Tips for Springtime Home Buying

Spring is widely known as the hottest real estate season for both buyers and sellers. It's a season for frantic races from property to property and quickly calculating your mortgage pre-approval in your head while trying to beat the other potential buyers to the next house.

Home sellers who've been renovating properties for months are finally ready to place them on the market - complete with new fences, budding gardens and recently installed hardwood floors, all meant to appeal to buyers' aesthetic values.

But spring also uncovers another type of home seller. The type who puts Band-Aids on bullet wounds, and hopes you don't ask any non-appearance-related questions. And for that reason, spring can be both a blessing and a curse, especially for first-time shoppers.

The House-Flipping Craze

The home renovation business is a $300-billion industry in the United States. And thanks to Mike Holmes, Bob Vila and Ty Pennington's magical bus of overvalued dreams, every homeowner with an electric sander is assumed to be a renovations expert.

Unfortunately, many do-it-yourselfers attempt to overshoot their skill levels, and the winter months provide just the right combination of time and isolation to completely fudge a job that should have been left to the professionals in the first place.

Luckily for them (and you), there are many home renovations projects that fall into the "basics" category. Painting a room, installing new flooring or molding, and even wiring a new light fixture can be completed by most construction novices in the span of a weekend.

With home renovations, as with plastic surgery, the value is in the details. You wouldn't want puffy duck lips from a bad Botox injection any more than you'd want uneven flooring or improperly cut baseboards. When viewing a home, don't be afraid to get a little dirty - check the corners of the walls for cracks (often painted over), and observe the gaps between the floors and the wall. If there are any items on the floor that look slightly out of place, move them and take a closer look. There's a fantastic chance they were put there to hide a flaw that the previous owner didn't (or couldn't) fix.

It's also a good idea to bring a level with you, to ensure that all countertops, shelves and ledges are completely flat. Any warping or uneven surfaces could be a sign of water or foundation damage, possibly caused during the spring thaw.

Pay Attention to the Details

Home staging has become another massive industry in the United States and Canada, and it is estimated that a properly staged home can bring in 15 per cent more than a barren or improperly staged one.

But all of the alphabetized encyclopedias, cookie-scented air fresheners and fresh fruit in the world shouldn't deter you from the house's details.

Here are the usual list of questions you should have ready:

•How old is the house?

•When was the furnace installed and when was it last inspected?

•What are the annual property taxes, on average?

•Are there warranties on the appliances?

•What are the estimated utilities costs for each season?


All of the above questions can produce answers that sellers might rather gloss over, but once you've paid your deposit, your fees and signed the paperwork, it's too late to ask - and some of those answers won't become apparent until you get your first tax assessement or the "hot" water tank gives you a chilly surprise.

The Springtime Blues

Springtime spawns a unique set of concerns for the real estate market. Potential homebuyers (and those who are just kicking tires) come out in record numbers between March and May, and this can often put serious shoppers in a panic, for fear of losing out on their dream homes to a higher bidder or stronger negotiator. But it's better to spot the signs of a poor investment sooner than later.

This great article is from the Globe and Mail.

If you have any questions on current market conditions or you are looking for a dedicated and trained professional to protect your interest, please give me a call or send me an email.

A New Web Site Tool Allows You to Gauge Your Financial "Fitness"

How "financally fit" are you?

Genworth Canada and the Canadian Association of Credit Counselling Services ("CACCS") together have launched an interactive tool to help Canadians gauge what is referred to as “financial fitness.”

According to a jointly issued press release, “This new Financial Fitness Score, the first of its kind in Canada, is available online at www.financialfitness.ca. The score is based on attitudinal and behavioural questions that were developed from financial fitness data collected in a survey sponsored by Genworth Financial Canada and CACCS. The tool helps people determine how well they are managing their finances and provides useful information that is based on their fitness level. “

The release of this tool comes at an opportune time, when many Canadians find that their finances are stretched pretty thin- and are likely to be tested further with costs for everyday goods- like gas and food- rising substantially. Coupled with the knowledge that the cost of borrowing is going to go up as a counter-balance to the rising rate of inflation, Canadians need to put their strategies to work towards affordability in check- and to make sure that their situations are financially fit.

“Having a firm understanding of what it means to manage your money is so important to peace of mind", said Henrietta Ross, Chief Executive Officer of CACCS. "It's quick, easy and free, but so rich in value. Understanding your score and what you can do to improve your situation is very empowering."

