8 Big Mistakes That Cost You $$ When Selling Your Home!

#1 Basing asking price on needs or emotion rather than market value. Many times sellers base their pricing on how much they paid for or invested in their home. This can be an expensive mistake. If your home is not priced competitively, buyers will reject it in favour of other larger homes for the same price. At the same time, the buyers who should be looking at your house will not see it because it is priced over their heads. The result is increased market time, and even when the price is eventually lowered, the buyers are wary because “nobody wants to buy a house that nobody else wants”. The result is low offers and an unwillingness to negotiate. Every seller wants to realize as much money as possible from the sale, but a listing priced too high often eventually sells for less than market value.

#2 Failing to “Showcase” the home. A property that is not clean or well maintained is a red flag for the buyer. It is an indication that there may be hidden defects that will result in increased cost of ownership. Sellers who fail to make necessary repairs, who don’t spruce up the house inside and out, and fail to keep it clean and neat, chase away buyers as fast as Realtors can bring them. Buyers are poor judges of the cost of repairs, and always build in a large margin for error when offering on such a property. Sellers are always better off doing the work themselves ahead of time.

#3 Over-improving the home prior to selling. Sellers often unwittingly spend thousands of dollars doing the wrong upgrades to their home prior to attempting to sell in the mistaken belief that they will recoup this cost. If you are upgrading your home for your personal enjoyment – fine. But if you are thinking of selling, you should be aware that only certain upgrades are cost effective. Always consult with your Realtor BEFORE committing to upgrading your home.

#4 Choosing the wrong Realtor or choosing for the wrong reasons. Many homeowners list with the agent who tells them the highest price. You need to choose an experienced agent with the best marketing plan to sell your home. In the real estate business, an agent with many successfully closed transactions usually costs the same as someone who is inexperienced. That experience could mean a higher price at the negotiating table, selling in less time, and with a minimum amount of hassles.

#5 Using the “Hard Sell” during showings. Buying a home is an emotional decision. Buyers like to “try on” a house and see if it is comfortable for them. It is difficult for them to do if you follow them around pointing out every improvement that you made. Good Realtors let the buyers discover the home on their own, pointing out only features they are sure are important to them. Many sales are lost by overselling. If buyers think they are paying for features that are not particularly important to them personally, they will reject the home in favour of a less expensive home without the features.

#6 Failing to take the first offer seriously.Often sellers believe that the first offer received will be one of many to come. There is a tendency to not take it seriously, and to hold out for a higher price. This is especially true if the offer comes in soon after the home is placed on the market. Experienced Realtors know that more often than not the first buyer ends up being the best buyer, and many, many sellers have had to accept far less money than the initial offer later in the selling process. The home is most saleable early in the marketing period, and the amount buyers are willing to pay diminishes with the length of time a property has been on the market. Many sellers would give anything to find that prospective buyer who made the first, and ONLY, offer.

#7 Not knowing your rights and obligations.The contract you sign to sell your property is a complex and legally binding document. An improperly written contract can allow the purchaser to void the sale, or cost you thousands of unnecessary dollars. Have an experienced Realtor who knows the “ins and outs” fully explain the contract you are about to sign to you, or have your lawyer review it before acceptance.

#8 Failure to effectively market the property.Good marketing opens the door that exposes the property to the marketplace. It means distinguishing your home from hundreds of others on the market. It also means selling the benefits, as well as the features. The two most obvious marketing tools (open houses and print advertising) are only moderately effective. Just 1% of homes are sold at open houses, and advertising studies show that only 3% of people purchased their home because they called on a print ad! Agents use these tools to attract future prospects, not to sell the house. The right Realtor will employ a wide variety of marketing activities, emphasizing the ones believed to work best for your home.

Canadian bank stocks so low any good news may spark rally.

