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Questions I have been dealing with on a daily basis indicate that most people have little or no idea on what will and will not be taxed. This is due mostly to an ineffective information sharing initiative by the Provincial and Federal Govt’s. It almost seems that they want to pretend the impact on families will be minimal once it begins; however it will be quite dramatic. I believe that the people of Ontario will start to react when the cost at the pump goes up .08 cents a litre overnight. So how will it affect home sales and purchases? For starters, resale homes are not taxable prior to, or after HST being applied July 1st. However, the services used to purchase or sell homes are taxable. Realtor commissions, home inspections, appraisals and bank fees are subject to tax. New home construction will be taxable with a rebate. (with the existing new home tax structure used for the application of GST one thing is for certain, most home buyers will be confused as to how the tax is applied) Other taxable services are: CMHC mortgage insurance fees, lawyers’ fees and disbursements, moving companies, status certificates, condo fees, and any other professional services. New homes are a bit of a mystery as to how the new tax will impact their prices. A conversation with Jane McCarthy, Lawyer for Palter/McCarthy indicated that to date the Provincial Govt. has not given clear direction on how a rebate will apply to new home purchases (there is a current Federal GST rebate that will not change). Expect that new homes will increase in cost and the builder will build the new tax into the purchase price in many cases. Residential rents are not taxable; however commercial rents will be taxable. The latest information available indicates that residential rents which include utilities will not increase, and that the landlords will not be able to increase rents to cover the increase in their utilities. One of my concerns with this tax is the impact it will have on retirees on fixed incomes. Take a retired couple living in a condo; they will see increases in their condo fees, utilities, internet services, investment counselling, holidays, memberships, repairs, home improvements... heck even funeral services will be taxed I am including a copy of a handout that the government has created to show how the changes will impact residents of Ontario.
Any further questions please feel free to call or email me at customerservice@soldbylindsay.com 
 Ask Your Agent - Oshawa This Week - February 17, 2010 Answer: Lindsay Ask Your Agent - Oshawa This Week - February 10, 2010 Jackie Answer Once a home is placed on the market by a bank they have an obligation to sell it for market value. The simple answer for this is that any monies left over after the mortgage, expenses and arrears are paid off goes back to the original owner. With this obligation some banks tend to list the homes a bit higher to limit their liability and in some cases I have seen many “sign-backs” to get to an acceptable price. Ask Your Agent - Oshawa This Week - February 3, 2010 Elaine Answer: Elaine, I hope this sheds some light on financing for your new home. More mortgage information can be found on my website at www.soldbylindsay.com
Ask Your Agent - Oshawa This Week - January 20th, 2010 Dear Lindsay: At a New Years Eve party a few of us were discussing the impact last year had on our homes and were curious about values; did they go up last year or down? With all of the talk of a recession how has this impacted my home? The three of us are all from the Oshawa, Whitby and Bowmanville areas. Answer:
Q: A: Ask Your Agent - Oshawa This Week - October 28, 2009 Answer: Ask Your Agent - Oshawa This Week August 2009 My husband and I have been renting for 5 years and the other night we started to look at how much money we are spending in rent ($1,200/mth) and are starting to realize that we are paying our landlords mortgage off. What are your thoughts in buying vs. renting? Lara
Buying a home is an investment on a few different levels. It is a financial investment, but also provides you with a place to live and raise a family. In the event you were to place a $10,000 downpayment on a home and the prices rise in a few years you have the value of the home going up with the market and will reap the benefits but also by making your mortgage payments will see the amount of your mortgage drop over time. Given that you cannot live in a mutual fund lets look at the big picture of ownership vs. renting within a few different price/rent ranges. Lets make a few assumptions; that the 5 year mortgage rate you get is at 5% - the real estate market increases over the next 5 years on average of 3% for 4 years and one year it does not increase – that you put the minimum down of 5%. Purchase Price Market Value after 5yrs Mortgage Reduction after 5 yrs Totals Lara, as you can see above if you were to buy an entry level home at $175,000 after 5 years you will have paid the mortgage down by almost $20,000 and the home will have increased in value by the same amount. This puts over $40,000 into your investment and offering you a comfortable place to live rather than spending $72,000 on rent that provides you with a roof and helps to pay your landlords mortgage down. For all of the “doom and gloomy” people that might offer advice that the market will not go up in value, with no appreciation over 5 years you have still paid between $19,600 and $33,650 off of your mortgage. Lara I have many tips and helpful hints on the buying process at www.soldbylindsay.com Buying a home is a serious move. I would suggest sitting down and going over a budget, ensuring you have job stability and a downpayment along with the costs for closing. Once you are in your own home no words can describe the feeling. Happy hunting! Lindsay Smith Ask Your Agent - Oshawa This Week July 1, 2009 Frank
