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Lethbridge Herald Newspaper Archives

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Lethbridge Herald, The (Newspaper) - June 26, 1974, Lethbridge, Alberta District The Lethbridge Herald Local news SECOND SECTION Lethbridge, Alberta, Wednesday, June 26, 1974 Pages 13-22 Housing It's a buyer's market if you've the money House buyers in Lethbridge are taking advantage of a sudden, and probably temporary, decline in house prices. Until recently there were more buyers than available houses and more mortgage money than house buyers seeking financing. But now the hot seller's market has cooled, to the benefit of buyers able to get mortgages. A Herald survey of real estate firms and lending institutions reveals there are now more houses than buyers in the city and there are more buyers than mortgages. Mortgage money is described as but the buyer with a healthy down payment can wheel and deal. One indication of the supply of houses for sale is the multiple listings of the Lethbridge Real Estate Board. In the first two weeks of June, 54 new MLS listings went out to member realtors- Many of these were exclusive listings, but realtors are apparently willing to forfeit commissions of to sell their clients' houses. A realtor selling a house on an exclusive earns commission. But once the same house is listed with MLS and is sold by another realtor, the listing agent pockets only Canada Trust real estate manager Line Coward says local house prices are in a "cooling-off period." Meanwhile, Royal Trust "real estate manager Robert Butchart says the number of houses being sold isn't declining that quickly. But the margin between the asking price .and the selling price is, he says. One realtor says a gap between asking and sale prices is not unusual on expensive houses. This gap is further to the buyer's benefit if a few months have passed since the house was appraised. Mr. Coward says the hot seller's market is cooling because "rising prices tend to create alower demand." "An Art Batty 963-square-foot house with four rooms and a bath sold for in 1957-58, and in 1959. The price has continued upward until now that same house, well maintained, sells for he says. Mortgage payments in the case of the Art Batty 963-square-foot house in 1958-59 were a month including taxes. "Today a person buying the same property would likely have to place a new mortgage at 12 per cent interest, provided he has 10 per cent, or to put down "His monthly payment including taxes would be about a says Mr. Coward. It's all because of inflation, he adds. A Herald survey of MLS sales figures follows the upward spiral of prices: Six years ago the average MLS sale was By 1970, the average sale had climbed to By 1971, For the first five months of 1974, the average residential non-revenue sale is a whopping Realtors agree that the current price slump on used houses is because of high mortgage costs. They agree that many people can't afford the high monthly payments that come with increased interest rates. The current rate for a 90 per cent, or high-ratio, 20-year mortgage is 12 per cent from a trust company. The first people to get squeezed out are speculators, now being discouraged by lending companies from buying up houses and. renting them out, says Ralph Tennant of Art Williams Agencies. "It's not as easy as it was for he says. He says mortgage companies are reserving high-ratio mortgages for buyers who plan to live in the houses purchased, forcing speculators to come up with large down payments. The manager of Royal Trust's mortgage department, Alt Fazio, says his company is encouraging residential purchases by owner tenants, not speculators. He describes the mortgage picture as "bad'-'. Funds, he says, are in short supply. "All lenders have done a tremendous amount of business in the first four months of this year." He says lending "went ahead too fast" earlier this year, so mortgage money isn't "coming in as fast as normal." But the current slump in sales is temporary, he says. This year will be a "bumper year" for real estate sales. Mr. Coward has a similar forecast: "Once the election is over and house prices stabilize, the money tap will be turned on again. "Mortgage interest rates will drop to around 11 per cent by November this year and 10 and one half to 10 and three quarters by June 1975. This is not my prediction, but comes from a recent meeting of 25 large mortgage lenders in Canada." he said. Meanwhile, the real estate market is giving buyers with financing a bit more room than usual to horse-trade in an arena that in the past benefited seller more often than the buyer. PARK MEADOWS IN LETHBRIDGE'S NORTHEAST CORNER Rules bent in rush to make sales City realtors agree that some real estate agents are using unethical and illegal practices to get listings, but no one wants to point an accusing finger. Lethbridge Real Estate Board president Ian Hamilton says it's against board ethics for a realtor to list property at an unrealistically high price in order to get a new listing. And, he says, it's illegal for a realtor to telephone, or visit in person, anyone selling a house privately without first identifying himself as a real estate agent. Mr. Hamilton says it's unethical for real estate agents to scan the obituary columns in the newspaper and immediately offer their services to bereaved family members. He says he has heard of agents pressuring next-of-kin "between the death and the funeral." He says