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Archive | September, 2011

First Time Home Sellers

September 20, 2011

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So much focus these days is placed on first time home buyers; how to plan, choosing a REALTOR, financing, etc. But what do those people do when they’re ready to move into a bigger home after a few years? Often there is more stress related to a first sale because there are two transactions that must take place. Hopefully this will help you along the road to your first sale and second purchase!

There are some mistakes people make when they think of selling their first home. The first piece of advice I can give is that potential buyers do not have the emotional investment in your home like you do. You may think your home is worth more than it is simply based on your attachment to it. Unfortunately, market value does not take these emotions into account 🙂 Be realistic about the price you’ll get. Talk to your REALTOR and they will help you establish an appropriate list price.

In one of my earlier blog posts, you can learn how not to underestimate the Value of Curb Appeal. Those first impressions are really important – you should remember this from when you were looking for your first home! The interior of your home also must be immaculate. Chipping paint, scuffs on walls or baseboards, missing outlet covers…all of these things play a part in how much you can get for your home. You can also ask your REALTOR to recommend a home stager for a consultation. This may cost you a couple hundred bucks upfront to have one come to your home, but think of the potential thousands you’re losing by not taking this step.

One thing that some homeowners often overlook is a pre-sale home inspection. You know that whoever buys your property will get one anyway, and this is usually conditional to the sale of your house. If you take the preemptive step and do one before you put your house on the market, you can intercept any potential problems that might come up at the stressful offer time. Again, this may cost you $300-500 ahead of time, but if it saves an offer it’ll be worth it. Remember, the people buying your home are probably first timers just like you were when you moved in, so take that into account when you think “oh, the tap has always been leaky but it’s fine” or “I know the eavestrough is cracked but water has never come into the house”.

You should also realize that most buyers are on www.realtor.ca before they start looking at homes. People look at photos and generally scan through hundreds of listings. Although they may only spend a few moments looking at a particular listing, most of that time is looking at photos of your home. Professional photographers may seem extravagant, but you have no idea how valuable they can be. I include photography as part of most of my listing packages, and you may be surprised at the feedback potential buyers give. The better your photos, the more showings you’ll probably get.

Hiring a REALTOR may even be a big decision for you. Certainly I’m biased, but I wouldn’t be in this career if I didn’t wholeheartedly believe in what I do. Paying for a commission might seem like an extra cost you can’t afford, but consider the added value you get when you hire a professional. Your home is probably your biggest asset, and you want it to be taken care of. You hire an electrician, a plumber, or a roofer because they’re more knowledgeable than you about their trade. REALTORs are the same. We have extensive training in our field, and we’re here to help. And feel free to interview a few different people! You’d be surprised at how differently we all operate and how many different services we all offer. If you decide to go it alone, make sure you have a great real estate lawyer (like our own Cesia Green!) to help you along with all the paperwork. Contracts play a major role in home sales, so you need to make sure you’re covered! Also consider that a REALTOR may bring buyers to you but you’ll have to pay them a commission for bringing those buyers.

Finally, just like when you were buying your first home, talk to your mortgage broker and ask them what’s involved in a home sale. They are a wealth of information and can give you all the tools you need financially to make the right decision. For example, if you ask Tim Walker what you need to do he can give you advice on your mortgage renewal, transfer or cancellation and also help you decide how much you can afford for your  next home.

There are many resources available to you online, such as www.howrealtorshelp.ca, the Canada Mortgage and Housing Corporation or the Real Estate Council of Ontario (RECO). Use these as well as talking to your REALTOR to stay informed and to make the best decision possible. Education is power, and the more you know about selling your home the more prepared you’ll be.

Laura

Laura Keller of Century 21 B.J. Roth Realty is a real estate agent with a business philosophy of nurturing relationships with her clients. She will walk you through the process of buying, selling, or investing step-by-step so there are no surprises at the end of your transaction.

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Don’t Sign That Mortgage Renewal

September 19, 2011

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The major banks currently renew somewhere between 80-90% of the mortgages they hold, and the majority of those renewals are done at posted rates (posted rates are the rates that are publically advertised by the banks, and the rates also used for qualifying for a variable rate mortgage). Many clients, especially those with a steady job and decent credit, can get way better than posted rates (for example, the posted rate at most banks is currently around 5.39%, but many of my clients are currently able to get a 5-year fixed rate of around 3.49% – that’s 1.9% cheaper!). Paying posted rates could end up costing over $18,000 in just 5 years on a $250,000 mortgage amortized over 25 years. That’s not chump change!

Sometimes getting a better rate from the banks is as simple as asking for it – but why would you want to do business with a company that won’t give you the best rate up front? Save yourself tens of thousands of dollars and make sure you either negotiate a better rate at your branch every time your mortgage comes up for renewal, or even better, ask for some help from a licensed mortgage broker, and let us help you get the best rate and options for your mortgage renewal.  We can survey all the lenders we have access to and help you not only get the best rates available to you, but also figure out which options (pre-payment privileges, term, etc) best fit your current needs and lifestyle requirements.

So the next time you receive a renewal notice from your bank in the mail, remember that it’s worth the time to negotiate a better rate – just signing it and sending it back could cost you thousands every year.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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I Want To Be A Landlord!