However, one of the most important reasons that a buyer would get pre-qualified is to guarantee a mortgage rate for a period of time. Typically, lenders commit a rate to a buyer for a period of 90 – 120 days after the pre-approval has been given. What this means is you are guaranteed that if the rate rises from the one you have been quoted during the 120 days you get the lower rate.(also, you get the lower rate if the rates drop) Here is a recent example of a client I worked with: - client was pre approved April 17/09 for a mortgage of $250,000 and purchased a property with the rate of 3.89% for a 5 year term. - had they waited till June/90 for pre-approval the rate would have risen to 4.49% The impact of this rate change over the 5 year term would have meant the buyer paying $5,000 more in mortgage payments. Frank, along with holding a real estate brokers license I am also licensed to broker mortgages (more info can be found at www.soldbylindsay.com) What makes your question timely is the fact that I have recently worked with a client who had their home on the market with another agent and had 3 offers presented with other agents all which were accepted. All of these offers were conditional upon financing and all 3 offers fell apart due to the fact that the buyers were not properly pre-qualified. This is unacceptable. There are two ways of pre-qualifying a buyer. A proper way and a inappropriate way. My suggestion is that you see a bank rep. or a mortgage broker and get yourself fully pre-qualified before you go looking. One thing you don’t need when you are buying your first home is any surprises. Lindsay Ask Your Agent - Oshawa This Week June 24, 2009 Ask Your Agent - Oshawa This Week Discharge penalties Q&A Published May 20/09 Question Lindsay: My husband and I own a home and are considering selling. We are just gathering info at this point and keep seeing the mortgage rates drop. Our friends have told us to break our mortgage and refinance. Is it worth it, I hear the penalties can been steep. Any advice will be helpful. June Hi June, the question you ask has been one I have been answering for my clients for the past few years. Along with my Real Estate Brokers license I also hold a license allowing me to broker mortgages so I deal with mortgages and renewals on a daily basis. There is an expression, “prescription without diagnosis is called malpractice.” In other words I can give you some general information on renewing your mortgage early and the costs involved but much like a doctor cannot give advice without looking at all of the facts, without specific information about your situation and mortgage I can offer a direction to consider but not an exact plan. When the mortgage rates shift, either increase or drop dramatically there will be some winners and some people who will not be as lucky. When a person breaks a mortgage before the mortgages maturity date, the bank will charge a “discharge penalty.” This penalty typically either 3 months of the mortgage interest or what the lenders call an “interest differential.” This is the loss the bank will take if they break a higher rate mortgage and reinvest the money at the current rates. How the lenders choose which penalty they will charge is decided by which penalty nets more for the lender. A few other issues that need to be considered are: if there was a “cash back” taken when the mortgage was funded, the cash back amount is added to the penalty – if the mortgage is renewed within the last 3 months of the mortgage the lender can only charge the interest they are losing. (ie: if broken 2 months prior to the maturity they cannot charge 3 months penalty) Here are some examples along with a breakdown to show you if it makes sense to break a mortgage and pay the discharge fees: Example #1) Homeowner has $150,000 mortgage at 5.5% with 18 months left on a 5 year term. They want to renew early to take advantage of the 3.89% - 5 year mortgage rates, Example #2) Homeowner has $200,000 mortgage at 4.75% - 15 months into a 5 year term. They want to renew early as well for a 3.89% - 5 year term. Example #3) Homeowner has $225,000 mortgage at 5.25% - 25 months into a 5 year term. They want to break the mortgage and renew with a 5 year variable rate mortgage. (currently at 3%) June, as you can see by the above examples the savings can range from minimal to dramatic. The first example shows that the homeowner will save over $5,000 by renewing early, however they are coming close to the maturity of their mortgage. The second example has the homeowner paying the bank over $4,000 to renew early to save almost $1,500 and the third example is the hardest situation to project the savings. With a variable (or adjustable) rate mortgage the rate is set on a monthly basis so you are at the mercy of the market. This can be risky, but also, offers the best opportunity to take advantage of the lowest rates. I would advise you to call your lender, a professional mortgage consultant to gather information on your particular situation before you make any decisions. Just remember to break your mortgage means paying a large sum to the bank for the opportunity to renew for a longer period. More tips can be found on mortgages and real estate info on www.soldbylindsay.com I hope this answers your question June, or at least has given you some things to consider as you begin to explore your options.
Ask Your Agent - Oshawa This Week Question Dear Lindsay: I am in my 20’s and renting an apartment with my boyfriend. We would love to buy a home; both of us have good jobs and we have a down-payment but with all of the negative things in the news today we are wondering if we should just keep renting. What are your thoughts?
