You may have heard all of the sales pitches about pricing your home to sell. If you take all the fast talking out of the sales pitch, you will find that the information is really quite sound - and especially valid in a tough economy. So let's discuss a few of these ideas...

"If you overprice your home, it will help to sell more attractively-priced homes". This is very true. Purchasers have no other way to compare value than to compare list prices. They are not mind readers and they have no way of knowing how flexible you will be. If your home is priced higher than a similar home you will be less likely to receive an offer - even if you would be willing to take less money for your home than the competition. The competition appears to be a better deal and it will generally sell first. My philosophy in listing a home is to look at the competition and, if necessary, to allow very little margin between the list price and the desired sale price. This is done in order to present a favourable list price when compared to other listed properties.

One problem with starting your home at an inflated list price is that Realtors will ignore your home - sometimes even after you have reduced the price. This statement is not meant to imply a conspiracy on the part of Realtors. The situation is this: Overpriced listings tend to become invisible to Realtors after a while. It may take a reduction in price to below market value before the property is noticed. This is why Realtors cringe when a seller says, "I can always come down in price later". It is so much more effective to start at the right price. The impact is there right off the bat.

Another thing to consider about overpricing is this: It is quite often the case, with two similar homes, that the higher priced home will ultimately fetch less money than the reasonably priced one... I have seen this time and time again. The increased interest in the lower priced home allows the seller to be less negotiable in his price. The lack of activity centring on the higher priced home requires this seller to become much more flexible in order to sell. Also, the availability of a reasonably priced home causes serious purchasers to be intercepted before they would be tempted to make an offer on the overpriced home. What often happens here is that the reasonably priced home sells and another reasonably priced home appears on the market - thereby creating exactly the same problem all over again. I might add that this type of problem occurs more frequently in subdivisions or areas where there are groups of similar homes. It is always easier to beat the current market price expectations if you have a unique and desirable type of property.

Even if you are convinced that it is important to list at the right price, you still have to figure out what that price is. It is the job of your Realtor to figure out exactly what that figure should be (and then to justify it to you). A good agent will be capable of finding that figure through researching data for past sales as well as currently listed properties. It's part science and part art, in my experience. It is fairly important for the agent to know the local area and the subtleties of marketing in that area in order to be accurate. For example, sometimes a few houses will sell higher than market expectations - perhaps due to some unusual local conditions (like, say, incoming transfers on a large scale) It is very important for the Realtor to be able to identify these glitches and account for them in his/her final evaluation. Otherwise the property to be listed may be priced incorrectly.

Well, I hope that this has been an informative article for you. It's certainly important stuff to keep in mind if you plan to sell your home.

This popular question goes something like ... "what does 'irrevocable' mean with respect to an offer?" Well, the word "irrevocable" refers to "something that is not able to be revoked" - I think this is fairly obvious - if you take apart the word. Now, if we take a look at the Offer form, we would find a clause - clause #4 to be exact - which says: "Purchaser agrees that this Offer shall be irrevocable until...". But does irrevocable really mean that you can't withdraw the offer once it has been made? That is an interesting question and its been before the courts - so there are decisions which tell us how the courts see this question. Before I give that answer, let's consider a likely scenario...

You and I sit down to draft an offer on a property. We have signed an agreement to say that I represent you, the Purchaser. This means that you are my client (I mention this relationship because it is importantto the outcome of this example). Anyway, you sign the offer I and get into my car and drive to meet the Vendor and his/her agent. While I am in the car you page me and tell me that you have changed your mind and do not want the offer presented. Now let's assume for our example, that irrevocable really means that the offer cannot be revoked. How would things go? Well my interpretation of being paged in the car is this: if lam the Purchaser's agent, then I must withdraw the offer since I represent the interests of the Purchaser - and in actual fact, the offer has not been made at all yet. There is no offer, from a legal point of view, until the Vendor sees it. If this scenario were changed to be typical of earlier years - where all agents represented the Vendor - then I would have a duty to present the offer once signed. My interpretation here is that the offer is considered to be presented once it is signed and in my possession - after all, I am an extension of the Vendor. At this point, the irrevocable nature of the Offer would apply. But perhaps I am digressing a bit. So back to our example...

Let's say that the offer has not been withdrawn after all and I arrive at the Vendor's home (as the agent for the purchaser) where the Vendor and the listing agent are waiting. The offer is presented and considered. The Vendor says that he would like to think about the offer for a day. Since the offer is irrevocable until 11:59 P.M. the following day, this should be no problem. The next morning, the Purchaser calls to say that he has changed his mind and would like the offer withdrawn. Can this be done? If "irrevocable" really means what it says then indeed the offer cannot be withdrawn until it expires at midnight. The Vendor has the option of accepting the offer until that time - and the Purchaser must honour the Agreement should the Vendor decide to accept.

Now let's hear what the courts have to say about all his! Indeed, if an offer is irrevocable it means that the offer cannot be withdrawn for the time period specified. But courts have also said that the Offer must be "signed under seal" in order to establish it's irrevocability. Those little black circles on the back of the Offer form - the ones that have the word "seal" in brackets under them - are considered to be seals. In days of old, a seal was something made of wax and imprinted with a seal (thus the term "sealing wax"). These days it's just an ink smudge. But an important smudge all the same! At least that's how our legal system sees it.

As an extreme example, let's say that I advertise: "Our office has the finest quality typewriters and photocopiers - to sell your home faster!" Well, there is a pretty sketchy connection between a great typewriter and a shorter market time for your home! This is obviously an irrelevant claim. Unfortunately, in the real world things are much more subtle. It is much more difficult to spot an irrelevant claim. Although it may be difficult for the general public to recognize the relevance of some of these claims, it is my intention to get you to think about this issue and to ask enough questions that you are able to separate the wheat from the chaff when it comes time to sell your home.

At this point, it might be useful to discuss a few examples that might be considered as suspect. So here goes... ln a recent column on technology, I discussed technology as it relates to real estate. My basic point was that, at this time, the internet is not a serious source for sales. The MLS (MultipIe Listing Service) is still the most powerful networking tool for selling real estate - by far! So claims about being on the information highway and it's ability to sell homes are, in my opinion, suspect. There is one company that proudly claims in its ads that all it's agents have an e-mail address. This fact may come into play in the future, but now it's a paper tiger. I am not saying this because I don't use the Net - actually, I have both an E-mail address as well as a "home page" on the World Wide Web (this may not mean anything to most people).

