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Real Estate

Jan 2019 Housing Market In Review

By | Real Estate

Well January 2019 has come and gone, what next?

Having recently attended the CREB Forecast Breakfast I heard the reality of our job creation and population growth from chief economist, Ann-Marie Lurie. It appears Calgary has no foreseeable relief  for our repressed Real Estate market. However, with all things said homes are still selling. It comes down to being the best of the best. Understanding your homes pros and cons from location to presentation in a buyers market. I recommend taking your time to step back from your home and view it with a fresh perspective, look at what is happening in your community. Visit some show homes. Consult a home stager or attend a home staging class. The average investment for preparing your home for sale is 1% to 3% of the total home value.

Remember it is the best of the best homes that is selling. Best price, best location, best presentation or the best deal. Buyers have time and choice on their side.

Soooo, here is the good news. Now is the time to move up!  Lets say your home adjusted from $400k to $360k over the past few years. That same 10% adjustment in a $600k would mean that home now is at $540K or less.  (These are just examples and not on a specific property)

All in all this is a good year to be cautious but continue moving forward. A year to lean into your community and family. A year to count your blessings and be open to asking for guidance. A year to finish your reading list or start the book of your life.

5 Things You Need to Ask Before Buying a Flipped Home

By | Ana Cummings, Design, Home, Real Estate, Renovation | No Comments

We all love a well done flipped home, and there are people who do a great job at it and make a profit on their investment. However, not all flipped homes are about the new kitchen cabinets or fancy new light fixtures. It about the unforeseen financial surprises that can come along with a flipped home. Here’s 5 questions you may want to ask before buying one.

  1. If the home is pre 1978, you will want to ask if the insulation has been upgraded. If not, what kind of insulation exists in the home? This will effect the level of energy efficiency, which can cost a lot of money in the long run, not to mention your comfortability in the home.
  2. Are there any “before” photos for you to see? And any photos during the construction phase? Photos don’t lie. They will show what the state of the home was when it was torn apart. That way you can see if there were any hidden no-no’s that could come up to haunt you in the future with respect to pipes, wires, ductwork, etc.  You want to make sure that the plumbing and electrical have been upgraded or brought up to local codes.
  3. Were permits submitted for the renovation? Any potential home buyer looking at a flipped home should want to have the peace of mind knowing that their flipped home was properly constructed. If permits were pulled, there will be a public record, including inspection reports that you can access. You will need to know what local city department to contact. It’s research well worth its weight because our homes are usually the single largest investment that we own.
  4. You might want to know who renovated the home. A licensed contractor that belongs to the local Better Business Bureau or a related Builder’s Association might be more reputable than a renovator found from Kijiji for example. You can usually tell with your eyes whether the workmanship is excellent or shoddy. Look closely at floor transitions, grout in a bathroom shower, and installation of doors, cabinetry & railings.
  5. Depending on the vintage of the home, have the sewer lines been replaced? That can be a 10-15k bill if there are large trees on the property.

Good luck if you’re thinking of purchasing a flipped home, and remember, consider the big ticket items that might not be instantly recognizable, like a new roof. It’s these “hidden items” that could be the deciding factor on whether you put in a bid, or keep looking.

ANA’s 9 Tips to Sell Your Home in Winter…Brrrr!

By | Ana Cummings, Design, Home Staging, Real Estate | No Comments

In Calgary, it might seem like we have a longer winter season than summer. If you plan on selling your home during the winter months, here are my best tips!

