Unless you've been hibernating for the past 6 months, I'm sure you've all heard the bad news about the World-wide economy in the past few months - from the collapsing banks to businesses failing, from massive lay-offs to homes defaulting - it seems everyone is being effected by this global financial crunch. While this is no doubt a tragedy, I find that many Canadians are too quick to include us in the group of countries that are struggling. It's true that we have felt the pinch of the harder economic times, but that's to be expected when your biggest international trading partner gets wiped out, but Canada hasn't been hit nearly as hard as the majority of countries.
So, why are we so special? What is different exactly? What did we do that was so different from the US and Europe? I recently came across a very interesting article explaining how and why our economy is so strong. It's written by Fareed Zakaria, the editor of Newsweek International, and I think he does an excellent job in explaining the whole situation - enjoy!
Worthwhile Canadian Initiative -
NewsWeek Feb. 7, 2009 - World View
The legendary editor of The New Republic, Michael Kinsley, once held a "Boring Headline Contest" and decided that the winner was "Worthwhile Canadian Initiative." Twenty-two years later, the magazine was rescued from its economic troubles by a Canadian media company, which should have taught us Americans to be a bit more humble. Now there is even more striking evidence of Canada's virtues. Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it's Canada. In 2008, the World Economic Forum ranked Canada's banking system the healthiest in the world. America's ranked 40th, Britain's 44th.
Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn't grown in size; the others have all shrunk.
So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada's more risk-averse business culture, but it is also a product of old-fashioned rules on banking.
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Canada has also been shielded from the worst aspects of this crisis because its housing prices have not fluctuated as wildly as those in the United States. Home prices are down 25 percent in the United States, but only half as much in Canada. Why? Well, the Canadian tax code does not provide the massive incentive for overconsumption that the U.S. code does: interest on your mortgage isn't deductible up north. In addition, home loans in the United States are "non-recourse," which basically means that if you go belly up on a bad mortgage, it's mostly the bank's problem. In Canada, it's yours. Ah, but you've heard American politicians wax eloquent on the need for these expensive programs—interest deductibility alone costs the federal government $100 billion a year—because they allow the average Joe to fulfill the American Dream of owning a home. Sixty-eight percent of Americans own their own homes. And the rate of Canadian homeownership? It's 68.4 percent.
Canada has been remarkably responsible over the past decade or so. It has had 12 years of budget surpluses, and can now spend money to fuel a recovery from a strong position. The government has restructured the national pension system, placing it on a firm fiscal footing, unlike our own insolvent Social Security. Its health-care system is cheaper than America's by far (accounting for 9.7 percent of GDP, versus 15.2 percent here), and yet does better on all major indexes. Life expectancy in Canada is 81 years, versus 78 in the United States; "healthy life expectancy" is 72 years, versus 69. American car companies have moved so many jobs to Canada to take advantage of lower health-care costs that since 2004, Ontario and not Michigan has been North America's largest car-producing region.
I could go on. The U.S. currently has a brain-dead immigration system. We issue a small number of work visas and green cards, turning away from our shores thousands of talented students who want to stay and work here. Canada, by contrast, has no limit on the number of skilled migrants who can move to the country. They can apply on their own for a Canadian Skilled Worker Visa, which allows them to become perfectly legal "permanent residents" in Canada—no need for a sponsoring employer, or even a job. Visas are awarded based on education level, work experience, age and language abilities. If a prospective immigrant earns 67 points out of 100 total (holding a Ph.D. is worth 25 points, for instance), he or she can become a full-time, legal resident of Canada.
Companies are noticing. In 2007 Microsoft, frustrated by its inability to hire foreign graduate students in the United States, decided to open a research center in Vancouver. The company's announcement noted that it would staff the center with "highly skilled people affected by immigration issues in the U.S." So the brightest Chinese and Indian software engineers are attracted to the United States, trained by American universities, then thrown out of the country and picked up by Canada—where most of them will work, innovate and pay taxes for the rest of their lives.
