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Home for the Holidays: How To Stretch Your Budget in a Season of Inflation

By GeneralNo Comments

You don’t have to break the bank to celebrate the holidays in style—even in this season of inflation. Prices may be higher on everything from food to gifts to decorations, but there are still plenty of opportunities to eke out extra savings. 

For example, you can trim your energy bills by up to 20% just by sealing air leaks in your home.1 Other small fixes—such as swapping old light bulbs for LEDs and plugging electronics into a powerstrip—can boost your yearly savings enough to pay off some of your holiday budget.

And thanks to a pandemic-era boom in online shopping, it is easier than ever to find deals on new and pre-owned furniture, thrifted gifts, DIY decor, and more. Even secondhand stalwarts like Goodwill have joined the digital fray, making it a cinch to score gently-used treasures at extra-low prices.2 

You won’t be the only one bargain-hunting your way to a more financially-stable New Year. Multiple surveys have found that inflation is not only chilling people’s spending, it’s also prompting shoppers to search for better deals and creative ways to reduce their bills.3 

Here are some strategies you can use to boost your holiday budget by trimming household expenses: 

 

1. Hunt for Deals on Groceries

If you’re finding it harder than it used to be to serve your family dinner on a budget, you’re not alone. With grocery prices rising at a record pace, many families are struggling to control costs on food staples, such as meat, dairy, produce, and grains.4 

That’s made pulling off holiday gatherings especially stressful lately. But don’t despair: Even with inflation, retailers are still giving motivated shoppers plenty of opportunities to whittle down their bills. 

The key is to pay attention to the cost of each item on your shopping list—not just the most expensive—and look for easy swaps and discounts. For example, try buying non-perishable items in bulk, especially when they’re on sale, and only in-season produce. Or trade name-brand goods for less expensive options from a store’s private label. As you tap into your inner bargain hunter, you could be surprised by what you save when you’re more mindful of your selections. 

And unlike in the old days, you no longer have to clip your way through paper flyers to snag a bargain. Instead, you can save both time and money by scouting for deals online, digitally clipping coupons, and earning cash back through special apps and browsers. For example, coupon aggregation sites, like Flipp, and shopping apps—such as Checkout 51 and Rakuten—make it easy to score discounts and cash back on a variety of purchases, including groceries.

Also, check to see if your neighbourhood grocer posts their weekly flyers online or if Save.ca has published flyers from other nearby stores. If you’re hosting a holiday party, the markdowns you find can help you narrow your food and recipe choices, based on what’s currently on sale.

 

2. Prep Your Home for Holiday Guests With Pre-Owned Finds

You don’t have to sacrifice style for the sake of preserving your holiday budget either. If you’re expecting company this year and would like to add some festive flair to your home, you can do so inexpensively—especially if you’re willing to decorate with items that are secondhand. 

Thrifting is back in vogue, with an increasing number of shoppers preferring pre-owned furniture and home goods. The number of Canadians who shop secondhand has grown.5 In fact, one study found that nearly three-quarters of Canadians now buy pre-owned goods of some type. 6 Plus, buying used isn’t just a great way to save money, it also helps the environment by keeping reusable items out of landfills.

Fortunately, it’s become easier to score secondhand deals online. For example, you can scout consumer marketplaces on Facebook and Kijiji. Or you can take advantage of neighbourhood freecycles and “Buy Nothing” groups. And a number of thrift shops now have e-commerce sites, including major chains, like Goodwill. 

If you’re handy with a paintbrush or have some basic carpentry skills, you can also modernize some of your existing furniture by upcycling it yourself. Or, if you enjoy crafting, search through your own recycling or sewing bin for raw material to make one-of-a-kind decorations.

Don’t stress yourself out, though, if you don’t have the time or money to dress your home the way you hoped. Your house can still feel festive and inviting, even if it’s not completely done up.

 

3. Forgo Major Renovations in Favor of DIY Home Improvements 

Holidays are always a tricky time to undergo big renovations. But with ongoing worker and material shortages, now is an especially bad time to commit. Inflated costs can add thousands to your reno budget—and unnecessary stress to your holiday. 

Instead of suffering through an ill-timed remodel, you’re better off saving this time of year for simpler, less expensive projects you can do yourself. 

One winter-perfect upgrade to consider: Build a DIY fire pit so that you and your guests can roast marshmallows and relax in the cozy comfort of your backyard. You can also add some extra ambiance by hanging energy-efficient LED outdoor string lights that change from white to colourful. These are festive enough for the holidays, but also versatile enough to use year-round.

Or, if you’d rather curl up by an indoor fire, channel your DIY energy into a fireplace upgrade. Adding a wooden beam to the top of your mantel can add an extra layer of coziness. Alternatively, re-tiling or painting your fireplace surround can lend contemporary flair. 

Just be sure to stick to DIY projects that you know you can do a quality job on—especially if your changes will be difficult to reverse. Feel free to reach out for a free assessment to find out how your planned renovations could impact your home’s resale value.

 

4. Invest in Home Maintenance Projects That Cut Your Utility Bills 

You can save money by completing basic home maintenance tasks, such as swapping your furnace filter and updating your lightbulbs. But if you really want to lower your bills this winter, consider projects that make your home more energy efficient. 

Research by the trade group NAIMA found that most homes in Canada are under-insulated, which wastes energy and money.7 The group estimates that Canadians can potentially save hundreds of dollars per year just by retrofitting their homes. Luckily, there are plenty of DIY insulation projects that you can complete in just a few days. For example, some projects you can do relatively quickly include:

  • Insulating your attic or basement crawl space
  • Weatherstripping doors and windows
  • Sealing areas around the house that may be leaking air, including electrical outlets and fireplaces

The savings you get from these projects can really add up. Natural Resources Canada estimates that walls alone account for roughly 20% of heat loss in homes, so they’re a rich target for tackling costly sources of air leakage.8 And thanks to the Canada Greener Homes Initiative, you can also save a bundle this year by investing in certain energy-efficient upgrades and claiming a tax rebate.9 Be sure to check with us about any municipal or provincial rebates and incentives that may be available, too, before getting started on a project. 

 

5. Use Expense Tracking to Boost Your Holiday Budget 

To avoid overextending yourself during the holidays, one of the best things you can do is track your income and expenses. If your monthly budget is usually tight, you may need to make some adjustments to free up cash for holiday expenditures.

For example, here’s a sample budget worksheet that we created. Start by adding in your expenses: Under the “Typical” column, you can list your standard expenses, and under the “Adjusted” column, list any areas where you could cut back on spending. 

Then consider how your standard wages may be adjusted this month by extra shifts, additional tips, or an end-of-year bonus. By decreasing your spending and/or increasing your income, you can build room in your budget for holiday gifts and gatherings.

Feel free to utilize this worksheet as a template that you can customize to your needs, or ask us for a PDF copy that you can print out and use right away. 

 

WE’RE HERE TO HELP

We would love to help you meet your financial goals now and in the year ahead. Whether you want to find lower-cost alternatives for home renovations, maintenance, or services, we are happy to provide our insights and referrals. 

And if you’re saving up to buy a new home, we can help with that, too. This is the perfect time to score a great deal because only the most motivated homebuyers and sellers are active in the market right now. So reach out to schedule a free consultation. We can fill you in on some of the exciting programs and incentives we’re seeing that help make homeownership more affordable.