Another thing to look carefully at are ads which refer to the "most" or "best". If a company advertises that they are, say, the largest in the world will this help you sell your home? Possibly. But perhaps this means that they have the most "warm bodies" and may, in fact, be surpassed in sales by another company. Perhaps the company that sells the most in your area is a small independent firm. Perhaps it doesn't matter if your agent works for the firm that is "most' or "best". Maybe it does matter. These are all questions that you have to ask yourself - and hear answers from your realtor. In this case, I am not going to say what I think are relevant claims. That's for you to decide - let's just say that I feel that many of the claims of this type don't have any effect on service to the customer.

Some agents are now pushing the fact that they are either members of Realtor networks or that they are connected with networks of Realtors organized and marketed by related businesses (not real estate firms). My experience with networks is that some are very powerful and others have no usefulness at all - except for Realtors to use to solicit listings (the classic paper tiger!). I have participated in five networks over the last few years - and have dropped out of three of them because they were useless entities that seemed to be vehicles for making money for the organizers of the network, as opposed to generating business for the Realtors. My experience is that the networks created by each franchise (e.g . RE/MAX, Century 21, etc) are generally effective - but again, you have to be the judge of each Realtor's claim.

To sum up I would say that anyone has the ability to judge Realtor's claims - provided that the necessary research is done. Question your Realtor - and keep asking "why?" until you have a good picture of what the Realtor's service will do for you.

OPEN VS CLOSED? - MAKING THE MOST OF YOUR MORTGAGE - By Hugh Hardy

In today's column, I thought I would talk a bit about how to get the best mortgage. My views regarding mortgages have changed quite a lot in the last few years, and I thought I would share some of my conclusions with you.

For one thing, I am pretty down on closed mortgages. There are plenty of reasons to have a closed mortgage - at least for certain people. Some of these reasons might include the following: if you absolutely can't afford an increase in your mortgage payment over the next few years; if your company would pay any mortgage discharge penalty; if you were transferred before the end of the mortgage term; if your mortgage approval was conditional upon your having a locked-in mortgage, etc.

I think that there are a lot more reasons not to have a closed mortgage. So let's cover the downside of having a closed (or "locked-in") mortgage. One thing that has always cheesed me off is the size of the penalty for a homeowner who wants to discharge his or her mortgage before the end of the term. Typically, on a $100,000. mortgage, the minimum penalty to discharge early is around $2,500 or more. This is a fairly hefty sum of money. You wouldn't believe the number of customers I have had who have ended up paying penalties like this - or even larger! If interest rates have gone down significantly since you took on your mortgage, the penalty could be the "interest differential". I won't go into a definition of that term right now. Let's just say that I've seen interest differential penalties on $100,000. mortgages that were in the $6,000. or $7,000. range! So the pure cash outlay if you have to break out of a closed mortgage is a good reason why I don't like them (and lenders very, very rarely negotiate penalties). I'm also just plain opposed, in principle, to paying money to be free from a loan.

Another advantage of an open mortgage is that interest rates for open mortgages are typically a fair bit lower than their closed counterparts. This means that you can save money every month with an open mortgage. Should interest rates go up, you still have a margin before you are paying more than you would if you had locked-in.

These days, most lenders have open mortgages that automatically "roll over" and are extended - usually with no fee (or maybe $50 in some cases). So you don't have to be attending to your mortgage on a regular basis.

The second issue that I would like to cover in today's column is about making sure that you negotiate your mortgage when buying a home. You should know that lenders are all very competitive when it comes to negotiating new mortgages. It might help you to know what kind of discount you can get from the "posted rates". Typically, a quarter of a percent discount is a no-brainer, a half a percent discount is easy, a three-quarter percent discount is a real coup, and a one percent discount is about as common as are lottery winners. Now you don't have to guess how negotiable your bank or trust company should be!

Besides negotiating the rate, many lenders offer incentives such as ... free property appraisals (necessary to obtain the loan), cash back on closing, money down on your VISA, money towards your legal fees or land transfer tax, first 3 months of mortgage payments free, deferral of first months payments... the list goes on!

I would encourage you to negotiate and shop around when looking for a mortgage. The banks count on the fact that customers are not as aware of their ability to negotiate as they should be. After all, how many billion dollars was it that the banks made in Canada last year? Gee, I don't have enough fingers and toes to keep track of that one!

I thought I would write this column in the form of a numbered list - for easy reference. So without further ado, here are a few of the things you are agreeing to when you sign an offer...

1. If you are buying or selling a house, it has to be VACANT for closing (unless otherwise detailed in the offer).
2. Watch out if you are buying a house because you are consenting to a credit check when you sign the offer!
3. Who the real estate agents represent is now filled in on the back of the offer - be sure to find out.
4. The owner guarantees that, to the best of his knowledge, there is no urea-formaldehyde foam insulation nor has any been removed.
5. Anything that a buyer and a seller agree to isn't legally binding unless it is in the offer in writing.
6. If you sell your house and die before it closes, your heirs must honour the Agreement. If you buy a house and die before the transaction closes, it's the same thing - your estate must honour the Agreement.
7. If you buy a house, and it burns down before you take possession, you can either get your deposit back or, if you prefer, it is your right to take the insurance money and whatever is left of the house and property.
8. Any taxes, utility bills, etc. are the Vendor's responsibility up until closing and the Purchaser's responsibility after closing. But what about the actual day of closing? That is the Purchaser's responsibility.
9. You can't make a contract that involves an illegal act.
10. Are you selling a dilapidated house? If the house can't be insured against fire then the deal is void - according to clause 8 in the Agreement of Purchase and Sale.

Well, that's all for this week. I hope you found these ten tems interesting. Perhaps there were a few things in there that you were not aware of already. It's all in the fine print, as they say.

REAL ESTATE TRIVIA - By Hugh Hardy

In today's column, I thought that I would make a list of facts about real estate that you might not know - little tidbits of trivia that have been floating around aimlessly in my brain for the last 10 years or so. For example, and I mentioned this in a previous column, did you know that by signing an offer on a property you are also consenting to a credit check? Anyway, here's my "did you know?" list for today...

