WAYNE COCHRANE’S REAL ESTATE
INSIDER OCTOBER 2013
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Inside this Issue: Important Reasons to Keep Your Gutters Clean How Does Your Home Compare To Others On The Market? Buyers Comfort Zone May Be A Danger Zone Seller Advice: Stay Calm During Negotiations Demystifying Real Estate Terminology For Homebuyers Canadian Census Reveals Changing Housing Market
Wayne Cochrane...www.mooving.ca Your Neighbourhood Real Estate Professional
OCTOBER ISSUE Important Reasons to Keep Your Gutters Clean Written by The Realty Times Staff A recent report from Prime Time Window Cleaning gives a clear picture of the damage that can be caused by failing to clean out your gutters each year.
house and it pools around the foundation it will expand when frozen and cause cracks which lead to floods in your basement or crawl space."
They report that millions of dollar in damage are caused to Chicago area homes. The lesson to be learned can be applied across the nation. When Fall comes calling, homeowners must clean out their gutters.
That’s a lot of damage from some fallen leaves! The first order of business is not procrastinating. If you wait until it’s miserably cold outside you may be tempted to skip this yearly task. If you wait even longer you may miss you opportunity as snow and ice fill your gutter systems.
One Prime Time Windows customer writes, "Naturally you might be thinking that this is one chore you would rather avoid this year especially with the busy holiday season rapidly approaching. Chances are you have ignored this time -consuming but vital home improvement chore in the past but if this winter is even half as destructive as the last, you could be looking at thousands of dollars in damage to your investment." The risks to skipping out on this task are easy enough to see. As leaves and debris build up in your guttering system, there become blockages. Instead of watering flowing easily into downspouts, it backs up onto eaves, the roof, and other parts of your house eventually leading to rot. This in turn can lead to interior home damage to walls and ceilings. Overly full gutters can also become extremely heavy. This can bend the gutters and their brackets, causing unsightly damage to the exterior of your home.
As you set out to complete this job, be sure to gather the correct tools. You’ll need comfortable gloves, trash cans or bags, a ladder, garden trowel, and a hose. Begin by scooping out the large debris and depositing it into your bag or can. Next, scrape any remaining deposits with your trowel. Finally, clean out the gutter with a steady stream of water from your home. If you find an area in a downspout, for example, that is clogged and can’t be reached simply use a plumbing snake to push the blockage on through. A little upkeep goes a long ways when it comes to gutters. Now you have a clean system that not only look good, but are also going to save you time and money in the future! Written By The Realty Times Staff
Fox news reports, "Even flooded basements and cracking foundations are other symptoms of clogged gutters. If water isn’t drained away from the
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WAYNE COCHRANE’S REAL ESTATE INSIDER How Does Your Home Compare To Others On The Market? Written by Phoebe Chunchua Real estate agents use comparable sales or "comps" (properties recently sold in the area) to see what the market bears for a listing price or value range marketing. But what makes a home a good comp? A few things must line up in order for the agent to utilize the comp to justify your listing price. The same neighborhood, school district, similar street and, of course, similar housing features and size. If these things align, then a comp can be used to provide a current estimated value of your home. Ideally, using a comp from a home that is the same model in the same subdivision is key. Even better is if a sold comp closed escrow very recently. Taking comps from many weeks or months before can weaken the comp. The expertise of a highly knowledgeable real estate agent can save you many hours of research and headaches. Most people don't really know how to compare real estate properties, which is why they hire an agent. Good agents take the work out of selling your home and give you solid reason to understand why the
Give me a call... Wayne Cochrane EXIT Realty Metro wayne@mooving.ca (902) 830-4761 (902)
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agent is pricing the home at a particular price. Location, upgrades, amenities, sale date, extras, foreclosures, short sales, and unique nuances of the home all affect the listing price and how your home is compared to a comp. Taking a closer look at each of these shows exactly what people in your area might be looking for when it comes to buying a home. For instance, a higher price on a home that has a pool can indicate that this is a family neighborhood and buyers put an increased value on amenities that create family/social fun. Your home may not have a pool but it might have another type of amenity: tennis courts, gym, or putting green. Agents look at both what is similar and what makes your home stand out. They search for the best characteristics to showcase and, when comparing your home to others that have sold, they look to see how yours stacks up from a buyer's perspective. Agents can add value to a home that might not have, say, for instance, the pool. Instead, your home might have an extra bedroom or den complete with floor-to-ceiling, high-quality
