing is pervasive and hypes their individual results, focusing on the how many they sell and how quickly and for list price or better.  Again, giving the impression that everything sells in a just a few days on the market (or even before being on the market!) and creating an impression that this is the market norm.  We submit that the overall sales stats refute the common perceptions created by these Realtor marketing posts.  One high level Realtor marketer quoted earlier in the year that more than 50% of their listings were selling in multiple offers &/or over list price.  While this may have been true for a short period, there is no way this is true over the year to date results.  Unfortunately, such marketing claims can mislead consumers. * during that approximate period the Ottawa Board did quote a figure of 20% of properties selling at list price or above for that specific month.  Unfortunately, there does not appear to be an easy way to track this statistic, which is totally bizarre in 2018.

Listing inventory continues to be low:
Listing inventory continues to run much lower than over the last 5 years (currently residential inventory is 16.8% lower than a year ago and condo inventory is 28.2% lower)  These numbers certainly reflect a relatively thin level of supply but if it was truly drastic…wouldn’t the average selling price increases be much higher under typical supply and demand rules?

Builders recording huge sales increases over last 2 years: Part of the growth in the recent market has been a huge uplift in builder and developer sales of new construction housing and condos and only a small portion of these are sold via MLS listings, so this growth is not included in our market statistics.  Most of these new construction buyers also have a property to sell and these properties do eventually get to the public market via an MLS listing, so those pending listings arrive in the resale market 90 to 150 days before the new construction property is due for possession.

Grey market for listings:
There has been a long growing trend towards pre-announcement of listings by Realtors both as a marketing tool and an attempt to get a property sold sooner.  Everyone has seen the “Coming Soon” or “Exclusive Listing” sign toppers in their neighbourhood and these are examples of what we call the “grey market”.  Though an advance notice market may seem like a good idea, we think it takes away from the impetus and proper MLS launch of a listing but if it makes sense to that seller, then of course that is up to them.

Unfortunately, any sales recorded by these “grey market” listings are not captured by MLS and therefore not included in our Ottawa Board statistics, which may distort the overall sales picture. (in fact, it may understate results and average prices)

Summary:
Overall, our market is healthy and lower listing inventory still favours sellers-so this fall and winter should be among the best in many, many years.  One of the tenets of Ottawa real estate is that it is steady and stable without the large peaks and valleys, experienced in some other markets and we are better off for it.

We are in a relatively strong market but not a runaway seller’s market and we would be happy to provide detailed research for buyers and sellers appropriate to their individual situation.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or mobile 613-371-9691

oasisrealty@rogers.com

oasisrealtyottawa.com

One of the highest ranked and “liked” real estate pages on facebook:
http://www.facebook.com/pages/Oasis-Realty-Brokerage-Ottawa/209265863918 

 

 

 

 

 

 

 

 

 

 

 

Moving to Ottawa? Some things to know about real estate

Average house prices a relative bargain:
Those moving from the GTA or Vancouver will view overall Ottawa average prices (average residential selling price approx. $447,000) as a real bargain and that would be correct.  Averages are just averages though and price ranges vary considerably across the city and the Ottawa real estate board reporting area. Urban residential price averages in 2018 are in the $600-$900K ranges and topped $1.5 million in Rockcliffe Village.  Prices have been increasing fairly strongly in the last couple of years, and limited listing inventory is a factor.

Geography:
Ottawa is quite spread out east to west along the Ottawa river some 45 km (Carp Rd to Trim) and about half that distance north-south. Dominant features include the Ottawa and Rideau River systems, the Rideau Canal and the “Greenbelt”, all of which have factored in Ottawa’s development. North of the Ottawa river is western Quebec, the Gatineau hills and the city of Gatineau. Realtors must be separately licenced/registered to practice in Quebec, so very few, if any, can provide services on both sides of the Ottawa River.  Average prices are about $100,000 less on the Quebec side, so buyers should determine which province is of most interest from the beginning of their search.

Big difference between urban and suburban living:
Much of Ottawa’s residential growth over the last couple of decades has been at the fringes in the east (Orleans), west (Kanata and Stittsville) and south. (southwest in Barrhaven and southeast in Findlay Creek and Riverside South)  Home prices have increased most in urban areas and this has fostered many condo developments and infill housing development in the highest urban demand areas.  We currently have several of the largest mixed residential urban neighbourhood projects in Ottawa history underway or planned.  These include: Wateridge, LeBreton, Greystone and Zibi plus numerous large (and tall!) condo projects.

High demand urban areas:
Westboro/Wellington West and Carling/Woodroffe area , Hintonburg/Mechanicsville, Civic Hospital, Glebe, Old Ottawa South, Ottawa East, Manor Park, New Edinburgh, Sandy Hill

Students, Students, everywhere!
Ottawa is a big education centre with over 80,000 full time post-secondary students (140,000+ counting part time) at University of Ottawa, Carleton, Algonquin, Cite Collegiale and St. Paul’s.  This demographic has an impact on housing, entertainment, dining and the work force.