Canadian bank stocks so low any good news may spark rally

Cameron French, Reuters · Nov. 29, 2011 | Last Updated: Nov. 29, 2011 5:06 AM ET

TORONTO – A volatile year for Canadian banking results is likely to end on a soft note, and the outlook for 2012 won’t inspire confidence as Europe’s debt troubles deepen and Canadian borrowers turn shy.

Analysts expect percentage year-over-year profit gains in the mid-to-high single digits when the country’s big banks begin reporting this week. On a quarter-to-quarter basis, profits are expected to drop from the third quarter.

Even so, with bank shares already at year-lows, even modest results could spark a rally, particularly if one or more of the banks raise dividends.

Toronto-Dominion Bank and Canadian Imperial Bank of Commerce are first in line to report for the fourth quarter, with results due early on Thursday.

Volatile financial markets will likely steer the results in the most recent quarter, just as they have so far this year.

“I think it’s fair to say the capital market side of the business is going to be lackluster,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier in Toronto.

The S&P/TSX composite index is down nearly 20% from the year-high reached in March. Falling trading fees, and weak underwriting and advisory activity should weigh on results, too. Analysts see only slim growth in wealth management income, a growing focus for several of Canada’s top six lenders.

National Bank of Canada, with one of the highest weightings of capital markets revenue, is the bank most likely to show zero growth, according to analysts. TD, which is most highly geared to retail banking, is expected to show double-digit profit growth.

The markets-related weakness should be offset by revenue from business and mortgage lending, which should grow despite razor-thin interest rate margins.

RBC Capital Markets analyst Andre-Philippe Hardy said stronger business-loan growth and lower loan losses should drive revenue in the business line that makes up the bulk of revenue for the banks. However, mortgage growth is expected to slow next year.

“In light of the recent market volatility and slowing economic growth, we expect bank commentary on the outlook for 2012 to have a greater impact on share prices than reported earnings relative to expectations,” he said in a note.

CIBC World Markets ana-lyst Robert Sedran expects full-year per-share earnings to rise a slim 4.4% in 2012, down sharply from his expected 12.3% for 2011.

Analysts also expect banks to reveal more about any exposure to Europe, where the sovereign debt crisis is spreading.

“I think the direct exposure is relatively minimal,” said Gavin Graham, president of Graham Investment Strategy.

“The real problem for the North American banks is the knock-on effect in the event we get a sort of Lehman-style freeze up in interbank lending,” he said, referring to the 2008 collapse investment bank Lehman Brothers.

Setting that aside, he said the recent pressure on the bank stocks could subside once results are released, particularly if the banks raise dividends again.

Shares of TD, Bank of Nova Scotia, and National Bank dropped to their lowest level in more than a year on Friday, while Royal Bank of Canada touched its lowest in more than two years.

After putting dividend increases on hold in 2008, Canadian banks began to resume raising payouts a year ago, and now all have done so except for Bank of Montreal, which instead directed its capital towards its $4 billion acquisition of Wisconsin bank Marshall & Ilsley.

“They got a [pass] because they had a big takeover,” Mr. Graham said. “But now you have to think there would be an indication from management that if they don’t do it now they are looking at raising it in the next few quarters.”

Other banks that analysts say may be due for dividend increases this quarter are Scotiabank and National Bank.

Bank of Canada could slash interest rates in 2012!!

Bank of Canada could slash interest rates in a big way next year

John Shmuel Nov 9, 2011 – 4:10 PM ET | Last Updated: Nov 10, 2011 2:06 AM ET

As the nail biter in Europe continues this week, two economists are predicting the Bank of Canada will move to cut rates in a big way next year.

Sheryl King, an economist at Bank of America Merril Lynch, said in a note that the volatility hitting Europe and the risk of damage to the global economy means the Bank of Canada will move to cut its benchmark interest rate to ward off the risk of recession. Her prediction is the cut will be a whopping 0.75% decrease from the current rate of 1%.

“With the Eurozone sovereign debt and banking crisis showing no sign of containment, we think the Bank of Canada will cut rates back to the effective lower bound of 25 basis points (0.25%) early next year,” she said.