bookcases. Reviewing the comps can provide a lot of insight about sales in your neighborhood. Physically viewing the properties can be even more eye-opening. Agents who routinely work in the neighborhood may have an excellent grasp of which homes will sell fastest. It's not a lucky guess. They've been inside these homes and have seen the notable upgrades or the tragic flaws of a home. They also know which homes were foreclosures or short sales. Generally, a foreclosed home is in poor condition. However, a short sale can be in much better condition. Both of these sales are at discounted rates. So, if a comp is used from one of these types of sales, your agent will take careful consideration to evaluate the distinct differences that may increase the value and, ultimately, the listing price on your home. Written by Phoebe Chungchua
OCTOBER ISSUE Buyers Comfort Zone May Be A Danger Zone Written By PJ Wade The greatest obstacles to success with any goal can be our advantages. These comfort zones can be dangerous distractions when advancing toward a goal to buy a home or cottage, or to achieve any significant change in life. Your advantages can represent limitations since they offer only familiar possibilities and obvious opportunities. These aren’t necessarily the best options, most creative solutions, or ideal choices for the future. Advantages of friendship, experience, financing, or family proximity can lure buyers to markets, locations, or price ranges which can detract from longterm goals, restrict lifestyle options, or limit return on real estate investment: Friendship can undermine analysis and decision making Look no further than friends for market research and real estate knowledge, and success is limited before you start. At the same time, a buyer who considers the real estate or mortgage salesperson a friend may leave more of the analysis for fit and practicality of the real estate or mortgage to the professional than is to the buyer’s advantage. Clearly-defined goals, not insecurity, short-sightedness, or plain laziness, should form the foundation for investing in real estate. Buyers who don’t take the initiative to think and act in their own best interest are vulnerable to the agendas—hidden and otherwise—of salespeople, and to sellers’ marketing campaigns and staging. If you don’t take charge of your future, others will. In times of change, experience can be a buyer’s worst enemy Let the fear of acquiring new skills, perspectives, or knowledge paralyse you, and you’ll be trapped in your comfort zone. For first-time buyers of a house, condominium, or cottage that can be problematic as they have no
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ownership experience to fall back on—just hearsay based on the questionable experience of nonprofessionals (that’s friends and family). Buyers who have owned at least one property, may not realize how dated their experience is. A lot has happened in the last year or so, thanks to the internet and the economy. If a buyer’s real estate experience and knowledge are a decade or two old, it may put decision -making at risk or at least cause a buyer to miss out on the best the current market has to offer. Cellphones and the net don’t automatically answer your wishes like Aladdin’s Lamp. Look beyond what is easily available and beyond Google™ and Wikipedia™, to learn from the broad range of experience and wisdom of real people and creative professionals. What can be afforded may not be all that can be bought. Even at the max pre-approved financing limit, buyers may not be able to purchase the location or type of housing they prefer. Add a rent-paying boarder or two, or a incomegenerating second unit to the real estate mix, and borrowing power is extended. Lenders will usually include at least half the rental income in mortgage calculations which can mean a mortgage large enough to buy that “dream home” or preferred neighbourhood. After a few years, the rental may no longer be necessary, or it could have evolved into a financial powerhouse in paying off the mortgage. Include a home-based business, and tax advantages will lower income tax while increasing cashflow. Using a mortgage broker to shop for the best mortgage package available can increase returns and expand affordability even further. Families can mean the best of times and the worst of times What the family thinks a buyer should do, may be dramatically different from
what the buyer would like to achieve, or it may be more than the buyer is ready to commit to. Add to this, the pressure to move near family, and you have buyers who are paying the mortgage on a house or condominium that may not really be their first choice. Purchase a property for family convenience or under pressure from others, and the independence that comes with real estate ownership is compromised from the beginning. If you don’t reach beyond what family thinks you can do because they know you so well, how will you discover that brilliant future that can lie ahead? The major limiting factor in buying real estate is not what the market is doing, but how creatively buyers can achieve the goals that matter to them. Play follow the leader and do what your friends are doing, and you’ll end up with what they’ve all settled for. Expand your thinking by learning more about where personal value lies and how to be a savvy buyer, and you’ll end up with more home, a more affordable mortgage, and less wasted money. Advantages become strengths when they are consciously used as bridges to overcome disadvantages. If you don’t move out of comfort zones, you’re in danger of never discovering what you’re missed. Written By PJ Wade
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WAYNE COCHRANE’S REAL ESTATE INSIDER Seller Advice: Stay Calm During Negotiations Written by Carla Hill Have Downtime: Getting your mind off of a stressful situation means you can come back later refreshed and ready for a challenge.
acknowledge that they came and then pull your focus back to your breathing. Even a few minutes can do wonders at centering the mind.