Transit oriented:
Ottawa has always been a transit oriented city with commuter ridership % among the highest in North America.  The OC Transpo system has been built on a mix of dedicated transitways (bus only roads) and express bus lanes which connect urban and suburban commuters with the downtown core.

2018 brings Phase 1 of Ottawa’s LRT (Confederation line) which will connect 13 stations over 12.5 KM, including a 2.5KM tunnel underneath the downtown core.  Phase 2 will expand the scope both east, west and south (Trillium Line) by 2023.

This has created a “transit oriented development” focus for city planners and a great deal of activity is planned around LRT transit hubs.

Greenbelt:
When one drives through Ottawa from the downtown towards the suburbs, the city seems to stop and then restart after large swathes of open space.  This was created way back in the day when the original plan was to keep Ottawa within the borders of this “Greenbelt”.  Over time, persuasive developers found a way to build new communities beyond the Greenbelt and this is where much growth has taken place since the 1970’s.

Schools:
We have a gamut of schools at the elementary and high school level encompassing English, French and immersion programs from public, Catholic and French school boards.  The widespread geography of Ottawa has become a bit of a problem in this regard, as demographics have changed school enrollment patterns and many schools are on the “to be closed” list due to lack of students while others are overloaded and still others have no local services at all.  Researching schools for both current and future requirements can be a key factor for many parents, so it is a good idea to review this early in your Ottawa home search to determine your geographic focus.

Real estate is local:
Every market is different, so be careful not to assume that things in Ottawa real estate will be the same as the market you are moving from.  Housing types/styles, trends and key features and highest demand items in one local market may vary widely from those in another.

If you are relocating and looking for an experienced brokerage team to consult on your home or condo buying plans, we are more than happy to help!  Give us a call at 613-435-4692 or check us out online at our co-ordinates below:

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or mobile 613-371-9691
oasisrealty@rogers.com
oasisrealtyottawa.com
One of the highest ranked and “liked” real estate pages on facebook:
http://www.facebook.com/pages/Oasis-Realty-Brokerage-Ottawa/209265863918

Follow us on Twitter for “all the real estate news that’s fit to post”  https://twitter.com/OasisrealtyOTT

One of Ottawa’s best real estate blogs: http://blog.oasisrealtyottawa.com/

 

 

 

 

Stittsville Open House Saturday June 30th 2-4 PM

Join us for the hottest open house of the year at 110 Shackleford Way in upscale Stittsville Poole Creek. Award winning Tartan “Parkhill”  model with over 3,000 sq ft of finished living space. (includes finished basement rec room) $60K+ in upgrades and additions.

This recently built (2015/16) home is located within 2 km of the Canadian Tire Centre and has easy access to highway 417.  Only 11 minutes to DND Carling campus and the same to the Kanata tech cluster.

Four good sized bedrooms upstairs plus 2 bathrooms, a loft/nook and convenient laundry and two linen closets. Note: at time of writing, there are only 4 listings for 4 bedroom homes with finished basements in the whole Stittsville North (MLS zone 8211) currently listed and this one is the 2nd lowest priced.

The bright and airy main floor is a modified open concept that connects the kitchen and eat in area to the main floor family/great room but also has another adjacent area for combined living room/dining room.  Gorgeous kitchen with granite counters, high end stainless steel appliances, breakfast bar, huge chef’s pantry cupboard and upgraded tile.

The builder finished basement rec room is almost 700 square feet and with 3 oversize windows it is an incredibly light, bright area.  A basement bathroom rough in upgrade plus ample storage.

Upgrades galore in hardwood flooring, tile, carpet,underpad, custom blinds and California shutters, smart security system (all windows and doors have sensors) cat 5 wiring, smart garage door opener, central vac and accessories, central air, Gladiator system garage rails, Energy Star certified for comfort and saving, heat recovery ventilator (HRV) for efficient air refresh, tankless hot water tank (rental).

Check out the detailed MLS listing here: https://oreb.mlxmatrix.com/matrix/shared/DgQX0GNfHl/110SHACKLEFORDWAYW

Take a virtual walkthrough here: https://youtu.be/DMC2BL5ipVo

Join us Saturday or call your Realtor to arrange a private showing and celebrate Canada Day weekend

Gord McCormick, Broker of Record

Dawn Davey, Broker

Oasis Realty Brokerage

613-435-4692 oasisrealty@rogers.com

www.oasisrealtyottawa.com

 

 

how to pay less real estate commission and get full service

The savvy seller can find a quality agent and broker and still get full service at lower commission rates.

What is normal commission?
The accepted norm for real estate commission is 5% of the sale price of a property.  Typically, the listing agent and the buyer representatives (and their respective brokerages) split this amount equally with 2.5% going to each.  With average prices continuing to climb, this adds up to a fair amount of a seller’s equity to cover the cost, as sellers normally pay both ends of the commission.

