Cudos Mr. Turner

Garth Turner has had a tumultuous run to say the least.

He has worn many hats in his days. From author to lecturer to syndicated newspaper columnist to TV personality to entrepreneur to 2 time MP. He may just be best known in Canada for standing up to Stephen Harper and getting the boot from the conservative caucus.

In his book "Greater Fool" he looks at where we are heading in the world of real estate. He does not see a rosy future.

Garth continues his thoughts from his book on his blog by the same name. A recent post includes a letter from a local RIM employee that recently sold his home privately in Waterloo.

"Mr. RIM" has $95,000 in equity saved up in his $244,900 house. The one thing that Garth does not expand on is the fact that had this RIM employee used a Realtor they would have used up 13.53% of their equity.

$244,900 x 5% = $12,245
$12,245 + 5% GST = $12,857.25
$12,857.25 / $95,000 = 13.53%

When we are considering whether to use an agent we make choices on a cost of 5% of our home. Unfortunately most of us don't own our home, the banks do. In the case above "Mr. RIM" only owned 38.79% of his home yet he is expected to pay the entire selling fee charged.

When you are looking at the future of your financial life you should look at the big picture not simply what is in front of you. Watch for what lies beneath the water, not just the majesty of what protrudes above the surface. That is a mistake made by so many in the past. Are we not supposed to learn from their mistakes?


M