Want to know where the cheapest gas prices are in your area?

As I'm writing this, gas in Tillbury is $1.17 per litre!  Check out this link to get the "low-down" on gas prices....just type in your city and get addresses and prices of the cheapest stations. http://www.ontariogasprices.com/

Easing the Cost of Home Ownership for First-Time Home Buyers

Even with today’s very affordable mortgage rates, the real estate market can still present a challenge to many people wanting to step onto the property ladder.  First-time buyers in particular are finding they have to make adjustments as they plan for their dream of home ownership.  Some young people are staying at home longer in order to save for a down payment.  Other would-be homebuyers are scaling down their expectations, while still others are choosing a home with a rental unit to help with mortgage payments.

There are some other creative alternatives available to help First Time Buyers start to build some equity in the real estate market that entail multiple ownership of the same property.  One option that may be of interest to family groups or close friends is the joint purchase of a multiple-unit dwelling, such as a duplex.  Such a property might be jointly purchased by two groups of buyers, with each family occupying one of the property’s units. 

The duplex approach can work well in situations where young people plan to marry, leaving their parents as “empty nesters”.  In this scenario, the family home is sold, with the parents buying one unit of a new duplex outright, and then banking their surplus funds, perhaps for retirement.  The younger generation then assumes the more manageable mortgage payments on the remaining half of the property.  In this way, they can start to build equity immediately, without having to come up with a large down payment, or taking on a big mortgage.

In less formal arrangements, two couples may elect to jointly buy one single-family residence and share all the living space. This can sometimes be a stressful situation, and the best chance for success is usually when there is a family relationship between the two couples, such two siblings with their spouses, where there is already some history of living together in a shared space.

Whatever method you choose to ease the cost of homeownership, the most important thing to remember is to get the all the details worked out before you buy.  Everyone involved in the purchase should agree on all sub-lease and re-sale provisions “up front”, and in writing.  For example, can one party move out and sublet their living space to someone else? Also, what happens when someone wants to sell? Does one party have the right to buy out the other’s interest?  If so, how will a fair price be determined?  And how long will the other party have to come up with the funds?  Or, is the property simply put on the market with all parties sharing the proceeds? 

In addition to the terms of ownership, the ongoing care of the property should also be considered.  Who will be responsible for the ongoing maintenance of the property?  What services such as landscaping or snow removal will be contracted out to service providers, and how will this cost be shared? How will the cost of major repairs be handled? 

As you can see there are a lot of variables to consider.  Such important issues should not be left to chance.  Don’t expect that they’ll be sorted out easily when the time comes. The best course of action is to get a lawyer involved and draw up an agreement that clearly sets out the rights and obligations of all co-owners.

Remember, when you’re thinking of creative ways to ease the cost of owning a home, talk it over first with the expert. 

Contact me so we can discuss your plans, and ensure that you are shown homes that conform to the appropriate zoning and municipal by-laws. 

I may even be able to suggest options that you’d never considered, and help you make your home ownership dream a reality.

How Much Home Can You Afford?

Having worked on 4 deals this month for buyers, I've realized that many buyers aren't completely aware of all the carrying costs of owning a home and the closing costs above and beyond the downpayment.  This is an important discussion to have with all buyers.

Part One - Budgeting your Carrying Costs

Finding the right property at an affordable price can sometimes be a challenge.  When it comes to deciding just how much home you can afford, there are two kinds of expenses you’ll need to consider – the ongoing or ‘carrying’ costs of the home, and your closing costs. 

The first step in determining your carrying costs is to get pre-approved for a mortgage.  By pre-qualifying for a mortgage, you can find out up front what your maximum mortgage payment might be, even before your home search begins.  Your lender will look at your earnings, credit history and any outstanding debt, and help you determine what size loan you qualify for, at what rate, and what your regular mortgage payments would be.  Being pre-qualified offers another advantage, since it puts you in a stronger negotiating position when you go into an offer with pre-approved financing.

Once you’re pre-approved, the next step is determining what you actually want to spend on your mortgage payments.  Remember, your pre-approved mortgage establishes the maximum amount of loan you’d qualify for, but you may decide that you want to aim at a smaller loan, with a lower payment. 

