Real Estate, St. Johns, Newfoundland R. Greg Osmond, Realtor

The Federal Government of Canada passed into law the Home Renovation Tax Credit as part of the last budget ratified in the House of Commons. The measure implemented a temporary 15-per-cent Home Renovation Tax Credit (HRTC) to provide approximately $3 billion in tax relief to an estimated 4.6 million Canadian families.

The HRTC is intended to encourage investments in Canada's housing, as well as provide employment for trades-people and boost sales for those who make and sell building products. It applies to eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010. Work committed to after January 27, 2009 will qualify.

The 15-per-cent credit may be claimed on the portion of eligible expenditures exceeding $1,000 but not more than $10,000. It will provide up to $1,350 in tax relief to the tax payer.

There are two things that must be done in order to receive the tax credit. One must retain receipts for the eligible expenses (they do not have to be sent in to Revenue Canada) and one must also claim the deduction on the year-end tax filing for the period.

This is an example of HRTC eligible and ineligible expenses.

Eligible

• Renovating a kitchen, bathroom, or basement

• New carpet or hardwood floors

• Building an addition, deck, fence or retaining wall

• A new furnace or water heater

• Painting the interior or exterior of a house

• Resurfacing a driveway

• Laying new sod

Ineligible

• Furniture and appliances (refrigerator, stove, couch)

• Purchase of tools

• Carpet cleaning

• Maintenance contracts (furnace cleaning, snow removal, lawn care, pool cleaning, etc.)

The HRTC can be claimed by homeowners for renovations and enduring alterations to a dwelling, or the land on which it sits. A dwelling will generally be considered eligible for the credit if it is used for personal purposes, such as a house, cottage and condominium unit.

Benefits of the HRTC—Example

Greg and Karen, a couple who have a son getting married this year, have decided to upgrade their home so that wedding guests who stay with them will have a fresh place to live while they visit the province. Greg and Karen paint some of the rooms, upgrade the deck, stain the house and install new flooring throughout the home in 2009.

It cost them a total of $10,000 in expenditures. After taking into account the $1,000 minimum threshold, a 15-per-cent credit will be available on $9,000 in eligible expenditures, providing tax relief of $1,350.

When you consider that in Newfoundland the HST charged on all goods and services is 13%, one can quickly see that the HRTC roughly computes to an amount similar to a wavier of HST for eligible expenses. The amount won’t buy you a new car or a trip down south but the way Greg and Karen see it, “Its money better in their pockets than being squandered by the government on some futile public inquiry.”

R. Greg Osmond is a Platinum Award winning Realtor serving St. John’s and surrounding areas, Newfoundland and Labrador for over 20 years and can be reached at 709-895-2500. Visit http://www.rgregosmond.com/ for further information.

In April of this year, CMHC reported that the resale housing industry in Canada has generated more than 202,000 jobs and an average of $22.3 billion annually in various economic spin-offs in the period from 2006 and 2008. As a point of interest, each residential MLS® transaction has generated an average of $46,400 in additional consumer spending during this period. This includes the purchase of furniture and appliances, moving costs, renovations, services, and taxes.

The study suggests that the economic impact of each MLS® sales varies by province or region, from a high of $60,200 in British Columbia to $28,925 in Atlantic Canada. The report notes that spending relates to the cost of moving from one home to another and for renovations after moving in – it does not include any renovation expenditures by sellers to prepare properties for sale. It seems likely that this would add meaningfully to the total expenditures incurred. In my experience, there are not many who put their home on the market without spending at least $1000.

There is no doubt that Canadians on the move continues to be one of the major engines leading to job creation and economic prosperity. Many home buyers will typically buy new appliances or furnishings, and renovate in various ways to tailor their home to their specific requirements. All of this activity helps keep the money flowing throughout the economy. This indicates that if people stopped moving, the economy would slow significantly and many jobs would be lost.

In my next post, I plan to tell you how to save money by investing in home renovations before you list your home. People who spend money on their home in order to prepare it for the market can save hundreds of dollars by doing two simple things. Come back soon and get the truth about renovation expenses. Or if you prefer, subscribe to my blog now and receive any updates as soon as they are posted.