If President Obama is looking for smart government, there is much he, and all of us, could learn from our quiet—OK, sometimes boring—neighbor to the north. Meanwhile, in the councils of the financial world, Canada is pushing for new rules for financial institutions that would reflect its approach. This strikes me as, well, a worthwhile Canadian initiative.
http://www.newsweek.com/id/183670
If you have any questions or concerns regarding this, or any of my other posts, please contact me at taylor@bennettrealestatepros.com
Wednesday, February 25, 2009
Tuesday, February 10, 2009
Something A Little Different...
As you can imagine, being part of a family who works in the real estate business in Ottawa, I don't have much time away from real estate - whether it's Sunday night dinner or Monday morning at the office, it is almost always the topic of conversation. Add to the mix that interest rates are at an all time low, the new Federal Budget introduced several first-time buyer and home renovation incentives, and the market is enterting in to its busiest time of the year, real estate will inevitably find its way into almost any conversation. So what do us realtors do when we want to get away and unwind? Just like you, we vacation. The locations and the lengths of time may vary from person to person, but the goal is always the same - to get as much R 'n' R as possible.
Being that time of the year where us Ottawans start to feel the winters blues and Mother Nature starts to tease us with those days of -2 or -1 degrees, sandwiched between two days of -18, it's only human nature to look for relief and to get away to preview the warm summer weather. Here are some tips when looking for your next trip.
1. Travel E-Newsletters (Electronic Newsletters)
Alright, I can almost hear the collective groan from here, but before you completely dismiss this idea, hear me out. Travel agencies, airlines, tour operators, etc... use e-newsletters to inform their clients of potential up-coming deals. Often is an airline is short in filling a specific flight, they will promote it - mainly using their electronic database. I will warn you that you should expect to receive quite a bit of spam and unwanted mail, but if you find these emails to be annoying or you just can't be bothered to see another one again, the good news is that most have an 'unsubscribing' option (usually found at the bottom of the email).
2. Shop and Compare
You wouldn't buy the first car you saw, would you? Then why buy the first vacation 'deal' that you see? Vacation package deals come in all shapes and sizes - all inclusive, 3 to 5 star, beach front, etc... so, it's important to look around at all the deals and narrow them down using only your interested characteristics. It's also important to note that when comparing two deals from two different sources, make sure they offer the same thing - if there's a significant difference in price, make sure both deals offer all of your necessary criteria.
3. Discounts!
This may seem obvious, but many people don't even consider outside discount memberships. Airmiles, Areoplan, CAA, etc... there are many points clubs and discount memberships that will allow you to redeem points for a discount in price.
4. Websites
If you've shopped for a vacation in the last 5 years or so, chances are you've probably used an online website. But if you haven't, or you've been using a travel agent to book your trips, consider using the internet to book, or at least look for, your next vacation. Travel websites are becoming more and more user friendly and making it quite easy to book trip, even for those of us who aren't confortable with computers.
5. Off-Season
If you're looking to book a holiday, consider booking during the off-season. During the off-season, due to the low volume of sales, there are many deals offered that you may never see during the rest of the year. Of course you don't want to end up on the beach in long-johns and a sweater, or end up wearing your rain coat the whole time, but try and book as close as you can to the 'busy' season and the weather shouldn't be all that different. Another advantage is that if you book during some of the slower times of the year, you won't have to fight for lawn chairs on the beach or deal with a crowded hotel.
6. Choose Weekdays Over Weekends
If you're only looking to get away for a few days or so, try and book during the week instead of weekends. If you're ever looked at hotel prices or airline charges during the week versus weekends or holidays, you would have noticed quite a large difference in prices. If you have the flexibility in your schedule, try to book as many weekdays in your vacation as possible.
7. Newspapers
Saturday newspapers to be more precise. While many travel companies elect to use advertising on the web or TV, there are quite a few who use local newspapers. Like home builders and realtors, airlines and travel agencies typically pick saturdays paper to promote their specials and deals, so don't forget to pick up a paper on the weekend.