Ms. King forecasts that the cut would come in two phases, with a 0.50% trim being announced during the bank’s January 17 meeting, while the second and final 0.25% cut coming during the March 8 meeting.

Also predicting a lower interest rate next year was David Madani, Canada economist at Capital Economics. He is forecasting a more mild cut of 50 basis points, however, saying he expects it to occur in April or June.

Either way, Mr. Madani said he expects interest rates in Canada will remain low for some time.

“The Bank might communicate that its policy rate will remain at 0.50% for a lengthy period of time, conditional on its projected outlook for consumer price inflation,” he said, in reference to the Bank of Canada’s target of 2% annual inflation.

“Even if we are wrong, the broader message remains that interest rates will remain unusually low for a very long time.”

Most economists, however, are still predicting that the Bank of Canada will raise interest rates rather than lower them in 2012. In a recent Reuters survey of 40 economists last month, the consensus was that an interest rate increase will occur in the third quarter of next year.

If rates are cut, it will mark a sharp turnaround for the Bank of Canada, which only last year raised interest rates. Canada became one of the first advanced economies to raise its benchmark interest rates following the recession when the Bank of Canada implemented a 25 basis point hike in September of last year. The benchmark rate has since remained unchanged at 1%.

Email: jshmuel@nationalpost.com | Twitter: jshmuel

What if the eurozone implodes?

By Peter Apps, Political Risk Correspondent

LONDON — Any eurozone failure would send shock waves around the globe, shifting the balance of geopolitical power and perhaps prompting a fundamental reassessment of what the world’s future might look like.

EU sources told Reuters that officials of France and Germany, since the 1950s the driving forces of European integration, had held discussions on a two-speed Europe with a smaller, more tightly integrated euro zone and a looser outer circle.

Estimates of how likely the currency bloc is to break up, how damaging it might be and what might remain afterwards vary wildly. But with European leaders still struggling to find a credible response to the crisis, the prospect of one or more countries leaving — and effectively defaulting on their sovereign debt as they do so — is seen rising by the day.

Suddenly, pundits, policymakers and other observers find themselves questioning one of their most fundamental assumptions — that an increasingly united Europe would be a key player in a newly multipolar world.

“You already have one of the great pillars of globalisation, the United States, entering a period of difficulty and looking inward,” said Thomas Barnett, US-based chief strategist of political risk consultancy Wikistrat — which is being asked by several private clients to urgently model scenarios. “Now one of the other pillars, Europe, looks about to implode.”

That, he said, could leave the continent’s powers — who only a handful of years ago made up much of the G7 group of largest economies — increasingly sidelined as China, India, Brazil and others rose.

At the very least, analysts say, the world may have to get used to a Europe that has lost much of its confidence and has much less appetite for international engagement.

Coming after so many meetings not just of European leaders but also the G20, it would also leave the reputation of existing global governance systems and a generation of political and economic elites in tatters. Some of the damage may already be largely irreversible.

“Even if by some magic the crisis were to be over tomorrow, the other strategic actors in the world are already beginning to revise their views of Europe,” said Thomas Kleine-Brokhoff, a strategy expert at Europe-facing Washington DC think tank the George Marshall Foundation of the United States. “Any consensus that Europe was simply and certainly on the path to integrate further and become a unitary actor is gone.” That raises interesting questions for other areas of the world, where many had often expected regional blocs would gradually in time form EU-like entities and move to closer integration.

“Europe was supposed to be the model for others to follow,” said Nikolas Gvosdev, professor of national security studies at the US Naval War College. “That’s going to be questioned.”


For some, any unravelling of the eurozone — whether or not it brings with it a collapse of the wider EU — would be seen as yet another sign of much faster than expected western decline.

“For India, China and many of the other new powers, they don’t see simply a crisis of the eurozone,” said Kleine-Brokhoff at the George Marshall Foundation of the United States. “They see a crisis of the rich world and it makes them even more confident that their time has come.”

