How is winning at the stock market like selling your house?

What’s a great way to make some cash without exerting a ton of energy? The stock market of course! Where else can you pick a lucky fund, invest some hard earned cash and come out with a big return? Now, you could choose to do it yourself, that would be a cheap way of getting it done yet you may worry some of the fact that you don’t know too much about the idea. It would be silly to invest a bunch of money on a hunch or a ‘stock tip’ from a friend who knows less about it than you do. What are your options then? Hire a stock broker.

Stock brokers are required to go through educational requirements in order to serve you and your money, such as a completed Canadian Securities Course,  and thank goodness too, because you want to make sure you are in the best hands. When picking a stock broker, how do you know who is the best? To pick do you

A) Go with the trader who offers you the best rate on your trading, the professional that offers you the biggest discount saving you money per trade?

Or

B) Go with the trader that has a track record of making their clients significant gains and produces extraordinary results?

The answer is B. The answer should always be B.

The same goes for real estate. We are in an extraordinary time where we have begun to see competitive convergence in our market place, where we have so many Real Estate professionals competing over price to help sell your home. This is such a great opportunity to help the industry get better because it lets those who shine be brightest of them all. When choosing to sell your home, are you worried about who will give you the best discount, or who will sell your home and net you the most amount of money? Like a stock broker, real estate professionals are not all created the same and I caution you, to pick based on track record and results, not discount. Because doing the latter would be considered silly, wouldn’t it?

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Blog post provided by Darin Germyn Personal Real Estate Corporation, a REALTOR® with Macdonald Realty in South Surrey / White Rock.   Visit Darin’s blog at Germyn.ca 

 

 

Macdonald Realty Voted Best Neighbourhood Real Estate Office | Georgia Straight

For the second consecutive year, the readers of  the Vancouver Magazine the Georgia Straight have voted Macdonald Realty number one in the Best Neighbourhood Real Estate Office category.  You can see the rankings here.  Covering Vancouver business and culture, the Georgia Straight is a weekly publication with over 690,000 readers; for the 2011 (16th annual) Best of Vancouver rankings, the magazine received over 10,000 ballots from Vancouverites.

 

Dealing with Low Ball Offers on Homes

Real estate listing inventories in Greater Victoria have been relatively high in the past few months, so it comes as no great surprise to us that we are seeing more “Low Ball” offers in the market of late.

That being said, sales activity remains steady, albeit at a lower level than the frenetic pace set last year in the wake of low interest rates and an unwinding of demand left over from the financial crisis of late 2008 & early 2009.

When faced with more homes to choose from than usual in the current market, some buyers are starting to write very low offers in the hopes of “getting a deal”.  I used quotes there because in real estate, a “deal” means different things to different people; no two houses or lots are alike.

Resist the urge to walk away

Most people realize that real estate transactions usually involve a mix of logic, emotion and pride, on both sides of the transaction.  Those realizations usually fly right out the window for both the buyer (when writing the offer) and for the seller (when receiving the offer), even when the purchase price is not in “low ball” territory.

Your REALTOR® is there to help you not only with the legal, logistical and negotiating aspects of selling your home, but to also be a sounding board, an ally and your advisor for those times when emotions are running high!

If you receive a low offer on your home, do your best to limit your emotions & pride and do your best to focus on the facts.

It may help to keep in mind that even a low purchase price offer means that the buyer wants to buy your home.  Many buyers may prepare a really low offer because they are afraid they will pay too much, because they are trying to get an indication of where your expectations are, or simply because they think a low ball offer is normal business practice.

Unless the offer is ludicrously low, prepare to counter the offer to keep the buyer engaged and interested in your home, because, as mentioned, they have more than a passing interest in your house.

In the absence of multiple offers for your listing, consider countering a low ball offer with the price, conditions, closing dates and other details that you’re willing to accept.  If you choose to just ignore a low ball, you won’t ever know if there was a possibility of a low offer turning into a negotiated sale that leaves both parties happy!

Consider the comparable sales

Some buyers will provide a list of recent sales with their offer to attempt to justify a low offer price.  Your REALTOR® will be able to help you decide if those comparables are similar to your home, or not. If the sales in that list do represent similar homes to yours and are at lower prices, you may need to lower your price if you truly want to sell your home.

