Your Monthly Real Estate Read May 2013
Seven Seller Slip-Ups That Send Buyers Packing Sure it's a sellers' market, but that doesn't mean it's a fool proof market. Sellers who approach the market like a cocky kid who thinks he or she knows it all will soon learn the real estate world isn't his or her oyster. If you want to sell your home quickly for the maximum sales price, consider these pearls of wisdom to avoid common seller mistakes. Mistake No. 1: Pricing your property too high - Every seller wants to get the most money for his or her product. Listing with an excessively high price is a mistake. A high listing price will simply alienate some buyers before they even see your property. Other buyers could expect more than your home really has to offer. Over-priced properties tend to take an unusually long time and sell for a lower price than a similar home that's priced right. Mistake No. 2: Mistaking refinance appraisals for market value - In a refinance, lenders often estimate the value of your property at a higher level than the home is worth to encourage refinancing. It's a good idea to ask your real estate agent for the latest comparable market analysis, based on similar, recently sold properties in the same
community. Mistake No. 3: Forgetting to "showcase" your home - No matter how many times sellers hear this advice, no matter how simple it is to achieve, there's widespread neglect when it comes to getting a property ready for sale. A poorly maintained home with neglected decor and an unorganized appearance will turn away buyers and slash thousands of dollars off the selling price. Mistake No. 4: Trying to "hard sell" while showing Buying a house is an emotional and difficult decision. Give prospective buyers time and space to examine your property. A home tour or open house event is not the time for pressuring prospective buyers. Point out subtle issues, but be friendly, be hospitable, be available and be receptive to questions, but only if the potential buyer asks. Mistake No. 5: Trying to sell to lookers - A prospective buyer who shows interest because of a "for sale" sign likely isn't really interested in your property. These buyers are more likely six to nine months from really taking the plunge. They are more interested in learning what's available, rather than looking for a home to buy.
Your real estate agent can distinguish between the looky -loos and real buyers by determining a prospective buyer's savings, credit rating, and purchasing power. If your real estate agent can't make this distinction, and you have to investigate on your own, consider finding a new real estate agent. Mistake No. 6: Not knowing your rights and responsibilities - It's crucial you are aware of all the details in your real estate contract. Real estate contracts are legally binding documents and can be complex and confusing, but failing to sweat the details could cost you thousands of dollars in repairs and >inspections. Mistake No. 7: Signing a contract with no escape - You have a right to a contract that allows you to fire your real estate agent - and hire another if the original agent fails to do the job as promised. Beware of real estate companies that simply replace an agent with another one, without consulting you. Be in control of your sale before you sign a real estate contract. Written By: P J Wade
An Open House Can Close The Deal
Spring is in the air and right now, many homeowners begin to consider putting their homes up for sale. If you are one of those homeowners, it's time to prepare your home for market. You'll have to examine your finances, hire a real estate agent, begin to de-clutter, clean your home and repair and replace where necessary. Also consider the advantages of an open house. Here are five reasons common reasons an open house might close the deal. Eyes on the prize - And open house attracts potential buyers who would otherwise be too casual, lax, or unmotivated to book a showing. The event also has one up on a simple listing. Your friends and family can mention the event to every potential buyer they know. Neighbors who drop by might be angling to have someone amiable move into
the neighborhood. Advertising and signage will catch the eye of both casual lookers and serious buyers. You direct the drama - Some home shoppers give little if any notice if they stop by your home for a traditional showing. It can be stressful keeping your home show-ready for the entire time it's listed. It's also time consuming to keep wastebaskets emptied, floors routinely swept, vacuumed or mopped and the laundry washed. Not so with an open house. You decide when the curtain goes up. You can schedule the event and prepare for an event with the potential to bring in throngs of prospective buyers - all in one fell swoop. It's a lot saner to deep clean and stage when you know exactly when home shoppers will arrive. A scheduled event also gives you time to sweeten the deal with some fresh-baked goodies and aromatic vases brimming with fresh flowers. Second time's a charm Typically there's a limit to the number of times even the most interested buyer is willing seek for a private tour. If your house already caught the eye of a potential buyer, he or she might feel less
overbearing and be more willing to come back for a second look in a less formal setting. An open house also gives buyers the opportunity to bring friends or family for their input. Walking through an open house also provides guests with plenty of time to look around - during open house hours. Buyers compare apples and oranges - On any given weekend, buyers are likely to visit several open houses in the same general location. This gives buyers looking in your area the opportunity to comparison shop by attending several open houses. That gives you the opportunity to make your home stand out from the crowd. Time is on your side - Many open houses are available some weekends, others, not so Written By: Kim Clark Mortgage Rates Fixed rates: 1 Year: 2.65 % 2 Year: 2.69 % 3 Year: 2.65 % 4 Year: 2.89 %