Pamela Thanks for the question Pamela, you have voiced a concern that many people have currently. A way of answering it might be to explain what I learned on a beach recently. Ok, I admit I went to Florida this past December. However it was for a Real Estate conference to learn how to market property in a softening market. The U.S. Real Estate market is really upside down and my memory of this conference will be how positive and hard working the attendees at the workshop were. The main feeling can be summed up in a quote: “when you get to the end of your rope, tie and knot and hang on.” (Franklin D. Roosevelt) One of the experiences that fits into what is happening today in our market happened on the beach one afternoon before the conference started. I took an extra day to lay on the beach and that day I left my room and headed to the sand. I want you to try to visualize this porcelain white Canadian with his Billabong shorts skulking down the path hoping no one would see him. Honestly, I was like as white as the jet I flew south on, so hiding really was of little use. I walked along the boardwalk and took my place on the sand amidst the throngs of sun worshipers. Soaking up the sun for a while I then headed down to the water to take a swim. The water was around 64 degrees and there were quite a few people looking for shells and walking along the beach. I waded into the water and saw that some of the beach folk were looking at me in a funny way. I am sure they were thinking I was out of my mind as I walked into the water and then started to swim. A few minutes later a very interesting thing happened. I watched as one person cautiously waded into the water and then another and another until quite a few people were swimming. I thought about this experience for quite a while and came to a few conclusions. The main lesson I learned was that many people will wait for an individual or a leader to follow. If I had not taken a swim many of the others would not have known how nice the water really was and stayed on the beach. I might not be the brightest sun worshiper, but I do know how “herd” mentality works. I have seen it over and over in my career selling homes. The past few months have been tough ones for our area. The number of homes for sale are growing slightly and Oshawa/Whitby/ Bowmanville and Courtice really dropped in the number of sales from January - February. Buyers are similar to the people standing on the beach looking at the water. They are dipping their toes in but it will take a few “leaders” to get the movement going and to see the sales increasing. What encourages people to get out and buy? Confidence, lower prices and favorable mortgage rates. Well confidence comes when people feel that they can make an investment in a home and their investment will be secure. Given that since 2000 real estate in Oshawa/Whitby/Courtice and Bowmanville has grown by an average of 50%, real estate is a safe and secure investment. Mortgage rates have dropped from 5.5% to 4.12% dropping the payments of a $200,000 mortgage by $9,300 over a 5 year term. It is time to buy! If we had a crystal ball we would have bought all of the real estate we could in 1993 during the last slowdown. If we would have we would have seen our investment grow by 79%! We just need a “herd” of buyers taking the plunge and picking up some of the opportunities on the market today. Pamela, my recommendation is to do you homework, research the market and given you have secure jobs and a down-payment select a home that fits your lifestyle and budget. A decade from now you will be smiling. For advice on any of today’s real estate opportunities call me at 905 434 5222 or email me at linsmith@trebnet.com Ask Your Agent - Oshawa This Week March 25, 2009 Question Lindsay, we are considering selling our home and moving up; and at a party last week one of our friends shared with us that they had recently turned down an offer because it was conditional on selling a home. What are your thoughts on a conditional offer such as this? Jenny. Answer Jenny, this question gets asked by many sellers when I am placing a home on the market for sale and I can share with you that the answer changes as the markets moves from a sellers market to a balanced or buyers market. Questions during the listing interview that are common are: - what are the chances of us getting an offer conditional upon the sale of a home? My first thought is to ask the question, “why would a buyer buy a home conditionally?” In a market that is fast moving, some buyers are prepared to assume the risk of buying first without selling. Not all buyers, but some do. In many instances, buyers who buy unconditionally end up getting a better price and/or better terms. Hence the expression, “money talks.” When buying a home with an unconditional offer, the buyer is guaranteed that they secure the home; if they buy conditionally they run the risk of losing it to another buyer. My experience has shown that many buyers pay more on a conditional offer than a firm one. Conditional offers are more frequent in homes of higher value than they are with first time buyer homes. However, in the past month I have had an offer presented on a townhome I had for sale and we turned it down due to the condition. It makes sense that as the market slows, and the selling times for homes are increasing that homeowners are warming to the thoughts of offers with a home sale condition. As a seller, when a conditional offer is presented, typically you expect to get a higher offer. If “money talks” then “conditions cost.” As an experienced agent, when a conditional offer comes in on one of my sellers homes and we are prepared to deal with the offer, the first thing I do is to tour the buyers home and do a market evaluation on the property to be able to advise my sellers on the salability of the home. A conditional offer is only as good as the salability of the buyers home and the advice I offer is based on how well the home is priced, it’s condition and the location of the property. Once a conditional offer is accepted, the price is kept confidential and not disclosed. All conditional offers have what is called an “escape clause” in them, allowing the home to be offered for sale after the conditional offer is accepted and in the event another offer is accepted by the sellers, the 1st buyer is given a notice to remove their condition. (this period is typically 24-48 hours) To answer the question about a conditional offer slowing activity I am of two minds: in some cases it will and in others it will not. If there is