The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

 

Sources: 

  1. CTV News –
    https://www.ctvnews.ca/lifestyle/8-tips-for-saving-on-your-home-heating-this-winter-1.6116384
  2. CBC News –
    https://www.cbc.ca/news/world/goodwill-online-store-1.6605808 
  3. MoneyWise –
    https://moneywise.ca/news/economy/canadians-plan-to-spend-less-as-retailers-brace-for-shopping-season
  4. Statistics Canada –
    https://www150.statcan.gc.ca/n1/pub/62f0014m/62f0014m2022014-eng.htm
  5. Statista –
    https://www.statista.com/statistics/998634/consumers-who-have-shopped-at-thrift-stores-canada/-​​ 
  6. Retail Insider –
    https://retail-insider.com/retail-insider/2022/08/resale-going-mainstream-in-canada-with-consumers-particularly-valuing-brand-owned-resale-report/ 
  7. NAIMA Canada –
    https://www.globenewswire.com/en/news-release/2016/10/27/1263857/0/en/New-Study-Reveals-Most-Homes-in-Canada-Are-Significantly-Under-Insulated.html
  8. Natural Resources Canada –
    https://www.nrcan.gc.ca/energy-efficiency/homes/make-your-home-more-energy-efficient/keeping-the-heat/chapter-7-insulating-walls/15641
  9. Government of Canada –
    https://www.nrcan.gc.ca/energy-efficiency/homes/canada-greener-homes-grant/start-your-energy-efficient-retrofits/plan-document-and-complete-your-home-retrofits/eligible-grants-for-my-home-retrofit/23504

7 Tips to Maximize Your Home’s Sale Price

By GeneralNo Comments

Over the past few years, a real estate buying frenzy bid up home prices to eye-popping amounts. However, as mortgage rates have risen, buyer demand has cooled.1 Consequently, home sellers who enter the market today may need to reset their expectations.

The reality is, it’s no longer enough to stick a “for sale” sign in the yard and wait for buyers to bang down the door. If you want to net the most money possible for your property in today’s market, you’ll need an effective game plan and a skilled team of professionals to implement it. 

Fortunately, we’ve developed a listing strategy that combines our proven approach to preparation, pricing, and promotion—all designed to help you get top dollar for your home. But you will play an important role in the selling process, as well. 

Here are some crucial steps you can take to set yourself up for success as a home seller in this market:

 

1. Make Strategic Repairs and Improvements

When you sell something, it’s important to consider what your customer wants to buy. And according to a recent survey, 83% of Canadians view “affording necessary renovations” as a major hurdle to buying a home.2 If you can present buyers with a move-in-ready option, they will feel more confident in making an offer.

Before your home goes on the market, we’ll conduct a thorough walk-through to identify any problems that could prevent it from selling. In some cases, we may recommend a professional pre-listing inspection. Finding and addressing issues like leaks, rot, and foundation problems up front can pay off in the final sale price. Plus, it prevents sales from falling through because of a red flag on the home inspection, a scenario no seller wants to face.

Beyond repairs, we’ll also help you identify the simple upgrades that offer the highest return on your investment. For example, new paint can give your home a fresh look at a reasonable cost. And according to a recent report, it’s one of the top renovations for return at resale.3 Similarly, minor landscaping improvements can pay off in a major way. A healthy lawn offers an estimated 256% ROI.4 

 

2. Declutter and Depersonalize

When buyers look at a home for sale, they’re trying to envision themselves living there. That’s hard to do if it’s chock-full of the current owner’s family photos, children’s artwork, and souvenir collections. Plus, cluttered homes look smaller, and older items can make them feel dated. 

Decluttering before you put your home up for sale will help you in the long run—after all, you’ll need to move all your things to your new home eventually. Now is the time to shred, digitize, or organize old documents, donate old clothes, or move bulky furniture into storage. At a minimum, you’ll want to pack away excess items neatly before potential buyers view the home. Remove personal photos and other trinkets to create a blank slate that viewers can imagine decorating with their own prized possessions.

If you feel overwhelmed by this process, we’d be happy to make recommendations or refer you to a local service provider who can help.

 

3. Stage Your Home for Success

Just as you take care to dress professionally for a job interview, you should always ensure your home looks its best for potential buyers. Home shoppers today are used to scrolling through Instagram and Pinterest, and they want to see the same wow factor when touring a home.

The process of making your home look its best and appeal to potential buyers is called staging, and it can be a game changer. According to the International Association of Home Staging Professionals, an average priced staged home sells 5 to 11 times faster than its unstaged counterpart. Even better, the majority of staged homes sell for 4% to 20% over list price!5

Some sellers hire a professional stager, who may bring in furniture and decor to increase the home’s appeal. Others choose to stage their homes themselves. We can help advise you on which route to choose and how much to invest in the process. 

It’s also important to consider what buyers in your neighbourhood are likely to be looking for in a home. We can help guide your staging choices with our local market insights. For example, in neighbourhoods where a large share of residents work from home, it may be effective to stage one room as an office space so potential buyers can envision their day-to-day routine.

 

4. Prep for Each Showing

Most of us don’t live picture-perfect lives, and our homes reflect that (sometimes messy) reality. But when your home is on the market, it’s important to ensure that it is always ready for viewers, even on short notice. A missed showing is a missed opportunity to sell your home!

Before your home hits the market, it may be worth hiring professional cleaners to get in all the nooks and crannies. After, try your best to keep things spic and span. Just a few minutes a day wiping down counters, sweeping the floors, and vacuuming can make a big difference. 

It’s also worth noting that most buyers will open cabinets, drawers, and closets—so try to make sure everything is as neat and organized as possible. Keep toiletries and small appliances off countertops, and secure valuables and sensitive documents in a safe or off-site.

Want help finding a cleaning service to make your home shine for buyers? Reach out for a referral!

 

5. Price Your Home Correctly From the Start

In the past few years, you may have seen homes in your neighbourhood sell for shocking amounts and wondered if you could get a similar price for your property. The temptation to list your home on the high side can be strong, but it’s best to be realistic from the start. Even in a strong market, some homes will sit for months. And the longer a property is listed, the more buyers worry that something is wrong with it.

Of course, you also don’t want to set your price too low and lose out on potential profit. That’s why it’s essential to work with real estate agents (like us!) who know the ins and outs of our local market and what buyers are willing to pay today. In a quickly-evolving market, comparable sales from a few months ago can lag the current market reality. 

Fortunately, if you’ve owned your home for several years, chances are good that it’s worth much more today than you paid for it. That means you stand to walk away with a handsome profit.

 

6. Avoid Acting on Emotion

The past few years of over-asking-price offers with few conditions have set certain expectations for many sellers. It’s only natural to feel hurt or even offended if an offer comes in lower than what you think your home is worth. 

However, it’s important to keep in mind that those market conditions were unprecedented, and we are now returning to a more typical market. Home sellers who act rationally, rather than emotionally, are going to get the best results. 

Remember: You can always counter a low offer. The same goes for repair requests and conditions—everything is negotiable. However, it’s important to accept that the market is adjusting and flexibility is key. Keep your expectations reasonable, and remain open-minded. And you can rest assured knowing that we’ll be by your side every step of the way to help you navigate the process and negotiate a great deal.

 

7. Work With a Local Market Expert

The economics impacting mortgage rates may be national, but real estate markets are hyperlocal. That’s why working with a professional agent who understands your neighbourhood’s dynamics is essential. Through our experience, we’ve gathered insights that can help us position your home for success in this market. Plus, we have the resources to connect with qualified buyers searching for a home like yours. 

Working with a knowledgeable agent is also the secret to getting as much money as possible for your home. We have access to extensive data on recent sales in your neighbourhood, which we will use to price and promote your property. That’s one reason why homes sold by agents draw much higher prices than those sold by their owners alone. The U.S.-based National Association of Realtors found that for-sale-by-owner homes went for a median price of $260,000 in 2020, while the median for homes sold by agents was $318,000.6 That’s a difference of $58,000—and money you don’t want to leave on the table.

 

YOUR AGENT AND ADVOCATE

Selling a home in a fast-changing market can be stressful. You’re likely to hear conflicting advice and opinions from people in your life, and decisions like what colour to paint your front door or how much to list your home for can be overwhelming. 

That’s where we come in. The market may be adjusting, but we’re here to help you make the most of it. We’re listing experts in our area, and we know what steps you need to take for a smooth, profitable transaction.

If you’re considering buying or selling a home, we invite you to reach out to schedule a free consultation. We’re happy to talk through your specific situation and goals and help you identify your next steps.