Be realistic and think about your lifestyle.  Although it may seem feasible to handle a sizable mortgage payment at first, keeping it up may eventually require cutting back on other expenses, such as clothing, or entertainment.  Make sure that if you plan to make any concessions in these areas, you’re prepared to live with your decision until there’s a change in your income.  Owning a home can give you a tremendous amount of pleasure and personal satisfaction, as long as you plan for adequate resources to enjoy it with some peace of mind. 

With your estimated mortgage payment in mind, the next step is to determine your total carrying costs.  Add up all your estimated monthly costs, such as the mortgage payment, property taxes, insurance, heating costs and other utilities.  Then add a figure to cover yearly maintenance and upkeep.  Consider both the interior and exterior of the house, as well as the garage, driveway, landscaping and all other aspects of the property when you arrive at this figure. 

When preparing your budget, be sure that you also make allowance for a “contingency fund” to cover unexpected expenses such as a major repair or the replacement of a large ticket item, such as an appliance. Life sometimes has a way of surprising us, and you don’t want to start out with a budget that’s so tight, there’s no room for the unexpected. 

Part Two – Closing Costs and Moving Expenses

After you’ve estimated your mortgage payment and other ongoing costs for carrying your first home, you’ll also need to consider the one-time expenses associated with the purchase of a property.  This includes your closing costs, as well as your moving expenses.

Be aware that there is no set rule for what’s included in closing costs, or how they’re calculated.  Closing costs can vary significantly from property to property, but may include home inspection fees, appraisal fees, title search, survey costs, home insurance and lawyer’s fees.  Some of these costs may be shared with the seller, while others are payable by the buyer only.  Your Coldwell Banker salesperson can give you helpful advice about specifying a cost-sharing agreement for some of these related costs within your offer to purchase.

You will also be required to reimburse the seller for a proportionate share of specific housing expenses that have been pre-paid by the seller and continue after your closing date.  These pre-paid expenses usually include property taxes and utilities, and the amount is typically equivalent to only a few months service.  Your real estate lawyer will give you an exact accounting of these expenses upon closing, so be sure to discuss this with your lawyer in advance, so you will have sufficient funds available to cover these costs at that time.  After these one-time adjustments are made, and the transfer of ownership is completed, you will pay for such expenses directly in future.

In addition, you’ll also have to budget for your relocation costs.  This could include such costs as a moving company truck and labor, packing charges, boxes and wrapping materials, or rental of a vehicle or trailer if you’re doing all or part of the move on your own.  There can be a wide variation of costs for these types of services, so you should start planning well in advance, and obtain comparative quotes from more than one mover.  Get the quotes in writing and ensure that all the required equipment, staffing and materials are documented.  Ask the provider to specify what charges may apply if your move does not proceed on schedule.  Be sure to read all the fine print carefully, so you understand upfront what other charges, such as waiting time, or a late return charge you might incur that are not planned for in the initial quote. 

I can they help you estimate carrying and closing costs and also recommend experienced and trusted service providers to help you keep the cost of moving and home ownership affordable and keep your move hassle free. 

Contact me today if you want to start searching for your new home!

Smart Sellers offer current Surveys

Since having an up-to-date property survey is generally of benefit to the buyer, sellers who can offer a current survey for their property will find it an attractive plus when promoting their listing.  Providing a current survey to the buyer helps ensure the correct information is properly disclosed, and that helps your sale to move smoothly to completion. 

Sellers should also be aware that not every transaction requires a brand new survey.  It depends in part on when the last survey was completed, and what physical changes have taken place since then.  If there have been no improvements to your property, your current survey may be sufficient for your needs.   

If a survey is needed, and no up-to-date version is available, you may be wondering who pays to have a new survey done.  The time to raise this question is during the negotiations between buyer and seller.  The seller is under no obligation to provide any such documentation, or to participate in the cost of a new one, unless it’s spelled out in the offer.

 Feel free to contact me on the best way to prepare for the sale of your property – from staging to disclosure issues.

Bank of Canada holds rate steady - but could rise to 3% by 2012

The Bank of Canada kept its benchmark lending rate unchanged at one per cent in its latest decision on Tuesday.

Since raising its overnight lending rate to one per cent in September, the bank has held steady for five consecutive policy decisions.

The Bank of Canada said economic growth in the United States appears to be picking up steam, while emerging markets continue to expand at a robust pace.

