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Do you need a Realtor?
Buyers in Canada’s housing market today face a fundamentally different reality from those a few decades ago, with the advent of new technologies, services and data sources to steer their own house hunt.
So what, then, is the modern role of a Realtor? Global News dug into that question in the latest instalment of Home School, a series giving Canadians the basics they need to know about buying a home they never learned in the classroom.
Real estate agents traditionally help buyers find properties that fit their needs and then facilitate the bidding, negotiation and final purchase process, with sellers’ agents on the other side of the deal.
Some who spoke to Global News this week argued that with publicly available data about comparable sales and other innovations in the market, agents aren’t needed.
Toronto-based Realtor Pritesh Parekh pushed back on those claims, arguing agents have never been more important to help buyers cut through the deluge of content available on the housing market.
“I believe, with the amount of technological advancement and information now at your fingertips as a client, it’s actually even more important to work with a real estate professional,” he says.
Read more on what you need to know about Realtors.
Is buying a home even worth it, though?
Some Canadians are rethinking the value of home ownership as high mortgage rates sour their view of the housing market at large.
The Canada Mortgage and Housing Corp. (CMHC) released the results of a survey Wednesday gauging the impact of the rapid rise in interest rates over the past year on Canadians’ sentiments and finances.
Almost three-quarters of all mortgage holders (74 per cent) said they have already been affected or expect to be impacted by the higher rates, according to CMHC.
The shock of higher rates is also pushing some to re-evaluate homeownership from an investment point of view.
Some 81 per cent of respondents to the survey said they felt homeownership was a good long-term financial investment, but that’s down from 91 per cent in 2022.
While more than half of homeowners said they expected their property would grow in value this year, that’s down sharply from a poll last year.
Read more on Canadians’ changing views on home ownership.
Air travel in ‘far better shape’ this summer
Years of travel headaches during the COVID-19 pandemic might have a silver lining this summer.
Travel experts who spoke to Global News say the disruptions that many Canadian airlines and airports faced in recent years have hardened the sector, which is in “far better shape” this summer than last.
“If there’s any bright light that’s come out of COVID, it’s that we have changed a lot of things right from passports to air travel and compensation,” said Martin Firestone, president of Travel Secure Inc.
Airports such as Toronto Pearson have seen significant boosts in staffing after being plagued by shortages during the COVID-19 recovery. New technologies have also been added at the airport to streamline baggage services and check-ins.
Airlines are also preparing for a hot travel summer. Air Canada, for instance, had also added staff compared with last year but is still flying a reduced schedule compared with 2019 as part of what it calls a “prudent approach.”
These changes come as the federal government is pushing for an overhaul of Canada’s passenger rights charter amid a massive backlog of complaints received by the Canadian Transportation Agency.
Read more on what to expect when you fly this summer.
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– THE QUESTION –
“I’m in my early 30s and getting married this summer and wondering to what degree we should merge our finances, particularly our investments. We both currently have our individual RRSPs and TFSAs, which aren’t maxed out yet. Is there a benefit to opening a joint brokerage account? Or should we continue to work on maxing out our registered accounts first? Are there any other joint investing options we should explore?“
— A Money123 reader
“I’m pleased to hear you and your intended are talking about money at this stage. Merging finances can be a fraught decision that reaches into personal views on freedom, fairness and, not surprisingly, power. It starts with, ‘Should we have a joint bank account?’ and then spreads to longer-term views on investing.
It is common for couples to maintain separate bank accounts to receive paycheques and set up automated savings into TFSA and RRSP accounts. But having one household joint account to cover operating costs – rent, utilities, food, etc. – is a good idea. You just have to agree on how much each person puts in.
If one of your goals is to buy a home, it will likely be the single most valuable joint investment in your lives. Saving for the down payment will be a priority, and using your separate TFSA accounts and separate RRSP and FHSA accounts will likely be the best start. Depending on your personal tax brackets, you might want one person to max out the RRSP and FHSA while the other socks money away in the TFSA.
A joint brokerage account is a fearsome animal to tame. Apart from the mountain of paperwork necessary to set it up, who will report the income for tax purposes? You cannot arbitrarily decide this – it is determined by where the investment money came from. Equal contributions from each of you means a 50/50 split at tax time. If one person puts more money in, the ratio must reflect this inequality and must be adjusted annually if you are making regular deposits. You will want to keep an Excel sheet as an audit trail. Beyond that, who will be the authorized trader on the account? Whose investor profile will determine the investment mix?
Generally speaking, the joint brokerage account is something that comes later in life when assets have been gathered and you are looking at efficient estate transfer.”
– Lenore Davis, founding partner, Dixon Davis & Company
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