WAYNE COCHRANE’S
INSIDER December 2013
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Inside this Issue: Benefits of House-Hunting During the Holiday Season The Benefits of Credit Repair Investors Watch Echo-Boomers For Real Estate Trends How to Buy in a Seller’s Market Home Move In-Tips Canadian Renovation Spending Will Stay Strong For Years
Wayne Cochrane...www.mooving.ca Your Neighbourhood Real Estate Professional
DECEMBER ISSUE Benefits of House-Hunting During The Holiday Season Written by Phoebe Chungchua When you're writing out the holiday shopping list, maybe it's time to put you on it and a home as the gift. If you've been considering buying a home, here are a few reasons why shopping for one during the holiday season can benefit you Yes, it may involve you really prioritizing your time; the holiday season is a busy time. But if you can make time to house-hunt and you have already been pre-approved so you know how much home you can afford, then this could be a very good experience. And it may lead you to a new home in time for Christmas! Like many businesses, the holiday season can cause things to slow way down. That's often the case for real estate. However, that doesn't mean you won't find eager sellers hoping you'll make an offer on their homes. Even though there are parties, kids' social activities and end-of-the-year work commitments, real estate sellers are still ready to let you step inside their homes to see if you'll find one is a good fit. When real estate slows down, that means mortgages slow down. So this is a good time to get a mortgage. There's a chance your loan will move through the process faster. That doesn't mean you will have lax guidelines, rather it means that if there are fewer loans to process, yours can move along faster.
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Some say that you have fewer options because inventory drops during the holiday season. While that may be true, it doesn't mean that every seller takes their home off the market. Sellers with their homes on the market during the end-of-the-year months are typically serious sellers. There may be tax reasons motivating a seller to sell before the end of the year which could create greater opportunities for negotiation. There's likely a sense of urgency on the seller's side.
looking for. But too many homes can also create a no-win situation by confusing and overwhelming you.
Often home prices are lower in December than in other months. If you wait until the spring, you're likely to wish you'd, at least, done some house-hunting. Industry reporting services often show home appreciation slows in the fourth quarter, making homes more affordable.
Simplify the house-hunting process by having some written notes about what you intend to buy. Of course, things do change, so be open to discovering that dream home that has something on your list you never knew you needed or wanted.
Since it is a busy time of year, you may find that there aren't many buyers shopping for homes, which is exactly why this may be a good time to house-hunt.
Shop smart by making a list of the "must-have" and the "really-would-like" items. Carry the list with you or use a home-buyers' app to keep it on your smartphone. It's much like a holiday gift shopping list - better to know who you're buying for, how much you want to spend, and, at least, an idea of what you'd like to get that person. Same goes for a home.
Your list will just help you evaluate and prioritize which things in a home are most important to you. Then instead of unwrapping this holiday season, you might be wrapping up and packing up your belongings!
Fewer buyers could mean a great opportunity for you to make an offer and negotiate a favorable price. However, fewer homes to choose from could mean you have more difficulty finding precisely what you're
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WAYNE COCHRANE’S REAL ESTATE INSIDER The Benefits of Credit Repair Written by Debra Bigler Why should you Consider Credit Repair? Discover the Basic Reasons! Do you look at your credit report and think about nothing but credit repair? If yes, then perhaps it's high time to get your credit repair process started. Anyone with poor credit scores will definitely know what a low credit score can cost you. Wonder how severe the consequences are? Well, high interest rates can seriously damage your finances, period. Imagine the payments you would have to make if your interest rate increases from 5% to 15%. All in all, your poor credit score can make you pay thousands of dollars additionally per year. This is the primary reason why it is critical to look at your credit report and repair your credit score. After all, it will not only lower your interest rate, but will also help you get loans. Credit Repair - Is it Really Helpful? When it comes to credit scores, a single mistake can cause you serious trouble. A recent research suggests that almost 79 percent of all Americans have some type of inaccuracy, miscalculations, and negative accounts in their credit reports. A majority of these errors can
Give me a call... Wayne Cochrane EXIT Realty Metro wayne@mooving.ca (902) 830-4761 (902)
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hurt their credit scores badly. In these situations, credit repair is the ultimate option they can get to bring their finances back on track. The process of credit repairing is used to identify mistakes, correct the relevant information, remove negative reporting and monitor the creditors to ensure that your credit report is as accurate as possible and corrected accordingly. Better Insurance Policies The policies most insurance companies offer are based on the clients' credit reports. For instance, you will not get a reasonably priced insurance policy if your report suggests that you are late with paying other accounts. Thus, credit repair can clean up your credit rating and help you get substantial savings over the duration of your policy. Better Job Options Nowadays, many employers check an applicant's credit history as an essential step of the employment screening process. Wonder why? Well, credit reports usually disclose what resumes may never tell. Employers check credit reports to determine if an applicant has unpaid child or spouse support, has a verdict against him or her, or pays bills promptly. In instances like these, you
can get a fresh start by opting for credit repair. Better Loan or Mortgage Facilities A low credit score can have a negative impact on your ability to get different loans. You may not get the desired loan amount or may have to make greater interest payments on the lifetime of your loans. If lenders find a poor credit score on your report, they can lower your credit limit, thus making the loan even more expensive for you. If dealerships turn you down for loans or offer very high interest rates, you have to consider going for credit repair. This will increase your chances to get your desired vehicle or own your dream home. Since credit scores and credit reports can affect you and your loved ones in a number of ways, it is important to keep your credit score in superb condition. Credit repair doesn't only benefit individuals with a low credit score, but can do wonders for people with average credit by getting negative items off of the reports, disputing late payment information and correcting any inaccuracies on your report.