R. Greg Osmond is a Platinum Award winning Realtor serving St. John’s and surrounding areas, Newfoundland and Labrador for over 20 years and can be reached at 709-895-2500. Visit http://www.rgregosmond.com/ for further information.

When my wife and I built our new home in Portugal Cove-St. Philips, Newfoundland, twenty-four years ago we were enthusiastic gardeners.  Borderline hobby farmers we were.  Like any young couple taking on the world, we planted a garden on the grandparents land even before we had been married to enjoy watching the seedlings sprout and await with anticipation the delicious flavour of our own fresh carrots in the fall. 

When we finished building our house in 1985 the next project we jumped into was building a pressure treated wood frame greenhouse covered with 10 ml polyethylene for growing tomatoes.  It was not long before we were delighted with our own fresh tomato sandwiches made with home made bread, tomato quiche and garden salads with chunks of Big Reds.  We loved it!  Who wouldn't?

As several years have passed, our early enthusiasm for gardening has lost the race with functional pragmatism.  Raising our family, increasing workloads and a multitude of life’s pressures have pruned our gardening endeavors down to maintaining a few perennial bushes, spading in a few flowers around the yard and picking all the berry bushes throughout the summer.  Our hot house has returned to its naked pressure treated frame undressed of its plastic covering.

Often I have thought how nice it would be to cover it again and grow those delicious tomatoes but alas, it sits through the Newfoundland elements somewhat purposeless and forlorn.  I too have felt its pain as no longer do I get to enjoy the fresh flavor of home grown tomatoes.  Instead I must consume those tasteless substitutes, mass produced for the market.  With due respect to farmers, those red mush balls sold in the supermarkets just do not measure up to one’s own garden variety no matter how round they make them.

About five years ago we began feeding the local bird community free of charge.  It seems all the little members agreed that the arrangement was a good one though my wife and I have on occassion had discussions about what amount is affordable.  A hand crafted bird feeder on the deck post and the V shaped trough atop of the greenhouse wall has made an ideal place to serve up the smorgasbord of seeds. 

Now each day we have a steady stream of birds native to Newfoundland that visit our greenhouse.  For its part, the new role of feeding the birds and providing shelter among the raspberry canes within has been happily embraced. It has become a veritable restaurant for the birds.  I am not sure it will qualify as feeding the poor on the final day of reckoning but I figure it can't hurt since God knows when even one little sparrow falls. 

Here are a few of our little friends who have benefited from the demise of our enthusiastic gardening ambitions.  Below are a Blue Jay, a couple of Juncos, a Nuthatch, two Pine Siskins and a White Throat Sparrow.  If you look closely you will see a Junco in flight and a White Throat Sparrow messing up the garden floor.  There are many others but perhaps I will share them on another day.

The St. John's metro area has seen a 45% growth in housing starts over the same month last year says Chris Janes, senior market anlaysist with CMHC in Newfoundland and Labrador. The strength of the local economy has sustained new home construction and buyers looking for newly built custom homes have driven the demand. The year to date growth in St. John's metro area was up 30%.

In Atlantic Canada, the housing starts in Urban centers was down by 31% in April compared with April of 2008. For Canada's urban centers housing starts were down by 53% in April compared to April 2008.

We are seeing a continued strength in the Newfoundland market while there still is year over year weakness in the rest of the country. This strength in our market when the rest of Canada's real estate market is showing signs of weakness is unusual. It seems the strong growth seen in Newfoundland last year will have a followup year that tells a similar story.

While we cannot conclude anything definite about market prices being up or down from a year ago, it is interesting to note that housing starts in Newfoundland are increasing suggesting there is strong demand for real estate in the St. John's area. As always, prices will be determined by demand. I expect that prices will maintain the current levels over the summer months yet I would not be surprised to see them increase slightly by year end.