Rates provided by Invis Mortgage as of May1st, 2013
Your Home Isnâ€™t Selling Because... Your home has languished unsold on the market for months, but you can't fathom why. Chances are, you've overlooked what buyers really want. Let's take a look in more detail at some of those issues you might have overlooked. Your price is too high This is the number one reason your house isn't selling. Sure, you are attached. Your home is where you raised a family and created memories you can't put a price on. However, today's buyers are more savvy than partial to your emotions. They either won't look at over-priced properties, or when they do, they'll make a low-ball offer, way below market value. If your home has been on the market for more than 30 days, it's time to review and adjust your price. Your house is poorly located or poorly planned There's not a lot you can do about this: a small yard, a weird hill that makes mowing maddening, a sink hole down the street, neglect that's turned to blight, a busy road nearby. No matter how magnificent your home may be on the inside, outside factors can keep buyers from crossing the threshold to take a
look. The only way to over come these obstacles is to lower the price until a buyer bites. Your advertising is insufficient - Your real estate agent should do more than just list your home with the local multiple listing service (MLS), sit back and wait for agents to beat a path to your door. When you choose a real estate agent, establish what the agent plans for marketing. What kind of photos will be used? Smartphone photos of your home aren't smart. How will the agent describe your home in the listing? Are open house events and broker tours planned? These are all important marketing approaches, but if they aren't part of the plan, the lack of them could be a contributing factor to your home's failure to sell. You are inflexible - If you are not ready to show your home at a moment's notice, say for a broker's tour, you are a big reason your home won't sell. If you can't show it, you can't sell it. The more buyers who see your home, the faster it sells. The more buyers who see your home, the higher the selling price. Too much "you" is in the house - Those snaking handrails and electric blue
kitchen you love so dearly, are not going to be big selling points. You want your home staged so that potential buyers can envision it as their home. Neutralize. Don't fill those beautiful, built-in bookcases with family photos and dog figurines. Move personal items out of the house and paint the rooms a neutral color so you allow buyers' imagination to help sell your home by seeing themselves in it. Your house looks run down - That big water stain under the deer antler chandelier? Fix the source of the stain and the stain itself. Take down he chandelier. The roof may be new, but potential home buyers will zero in on stains, blemishes and discolorations and believe the cause of the damage remains. Give the carpets a good cleaning too. You don't want to turn off a potential buyer because he or she thinks they will have to repair or replace something.
Written By: Laura N. Oatley
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Interior Designers Create The Right Starting Point By the time you're ready to take possession of the first real estate you've every bought, you'll probably be swamped with advice and design ideas from friends and family who've "been there." Even if you've made decisions based on this information and your own research, take a fresh look at your new home before you act on these preconceived ideas. Prior to moving in, you've probably spent less than an hour or two in the property you'll call home for years. Slow down. Get to know the real advantages and disadvantages of what you've bought before you start ripping it apart. When you open the door for the first time, you may be surprised by how much you didn't remember or that you remembered wrong about the space. • Those who bought a carefully - staged home, discover recreating that ambiance is not so easy when presented with an empty space. • If you've only seen building plans, the 3D "square foot" reality may hold surprises. That fixer - upper you bought may look even worse when the place is vacant. There is art and science in translating vacant space into a home while staying on budget and on schedule and remaining sane - that's where Interior Designers come in. You may be under the popular misconception that hiring an interior designer is an added ex-
pense for two reasons: their fee and a believed - need to purge the old and buy new. If you believe this, you have missed an important point: experience makes any project easier and the results more impressive. "An hour of design advice costs a lot less than the cost of repainting a room," says Interior Designer and Realtor Jutta Van Der Kuijp of Space Lifts Interior Design, commenting on how professional expertise can save on many levels. "Interior designers have access to trade - only suppliers where discounts are quite deep and many designers pass on most of the savings. Interior designers facilitate your vision within your budget, not the designer's vision within the designer's budget." Even if you want to make colour choices and room - renovation decisions yourself, professional input may save you time, money and "do - over" frustrations. Whether you arrange a one time, one - to - four hour home assessment, hire a designer to take over, or any consulting variation in between, why choose to learn anything the expensive and frustrating "hard way" when it comes to your first home? Visit Interior Designers of Canada to locate your provincial association and designers in your area. Interview a few. Examine their portfolios and talk to their clients until you click with the designer who will champion