1. The definition of "first time buyer" according to CMHC - which allows you to buy with 5% down - has been expanded to include purchasers who have been relocated for job reasons, purchasers who have either split with a spouse or ended a joint family ownership, and finally, purchasers who have lost equity in a home and no longer have 10% down.
2. CMHC stands for Canada Mortgage and Housing Corporation and is a Government of Canada organization to assist with the purchase of homes and the repair of existing homes.
3. The square footage of a house is measured from the outside walls of the house and only includes living area that is above grade. Agents may list the square footage of the entire house - both above and below grade - by using terms like "total finished living area".
4. A bathroom with a door to the master bedroom as well as a door to the main house is called a semi-ensuite".
5. A Lis Pendens is a notice that is recorded on the title of a property in the land registry office that says that there is pending court action involving the property. Betcha didn't know that one!
6. MLS is a trademark - just like Coca-Cola. The real estate boards are licenced to use the MLS trademark. Nobody else can.
7. An "SPP" offer is part of the lingo used by real estate agents to refer to an offer that is conditional upon the sale of the purchaser's property.
8. Most SPP offers have an "escape clause" which allows another offer to bump the SPP offer. Most people think that the escape clause can only be used with SPP offers. This is not true. An escape clause can be used with any conditional offer - for example, an offer which is conditional on mortgage approval can also have an escape clause. Also, on the other hand, an SPP offer does not necessarily have to have an escape clause if all parties to the transaction agree.
9. If an Agent innocently misrepresents the facts about a property and should have known the true facts - based upon his assumed expertise - then that Agent can be sued and held liable for the error. This is called Negligent Misrepresentation.
10. It is legal for a real estate company to have a fixed commission policy for it's sales people, but it is illegal for real estate companies to get together with other real estate companies to set fixed commission rates. This violates the Competition Act.

Well, that's it for little known facts for this week. I'll be writing the occasional column on this topic in the future - stay tuned!

GETTING THE MOST FROM YOUR REALTOR - By Hugh Hardy

Today I'd like to talk about what you can expect from real estate salespeople. It's interesting to me that there are so many different ways that people deal with Realtors. I think a lot of it has to do with how these people see Realtors - how they expect that they will be treated.

Some people feel that Realtors are pretty much like "used car saIesmen". As a result, these people tend to avoid anything more than casual contact. Of course, they never leave names or phone numbers for follow-up. As a result, they tend to deal with a different Realtor each time they make an inquiry - or perhaps 3 or 4 Realtors in rotation. This acts like a self-fulfilling prophecy. This type of customer has his feelings about Realtors confirmed - because the Realtor is never able to look in depth at the customer's situation, is always treated with suspicion and is not allowed to develop a rapport that allows the Realtor to serve the customer most effectively. Dealing with these people can be frustrating for a conscientious and naturally helpful Realtor.

Now, I'm not saying that there aren't a few "bad apples" amongst Realtors who have little respect for their customers. But, for the most part, the average Realtor is a true professional with service in mind. After all, that's how we establish repeat business and thus longevity.

I should clarify that it is natural for someone making the most casual of inquiries to deal this way with salespeople. I am not referring to that type of person here. I'm referring to potential Purchasers who are very serious about purchasing a home, but still remain "stand-offish". I've seen it so many times. These people usually don't even realize that they are not working in their own best interest!

Let me explain that what we are talking about here is specifically how potential Purchasers deal with Realtors - not Vendors. This is because Vendors, by necessity, must establish an on-going relationship with a Realtor. This relationship is created with the signing of the Listing Agreement. The Listing Agreement is the "glue", the contract, in which the Vendor offers exclusive representation for the marketing of his or her home, and contracts the Realtor to act in the best interest of the Vendor.

Now, it turns out that the way to increase your chances of finding the most suitable home, and in negotiating to your best advantage, is by using one competent Realtor exclusively. It is only natural that customer loyalty creates Realtor loyalty. These days, that relationship is often manifested legally, in that, it is now commonplace for Purchasers to sign a "Purchaser's Agency Agreement" with the Agent. This allows the Purchaser to have the same level of commitment from a single Realtor that the Vendor gets when signing a Listing Agreement. In most cases, the Purchaser's Agency Agreement specifies that the commission will still be paid by the Vendor of the home that is ultimately purchased. So it's a free service to the Purchaser too!

Having your own Agent means that she/he can do all of the following things for you: calculate what you can afford to purchase; show any listed houses to you; draft an offer; negotiate with the Vendor on your behalf; watch for suitable new listings as they come up; share "grapevine" information; help you find a bank or a home inspector if you don't have one; buy you lunch (this may create serious repercussions from all my past clients!); help you sort out the pros and cons of a particular property; etc; etc.

This is not a complete list of the duties of a Purchaser's Agent, by any means. But I hope you get the "drift". Working with one Agent on an on-going basis is definitely the best way to get the most in the long run.

Today I'd like to discuss the mechanics of "trading up - or, for that matter, trading down or trading even. Basically, any situation where you might be selling a home and then buying. For families who have guaranteed sale programs - the military for example - this column may not be relevant. But for "Joe Average", who can't own two houses at the same time, things can get complicated.

When the market was red hot back in 1989, many people would find the house they wanted, buy it with, say, a 90 day closing, and then sell their own home with the same closing date required. But these days that's a bit risky. It's not guaranteed that your house will sell before the closing date on your purchase - and that can be a disaster unless you've just won the "649".

But there are two basic safe ways that we can approach the trade up scenario these days. The first way goes like this: You find the house you want, put in an offer conditional on the sale of your existing home, and wait for your home to sell. The second way goes like this: Vou put your house on the market and start looking casually for a house to buy. But you don't make any offers until your house is sold. When the house is sold, you shop for a home and buy it with the same closing date as your sale.

Both of these approaches are safe because there is no possible way that you can end up owning two homes. But they each have their advantages and disadvantages. Let's look at those now.

If we take the first scenario - where you buy a home conditional on the sale of your home - there is one major advantage over the other scenario. The advantage is that you can search for a home until you find exactly the right one. You can take all the time you like. This is a significant advantage. Unfortunately, this scenario is fraught with problems. 99% of the time, the seller of the home you want to buy will require that you put an "escape clause" in your offer. What is an escape clause? An escape clause says that the seller can continue to offer his property for sale and if he receives another offer that he likes better, he can give you a specified amount of time (usually 48 hours) to firm up your offer - to remove your condition about selling your home This is reasonable. Why would a seller want to have her home tied up and unsaleable while she waits months for a potential purchaser to sell his home. The downside for you, the prospective purchaser, is that you can find your dream home and then be "bumped" before you have sold your home. This is especially likely to happen when the market is busy and homes are selling well.