Today's buyers who are hesitant to make a purchase now are only deferring the inevitable. It is frequently difficult to buy a home when prices are climbing further but unless one takes action, the subsequent years find home prices higher than the previous one. Buying in a strong market is like swimming in a cold pond on the 1st day of June. Sometimes you just have to hold your nose and jump in.

R. Greg Osmond is a Platinum Award winning Realtor serving St. John’s and surrounding areas, Newfoundland and Labrador for over 20 years and can be reached at 709-895-2500. Visit http://www.rgregosmond.com/ for further information.

Two days ago I attended a presentation from the Morris Real Estate Marketing Group from Toronto. The speaker, Mr. Phil Hollander presented. The purpose of his presentation was to engage Realtors in St. John’s, Newfoundland to think about the importance of referrals and repeat marketing. His premise was that repeat business and referrals from existing clients are important because if we can generate a steady stream of referrals and repeat business from our existing clients, we will have effectively created an annuity that will generate hundreds of thousands of dollars in future income.

Since Realtors do not receive any kind of guaranteed income or salary or pension like people with “normal” jobs, that has to be very important to them. A commission based life style is not very secure unless one can build an enduring engine of referrals and repeat business.

Fortunately, the “how to” is a simple concept. We first need to ask ourselves, who are the most likely people to send me business tomorrow? I think most of us would agree that the clients whom we have successfully helped purchase or sell a home today are our best prospects from whom we may expect a whole hearted recommendations and the probability of repeat business tomorrow.

Yet if we look at our daily routine as Realtors, we are often marketing to and looking for business from the people who do not even know us. We spend much of our time and money finding the prospect that is cold instead of building enduring relationships with the people who know and appreciate us.

Three excellent actions were suggested at the seminar that are contributing to building a strong relationship with our current clients and friends.

1. Have a Client Appreciation Event once a year. Host your clients, their family and friends to an event that they will enjoy. This could be a barbeque in the park or your back yard if it is large enough. It could be movie showing for the whole family at the theatre on a Saturday morning. (Usually this is a cheaper time to rent the theatre) Perhaps you may offer a musical concert or play organized by a local production company who may want to try their new production out on a friendly crowd for a reasonable rate.

Put your thinking hat on and come up with something that you can invite your clients too. Even those that can’t come will remember the gesture. If it is an annual practice of yours to invite them to a client appreciation event they will be hard pressed to turn you down every year. Sure, it will cost you something. And so does marketing to the people who do not know you. Remember, investing in keeping your clients is a worthwhile investment that will give you pay back many times over.

2. Make it a routine to call two or three of your clients every day. Start at one end of the list and go through to them all until you get to speak with everyone. If you don't reach them leave your name and number so they will know you called. If you do connect, you can say, “Hello. How are you and the family doing?” You will start there but it will lead to much more. A personal call from their Realtor once a year, even though they are not thinking of selling, will continue to build a lasting relationship long after the sale has closed.

But don’t try to call all of them all at once. Phoning your clients should be a daily and manageable routine so it will become a part of your work habits. Two or three clients a day is enough. If you really can’t do it, having your assistant call is better than not at all. But making the call yourself will definitely strengthen the bond between you and your client.

3. Send your clients a list of homes sold in their area even when they aren’t thinking of selling. When you give information that cost you virtually nothing but keeps your clients thinking about real estate with your name top of mind, you will be remembered when the need for real estate service arises. This will cost you time but will demonstrate to your clients that you really do think about them and their Real Estate interests.

Of course, like any good idea, it requires implementation and persistence in order for it to work. But doing these three things alone will generate referral business from your clients and build client loyalty and repeat business. We should take more time and care with the very people who know us and who are happy with our services. By doing so, we will remind them that we are right here for them whenever they want real estate assistance. If we do, we will need to spend much less time and money on the people who don’t even know us. And we will build a perpetual annuity that will provide real cash flows well beyond our expectations.

R. Greg Osmond is a Platinum Award winning Realtor serving St. John’s and surrounding areas, Newfoundland and Labrador for over 20 years and can be reached at 709-895-2500. Visit http://www.rgregosmond.com/ for further information.