your interests on the rocky road of renovation. In spite of what you've seen on TV, renovations take longer than a weekend and can unearth more problems than they solve. Removing a wall seems simple, but how do you repair the floor, shift the ducts and wiring in the wall and ensure you've not weakened the structure? To retain your sanity and stay on budget, start with a clear plan, specific budget and detailed schedule. Experience is what makes the difference here. Would you prefer a "learn from my mistakes" education or a productive, results - oriented experience with a professional who knows how to avoid mistakes?: • When buying resale, Van Der Kuijp suggests the first step should be to clean everything that's windows, too. Gutting a bathroom may not be necessary. Once it's really clean, simple repairs and transformations reveal themselves. Her clients are advised to live with the house or condo for at least a year - "experience the bones of the house" - before tackling major renovations. What may seem a problem at first, can turn into a plus once you understand first - hand how the space responds through the seasons. • Design consultant Monique Le Ray Design suggests acting on your observations of lacking curb appeal and to make sure you love the look of your house
while you come home to continued interior disruption. According to Le Ray, the feel good factor is important for you to have fun and energy. Once you're working in the house, the outside is left for later, but you're reminded of unfinished, simple "I'll fix that railing one day" or "that light fixture needs replacing" improvements every time you come home. A can of flat black paint can work wonders for quick make - over touches. Then Le Ray suggests starting in the foyer and moving through the house. As you go, search out what needs improving, how light can be redistributed and what each room's focal point will be before you take action anywhere. • It's human nature to start on familiar territory, so many first timers zero in on paint colours when the most practical first choices should be the more expensive, difficult - to change elements like carpeting, the couch and window treatments. It's easier to match paint to window treatment fabrics rather than searching around for drapes or carpeting to match a paint colour. If painting is necessary before these purchases are finalized, white primer or colour - tinted primer can prove a fresh canvas which will also make a good foundation for future colour choices. Accessories and paint are less expensive and have a greater variety to chose from. These elements can tie rooms and the home together. • Finishings in the kitchen and bathrooms can set the tone for the house since these
rooms are tied to value and to lifestyle. Clever make - overs with paint, new doors, up dated fixtures and accessory touches can give the illusion of high - end budgets until you're ready for a major overhaul. Don't expect to transform the house or condo into perfection in the first few weeks or months. The "reveal" may be down the road, so concentrate on being able to live comfortably and affordability in the process. • What if your furniture won't fit? Condos can offer challenges that have spawned an entire scaled - down line of furnishings. Designers know clever
ways to repurpose furniture and have take a long - term view of furniture buying that will solve problems while controlling costs. Brenda Bjarnason, BID, ARIDO, IDC, of Bjarnason + Associates Inc., stresses taking time to plan and research renovations, using the extra time to collect better ideas and build on your experience of living in the home: "If the kitchen is truly unsanitary and/ or non - functional, instead of new custom cupboards, install "ready made" cabinets from a reputable company; these cabinets can be re - used in a future renovation of a laun-
dry room, basement storage area or garage; if you can't afford the dream kitchen now, this is a reasonable upgrade that deliver a "second return" on your expenditure by reusing it elsewhere at a later date." • Up grade ceiling lights, cupboard handles, door knobs, bathroom hardware...the details. Just remember that everyone recognizes "big box" items. Smaller specialty stores often offer price - comparable goods and sale items that make your home different. When it is time for paint decisions, don't struggle to pick a colour - pick a designer. There are thousands of colours to sort through and a shade can make a difference. A warm white versus a cool white - can you tell the difference and why it matters? On moving - in day, you may be amazed by what was taken and what got left behind: • Go carefully through the house to make sure items listed in the offer as "included" are there and intact, and that there is not significant new damage. Contact your lawyer if there are any discrepancies. If this is a brand new home, make sure you know the drill warranty - wise. The website for your provincial new home warranty program will outline "to dos" and "don't dos." Either way, take photos of every room and any areas of concern. Evidence, if necessary, yes, but these pics will also remind you of how much you've accomplished when, a few months down the road, you're still "moving in."