Other disadvantages of this approach can be listed as follows:

1. You don't know how much you will get for your home before you make the offer on your purchase, so accurate calculations of final mortgage amounts that you will carry in the new house are not possible.
2. You have to pick a closing date on your purchase and try to make the date on your sale the same - but sometimes this doesn't work out - especially if it takes longer than expected for you to sell.
3. You can't negotiate as good a purchase price if your offer is conditional upon sale - firm offers and offers conditional upon financing approval are much more certain and thus will be looked at with more seriousness. After all, your home may not sell.

So let's look at scenario number two - where you sell first and then buy. The trick here is to negotiate a long enough closing on your sale that you can find and purchase a suitable house with the same closing date. So, if you sell your home with a 90 day closing, this allows a minimum of 30 days for you to find a home and buy it with a 60 day closing to match the closing date on your sale.

The major disadvantage to this method is that you have a limited amount of time to find a home to buy. It's definitely not for those who have a narrow and inflexible range of possible home purchases. This method works well, however, with people who are definite about selling and who have a fairly wide range of possible purchases in mind.

The advantages of this method are:

1. You know the closing date of your sale and can buy accordingly.
2. You know how much money you are getting for your sale and thus what you can spend.
3. When you find the right home you can buy it firm - you'II never lose a home that you want by being bumped.
4. You have already sold, so you can negotiate a better price with a firm offer.

Well, that's a quick overview of the two safe methods of trade up buying. Your Realtor can discuss these scenarios in much greater detail.

Let's get right to the first and most significant issue - and that is representation. Most of us in the industry are getting used to the new way that Realtors work with buyers - as the buyer's own agent (but still paid by the seller). This has completely turned around in the last two or three years, and rightly so! As you may know, buyers used to have no proper representation and were serviced by Realtors who owed their allegiance to the seller. Thank goodness this has, for the most part, changed. So make sure that you sign a short term contract with your Realtor in order to obtain representation. This will allow your Realtor to work in your best interests - and to keep your secrets!

When you start out looking, the first thing that your Realtor should do for you is to provide you with MLS data on houses currently for sale - so that you can zero in on potential purchases. Virtually all homes, regardless of who the listing Realtor is, are on the MLS. Looking at ads can often be a waste of time and throw you off the trail because ads usually don't give location, contain less hard data, and only mention the positive aspects of a property. You should only work with MLS listings. If you should see an ad that looks interesting, it can be cross-referenced with the MLS.

If you rely on a knowledgeable Realtor to help you interpret the data contained in the MLS, you can save a lot of time. Additional to this, your Realtor should be able to help you determine your wants and needs, and to help you to prioritize these points, in order to filter the MLS data. If you have a Realtor with a history in the area that you are looking, then you can obtain advice about specific neighbourhoods and maybe even specific homes. I know that I have often had clients ask me about specific homes on the market that, coincidentally, I have previously sold. Knowing the history of a home can be a real advantage to a prospective purchaser.

Your Realtor should help you maintain focus when you start looking at homes. It's easy to start wandering into unaffordable price ranges and impractical locations. The Realtor should always be reiterating your needs and keep you from buying a house that you will later regret. I try not to show large numbers of homes in one outing. And I always try to follow up the viewings with some discussion of what we have seen. This helps to maintain focus. Seeing 20 homes in one outing can be confusing.

Now let's talk a bit about financing. Any Realtor should be able to help you by working out the size of mortgage that you would qualify for at the bank. Beyond this, different mortgage scenarios should be "played with" as well. How much would the payments be if you were to spend $10,000 less than planned? What is the monthly payment with a 20 year amortization instead of a 25 year? How about different mortgage terms and thus interest rates? This is all easy stuff to work out. Your Realtor should also have a knowledge of current programs - like the CMHC 5% down program, borrowing from your RSP, land transfer tax rebates on new homes, etc. Your Realtor should also have a good knowledge of what separates the different lending institutions in terms of incentives, bottom line interest rates, and levels of mortgage flexibility. Lastly, your Realtor should be able to help you find the best lender for you.

Well, that covers a few points to look for from your agent when you are buying. It is worth mentioning that there is a whole lot more to it than what I have been able to cover here - due to space limitations.

Next week, I'll talk a bit about drafting and negotiating the offer - from a buyer's point of view.

The most obvious thing about a new home is that everything is new. You are unlikely to have to worry about maintenance for quite some time - if the home is properly built, that is. With a resale home, you may have to replace worn carpets, have the furnace cleaned replace windows that don't keep the cold out etc. With a new home, you choose your own colours and styles - with a resale home you are stuck with the original owner's choices - and these may not suit you.

Many potential new home buyers worry about the home settling. In my experience, you are much more likely to have problems with an older home than with a reasonably constructed new home. But these problems are usually extremely minor and are covered under the Ontario New Home Warranty Program (ONHWP).

This brings to mind another point. Many people I talk to are afraid of purchasing a new home because they are afraid of cost overruns during construction and they are also concerned about whether they can get the builder to come back to fix future problems. Well, let me say that there is a way to avoid these hassles. If you buy a lot and hire a contractor to build a home, then these two problems are possible. Why? You are actually acting as the builder if you do it this way. The contractor is invoicing you for the work he does. When you build a home this way it is easier for the contractor to add costs to his original estimate. It is also not technically necessary for the contractor to supply an ONHWP warranty. The best way to go is to have the contractor buy the lot and to make an offer to the contractor for the finished home on your choice of lot. This now means that the contractor must be licenced by the ONHWP people and he must supply a warranty with the home. It also means that your offer becomes a binding contract when signed by the contractor and the price and terms specified are no longer negotiable. This eliminates the problem of cost overruns. I always work this way when dealing with builders. It really eliminates problems. I get pretty technical in the body of the offer regarding the different grades of construction materials to be used and the quality of construction. This further protects the purchaser. It also protects the builder because he then knows exactly how to accurately cost out the project.