Summer tightening

Still, analysts believe that the Bank of Canada should be ready to pull the interest rate trigger as the year progresses.

"Although this stronger growth is not expected to result in an immediate hike in interest rates, the acknowledgement of such will solidify financial market expectations for the return to tightening later this summer," wrote Paul Ferley, assistant chief economist at RBC Economics.

Paul Ferley spoke earlier this year at the Coldwell Banker Economic Forum in Kitchener.

RBC predicts that the Bank's overnight rate will rise from the current level of one per cent to three per cent by 2012.

The Value of a Home Inspection

Having put together 3 purchases for buyer clients in less than two weeks, I've had my share of inspections lately.

This has started me thinking about how I, as a REALTOR, take such things for granted but buyers don't often see the value of a home inspection.

Buying a home is probably the single largest investment you'll ever make, and you want to ensure you get the best value for your hard-earned dollar. That's why more and more buyers today are turning to professional Home Inspections.  Prospective home buyers, especially first timers with less experience than a repeat buyer, may not always be able to anticipate potential problems down the line.  Here’s where the Home Inspector can help.

A professional Home Inspector takes a close look beneath what’s on the surface, and then prepares a detailed written report for the prospective buyer on what repair and maintenance work is required now, or is likely to arise in the near future, as well as help you estimate how much this work might cost.  The Inspector should look at such things as the condition of the foundation, electrical service, roof, insulation, and other structural factors. Your Coldwell Banker real estate professional can help you connect with an experienced Home Inspection service in your community.

Although costs will vary, you can probably expect to spend a few hundred dollars for an inspection of a single family home.  And who pays for it?  Well, since the benefit of a home inspection is almost entirely that of the buyer, it’s often the buyer who pays the full cost.  However, there’s no set rule, and as with most things in real estate, the cost and who pays for it is negotiable.  All things considered, it's a small price to pay for the peace of mind it provides, and the negotiating power it can give you as an informed buyer -- especially if the inspection indicates that there are major repairs required.  Under such circumstances, you may still decide to proceed with your offer, but take the cost of the upcoming repairs into consideration when you decide on your offer price. 

When it comes to making your offer to purchase, your Coldwell Banker professional can advise you how to allow for a satisfactory home inspection as a condition of your offer.  Provided you can obtain the homeowner’s permission,

a home inspection can be arranged either before your offer is submitted, or after your conditional offer is accepted by the seller.  If the conditional offer is accepted, the property owner is temporarily held from accepting any other offers during a specified time period, so that you can get the inspection done and review the report before you’re locked in.  More importantly, you have a legal escape route if the report turns up some major negative surprises, such as a bad roof or a crumbling foundation.

If you have any questions, please contact me and we can work together to uncover the best answers to your real estate questions.

How to pay off your mortgage quickly

Many financial planners will tell you that one of the best investment strategies you can adopt is to pay off your mortgage in the shortest time frame possible.  Here are a few tips to put your mortgage repayment schedule on the fast track, and with a minimum of hassle and stress.

·       Select the most frequent payment option available.  By choosing to make your mortgage payment on a bi-weekly, or better still, a weekly basis versus monthly payments, the result is making extra payments every year.  Over the life of your mortgage loan, this approach can save you thousands of dollars in interest, and pay off your mortgage years earlier.  Best of all, you’ll hardly notice the difference, since you’ll simply be making regular payments.

·       Consider a closed mortgage.  Getting the lowest rate mortgage available just seems like common sense, yet a great many homeowners choose open mortgages versus the lower rate closed versions.  Unless you’re expecting a windfall and are planning to pay off your mortgage before the end of it’s term, closed mortgages may be your best choice.  Although you can’t add extra money whenever you wish, most closed mortgages allow for an annual lump sum payment, perhaps ten percent of the loan.  Talk to your lender to find out what provisions their closed mortgages offer for repayment.  In most cases, you’ll find that the lower rate closed mortgage offers you the best alternative.

·       Shop around for mortgages.  Gone are the days of “one-stop financial shopping” when people routinely arranged for mortgages at the same place where they did their banking.  Your mortgage represents one of the biggest financial commitments of your life, so it pays to do some research and a little comparison shopping.  There may also be some financing options available to you that you haven’t even considered.  Ask your Coldwell Banker real estate professional to tell you more.