great selection for a home such as yours, it might slow activity. Agents may choose to show homes not sold conditionally given that the process is easier. If your home is unique, or if there is little competition then the number of showings should not decrease at all. This question is more specific to the home and the current market activity. If you are sold conditionally and a 2nd offer comes in, the details of the first are kept private. Therefore, the 2nd buyer offers what they feel is market value, and in the event the offer is accepted and is higher than the first, the first buyer still has the opportunity to firm up their offer at the lower price. A common misconception is that they have to match the 2nd offer. We are seeing more and more conditional offers in the marketplace today than in the previous years. I have found that there are very few hard and fast rules when it comes offers be they conditional for any reason. I tend to look at each situation and with an advisory/consultative approach offer direction that best meets the needs of my clients. I hope this helps with your gathering of information and Jenny, for more tips on selling in today’s market go to www.soldbylindsay.com
Ask Your Agent - Oshawa This Week - March 18, 2009 Question Lindsay, I am considering buying a home and am wondering what the pro’s and con’s are of looking at Power of sales. Are they worth considering and if so are there any things to be aware of? Joe
Joe, this is a question I am asked many times by the buyers I am talking with as they do their “homework” in the search of finding a home. Firstly, I would like to give you some definitions and the reasons why homes are being sold under power of sale. There are several ways of a property being taken back by a lender: one is called “power of sale” and the other process available is “foreclosure”. Foreclosures are rarely used in our area so lets concentrate on “power of sales”. Power of sale – this is really a clause inserted into a mortgage document that allows the lender to seize the property from the homeowner and sell it when the homeowner defaults. The action can be brought on by non-payment of the mortgage. (there are other reasons a home can go through this process but for this article we will deal only with mortgage non-payment) Once a homeowner goes through the power of sale process and the lender or bank recovers the property the home is placed on the market with a Realtor. This process can happen quickly or take a long period of time. The lender prices the home based on appraisals that have been done on the property, and they are under an obligation to get market value for the home. Any monies left over after paying arrears, costs and the mortgage itself are returned to the homeowner. So in a nutshell the bank is just trying to get their money back and anything left over gets returned. Pro’s of buying a Power of Sale: the opportunity of getting a better deal that you would get from a home owner owned property. Con’s of buying a Power of Sale: There are quite a few issues with purchasing a home in this manner. The home is purchased with no history or warranties. This means that you have to do you homework as there is no owner disclosing any defects in the property, the age of any renovations or any warranties on any improvements. The most important issue with buying a home in this manner, is that the original homeowner can “redeem” the property up until the day of closing. This means if they come into enough money to pay back the lender all of their costs and mortgage they can get their home back. This can happen even after you purchase the home. (not to alarm you Joe, in 24 years I have never heard of a person redeeming) Another issue I have found, is that many of the homes I have shown that are being sold under power of sale are usually in need of repair or at best some work. People who lose their homes sometimes lose interest in taking care of them so you might prepare yourself for some work once you get into the home. Buying a home under power of sale is a bit more complicated than a regular home with happy homeowners. The process usually takes a bit longer, dealing with a bank rather than homeowners and more paperwork due to the process. I would highly suggest you have a lawyer advise you once you get involved with an offer for a home under power of sale to ensure your interests are taken care of. I have been sending out weekly power of sale email blasts to many buyers over the past few months and some have found some amazing deals. For more info on power of sales or distressed properties go to www.soldbylindsay.com
Ask Your Agent - Oshawa This Week - Published March 11, 2009
Mel
Hi Mel, thanks for the question about today’s market. I have been comparing the current market to the one in the early 90’s over the past few weeks prior to your question and have found some interesting data. Having gone thru the boom of the late 80’s and the recession of the early 90’s, I have seen pretty much every type of market the economy can toss at an agent. To answer your question about buying now, I feel that this is the best time in the past 15 years to purchase a home. The people who most benefit from the current market are first time and move up buyers. Homeowners who are downsizing are a little more at risk due to the fluctuations in values in the different price ranges. I did some historical searching and found affordability better today than is has been in almost 20 years. Here is an example
Recent Sale 2009 The homes used as comparables were a few doors from each other on Vancouver Cresc. and you can see that the increase in value for homes has been $36,000 but with today’s current rates the cost difference in carrying the mortgage is $489/ month. This is huge! If you take a 5 year mortgage the savings is $29,000! So we know it is cheaper to carry a home but if you are choosing between renting and buying it might be difficult to find a home to rent for around $1,000/mth and if you did, 5 years from now you would have spent $60,000 with nothing to show for it. Markets come and go; they fluctuate and one constant I have noticed is that when the media is promoting “doom and gloom” many people feel that things will never change - but they do and the people who take advantage of markets like this end up winners. I will leave you with a great Canadian quote from Wayne Gretzky: “a good player plays to where the puck is.. a great player plays to where the puck is going”. The people who are the most successful with real estate buy knowing the values “are going” – UP!