DECEMBER ISSUE Investors Watch Echo-Boomers For Real Estate Trends Written By Jim Adair In the City of Toronto, there are still construction cranes everywhere, after more than a decade of frantic development. More high-rise buildings are under construction there than anywhere else in North America. Most of the buildings are mixed-use condominium and retail buildings, but there are also several new office buildings underway. It’s part of a trend being seen across Canada and around the world, and one that real estate investors are enthusiastically embracing. "Intensification of downtown areas of cities is continuing in Canada’s major centres to combine with reverse migration from the suburbs….(It’s) one of the most forceful and rapidly emerging secular trends in both corporate office and residential real estate," says Emerging Trends in Real Estate 2014, by PwC Canada. "Both residents of suburbs and employees of companies in suburban offices have grown tired of their long commutes and are reacting by moving into downtown areas…" Leading the march back downtown are the children of baby boomers, described by Statistics Canada as those born from 1972 to 1992. At a recent conference hosted by Canada Mortgage and Housing Corp. (CMHC), Masha Dudelzak of CBRE said that 50 per cent of downtown Toronto residents are now echo-baby boomers, while only 25 per cent of suburban residents are in this age group.Representatives of two developers who target this demographic, but in very different ways, spoke at the CMHC conference. Peter Zimmerman, director of development for Freed Developments, said his company is building condo apartments in "neighbourhoods with the greatest appeal" in downtown Toronto. "Our emphasis is on locating on public transit, in attractive city neighbourhoods near shopping and restaurants."
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First-time buyers in the 25 to 35 age group are the prime market, buying one-bedroom units in the 500-squarefoot range. Forty to fifty per cent of the buyers are investors who rent out the units, he said.In contrast, Dave McLean, president of GTA Homebuilding at Mattamy Homes, said his company is building thousands of homes in the suburbs. The entry level home is a "back-toback townhome" with no backyard, three storeys of living space and 1,300 to 1,800 square feet of living space.
of the people who live there." In Toronto, hardly any new rental apartment units have been built for several years. Condos have filled the vacancy gap and are still in demand, with rents rising.Both Zimmerman and McLean say their echo-boomer buyers don’t stay in entry-level homes for long. "They often move up, right in the same neighbourhood," says McLean.
"We understand that some of our buyers are investors but we have long discouraged that," said McLean. "Our communities sell our homes, and five to 10 years after they are sold out, we like to think it shows well. We’re concerned that investors renting out the properties en masse will take away from the community and the curb appeal."
"One of the truths in the business we are in is that every person who moves into a 500-square-foot apartment will move on and move up in four or five years," said Zimmerman. "Most want to buy a larger home in downtown Toronto."What about those who want to start having a family but still want to enjoy the vibrant downtown lifestyle? Are downtown developers working to build larger, affordable family-friendly condo units? Not so much, say the developers.
What’s the difference between the downtown and the suburban buyers? McLean says his buyers are looking for green space and more square footage than they could get in a condo. There are more families buying in the suburbs and it’s not unusual for a couple to visit the sales office with their parents, who will be contributing financially to the sale. Some parents are using the home as an investment while their children live there, and frequently the parents are also coming to live in the home with their children. He says many of the echo-boomers who buy in the suburbs are still commuting downtown to work.
"There is still some affordable groundrelated housing available in the city," says Zimmerman. But with house prices still rising faster than incomes, affordability is the key driver when new units are being planned. "Firsttime buyers are price-point sensitive," he said. "The vast majority of suites are trending down - they are even smaller."McLean says the same is true in the suburbs. "We’re building a lot more affordable product, such as stacked townhouses and smaller square-footage homes. We recognize that if we are going to be a builder/ developer in the GTA, we’re going to have to be building up."