Don’t forget the HST! The average residential real estate transaction in Ottawa these days is almost $450,000, so this requires a commission payment of $22,500, using the 5% model…but wait…there’s more!  The HST is charged on the real estate services, adding another 13% or $2,925 to bring the total to $25,425.  So this is clearly and expense that a prudent seller will want to optimize.

As one can see from the photo enclosed, this seller paid only 3% commission which would be a savings of over $10,000 in commission and hst in the example of the typical $450,000 property above…that’s worth considering, right?

Typical commission splits between the sales person and the brokerage:
Most large brand name brokerage sales agents need to charge the 5% rates to cover their corporate overhead.  Though individual Realtors are able to determine their own listing fees as independent contractors, most are constrained via contract, company policy and management practice plus they also need to maximize their earnings, accounting for the split they must pay to the franchise and corporate real estate company.  These splits take 10-30% of the commission revenue earned in *most cases. (splits vary greatly across the industry)

Optimizing real estate commission:
There are many different commission approaches out there these days, many of them available from smaller or mid-size brokerages such as ours.  (to be fair, some agents with larger brokers also have variable commission fees but they are very hard to find-since they are typically not permitted to advertise their commission rates)

The challenge most sellers face is how to get a lower commission cost without having to sacrifice the level of service received.  Even the “for-sale-by-owner” companies (who misleadingly advertise “no commission”, IMHO) do most often require a commission payment to the agent and brokerage representing the buyer on top of the fees charged to “sell it yourself”.  Almost all buyer agents expect 2.5% (+HST) when providing a buyer and facilitating the transaction on behalf of both parties.  So “ for-sale-by-owner”  is not commission free and though it may cut down the total commission being paid, the seller does not have the same level of representation or service they would have had by engaging a listing sales person or Broker.

Mere Posting services:
There are some brokerages who offer very low “ listing end” fees but for limited services and of course, the buyer agent/representative is still looking for their 2.5%, so while this works for some, it may not be ideal in this high paced market.  While intuitively, our sellers’ market would suggest it is easier to sell and therefore marketing and service effort should be less (with commensurately lower cost)  this is not the case.  This market puts a lot of pressure on Realtors to get the price and marketing strategy right and manage a complex set of issues to get the best deal for their client.

The happy medium:
The growth of small and medium sized firms has proliferated in recent years, as many Realtors choose to lower their costs and also become more independent, away from the umbrella of the somewhat restrictive corporate franchise broker.

Firms like ours are able to offer lower commissions and more flexible programs, as we do not bear the overhead of the larger brokerage entities.

Types of commissions that work for sellers:
A seller who also buys with the same agent should expect to get some level of discount on the selling side.  We charge only 3% or 3.5% in this situation) A seller whose agent represents both the seller and a buyer of that property should also expect to pay less, since there is no other agent to pay. (we charge 2.5 or 3% only in these circumstances)

Day-in-day-out lower fees:
We offer the government contract rate of only 3.7% (+HST) for residential properties and 3.99% for condos or country residential properties on well and septic systems.

 Flat fees:
Some firms offer flat fees on the listing end ie $2,995 but typically there will also be a % charge for the buyer representative/brokerage, too.

Volume discount or negotiated discount:
Each property is different and each situation is different, so there may well be some discounts available based on the situation that can be negotiated.

Tips on commission hunting:
Make sure you know what services are being offered.  If you expect the typical suite of Realtor services, make sure these are being offered at the reduced price.  Ie if no professional photography, online marketing, showing feedback or open houses are included, you may not be getting the same value.

Make sure you know the commission rate being offered to the buyer representative who brings the buyer of your property.  Many lower commission plans also drop the % paid and this can have adverse consequences to a seller.

Make sure you know the distinction and are getting a full MLS® listing, as some agents offer a lower commission rate package on what is called an “exclusive listing” but this listing does not get published on MLS and the individual agent is often trying to sell the property themselves (like a pocket listing)  and not have to pay another Realtor for the buying end.  While this lower commission may be attractive, the power of MLS is that all listings go on realtor.ca and all Realtors and their buyers are exposed and engaged to get the listing sold to the widest possible audience. (2 million+ visitors per month)

Is the firm and individual offering the value priced commission experienced enough to manage your listing and are you comfortable with them?

Get all commission rates and service levels committed in writing and included as an addendum to the listing contract and that way you know what you are paying and what you are getting in return.

There are dozens and dozens of independent firms covering every corner of Ottawa, so don’t be shy about seeking one out and using them for your listing brokerage!

For more information about our boutique brokerage services, feel free to give us a call at 613-435-4692 or email oasisrealty@rogers.com  (not intended to solicit those working with other Realtors)  You can also find more Ottawa real estate information and tips at our social media accounts and blog below:

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage Ottawa, ON

Oasisrealtyottawa.com
https://www.facebook.com/oasisrealtyottawa/
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http://blog.oasisrealtyottawa.com/

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