  1. Make sure all your rooms are well lit. Replace low voltage or old bulbs with brighter or LED ones. In winter, the sun goes down much earlier, therefore your afternoon and evening viewings will require more light. Aim for 100w for every 50 square feet.
  2. Style your home as cozy as possible. This means layers. Put out a fur throw on the sofa or at the end of the bed. Luxurious touches that invite visual warmth will imbue a sense of comfort.
  3. Have an adequate place for boots and coats during your viewings. Empty out the front closet and put a mat underneath. This will not only keep the house tidy, but will make your potential buyer feel like they are already “at home”.
  4. Bake some cookies in the oven or have a fragrance diffuser in the home that triggers good memories of wintertime. Cinnamon, chocolate, cider smells are wonderful this time of year.
  5. Make sure the outside of the home is free and clear of snow and ice. This is your first impression and it needs to be as easily accessible as possible. Maintaining the outside of your home is just as important as the inside. Adding a couple of winter planters is also a welcoming touch.
  6. Turn on all in-floor heat in bathrooms and in areas that have it. There is no other feeling in the world than coming in from the cold and into a warm cocoon of a home. Our feet love to be warm. Having said that, being too warm is also a turn off. Monitor the weather and plan your temperature control accordingly.
  7. Add fresh flowers in places like hallways and kitchens. The addition of botanical elements adds life to a room in winter.
  8. Keep your home as clean as humanly possible; give the kids baskets to put their bulky items into.
  9. Have a designated place you and the family can go that will allow you to work and the kids to continue to study or do homework; like a public library or cozy cafe.

Best of luck to you!

How to Sell Your Home with Messy Kids

By | Ana Cummings, Design, Home Staging, Real Estate | No Comments

Kids right? Cleaning up after them is like cleaning up after a party that you weren’t invited to – and the party never stops! This is when you aren’t trying to sell your home, so what do you do when your home is on the market? Don’t worry, I’ve put together my top 10 best tips for getting your home sold, despite having messy kiddos.

  1. The daily to-do list. Get every family member involved with completing the daily to-do list. Put alerts on devices so that every morning everyone makes their bed and puts their unworn clothes away.
  2. Build multi-tasking muscles. Kids love games! Tell them they need to develop their “multi-tasking muscles” by making sure every trip up or down the stairs involves carrying something that needs to be put back in “its spot.”
  3. Have secret storage spots in each room. Make these new to-dos a snap by purchasing baskets or bins with lids that everyone can keep under their bed or in a designated storage area in each room.
  4. Hire a cleaning service. You need to make sure toilets, showers, and sinks are always sparkling. You can negotiate with cleaning companies to offer you the basics like bathrooms and kitchens (or the whole house). Tell your kids that they can earn some extra allowance each week if they keep their bathroom clean. Make sure each bathroom has its own set of cleaning items, including a container of disinfectant wipes for quick clean ups.
  5. Install diffusers at the entry so the home always has a pleasant fragrance. Hang charcoal air filters in smelly closets.
  6. Be proactive with your storage. Pack up any toys or clutter that make the most messes (ahem, Lego) right at the get go. That way you won’t have to worry about it when you have a last minute showing.
  7. Get the paint can out. Make sure all of your high traffic walls and doors are freshly painted; no need to see the many finger prints and dings accumulated over the years. Remove all posters tacked to walls in bedrooms.
  8. Relocate the pets. If possible, temporarily send beloved pets to a welcoming friend or neighbour’s house. This will eliminate any odors and associated accoutrements that may put off a potential buyer.
  9. Make sure everyone’s closets are super organized. This is one of the biggest challenges when you have kids, especially kids that like to collect things. A professional organizer can help. Potential buyers look inside of closets because storage is important, keep them as tidy as possible!
  10. Keep those carpets and floors spotless. Have your carpets and floors professionally cleaned prior to listing and install a strict “no shoes, no food, no drink” policy. Everyone enjoys their snacks and food at one designated spot which is cleaned immediately after each meal.

Best of luck! You can do this.

Home Staging

By | Calgary, Design, Home Staging, Real Estate | No Comments

On this week’s episode, we bring in the home staging experts! Ana Cummings of ANA Interiors and Natasha Borosh of Dezin Group sit down with Kim to talk all about home staging. But what exactly is home staging? Here are a few quick facts on home staging and why it’s important:

Home staging is all of the prep work done in order to get a home ready to go on the market. When you hire a professional, they analyze your space and decide how to bring everything together. They work with you to determine your needs. If your house is vacant, furniture can be rented to fill the space. They decide what your décor style is (modern, classic, country, etc.) and how to best work with this throughout the space.