8. Don't Be Afraid To Ask
I'm not sure if it's in our polite nature as Canadians, but I find many of us don't ask for a better deal. In most transactions, there is always room for discounts, added bonuses, etc... but rarely do consumers take advantage of these - why? Because they don't ask. Just like in real estate, if you don't ask for any special treatment, you won't get it. Many sales people and agents are authorized to allow for a certain level of discount, but unless you ask for it, they won't offer it.
9. Take Advantage of Todays' Economy
I'm sure you've all noticed a significant decrease in prices lately, and vacations are no different. Because much of the world is feeling the pinch of the tighter economy, many businesses are dropping their prices to promote spending. Fortunately, us Ottawans live in a very stable economy, the most stable in the Canada and one of the most on the continent, so we are able to take advantage of some of the better deals that are out there. Just like in housing with the dropping interests rates, now is the time to book a vacation - you'll be sure to get more than a few freebees thrown in.
If you have any questions or comments about this blog or any of my other blogs, please feel free to send me an email: taylor@bennettrealestatepros.com
Being that time of the year where us Ottawans start to feel the winters blues and Mother Nature starts to tease us with those days of -2 or -1 degrees, sandwiched between two days of -18, it's only human nature to look for relief and to get away to preview the warm summer weather. Here are some tips when looking for your next trip.
1. Travel E-Newsletters (Electronic Newsletters)
Alright, I can almost hear the collective groan from here, but before you completely dismiss this idea, hear me out. Travel agencies, airlines, tour operators, etc... use e-newsletters to inform their clients of potential up-coming deals. Often is an airline is short in filling a specific flight, they will promote it - mainly using their electronic database. I will warn you that you should expect to receive quite a bit of spam and unwanted mail, but if you find these emails to be annoying or you just can't be bothered to see another one again, the good news is that most have an 'unsubscribing' option (usually found at the bottom of the email).
2. Shop and Compare
You wouldn't buy the first car you saw, would you? Then why buy the first vacation 'deal' that you see? Vacation package deals come in all shapes and sizes - all inclusive, 3 to 5 star, beach front, etc... so, it's important to look around at all the deals and narrow them down using only your interested characteristics. It's also important to note that when comparing two deals from two different sources, make sure they offer the same thing - if there's a significant difference in price, make sure both deals offer all of your necessary criteria.
3. Discounts!
This may seem obvious, but many people don't even consider outside discount memberships. Airmiles, Areoplan, CAA, etc... there are many points clubs and discount memberships that will allow you to redeem points for a discount in price.
4. Websites
If you've shopped for a vacation in the last 5 years or so, chances are you've probably used an online website. But if you haven't, or you've been using a travel agent to book your trips, consider using the internet to book, or at least look for, your next vacation. Travel websites are becoming more and more user friendly and making it quite easy to book trip, even for those of us who aren't confortable with computers.
5. Off-Season
If you're looking to book a holiday, consider booking during the off-season. During the off-season, due to the low volume of sales, there are many deals offered that you may never see during the rest of the year. Of course you don't want to end up on the beach in long-johns and a sweater, or end up wearing your rain coat the whole time, but try and book as close as you can to the 'busy' season and the weather shouldn't be all that different. Another advantage is that if you book during some of the slower times of the year, you won't have to fight for lawn chairs on the beach or deal with a crowded hotel.
6. Choose Weekdays Over Weekends
If you're only looking to get away for a few days or so, try and book during the week instead of weekends. If you're ever looked at hotel prices or airline charges during the week versus weekends or holidays, you would have noticed quite a large difference in prices. If you have the flexibility in your schedule, try to book as many weekdays in your vacation as possible.
7. Newspapers
Saturday newspapers to be more precise. While many travel companies elect to use advertising on the web or TV, there are quite a few who use local newspapers. Like home builders and realtors, airlines and travel agencies typically pick saturdays paper to promote their specials and deals, so don't forget to pick up a paper on the weekend.
8. Don't Be Afraid To Ask
I'm not sure if it's in our polite nature as Canadians, but I find many of us don't ask for a better deal. In most transactions, there is always room for discounts, added bonuses, etc... but rarely do consumers take advantage of these - why? Because they don't ask. Just like in real estate, if you don't ask for any special treatment, you won't get it. Many sales people and agents are authorized to allow for a certain level of discount, but unless you ask for it, they won't offer it.