Ask Your Agent - Oshawa This Week - Published March 4th, 2009 Question: Lindsay: I am a homeowner in Oshawa and read recently about the Federal Tax Credit for renovating your home. Can you share with me how the program works? Roland. Answer Roland: The Federal Government is good at creating new ways of getting money from us, not giving it back. This program is definitely a win/ win for individuals and for businesses in Canada. Simply put, the program is a non-refundable tax credit for work performed or goods acquired in respect of an eligible dwelling. The monies have to be spent between Jan 27th/09 and Feb 1 2010. For the purposes of the program the definition of “eligible dwelling” is defined as: - A “housing unit” that is the individual’s principal residence or that of one or more of their family member. This is being marketed as a “family based” credit and only one credit will be shared within a family. The credit will apply to expenditures of more than $1,000, but not more than $10,000, resulting in a maximum credit of $1,250. ($9,000 x 15%) One small twist to be aware of and I will quote from the Govt’s media release “if two or more families share the ownership of an eligible dwelling, each family will be eligible for their own separate credit.” Roland, the allowable expenditures include renovations or alterations to the dwelling (or the land that forms part of the dwelling), and must be of an enduring nature. It includes labor costs, professional services, building materials, fixtures, rentals and permits. Documentation must be retained by you to prove the eligibility of the expenditure. Some examples of eligible expenditures are; renovating a kitchen, bathroom or basement, new carpet or hardwood flooring, installation of a furnace or central air conditioning or painting. Some examples of ineligible expenditures are; furniture, appliances, audio equipment, draperies, tools or cleaning. The claim for the credit will be made with the submission of your 2009 tax return and dealt with by Revenue Canada. The documentation for proof of expenses need not be sent with your tax return but made available if requested by Revenue Canada. All in all it is a good program that will cause people to spend money to better their homes for their enjoyment or to do work prior to selling. More information can be found at www.soldbylindsay.com or the Federal Governments web site at http://www.fin.gc.ca (Thanks to Oshawa accountant, John Patte CA for help with this answer. For further info on the action plan as it applies to your tax situation call John at 905 723 9511)
Ask Your Agent - Oshawa This Week Wednesday Edition January 21, 2009 Question: Lindsay:
Answer: Dear Saul: For the past 23 years I have been asked questions such as these early in the year from people who are planning to make a move and have a closing date in the warm weather. Most people seem to think that the calendar spring is the same as the spring market for home sales but in reality the sales start early and by time the tulips see sunlight the buyers are already waiting to move into the homes they have purchased. January is second to December for the fewest number of homes for sale. Jan/08 we had 1148 homes on the market in Oshawa/Whitby and Courtice/Bowmanville and by April the number of homes for sale jumped to 1603! The more homes on the market, the harder it is to attract buyers to your property. In January/08 we had 324 homes sell in the same area. So January is usually a strong month for sales with the buyers having a shorter list of homes to view. The statistics have just been released for December/08 and we are starting off with more homes for sale than we did in Jan/07. (an average increase of 8% more homes for sale) Real Estate is easy to understand: supply and demand. If you are planning a move this year it is best to get your home on the market early before the flood of new homes are introduced as we move into the spring. More that any year in the past decade, marketing experience and negotiating skills are critical in today’s market. I remember having gone thru the experience of the early 90’s and gaining skills of dealing in a soft market. By the end of the 90’s I recall making a joke that I had developed expert skills dealing in a recession like market that I probably will never use again. These days, all of the skills and experience I gained from the early 90’s are being used in full force today to get sold signs on my properties at the top prices the market will bear. So there are more homes for sale; are the buyers buying. A story might be a great way to give you an overview of the market from a buyers perspective. This weekend I showed a home to a buyer. It was exactly what they were looking for; the right location, clean, well taken care of and priced in the right range. The following day we did an offer on the home and ended up in a bidding war. We got the home at the right price but the message that came across for buyers is that if you find the right home, move fast because there are others out there snapping up the good deals. Good luck in the “early” spring market Saul. You can find more buying/ selling tips at www.soldbylindsay.com Ask Your Agent - Oshawa This Week Wednesday Edition December 3, 2008 Question: Claire Answer The statistics you are referring to are the ones that the Toronto Real Estate Board released earlier this month. They include the areas surrounding Toronto and literally thousands of properties and millions of people. Let’s examine the statistics for Oshawa/Whitby and Courtice/ Bowmanville. Year to date Statistics, compared to year to date Oct/07. How interesting! The GTA is down 38% in sales yet Whitby is down only 7%. As well, the prices in all three communities are either the same or have increased marginally. This shows that the market is still robust and homes are selling. (In the above 3 communities 345 homes were sold in Oct/08). There are more homes for sale than there were last year, although there were fewer sales. However, the numbers are quite positive when you compare them to the statistics you mentioned. Now to answer your question about real estate being a good investment, take a look at the graph below. In 2000, the average home in Oshawa sold for $135,000. In October, 2008 the average had increased to $208,450. That means that if you purchased your home in Oshawa in 2000 your home has increased in value by 54%. And remember. your home increases tax free, so this is a net increase. Here is a quick look at the increases in our area since 2000. Real estate is and has always been a good investment. It is a long term investment given the fact that the market fluctuates up and down on a yearly basis. So we have seen that the values are up in the past 8 years, the number of homes for sale is up and home sales are down but still selling – so where are the opportunities? When the market calms in sales usually the first segment of the market to slow is the highest price ranges. For instance, sales of homes priced between $375,000 and $400,000 in Oshawa have slowed down as we have moved into the fall market. Since July, only 3 homes sold in that price range, and one of which was listed for $429,000 and eventually sold for $375,000. If there was ever a time in the past decade to move up it would be now! I am not suggesting that you can go out and lowball offers or “get a steal” but with more selection to choose from there inevitably will be bargains. There is an expression in sales involving using a “velvet hammer”. This means negotiating firmly but understanding that both sides need to feel like they have won for a sale to take place. I have worked in a market such as this in the 1990’s and my recollection is that buyers began to select homes based on needs and wants rather than in a busy market where there was no more passion involved in buying a home than a pound of ground beef or a stock purchase. Buyers are more selective and sellers understand that condition and pricing is the foundation of a smooth selling process. This is a market I love and excel in – one where creative marketing strategies are important, relationships are built with clients, and with a lot of hard work and determination houses are bought and sold and everyone is happy. Claire, real estate is a good investment. It needs people like you and I to reinforce to the people we meet on a daily basis what a special experience it is both personally and financially to own your home, so unpack your velvet hammer and go shopping!
