Royal LePage - Your Community Realty, Independently Owned and Operated, (905) 731-2000  Jim Reid, Broker, (905) 731-2000	INSIDE THIS ISSUE: MARKET FACTS: 1, Commissions Earned? 2. Pre-Marketing is Key! 3. Market Report 4. Economic Report * GTA average price $386k * Active Listings down 40% from 12 month's ago * Heritage Estates average price $652k * 5 YR. Mortgage Rate at 3.9% 1. COMMISSIONS EARNED? The average commission income of the 28,000 members of the GTA’s Toronto Real Estate Board in 2008 was under $40k, or only 5 deals. In fact, with top agents dominating market shares, the large majority of realtors did less than 3 deals and pocketed under $20k. With expenses, they didn’t contribute much to their family’s income. With so little income, most can’t afford to do a full marketing programme for their small number of clients. If they aren’t doing a lot of deals, they aren’t likely acquiring the experience and skills to do an effective job for their clients. Professional realtors invest in their business and in their client’s properties. Usually, their clients aren’t aware of how many activities a realtor must do to be able to provide outstanding services that achieve outstanding results. But what are outstanding results? The average time to sell a property is over 10 weeks. Agents selling within 5 weeks are achieving outstanding results. Similarly, discounts from original list prices are averaging above 7%, so agents consistently getting 97% or more are well worth their commissions. You may like to know what it takes to become an outstanding realtor. Top realtors invest an extraordinary amount of time into their work. They often are working nights and weekends as well as doing on-going research or taking courses during the day. Speaking to other realtors, booking appointments, appointment follow-up calls, searching databases, networking, designing and producing advertising materials, visiting properties or maintaining web sites and answering e-mails keeps us very busy. And don’t forget that lots of people enjoy our free services even though they may not be selling or buying this year. Only 20% of those we consult with will actually lead to a commission cheque. We also have lots of costs and expenses our clients aren’t aware of. We have an on-going “branding” program so you will think to call us. We spend a lot on pre-marketing activities including signage, feature sheets, photography, ads, web site placement, etc. These continue until the property is sold. There are also brokerage fees, board fees, RECO fees, insurance, office costs, communications costs, etc., etc. If others knew how hard you work for your income, they would likely feel you deserve every penny. Perhaps realtors aren’t over-paid either? 2. Pre-Marketing is Key!   Sometimes it is possible to get a property onto the market the day after you meet your realtor, but this doesn’t allow for the most effective market launch. Around 25% of new listings get acceptable offers within one week. These properties had strong pre-marketing programmes. Few realtors have degrees in marketing. Most are very good salespeople, but lack the expertise and skills of a professional marketer. Pre-marketing includes many activities that equip you and your realtor to attract and sell to buyers at a price close to the asking price. When you buy a house, there are many factors that can turn you off or turn you on. Yes, pricing is important, but if the price is cheap and other factors turn you off – you ain’t making an offer. Conversely, if the price is high, and other factors turn you on – you will make an offer. An exceptional realtor would have done his pre-marketing research and will know what prices to suggest that will meet your needs. The financial power from effectively preparing a property is outstanding. Professionally staged homes rarely sell for below 97% of List price and often get above list price. Homeowners with personal decorating style can’t match the appearance of a “professionally staged” home. With 80% of homes previewed on the Internet, agents must write quality copy and take tantalizing pictures that will produce showings instead of another “mouse click”. Interior and exterior marketing assessments are crucial. Your agent’s pre-marketing strategy should have identified the lifestyles your property will offer. Feature sheets are powerful “silent salesmen” that can turn an “interested” buyer into an “offer” buyer. Promoting and conducting the public “Open House” event can be a “time-waster” or a “time-saver”. This first marketing event can also produce the feedback needed to see how the market views your property. Personal contact pre-marketing e-mails can help launch a new listing. As you can see, a professional pre-marketing plan is very important. 3. Market Report August’s dismal sales and average selling prices slipped for the second month only $7.5k which keeps us 1.7% ahead of the 2008 average. August continued the contraction in the GTA real estate market. New listing dropped 11% and active listing are now 37.5% fewer than 2008. Heritage Estates sales are slow as buyers avoid the relatively high asking prices. I’m expecting market values to hold for another two months and we should see some new listings that will go quickly with proper pricing. Five year mortgage rates recently slipped below 4%, so we should see some action this Fall. If the banks would stop being so greedy, and flip back to the three months’ interest penalties for purchase renewals, we could experience a real estate revival. Unfortunately, the near future of the real estate market will have less to do with realty supply and demand and more to do with economic and political uncertainties. When the public senses danger ahead, they tend to stay put. Real estate appears to have very little upside potential nowadays and many people are becoming concerned about a possible increase in downside potential. This is somewhat supported by heavily discounted offers. (I was involved in a triple offer situation where the property still sold below asking after two group sign-backs.) Unless the banks switch feet, we can expect the real estate market to remain quite thin this Fall, which means you can still sell close to peak market prices. 4. Economic Report Did you see the Ignatieff election ad? He has about as much charisma as a melted chocolate Sunday. Now there is a poorly designed political campaign. A fall election might even help give Harper a majority. In spite of the failure of the massive civil service budget increases, Canada’s economy will have to wait until the USA and our other major trading partners recover before we get rolling again. Civil service spending splurges merely grow the civil service and do nothing significant for our most productive enterprises. In spite of stock market speculations, there is a growing tide of “experts” who feel this is a “double-dip” recession and that the next dip will be larger than the first. The major overseas economies are also anticipating more slowdowns. The Swedish central reserve bank, the oldest in the world, for the first time in history has even adopted “negative interest rates” to try to stimulate bank lending. You may have noticed the recent surge in gold prices. Volumes of gold trading are much higher than normal and rumours are circulating that a number of countries are demanding delivery from Britain and the USA of their gold reserve contracts. Apparently, supplies of gold bullion have been over-sold. There is also a lot of stock-piling of all sorts of commodities as countries try to dump their US dollars. Canada’s commodities-rich economy stands to benefit from these actions, so the TSE may not be hit as hard as the NYSE if the cat gets out of the bag. Our currency may rise even further to the consternation of our manufacturing sector. My concern is that the extra government revenues from the appreciation in value of our commodities will not be enough to cover the ballooning deficit. The only people able to pay the increased taxes after the next election will be civil servants with handsome pay increases. The private sector employees and self-employed are looking at no pay raises and reduced earnings for a few years whilst being burdened by increasing direct and hidden taxation&ldots; it looks like “Every man for himself!”