 

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

 


Sources: 

  1. Global News –
    https://globalnews.ca/news/8833692/canada-housing-prices-bidding-offers/
  2. Chartered Professional Accountants Canada –
    https://www.cpacanada.ca/en/news/canada/housing-survey
  3. RE/MAX Blog –
    https://blog.remax.ca/renovations-that-pay-off-on-resale-according-to-re-max-brokers/
  4. Angi –
    https://www.angi.com/articles/smart-landscaping-tips-can-increase-home-value.htm
  5. International Association of Home Staging Professionals –
    https://pages.iahsp.com/home-staging-statistics/
  6. National Association of Realtors –
    https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers#purchased

1781 View Street, Port Moody, BC

By GeneralNo Comments

Welcome to the COVETED LAMPLIGHTER in the heart of the West End. Soak in the SOUTH FACING OCEAN VIEWS from your HIGH END fully renovated 595SF 1 BED/1BATH condo, designed to the HIGHEST QUALITY standards. Nothing to do but MOVE IN! S/S appliances, QUARTZ counters, IN SUITE LAUNDRY, central VACUUM,

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Buy Now or Rent Longer? 5 Questions to Answer Before Purchasing Your First Home

By GeneralNo Comments

Deciding whether to jump into the housing market or rent instead is rarely an easy decision – especially if you’re a first-time homebuyer. But in today’s whirlwind market, you may find it particularly challenging to pinpoint the best time to start exploring homeownership.

A real estate boom during the pandemic pushed home prices to an all-time high.1 Add higher mortgage rates to the mix, and some would-be buyers are wondering if they should wait to see if prices or rates come down.

But is renting a better alternative? Rents have also soared along with inflation – and are likely to continue climbing due to a persistent housing shortage.2 And while homebuyers can lock in a set mortgage payment, renters are at the mercy of these rising costs for the foreseeable future.

So, what’s the better choice for you? There’s a lot to consider when it comes to buying versus renting. Luckily, you don’t have to do it alone. Reach out to schedule a free consultation and we’ll help walk you through your options. You may also find it helpful to ask yourself the following questions:

1. How long do I plan to stay in the home?

You’ll get the most financial benefit from a home purchase if you own the property for at least five years.3 If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you.

There are costs associated with buying and selling a home, and it may take time for the property’s value to rise enough to offset those expenditures.

Even though housing markets can shift from one year to the next, you’ll typically find that a home’s value will ride out a market’s ups and downs and appreciate with time.4 The longer you own a property, the more you are likely to benefit from its appreciation.

Once you’ve found a community that you’d like to stay in for several years, then buying over renting can really pay off. You’ll not only benefit from appreciation, but you’ll also build equity as you pay down your mortgage – and you’ll have more security and stability overall.

Also important: If you plan to stay in the home for the life of the mortgage, there will come a time when you no longer have to make those payments. As a result, your housing costs will drop dramatically, while your equity (and net worth) continue to grow.

2. Is it a better value to buy or rent in my area?

If you know you plan to stay put for at least five years, you should consider whether buying or renting is the better bargain in your area.

One helpful tool for deciding is a neighbourhood’s price-to-rent ratio: just divide the median home price by the median yearly rent price. The higher the price-to-rent ratio is, the more expensive it is to buy compared to rent.5 Keep in mind, though, that this equation provides only a snapshot of where the market stands today. As such, it may not accurately account for the full impact of rising home values and rent increases over the long term.

According to data from the Canadian Real Estate Association, a homeowner who purchased an average-priced Canadian home 10 years ago would have gained roughly $285,000 in equity — all while maintaining a steady mortgage payment.6,7

In contrast, someone who chose to rent during that same period would have not only missed out on those equity gains, but they would have also seen average Canadian rental prices increase by around 34%.8

So even if renting seems like a better bargain today, buying could be the better long-term financial play.

Ready to compare your options? Then reach out to schedule a free consultation. As local market experts, we can help you interpret the numbers to determine if buying or renting is a better value in your particular neighbourhood.

3. Can I afford to be a homeowner?

If you determine that buying a home is the better value, you’ll want to evaluate your financial readiness.

Start by examining how much you have in savings. After committing a down payment and closing costs, will you still have enough money left over for ancillary expenses and emergencies? If not, that’s a sign you may be better off waiting until you’ve built a larger rainy-day fund.

Then consider how your monthly budget will be impacted. Remember, your monthly mortgage payment won’t be your only expense going forward. You may also need to factor in property taxes, insurance, association fees, maintenance, and repairs.

Still, you could find that the monthly cost of homeownership is comparable to renting, especially if you make a sizable down payment. Landlords often pass the extra costs of homeowning onto tenants, so it’s not always the cheaper option.

Plus, even though you’ll be in charge of financing your home’s upkeep if you buy, you’ll also be the one who stands to benefit from the fruits of your investment. Every major upgrade, for example, not only makes your home a nicer place to live; it also helps boost your home’s market value.

If you want to buy a home but aren’t sure you can afford it, give us a call to discuss your goals and budget. We can give you a realistic assessment of your options and help you determine if your homeowning dreams are within reach.

4. Can I qualify for a mortgage?

If you’re prepared to handle the costs of homeownership, you’ll next want to look into how likely you are to pass Canada’s mortgage stress test and get approved for a mortgage.

Every borrower who applies for a mortgage from a federally-regulated lender, such as a bank, must pass a mortgage stress test – even if you have an ample down payment. (Some smaller lenders that aren’t federally regulated, such as credit unions, may also put your mortgage application through a stress test, but they aren’t required to do so.)9

To conduct the test, a lender will consider your qualifying income, estimated expenses (such as condo fees or non-mortgage-related debt), and prospective mortgage amount and calculate whether you’d still be able to afford the mortgage if your rate rose by a certain amount. You can also conduct your own mock stress test by inputting some income and expense estimates into the Government of Canada’s Mortgage Qualifier Tool.10 However, be aware the government’s minimum qualifying interest rate could change by the time you’re ready to buy.

Every lender will also have its own approval criteria separate from the feds’ minimum. But, in general, you can expect a creditor to scrutinize your job stability, credit history, and savings to make sure you can handle a monthly mortgage payment.

For example, lenders like to see evidence that your income is stable and predictable. So if you’re self-employed, you may need to provide additional documentation proving that your earnings are dependable. A lender will also compare your monthly debt payments to your income to make sure you aren’t at risk of becoming financially overextended.

In addition, a lender will check your credit report to verify that you have a history of on-time payments and can be trusted to pay your bills. Generally, the higher your credit score, the better your odds of securing a competitive rate.

Whatever your circumstances, it’s always a good idea to get preapproved for a mortgage before you start house hunting. Let us know if you’re interested, and we’ll give you a referral to a loan officer or mortgage broker who can help.

 

Want to learn more about applying for a mortgage? Reach out to request a copy of our report: “8 Strategies to Secure a Lower Mortgage Rate”

5. How would owning a home change my life?

Before you begin the preapproval process, however, it’s important to consider how homeownership would affect your life, aside from the long-term financial gains.

In general, you should be prepared to invest more time and energy in owning a home than you do renting. There can be a fair amount of upkeep involved, especially if you buy a fixer-upper or overcommit yourself to a lot of DIY projects. If you’ve only lived in an apartment, for example, you could be surprised by the amount of time you spend maintaining a lawn.

On the other hand, you might relish the chance to tinker in your very own garden, make HGTV-inspired improvements, or play with your dog in a big backyard. Or, if you’re more social, you might enjoy hosting family gatherings or attending block parties with other committed homeowners.

The great thing about owning a home is that you can generally do what you want with it – even if that means painting your walls fiesta red one month and eggplant purple the next.

The choice – like the home – is all yours.

HAVE MORE QUESTIONS? WE’VE GOT ANSWERS

The decision to buy or rent a home is among the most consequential you will make in your lifetime. We can make the process easier by helping you compare your options using real-time local market data. So don’t hesitate to reach out for a personalized consultation, regardless of where you are in your deliberations. We’d be happy to answer your questions and identify actionable steps you can take now to reach your long-term goals.

