I have been reading Garth Turners blog for quite some time and today I actually got a brief glimpse at what it is like to monitor comments from rude, ignorant, people who largely are so far in the extreme of their ideas they are not prepared to listen to others views.  Garth, seriously dude, hats off.

Anyway although I may not agree with many of Garth Turners views, or his motives, which I am actually not sure what they are beyond selling books, I try to keep my rebuttals respectful, so here we go again.

The most recurring cheap shot was that I was lieing when I discussed the base of our Inflation Hedge Mortgage Strategy which is to protect people from future payment shock of certain higher interest rates in the future.

In the video here are the

ASSUMPTIONS:

Purchase Price: $450,000

Down payment: $45,000 (10%)

Mortgage Insurance: $8,100 (2%)

Amortization: 25 Years

Term: Five Years

Starting Interest Rate Today: 4.39%

Here are the FACTS:

Mortgage Payment Today = $2,261.20

Balance at the end of the term = $362,885.07

THEREFORE to calculate the payments at the END of five years you would take the NEW balance of $362,885.07 and do a new schedule based on 20 years remaining.

New payment at the start of YEAR 6 = $3,366.26

Difference in payments between the Year 6 payment and the year one payment (payment shock) = $920.89

By the way if the client takes our Inflation Hedge Mortgage Strategy they would owe $288,892.47 after five years and have ZERO payment shock. That is a saving of $73,992.60 over five years.

Please Note: This is corrected math from what was presented in the video. I said in the video that it was approximately $600 and that was incorrect.

Our philosophy is to ensure that people who are going to buy a home do it responsibly and understand all the financial repercussions they are facing.  We design a mortgage strategy that will fit into their overall financial wellness, particularly ensuring that they can truly afford the house they are contemplating and to protect them against inflation, which will lead to higher interest rates in the future and the dreaded payment shock. Garth Turner’s job is to tell people not to buy homes, my job is to ensure those that are going to, do it carefully and with a well thought out plan.

This morning I had my first Live broadcast for the Mortgage and Real Estate Show for my good friends at Royal Lepage Foothills Real Estate here in Calgary.

Today’s topics include a discussion around all this negative talk on the blogosphere, particularly led by the likes of Garth Turner about an impending housing shock, when people buying homes today have to renew their mortgages in five years time, you will be shocked at the results.

As well we have a discussion about the effect the recovery will have on Calgary Real Estate and the Calgary mortgage market.

As we are in the heat of the market and many people are starting to welcome the balanced market we have it is a good time to review how to choose a Realtor.

Let me start off with the number one mistake in choosing a Realtor.  Simply based solely on them being a friend or family member.  It is important you let your friend or family member know that you will be interviewing other Realtors.  if for no other reason but to make your friend or family member have to be on their game to prove they are worthy to sell your home.  This is business not personal, do it right.  On that note what should you be doing?

1) Interview more then one Realtor

This is often a big mistake people make.  it is valuable to hear a couple different viewpoints on the pricing of your home, the strategy proposed for marketing, and the track record of the candidates.  Remember also that if you are going to be working closely together for a few weeks or longer it is important that you also like the person you will be dealing with.  If they turn you off in the first meeting what do you think it will be like after three weeks of continuous contact and meetings?

2) Write out your questions in advance

Do some research, remember this is an interview.  The internet is full of informative sites that can be used to gather some questions that you should ask your candidates.  It also allows you to reflect on their answers later during the deliberation phase to see who you will choose.

3) Innovative, and Fresh Marketing strategies

Make sure you go with the Realtor who has a broad, but most important a unique and innovative marketing strategy.  If the strategy is holding open houses and advertising in the local real estate print media, then consider whether this is enough in today’s internet world.

Today’s marketing strategy must have a solid internet and/or social media component as this is the way buyers today are shopping for homes.  A staggering over 80% of buyers today shop on-line for their real estate.  Look for the realtor who comes up with more strategies to get your home in front of as many eyeballs as possible.  If you would like a good example of Realtors who are embracing the internet world go to www.foothillsrealestate.ca .

4) Price Strategy

This is a big one.  Make sure you ask lots of questions on how they came up with the proposed price for your home. Try not to get in the way here.  many homeowners have an inflated view of the value of their home and weak Realtors will just agree with your over-priced value in order to get the listing, and then just beat you down over the coming weeks to get your price where it should have been. It will sell weeks later then it could have if you priced it right in the first place.  If a Realtor does not respectfully disagree or challenge you on your inflated price then you need to ask yourself if this is the right one for you.  Remember if you have chosen your candidates properly you are dealing with someone who has sold many homes in your area and knows more about the price then you do who have sold no other homes in the area. Trust the experts.

Another month of the data has come and once again we see many positive signs that are of course ignored by mainstream media.  Are we at the bottom of the Calgary real estate market?  Watch and see….

CREB April Analysis from Greg Williamson on Vimeo.

I get many of my regular readers and people I speak to at meetings etc. ask me about buying recreational real estate down south.  I have been consistently saying that you should be holding off.  Even when people were buying when the dollar was at par with the US they have seen their property value drop significantly since then.

Well, according to M. Anthony Carr in March 2009 sales in Phoenix are up 78% over March of 2008.  Another piece of great news is that there listings are down 17% and consequently prices are lower then they have been in over 5 years.

YOY sales are up for the 10th straight month in a row.

Some sobering news is that 75% of the sales in March 2009 were foreclosures!!! Yikes!

So is it the bottom, should I buy?  the answer…it depends

If you are a buy and hold then I think it could be ok except for the value of the dollar? I am told that in the Phoenix popular areas, and popular retirement communities they are seeing normal to increased sales activity.

If the bottom is not here, I would say it is near.  As well by years end you may see the Canadian Dollar rise in relation to the US dollar, mostly due to the devaluing of the US currency.  Once the Canadian dollar edges over .90 cents to the US dollar and given this information about the improving real estate market in Phoenix, it may be time to pull the trigger.