But that interpretation, some analysts say, could prove an illusion.

“No one would be laughing — I don’t think there would be any winners at all,” said Michael Denison, a former senior adviser to ex-British Foreign Secretary David Miliband and now research director for consultancy Control Risks. “You’d have a banking and sovereign debt crisis that would hurt everyone.”

Whilst relatively self-sufficient states such as India might be among the least affected, most analysts say other emerging markets could suffer perhaps disproportionately.

Whilst the United States and possibly a handful of other states such as Switzerland might enjoy safe haven status and incoming capital, US-based private intelligence consultancy Stratfor — which puts the prospect of at least a partial Eurozone breakup within the year as high as 90% — believes China could prove the greatest loser.

“You’re going to see … a collapse in capital flows to countries like Vietnam, Brazil, parts of Africa,” said Peter Zeihan, Stratfor vice president for strategy. “It’s also going to be the end of the Chinese economic miracle. The largest single market for China is Europe. That’s going to have a huge knock-on effect in China which could include social revolution.”


Taken as a sign of what increasingly looks like a rudderless and fragmented world, some states may take matters more into their own hands — as Israel is already suspected to be considering over Iran — rather than multilaterally.

“It is almost certainly going to make European participation in operations such as Libya much less likely,” said Gvosdev at the US Naval War College. “That comes just as Washington was hoping Europe would be able to take more of the strain.”

Wikistrat chief strategist Barnett says much depends on what emerges if the Euro falls. If, as many suspect, a rump Eurozone around Germany remains whilst Mediterranean states go their own way, the whole geopolitical focus of the continent could shift.

The northern element, he suggests, could focus its attention

more to the east, giving priority to what could either become a corporatist or confrontational relationship with Moscow. The southern states, in contrast, might integrate much more closely with North Africa and the rest of the Mediterranean — a region perhaps dominated by a newly assertive Turkey. The euro itself should still be salvageable, he says, but it may just be that the political will is simply not there. “It’s essentially a common-law marriage that never quite made it to the church and now seems to be moving towards a split,” said Barnett. “It shouldn’t be necessary, you would have hoped that it could be avoided, but we are living through an age of political immaturity.”

There is a high likelihood of a rise in street protest and resistance to austerity measures in Europe and probably also elsewhere, many experts say, even if more serious violence should largely be avoided.

“This isn’t the breakup of Yugoslavia,” said Control Risks’ Denison. But others aren’t so sure. Chancellor Angela Merkel warned several weeks ago any eurozone failure might endanger the decades of peace the currency and the EU were supposed to cement.

Some worry the risks have been exacerbated by the extent to which Europe’s political and wider elites refused until the last to consider the euro project might fail.

“It’s very difficult to say any of this without sounding like rather a scaremonger, or someone addicted to worst case analysis,” said Paul Cornish, professor of international politics at the University of Bath.

“We (may) be persistently resistant to the signs of change because we don’t like what we see. Eurozone failure might create deep political instability, possibly involving tension and even conflict. We will find ourselves under-equipped and ill-prepared to deal with whatever does happen.”

Calgary house prices increase 126% in past decade!

CALGARY — Strong in-migration, population growth and a vibrant oil and gas sector have pushed Calgary average house prices to an increase of 126 per cent in the past decade, says a new report released Monday by Re/Max.

The report said renovation spending and new construction have been “considerable” secondary factors propping up values throughout the city between 2000-2010.

The report also said the total value of residential building permits in the city during that period was the third highest in the country at $23.1 billion behind Toronto ($77.3 billion) and Vancouver ($35 billion).

“A few reasons I believe Calgary has seen such growth in the last 10 years is simple due to our strong economy from natural resources which has been a driving force in migration into Calgary for jobs,” says Tanya Eklund, a realtor with Re/Max Real Estate Central. “This has resulted in growing our population to well over one million, low unemployment rates, a strong GDP and the demand for housing.

