How Much of a New Home Can You Afford?
If you’re thinking of shopping for a new home, one of the first considerations is price range. You want to know what you can reasonably afford.
How do you figure that out?
First of all, you need to determine the initial out-of-pocket costs you will need to cover. There are often more costs associated with purchasing a home than its actual price. You need to take into account such additional expenses as moving costs, legal fees, and a home inspection, not to mention the costs of prepping your current property for sale.
Experts say you should budget 5-10% above the purchase price for these items. So if you can afford to spend $470K on a new home, you should be shopping in the $425-445K range.
Another factor to consider are the potential proceeds from the sale of your current home. Your REALTOR® can help you determine how much your property will likely sell for in today’s market. Any existing mortgage will need to be subtracted from that amount to determine how much cash will be left.
Of course, you should speak to a mortgage broker or lender who can compute how much of a mortgage you qualify for. Remember, qualifying for a big mortgage doesn’t necessarily mean you should have one. You also need to consider your personal finances and desired lifestyle – and whether or not having a large mortgage is a good idea for you.
Once you have gathered all of your information, you can add any potential sale proceeds to the amount of mortgage you qualify for, add other sources of cash available for this purpose and subtract 5-10% for initial expenses, and you’ll have an idea of the price range you should be considering.
Finally, it’s important to take the time to decide what kind of home you want. Do you want a large backyard with trees? A quiet, family-oriented neighborhood? Four bedrooms and a finished basement? Once you decide what you want most in a new home, it becomes much easier to find one that’s in your price range.
Need help deciding how much you can afford when shopping for a new home? Call today.
“Closing Day” Terminology You Need To Know
Closing day is an exciting time. After all, you’re moving into your new home! However, it can be stressful as well. The last thing you need is to be confronted with something you don’t understand. So here is a quick list of common “closing day” terms.
- Disbursements. This is the allocation of funds to the appropriate parties, such as the seller. Your lawyer will take care of this for you.
- Possession. This is the moment on closing day when you are legally able to take possession of your new home. It’s usually when your REALTOR® or lawyer hands you the keys.
- Title. This is a legal document that identifies the property and its owner.
- Closing costs. These are expenses, excluding the selling cost of the property, that are due on closing day, such as legal fees, reimbursement for pre-paid utilities, utility deposits, insurance, and taxes.
- Closing adjustments. These are expenses pre-paid by the seller that need to be reimbursed on closing.
There may be other terms you come across on closing day as well. Don’t worry, a good REALTOR® can help make the day go smoothly for you and your family.
Looking for a good REALTOR®? Call today.
Avoiding moisture problems in the home
There are many hidden sources of moisture in your home that can lead to serious problems, such as mould. To keep moisture levels in check, consider these tips:
- Bathrooms are an obvious source of moisture build-up. Contractor and TV personality Mike Holmes recommends keeping the fan going for at least a half hour after a shower.
- Check regularly for water infiltration around window and door sills, as well as other intakes into the home, such as dryer vents and cable wiring.
- Determine the humidity level in your home. According to the Environmental Protection Agency, it should be 30-60%. (Keep in mind that humidity may vary greatly from room to room.)
- Regularly inspect caulking around sinks, tubs and showers. Even a tiny break can cause water to leak gradually into the wall or floor, causing damage you may not notice for months.
- Clean up wet spills as soon as possible. On hardwood floors especially, water can seep through and become trapped.
- Repair leaking faucets, toilets and pipes immediately. A drip can quickly become a shower.
Being mindful of moisture today can help you avoid potentially high repair bills later on.
How to Help Sell Your Home Quickly
Usually when you list your home, you would prefer to sell it quickly. It’s like being the first one served at a crowded ice cream parlour. It’s satisfying.
However, sometimes there’s more to it than that. There may be a truly urgent reason why you need to find a buyer for your property as soon as possible, such as a sudden job relocation.
If that’s the case, it’s important to explain your situation to your REALTOR®, who will be able to put together an action plan for selling your home quickly and for the best price possible.
During that conversation, ask what you can do to help the process along. For example, you may be able to:
- Spread the word to your friends and other connections on Facebook.
- Canvass your neighbours and tell them about your listing.
- Stage your home so that it’s more attractive to prospective buyers.
When it comes to price, be prepared to be flexible. That doesn’t mean you must settle for a price far below your home’s market value. However, you do need to be prepared to accept a good offer rather than try to hold out for a great one.
Also be open to as many viewings and open houses as possible. Having many prospective buyers come through your home within a short period of time may be a little inconvenient, but the payoff might be an offer!
Finally, work with your REALTOR®. A good REALTOR® will know the local market well and have many ideas for selling your property fast.
Looking for a good REALTOR® like that? Call today.