September 15, 2011

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As a residential real estate agent, rather naturally I am a huge advocate of investing in residential real estate as a means of creating short term cash flow, and achieving long term investment goals. However; the road to riches as a landlord comes with great responsibility and numerous elements of risk, especially if the landlord and/or tenants aren’t familiar with their rights and obligations and a conflict occurs.

A great jumping off point for anyone considering becoming a landlord here in Ontario is to have a look at the resources provided by the Landlord and Tenant Board supported by the Government of Ontario. The Landlord and Tenant Board endeavors to “Inform landlords and tenants about their rights and responsibilities under the Residential Tenancies Act and provide balanced and timely dispute resolution in accordance with the law.”

I find that most aspiring Landlords are not familiar with the responsibilities and obligations they will have if they enter the “business”, and the bulk of them will change their mind when they realize renting a property is not just a case of getting a set of keys cut, placing a Kijiji ad, and collecting cheques from the first party that expresses an interest.

For those of you who have read over the information on the rights and responsibilities of being a landlord, thought things through, and are still comfortable with the investment, I would strongly suggest that you talk to the following individuals:

a) A real estate agent who is familiar with the process of investment purchases – he/she can point you to areas of town that will suit budget, tell you what type of tenants you might attract in certain pockets of town, etc.
b) A mortgage agent who can discuss the unique circumstances of your investment needs with respect to a mortgage and then secure a great product/rate that will maximize your income
c) A real estate lawyer who can assist you in closing the transaction, structuring lease agreements, etc. If you are going to acquire more properties you might even discuss incorporating, a holdings company, etc.
d) Your local municipality to make sure you are not violating any zoning or property use bylaws by renting the property.

Rental properties are a very rewarding source of income when structured properly and treated as a business, each one of us contributing to this blog have our own areas of expertise and welcome any questions that you may have about the process of acquiring investment real estate.

Brendan

Brendan Clemmens of Royal LePage First Contact Realty is a residential real estate agent in Barrie that provides value added service to all of his clients. Brendan can help you with all of your real estate needs but has a specific focus on helpin g young families and investors.

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What you don’t know can, in fact, hurt you

September 14, 2011

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There was a case a while back in British Columbia that involved a house the buyers ended up not really wanting. In Cardwell v. Perthen, the buyers found after purchasing their home that there was shoddy workmanship, leaks, deterioration of structural components and mould. They chose not to get a home inspection at the time they bought, but the court determined that they had the right to obtain a home inspection and that their choice not to do so should not shift the obligation over to the seller.

In BC, as in Ontario, it is the buyer’s obligation to determine whether there is anything wrong with a house before purchase; it is not the seller’s duty to disclose anything that is what is called patent, or discoverable. If you, or a qualified home inspector, could have discovered that there was mould, or mice, or a rusted furnace, the seller is not responsible for compensating you even if you chose not to get a home inspection, unless the seller actually prevented you from getting a home inspection.

In Ontario, truly, the buyer must beware.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she's not online, she can usually be found in her garden.

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Downsizing?

September 13, 2011

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So much real estate is centred around buying your first home or moving up. Getting a smaller home has a lot of significance for several families. There can be many different reasons people downsize, and some things to keep in mind when you do!

The first thought that comes to mind has to do with “empty nesters”. This basically implies that a couple or a parent is living in a larger home they purchased when there were children living there. Once those children move out of the home to go to college, university, or out in the work force, the space seems much bigger than you remember! When you’re just a couple or a single person in a three- or four-bedroom home you can feel somewhat alone. Moving into a smaller house or condo can mean a lot less home to maintain, and can feel much more cozy.

Downsizing isn’t always an easy decision, though. A client I recently helped had a large country home with a lot of landscaping to take care of. The difficult they had was that it had been their family home for many years and it felt like home to them and their adult children. When you’re considering this option, it’s best to weigh all pros and cons of staying in your current home or moving into a smaller one.

Another reason that is sometimes overlooked is an economic one. In the last couple of years, we’ve heard many horror stories – primarily in the United States – of foreclosures or people having to sell their homes for less than what they owe. Power of sales are more common in Canada (for several reasons – a later discussion!) and they happen more often than you may think. Some homeowners, to avoid this situation, sell when they know they can’t afford it anymore. This could happen due to layoffs, a separation, or unexpected bills piling up. Although this is another difficult decision, it can relieve financial stress in your household.

Moving into a smaller home will probably mean that you’re giving up some of the luxuries you had in your previous house, but the maintenance will most likely be far easier to keep up; less floor space to vacuum and mop, fewer windows to wash every spring, and maybe even a smaller yard to mow!

Once you’ve made the decision to downsize your home, there are some ideas that will be very helpful as you start planning and packing. This link for “Top 10 Tips for Downsizing” can help you along the way. If you want to hear a first-hand story of the process, check out the Globe and Mail’s article “Downsizing is a huge step” for some anecdotes and the trial and error search for the perfect smaller home.

Laura

Laura Keller of Century 21 B.J. Roth Realty is a real estate agent with a business philosophy of nurturing relationships with her clients. She will walk you through the process of buying, selling, or investing step-by-step so there are no surprises at the end of your transaction.

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