“We are highly affected by inventory levels in real estate. When inventory is low and the demand is there, prices increase . . . We had a very balanced market in this time period and saw huge economic growth which proved significant gains in the housing sector.”

In Calgary, the average price rose from $176,305 in 2000 to $398,764 by year-end 2010.

The Re/Max Housing Evolution report said the average residential price in Canada rose by 106 per cent in the past decade, led by Regina which saw a hike of 173 per cent.

Regina was followed by Edmonton (165 per cent), Saskatoon (163 per cent), Winnipeg (158 per cent), Kelowna (156 per cent), St. John’s (149 per cent), Greater Vancouver (128 per cent) and Calgary.

The report said investment in Canada’s housing stock is at an all-time high in the 16 Canadian residential real estate markets surveyed.

“Revitalization, renovation and new construction have been largely underestimated in terms of overall impact on rising average price,” said Elton Ash, regional executive vice-president of Re/Max of Western Canada. “Yet, outside of supply and demand, these have been among the foremost variables influencing real estate values.

“Population growth is a central to housing evolution, supporting steady household formation, which in turn will boost revitalization, new construction and investment in Canada’s housing stock for years to come. Ultimately, a rising population bolsters the health of the real estate sector and fuels the trends that lead to continued average price growth on all fronts.”

A Housing Market Outlook by Canada Mortgage and Housing Corp. said many factors that support resale housing demand in Calgary have become or remained favourable this year, including growth in full-time employment, low mortgage rates and improved net migration.

“However, competing factors such as uncertainty in the global economy has kept some prospective buyers on the fence, and will continue to temper any large increases in sales,” said the CMHC.

The average price for a residential property in the Calgary census metropolitan area this year is forecast to be $402,000, up 0.8 per cent from 2010.

As the supply in the resale market moves lower and conditions become more balanced, stronger price growth is expected next year, said the CMHC.

In 2012, the average price is anticipated to rise 2.2 per cent to $411,000.


Read more: http://www.calgaryherald.com/business/Calgary+house+prices+increase+past+decade/5668708/story.html#ixzz1dEgBdqFk

Italy’s borrowing costs hit breaking point

Italy’s borrowing costs hit breaking point

By Philip Pullella and Emelia Sithole-Matarise

ROME/LONDON — Italian borrowing costs reached breaking point on Wednesday after Prime Minister Silvio Berlusconi’s promise to resign failed to raise optimism about the country’s ability to deliver on long-promised economic reforms.

Italian 10-year bond yields shot above the 7% level that is widely deemed unsustainable, reflecting investors’ concerns that they may not get their money back, a fear that also showed up in a jump in the cost of insuring against Italian debt default.

Portugal and Ireland were forced to seek EU-IMF bailouts when their borrowing costs reached similar levels and clearing house LCH.Clearnet sounded another alarm by increasing the margin it demands on debt from the eurozone’s third largest country, effectively raising the cost of holding its bonds.

The European Central Bank, the only effective bulwark against market attacks on the eurozone, wasted no time intervening to buy Italian bonds, traders said.

“The ECB is buying in decent sizes,” a London hedge fund investor said. “It makes you wonder how much firepower it has. It’s scary. The market was a bit naive when Berlusconi left. Now it realises there’s a mountain to climb.”

Italy has replaced Greece at the centre of the eurozone debt crisis and is teetering on the cusp of requiring a bailout that Europe cannot afford to give.

Having lost his majority in a key parliamentary vote, Berlusconi confirmed he would resign after implementing urgent economic reforms demanded by the European Union, and said Italy must then hold an election, in which he would not stand.

He opposed any form of transitional or national unity government — which the opposition and many on the markets favour — and said polls were not likely until February, leaving a three-month policy vacuum in which markets could create havoc.

Even with the exit of a man who came to symbolise scandal and empty promises, it will not be easy for Italy to convince markets it can cut its huge debt, liberalise the labour market, attack tax evasion and boost productivity.