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

 

  1. Canadian Real Estate Association (CREA) –
    https://stats.crea.ca/en-CA/
  2. Financial Post –
    https://financialpost.com/real-estate/nowhere-to-live-rents-in-canada-surge-as-home-prices-fall
  3. Wealthsimple –
    https://www.wealthsimple.com/en-ca/magazine/buying-vs-renting-your-home
  4. Trading Economics –
    https://tradingeconomics.com/canada/housing-index
  5. Investopedia –
    https://www.investopedia.com/terms/p/price-to-rent-ratio.asp
  6. CBC –
    https://www.cbc.ca/news/business/average-home-price-ticked-2-lower-in-july-1.1281984
  7. Canadian Real Estate Association (CREA) –
    https://stats.crea.ca/en-CA/
  8. CMHC –
    https://www03.cmhc-schl.gc.ca/hmip-pimh/en/TableMapChart/TableMatchingCriteria?GeographyType=Country&GeographyId=1&CategoryLevel1=Primary%20Rental%20Market&CategoryLevel2=Average%20Rent%20%28%24%29&ColumnField=2&RowField=TIMESERIES#timeperiod
  9. Government of Canada –
    https://www.canada.ca/en/financial-consumer-agency/services/mortgages/preparing-mortgage.html
  10. Financial Consumer Agency of Canada –
    https://itools-ioutils.fcac-acfc.gc.ca/MQ-HQ/MQ-EAPH-eng.aspx

 

 

8 Strategies to Secure a Lower Mortgage Rate

By GeneralNo Comments

Interest rates have risen rapidly this year, triggered by the Bank of Canada’s efforts to curb inflation. And the July MNP Consumer Debt Index found that 59% of Canadians “are already feeling the effects of interest rate increases.”1  

Why has the impact been so widespread? In part, due to the rising popularity of variable rate mortgages. According to the Canada Mortgage and Housing Corporation, in the latter half of last year, the majority of mortgage borrowers opted for a variable over a fixed interest rate.2 

Variable mortgages are typically pegged to the lender’s prime rate, which means they are immediately affected by rising interest rates. Homeowners with fixed mortgages aren’t impacted as quickly because their interest rate is locked in, but they will face higher rates, as well, when their mortgages are up for renewal. And many homebuyers are finding it increasingly difficult to afford or even qualify for a mortgage at today’s elevated rates.

Fortunately, there are steps you can take to strengthen your position if you have plans to buy a home or renew an existing mortgage. Try these eight strategies to help secure the best available rate:

  1. Raise your credit score.

Borrowers with higher credit scores are viewed as “less risky” to lenders, so they are offered lower interest rates. A “good” credit score typically starts at 660 and can move up into the 800s.3 If you don’t know your score, you can access it online from Canada’s two primary credit bureaus, Equifax and Transunion.4 

Then, if your credit score is low, you can take steps to improve it, including:5

  • Correct any errors on your credit reports, which can bring down your score. You can request free copies of your reports through the Equifax and Transunion websites. 
  • Pay down revolving debt. This includes credit card balances and home equity lines of credit.
  • Avoid closing old credit card accounts in good standing. It could lower your score by shortening your credit history and shrinking your total available credit.
  • Make all future payments on time. Payment history is a primary factor in determining your credit score, so make it a priority.
  • Limit your credit applications to avoid having your score dinged by too many inquiries. If you’re shopping around for a car loan or mortgage, minimize the impact by limiting your applications to a two-week period.

Over time, you should start to see your credit score climb — which will help you qualify for a lower mortgage rate.

  1. Keep steady employment.

If you are preparing to purchase a home, it might not be the best time to make a major career change. Unfortunately, frequent job moves or gaps in your résumé could hurt your borrower eligibility. 

When you apply for a new mortgage, lenders will typically review your employment and income history and look for evidence that you’ve been financially stable for at least two years.6 If you’ve earned a steady paycheck, you could qualify for a better interest rate. A stable employment history gives lenders more confidence in your ability to repay the loan.

That doesn’t mean a job change will automatically disqualify you from purchasing a home. But certain moves, like switching from corporate employment to freelance or self-employment status, could force you to delay your purchase, since lenders will want to see proof of steady, long-term earnings.6 

  1. Lower your debt service ratios.

Even with a high credit score and a great job, lenders will be concerned if your debt payments are consuming too much of your income. That’s where your debt service ratios will come into play.

There are two types of debt service ratios:7

  1. Gross debt service (GDS) — What percentage of your gross monthly income will go towards covering housing expenses (mortgage, property taxes, utilities, and 50% of condo maintenance fees)? 
  2. Total debt service (TDS) — What percentage of your gross monthly income will go towards covering ALL debt obligations (housing expenses, credit cards, student loans, and other debt)?

What’s considered a good debt service ratio? Lenders typically want to see a GDS ratio that’s no higher than 32% and a TDS ratio that’s 40% or less.7 

Low debt service ratios will also help you pass a mortgage stress test, which is required by all Canadian banks and some other types of lenders. The stress test is designed to help ensure you can continue to afford your mortgage payments even if interest rates rise. You can use the government of Canada’s Mortgage Qualifier Tool to calculate how much you can afford to borrow. 

If your debt service ratios are too high, or you can’t pass a mortgage stress test, you may need to consider purchasing a less expensive home, increasing your down payment, or paying down your existing debt. A bump in your monthly income will also help.

  1. Increase your down payment.

Minimum down payment requirements vary by loan size and property type. But, in some cases, you can qualify for a lower mortgage rate if you make a larger down payment.

Why do lenders care about your down payment size? Because borrowers with significant equity in their homes are less likely to default on their mortgages. That’s why you will be required to purchase mortgage default insurance if you put down less than 20%.8 

It’s important to note that some lenders offer discount rates for borrowers who put down less than 20% – because the required default insurance protects them from any potential loss. However, the cost of CMHC or private mortgage default insurance will typically exceed any interest savings. You’ll also have to pay interest on that insurance if you add it to your mortgage.9 The bottom line: you’ll save money in borrowing costs if you can afford a larger down payment.

Fortunately, there are a couple of government-initiated resources designed to help eligible first-time home buyers with a down payment, including:9

  • Home Buyers’ Plan (HBP) – Buyers may withdraw up to $35,000 (tax-free) from their Registered Retirement Savings Plan(RRSP). The money must be used to build or purchase a qualifying home and repaid to the RRSP within 15 years.
  • First-Time Home Buyer Incentive – Buyers can take advantage of a shared-equity mortgage with the Government of Canada. Essentially, the Government will put 5% or 10% towards your down payment, interest-free, in exchange for a limited equity share of your property. The repayment is due in 25 years or when you sell your home. 

We’d be happy to discuss these and other programs, tax rebates, and incentives that might help you increase your down payment.

  1. Weigh interest rate options.

All mortgages are not created equal, and some may be a better fit than others, depending on your priorities and risk tolerance. For starters, there are several interest rate options to choose from:10

  • Fixed — You’re guaranteed to keep the same interest rate for the entire length of the loan. Many buyers prefer a fixed rate because it offers them predictability and stability. However, you’ll pay a premium for it, as these mortgages typically have a higher interest rate to start. And if rates fall, you’ll be locked into that higher rate.
  • Variable — Your interest rate will rise or fall along with your lender’s prime rate. You can choose either an adjustable or a fixed monthly payment. However, if you opt for a fixed payment, the amount that goes towards principal and interest each month will fluctuate depending on the current rate. Variable-rate mortgages typically offer lower interest rates to start but run the risk of increasing.
  • Hybrid – Can’t decide between a fixed or variable rate? Hybrid mortgages attempt to address that dilemma. A portion of the mortgage will have a fixed rate and the remainder will have a variable rate. The fixed gives you some protection if rates go up, while the variable offers some benefit if rates fall.

What’s the best choice if you’re looking for the lowest mortgage rate? The answer is…it depends. If mortgage rates don’t rise much higher, or drop back down in a couple of years, you could win by opting for a variable rate. However, if they continue to climb, you may be better off with a fixed rate.

Keep in mind that the spread between variable and fixed rates has narrowed as rates rise.11  However, it’s still easier to meet the stress-test requirements for a variable mortgage, since the threshold is lower.12 So, your choice may be limited by your ability to qualify.

  1. Compare loan terms.

A mortgage term is the length of time your mortgage agreement is in effect. At the end of the term, a mortgage holder will need to either pay off their mortgage or renew for another term.