Now let's talk about the cost of new versus resale. Let me start with some background. When an appraiser tries to establish the value of a property, there are two possible ways that he can calculate this figure. One is through comparing it to other similar homes that have sold and then adjusting for differences. The other is to calculate the value of the land and then add the cost of construction to it. These two methods of calculating value actually give us the cost of building something versus the cost of buying the same home as a resale. Since we work with these two calculations as our basic ways of determining value we are always aware of the relative costs of building versus buying a resale home. So what do we find? In the late 1980s, when the market was booming, it was definitely cheaper to build. In fact, you could build a home and sell it immediately for a substantial profit. As the market fell, it became more expensive to build. As this trend continued, the builders then found that they weren't selling too many homes - so they began to reduce their profit margins in order to sell homes. Today, it is pretty much neck and neck as far as the cost of a resale versus building is concerned. Sometimes the builder's homes are cheaper and sometimes the resales are cheaper. However, there are some exceptions. High end, larger homes, often sell for much less than reproduction cost - just because of the limited market for these homes. In the very low end, it is possible to get a home built for less than the cost of a comparable resale. But generally the value is about the same.

Knowing your relative strengths and weaknesses is perhaps the most important aspect of the bargaining process when you are buying or selling a home. If you know the strength of your position, then it is possible to get the best result under the circumstances.

Let me start with an example: Let's say that we have a couple who wish to purchase a larger home. They begin to look at houses with their Realtor. They search for awhile and soon find a very suitable home. The Purchasers want to put an offer on the home, but they also have a home to sell. For this reason their offer must be conditional upon the sale of the Purchaser's home. At this point, the Purchasers indicate that they want to negotiate price aggressively. So the Agent presents the offer and the deal does not come together - based on a price discrepancy. The Purchasers are put off by this so they decide not to move after all. So what are the problems in this hypothetical scenario?

There two things that immediately come to mind that the Purchasers should consider. Firstly, how much demand is there for this particular home - the answer to this is based on two factors - how well is the home priced and what is the general market demand for homes like this one? Secondly, to what extent will the conditions in the Offer To Purchase compromise it's strengths? Because the offer was conditional upon the sale of a property, the Seller considered the Purchaser's offer very much a trial proposition - obviously, there is no guarantee that the Purchasers would be successful in selling their home. So why should the Seller pare his price to the bone based on a "maybe"

Indeed, the Purchasers should have realized that their position was weak. Realizing this, they would have two options under the circumstances. The first would be to pay the Seller a premium price in order to secure an option on the property (most Sellers will offer more flexibility in their prices for firm offers). The second option would be for the Purchasers to put their own house on the market and then to make a firm, aggressive offer on the property when they get an offer on their own home. Both of these scenarios show the Purchasers awareness of the strengths and weaknesses of their position.

As an addendum to the first scenario, it should be added that the Purchasers could potentially re-negotiate the accepted price on their conditional offer should they receive an offer on their own home. The Purchasers could go to the Seller and say that they have received an offer and would the Seller agree to reduce his price if they were to remove the condition and to buy the house firm. Most Sellers do not like to re-open negotiations after an Agreement is made unless there is a legitimate reason for doing so. One such reason might be that the Purchasers are looking at an offer on their home which is lower than they will accept unless the Seller will "share the pain" and re-write the existing Agreement at a lower price. I have executed this particular game-plan many times - it works well as long as all parties are "above-board" in their dealings and honest in intention.

As I mentioned before, supply and demand really comes into play in assessing your strengths and weaknesses. In a busy market, the Seller of a desirable home can demand more from the Purchaser - both financially and with regards to terms and conditions. In a slow market, Purchasers are generally favoured.

Of course in the previous scenario we are assuming that the house that the Purchasers want to buy is a very saleable house in a relatively busy market. If this were not the case then I'm sure that the Seller would be more willing to negotiate both the price and the terms. Perhaps even accepting a low offer containing a "sale of Purchaser's property" condition.

In general, the more flexible that a Purchaser can be regarding terms, the more flexibility there will be in price. Firm cash offers with no conditions, a flexible closing date, and few inclusions (meaning chattels like appliances or furnishings) will be the strongest. For the most part, offers conditional on financing approval and/or a building inspection do not significantly compromise your negotiating position. Offers conditional upon the sale of a property are considered as weaker - unless there are mitigating factors - like, for example, an excellent offer price.

So assess your strengths and weaknesses - your Realtor can help - in the long run you will come out ahead.

"What does it take to sell your home?" In my 11 or so years in the real estate business, I've been over this question more than a few times. My experience has led me to some conclusions as to exactly what is needed to do the job - and these conclusions may surprise some of you. Although I have worked in a market of a certain specific size, location, and demographic, I believe that the answers which I have found can be applied to almost any market - maybe with the exception of very small towns with correspondingly small populations (populations in the 100's, for example).

The answer to this question is not a particularly deep, dark secret. In fact, most Realtors intuitively know what works to sell your home - and what doesn't. So why does the answer often seem like a mystery? For one thing, not every Realtor has the conviction to apply the methods that work and forget the stuff that just looks good. To further complicate matters, some Realtors may not be particularly good at conveying blunt opinions to their Vendors. What are the reasons that the house is not sold and what it would take to get it sold? That's the million dollar question.

One example of stuff that doesn't really work is the "Open House". Open houses are ineffective in most markets - plus they are a tremendous inconvenience for Vendors and an inefficient use of time for Realtors. Yet open houses are commonly done by many Realtors (out of good intentions mostly). I spoke with one Realtor who averages around 80 home sales a year and hasn't done an open house on a resale home in over 8 years (new homes are an exception to this rule - they are typically sold by showing models in an open house setting)! She was adamant that open houses are a complete waste of time! I'm not saying that open houses never work. I'm just saying that they are incredibly ineffective in most areas. For all intents and purposes they can be eliminated and the Realtors energies applied elsewhere.

So let's focus on the most powerful tools that the Realtor can use to sell your home. There are two pillars that support the sale of your home. They work hand-in-hand and together account for at least 90% of all home sales, in my opinion. If you did nothing else, these two strategies are enough to sell almost every home within a reasonable time period.

O.K. - out with it, you say! Well I hate to disappoint you, but these two strategies are incredibly simple. And they are not secret. They are, however, often overlooked - or at least there is a reluctance to place the high degree of importance on these strategies that they deserve. So what are these two pillars of real estate? Firstly, the home must be priced right. By this I mean that the list price should be very close to the appraised value of the home. Each market has an optimum amount of flexibility between the list price and the anticipated sale price. When I say "optimum", this word is really interchangeable with "minimum". The typical minimum flexibilities should be observed according to your locale. The second weapon we have is the best possible Multiple Listing Service (MLS) exposure. Now in most areas, this just means the local MLS service should be employed. In a few areas, there is more than one MLS service - meaning that two separate MLS services overlap. In this case, it is often, but not always, wise to list with an Agent who has dual MLS membership.