Home staging is what gets potential buyers through the door. People spend an average of seven seconds analyzing a home online before deciding to check it out in person. You want to make sure your home photographs well and the best place to start is with a well arranged space. You want a space that flows and that gives the next home owner the ability to visualize their life there. Remember, as soon as your home goes up on the market, it is no longer your home.

For the full discussion, tune in this Wednesday at 8:30 a.m. on CTV2 or this Saturday at 10:30 a.m. on CTV. Our experts break down what you can expect for costs and how much home staging can save you overall. They’ll also tell you the three most important spaces to think about and the importance of leaving buyers visual cues.

What Makes a Community Great?

By | Calgary, Real Estate | No Comments

On this week’s episode, Kim sits down with Shane Keating, Councilor Ward 12, and Lesley Evens, Executive Director of Federation of Calgary Communities, to talk about what makes a community great. With so many great communities to choose from in Calgary, how do you pick the right one for you? Our experts recommend three things when it comes to selecting your neighbourhood.

  1. Understand your needs. What stage are you at in life? Pick a community that suits your current stage, while accommodating the stages you’ll move into.
  2. Home type and community. Are you a fan of bungalows or two stories? Attached, detached? Figure out what type of home you are looking for and find a community that accommodates this.
  3. Check out local community associations. Every community has a community association and they act as a voice for community life. Once you’ve selected your community, try your hand at volunteering with your association. Volunteering is a great way to give back and a chance to have your voice heard. See what you can offer. Everyone is a neighbor and everyone has a special skill.

Remember, whichever neighbourhood you choose, it’s up to you to get out and be neighbourly. Make efforts to get to know your neighbours and ingrain yourself in the community. For more ideas on how to be neighbourly, tune into tomorrow at 8:30 a.m. on CTV2 or on Saturday at 10:30 a.m. on CTV.

Thank you to Shane and Lesley for joining us!

Update on the Housing Market

By | Calgary, Jeremy Nagel, Mortgage, Real Estate | No Comments

Jeremy Nagel, your mortgage guru, here to give you a quick update on the market. Currently there is good news on two fronts.

First off, good news for consumers looking to get into the housing market. Especially for those looking into getting into the market today. Why is this? Let me break it down for you. Currently, the pressure is off interest rates, as bond yields fall to a two month low. At present, the 5-year bond yield has fallen below 1.60%, sending spread lower and bank profit margins higher. As my Fixe Rate Barometer depicts (image below), spreads are outside the comfort zone suggesting lower rates on the horizon. That said, I wouldn’t expect a fixed rate drop across the board at this point, however, it is possible that we will see lenders offering quick close specials to those clients looking for a quicker possession.

Second bit of good news is on the variable/adjustable rate side. Here we are seeing the spread sitting in the comfort zone at 1.56%. The dust has finally settled after the Octobers pause, on the heels of two back-to-back prime rate increases in July and September. After the recent comment made by the Bank of Canada’s (BOC) Stephen Poloz, it appears the markets have calmed in anticipation of no further BOC moves as we head into 2018. This is evident in my Adjustable Rate Barometer below. That said, market sentiment can change quickly, as we saw mere weeks prior to the July BOC increase that shocked the market.

Today’s interest rate market, in conjunction with the recent announcement of a “Stress Test” for all uninsured mortgages with less than 20% down payment (or equity in the home), has provided a great opportunity for both those looking to purchase and those looking to make changes to their current mortgage (renovations, debt consolidation, renewal, etc.).

For more information on this or if you are looking for some money saving strategies, give me a shout, 403.242.5547.

 

So, How’s the Market?