agents should wait a "proper period of time.. a month or so after the funeral." City realtor Tom Seines agrees that salesmen seeking new listings are following "leads" from obituaries: "We've had it happen here (Astro "One of our salesmen died and one of the opposition called his wife." The poor guy wasn't even in the ground, before the high-pressure soliciting began, he says. Mr. Hamilton says real estate is a competitive business to begin with, but new listings are the life-blood of the industry. The most aggressive company at seeking new listings, according not only to city realtors but also to the manager of that company, is Block Brothers Realty. Smaller realty companies are envious of Block Brothers aggressive listings search, and a bit peeved that Block Brothers offers its sales people incentives for bringing in new listings. All real estate companies encourage agents to bring in new listings, but Block Brothers does it on a grand scale. Last year when the company needed listings. Block Brothers offered sales Recently sold for This 22-year-old southside home with a basement suite recently sold for about After a 10 per cent down payment you'd face monthly payments on a 20-year, 12 per cent mortgage of about plus 1974 taxes of Yours for down If you have in your pocket and an annual salary of about you're eligible for a mortgage on this three-bedroom, southside Home with two-bedroom basement suite. Listed on multiple listing service at monthly pay- ments on a 12 per cent mortgage would be about including taxes. personnel to cash bonuses for each new listing; says Block Brothers local manager" Frank Tinordi. This year Block Brothers sales people are working on an expenses-paid trip to Hawaii in return for bringing in some 30 new listings in the course of a year. Of the 30 listings. 21 must sell. Smaller realty companies complain that Block Brothers goes overboard on seeking listings. Block Brother's manager shrugs off these complaints: "It's good business." he says, agreeing that his company does, indeed, want to corner the market. He says a monthly sales volume of over million entitles competitors "to be angry with us." Although the 26 agents working from Block Brother's office garner the major share of new listings "we sell about.70 per cent of our listings." Another complaint of smaller realty firms is Block Brother's door-to-door method of soliciting. Mr. Tinordi says door-to-door canvassing is part of Block Brother's bag of tricks, but says there's nothing high-pressure about the approach to homeowners. Real estate board head Hamilton says the most common complaints received at the board's office come from residents in areas of the city currently in demand. These residents, he says, are annoyed by realtors asking if they want to sell. He said Block Brothers is not alone in the knock-on- the-door, approach. Mr. Hamilton says it's not unethical for sales people to contact people selling homes privately. A Herald survey 9f sellers advertising private sales in the classifieds showed almost without exception that people advertising property for sale in the city had been phoned and contacted personally by real estate agents. One woman says three or four realtors have contacted her since her ad appeared two weeks ago in The Herald. "I suspect there's she says. "I can feel them." She says she's selling privately because of a bad experience with a local realtor. The agent got the listing by promising a high selling price, but later tried to reduce the price without consulting the owners after buyers ignored the house. The experience left a "bitter taste in my mouth" for real estate agents, she says. Realtors agree that high appraisals intended to get new listings give the industry a bad image. Mortgage companies have come up with a new phrase to handle the situation. Regardless of the selling price of a house, mortgage companies now finance according to "prudent value." So it's conceivable that a buyer could buy a house for and only be able to finance 90 per cent of a lower "prudent" value of Mr. Hamilton says it's unethical for agents to "mislead the public." Anyone who thinks they've been misled should complain to the real estate board, he adds. He says anyone selling a house privately should have a realtor appraise the house. This costs If any agents tell you you're not priced high enough, be very suspicious, he warns. Tom Seines has similar advice. If an agent ever asks you to consider selling your house, don't reply: "Sure, if the price is right." The price might be right for you as seller, but it's likely the price won't be right for the buyer. Meanwhile, the search for new listings continues in a business one realtor characterizes as "dog-eat-dog." As Ian Hamilton says: "You get the listings and the sales will follow." ASLEEP OR AWAKE, OWNER PER HOUR LIVING HERE Home can be a good investment Mortgage money is des- cribed as but the buyer with a healthy down payment can wheel and deal. 'It's not as easy as it was for speculators.' 'You get the listings and the sales will follow.' CP Rail executive John O'Hara earned every hour he slept in this northside house. His waking hours proved no less rewarding. Mr O'Hara bought this house for over a year ago and sold it recently for after CP Rail transferred him to Calgary. After paying fees to lawyers and commissions to real estate agents. Mr. O'Hara was left with a "living salary" of or about a for each hour he lived in his north side home. Stories by Russell Oughtred ;