These two strategies work hand-in-hand. If the price is not right, the MLS service will be ineffective. If the price is right but the home is not properly exposed to other Realtors, and thus the public, through the MLS, then again the home will probably not move. So remember, employ both these strategies and you'll get results!

Now that we have a good idea of how to get your home sold, I'd like to briefly discuss a few of the other methods that a Realtor can employ to get results. Even though we have 90% of the solution, there's no reason not to have the other 10%.

Firstly, I'd like to talk about the Internet. This is the one to watch, for sure. It is very possible that the role of the Internet will soon become primary in selling homes. It hasn't hit yet but I can see the revolution coming. Even now, most homes in Canada can be found on the "www.mls.ca" website. Personal promotion and relocation services will also be effectively served on the Net in the near future.

A sign on the lawn is a "must". It's your 24 hour ad. And many home shoppers drive their favourite areas. Advertising in it's many forms newspapers, TV, flyers, etc. - has it's use. But these methods are generally not terribly effective They tend to result in personal promotion for the Realtor rather than selling your home - although indirectly that can help to sell your home. As I have often said, "the promoters are always looking for new ways for Realtors to spend money". By this I mean that adding another newspaper or a new medium for advertising never seems to increase our sales but certainly increases or expenses. So I suggest that while an advertising presence is important, it has a fairly minor role in home sales.

Well that's a brief overview of strategies to help sell your home. Obviously, these are only my opinions. The relative importance of the points covered here may be skewed slightly in your area. Perhaps you can continue this conversation with your own Realtor.

One of the things that I first began to notice was true, particularly in the "buyer's market" of the last few years (and let's face it, it's been a buyer's market since about 1990 and although there are signs of a turn-around, the buyer is still often favoured), is that you can't time your sale. What do I mean by this? What I mean is that you can't say: "well, we want to move in June, therefore we'll list our home in February." These days, sales happen at unpredictable times. I have often seen homes that have been on the market for more than 6 months that sell in December or July - strange months if you are trying to make predictions. So I guess I am saying that the new pattern that has arisen over the last few years is that there is no way to predict a most probable time when a particular house will sell. What I mean by this is two things:

1. ...that during the red hot market of the late 1980s you could pretty much say that if a house sat around for more than 3 months there must be something wrong with it. This is no longer the case.
2. ...that the market is less seasonal than it used to be. In addition to this inability to accurately predict how long it will take for a property to sell, our traditional seasons of activity have been out of whack in the last few years.

An excellent example of this occurred in the Spring of 1995 in which there were very few sales during the traditional Spring market. Most of the activity that year - at least in Ontario was in June and July. This was most unusual. So to sum up, there are these two ways in which real estate has become less predictable. Firstly, general predictions about the amount of time needed on the market have become more difficult. And secondly, seasonal predictions have become a hit and miss proposition.

Now I should reiterate that there are signs of a turn-around that is most evident in places like Toronto, and a little less evident in most parts of Simcoe County. Here, we are seeing fits and starts of increased activity combined with occasional slower months. But I think that the better the market becomes, the more we will once again be able to rely upon predictable seasonal activity and shorter and more predictable sale times.

I should say that over the last few years I have still been able to make some predictions about sale times for my sellers - it's just that they have been much more open ended - over a less specific time frame - than the predictions that I was able to make in the late 1980's. I think the way to look at it - and I tell my clients this - is ... as long as your property is being marketed properly and it is priced right, you just have to relax and sit back and wait. As they say: "you can't push the river". Basically, you follow the right marketing steps, price the property reasonably, and the property will sell when its time comes.

As a footnote, I should advise all you buyers out there that often the best time to buy is when the market is experiencing a slow month - to go against the normal instinct to buy when it's active and everyone else is buying. You will usually find that sellers are more receptive and will negotiate more when things are slow.

Of course there was a big catch with these advertised rates. The catch was that the figures quoted here were, as far as I have been able to ascertain, always either for exclusive listings - ones that did not find their way into the MLS catalogue - or they were for MLS listings provided that the Agent who listed the property also brought the selling offer (most frequently, the offer is brought by a different agent than the listing agent through the MLS network). Both of these situations are not ones that I would want to be involved in if I were selling. Why? Well, most agents only sell their own listings a small percentage of the time, so you can't count on getting the lower commission in the second scenario. As for the "exclusive" listing method, homes are almost never listed exclusively these days simply because the MLS system is so effective. As an added benefit, the MLS should also help you to maximize the sale price that you attain.

A lot of folks don't realize that they will probably end up paying just about the same commission with a competitive internationally prominent firm as with a company with a name like "Commish-Low", or whatever. Why is this? Well, in order to be effective, even a company that advertises a low commission must utilize the MLS. In using the MLS, the commission discounter must still pay an attractive fee to the agents who will try to sell the property. This means that the commission can really only be discounted from the portion that the listing company itself would receive. Now if the commission cutter takes less money for himself, then there is less money available to advertise and promote the listing. This often ultimately ends up working against you, the seller.

I'm all for competitive commission rates. As a matter of fact, it is illegal for real estate companies to get together and fix prices. This violates the "Competition Act". In the past, there have been real estate boards taken to court for trying to set minimum commissions for their member companies. So this means that there is no "standard" real estate fee - and it is illegal for a Realtor to tell you that there is. Individual real estate companies are entitled to set commission policies for their salespeople - I believe Royal LePage used to have a minimum commission of 6% (this has now changed). But the industry in general cannot and does not price-fix when it comes to commissions.

It is a good idea to find out what each prospective Realtor will do for you and what commission they will charge. It's not a bad idea to get it in writing either. At what frequency will ads be run, what is the MLS coverage, etc.? When you buy a product you probably look at value for your money - the same should be true when selecting a Realtor. But also keep in mind that a good Realtor may be able to get you a few thousand dollars more for your home - and that can add up to a lot more than the extra commission that you might pay over and above the absolute lowest commission available.

I'll be back next week to answer some of your questions.

Basically, a chattel is defined as a "moveable item or personal property". A fixture is defined as anything that is "affixed to the property and which has a degree of importance to the property". A chattel can become a fixture by being fixed to the property. But some chattels remain chattels even though they are attached to the dwelling. An example of this would be a hanging oriental rug which is nailed to the wall. The reason that this item does not become a fixture is that it does not serve the function of the house - it does not have "a degree of importance to the property".