In the absence of a list of comparables from the buyer, your REALTOR® can also help you prepare a list of comparable sales to send back along with your counter offer that support your asking price.

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Blog post provided by Sean Farrell, a REALTOR® with Macdonald Realty in Victoria.  Visit his website farrellgroup.ca for more information. 

Homeowners insurance: What you need to know

Nowadays, buying homeowners insurance takes a lot more than simply telling an insurance agent how much you paid for your house, and then walking away.

Anxious to get things right from the outset, insurers may insist on seeing a more detailed site plan, particularly for higher-end homes, and might send out appraisers for a first-hand look at the property.

Aside from a walk through, particularly in older houses, some appraisers are using infrared cameras and moisture meters to spot water damage and fire risk — something that helps keep unpleasant surprises to a minimum.

That examination might also include checking to see if the gutters are cleaned or helmeted, whether the flashing is adequate and whether the grading on your property carries water away from the house.

The purpose of all this scrutiny is three-fold. First, it gives your broker or agent the basis for determining the best insurance coverage for you so that you’re not over-insured, which is a waste of money, or under-insured, which is foolish in the extreme.

Secondly, insurance coverage appraisal reports serve as your record of value in the event of a loss and subsequent claim. These detailed documents generally focus on helping to estimate replacement value, which is the cost to restore a stolen, damaged or destroyed possession with one of similar quality.

Finally, getting things in writing provides the type of clear evidence you need to satisfy the “burden of proof” in the event of a claim. It also ensures that you and your adjuster/insurance company won’t end up at an impasse on the value of both your home and your valuables.

Insurance policies have strict requirements that require you to back up your claim with proof. When filing a loss claim, you’re expected to provide a complete inventory of items you’ve lost, along with the current value of each and every item.

When it comes to determining value, make sure you have your agent or broker go through your policy limitations in detail with you. They vary from insurance company to insurance company in terms of actual dollar amounts, the type of property and also whether the limitations apply to all types of losses, or just to certain types.

If disaster were to strike and all of the valuables in your home were stolen or damaged, would you be able to report the details accurately? Could you put your hands on supporting documentation such as receipts or invoices? Probably not — which is why, whether or not you have a formal appraisal, you should still be keeping track of things yourself.

You can’t go wrong, for instance, photographing or videotaping all your valuables and recording the make, model and serial numbers of any electronic devices.

Once you’ve done that, transfer all of the digital photo files onto a CD or memory stick and keep this in a safe place. You may also want to take the pictures to a good commercial printer and get two sets of prints for easy reference.

There are several popular software packages on the market that can help you here.

The Insurance Information Institute’s “Know Your Stuff” software, for instance, allows you to organize your possessions according to the room in which they’re located and provides lists of items that are typically found in certain rooms as a prompt. It also has the capacity to store digital photographs.

When making a record of your possessions, it’s essential to note expensive items such as jewellery, furs, collectables and other heirlooms since they may require additional coverage, according to the Institute.

But, it’s also a good idea to make note of more commonplace items such as toys, clothing and even towels and linens, since the cost of replacing these items can really add up if you suffer a major disaster.

Keep copies of any store receipts, appraisals for coins or jewellery, and any other documentation needed to support the purchase and cost of major items in your home. Consider photocopying certain original receipts that may fade over time.

Although perhaps lacking in financial value, personal items such as photographs, wills, diplomas, etc. should all be stored in a secure place away from your home (e.g. in a safety deposit box).

One last thing: Keep your appraisals current. Some insurance companies won’t accept an appraisal that is more than a few years old.

Click here to view the article.  Source: MSN News, www.msn.ca

 

Costs of Buying a Home in BC

Many of our clients, particularly first time buyers, ask us what are the costs associated with buying a home. We thought we’d compile a list of the major costs and share them with you.

1. Mortgage costs
There may be a mortgage application fee at some lending institutions.
If you put less than 20% down for the purchase of the mortgage, you will have to buy mortgage loan insurance from CMHC or a private company. There may not be an application fee charged but a onetime insurance cost added to your mortgage amount. Please refer to your mortgage specialist or broker for more info.