There are three major types of mortgage terms:13

  • Shorter-term – These can range from 6 months to 5 years, and they are the most popular type in Canada. Borrowers can choose between a fixed or variable interest rate.
  • Longer-term – These are longer than 5 years but generally no more than 10 years in length. Longer-term mortgages are more likely to feature fixed-interest rates and hefty prepayment penalties.
  • Convertible – Offers the option to extend a shorter-term mortgage to a longer-term mortgage, typically at a different interest rate.

Which loan term offers the lowest rate? A shorter-term mortgage will typically feature a lower interest rate than a longer-term mortgage. However, the rate on a 1-year or a 3-year mortgage could be higher or lower than a 5-year mortgage depending on the current economic climate and whether it’s fixed or variable. 

Many lenders offer especially attractive rates for 5-year mortgages due to their popularity.14 But to find the best rate, you’ll need to compare your options at the time of purchase or renewal.

  1. Get quotes from multiple lenders.

When shopping for a mortgage, be sure to solicit quotes from several different lenders and lender types to compare the interest rates and fees. Depending upon your situation, you could find that one institution offers a better deal for the type of loan and term length you want.

Ideally, you should begin this process before you start looking for a home. If you get preapproved for a mortgage, in most cases, you can lock in the mortgage rate for 90 to 120 days. This is especially important when interest rates are rising.15

Some borrowers choose to work with a mortgage broker. Like an insurance broker, they can help you gather quotes and find the best rate. They’re paid a commission by the lender, so it won’t cost you anything out of pocket to use a broker. However, make sure you find out which lenders they work with and contact more than one so you can compare their recommendations.16

Don’t forget that we can be a valuable resource in finding a lender, especially if you are new to the home buying process. After a consultation, we can discuss your financing needs and connect you with loan officers or brokers best suited for your situation.

  1. Ask for a discount.

When shopping for a mortgage, don’t be afraid to negotiate. In Canada, it’s commonplace for lenders to discount their advertised interest rates, which are called posted rates. And in many cases, all you have to do is ask. Of course, the strength of your application will come into play here – so don’t neglect strategies 1 through 4 above.17

Keep in mind that interest rates aren’t the only thing on the table. You can negotiate other contract terms, as well, like prepayment options and rebates. And if you get a great offer from one lender, you can leverage it by asking your preferred institution to match or beat it.17



Getting Started

Unfortunately, the rock-bottom mortgage rates we saw during the height of the pandemic are behind us. However, today’s 5-year fixed rates still fall beneath the historical average — and are well below the all-time peak of 20.75% in 1981.18

And although higher mortgage rates have made it more expensive to finance a home purchase, they have also ushered in a more balanced market. Consequently, today’s buyers are finding more homes to choose from, a better value for their investment, and sellers who are willing to negotiate.

If you have questions or would like more information about buying or selling a home, reach out to schedule a free consultation. We’d love to help you weigh your options, navigate this shifting market, and reach your real estate goals!




Sources:

  1. MNP Consumer Debt Index –
    https://mnpdebt.ca/en/resources/mnp-consumer-debt-index
  2. Global News –
    https://globalnews.ca/news/8970237/canada-mortgages-variable-fixed-cmhc/
  3. Loans Canada –
    https://loanscanada.ca/mortgage/minimum-credit-score-required-for-mortgage-approval/
  4. Government of Canada –
    https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/order-credit-report.html
  5. Government of Canada – https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/improve-credit-score.html
  6. RATESDOTCA –
    https://rates.ca/resources/how-long-at-job-before-applying-mortgage
  7. NerdWallet –
    https://www.nerdwallet.com/ca/mortgages/what-are-debt-service-ratios
  8. Royal Bank of Canada –
    https://www.rbcroyalbank.com/mortgages/mortgage-default-insurance.html
  9. Government of Canada –
    https://www.canada.ca/en/financial-consumer-agency/services/mortgages/down-payment.html#toc2
  10. Government of Canada –
    https://www.canada.ca/en/financial-consumer-agency/services/mortgages/choose-mortgage.html
  11. Canada Mortgage Professional –
    https://www.mpamag.com/ca/mortgage-industry/industry-trends/what-do-falling-bond-yields-mean-for-fixed-rates/416463
  12. The Globe and Mail –
    https://www.theglobeandmail.com/business/article-the-best-mortgage-strategies-for-a-rising-interest-rate-environment/
  13. Government of Canada –
    https://www.canada.ca/en/financial-consumer-agency/services/mortgages/mortgage-terms-amortization.html
  14. WOWA.ca –
    https://wowa.ca/mortgage-rates
  15. NerdWallet –
    https://www.nerdwallet.com/ca/mortgages/what-is-mortgage-pre-approval
  16. Government of Canada –https://www.canada.ca/en/financial-consumer-agency/services/mortgages/preapproval-qualify-mortgage.html
  17. NerdWallet –
    https://www.nerdwallet.com/ca/mortgages/negotiating-mortgage-fees
  18. RateHub.ca –
    https://www.ratehub.ca/5-year-fixed-mortgage-rate-history

10 Pro Tips for a Smooth Home Move

By GeneralNo Comments

The process of buying a new home can be both exhilarating and exhausting. But the journey doesn’t stop when you close on your property. On the contrary, you still have quite a bit to do before you can begin the process of settling into your new place. 

Fortunately, you don’t have to do everything in a day. You don’t have to do it all alone, either. When you work with us to sell or purchase a home, you’ll have an ally by your side long after your transaction has closed. We’ll continue to be a resource, offering advice and referrals whenever you need them on packing, hiring movers and contractors, and acclimating to your new home and neighbourhood. 

When it comes to a life event as stressful as moving, it pays to have a professional by your side. Here are some of our favourite pro tips to share with clients as they prepare for an upcoming move. 

 


1. Watch out for moving scams.

Maybe you receive a flyer for a moving company in the mail. Perhaps you find a mover online. Either way, never assume that you’re getting accurate information. According to The Canadian Association of Movers, moving scams are on the rise — with seniors, in particular, being targeted.1 

How can you tell if a moving deal is too good to be true? Trust your instincts. If the price appears too low or you can’t pin down the mover’s physical business address, try someone else. The same goes for any moving company representative who dodges questions. Reputable movers should offer transparent pricing, conduct in-home estimates, and provide referrals and copies of their insurance documents upon request.1 For help finding trustworthy movers, reach out. We’d be happy to share our recommendations.  

 


2. Insure your belongings.

Your moving company promises to take care of your custom piano or your antique furniture. But don’t just take their word for it. Ask to see how much insurance they carry and talk about how the claims process works. That way, you’ll know what is (and isn’t) covered in case of loss or damage. If needed, consider paying extra to upgrade to full replacement value protection.2

Of course, some items are priceless because they’re irreplaceable. You might want to move your more sensitive valuables (jewellery, documents, family heirlooms, etc.) in your own vehicle just to be safe. For added peace of mind, call your home insurance provider if you’re moving anything yourself. In many cases, your personal property will be covered while in transit for a limited period of time.  

 


3. Start packing when you start looking for a new home.

As soon as your house hunting begins in earnest, think about packing away things you won’t need for the next few months. These could include seasonal or holiday decor, clothing, and books. Tackling just one or two boxes a day will give you a head start.

If you’re going to put your current home on the market, you’ll want to declutter anyway. Decluttering will make your home seem larger, and depersonalizing helps buyers envision their own items in the space. Consider selling, donating, or throwing out possessions you no longer need. The things you want to keep can be placed in storage until you officially start moving to a new place.

 


4. Pack to make unpacking easier.

Have you ever opened a packed box only to find that it’s filled with an assortment of items that don’t belong together? This isn’t efficient and will only make unpacking harder. A better way to pack is to bundle items from a single room in a labelled box. Labels can let movers know (and remind you) where to place each box, whether it’s fragile, and which side needs to be up. Some people like to assign colours to each room in their new home to make distributing colour-coded boxes a breeze. 

Feel free to unleash your inner organizer with this project. For example, you could create a spreadsheet and assign each box a number. As boxes are packed, simply fill in the spreadsheet with a list of contents. Anyone with access to the spreadsheet can log in and quickly find a desired item.