Ask Your Agent - Oshawa This Week Wednesday Edition November 26, 2008 Question: Dan Answer: Some agents use these short forms to describe features and upgrades: Dt’s - drapery tracks Here is a list of interpretations of words you might commonly find in Charming/cozy - small; nothing but a single bed fits in any bedroom, Low maintenance - no yard, kids have to play on the street, Bright and sunny - drapes and blinds not included, Executive neighbourhood - high taxes, Park like setting - at least one tree on the street, Natural setting - forget about planting, the deer and squirrels will eat everything, Playground nearby - all summer long the street is an obstacle course due to road hockey, Tudor styling - two bedrooms upstairs, cold in the winter, hot in the summer, Meticulously maintained in the original condition - you don’t need help with this one! Single car garage - your Ford Escort fits in the garage but you need to crawl out the sunroof, Large family room - at a minimum the basement has carpet and painted walls, Lots of storage space - basement is too small to be called a family room, Amazing views ? good view of your neighbour’s bedroom window, Efficiently designed kitchen - two people cannot be in it at the same time, Pet friendly neighbourhood - the front yards are a minefield, Neighbourhood watch - your neighbour has a professional pair of binoculars.
P.S. my favourite new term is “knife catcher”. This is a person who is waiting to buy at the bottom of any market. Ask Your Agent - Oshawa This Week Wednesday Edition November 20, 2008 Question: Mike of Oshawa On. Answer: Title is a legal term that means you have ownership of a property and is commonly referred to as having a “deed” to a property. So we know what title means and it is known that insurance is a way of protecting something of value, but what exactly does title insurance protect against? Mike, here are the basic losses this insurance protects against: - Unknown title defects (title issues that prevent you from having clear ownership of the property); Title insurance is paid only once, and can be either done at the closing of a property or added to an existing home by the homeowner at any time during their ownership. The insurance coverage is valid for the duration that the property is owned by the insurer. I called a local law office and was given these approximate costs for title insurance; - up to $200,000 purchase price for a new purchase $197.00 Title insurance can be purchased for houses, condominiums, cottages, rental units, vacant land, cooperatives and rural properties.
Mike, title insurance is a wise purchase when you are closing on your new home. I would advise you to discuss the pros and cons with your lawyer when you meet with them and make your decision based on the information you are given. More info on title insurance can be found at www.fsco.gov.on.ca – more tips about buying real estate can be found at www.soldbylindsay.com
Ask Your Agent - Oshawa This Week Wednesday Edition October 29, 2008 Question: Michael M. Answer: Michael, it sounds like you were in the “no mans land” when you were on the market. I have no idea where your home is or what it looks like, but one observation would be that the price was too high. By the sheer number of price reductions happening on a daily basis on our real estate board more homes are overpriced than those who sell without any reductions. Another reason may be the property was not staged or did not show off the features creating excitement in the buyer’s eyes. Pricing is a complex formula; you want to get the most money your home can possibly get in today’s market, but also do not want to be so highly priced that it turns buyers away. Accurate pricing or “positioning” is done by critically looking at and interpreting the available homes for sale or the “competition”, and looking at what has been sold recently in your area. Depending on the type of market, more weight will be put on values of homes sold than listed for sale or vice versa. The sales show you trends of historical pricing and the available homes show how the market is doing on a daily basis. How long have these homes been for sale, have they had price reductions or been listed for sale more than once are indicators of current trends. To give you a sense of how many homes are priced incorrectly, in the past 30 days 142 homes have expired not sold in Oshawa. Currently we have 771 homes on the market in Oshawa, which indicates that 18% of the homes are not selling, at least during that listing period. Michael, pricing a home is as much an art as it is a science. A realtor has to take into consideration trends, activity and the local economy and then conflate that with the benefits and features the home offers. Markets come and go, some are good and some a bit soft, but the principles of selling never change. Stage your home to show it in its best possible way, lead the market with competitive pricing and work with an agent who is a master at creative marketing and negotiations. The sold sign will take care of itself if all of these elements are in place. Hope this answers your question Michael and for more info and tips go to www.soldbylindsay.com Ask Your Agent - Oshawa This Week Wednesday Edition October 23, 2008 Question: Stacey Answer: So where do you start? Here is the process I would recommend: 1. Do your Homework: this begins the process and typically is done over many cups of coffee and with lots of “free advice” from family and friends. Start with a plan; where is it you could see you are your family living? If you currently have children or if they are planned for the near future what school areas do you want to be in? How much cash do you have to use as a down payment and how much is available for household items once you move into your home. How secure are your jobs? How much can you afford if you drop to one income as your family grows? Similar to buying a car, if you decide on a Saturday morning you want a new car and wander into a few dealerships without planning in advance and buy that afternoon your chances of making a mistake are high. The more you discuss and identify what your needs and wants are, the better you will be at making a decision. 2. Create a budget: look at your income and your debts and try to think of the purchase of a home in a 5 year cycle. Are there any big expenses you can see in the future that might make your cash flow tight, or can you see any changes to your income or cash flow in a positive way? Banks typically will lend much more than you will want to borrow. For example, if you and your husband make $100,000/ yr and you’re only debts are car loans that equal $1,000/mth, the bank will qualify you for a mortgage of about $370,000 which probably is much more than you want to borrow. Be reasonable when you choose the price range you feel comfortable buying in and then create a budget around it. The budget should include after sale costs such as appliances, décor and new furniture.