2. Legal/notary fees
Whether you hire a lawyer or a notary to help you with legal representation, costs are approximately $800-1000 to convey title and register a mortage plus taxes. Add another $500-600 if you are selling a property at the same time. The legal fees to only register a mortgage will be in the $400-600 range.

3. Property transfer tax
This tax is payable on the purchase of real estate in BC. The British Columbia Provincial Government imposes a property transfer tax, which must be paid before any home can be legally transferred to a new owner. The amount of tax is 1% of the first $200,000 and 2% on any amount of the purchase price above $200,000. Some buyers may be exempt from this tax, particularly First Time Buyers if:
a) they never owned a principal residence anywhere
b) they are a resident of BC for a minimum 12 months
c) the purchase price is not over $425,000
d) they borrow at least 70% of purchase price

4. HST
If you plan on buying a newly constructed home, you may be subject to HST on the purchase price. There may be some rebates available, contact Canada Revenue Agency for more info www.cra-arc.gc.ca

5. Appraisal fee
If a client has 20% or more down into the purchase the lender may require an appraisal. This is done to ensure that a) the lending institution is not over lending on the property and b) to protect the borrower from overpaying. Typically an appraisal costs $200-250.

6. Home inspection
It is a wise investment to have a home inspection done on the property you plan to buy. This is not a requirement but we suggest that all our clients consider this. The inspection evaluates the structure, systems and components of a home and generally costs $300-500.

7. Deposit $
In all purchases a deposit is required on the subject removal date or within 24 hours of subject removal. The amount is generally 5% of the purchase price but negotiable at the time the contract is written. This is your money and is held in trust at your realtor’s office. This forms part of your downpayment.

8. Home insurance/insurance binder
This is a requirement by the bank to ensure that the borrower has arranged sufficient insurance to cover any losses that may be incurred on the purchase. Proof of coverage by way of an insurance binder supplied by the insurance agent is necessary and usually costs $35 (not applicable for a strata property). To be safe, make the insurance effective on the earlier of either the completion date or the date that you pay the balance of the funds in trust.

9. Survey certificate/title insurance
The lending institution may require that a survey certificate be presented to them. The purpose of the survey is to formally establish the boundaries of the property and to ensure that all buildings don’t encroach or cross over property lines. The seller may have a survey but if not, the purchaser will need to order a new survey. Cost is generally $200-300.  An alternative to obtaining a survey certificate is to obtain Title Insurance (approx $200-400).

10. Strata title and fees
If you are buying a strata property (condominium or townhouse), you don’t need a survey certificate but there are a few fees you may have to pay. Two documents that are required to complete a strata purchase are Form B and Form F and fees range from $50-100 each. Your lawyer will order a copy of the Strata Plan to ensure that you are in fact purchasing the strata unit you are intending to (approx $15).  An adjustment for your portion on the monthly strata fees for the month in which your purchase falls. There may be a move-in fee (approx $100-300).

11. Prepaid property taxes or utility bills
You will need to reimburse the sellers for any prepayments, which is typically done during the adjustments with the lawyer or notary at closing. Property taxes for the calendar year are paid at the beginning of July for the full calendar year. If you purchase a property before July 1st, the seller will be paying you for the days they owned a home from January 1st to completion day. You are then responsible for the entire amount to be paid to the municipality on July 1st. If you purchase a property after July 1, you will have to pay the seller for the days you own the property from completion day to December 31. Your lawyer or notary will make this adjustment.

12. Interest adjustment
This is the interest you will pay for receiving your mortgage money before the official start of your mortgage (eg. if your “completion” were on the 23rd of a 30 day month, your interest adjustment would be 8 days interest).

13. Moving fees
If you are budgeting for costs, don’t forget to include moving expenses!

14. Maintenance and utility costs of your new home

Whew! There’s a lot to consider but thought it would be useful to have these costs considered upfront rather than later when you are having difficulty getting the money out of a RRSP, savings account or locked term account. If you have any questions, comments about the buying process and costs or are considering buying a home, contact us.