Easy-to Miss Home Security Tips for Your Vacation
If you’re relaxing on a Caribbean beach, or enjoying a bus tour through historic Paris, the last thing you want to worry about is your home. Most people know the basics of keeping a home secure while away. Here are some additional tips that are easy to miss:
- Tell your kids not to boast about your fabulous vacation plans, especially on social media. The fewer who know that the house will be empty, the better.
- Ask a neighbour to pick up any mail and flyers dropped at your doorstep. But don’t rely on that alone. Also call the newspaper and post office to temporarily halt delivery.
- You can buy timers to automatically turn lights on and off. However, most will stop working if the power goes out and restart with the incorrect time when the power comes back on. That’s why you should keep at least a couple of lights turned on continuously, and not connected to timers.
- If you’re leaving in the evening, or before dawn, don’t forget to open the blinds. Closed blinds during the day are a dead giveaway that the owners are away.
Finally, experts recommend creating a home security checklist, so you don’t forget anything. That will give you peace-of-mind.
Surprising Ways Buyers Find Homes
Do you ever wonder how most people find the homes they eventually buy? You might imagine them driving by a “For Sale” sign or seeing a home for sale in the newspaper and then calling to enquire.
Of course, many buyers find out about listed properties that way. But, according to research by the National Association of Realtors, there are many other — sometimes surprising — ways buyers find their next dream home.
- 88% of buyers find a home with the help of a real estate agent.
- 90% of buyers search online as part of the home buying process. (Such as viewing a property’s profile on the agent’s website.)
- 69% of buyers searching for a home using Google, use a specific local term, such as “Whitby-south homes for sale”.
- 29-46% of buyers attend an Open House as part of their home hunting activities.
Overall, the research shows that buyers are using a multitude of ways — combining online and offline methods — to find homes.
What does all this mean to you? If means that if you’re preparing your home for sale, you need to ensure your marketing plan takes into account all the ways buyers are finding properties — so you can be sure that they will find yours.
Looking for a REALTOR® who knows how to market your home for maximum exposure? Call today.
Making “Neighbourhood Targeting” Work for You
Imagine if you dreamed of owning a special limited edition vehicle. What would you do to ensure that your dream vehicle would someday be parked in your driveway — with your name on the ownership papers?
You would probably start by doing some research. You’d find out how much that vehicle would cost, what features are available, and so forth. You would likely visit a local dealership and take a test drive if a model is available on site. You would keep an eye on the market for any that come up and let the dealer know you’re looking for just that car.
If you did, then, some day, you’d probably be the proud owner of the limited edition car of your dreams.
What does this have to do with real estate?
Well, you can take the same approach when there’s a neighborhood you’d love to live in someday. You can target it, learn what homes typically cost in that area, and keep your eye on that market in case a property becomes available that meets your criteria.
By focusing on a specific neighbourhood, you increase your chances of someday living there, simply because you’re focusing on it.
Of course, neighborhood targeting isn’t as simple as aiming to own a specific car someday. That’s why you need a great REALTOR® who can keep an eye on that neighborhood on your behalf and alert you to opportunities that become available.
Then, when there is a listing that’s a good fit, you can decide whether or not to make a move.
Is there a dream neighborhood you’d like to live in some day? Call today to start making it happen.
Not-So-Obvious Reasons to Meet with a REALTOR®
When is the best time to meet with a REALTOR® like me? Chances are, you would say, “When I’m thinking of buying or selling a home.” You’d be right, of course!
However, there are many other good reasons to meet with me. Here are just a few:
- You want a professional opinion as to the current value of your property, so you know what it would likely sell for in today’s market.
- You notice a home listed for sale in a desirable neighbourhood, and you’re interested in learning more — even if you’re unsure you want to make a move.
- You’re thinking of moving within the next couple of years, and you want to find a REALTOR® like me, that you can get to know and trust.
- You want some recommendations for preparing your home for sale and especially determining what repairs and other work needs to be done.
- You want an honest assessment as to the state of the local market, and the best time for you to buy or sell.
- You have real estate-related questions and you want to talk to an expert who knows the local market well and can provide you with answers.
As you can see, there’s a lot of value you can get from talking to me as your REALTOR®. Call today.
Federal Government Changes Mortgage Rules
Federal Government Changes to Mortgage Insurance Rules - October 3, 2016
The Federal Government announced significant changes to regulations for new-government backed insured mortgages today. EffectiveOctober 17, 2016, all insured homebuyers will have to qualify at the posted 5-year qualifying rate. This is a change from previous policy where only variable rate mortgages and mortgages with terms less than 5-years were subject to a higher qualifying rate.
With this move, the Federal Government has chosen to offset a modest risk to the taxpayer by severely eroding affordability for low equity home buyers, particularly first time home buyers. The qualifying rate is updated weekly and available on the Bank of Canada website. It is currently 4.64 per cent, about 200 basis points higher than the best bank offered rates.