By | Calgary, Entrepreneur, Finance, Mortgage, Real Estate | No Comments

As you are probably aware Calgary is technically in a recession. But that doesn’t mean it is all doom and gloom! On this week’s episode, Kim sits down with Luke Azevedo (TV & Creative Industries Commissioner at Calgary Economic Development), Jeremy Nagel (our mortgage expert from Canada Mortgage Direct), and Doug Hayden (Real Estate Agent and Entrepreneur) to answer the question “So, how’s the market?”

What did the experts have to say? And what’s next for Calgary?

  1. Calgary is a dynamic city with worldwide appeal. Calgary gets top marks on several city ranking lists. We’re a clean city, with close proximity to the mountains (ahh), and we’re a great place for start-ups to grow and thrive. Our city attracts a wide variety of people, making us a truly dynamic city and great place to live.
  2. Opportunity for entrepreneurs to grow in this economy. The new announcement from CMHC (Canada Mortgage and Housing Corporation) came in and it’s looking good for entrepreneurs. CMHC is looking to help entrepreneurs enter the home buyers’ market, making it a great place to grow a business and make a life.
  3. Looking out for the next industry. To offset what is happening in energy sector, different industries are growing to diversify the economy; such as rocket space. Rocket space? You read that right, rocket space could be on the horizon for Calgary.

For the full discussion, tune in Wednesday November 15 on CTV2 at 8:30 a.m. Thank you to our experts!

The Top 10 Things to Know About the Client/Real Estate Agent Relationship

By | Calgary, Jeff Kahane, Legal, Real Estate | No Comments

You’ve decided to buy a home or sell your current home. Now you need the assistance of an experienced real estate professional to help guide you through the process. This can be a stressful time, after all it is one of the most important financial decisions you’ll make in your life. But picking the right agent can help guide you through the turbulent highs and lows of selling or buying a home.

How do you pick the right person for you?

I’ve put together a list of the top 10 things you should be asking your real estate agent before and during the process of buying and selling your home.

  1. Be picky. Do not pick a real estate agent simply because you see his or her ads all over bus benches or because they were the first one to call you back. Shop around and interview a few agents over the phone.  In Alberta, you can verify a real estate agent’s license by entering their name and city here. Once you sign onto a client/agent relationship, that contract is difficult to break.

Ask how many years of experience they have and their knowledge of the local area. Experienced agents, who know the local market are your safest bet. To verify this, ask them for a copy of the agent’s production record which will show:

  • The number of homes the agent has sold each year
  • How much the homes sold for
  • Where the homes were located

Depending on the market, a successful agent typically sells one home every month.

  1. Avoid the over-promise and under-deliver. If your real estate agent agrees with all your ideas, this could be a bad sign. For example, when discussing the pricing of your home, if the agent simply lists your property for the price you asked for, watch out. You should ask the real estate agent’s advice on pricing and insist that your agent produces market research that supports how he/she arrived at that number.
  2. Ask for referrals. Ask your real estate agent to give you a list of referrals from clients they have worked with in the past. Ask for permission to chat with them about their experience.
  3. Do they listen to your needs? For buyers, you should convey to your real estate agent how much you wish to spend, where you are looking to buy, and whether you have a timeframe. Make sure to keep your real estate agent in the loop should your priorities change. For sellers, tell your real estate agent if you have timeline for selling your home because this impacts how the home should be priced and how it will be marketed.

Your agent should have strong listening and communication skills. To assess if they have a clear understanding of your needs, ask the real estate agent to repeat it back to you. If your agent does not appear to understand what your goals are, you should hire someone else.

  1. What is their marketing strategy? Real estate agents should be using all the marketing tools at their disposal to find the home of your dreams or market your home to buyers. Sellers, you should expect your real estate agent to take good photos, write thorough descriptions, and to distribute the listing online, in local newspapers, and if appropriate, in flyers mailed to homes. Buyers and sellers should ask key questions to determine how the agent intends to achieve the client’s goals.

Buyers should ask:

  • What tools will you use to find my home?
  • On average, how many homes will you show me before I decide?
  • If there are multiple offers on the home I want, how will you handle this?