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Blog post provided by Greg & Liz Holmes, a REALTOR® Team with Macdonald Realty in South Surrey / White Rock.   Visit The Holmes Team blog at holmesteam.ca

The value of an expert and why you need one in real estate

An expert as defined by Wikipedia is a person with extensive knowledge or ability based on research, experience, or occupation and in a particular area of study. An expert can be, by virtue of credential, training, education, profession, publication or experience, believed to have special knowledge of a subject beyond that of the average person, sufficient that others may officially (and legally) rely upon the individual’s opinion.

If your car is broken, do you send it to a mechanic or your hairdresser? If your refrigerator stops working, do you call in the technician or call you accountant? When you decide to purchase or make available your most valuable asset, your home, do you call a realtor or take advice from your neighbour? Buying and selling a home is best left to an expert.

Everyone seems to have an advanced knowledge of many things, and real estate is no different. Quite often you have someone who has bought and sold a home as many as 5 times in their lifetime, and feel that this warrants an advanced knowledge of the subject. I have baked cookies about 5 times in my life, and that does not make me an expert baker.

A self-proclaimed expert as defined by Urban dictionary is The annoying know-it-all in everyone’s social circle, or quasi-member thereof, who always insists on one-upping the person controlling a current conversation with useless factoids or name-dropping to make himself appear more knowledgeable or superior to the audience in question. Considers himself (herself) the perfect candidate for “Jeopardy.

Now this description is humorous yet also strikes to a point. John Nesbi made famous so many years ago by saying, “We are drowning in information but starving for Knowledge.” With the likes of Google making information readily available to the public within micro seconds, anyone can be a self-proclaimed expert on anything within minutes online. This does not make you an expert based on our Wikipedia understanding.

It is ever so important to have someone that you like and trust when deciding to acquire or dispose of your most valuable asset. The right real estate professional will guide you to the best practises, the ins and outs of the industry, the common pit falls, and most importantly, represent your best assets on your behalf. The right real estate professional will help you get what you want, on your terms, and ensure you are looked after. The process of buying/selling is full of major hazards, legalities, and costly ventures. Trust the professionals and experts to handle the ride as you sit back and enjoy the view. When it comes to taking advice from your neighbour, family, or co-workers, double check their day to day job descriptions and thank them for thinking of your best interest. Smile and kindly remind them, you will take their recommendations to heart, and relay their concerns and advice to the expert, your real estate professional.

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Blog post provided by Darin Germyn Personal Real Estate Corporation, a REALTOR® with Macdonald Realty in South Surrey / White Rock.   Visit Darin’s blog at Germyn.ca  

 

 

Do Numbers Ever Lie? | by Stewart Henderson, Managing Broker, Macdonald Realty Langley

Many years ago, during the Dark Ages, one of my earliest sales managers made a very interesting comment to me. He said, “Stew, you’ve got to remember that Liars can figure, but figures can also lie.” In other words, don’t necessarily believe everything you see or hear.

I was reminded of this when one of our Realtors showed me a recent report from Urban Futures entitled, “Averages & Anecdotes: Deciphering Trends in Real Estate Prices, Part 1″ a very thought-provoking report without the slap on the side of the head impact that my old sales manager used to have. Urban Futures looked at some comments in a press release from Gregory Klump, chief economist of the Canadian Real Estate Association in a press release that CREA had issued, which stated that the national average of real estate prices had risen 8.9% on a year over year basis at the end of March 2011. Mr. Klump stated that, “there had been a record number of multi-million dollar property sales in Richmond and Vancouver West which had pushed up average prices for Vancouver, British Columbia and nationally”. He further stated that, “if Vancouver is excluded from the equation, the national average price increase is cut by more than half to 4.3 per cent”.

WOW!! Look at that statement again.

What a tremendous effect that Vancouver house prices have on the rest of the country. One could be excused for thinking that the 8.9% average increase is a lie. But it’s not a lie, it’s the truth. It’s just so distorted by Vancouver that it’s not relevant to someone who doesn’t live in Vancouver.

With the assistance of Landcor Data Corporation, Landcor and Urban Futures was able to segment the sales price data for Vancouver into quintiles. There’s a word we all use everyday. Quintiling involves ranking all sales from lowest to highest and then creating five price groups, that each contain an equal number of sales. Thus, each price group would contain 20% of the total sales.