Zimmerman says singles and couples are the vast majority of buyers for his firm’s projects, but they also often get help with financing from their parents. It’s not unusual for a parent to buy a condo for their child to live in while attending school downtown, he said.
"It’s a huge challenge...," said Zimmerman. "I think the development industry will catch up, but it will be tough…"CMHC says that the 25 to 44 age group represented about 11 per cent of the households in Ontario in 2012, but will grow to more than 20 per cent by 2016 and will represent more than 33 per cent of housing demand in the province by 2021.
"We court investors, and the units they buy become rental properties," he says. "We don’t think it has a noticeable impact on the quality of life
WAYNE COCHRANE’S REAL ESTATE INSIDER How To Buy in a Seller’s Market Written by Blanche Evans The average home purchased in 2013 was about 20 years old, up from 11 years old at the height of the housing boom. You may be able to buy at a discount, make the updates First, get preapproved by a lender. you want, and bring your home to That means sharing your financial neighborhood standards - a quick information, going online and playing route to building equity. with a mortgage calculator. Give the lender the documentation they need, When you visit open houses or new such as salary stubs, revolving credit builder homes, tell the listing agent or builder's representative that you obligations, and bank statements. are represented by your buyer's You'll know for certain how much agent. If you decide to make an you can afford, how much you need offer, your buyer's agent can be in helping you to put down to qualify and what your instrumental negotiate. interest rate will be. Prices are rising and perhaps there are fewer homes for sale where you want to live. What can you do to put the odds in your favor?
Make your must-have and wish list realistic, beginning with price. Be prepared for compromises - a bigger home vs a longer commute, or a smaller home in a preferred school district.
Don't get caught up in the buying frenzy. If you need to make a full price offer or get in a bidding war, stay within your budget. Don't let yourself become housepoor; your house payment including principal, interest, taxes and insurance should be no more than about 28% of your gross monthly income. That's the conforming loan standard and it's a good guideline for homebuyers to help them buy safely within their means.
Shop for homes with your real estate professional. He knows the market and will give you preferential treatment if you sign a buyer's representation agreement. The agent can tap into a vast network of contacts to get the right home for you - especially homes coming onto the market before others get the Plan to stay in your new home at least five years. chance to view them. In a seller's market, homes sell quickly, so the homes you find online or by driving the neighborhood may already be under contract or sold before you even get the chance to see them.
To buy and sell a home at breakeven or with a profit, means you must be able to pay back typical closing costs, approximately 14 percent of the buy side and sell side transactions combined.
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Homes in the best condition will sell for top dollar. Consider homes in need of cosmetic updates or repairs.
Brain Teasers Word Scramble: smiontpusa Alive without breath, As cold as death, Clad in mail never clinking, Never thirsty, never drinking. What is it?
The more there is the less you see. What is it?
Go to www.mooving.ca - ‘Wayne’s Team’ and click on ‘Trivia Answers’ Page 5
DECEMBER ISSUE Home Move In-Tips By Phoebe Chungchua Congratulations, you've bought your home and it's move-in time. Wait! Before you move in, read on to get some practical and important tips.
up in your new home. You can find moving inventory sheets on the Web. Repair and paint while the home is empty.
Change the locks. You've closed escrow and the keys to your new home are yours. The first thing you should do is change the locks. It's hard to say who may have access to your home. Anyone from real estate agents to the sellers or maintenance people: all could still have a set of keys to your home. Be safe and change the locks first thing. If the home doesn't have deadbolts on the doors, install them. If the door has glass on it, be sure you install a deadbolt that uses a key to unlock from both sides. If someone is breaking into your house and there is glass on the door, it can be shattered and the intruder can just reach through the broken glass and turn the deadbolt. Instead use a key deadbolt and keep an extra key near the door but out of reach and out of sight from the outside.
It's a no-brainer but sometimes goes overlooked. If you have to make major repairs, try to do them before you move in. It's easier to take care of major maintenance or messy repair jobs when the home is empty. So, give your new home a good look and mark down the maintenance needs, then try to plan your move-in dates for after the work is completed. Even if the work is being done in an entirely different room, it still helps to have the house empty. That way you can feel better about leaving workers in the home while you're not there because your home is empty. Whole-House cleaning. It's maybe the only time you'll have this opportunity. Give the entire house a good top-to-bottom cleaning. It's a great way to start a new life in a fresh, clean home. Plus it's a lot easier to clean everything when nothing is inside to be moved around.
