Looking for Real Estate Deals

I just took part in a live chat hosted by The Gazette on the topic of finding real estate deals. The questions came at us fast and thick. It was a bit chaotic but lotsa fun.

You can read the transcript here. There are some good tips for finding deals and knowing a deal when you see one.

Londono's Disciplanary Hearing Sparks Debate about Heels

The Gazette has prompted debate about whether mentioning Tatiana Londono's fancy Christian Louboutin stilettos in a story about the celebrity broker's disciplinary hearing before the OACIQ (Organisme d'autoreglementation du courtage immobilier du Québec) was sexist or basic reporting.

Here's the Gazette story.

Here's reporter Allison Lampert's Open House blog post on reader reaction.

Discuss amongst yourselves.

(BTW, a pet peeve. Can you think of a name or acronym that is less user-friendly than Organisme d'autoreglementation du courtage immobilier du Québec or OACIQ  ( pronounced wah-SICK)? It's not exactly NASA, WHO or UNICEF, if you get my drift.)

It's Like Having a Mortgage Broker in Your Pocket!

I've just downloaded a new Bank of Montreal mortgage app for my smart phone.  This handy tool allows me to calculate mortgage costs based on different scenarios - five per cent down, 10 per cent down, 25-year amortization, 30-year amortization, etc.

It has other functions, too. Users can create  profiles for the different properties they visit and even start the preapproval process with a BMO mortgage specialist with just a few taps of the screen.

So far, the thing seems to only work with iPhones and Androids.

You can find out more here

Habitat for Cars not Humanity

I've been keeping my eye out for a piece of undeveloped land in inner-city Montreal for the last few months because Habitat for Humanity is on the lookout for a site to build it's next project.
Habitat  buys land and, using volunteer labour as well as funds and materials donated by corporate partners, build houses for people who might not otherwise be able to achieve the dream of home ownership. Each Habitat family must invest "sweat equity" in their home through volunteer labour. They also have to have the means to pay the mortgage once the house is built.
I wrote about Habitat's last build here.
I actually thought I'd hit the jackpot a few weeks ago when a 2,000-square-foot lot on a nice street in St. Henri came up for sale on the MLS. I quickly got the okay from H4H and raced to the owner's home to present the offer. The lot was right next door to their triplex, which was also for sale. I couldn't help but notice that the lot had a nice tree on it and thought how sad it would be to cut that tree down in order to build.
We came in at asking price and I did my best to pitch the merits of selling to a non-profit group already active in St. Henri. The plan was to build three units on the site. I had photos, brochures and a compelling story. It was all good. They didn't throw me out!
The next day the listing agent said that his clients' had received five offers on the property (after it had been listed for less than 48 hours) and had decided to take it off the market. I couldn't help but think that the owners tested the market in order to set a price for that piece of land. Their real hope was to sell it with their triplex. Whatevs.
Which brings me to today. Every morning I do a H4H search on the MLS. The criteria are specific. The price must be about $200.000, the land must be in an inner-city neighborhood with good public-transit access and local services. The lot has to be a minimum of 2,000 square feet, with the possibility of building three units.
This morning, I thought I'd hit the motherlode. A new listing for a lot in downtown Ville Marie borough popped up. Asking price - $42,000 plus QST and GST. Wow!
A closer look revealed that the listing was in fact for a parking spot in a downtown garage.  There are 25 of them for sale. Imagine that, some people can afford to spend nearly $48,000 for homes for their cars, while Habitat is down amongst the sofa cushions trying to scratch up the cash to build houses for people.
I wonder if we could build a house in a parking garage. . .

Foreclosures Down in 2010

Good news from an economist at the Quebec Federation of Real Estate Boards. The number of properties that went into foreclosure, or were seized by mortgage lenders because of non-payment of debt, fell by 15 per cent last year to 2,356.

That compared to 2,782 properties seized in 2009. The report was prepared by economist Paul Cardinal.

How does foreclosure work? If you have a mortgage, you are bound by the terms outlined in it. Your lender will expect payment according to the agreed-upon schedule. If you fall 30 days behind in  payments, the lender will send a letter threatening action if the payments are not brought up to date. They have to warn you before beginning foreclosure proceedings.

Here's the thing. Bankers are not sitting in their money-filled towers eagerly waiting for you to default on your mortgage. They really would much rather keep you in your house and paying them regularly. If you're having temporary problems paying a mortgage because of ill health or a temporary work stoppage, it's better to tell your bank up front. Chances are they'lll work out an arrangement of some sort. The worse thing you can do is try to duck your lender.

The lender must publishes a notice in the Quebec Land Registry notifying the borrower that his or her property will be seized if the outstanding balance is not repaid within 60 days. Then they ask the court's leave to begin proceedings. The 60 days gives the borrower time to get his poop in a group. That could mean scaring up the cash to pay back the arrears. Often it means putting the property up for sale to pay off the debt and walk away with whatever equity has built up.

Here's the bad news. Once the bank has begun foreclosure proceedings that will necessarily mean extra legal costs - thousands if not tens of thousands of dollars depending on the file and the number of legal manoeuvres involved. Eventually that comes out of the defaulting party's end of the sale.

7,288 mortgage holders received foreclosure notices in Quebec last year, versus 8,809  a year earlier. That represented a 17-per-cent decline in notices sent out.

A notice does not necessarily translate into a foreclosure. About 58 per cent of those served managed to repay their arrears and hang onto their homes. That left the unfortunate 12.5 per cent who couldn't and didn't. Those 909 had their property seized and sold. 597 or about 8 per cent were able to sell their properties and repay their debts. Another 8 per cent, or 607, repaid their defaulted amounts and at least temporarily got their lenders off their back but then received second notices a few months later.

In Montreal. 175 mortgage holders lost properties to foreclosure last year, a 29-per-cent decline compared to the 247 of 2009. The hot spot in the province was the Montéregie region south of Montreal where 488 foreclosures took place, down from 586 a year earlier.  In fact, the number of foreclosures fell across the province except for in four regions, the Mauricie, Gaspésie-Îles-de-la-Madeleine, Centre du Québec and Abitibi-Tèmiscamingue.

A jump in foreclosures is often a sign of trouble ahead for the real estate market. In Quebec,  1 out of every 278 sold properties received a so-called 60-day notice last year. That compares to 1 in 59 in the U.S.  One out of every 860 Quebec properties was foreclosed upon, versus 1 of 45 in the U.S.

More significantly, foreclosures accounted for between 2 per cent and 2.5 per cent of all residential sales in Quebec last year. That stacked up against 26 per cent in the U.S.

A strong Quebec real estate market helped absorb those foreclosed properties efficiently. Over all property prices rose 8 per cent in the province last year.