 


5. Think outside the box when transporting clothes.

Who wants to worry about boxing up clothes? If you plan on hiring professional movers, ask if you can leave clothing in your dressers. In many cases, they will use plastic to wrap the dresser so the drawers don’t fall out during transport. If keeping your clothes in your furniture makes it too heavy, the movers might be able to wrap and move drawers by themselves.

Another easy transport trick involves turning clean garbage bags into garment bags. Poke a hole in the bottom of a garbage bag, turn the bag upside down, slide it over five to seven garments on hangers, and lay the items flat in the back seat or trunk of your vehicle. The bags will help prevent wrinkling, and your clothes will be ready to hang up when you get to your new home.

 


6. Document prior to disassembling appliances and furnishings.

Few things are as confusing as looking at a plastic baggie filled with nuts, bolts, and screws from your disassembled dining room table or sorting through a box of electrical wires and cords to see which ones fit your TV. 

The best workaround to easier reassembly is to document the disassembly process. Take photos and videos or thorough notes as you go. Whether it’s your headboard or treadmill, be very precise. And just a tip: Construct your beds first when you get to your new home. After a long moving day, the very last thing you want is to be assembling beds into the wee hours of the morning. 

 


7. Prioritize unpacking kids’ rooms.

Children can become very stressed by a big move. To ease their transition, consider prioritizing unpacking their rooms as their “safe zones.”3 You aren’t obligated to unpack everything, certainly. However, set up your children’s rooms to be functional. That way, your kids can hang out in a private oasis away from the chaos while you’re running around and moving everything else.

Depending upon how old your youngsters are, you might want to give them decorating leeway, too. Even if it’s just letting them choose where furniture goes, it gives them a sense of buy-in. This can help ease the blues of leaving a former home they loved.

 


8. Be a thoughtful pet parent.

Many types of pets can’t handle the commotion of moving day. Knowing this, be considerate and seek ways to give your pets breaks from the action. You might ask a friend to pet-sit your pooch or keep your kitty in a quieter room, like a guest bathroom.

Be sure to check in on your pet frequently. Pets like to know that you’re around. Give them treats, food, and water throughout the day. When it’s time to transport your pet, do it calmly. At your new property, give your pet access to just a room or two at first. Pets typically prefer to acclimate themselves slowly to unfamiliar environments.4

 


9. Plan for your move like you’re planning for an exciting vacation.

When you plan vacations, you probably look up local restaurants, shops, and recreational areas. Who says you can’t do the same thing when moving? Create a list of all the places you want to go and things you want to do around your newly purchased home. Having a to-explore list keeps everyone’s spirits high and gives you starting points to settle into the neighbourhood. 

And don’t feel that you have to cook that first night. Once the moving trucks are gone, you can always pop over to a local eatery or order SkipTheDishes for major convenience. The first meal in your new home should be a happy, welcoming treat. And if you’re relocating to our neck of the woods, we would love to introduce you to the hot spots in town and recommend our local favourites.

 


10. Pack an “Open Me First!” box.

You won’t be able to unpack all your boxes in one day, but you shouldn’t go without your sheets, pillows, or toothbrush. Designate some boxes with “Open Me First!” labels. (Pro tip: Keep a tool kit front and centre for all that reassembling.) 

Along these lines, use luggage and duffel bags to transport everyone’s personal must-have items and enough clothing for a couple of days. That way, you won’t have to rummage through everything in the middle of your move looking for sneakers or snacks.

When packing your “Open Me First!” boxes, think about which items you’ll need in those first 24 hours. For example, toilet paper and hand soap are musts. A box cutter will make unpacking a lot easier, and paper towels and trash bags are sure to come in handy. Reach out for a complete, printable list of “Open Me First!” box essentials to keep on hand for your next move!

 


LET’S GET MOVING

Getting the phone call from your real estate agent that your bid was accepted is a thrilling moment. Make sure you keep the positivity flowing during the following weeks by mapping out a streamlined, efficient move. Feel free to get in touch with us today to help make your big move your best move.

 

 


Sources:

  1. Mover.net –
    https://www.mover.net/planning-a-move/consumer-alerts/moving-fraud
  2. Mover.net –
    https://www.mover.net/planning-a-move/info-about-moving/moving-protection
  3. Aha! Parenting –
    https://www.ahaparenting.com/read/moving-help-child-adjust
  4. Ontario SPCA –
    https://ontariospca.ca/blog/how-to-successfully-move-homes-with-your-pet/

7 Costly Mistakes Home Sellers Make (And How to Avoid Them)

By GeneralNo Comments

No matter what’s going on in the housing market, the process of selling a home can be challenging. Some sellers have a hard time saying goodbye to a treasured family residence. Others want to skip ahead to the fun of decorating and settling in a new place. Almost all sellers want to make the most money possible. 

Whatever your circumstances, the road to the closing table can be riddled with obstacles — from issues with showings and negotiations to inspection surprises. But many of these complications are avoidable when you have a skilled and knowledgeable real estate agent by your side.

For example, here are seven common mistakes that many home sellers make. These can cause anxiety, cost you time, and shrink your financial proceeds. Fortunately, we can help you avert these missteps and set you up for a successful and low-stress selling experience instead.

 


MISTAKE # 1: Setting An Unrealistic Price

Many sellers believe that pricing their home high and waiting for the “right buyer” to come along will net them the most money. However, overpriced homes often sit on the market with little activity, which can be the kiss of death in real estate — and result in an inevitable price drop.1

Alternatively, if you price your home at (or sometimes slightly below) market value, your home can be among the nicest that buyers have seen within their budget. This can increase your likelihood of receiving multiple offers.2

To help you set a realistic price from the start, we will do a comparative market analysis, or CMA. This integral piece of research will help us determine an ideal listing price, based on the amount that similar properties have recently sold for in your area.

Without this data, you risk pricing your home too high (and getting no offers) or too low (and leaving money on the table). We can help you find that sweet spot that will draw in buyers without undercutting your profits. 

 


MISTAKE #2: Trying To Time The Market

You’ve probably heard the old saying: “Buy low and sell high.” But when it comes to real estate, that’s easier said than done. 

Delaying your home sale until prices are at their peak may sound like a great idea. But sellers should keep these factors in mind:

  1. Predicting the market with certainty is nearly impossible.
  2. If you wait to buy your next home, its price could increase, as well. This may erode any additional proceeds from your sale.
  3. If mortgage rates are rising, your pool of potential buyers could shrink—and you will have to pay more to finance your next purchase.

Instead of trying to time the market, choose your ideal sales timeline, instead. This may be based on factors like your personal financial situation, shifting family dynamics, or the seasonal patterns in your particular neighbourhood. We can help you figure out the best time to sell given your individual circumstances.

 


MISTAKE #3: Failing To Address Needed Repairs 

Many sellers hope that buyers won’t notice their leaky faucet or broken shutters during a home showing. But minor issues like these can leave buyers worrying about more serious — and costly — problems lurking out of sight. 

Even if you do receive an offer, there’s a high likelihood that the buyer will hire a professional home inspector, who will flag any defects in their report. Neglecting to address a major issue could lead buyers to ask for costly repairs, money back, or worse yet, walk away from the purchase altogether.

To avoid these types of disruptions, it’s important to make necessary renovations before your home hits the market. We can help you decide which repairs and updates are worth your time and investment. In some cases, we may recommend a professional pre-listing inspection. 

This extra time and attention can help you avoid potential surprises down the road and identify any major structural, system, or cosmetic faults that could impact a future sale.3 

 


MISTAKE #4:  Neglecting To Stage Your Home

Staging is the act of preparing your home for potential buyers. The goal is to “set the stage” for buyers to help them envision themselves living in your home. Some sellers opt to skip this step, but that mistake can cost them time and money in the long run. A 2021 survey by the Real Estate Staging Association found that, on average, staged homes sold nine days faster and for $40,000 over list price.4

Indoors, staging could include everything from redecorating, painting, or rearranging your furniture pieces to removing personal items, decluttering, and deep cleaning. Outdoors, you might focus on power washing, planting flowers, or hanging a wreath on the front door.