4. Get approved with a lender: This means the “real deal”, meaning, you need to have a credit report done and have a lender approve you to the point where you can buy a home subject to the home qualifying. Ask for written confirmation of the approval. Many buyers are shopping for a home with “verbal” approvals which have little value, (pun intended) so it is best to have a lender tell you in writing what you can afford and which options are available to you. 5. Hire an experienced, trustworthy Realtor: An agent is your guide through the process and ultimately will be the reason you look back on your purchase with fond memories or the memory of a stress filled experience. A good Agent will work with you on your budget, the costs to buy, your banking information and areas/ types of homes in your range. By “hiring” I mean to interview agents until you find one you feel comfortable working with and sign a Buyer agreement with them. This agreement allows the Agent to represent you and spend time knowing that he or she will get paid for your purchase. (you do not directly pay for your agent the commission comes out of the price of the home) The agent is the one who will educate you about how the process works. From identifying what your needs and wants are to the showing process and ultimately to drafting the offer to purchase and negotiating on your behalf. 6. Accepted offer Stage: Your Agent will help you thru this process; you will need to line up a home inspector, finalize your financing, contact a lawyer and an insurance broker and contact a moving company. (or plan to spend money on a few cases of beer and some strong friends)
Stacey, I hope these ideas will help guide you thru the process of beginning the search leading you to your dream home. Buying a home does not need to be scary, it should be an enjoyable experience and if you do your homework, choose the right Agent, you will be relaxing in your home in the very near future. For more tips on planning your move go to www.soldbylindsay.com
Ask Your Agent - Oshawa This Week Wednesday Edition October 15, 2008 Question Answer: In the areas of Oshawa, Whitby and Bowmanville/ Courtice here is what happened (comparing Sept/08 to Sept/07): The number of homes for sale was up 13% over last year; the sales up 6%. There were 1,590 homes currently listed for sale in Sept/08 and 426 homes sold. Prices, well they have maintained and increased ever so slightly. So things are moving and the market is quite active. That being said the buyers have a lot more to choose from compared to this time last year and many of the homes on the market are priced unrealistically adding to the confusion of pretty much everyone. The media is good at sending mixed messages, and when they do, sellers believe the optimistic reports and the buyers believe the negative ones. The questions above seem to come from a feeling of uncertainty and misinformation coming from many sources. I would first question both Brad and Dracula that if now is the right time to make a move for them and their families? (still pondering if Dracula is married and has kids or do vampires have families) If so as a seller, you need to price your property realistically and have an agent who is an expert at marketing it. There were 426 homes sold locally last month and the Durham Region Assoc. of Realtors posted that on average they sold for 98% of asking which proves that if you have a good home, in a good area, priced right and the right agent working for you the chances of selling are high. For Brad, if you are planning a move make sure the timing is right. Make sure that Angelina and the kids will live in Durham Region, but also that your job is secure and you have the money in reserve to customize the home to make it comfortable. Asking if the market will drop is a “crystal ball” question but implies that things are not doing well. The stats prove otherwise. If now is the right time to make a move, go for it! There are great selections for buyers and for sellers the market is active and stable. Here in Durham Region things are good, the market is fine and last month 426 sellers celebrated with a sold sign. (by the way we sold 6% more homes last month than Sept/07) P.S. if you are a buyer and thought about buying last year but waited for the prices to drop, how much did you spend on rent? The prices have pretty much maintained locally, so if you are waiting for a bell to ring at the bottom the sound you might have heard is a cash register ringing up sales. Lindsay Smith, Broker Ask Your Agent - Oshawa This Week Wednesday Edition October 8,2008 Question: Heather Answer: When looking at a return on investment, a buyer who is viewing a newer home may have ideas on what they need to do to personalize the home to their standards. These items might be in a 1-5 year plan, so when out looking the buyer views asking prices based on the value of the home as it currently appears. On the other hand, if a 20 year old home is in need of a new roof, furnace and windows it might possibly cause the buyer to discount the price to allow themselves to do the necessary repairs immediately. So Heather, renovations seem to fall into two categories: necessary upgrades and added value upgrades. Here is a list of return on investment for some of the more common upgrades. (from a Re/max International survey) - bathroom remodel 78.3% If you are considering renovating I would first consider which renovations would have an impact on the enjoyment your family would have in your home. Kitchen and bathroom renovations are typically the best investment as they tend to be two of the biggest selling features that buyers are looking for when considering a home purchase. That being said, an older bungalow in tip top condition and with all of the maintenance upgrades done is currently one of the most desired types of homes. Once you have identified the renovation you are interested in doing do you homework. Check into financing if you need it with a lender and interview at least 3 different contractors before you decide.
