Hamilton's Property

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Perhaps the most common question would-be home buyers ask me is What do you think this house will sell for?.  (Actually, home OWNERS ask the same question).

The real, honest answer is: Whatever someone is willing to pay for it.  Since we dont have a Crystal Ball, no one can predict the final selling price.  It all depends on how many offers there are on a house, and how badly someone wants it.  Incidentally, I dont like the term bidding war, because that is really not correct or descriptive of the process.  But here are a couple of guidelines to help us along in the offer process:

If the house has been on the market for a few weeks, or even months (yes, that DOES happen, even in Winnipeg), and the owner and their agent have never adjusted the price, the buyer might try to offer something a little lower than asking-price.  Provided that the buyer (with his own agent)  has done some comparing and homework, and assuming that the listing price of the house is not pie-in-the-sky-dreamin, an offer of a few thousand below asking price might be accepted.

If the house is taking offers on a given date, and the buyer is lucky enough not to have to compete, putting in an offer of full-asking price might not be a bad idea.  Again, I stress that the buyer thru his agent, has performed a comparison-study of the house, and assured that it is fairly priced.  Assuming the asking price is realistic, a buyer might be well advised to count their blessings for not having to compete against a number of other buyers.

If the house in question is receiving 5, 6, (thirty?) offers, then all bets are off.  Ive seen some pretty scary and ridiculous things happen in a case like this, and my best advice to my buyer would be: Write your best offer.your walk-away price.  In other words, if the house goes for more than your offer, you feel youve given it your best shot and dont wake up the next day going Doh ala Homer Simpson.

The reason that bidding war is somewhat of a misnomer: In a case of so many offers, the process is really pretty simple..put your best offer forward and hope for the best.  On the plus side, at least you will find out almost immediately (within hours, anyway) whether your offer is accepted.

Ive had a few buyers who have tried to buy a Private Sale, and were left hanging for a week before being rejected.  In their case, they could not go out and pursue other homes, while their offers, (along with the deposit cheques) languished in the home-owners hands.  It seems that some private sellers are being coached to hold on to offers and tell the buyers that they have to think about it?.  Then, during the next week, while they are no doubt thinking hard, they are also shopping the offer around.

Please remember this:  yes, the market is hot, competition for homes is fierce.  However, homes listed with Realtors still have certain rules to follow, whereas private sellers are pretty much left unregulated.  Its buyer beware to the extreme

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Two Riverton residents were sentenced Thursday for their roles in a mortgage fraud scheme involving properties in Davis, Salt Lake and Utah counties.

U.S. District Judge David Sam sentenced Christopher Ethington, 36, to three years and one month in federal prison for his guilty plea to mail fraud. His former wife, Janet H. Ethington, 34, was sentenced to 30 days in a county jail and was put on probation for five years for her guilty plea to mail fraud.

Sam also ordered the pair to pay $1.3 million in restitution.

James Merrill Roberts, 42, of Cedar Hills, also is serving a 37-month federal prison sentence for his guilty plea in the case.

Roberts and the Ethingtons were charged in a 12-count indictment in June 2010 that alleged they operated a scheme to identify residential properties, recruit straw buyers and then use false statements on loan applications to inflate the value of the properties and convince lenders to grant loans for amounts in excess of the properties’ market value.

Federal prosecutors said their investigation focused on 18 residential properties, but a significantly larger number of homes were involved in the scheme.

Roberts pleaded guilty in May to mail fraud and money laundering. A

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One of our Real Wealth Network members came in for a strategy session last week to get some ideas on how to reduce her taxes this year.  I’ll call her “Sam,” for the purposes of this blog.

Sam and her spouse are self-employed and earned approximately $230,000 this year.  Assuming a 35% effective tax rate, they’re looking at paying approximately $80,000 in taxes.  They have $130,000 in the bank.

Their CPA gave them some suggestions that included:

- Buying more stuff to write off (computers, office supplies & furniture, etc.) – Buying an SUV, which would be a 100% business deduction – Contributing to a 401K or other tax-deferred retirement plan

Sam was advised to set up a Solo-401K as the best way to reduce taxes this year.  A Solo 401K plan is for self-employed individuals and owner-only businesses.  Under a profit-sharing contribution plan, Sam could contribute 25% of her compensation, up to $49K, to her Solo 401K retirement plan.  Doing this would reduce her taxes by approximately $17K. She a

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The presentation of property online has radically transformed over the past 5 years.

Back in 2006 when the new website of Realestate.co.nz emerged to provide a much improved user experience, the content provided on the site was by today’s standards pitiful. On average a listing had only 3 photos. The property seldom had an address, and the description was often copied from the newspaper advert. At the time the real estate industry in general judged the web as an after-thought, with the central focus being on print advertising in newspapers and magazines.

Skip forward 5 years to today and so much has changed. Today the first destination for almost all property seekers is online, on average property seekers spend over 3 hours a week on property websites. Their intent is to spend even more time in the future with more than a third of them say they will check out property online more frequently. (

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Will the FHA loan program raise its insurance premium for new borrowers?

At first it might seem as though higher premiums are in order given that the FHA reserve fund the Mutual Mortgage Insurance Fund or MMI is well below the 2 percent required reserve. While that may be true, one must also look at trends and directions.

HUD Secretary Shaun Donovan says his department is now looking at five potential changes in the FHA program including higher mortgage loan premiums.

According to Donovan, the FHA is constantly evaluating the appropriate level of premiums given the potential risks to the MMI Fund, and any action regarding premiums will be considered in the context of balancing access to credit in today’s economic environment with the need for added revenue generation to protect the Fund. <

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