Price is the MOST important factor to consider when selling. So when pricing a home, should you list competitively, or should you speculate a bit and see if you will catch the “big fish”? Let’s take a look at both options.

What would happen if the real estate market suddenly shifted in favor of sellers, and you priced your home off comparable properties in your area that were now outdated (pricing it too low)? Well… in this case, you would likely have an offer on your home within a couple days and within 98-100% of your list price. You may even get competing offers and receive more than the original asking price. Your sale is now done and you can forget about it. You may have gotten $5,000 – $10,000 more in 30-60 days, but that is only a “may”. Continue reading »

If every transaction and home was squeaky clean, then we really wouldn’t need lawyers, home inspectors, Realtors and other professionals to assist and protect us through the process. There are hundreds of things that can be problems in a house or with the deal itself. Below are a few red flags that should pique your attention when buying a house.

PLEASE NOTE: These items are only red flags. They are not necessarily problems in themselves, but should trigger a little more research.

Current Owner Assumed Their Mortgage – Assumable mortgages have been an easy way for unscrupulous people to purchase homes without using a bank.

Low Down Assumable Offered – The terms of the mortgage may be horrible, or the house may be over priced.

Stained Basement Items – Water stains on any item in the basement should be questioned.

Newly Finished Basement – This is a common way to hide past problems.

Odd Smell – Could be mould, mildew or caused by water or a past drug operation.

Exterior Cracking – Any unsealed opening on the exterior can cause water entry.

Slope Toward the House – The yard should move water away and not toward the house. Continue reading »

A Brief Explanation…

The Joint Venture is by far the most powerful business concept ever conceived. The ability for two or more people to pool their resources together (money, time, skills, etc) to achieve a greater goal, has been the hallmark of the world’s most successful companies and business ventures.

The joint venture’s application to real estate is absolutely natural and has allowed hundreds of thousands (if not millions) of people to accelerate and multiply their results.

Two or more people with a common goal (typically financial) get together and offer each other their resources. One partner may offer their time and services, whereas the other may front the money for the transaction. Since the active partner (time and service) may not have the money, and the investing partner (the source of financing) may not have the time or expertise, both parties are required to successfully bring a transaction together.

An agreement between the two partners is formed. The nature of this agreement is truly mutually beneficial to both parties and huge rewards can be realized. Continue reading »

Buying a home is a big financial step, and it’s hard to
know when you’re really ready to buy. No wonder that
many Canadian renters are still sitting on the white picket
fence when it comes to home ownership.

The exciting news is that it could be time to make your
move. There are a few reasons why. To begin, it’s pretty
simple math: if you can afford to rent, chances are that
you can afford to buy your own home. Your monthly
mortgage payments may be similar to your rent! That
monthly rent cheque doesn’t need to be money out the
window; it could be money that’s building you equity in
your very own home.

Let’s take a look at how rent and mortgage payments
might compare. If you’re paying $1250 in rent each
month, for example, you could be carrying a mortgage
of $211,794. If you’re paying $1500, that’s potentially a
mortgage of $266,663. Forking over $1750 each month?
You could be paying off a mortgage of $321,532!
How are the mortgage payments so affordable?

Firstly, right now you’re benefiting from historically
low mortgage rates. Secondly, you now have access
to longer-amortization mortgages that lower your
monthly mortgage payment. (The examples above were
based on that combination: a 4.1% rate and 35-year
amortization, 5% downpayment
and 3.15% insurance premium, property taxes and heat of $285 per month).

Many first-time buyers opt for the longer 35-year
amortization mortgage to start, but then down the road,
when cash flow and incomes increase, they know they can
ramp up their payments to pay off their mortgages faster!
Think you can’t buy a house because you haven’t saved
up a downpayment? You can buy a home with 5%
down and use some of the flexible options to obtain the
downpayment, for example from gifts, through borrowing,
or cash back incentives. Mortgage insurers and innovative
lenders believe that Canadians benefit from homeownership
– and they’re helping to make it more accessible.

Even if you’ve had past credit problems, new credit repair
mortgages can help transition you to a brighter future.
That’s more good news for renters!

One more hurdle that some renters worry about is
showing enough income to qualify for a mortgage. If
you’re self-employed, for example, there are mortgage
options available that don’t require you to verify your
income. If you have a good credit history and reliable
income-earning capacity, then you may qualify for a
no-income verification mortgage loan.

Still sitting on the fence? Think about this: every time
you sign a rental or lease agreement, you are signing
a long- lasting contract that has no profit potential
whatever – at least, not for you. When you sign a
mortgage loan agreement, not only do you sign onto
homeownership, but you also sign up for a great equity making
opportunity too.

Buying a home makes both financial and emotional sense.
There are the intangible pleasures that homeownership
offers: increased freedom, privacy, and a sense of
community, for example. Then there are the more tangible
rewards: for decades, Canadian homeowners have been
able to leverage their property purchase into a large
financial return. You’re at a moment of real opportunity
right now: this may be the perfect time for you to get on
the right side of that picket fence!

This article was provided by Jen Mikla, AMP. You can contact her for more information at www.mortgagewithjen.com

This blog article is powered by CIR Realty, adding value to you and your business by bringing you innovation and experience. To find out more about us, visit www.cirrealty.ca.