Considering the top quintile for detached homes, the average price in Vancouver of these top 20% of sales was $1,690,000, twice the average price in Vancouver of $810,398. The average sales price of the other four quintiles was $591,092, which, Urban Futures suggest, might be more representative of what most people would be purchasing. A similar analysis of the condo/apartment market revealed a similar situation.

So, in summary, Urban Futures findings were similar to CREA. CREA found that removing Vancouver data from the national data reduced the average price increase in housing prices by 52% (from 8.9% to 4.3%). By removing the most expensive quintile from the Lower Mainland data, Urban Futures found that the average price in Vancouver might actually be 27% lower ( $591,092 vs. $810,398) in the price range that most of us live in.

So, is someone lying to us? No, I don’t think so. But I think my old sales manager was trying to teach me the same thing that Urban Futures is trying to illustrate. Figures can lie – they can be very misleading- and we have to be careful how we use them.

For more information contact Stewart Henderson, Managing Broker, Macdonald Realty in Langley

A Happy Home for You and Your Dog

Let’s face it…there’s a lot of excitement when buying a home. The idea of more space, summer BBQs in the backyard, new paint colours and new decorating thoughts fill one’s mind. You want a happy home for yourself…but if you have dogs, you also want a happy place for them too!  We’re proud dog owners…our beloved Amber is more than a pet…she’s part of our family. She’s practically a big sister to our little girl, who is almost two years old. We’re very happy where we live, and we made sure we considered our dog in our buying process.  Therefore, with so much going through your mind when buying a place, it would be wise to put yourself into Rover’s shoes, or should we say, paws to consider their feelings about a new home.

Flooring:
Does the home have hardwood floors. In our opinion, a hard-floored surface seems to be great with pet owners. We all know how dogs shed hair, and cleaning up a carpet can be a big hassle. Hardwood or laminate is easy to clean, but it’s important to know that a lot of hardwood surfaces are actually quite soft so susceptible to scratches, including dogs nails. Those nails can dig into the floor and leave some pretty big gashes in the floor, especially if you have an exciteable dog that runs around inside. If you have a dog that has long and/or sharp nails, a laminate floor might be a more suitable option. We’ve found laminate to be more resistant to scratches. If you prefer carpeting, consider the length of the carpet. If it’s a long and shaggy carpet, remember that it will be more difficult to get dog’s hair out, as opposed to a groomed carpet, or something easier to vacuum. If your dog is anything like ours…she loves lying on the soft carpet in front of our fireplace…oh how snuggly!

Fencing:
You should never assume that a house is fully fenced. It’s a good idea to walk around the property and check to make sure all panels of the fence are in place and not about to fall off. We can’t imagine a worse feeling that seeing Rover running down the street due to a missing fence panel. This also includes fencing behind shrubs. While shrubs add privacy to a yard, sometimes there is not fencing behind the trees, making an easy escape for dogs.

Around the neighbourhood:
Obviously, it would be important to know whether dog parks, or parks in general, are within walking distance. Places within walking distance usually mean you (and Rover) get out more. If it involves a car (even a short drive), it’s more easy to put off that trip to the park…poor Rover won’t get to see his friends as often. Also, what kinds of pet services are nearby… Where is the closest animal hospital? How far away is a reputable kennel for those times you travel? Where are you going to get their pet food? Since these may be aspects in our everyday lives, you probably should at least think of this when buying a place.

Pet-friendly complexes:
While it is true that many strata properties (condos or townhomes) have pet restrictions (often limiting the type and/or number of pets), some complexes are “pet-friendlier” than others. Be sure to look around when you’re looking at properties. Do you see large dogs? Are there “no pet” signs? Do you see a lot of people walking with the dogs on a leash? All these are pretty good indicators as to “how pet-friendly” a complex is.

Overall, there are a lot of factors that go into buying a home. While Rover probably doesn’t get the final say, it’s important to consider how your dog will adapt to their new home. As you know, they only want you to be happy, so why not make sure that they’ll be happy too.

Happy trails!