Sellers should ask:

  • How exactly will you be selling my home?
  • Will you arrange an open house?
  • Where do you advertise and how often?
  • Will you be marketing my house online? (Typically, homes are listed on the Multiple Listing Service System (MLS))
  • Will you be using direct mail campaigns?
  • Do you offer professional photography?
  1. Can you cancel your agreement? Before signing on to have your real estate agent represent you, ask them to point out the cancellation rights in the contract before the agreement expires. Make sure that you reserve the right to cancel the agreement before your contract expires if you are unsatisfied with the arrangement.
  2. Read the fine print. Real estate transactions come with a lot of paperwork and deadlines. Ask your agent for all the legal documents and forms upfront so you can review them ahead of time before signing. Make sure all the conditions are included in your real estate purchase contract. For buyers, it is common to include conditions that state that your offer is contingent upon obtaining certain things such as financing and a home inspection. For a peace of mind, click here to contact our real estate lawyers at Kahane Law Office. We can help you review your real estate contract.
  3. Avoid the pressure. Real estate agents, like lawyers and doctors, have fiduciary duties to their clients. The agent is legally required to perform certain obligations that are in your best interests. Real estate agents must fully disclose any conflict of interest. Despite this, sometimes, real estate agents push buyers to purchase a certain home over another. If agents sell a buyer a home that they are currently listing, it can mean more commission for your agent. Most real estate agents know their duty to you, but like any industry, you need to know you have someone who has your back. Your agent should disclose any important information about a property that could influence your purchasing decision.
  4. How much? Different real estate agents will charge different fees, but remember, all real estate fees are negotiable. The level of service provided is also negotiable. To avoid any future disagreements about the real estate agent’s fees, you should ask questions before signing a contract with your agent.
  5. Keep the lines of communication open. It is important to ensure that you are communicating with your real estate agent throughout the process. A common complaint sellers report is that communication with their real estate agent dwindles the longer the home sits on the market. The client is left in the dark about why their house is not selling, meanwhile, their property may smell like dogs, be too dark, or have other issues the seller has not discovered. If a few weeks go by and your real estate agent has still not found a seller, you should reach out to your real estate agent and ask what feedback they have received from real estate agents representing the buyers and what other efforts they have made to sell your home. Your real estate agent should be updating you on the state of the market, giving you advance notice on scheduled showings, providing you feedback received from viewings and inform you of any offers.

For buyers, your agent should tell you about any new homes on the market that match your criteria and arranging mutually convenient times for viewings.

Questions on your Real Estate Transaction? Give Us a Call.

At Kahane Law, we have a team of highly experienced Calgary based lawyers and paralegals who will be able to facilitate residential and commercial real estate transactions. Form the initial stages of real estate contract drafting through to possession, we can help you every step of the way. For clients who wish to refinance an existing mortgage, we can expedite the process to make sure you receive funds in a timely manner. We charge a flat rate fee and have no hidden fees. In Calgary, Alberta? Connect today at 403-225-8810. We can also be reached toll-free at 1-877-225-8817 or email us here directly.

 

 

 

 

Shopping for a Mortgage: Bank vs. Non-Bank Penalty

By | Calgary, Jeremy Nagel, Mortgage, Real Estate | 2 Comments

When shopping for a mortgage, the majority of consumers ask one question, what is your best rate? True, some ask questions beyond rate (as they should) but not all do, so I’m going to help the majority look beyond rate. What if you obtained the lowest possible five year fixed rate on day one but two years later the penalty is ten’s of thousands of dollars? Did you really get a great deal? Let’s investigate

Let’s say you have a mortgage with a balance of $375,500 and a five year fixed interest rate of 3.49% (which you have had for the past two years). Let’s pretend, for whatever reason, you decide to break the term of your contract. Maybe the reason is to take advantage of today’s lower interest rates, debt consolidation, or selling the existing home.