9. Take Advantage of Todays' Economy
I'm sure you've all noticed a significant decrease in prices lately, and vacations are no different. Because much of the world is feeling the pinch of the tighter economy, many businesses are dropping their prices to promote spending. Fortunately, us Ottawans live in a very stable economy, the most stable in the Canada and one of the most on the continent, so we are able to take advantage of some of the better deals that are out there. Just like in housing with the dropping interests rates, now is the time to book a vacation - you'll be sure to get more than a few freebees thrown in.
If you have any questions or comments about this blog or any of my other blogs, please feel free to send me an email: taylor@bennettrealestatepros.com
Sunday, February 8, 2009
Mortgage Broker vs Banker – What’s the Difference?
When it comes to financing your home, there are many options available for you. The two best and most popular choices are A) a Mortgage BANKER and B) a Mortgage BROKER. But what can each do for you? And which choice is best for you?
Mortgage Banker
A mortgage banker is the lender – the person who is actually lending you the money. Even if you use a mortgage broker, it is the mortgage banker who makes the credit decision. While this option may be cheaper and faster, keep in mind that a mortgage banker will provide you with ONLY their banks rates and mortgage programs. If you are looking for comparative rates, you will need to visit several different lender agencies on your own.
Mortgage Broker
A mortgage broker will do the comparative shopping for you for a small fee. The broker does everything the lender would do -- checks your credit and work record, arranges for title search and hires the property appraiser -- but, once all of this information is compiled, the broker selects a mortgage lender that will most likely accept your application based on your financial data and personal information. In some offices, the mortgage brokers also are lenders.
If you choose to work with a Broker, we recommend that you have your Broker present several lending options so that you can see what the options are for yourself.
Each choice has its advantages and disadvantages, so it's wise that you analyze your current situation and look at your comfort level and confidence in negotiating a mortgage. If you feel that you have a strong understanding of mortgages and what type would be best for you, perhaps a Mortgage Banker would suit you best. But if you find that mortgage calculations make you go cross-eyed, or you simply do not have the time to shop your mortgage around, a Mortgage Broker might be best suited for you. Whatever your choice is, remember that both Mortgage Banker and Brokers do get paid unless you get a mortgage, so they are both working in your best interest.
For more information on the mortgage and other lending options, please visit: http://www.bennettrealestatepros.com/ or send an email to taylor@BennettRealEstatePros.com
Mortgage Banker
A mortgage banker is the lender – the person who is actually lending you the money. Even if you use a mortgage broker, it is the mortgage banker who makes the credit decision. While this option may be cheaper and faster, keep in mind that a mortgage banker will provide you with ONLY their banks rates and mortgage programs. If you are looking for comparative rates, you will need to visit several different lender agencies on your own.
Mortgage Broker
A mortgage broker will do the comparative shopping for you for a small fee. The broker does everything the lender would do -- checks your credit and work record, arranges for title search and hires the property appraiser -- but, once all of this information is compiled, the broker selects a mortgage lender that will most likely accept your application based on your financial data and personal information. In some offices, the mortgage brokers also are lenders.
If you choose to work with a Broker, we recommend that you have your Broker present several lending options so that you can see what the options are for yourself.
Each choice has its advantages and disadvantages, so it's wise that you analyze your current situation and look at your comfort level and confidence in negotiating a mortgage. If you feel that you have a strong understanding of mortgages and what type would be best for you, perhaps a Mortgage Banker would suit you best. But if you find that mortgage calculations make you go cross-eyed, or you simply do not have the time to shop your mortgage around, a Mortgage Broker might be best suited for you. Whatever your choice is, remember that both Mortgage Banker and Brokers do get paid unless you get a mortgage, so they are both working in your best interest.
For more information on the mortgage and other lending options, please visit: http://www.bennettrealestatepros.com/ or send an email to taylor@BennettRealEstatePros.com
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