“There is no guarantee (Berlusconi’s) successor will be able to do a better job. Just keep your eyes on the Italian yield for now,” Christian Jimenez, fund manager and president of Diamant Bleu Gestion, said.

Policymakers outside the euro area kept up a chorus of pressure for more decisive action to stop the crisis spreading.

Christine Lagarde, head of the International Monetary Fund, told a financial forum in Beijing that Europe’s debt crisis risked plunging the global economy into a Japan-style “lost decade” and said it was up to rich nations to shoulder the burden of restoring growth and confidence.

“Our sense is that if we do not act boldly and if we do not act together, the economy around the world runs the risk of downward spiral of uncertainty, financial instability and potential collapse of global demand… we could run the risk of what some commentators are already calling the lost decade.”

Berlusconi has reluctantly conceded that the IMF can oversee Italian reform efforts.

Eurozone finance ministers agreed on Monday on a roadmap for boosting the 17-nation currency bloc’s 440-billion-euro ($600 billion) rescue fund to shield larger economies like Italy and Spain from a possible Greek default.

But with bond investors increasingly on strike, there are doubts about the efficacy of those complex leveraging plans, and with Italy’s debt totalling around 1.9 trillion euros even a larger bailout fund could struggle to cope.

Lagarde said she was hopeful that the technical details of an EU plan to boost the European Financial Stability Fund (EFSF) to around 1 trillion euros would be ready by December.

Many outside Europe cannot understand why the ECB does not take a more active role as other major central banks do in acting as lender of last resort. German opposition to that remains implacable, seeing it as a threat to the central bank’s independence from politics.

German central bank chief Jens Weidmann, a key member of the ECB, rejected a separate proposal to use national gold and currency reserves or IMF special drawing rights to boost the bailout fund, welcoming opposition from Chancellor Angela Merkel to the same.

But with the ECB just about the only buyer of Italian bonds, according to traders, it may have to act more aggressively to contain the latest wave of crisis, despite internal opposition to its bond-buying programme.

It could call on limitless power if it began printing money as the Federal Reserve and Bank of England have. But for it, and Berlin, that is a step too far.

With the markets’ fire turned firmly on Italy, Greece’s struggle to find a new prime minister became something of a sideshow, but one which demonstrated the difficulty in taking decisive action anywhere within the euro zone.

Greek political leaders scrambled to agree on a new premier to lead the country back from the brink of bankruptcy, after a plan to name a former European Central Bank official appeared to fall apart.

In the past two days government sources have made a number of optimistic predictions about forming the government, which must secure a 130-billion-euro ($180-billion) bailout from the eurozone, only for no deal to materialise.

The socialist and conservative parties had wanted former ECB vice-president Lucas Papademos to lead a government of national unity, aiming to re-establish an international credibility that the politicians lost long ago.

But he appears to have made demands about his level of influence which they could not swallow.

© Thomson Reuters 2011





Greek PM calls referndum on new EU deal

By Dina Kyriakidou and Harry Papachristou

ATHENS | Mon Oct 31, 2011 6:50pm EDT

ATHENS (Reuters) – Greek Prime Minister George Papandreou called an unexpected referendum on Monday on the EU bailout deal for his debt-ridden country, a move that could necessitate a snap election if a public angry with swinging austerity measures rejects the deal.

Pressured by his own lawmakers to share the heavy political burden of belt-tightening with other parties, Papandreou said he needed wider political support for the fiscal measures and structural reforms required by international lenders.

“We trust citizens, we believe in their judgment, we believe in their decision,” he told ruling Socialist party deputies. “In a few weeks the (EU) agreement will be a new loan contract… we must spell out if we are accepting it or if we are rejecting it.”

Analysts said holding a referendum was a baffling decision, given that the latest survey showed a majority of Greeks taking a negative view of the bailout deal.