A standard IRD (Interest Rate Differential) penalty would look like this:

  • Mortgage balance = $375,500
  • Your contract five year fixed interest rate = 3.49%
  • Number of years remaining on your term = three years
  • Current three year mortgage rate (term closest to the term remaining) = 2.89%

Standard IRD Penalty = A x C x (B-D)
$375,500 x 3 x (3.49% – 2.89%) = $6,759
Standard IRD Penalty is $6,759

Standard IRD penalties are typically offered by non-bank lenders, are available through the mortgage broker channel, and are significantly different from that of a big bank IRD penalty calculation. Let’s look at a ‘Big Bank’ IRD penalty (I won’t mention which bank this is, but they are all similar).

Bank IRD penalty calculation:

First, we must determine your ‘discount’. To do this, we must look back in time to when you first took out your mortgage 2 years ago. What was the posted rate? If you can’t remember, it should be posted on your original mortgage document. If you still can’t find it, I would suggest you consult your bank representative. That same mortgage document should be a break down of the mortgage penalty calculation, but if it doesn’t, you can find the break down below.

Step One: Find the discount

The bank’s five year fixed posted interest rate = 5.59% (this is the posted rate at the time you took your mortgage out and your bank can let you know what it is). Your contract five year fixed interest rate = 3.49% (this is the rate you were given).

5.59% – 3.49% = 2.1%

Your discount (the difference between the posted rate and your contract rate) is 2.1%.

Step Two: Choose the term closest to the term remaining
To do this, visit your bank’s website to select the term and corresponding posted fixed rate. The bank’s five year fixed posted interest rate = 5.59% (this is the posted rate at the time you took your mortgage out and your bank can let you know what it is). Your contract five year fixed interest rate = 3.49% (this is the rate you were given).

5.59% – 3.49% = 2.1%

Your discount (the difference between the posted rate and your contract rate) is 2.1%.

Step Two: Choose the term closest to the term remaining
To do this, visit your bank’s website to select the term and corresponding posted fixed rate.

Step Three: The calculation

  • Mortgage balance = $375,500
  • Your contract five year fixed interest rate = 3.49%
  • Number of years remaining on your term = three years
  • Current three year mortgage rate (term closest to the term remaining)= 2.89%
  • Your discount (as determined above) = 2.1%
  • Current three year posted rate = 3.44%

Bank IRD penalty = A x C x (B-(F-E))
$375,500 x 3 x (3.49% – (3.44% – 2.1%))
$375,500 x 3 x  2.15% = $24,219.75
Your bank IRD penalty is = $24,219.75

What’s the average annual rate of interest, non-bank vs. big bank?

Bank

Average annual rate of interest: $375,500 x 3.49% = $13,104.95
IRD Penalty per year: $24,219.75 / 2 = $12,109.88

($13,104.95 + $12,109.88) / $375,500 = 6.72%

Average annual rate of interest: 6.72%

Non-bank

Average annual rate of interest: $375,500 x 3.49% = $13,104.95
IRD Penalty per year: $6,759 / 2 = $3,379.50

(13,104.95 + 3,379.50) / $375,500 = 4.39%

In the bank example, the lower the interest rate, the higher the discount. Which means the larger the penalty. Do your homework to avoid situations like this where your penalty can double, triple, or worse. It is estimated that between 60-70% of mortgage holders do not carry their mortgage to maturity. Make sure you are asking the right questions of your mortgage provider, bank, or broker. By virtue of the employee/employer relationship, it is difficult to receive unbiased advice from a big bank. My suggestion would be to speak with a mortgage broker, even if it’s for a second opinion.

Oh, and if dealing with a bank, ask the representative how they calculate their penalty. I bet they have no idea, which should be a red flag.

We are committed to helping Canadians save money and become mortgage free faster. To help you with asking the right questions, I have created a ‘Shopping Around’ questionnaire with five basic but very important questions.

If you are interested in learning more, I would encourage you to call us at 403.242.5547 or shoot me an email at jeremy@canadamortgagedirect.com.