 

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Blog post provided by Greg & Liz Holmes, a REALTOR® Team with Macdonald Realty in South Surrey / White Rock.   Visit The Holmes Team blog at holmesteam.ca

6 Signs it is time to buy a house – Part 2

Is it the right time for you to buy a house? Learn more about that in this article below in part 2 of this series by Janet Fowler, Investopedia.com

4. Low interest rates

When interest rates are low, it’s a great time to look at buying a home. You will be able to get a reasonable interest rate on your mortgage loan, which can save you a lot of money in the long run. A home is generally the single largest purchase anyone makes, and the amount of interest tacked onto a mortgage really adds up over the years that you’re repaying the loan. Even a difference of a fraction of a percentage point can make a pretty big difference over the long term. Consider a mortgage of $220,000. The difference between a rate of 4.2 per cent and 4.5 per cent results in an extra $13,993 paid toward interest over the course of a 30-year mortgage. That’s a lot more than just pocket change.

5. Adequate funds for a down payment

Having a hefty down payment helps in the same way as finding a low interest rate. Ultimately, the less you owe, the less you’ll have to repay and the less you’ll have to tack on for interest. If you find yourself with a nice lump of cash, putting it toward a home purchase is definitely a solid financial investment. Just think, you’ll be building equity in your home which you’ll see again when you sell, and you’ll have somewhere to live in the meantime. Though it may be tempting to put the money toward a trip, a new car or a luxury shopping spree, the return on investment on these sorts of purchases — at least in the strict financial sense — can be rather disappointing.

6. Seasonal

During the springtime, more house listings tend to come on the market. With the poor winter weather over and the kids nearly done school for another year, this seems to be the time when most people are willing to take on a move. Having more homes on the market means a wider selection — and a greater ability to negotiate price. However, this is also the time of year when more buyers are in the market. Circumstances will depend on your particular market conditions, but the arrival of spring typically revives the real estate market after quieter winters. Alternatively, if you’re willing to move during the winter months, sometimes owners of homes that have been sitting on the market for a long time are more willing to negotiate.

 

To read the full article click here.

 

6 signs it is time to buy a house – Part 1

Are you ready to buy a home? Find out if it’s the right time for you to enter the real estate market.

If you’ve been considering buying a house but you’re still unsure, consider some of the personal and economic conditions that favour home purchases. If you find that a number of these signs ring true for you, it might be time to contact a real estate agent and start shopping.

1. You’re ready to commit

First and foremost, if you’re not ready to commit to owning a home, you should not buy a house. Home ownership comes with a plethora of responsibilities, including home maintenance, property taxes and the process of selling the property when it comes time to move.

Legal fees, moving expenses, and all of the incidental costs associated with buying a home can really add up. To make the most of these costs, it’s best to plan on living in your new home for a stretch of time. Consider whether you have a stable job that will provide a solid income for a mortgage, and if there’s any chance you’ll have to relocate in the near future. If you feel you can commit to sticking with a home for at least five years, then it might be just the right time for you to buy. If you’re typically a hardened commitment-phobe, remember that you can sell or rent your property if your situation changes dramatically.

2. Owning costs less than renting

If you’ve examined your budget and realized that your monthly payments associated with buying a home are less than you’re currently paying in rent, it’s time to consider a home purchase. Talk to your bank and look at what your mortgage payments would be for a variety of different properties and gauge what you can afford. Factor in any additional costs you may have to pay, such as condominium fees or extra utility bills, and compare your total costs to what you’re paying in rent. If it’s roughly the same or less, you could be saving money by purchasing a home — plus there’s the added benefit that you’ll be putting your monthly home expenditures toward your own home equity!

3. Buyer’s market

When demand for housing is low and there’s a wealth of properties on the market that aren’t moving too fast, that’s known as a buyer’s market. You’ll have a lot more bargaining power under these conditions than if you’re buying in a seller’s market, which is when demand for homes is high, resulting in few properties on the market that are selling fast. In a buyer’s market, chances are you’ll be able to negotiate a seller’s list price down — sometimes quite substantially — and save yourself a lot of money in the process.

Stay tuned for part 2 of this blog series Signs it is time to buy a house by Janet Fowler, Investopedia.com