Opposition parties reacted angrily, accusing Papandreou of looking for a way out for his embattled party by dragging Greece, which has seen violent clashes between protesters and riot police, through a lengthy period of political instability.

The euro extended losses against the dollar after the announcement, tumbling more than 2 percent to a session low.

Papandreou, grappling with Greece’s worst financial crisis in 40 years, had discussed holding a referendum but many people were shocked at the prospect of weary, disgruntled citizens being asked to decide whether to accept or reject the bailout.

“Mr. Papandreou is dangerous, he tosses Greece’s EU membership like a coin in the air,” said conservative opposition New Democracy party spokesman Yannis Michelakis. “He cannot govern and instead of withdrawing honorably, he dynamites everything.”

New Democracy leader Antonis Samaras will visit President Karolos Papoulias on Tuesday to discuss developments and push for snap elections, party officials said.

Weekend polls showed most Greeks took a negative view of the decision by euro zone leaders last week to hand cashed-strapped Athens a second, 130-billion-euro bailout and a 50-percent write-down on its enormous debt to make it sustainable.

“I never expected Papandreou to take such a dangerous and frivolous decision,” said Dora Bakoyanni, former foreign minister and leader of the small center-right Democratic Alliance party. “Tomorrow all the international media will say that Greece itself is putting the EU deal at risk.”

Germany issued a statement saying the EU was working hard to put the second Greek aid package in place by the end of the year and had no comment on the referendum. EU leaders hammered out the deal last week, fearing the Greek debt crisis would speed to other euro zone countries and shake global markets.

“If there was to be a referendum, we may reasonably conclude that they may not accept the austerity measures. We may conclude that it will bring the pack of cards tumbling down,” said Howard Wheeldon, senior strategist at BGC Partners in London.

Papandreou also said he would ask for a vote of confidence to secure support for his policy for the rest of his four-year term, which expires in 2013.

Analysts said he was likely to win that, despite dissent among his parliamentary team. He was forced to expel a senior party member for voting against part of his latest austerity package and others warned him it was the last time they would vote for measures they did not believe in.

Parliament officials said the confidence debate would begin on Wednesday, with a vote on Thursday or Friday.


Papandreou said the referendum would ask Greeks whether or not they agreed to the deal and would take place in a few weeks. Finance Minister Evangelos Venizelos told Greek TV it would probably be held early next year.

But parliamentarians questioned its legality under the constitution, which does not allow referendums on economic issues, only on matters of great national importance.

The last time Greeks held a referendum was in December 1974, when they voted to abolish the monarchy shortly after the collapse of a military dictatorship.

“It’s debatable whether the constitution allows such a referendum,” said Fotis Kouvelis, leader of the small Democratic Left party. “The country must go to early elections. Given the situation, it’s the most honorable solution.”

For a referendum result to be binding, there must be a minimum 40 percent turnout on issues of “crucial national importance” and 50 percent on a law that has already been voted on in parliament and “regulates a serious social issue,” according to legislation enacted earlier this year. It was not clear which option the government would favor.

“If the referendum answer is no, Papandreou has to resign,” said Costas Panagopoulos, an analyst at polling firm Alco.

“In the meantime what will happen with the decisions the EU took last week? I cannot understand what the prime minister wants to do. It could be the only way he has to leave the government, to share responsibility.”

Nearly 60 percent of Greeks view Thursday’s EU summit agreement on the new bailout package as negative or probably negative, a survey showed on Saturday.

Several lawmakers have defected from Papandreou’s Socialist party over the packages of austerity measures enacted to qualify for bailout payments under last year’s aid agreement, and the party trails in opinion polls.

New Democracy is rising fast in opinion polls, but no party would win outright if polls were held now, leading to coalition governments or repeated elections.

“The prime minister is obviously stuck in a dead end and he is leading the country down a very dangerous slope,” said far right LAOS party MP Makis Voridis.

(Additional reporting by Ingrid Melander; Writing by Dina Kyriakidou; Editing by Tim Pearce)