You may not need to do all of these tasks, but almost every home can benefit from some form of staging. Before your home hits the market, we can refer you to a professional stager or offer our insights and suggestions if you prefer the do-it-yourself route.

 


MISTAKE #5: Evaluating Offers On Price Alone

When reviewing offers, most sellers focus on one thing: the offer price. And while dollar value is certainly important, a high-priced offer is worthless if the deal never reaches the closing table. That’s why it’s important to consider other factors in addition to the offer price, such as:

  • Financing and buyer qualifications
  • Deposit size
  • Contract contingencies
  • Closing date

Depending on your particular circumstances, some of these factors may or may not be important to you. For example, if you’re still shopping for your next home, you might place a high premium on an offer that allows for a flexible closing date.

Buyers and their agents are focused on crafting a deal that works well for them. We can help you assess your needs and goals to select an offer that works best for you. 

 


MISTAKE #6: Acting On Emotion Instead Of Reason 

It’s only natural to grow emotionally attached to your home. That’s why so many sellers end up feeling hurt or offended at some point during the selling process. Low offers can feel like insults. Repair requests can feel like judgments. And whatever you do — don’t listen in on showings through your security monitoring system. Chances are, some buyers won’t like your decor choices, either!

However, it’s a huge mistake to ruin a great selling opportunity because you refuse to counter a low offer or negotiate minor repairs. Instead, try to keep a cool head and be willing to adjust reasonably to make the sale. We can help you weigh your decisions and provide rational advice with your best interests in mind.

 


MISTAKE #7: Not Hiring An Agent

There’s a good reason 90% of homeowners choose to sell with the help of a real estate agent. Homes listed by an agent sold for 22% more than the average for-sale-by-owner home, according to a recent US-based study.5 

Selling a home on your own may seem like an easy way to save money. But in reality, there is a steep learning curve. And a listing agent can: 

  • Skip past time-consuming problems 
  • Use market knowledge to get the best price
  • Access contacts and networks to speed up the selling process 

If you choose to work with a listing agent, you’ll save significant time and effort while minimizing your personal risk and liability. And the increased profits realized through a more effective marketing and negotiation strategy could more than make up for the cost of your agent’s commission.

We can navigate the ins and outs of the housing market for you and make your selling process as stress-free as possible. You may even end up with an offer for your home that’s better than you expected.

 


BYPASS THE PITFALLS WITH A KNOWLEDGEABLE GUIDE

Your home selling journey doesn’t have to be hard. When you hire us as your listing agent, we’ll develop a customized sales plan to help you get top dollar for your home without any undue risk, stress, or aggravation. If you’re thinking of buying or selling a home, reach out today to schedule a free consultation and home value assessment.

 

 


Sources:

  1. Realtor.ca –
    https://www.realtor.ca/blog/postpage/2666/1362/the-importance-of-having-a-realtor%C2%AE-price-your-home/  
  2. Royal Bank of Canada –
    https://www.rbcroyalbank.com/mortgages/sellers-vs-buyers-market.html 
  3. Canadian Association of Home & Property Inspectors –
    https://www.cahpi.ca/en/blog/3-reasons-you-should-hire-a-cahpi-inspector
  4. Real Estate Staging Association –
    https://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548 
  5. National Association of Realtors –
    https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics 

Higher Rates and Short Supply: The State of Real Estate in 2022

By GeneralNo Comments


Canada’s housing market hit a boiling point last year as homebuyers clambered for real estate in regions with significantly more demand than supply. But now that homeowners and buyers alike are feeling the pinch of rising interest rates and record inflation, the market appears to finally be simmering down.

That, in turn, could create a welcome opening for shoppers to be more selective with their searches. However, buyers hoping for a major downturn in prices may be left disappointed. Although home values in some segments are beginning to sag under the weight of higher borrowing costs, a persistent housing shortage is expected to keep prices high.

Read on for a closer look at some of the top factors impacting Canada’s real estate market and how they could affect you.



RISING MORTGAGE RATES ARE COOLING AN OVERHEATED MARKET

Over the past couple of years, homebuyers have faced record-high price appreciation and intense competition—in part due to historically low mortgage rates that were a result of the Bank of Canada’s efforts to keep the economy afloat during the COVID-19 pandemic.1 

According to the Canadian Real Estate Association (CREA), in 2021, both the number of sales and average home price hit at an all-time high, with demand for new homes far exceeding supply.2 This trend continued through early 2022, despite widespread predictions that the Bank of Canada was gearing up to increase interest rates.3 

But now that the central bank has officially begun pushing its key interest rate back up from emergency levels, the housing market is responding, with the pace of home sales cooling in March and April.4 The Canada Mortgage and Housing Corporation (CMHC) predicts that the housing market will continue to moderate in the coming year.5

The feds plan to keep raising interest rates as necessary to fight inflation, which means target rates could rise by another 1 to 2% or more over the next year.6 That, in turn, will cause both fixed and variable mortgage rates to rise.

As Senior Deputy Governor Carolyn Rogers noted in May: “We need higher rates to moderate demand, including demand in the housing market. Housing price growth is unsustainably strong in Canada.”7

What does it mean for you?

If you’re shopping for a new home, expect mortgage rates to keep rising into 2024.8 So, you’ll need to act fast if you want to get in at a lower rate. However, the cooling effect should make for a less competitive market. We can help you chart the best path.

If you’ve been thinking about selling, higher mortgage rates may shrink your pool of potential buyers, so don’t wait too long to list. And if you are up for a renewal, you should also act quickly or risk paying a higher rate. Contact us to discuss your options.



DEMAND AND PRICES ARE STARTING TO SOFTEN IN SOME SEGMENTS

Nationally, home prices soared a record 26.6% last year, an unsustainable rate of appreciation by any measure.9 But now that the Bank of Canada has put rock-bottom rates in the rear view window, sales have begun to slow.

Soon after the Bank of Canada began raising interest rates in early March, the real estate market responded. According to the CREA, in March, home sales fell by 5.4% on a month-over-month basis and the Aggregate Composite MLS® Home Price Index (HPI) ticked up just 1%, “a marked slowdown from the record 3.5% increase in February.”10 

By April, home sales dropped by another 12.6% over the previous month as homeowners and buyers continued adjusting to higher rates.. “Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” said CREA Chair Jill Oudil. Meanwhile, prices are still rising in some markets, but are sagging in others, causing the HPI to dip in April for the first time since 2020.11

As the Bank of Canada continues pushing up rates, more buyers may give up on their homeownership dreams if they feel too squeezed by the combination of high rates and high prices. Still, many experts say a major downturn in prices is unlikely. That’s in part due to the fact that there still aren’t enough homes available to meet the demands of a growing population, says CREA CEO Michael Bourque. “The supply of new homes is not even close to keeping up with demographic changes and population growth.”12 As long as housing remains a scarce asset, prices will remain relatively elevated. 

What does it mean for you?

If you’ve been waiting to buy a home, now may be the perfect time to jump in the market. There are deals to be found if you know where to look. But don’t wait too long, or higher mortgage rates will erode any cost savings. We can help you find the best opportunities in today’s market.

For homeowners, the outlook is still bright. Governmental interventions are being put in place to stabilize the market–not crash it. And demand for housing and a strong job market should help protect your investment. 



INVENTORY REMAINS TIGHT

According to the CMHC, housing starts trended higher in April after a small downturn in March. Overall, new homes are still being built at a faster clip today than in the past, but at a slower pace than we saw in 2021, noted CMHC Chief Economist Bob Dugan.13 Homebuilders are facing a wide range of challenges, including persistent inflation, rising rates, and ongoing labour shortages.

Increased federal investment could help counteract at least some of those challenges. The federal government recently announced plans to help double the pace of housing construction over the next decade by funding significantly more new and affordable housing. It also announced additional relief measures, including a temporary ban on foreign investment, doubling first-time buyers’ tax credit, and halting blind bidding wars.14 

In addition to fewer homes being built, new listings are also down, according to the CREA’s sales report. But a decrease in demand is offsetting the impact in some areas. “A little more than half of local markets were balanced markets…a little less than half were in seller’s market territory.”11

What does it mean for you?