Open Communication: Express real concerns to your spouse, significant other, or business partner. You The time has come, though. You never really know what someone have received an offer on your else is thinking unless you talk home. How can you make it openly. through? This can be a very trying time. How do you know which offer Exercise: This is a great way to clear to take or what counteroffer to your mind and to gear your body up make? for the stress of selling. Walks, runs,
Run the Numbers: Seeing the facts in black and white can help take emotion out of this business decision. Should you accept this offer? Is it too low? Do the math and know for sure.
After much soul-searching and working the numbers, you decided to put your home on the market. You may be selling to change cities for a job or are needing to downsize. Regardless of the reason, this is a big and important decision!
Practice Patience: Buyers may take their time to consider your counteroffers. Be patient and know that an and even a trip to the gym can be answer will eventually come. Here are 10 tips to help you stay extremely beneficial. calm during negotiations. Leave Impulse at the Door: This is not a time to make rash decisions. You want to be sure that this is the right deal and the right time.
Trust your Agent: You hired your agent for a reason. They have experience handling negotiations and contracts. Feel free to ask any questions you have, but don't let the pressure of every minute detail overwhelm you. Eat and Sleep: Our body needs to refuel in two ways: food and rest. Be sure to get plenty of both so that your brain is well-prepared for any big decisions you may need to make. Pack a bag lunch or some snacks if you think you may be too busy to stop for lunch or dinner on the way to your agent's office.
Enjoy the Process: Yes, it's a stressful time, but it can also be the doorway to your new life. Embrace it and stay positive. Meditate: Take a moment and find a quiet space. Sit quietly with your eyes closed and focus on your breath coming in and going out of your body. Be still and be in the present moment. As thoughts and worries come in your mind,
It was a big day when you decided to list your home for sale and it will be a even bigger day when you close with a seller. Take care of your body, relax your mind, and trust in your team of professionals and you're sure to make it through this stressful time. Written by Carla Hill
Brain Teasers What can you hold in your Left Hand but not in your Right?
What is the only word In the English Dictionary that has a silent z?
Go to www.mooving.ca - ‘Wayne’s Team’ and click on ‘Trivia Answers’ Page 5
OCTOBER ISSUE Demystifying Real Estate Terminology For Homebuyers By Kristen Brown First-time home buyers can have a tough time sorting through real estate terms spewed by real estate agents, lenders, real estate attorneys and other real estate professionals. Here's a brief alphabetical glossary of some basic real estate terms first-time home buyers need to know: Amortization: The repayment of a mortgage in small equal periodic installments of principal and interest, as determined by a payment plan to pay off the loan over a certain amount of time. Appraisal: An appraiser's assessment of a property's value. A home sale is contingent upon an appraisal for at least the amount of the loan the buyer wants to secure. Closing costs: One-time costs associated with buying a home, disclosed before closing, but due at closing. The costs can include fees for an attorney, recording, inspections, appraisals, title service costs, even prepaid homeowner's insurance and taxes. Contingency: Contractual conditions that must be met before a home sale closes. They can protect the buyer or the seller and can include a satisfactory home inspection, secured financing, adequate appraisal, etc. Credit Report: A report card of your creditworthiness. Go to AnnualCreditReport.com to get one free credit report, every year, from each of the three credit reporting agencies: TransUnion, Experian, and Equifax. That's three free per year. Credit Score: A numerical rendition of your credit report that plays a significant role in a mortgage approval, the cost of the loan and other terms of the loan. Get your credit score directly from the three credit reporting agencies.
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Down Payment: Cash the homebuyer brings to the deal. A down payment reduces the amount financed by the amount of the down payment and brings equity to the deal. Many lenders require at least 20 percent down to reduce its risk, but various loan programs require as little down at 3.5 percent down. Earnest Money: A deposit of good faith money, typically included with the offer to buy a house. Earnest money can become part of the down payment.
contingencies. Title: A public records document that proves ownership of the property. A title also includes any claims against that ownership. During a home purchase, the buyer conducts a title search to verify the seller is the owner and if the title contains any judgments or liens against it. This list is a small real estate glossary. Talk to your real estate agent if you have questions about other terms.