Now if this is somewhat confusing, I'm not surprised, because the classification of specific items as either fixtures or chattels is a murky one. Opposing positions are often taken with valid arguments on both sides. Is my deluxe 700 lb. concrete birdbath a chattel or a fixture? It may not be attached, but it sure isn't going anywhere either. And what about wall-to-wall carpeting that is fitted but not attached with either carpet track or any other kind of tacks? You could argue these "until the cows come home" (and I'm pretty sure the cows are chattels).

What really makes the distinction between chattels and fixtures a loaded question is that in real estate transactions any fixtures which are not specifically mentioned in the Agreement are considered to be included, and any chattels are considered to be excluded. So it really becomes a money issue. It's not too unusual to see Purchasers move into a house and say... "we thought that the satellite dish was included but it's been taken".

The best defense in these situations is to clarify any ambiguous items in the Agreement of Purchase and Sale. To avoid confusion, it's standard practice to specify any rental items on the Agreement. It's also normal to say something like this in the Agreement: "Purchase price to include all permanent fixtures now on the property including all existing light fixtures, storms, screens and storm doors, heating equipment, drapery tracks, broadloom where laid, and all shrubs and landscaping." Even though this clause helps to clarify included and excluded items somewhat, it may not be detailed enough to avoid future conflict. Obviously you can't cover everything, but a more detailed list of included items can save some grief later on.

So when you are buying a house, I recommend spending some time going over what you feel is included in the purchase - and then itemizing the significant items for inclusion in the offer - even if it's a full page to be included as an Addendum to the Agreement. Your Realtor can help you with this.

This started me thinking... "This guy is not acting in his own best interest. He isn't aware of how he can get the best representation. Maybe he doesn't know how the MLS system works." I tried to explain as best I could in the few short minutes that we had to talk, that he would be better off finding an Agent that he would be comfortable with and sticking with her/him.

It is this experience, and other similar ones, that triggered my interest in writing this column.

So let's start with a bit of background to bring the reader up to speed on this topic. Prior to 1995 in Ontario, all Realtors in a transaction typically represented the Seller. The Seller paid the commission, so it was logical that the Realtors owed their primary allegiance to the seller. This meant that if you were buying a house your Agent was actually not working for you. If you told him that you wanted to offer $175,000 but would pay up to $181,000, then the Agent was duty-bound to convey this statement to the Seller. Bad deal for the Purchaser? Absolutely! So there would be no legal advantage to a Buyer using one Agent. There might be a familiarity and convenience advantage - but the Agent would still owe primary allegiance to the Seller - end of story!

As a result of this unsatisfactory situation, the system was changed in 1995. It became necessary for the Agents involved in a transaction to disclose, in writing, to all parties, just who they worked for. From this requirement, it was not long before Purchasers said that they wanted their own representation. The legal experts then determined that Purchasers could have representation from the Agents they bought through, even though these Agents were still paid a commission by the Seller. Problem solved!

Therefore, as a buyer, if you could work exclusively through the Agent of your choice, you could develop a good working relationship - the Agent would know your needs and be able to look out for your best interests. This arrangement would dovetail nicely with the new legal relationship between the Buyer and his Agent.

Now, the whole thing also works very nicely because of the current state of the Multiple Listing Service (MLS). Today, 99.9% of the residential properties for sale are listed on the MLS and virtually all Agents have MLS membership. This means that Agents have the data and the ability to show any listed property - it's one stop shopping! You can sit down with your Agent (that's right, now your Agent is by contract your Agent) and see any property on the market - regardless of the Listing Real Estate Company. If you see an ad or a "for sale" sign you can simply call your Agent for information and a viewing. And your Agent can supply you with a catalogue of all the homes available in your area.

Let's outline some of the nitty-gritty advantages of working with one Agent:

• You can get a complete list of available properties from one Agent.
• Your Agent can set up multiple showings so that they "flow" and a minimum amount of time is wasted.
• Your Agent will get a feel for your needs and can suggest particular properties or he/she may know about suitable unlisted properties before they come on the market (this gives you 'the jump" on other Purchasers).
• Your Agent will get to know you and have your best interests at heart.
• Your Agent has experience with lenders and lawyers and can usually advise you when questions or problems crop up. For example, your Agent can calculate the approximate amount of the mortgage that the bank will qualify you for. Your Agent can suggest different types of mortgages and the relative advantages of each.
• Your Agent will keep you secrets! That's important when negotiating a deal.
• Your Agent will present an offer on your behalf to the Seller and his Agent. He will try to get the best deal for you!

I hope that this column has given you a bit of insight into the value of working with one Agent. There's more to it than we have room to discuss here. But what I have done, I believe, is to outline the basic principles. As with finding any professional - like picking a doctor or a lawyer - it may take some time to find an Agent you are confident in and comfortable with - but the long term benefits are usually substantial.

Let's start with the preparation of the home for resale and leave marketing for our next discussion. I know that everyone has seen lists of suggestions as to what should be done to prepare for resale. I always know when I enter a home for a showing, and there is the smell of vanilla or potpourri, that the Vendor has been reading somebody's helpful hints!

To my mind, virtually all of the preparations that can be made to a home for resale are things that make the home seem inviting, comfortable, and the kind of place where one would want to live. If a potential purchaser does not feel "at home" in your home, then they likely aren't going to buy it - even if it is suitable from a "needs" point of view. Also, well-maintained and clean homes often fetch a premium price - and this shouldn't be overlooked!

Right at the top of the list is the need to make the home feel spacious. To this end, reducing clutter is essential. Stacks of papers, things laying about on tables, too much furniture in one room, cluttered kitchen counters, crammed cupboards and closets, etc. These are all items that should be dealt with. I often suggest to Vendors that they even put some things away that might occasionally get used - at least until the house is sold. These items can be neatly boxed and stored on shelves in the basement. The basement is never as critical as the main living area anyway. Purchasers are much more willing to accept a slightly messy basement as long as the main living area is neat and clean.

Any unfinished work should be finished if at all possible. If a Purchaser sees a house as a "project" house, you can be sure that he is going to want to be compensated for it. Similarly, any repairs should be made as necessary. Ripped cushion floor, damage to walls and doors, peeling or mildewed window frames, etc. should all be repaired if possible.

As far as painting goes, any rooms that need a coat of paint should be painted in a neutral colour. It's my experience that wallpaper is generally a "negative", and certainly you should not wallpaper in anticipation of reselling your home. Borders - whether stenciled or wallpaper - can add a nice touch to a room if tastefully done. Borders don't seem to have a negative effect.