Lock in rates while they’re at their most affordable.  A good way to protect yourself against a potential increase in interest rates is to get pre-qualified for a mortgage, and lock in your interest rate now with your lender.  A difference of even a quarter percent in interest can add up to thousands of dollars over the life of a mortgage.  Rates are very favorable right now, so why not protect yourself and lock in the current rates while you look for a home, and avoid the risk of paying a higher mortgage payment if rates go up before you close.

Tips for Visiting an Open House

Warmer weather has arrived (kind of) and many people are taking advantage and beginning to venture out to tour open houses.

There’s a lot of information out there for sellers staging an Open House, but surprisingly few guidelines for the people who come to view them.  For some, an Open House viewing may simply be an impulse activity to satisfy their curiosity about a neighbor’s home.  However, for serious buyers, especially First Time Buyers who have limited experience in seeing different home styles and layouts, visiting Open Houses can be a very worthwhile exercise.

To plan an effective Open House tour, you should start with a map.  Plot out the addresses of where the Open Houses are located, and the times of showings to ensure that you make the most productive use of your time.  For open houses in Kitchener-Waterloo, check out http://www.kwar.ca/open-houses/

If you don’t already know the neighbourhood, then that’s the first place to start.  Look at your map, and see where major transportation links are located, as well as parks, schools, shopping and amenities.  If everything you see on the map looks good, then start out with a driving tour of the neighbourhood itself, before you devote some time to viewing individual houses.  If you contact me ahead of time I can provide you a Neighbourhood Amenities Report which will outline all the area shopping, doctors, schools, etc....

If you plan on visiting an Open House, and you’re already working with a real estate salesperson - hopefully me-,  be sure to notify them in advance.  Your sales representative can be a very valuable source of information about the neighborhood, and may possibly even be familiar with the individual property.  Of course, if you aren’t yet working with a sales representative, Open Houses can provide a great opportunity to not only look for the right house, but the right salesperson.  What better way to see them in action, and find out quickly if you communicate on the same wavelength.

As you tour an Open House, try to see past the furnishings, and any personal clutter, and focus on whether the space and layout works for your needs.  Don’t assume that what you see is what you get!  Many things you see at the viewing, such as window treatments, light fixtures, appliances and even that hot tub on the back deck may not be included in the list price.  Check details on the feature sheet and verify what’s included with the agent hosting the Open House.

When touring an Open House, be direct and ask questions.  Remember, this is no time to be diplomatic.  The real estate professional showing the home realizes that it may not be right for everyone.  By keeping your comments open and direct, you help the sales representative to better understand your needs, and offer solutions to meet them.

Of course, if you are working with a Buyer Representative, you don’t have to wait for open houses to view a property for sale.  Your salesperson, who is looking after your interests, can set up a private showing and explain the benefits and features of the home as you view it.

Contact me if you would like more information on properties or to view any properties – I am a trained buyer representative who will protect YOUR interests, and not those of the seller.

Kitchener-Waterloo Community Resources

Here are links to all of the community resources including Walk-in Clinics, Community Centres, Shelters and Food Banks, etc.....

Emergency / Important Numbers
Walk-in Clinics & Urgent Care
Shelters & Food Banks
Community Centres & Pools
Municipal Services

Banks Raising Mortgage Rates Today

Several of Canada’s big banks are raising most of their fixed-term mortgage rates ahead of the busy spring real estate market.

AT TD Canada Trust the biggest increases will be for mortgages with terms of five to 10 years, which will all go up by 0.35 percentage points starting Tuesday.

The move was matched by CIBC.

The Royal Bank raised its rates on mortgages for five- and 10-year terms by 0.35 percentage points and its seven-year rate by 0.15 percentage points.

The posted rate for five-year closed mortgages — one of the most popular types of loans for Canadian home owners — will rise to 5.69 per cent.

The three banks will also raise their rates on one-year, three-year and four-year terms by 0.2 percentage points while two-year terms go up 0.3 percentage points.

Fixed mortgage rates, which are closely tied to the bond market, usually rise when traders shift investment activity to riskier equity assets from bonds, which are considered safer.

As predicted some time ago, rates have no where to go but up, which can significantly increase the costs of your mortgage, particularly in the early terms.

If you would like more information on mortgage costs or acquiring pre-approvals, please contact me.

Me, Elmira, Maple Syrup Festival...