While supply remains at historically low levels, even a modest bump in inventory can help take pressure off of buyers. If you’ve had trouble finding a home in the past, give us a call to discuss what we’re currently seeing in your target neighbourhood and price range.

If you’re a homeowner, it’s still a great time to sell and cash out those big equity gains. Contact us to find out how much your home is worth in today’s market.



WE’RE HERE TO GUIDE YOU

While national real estate trends can provide a “big picture” outlook, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighbourhood.

If you’re considering buying or selling a home, contact us now to schedule a free consultation. We can help you assess your options and make the most of this unique real estate landscape.




Sources:

  1. Bank of Canada –
    https://www.bankofcanada.ca/2020/03/press-release-2020-03-27/ 
  2. Global News –
    https://globalnews.ca/news/8516543/canada-home-sales-record-crea/
  3. CBC –
    https://www.cbc.ca/news/business/crea-housing-february-1.6385274 
  4. Canadian Real Estate Association –
    https://www.crea.ca/housing-market-stats/stats/
  5. Canada Mortgage and Housing Corporation –
    https://www.cmhc-schl.gc.ca/en/media-newsroom/news-releases/2022/housing-markets-moderate-historic-2021-levels 
  6. Bank of Canada –
    https://www.bankofcanada.ca/press/press-releases/ 
  7. Reuters –
    https://www.reuters.com/world/americas/bank-canada-says-strong-demand-risks-higher-inflation-2022-05-03/ 
  8. Better Dwelling –
    https://betterdwelling.com/canadian-mortgage-rates-to-surge-demand-will-be-slowest-in-recent-history-moodys/ 
  9. CBC –
    https://www.cbc.ca/news/business/crea-housing-december-1.6317503#
  10. Canadian Real Estate Association –
    https://www.crea.ca/news/march-home-sales-and-new-listings-ease-back-following-surge-in-february/
  11. Canadian Real Estate Association –
    https://www.crea.ca/news/home-sales-drop-in-april-as-mortgage-rates-shoot-higher/  
  12. Global News –
    https://globalnews.ca/news/8716412/canada-housing-market-cooling-bubble-interest-rate/
  13. Canada Mortgage and Housing Corporation –
    https://www.cmhc-schl.gc.ca/en/media-newsroom/news-releases/2022/canadian-housing-starts-trend-higher-april 
  14. Office of the Prime Minister of Canada, Justin Trudeau –
    https://pm.gc.ca/en/news/news-releases/2022/04/13/helping-young-people-get-housing-market

5 Ways to Write a Winning Offer in Today’s Real Estate Market

By GeneralNo Comments

Our nation is in the midst of a shifting real estate market. But even as the buying frenzy begins to slow, many properties are still receiving multiple offers.1

So what’s the best way to compete as a buyer–especially if you’re wary about overpaying?

While a high offer price gets attention, most sellers consider a variety of factors when evaluating an offer. With that in mind, here are five tactics you can utilize to sweeten your proposal and outshine your competition.

We can help you weigh the risks and benefits of each tactic and craft a compelling offer designed to get you your dream home—without giving away the farm.

1. Demonstrate Solid Financing

The reality is, no one gets paid if a home sale falls through. That’s why sellers (and their listing agents) favour offers with a high probability of closing.

Sellers particularly love all-cash offers because there’s no chance of financing issues cropping up at the last moment. But all-cash offers are rare, and if sellers are assured that financing will come through, buying with a mortgage doesn’t have to be a disadvantage.

The most important step you can take as a buyer is to get preapproved before you start looking for homes. A preapproval letter shows sellers that you are serious about buying and that you will be able to make good on your offer.2

It’s also important to consider the reputation of your lender. While sellers may not know or care about a lender’s reputation, their agents often do. Some lenders are much easier to work with than others. If you’re unsure who to choose, we are happy to refer you to reputable lenders known for their ease of doing business.

2. Put Down a Sizeable Deposit

Buyers can show sellers that they’re serious about their offer and have “skin in the game” by putting down a large deposit. This, however, is not the same as a down payment.

The deposit is typically held in a trust account by the seller’s brokerage or lawyer.3 If the purchase goes through, it is applied to the down payment and closing costs. If the sale falls through, however, the buyer could lose some or all of that deposit, depending on the contract terms.

Deposit amounts vary, but offering a higher deposit can help demonstrate to the buyer that you are serious about the property. We can help you determine an appropriate deposit to offer based on your specific circumstances.

3. Ask for Few (or No) Conditions

Most real estate offers include conditions, which are clauses that allow one or both parties to back out of the agreement if certain requirements are not met. These conditions appear in the purchase agreement and must be accepted by both the buyer and seller to be legally binding.

Two of the most common conditions are:4

 

  • Financing: A financing condition gives the buyer a window of time in which to secure a mortgage. If they are unable to do so, they can withdraw from the purchase and the seller can move on to other buyers.
  • Inspection: An inspection condition gives the buyer the opportunity to have the home professionally inspected for issues with the structure, wiring, plumbing, etc. Typically, the seller may choose whether or not to remediate those issues; if they do not, the buyer may withdraw from the contract.

Since conditions reduce the likelihood that a sale will go through, they generally make an offer less desirable to the seller. The more conditions that are included, the weaker the offer becomes. Therefore, buyers in a competitive market often volunteer to waive or exclude certain conditions.

However, it’s very important to make this decision carefully and recognize the risks of doing so. For example, a buyer who chooses to waive a home inspection condition may find out too late that the home requires extensive renovations. If you back out of a home purchase without the protection of a condition, you could lose your deposit.5 We can help you assess the risks and benefits involved.

4. Offer a Flexible Closing Date

When it comes to selling a house, money isn’t everything. People sell their homes for a wide variety of reasons, and flexible terms that work with their personal situations can sometimes make all the difference. For example, if a seller is in the process of planning a significant move, they may appreciate an option to advance or postpone their closing date.

This flexibility can provide a powerful advantage for first-time homebuyers. If you have a month-to-month or easily transferable lease, for example, you may be able to offer a more flexible timeline than a buyer who is simultaneously selling their existing home.

Of course, the value of these terms depends on the seller’s situation. We can reach out to the listing agent to find out the seller’s preferred terms, and then collaborate with you to write a compelling offer that works for both parties.

5. Work With a Skilled Buyer’s Agent

In this real estate market, one of the greatest advantages you can give yourself is to work with a skilled and trustworthy real estate professional. We will make sure you fully understand the process and help you submit an appealing offer without taking on too much risk.

Plus, we know how to write offers that are designed to win over both the seller and their listing agent. The truth is, listing agents play a huge role in helping sellers evaluate offers, and they want to work with skilled buyer’s agents who are professional, communicative, and courteous.

Once your offer is accepted, we’ll also handle any further negotiations and coordinate all the paperwork and other details involved in your home purchase. The best part is, you’ll have a knowledgeable, licensed advocate on your side who is watching out for your best interests every step of the way.

Helping You Get to the Right Offer

In many cases, a competitive offer doesn’t need to be condition-free or significantly above asking price. But if you’re serious about buying a home in today’s market, it’s important to consider what you can do to sweeten the deal.

If you’re a buyer, we can help you compete in today’s market without getting steamrolled. And if you’re a seller, we can help you evaluate offers by taking all the relevant factors into account. Contact us today to schedule a free consultation.

Sources:

 

  1. Bloomberg –
    https://www.bloomberg.com/news/articles/2022-04-12/home-prices-could-start-to-cool-in-canada-s-hot-housing-market
  2. NerdWallet –
    https://www.nerdwallet.com/ca/mortgages/what-is-mortgage-pre-approval
  3. Nesto –
    https://www.nesto.ca/mortgage-basics/house-deposit-vs-down-payment/
  4. Real Estate Council Alberta –
    https://www.reca.ca/2020/02/05/conditional-sales/
  5. Loans Canada –
    https://loanscanada.ca/mortgage/what-happens-when-you-walk-away-from-your-offer-on-a-house/

 

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