It seems obvious, but I should mention that the house should be clean. As they say: "people buy the 'sizzle' not the steak". This basically means that appearances are more important to most Purchasers than structure. Part of this cleaning process should be in making sure that any carpets are steam-cleaned This is very important. I won't discuss cleaning any further because it should be a familiar concept to most folks. Hire a cleaner if you don't have time to clean - It could make thousands of dollars difference in the sale price of your home.

This brings me to "smells" - which is linked directly to "pets". Probably one of the single greatest deterrents to potential Purchasers is pet smells. When cats "do their thing", it is much worse to deal with, and the odor is a fair bit stronger, than with dogs. I won't even get into the exotics like ferrets and the like! Anyway, you might have to rip out a carpet that has been peed on by a cat in order to avoid staIling your house sale. Sometimes carpets have to be replaced in order to get rid of a general pet odor - even one that is not necessarily urine. It may cost a fair bit to replace carpets, but generally, the effect on the bottom line price you get for your home will exceed the price of the carpets. Sometimes, steam cleaning will be enough to eliminate pet odors.

Smokers should try to keep their homes well ventilated and definitely steam-clean carpets and paint walls. Actually, these measures, along with general scrubbing and cleaning - which are all part of preparing any home for resale - go a long way towards eliminating smoke or, in fact, any odors. Sure you can boil potpourri or vanilla beans or use an air-freshener, but eliminating odors is the way to go first off - deal with the root cause first.

At this point rather than ramble, I'll quickly list, in point form, a few of the other hints that might help you in preparing your home for resale:

• Paint your basement floor if it is unpainted or the paint is worn.
• Keep your grass cut and snow cleared.
• Make sure all the lights are on and the curtains open for showings.
• Air the house out prior to showings.
• Clean out and organize the garage - help a potential Purchaser to see that it is actually possible to park in the garage?

Next time I'll talk about marketing strategies for your home.

It's amazing how easy it is to work year in and year out and never have anything to show for it. If this is your situation - then you are in the majority! But it doesn't have to be this way. Just read the financial planning books. These books tell us over and over again that there is very little difference between those who have managed to save money and those who find that they just can't do it! It is my intention to expose the common kernel of wisdom that can be distilled from many of these financial strategies and to show how home ownership - whether you currently own or plan to buy in the future - will dovetail perfectly with your plan to create a "nest egg".

For most people, budgets are not the way to save money for a nest egg. I think that we can say that budgets are like diets - they don't usually work! Try budgeting for a while, and you might find that you re-bound twice as hard, as soon as the purse strings are loosened a bit. That's much like a diet, for sure. So what can we do about this situation? According to the experts, we must create an idiot-proof system that will guarantee a certain financial outcome - no matter what. These money gurus say that it is simply a consistent effort - a small monthly commitment to saving - that is the difference between the "haves" and the "have-nots". And it's basically executed through a system of forced savings. From what I can see, it's a two-pronged approach that works best. There's a cash savings component - perhaps as a compound interest RSP or GIC - and there is a home ownership component. By owning your home outright at the end of 10 or 20 years, you have laid the cornerstone of your nest egg. One of the nice things about making your home part of "the plan" is that everyone needs somewhere to live and must pay some kind of rent anyway. This money might as well be working for us - rather than padding someone else's pocket!

So the gist of the system is that, no matter what, we always make our monthly mortgage payment and our small RSP contribution. These are the first things that get paid. Using an automatic withdrawal from the bank is a great way to make it inflexible and "idiot-proof". That way, "The Plan" can't be tampered with! So, as long as you can remain financially solvent, you're guaranteed to have your house paid for and a sizable nest egg in twenty years or less - whatever timeframe you set for yourself. Let's see what makes that small monthly savings become so sizable over the years. I'll briefly go over one example to show you how compound interest can exponentially increase savings with only a small outlay each month, and then I'll tackle the best way to deal with home ownership. It may seem outrageous, but an investment of $200 per month, over 30 years, at an average return of 15% per year (smart investing will create this rate of return), will generate a nest egg of 1.4 million dollars! That's right, 1.4 million dollars!!! Don't take my word for it, these figures are straight out of the Canadian financial planning book; "The Wealthy Barber". Of course, $200 per month may be more than you can afford, so start with a smaller figure, and contribute consistently. The results will still be dramatic over time.

Now let's talk about how to set your mortgage up for the best long-term results. No doubt, you have heard all the suggestions as to the best way to structure your mortgage. The banks scream at us. "Pay weekly". "Pay bi-weekly". "Double-up your payments". "Amortize over 15 years". Forget all the hype! All these payment options can be distilled down to one simple issue - "what's the amortization?" If you can minimize the length of time that it takes to pay the mortgage off (this timeframe is called the "amortization"), then the total amount of interest paid over the course of the loan will also be minimized. All the different payment options mentioned above have different amortizations attached to them. It is only the amortization number that has any ultimate significance to the smart borrower. For example, paying weekly just means that you make the equivalent of 13 monthly payments per year because there are more than 28 days in the average month. This shortens the amortization period, and consequently, the total interest paid.

In plain English - and this is ALL you have to know - "pay off the mortgage as fast as you can handle and you'll pay dramatically less interest!"

Let's look at some numbers. Assuming that we are dealing with a $100,000 mortgage and an interest rate of 7% per year, we can vary the amortization period and look at the total interest paid as well as the monthly mortgage payment. If we pay the loan over 25 years, the monthly payment is an easy $700, but the interest paid over the 25 years is a whopping $110,123! It's no wonder that the banks are smiling when we sign our mortgage papers! If the amortization is reduced to 20 years, the payment is only $69 more per month, but we have now saved $25,488 in total interest over the 25 year amortization! A 15 year amortization would mean a monthly payment of $893 with a total interest payment of $60,785 over the course of the loan. Finally, a 10 year amortization would mean a monthly payment of $1156, and a total interest payment of $38,713.

My suggestion is to forget all the cute ways of paying and simply set up the largest payment that you can afford (whether it's monthly or weekly or bi-weekly should only be according to convenience). There aren't too many banks that are keen to push this approach. They'd never say: "Pay that mortgage to zero as fast as possible!" After all, it's the banks that keep making billion dollar plus profits every year - and they want you and me to give them as much help as possible!