Written By: PJ Wade
Canadian Homeowners Have No Plans To Downsize Recently I wrote a column quoting professor John Andrew about a trend for Canadians to move to smaller homes and condominiums. Based on a Statistics Canada report, Andrew said demand will increase for smaller units in cities, and there may be less demand for three- and four-bedroom homes in the suburbs. But since that story, several housing observers have said the baby boomer generation and their children are not finished with those big homes yet. A recent survey by Leger Marketing, sponsored by Royal LePage Real Estate, found the demand for suburban detached homes remains strong among baby boomers and their children, known as Generation Y. "Baby boomers are the wealthiest generation in Canadian history," says Phil Soper, CEO of Royal LePage. "They live in large homes with ample space for their many possessions. They love their garages and their yards. This study clearly indicates that contrary to popular belief, most boomers do not intend to downsize anytime soon." Just over 40 per cent of boomers surveyed said they
planned to move, but of that group, almost half plan to buy a home that’s the same size or larger than their current house. Canada Mortgage and Housing Corp. (CMHC) says that Canadians aged 55 to 64 have the highest rates of homeownership among all age groups, at about 78 per cent. In households where the primary household maintainer is aged 75 or more, 67.9 per cent are homeowners. "The biggest increase in agespecific ownership rates in recent decades has been among those 65-74 and 75 plus," says Adrienne Warren of Scotiabank Economics. "Contrary to some dire predictions, population aging will not fuel a demographically induced selloff in Canadian real estate," she says. "Today’s seniors are healthier, wealthier and living longer than prior generations. They are increasingly likely to own their own home and to live in their homes for longer. Many will not need to tap into their principal home to finance retirement." CMHC says about 85 per cent of Canadians over 55years-old want to remain in their current home for as
long as possible, according to a 2008 study conducted by the federal housing agency. One reason why boomers are choosing to stay in their larger homes is because the next generation hasn’t moved out yet. "The adult children of baby boomers aren’t going anywhere fast," says Soper. "Good jobs have proven more difficult for them to find, they’re extending their studies and they’re living at home. It is no wonder the concept of swapping a family-sized home for a small retreat has lost its lustre." But when Generation Y (born between 1980 and 1994) is ready to buy a home, most intend to purchase in the suburbs, says the Leger Marketing survey. Fifty-five per cent said they would buy in the suburbs, while 21.7 said they would prefer living in the downtown core of a city. "The young people who make up Generation Y are our first-time home buyers," says Soper. "Like their parents, they dream of owning a lovely house in the suburbs, which provides value as well as access to parkland for children to play and the perception of greater
family safety. Even as condominium living becomes more popular across Canada, the study results do not point to a corresponding decrease in demand for traditional single-family homes. For the baby boomers that do head downtown, there is a generation waiting to move in." Immigrants are likely to become more important to Canadian population growth during the next 20 years and currently account for almost two-thirds of growth. Scotiabank says that immigrants are more likely to settle in large and midsized urban centres than their Canadian-born counterparts, and that immigrant households are twice as likely to live in a condo-
minium as non-immigrant families. Affordability is cited as the main reason for this choice. CMHCâ€™s Online Guide for Older Canadians says that ethnic groups have different settlement patterns and housing preferences. "For example, immigrants from Hong Kong typically bypass inner-city reception areas in favour of immediate settlement in the suburbs." It says that a study of a Toronto suburb "found that immigrants from Italy had the highest rate of homeownership (95 per cent) followed by immigrants from Hong Kong, Portugal, Germany, the Peopleâ€™s Republic of China, the Netherlands, the United Kingdom and India. The study also
found that immigrant housing preferences come to resemble the preferences of Canadian-born households over time; that is, they tend to choose singledetached homes in lowdensity suburbs." A TD Economics report about the long-term outlook for house prices says: "In our projections, we have assumed that baby boomers will not sell their homes in droves, driving down average prices. Even if they did - and the jury is still out on how many will downgrade their properties - baby boomers will not all sell their homes on the same day. These adjustments happen over years, which mitigate their impact." Written By: Jim Adair