Escrow account: A lender-held account to which the buyer makes monthly deposits beyond the monthly principal and interest payment. The monthly payments are used to pay the homeowners property taxes and homeowner's insurance. Otherwise the homeowner is saddled with large lump sum tax and insurance payments once or twice a year. Mortgage: A loan from a bank, mortgage lender, credit union or other lender to finance the purchase of a home. Mortgages vary and can include fixed- and adjustable rate mortgages, conventional loans, larger jumbo loans and loans backed by the federal government. Points: Sometimes referred to as "discount points" these costs reduce the interest rate and are paid at closing or up front when used. One point is one percent of the mortgage amount. Pre-approval: An official document and the process by which a homebuyer obtains proof he or she has been approved for a mortgage, pending the home appraisal and other financial contingencies. During the process, the lender verifies the buyer's credit score, income, debts, employment and other factors that go into a mortgage application. A pre-approval letter says the buyer has been approved for a certain mortgage, again pending
Written By Kristen Brown
Give me a call... Wayne Cochrane 406-SOLD
WAYNE COCHRANE’S REAL ESTATE INSIDER Canadian Census Reveals Changing Housing Market By Jim Adair
To see how Canada’s housing market is evolving, take a look at the National Household Survey (NHS), part of the 2011 Census that was recently released by Statistics Canada. The survey shows that while Canada’s homeownership rate has remained at about 69 per cent during the last decade, the market is shifting. Condominiums are taking an increasing market share and first-time buyers are driving the market. But as the country has enjoyed a robust real estate market for the last decade, house prices have driven many Canadian homeowners to spend more than they can afford on housing costs. Four of out five "couple families" defined as one married couple or a couple living common-law, with or without children - own their homes, while just 48.5 per cent of non-family households are owners.The highest homeownership rate is in Newfoundland at 77.5 per cent, while the lowest rate among the provinces is Quebec at 61.2 per cent. The far north - Nunavut and the Northwest Territories - have the lowest homeownership rates in the country. Most Canadian households live in single -detached dwellings (55 per cent), with row houses, semi-detached houses, duplexes, movable dwellings and other single-attached dwellings accounting for just 17.8 per cent of total households. About a quarter of households live in apartment buildings. However, about 20 per cent of those who bought a home between 2006 and 2011 purchased a condominium. There were about 1.2 million owner-occupied condos in Canada when the Census was taken, but almost half of those owners moved in during the five-year period of the Census. A look at the construction sites in any Canadian city shows that many more people will be living in condos when the next Census takes place. The NHS says households in which the "primary maintainer" - the
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person responsible for paying the rent, mortgage, taxes and utilities for the home - was 35 or less were more likely to own a home than rent, if total household income was $60,000 or more. Overall, households where the primary maintainer is 35 or less has an ownership rate of 46.9 per cent. Ownership rates rise as the age of the primary maintainer rises. Those aged 55 to 64 have an ownership rate of 77.1 per cent, and those aged 75 and older have an ownership rate of 70.5 per cent. First-time owners are critical to the real estate market. Of all the households that bought a home between 2006 and 2011, almost one-third had a primary maintainer under 35-years-old. You can see why the real estate market has been so active when you look at the number of people who bought or built a home and moved during the five-year Census period. Of the 9.2 million owner households in Canada, about 2.6 million or 28.1 per cent moved into their home during that time. The majority of homebuyers came from the immediate neighbourhood, while 41.4 per cent moved from outside the area. Calgary had the largest proportion of owner households that moved at 35.8 per cent, while Windsor, Ont. had the smallest proportion at 20.4 per cent. Four out of five home-buying households had a mortgage, which was higher than the proportion of households that did not move (50.3 per cent).The NHS reports that in 2011, the average monthly shelter cost paid by all households (owned and rented) in Canada was $1,050. Owners paid an average shelter cost of $1,141 while renters paid $848. The highest shelter costs were in Toronto ($1,366) and the lowest was TroisRivières, Que. ($697). About 25 per cent of households, or
3.3 million, spent more than 30 per cent of their total household income on shelter costs. Canada Mortgage and Housing Corp. and the provinces say 30 per cent of total household income is the threshold at which housing costs become unaffordable. Of those 3.3 million households, 1.7 million were owners and 1.6 million were renters. Vancouver, which has led the country in real estate prices for several years, had the largest proportion of households paying more than 30 per cent of total income for shelter costs, at 33.5 per cent. Saguenay, Que. had the lowest proportion at 18.9 per cent. Of the households that exceeded the 30 per cent threshold, owners paid an average of $1,583, which was $617 per month more than the threshold. Renters paid $928, exceeding the threshold by $403 per month. Of all homeowner households, about 58.6 per cent have a mortgage. The average shelter cost for houses with a mortgage was three times higher than that of households that are mortgage-free - $1,585 per month compared to $511 per month. Mortgage interest rates have been at historically low levels for several years but are expected to rise gradually during the next few years. Anyone purchasing a home now should make sure they "stress-test" their mortgage to make sure they will be able to afford it if rates go up by renewal time. Wirtten By Jim Adair
WAYNE COCHRANE’S REAL ESTATE INSIDER
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Wayne Cochrane Real Estate Professional 902-830-4761 wayne@mooving.ca unless noted otherwise
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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