The new Harmonized sales tax comes into effect July 1st. Essentially, it will mirror all things that used to be GST applicable as well as a few other items that previously weren't. Whether I agree with the tax is really a mute point - what concerns me, is that the general public seems to misunderstand how the HST applies to a real estate transaction. Over the last 4 weeks our market has slowed somewhat - yes, there are still multiple offers coming in on well priced homes and certainly the real estate market did heat up sooner this year as compared to last year BUT... Buyers seem to want to wait until 'this whole HST thing settles' before they go house hunting. When pressed as to why they feel they should wait, it becomes apparent that they feel the HST will be tacked onto the entire purchase price of the home. NOT SO! on a residential resale home, the HST only applies to the commissions payable by (usually the Seller) as well as the legal fees, any home inspections, surveys or other services.
Knowledge is Power...
What can the current HST misunderstandings mean to a Seller? Certainly a little frustration, since we seem to have some timid Buyers out there. But shrewd Buyers who are clear on the HST implications and therefore actively looking for a home to buy - have the advantage of avoiding major competition among numerous Buyers. If you are currently working with Buyers OR have some 'on the fence' - educate them NOW and encourage them to take advantage of this knowledge.
Our industry will always present us with unique challenges - the key is that successful agents use these challenges as a means to leverage more business by keeping their Clients and potential Clients educated.
I encourage you to use the HST information as a reason to contact and educate your clients.
Happy Selling
Corrie
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