Create an inventory of your belongings. Don't risk losing something that means a lot to you. Take an inventory of all your belongings. It's best if you can pack your items in clearly labeled and numbered boxes that are marked for particular rooms, such as kitchen or bathroom supplies. Using an inventory sheet to detail what each box contains will make it so much easier to unpack and remember where things are. You may need to find something quickly before you're fully unpacked. If you're using movers or friends and family to help, the inventory sheet will also help you keep track of your stuff and make sure that it all ends
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This is a good time to make sure things like smoke and carbon monoxide detectors are all functioning properly. Change the batteries on them so that you can track the need for new batteries with the anniversary of the home purchase. Thinking ahead and taking a few extra steps will save you time and energy. It will simplify the move-in process and make your home a safe place to get good sleep on your first night.
Give me a call... Wayne Cochrane 406-SOLD
WAYNE COCHRANE’S REAL ESTATE INSIDER Canadian Renovation Spending Will Stay Strong For Years By Jim Adair
If you're getting your house ready to sell, chances are good that you'll be spending some money to fix it up and make it more attractive to buyers. If you just bought a house, you're likely going to spend some money to decorate it and change a few things that you don't like. When the resale housing market is booming, so is Canada's renovation industry. Residential renovation in Canada employs 454,000 people making $24 billion in wages, says the Canadian Home Builders' Association. Renovation provides $60.6 billion in investment value annually, the "largest single wealth-builder for a majority of families," says the association. Two recent reports suggest that while residential renovation is poised to slow down during the next few years due to higher interest rates and a more stable real estate market, spending will still continue to increase. Scotiabank economist Adrienne Warren says two per cent growth in inflation-adjusted expenditures is likely. TD Economics expects growth to be closer to three to five per cent this year and in 2014, followed by a "modest" dip in 2015. "That said, the $45 billion in total renovation activity expected in that year will still be more than double its level of a decade ago," says TD Economics. The TD paper, written by economist Diana Petramala, says during the 1900s, home renovations accounted for about 25 per cent of total residential investment but now that share is almost 40 per cent. These numbers do not include regular maintenance and repair. Renovation, as defined by Statistics Canada, includes structural additions to properties; alterations such as remodelling rooms, adding or replacing doors and windows, renovating exterior walls and upgrading insulation; and installation or replacement of equipment such as a
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heating system, roof or carpet.The numbers also do not include work done in the "underground economy", where jobs are paid for in cash to avoid paying taxes. "Over the last 10 years, a number of economic factors have contributed to the strength in renovation spending, including a robust labour market, strong income gains and an aging housing stock," says Petramala. "The average home in Canada was built in the 1970 to 1980 period and was likely due for some upgrading. Still, the most important factors have been the availability and the falling costs of credit as well as a record-setting decade in the resale housing market." She says the "wealth effect associated with robust home price gains" has also become an important driver in renovation growth. "Increases in home valuations makes households feel wealthier and more willing to go out and spend. Studies show that for every $1 increase in wealth due to home price appreciation, households go out and spend an additional nickel - some of which ends in renovations." But Warren's report says Canadians are now being more careful about increasing debt, despite continuing low borrowing costs. While large renovation jobs are often financed through mortgage financing or consumer lending, both of those credit categories are now growing at the slowest pace in more than a decade, she says. "Canada's housing stock has expanded by more than 15 per cent (or about two million units) over the past decade, mirroring strong growth in household formation," says Warren. "A record high homeownership rate of almost 70 per cent is supportive of renovation spending, with owners more likely to undertake upgrades compared with renters and landlords. An aging population and government rebates should continue to support demand for accessibility and energy
efficiency retrofits."
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Another Scotiabank study found that two-thirds of homeowners say they are likely to consider making their home more energy efficient by incorporating "green" home renovations. Fifty-two per cent of those surveyed say that green renovation choices will lower the operating cost of their home in the long run. The TD report says that retail spending at building material and supply stores has stagnated since 2007, while renovation-oriented wholesalers have enjoyed aboveaverage growth of three to four per cent. "This trend would suggest that more and more households have been turning to contractors for work rather than doing it themselves," says Petramala. In the Toronto area, a massive new home improvement mall is under construction that will bring together 400 home improvement retailers under one roof, on more than 320,000 square feet of space spanning 21 acres. The developers of the Improve Canada site say they are bringing together three key concepts - using a mall as a traffic magnet; grouping competitive suppliers together and concentrating only on home improvement retailers; and offering a permanent home show environment. The developers say the retail space is 90 per cent sold. The building is scheduled to open in 2014. Looking ahead, Petramala says that although all the spending on renovation has left Canada's housing stock "in the best condition in decades," the sector is "likely to remain a bright spot amid a slowing housing sector and declining new home construction."
WAYNE COCHRANE’S REAL ESTATE INSIDER
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Note: This is not intended to solicit clients currently under contract. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA.
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