To qualify for mortgage insurance, a homebuyer's debt servicing ratio must be no higher than:
The announced measure will apply to new mortgage insurance applications received on October 17, 2016 or later. This measure will not apply to mortgage loans where:
- Gross Debt Service - 39 per cent of household income, including mortgage payment, taxes and heating costs.
- Total Debt Service - 44 per cent of household income, including mortgage payment, taxes, heating costs and all other debt payments
Mortgage loans for which mortgage insurance applications are received after October 2, 2016 and before October 17, 2016 are also not affected by the rule change, provided that the mortgage is funded by March 1, 2017. Homeowners with an existing insured mortgage or those renewing existing insured mortgages are not affected by this measure.
- before October 3, 2016: a mortgage insurance application was received;
- the lender made a legally binding commitment to make the loan;
- the borrower entered into a legally binding agreement of purchase and sale for the property against which the loan is secured.
The Federal Government is also instituting new eligibility rules for low-ratio (higher than 20% down payment) mortgages backed by government insurance. As of November 30, 2016, to be eligible for government insurance, new mortgages must meet the following requirements:
These new criteria, in particular requiring a maximum purchase price below $1 million, will essentially make the majority of single family homes in Metro-Vancouver ineligible for government issued insurance for low-ratio mortgages.
- A loan whose purpose includes the purchase of a property or subsequent renewal of such a loan;
- A maximum amortization length of 25 years;
- A maximum property purchase price below $1,000,000 at the time the loan is approved;
- For variable-rate loans that allow fluctuations in the amortization period, loan payments that are recalculated at least once every five years to conform to the original amortization schedule;
- A minimum credit score of 600 at the time the loan is approved;
- A maximum Gross Debt Service ratio of 39 per cent and a maximum Total Debt Service ratio of 44 per cent at the time the loan is approved, calculated by applying the greater of the mortgage contract rate or the Bank of Canada conventional five-year fixed posted rate; and,
- A property that will be owner-occupied.
New BC Home Partnership for First Time Home Buyers
If you’re entering the market to buy your first home, the B.C. government is launching a new program to partner with you on the down payment for your mortgage, Premier Christy Clark announced today.
“We believe every British Columbian deserves a place to call home,” said Premier Christy Clark. “We’ve invested in affordable rental housing, we’ve invested in transitional and emergency housing, ...
December 15th, 2016
BC Home Sales Trend Toward Ten-Year Average
Vancouver, BC – December 15, 2016. The British Columbia Real Estate Association (BCREA) reports that 6,419 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in November, down 20.1 per cent from the same month last year. Total sales dollar volume was $4.02 billion in November, a decline of 25.2 per cent compared to the ...
Will an Open House Help Sell your Home?
You’ve probably seen signs around the area for Open Houses.
You may have even attended a few. These are open invitations for potential buyers to drop by on a certain day and time, to check out the property and get more information.
When you’re listing your home for sale, you might wonder whether you’ll need to have an Open House. To answer that question, you’ll need to consider the pros and cons.
Planning and hosting an open house isn’t as easy as it may seem. There’s a lot of preparation involved. In addition, you’ll likely spend hours making your property look its best and you’ll need to be away from your home for a good part of that day.
That being said, an Open House has many advantages.
• It helps showcase features of your property that may not come across well in advertisements and listing descriptions.
• It attracts potential buyers who, for any number of reasons, might not otherwise call to view the home.
• It generates a buzz and publicity about your listing.
However, an Open House might not be necessary if there is high demand for properties like yours and you’re likely to get multiple offers.
To appeal or not to appeal? Expert advice for dealing with your new property assessment
According to a property tax agent, presenting solid evidence is the key to winning your appeal
By Michelle Ghoussoub
Read article here
Royal LePage sees a nationwide revision to the mean in 2017
Making an Offer in a Competitive Market
Imagine finding a home you love, making an offer, and then finding out there are other competing offers on the table. Ouch.
f you’re looking for a property in a competitive market, it is likely that there will be multiple offers. Even just one can create the risk that you’ll lose the home.
So how do you make sure your offer is enticing enough to win over the seller? Here are some ideas:
• Don’t make a low-ball offer. If you do, it might be dismissed and you probably won’t get another chance to bid — especially if the other competing offers are near the listing price.
• Have a pre-arranged mortgage and include that with your offer. This reassures the seller there won’t be any money issues. (Most lenders will provide you with a pre-arranged mortgage certificate for this purpose.)
• Go in with a price high enough that the seller will be interested, but not so high as to be leaving money on the table. This is tricky and requires a savvy knowledge of the current market.
• Have a REALTOR® present the offer on your behalf. A REALTOR® will know how to do so professionally, and in a manner that gives you the best chance of getting the home.
In a competitive situation, working with a REALTOR® who is an expert on the local market — and a skilled negotiator — is crucial.
Looking for a REALTOR® like that? Call me today @ 250.803.8120