Should I use cash or credit? ARM loan or fixed rate? Ten percent down or twenty percent? Should I pay down debt or keep a cash reserve? These are all good questions, and here’s some of the answers.

Cash vs. Credit: The Concept of Leverage

In order to understand real estate financing, it is important that you understand the time value of money. Because of inflation, a dollar today is generally worth less in the future. Thus, while real estate values may increase, an all-cash purchase may not be economically feasible, since the investor’s cash may be utilized in more effective ways. Leverage is the concept of using borrowed money to make a return on an investment. Let’s say you bought a house using all of your cash for $100,000. If the property were to increase in value 10% over 12 months, it would now be worth $110,000. Your return on investment would 10% annually (of course, you would actually net less, since you would incur costs in selling the property).

If you purchased a property using $10,000 of your own cash and $90,000 in borrowed money, a 10% increase in value would still result in $10,000 of increased equity, but your return on cash is 100% ($10,000 investment yielding $20,000 in equity). Of course, the borrowed money isn’t free; you would have to incur loan costs and interest payments in borrowing money. However, you could also rent the property in the meantime, which would offset the interest expense of the loan. Continue reading »

Step 1 – Realtor Interviews and the Comparative Market Analysis (CMA)

There are hundreds of critical mistakes you can make when selling your home, however there is a universal cure for them all . . . qualifying and choosing the right agent. Ask your agent lots of questions to ensure their motives are in the right place and they have the ability to properly represent you. Furthermore, you need to find out if you are comfortable with this person’s style of business.

In addition to an interview with an agent, have them look at your house and give you an idea of value. The agent will then assess the other homes in the area that are comparable to yours, make financial adjustments for the differences and give you an approximate value. This process is called a CMA.

Step 2 – Document & Material Preparation

In order to sell, there are certain documents and materials that you should obtain. These include an updated survey of your property called a Real Property Report (you likely have one from when you bought the home), any relevant repair receipts (such as a new roof or furnace), any home warranty documents, a spare set of keys, relevant rental or lease agreements, etc. If you live in a condo, pull all the documents you have received from the board or management company. Your Realtor should help you with the rest.

Step 3 – Home Preparation Continue reading »

When should I sell? How can I make sure that I will get the most for my home? I can’t afford to own two homes, so how can I be sure I don’t get stuck with my house?

Timing is a critical factor in determining the amount of money you can expect to get for your home. It is important to note that we are discussing a free, “no labour required” way to add thousands to the price of your home. Before figuring out when we should sell, we need to understand the two primary factors that will determine how effectively you can maximize your return in regards to timing; Supply & Demand and Motivation.

Supply & Demand

There are certain laws in life that are always right and never wrong. The principle of supply & demand is one of them.

When there are more properties for sale than there are buyers (too much supply and not enough demand), then prices will decrease until the demand equals the supply and the market levels out. Conversely, if there are more buyers than homes (limited supply and high demand) then prices will rise until the demand begins to fall and level off. This law governs the entire real estate industry. Continue reading »

Before you buy a home, it is smart to look at what steps you need to take in order to ensure the smoothest possible process. Here’s a quick summary of what you need to know in order to get into your dream home successfully:

Pre-Approval

Knowing how much you can afford to spend on a home, and finding the right way to finance it, are two of the easiest ways to increase the comfort of home ownership. Before falling in love with a potential new home, you may want to obtain a pre-approval. This will help you stay within your price range and spend your time wisely looking at homes you can reasonably afford. The pre-approval meeting is the time to find out about different mortgage products that are available to suit your particular needs.

Making an Offer to Purchase

Once you’ve found your new home, it’s time to finalize the deal. This can be one of the most emotional times within the home buying process, as you will make an Offer to Purchase or Agreement of Purchase and Sale which will bring you closer to owning a home. The Offer to Purchase is the official document that outlines the agreement between the seller and buyer of a property. It contains the particulars of the transaction such as: the purchase price, deposit, conditions, date of closing, etc. Continue reading »

Selling your home?  Your first move is to review your mortgage options!

If you plan on selling your home and buying a new one, your first move should be to look into your mortgage options.  You need to consider your current mortgage of course, and the mortgage that you’ll need on your new house.  If you are downsizing then there is no additional financing needed.  But if you are “trading up” and planning on having a bigger mortgage, you need to examine your options, which include:

Bringing your mortgage with you
Most mortgages today are portable, which means you can take your current interest rate and mortgage contract to your new home, subject of course to certain conditions like the amount of your mortgage. If you need a bigger mortgage, you can often “blend” your current mortgage rate with the mortgage rate on the additional funds you need Continue reading »

When buying a house there are things to take into consideration; it’s a major commitment. One element that does not get the attention it deserves is the importance of hiring a home inspector to assess the condition of your prospective home. Home inspectors are not one size fits all, so it’s important to be very careful about whom you choose to do the job.  Right now in Alberta just about anyone can call themselves a ‘home inspector’ – there is no national licensing scheme therefore anyone can say they are “qualified”.

Personally, we feel it is in your best interest to hire a Registered Home Inspector from the Canadian Association of Home and Property Inspectors Alberta. All members of the association require following minimum standards of practice; thus, bringing very good service. The purpose of the standards of practice is to establish uniform standards for home inspectors that are intended to provide prospective home buyers with critical information regarding the condition of the systems and components of the home. Continue reading »