by Mike on February 17, 2010
It’s that time of year when I get to do something I really don’t enjoy doing – my taxes. I’ve concluded that the main problem with taxes is not the form filling but rather the book keeping. I’ve improved my record keeping system over the last year but it still needs some improvement. My taxes are a lot more complicated than they used to be so that is also part of the problem.
I had toyed with the idea of using an accountant this year but decided against it since I couldn’t be bothered to find one and I also decided to splurge on QuickTax tax software which so far is making things a lot easier than in past years. I’ll be doing a proper review of QuickTax next week, but so far I like it a lot.
Why are my taxes so complicated?
They aren’t really – but gone are the days when I used to just have a T4 with my income and a few deductions (taxes, EI, CPP) and a couple of RRSP contribution receipts. I still have the T4 and the RRSP receipts but I also have a few other things.
Taxable investment income/investment loan and capital gain
Until late last year I had a leveraged investment plan in place which means that I need to declare any dividend income from the investments as well as write off the interest on the investment loan. This is complicated by the fact that switched from RBC Direct to Questrade last year. Because I sold all the leveraged investments last year, I need also figure out the ACBs of all the stocks to determine how much capital gain there was. The good news is that this is the last year I need to do this since I collapsed the leveraged plan.
Home Buyers Plan (HBP) loan repayments
Ok, the accounting for home buyers plans loan repayments isn’t very complicated but it is one more thing than I used to do before owning a house.
Small Business
My business which consists of this site among others makes up the bulk of the work for my taxes. As a sole proprietorship business it is surprisingly easy to do the taxes for it but the book keeping is another story. Last year I totally revamped how I kept track of my expenses and income by using an income/expense spreadsheet inspired by Finance Freelance Life. I’m going to be experimenting soon with QuickBooks to see if that helps a bit as well.
So that’s my tax story so far this year – has anyone else started their taxes yet? Using an accountant? Planning on doing some major cheating? 
by Mike on February 17, 2010
Mr. Cheap & I have published a rather large number of posts where we point out that SOMETIMES real estate agents are not your friend, associate or even on your side and they definitely can’t ALWAYS be trusted. Heck, sometimes people DO use a friend as a real estate agent and SOME agents must be foolish enough to be honest with clients.
That said, neither one of us has anything personal against agents – most of our complaints have to do with their compensation system which is determined by the large real estate brokerage companies who control MLS (for now).
In fact, I recommend that most people should use a real estate agent for a number of reasons.
1)Â Knowledge of the local market prices
Yes, your agent will undoubtedly withhold and manipulate data as they see fit for their own gain, but the fact remains that they should have more knowledge than you regarding local market conditions. Unless you are willing to spend a ton of time learning the market yourself then it’s worth paying for someone else’s experience.
2)Â Knowledge of local landscape
When I bought my first house I had a few pretty nice areas in mind where I wanted to live. Once I figured out that I couldn’t afford to live there then my agent suggested a couple of areas that were not quite as nice (which is not to say they were bad). If you don’t know all the areas in your city or if you are new to a city then hiring a local real estate agent can be quite helpful.
3 Access to house details and comparative sales
This is the big reason why MLS is so valuable. If you are selling a 3-bedroom semi in Leaside then you look at all the recent sale prices and get a better sense for the market. This info is available from other sources such as city hall but it is very difficult and inconvenient.
4)Â Easier access to houses
This is one of the biggest advantages of having an agent regardless of how experienced you are with buying houses. The fact is that people selling a house are not going to let you in without an agent. You can contact the selling agent to book an appointment but there is no guarantee they will play ball. Open houses are a good way to look at a house but they are quite limited.
Another problem is that sometimes buyers without agents are considered “ignorant” and might not be taken seriously.
5)Â Transportation when looking at houses
The two agents I’ve dealt with on the buy side always drove me around to look at houses. Considering I had a car this wasn’t what I would call an overly valuable service but for a house buyer that doesn’t own a car, this would come in pretty handy.
6)Â Less stress to close the deal
One thing about an agent is that they will do all the administration for documents, finances etc. This service might not be worth the money it costs, but regardless, it’s work you don’t have to do.
7)Â Renovation ideas
Agents tend to have at least some knowledge of renovation and design ideas so for a client who has a problem with the layout/condition/colour of a potential house, that agent might be able to lend some insight about how to change things. You have to remember that the agent is doing whatever they can to get you to buy the house so they will estimate potential renovation costs WAY on the low side.
On the sell side, the agent should be able to know what buyers are looking for and can make suggestions to the home owner on what parts of the house to fix up for sale.
8) You are going to pay anyway.
Even if you do the dual-agent ripoff thing you will still be paying for an agent anyway since the “dual” agent will just collect twice as much commission so you might as well get some service out of it.
So there you go – all the reasons you need to get a real estate agent, hold your nose over the fees and get going on your real estate adventure!