Ask Your Agent - Oshawa This Week Wednesday Edition October 1, 2008 Question: Jessica. Answer My first thoughts when thinking about setting market value are, “features are tied directly to the property being sold and benefits are tied to the buyer”. This is the start of getting to a market value price. Sellers and Agents set the price but it is the Buyers that set the value of the home. Value is established in the Buyers mind by doing a comparison of features and benefits being offered by current properties available today, but more importantly by establishing which features are ones they are willing to pay for. The old adage that kitchens and bathrooms sell homes has some truth to it, but today homeowners are putting many upgrades into their home and are unaware if they will increase market value. For instance, a hot tub may have just been installed by the Seller at a cost of $8,000 but to a buyer they may have to look at costs of removing it if they are not interested in owning one. Some features have little or no value to the Buyer or in fact they may detract from market value having to be changed or removed. A few years ago when we were in more of a Sellers market pricing properties was much easier than it is today. The Agent would look at the recent sales and establish a price a bit higher that what had been sold. Available properties were used but it truly was the sold homes that set prices. There were times over the past decade where if the Agent made a mistake and priced the home to high the market would catch up and the home would sell. Today things are much different. With more inventory of homes for sale and fewer sales taking place, pricing becomes a much more complicated process. Getting back to the “features and benefits”, the first thing I do is to look at the available homes for sale and review the price, what they are offering and how long the homes have been on the market. Using the sold properties as comparisons is still valuable but they need to be very recent sales. A home that sold 3 or 4 months ago may not work if the market has changed since then or if the yearly timing is different. In an uprising market like we have enjoyed over the past decade it was risky to overprice a home but in today’s market an overpriced the home will just sit in “no mans land” frustrating everyone in the process. It is better in this market to price right at market value or just a shade under it. Pricing a home aggressively causes the same reaction with the buyers today as it did over the past few years. As and example, in the last month I have been in 4 bidding wars, with the most recent having two buyers competing and the home selling for 99.6% of asking. In my experience, I have found that sellers do not sell for more money by increasing their asking price in order to create negotiating room. The closer they are to the right price the less the buyers will negotiate. Serious Buyers know good deals when they see them and when they do they feel the need to move quickly before they lose the home to someone else. In todays market it is possible to have buyers making buying decisions quickly, however they only do when homes are priced to cause a stir in the marketplace. I have mentioned before that we are in “a price war and a beauty contest” so the better your home looks and the more realistically it is priced will ensure a timely sale. Jessica, I hope this helped with your question and for further tips go to www.soldbylindsay.com
Ask Your Agent - Oshawa This Week Wednesday Edition Sept 24, 2008 Question: Marian V. Answer: This is a question I get constantly when folks are considering a move. “Should I sell now or in the spring; should I wait till the fall; is it better to list my home in the summer for a school year closing”? Whatever month you are in, the question arises if this month is the right month to sell. So in order to answer this question let me get my crystal ball out and shine it up. The first thought that comes to mind when a client asks this question is “if you could pick a perfect time to plan a move, independent of the time of year would you choose this month? Or would you wait”? Timing has so much to do with a move; in that I mean timing with regards to the family, not the market. In a perfect world the best time to sell is February- April and the closing dates come in July – August just before the kids start school, but not everything works in a smooth perfect historical timeline. When I first started selling real estate in the mid 80’s you could bet money that the spring market was the best time to sell, but over the years the curves of market activity have literally been all over the place. I have seen years where November was one of the most exceptional months for selling and where the summertime has been incredibly active. Other years have seen the spring time to be flat and a poor time to sell. So really there is little rhyme or reason to market activity these days. If you are planning a move you can only gauge today’s activity of competition and the sales that have taken place over the past month or so to give yourself a sense of how the market is behaving. Trying to forecast how the market will look, for instance in the spring of next year is anyone’s guess. A professional realtor can make comments on and offer advice for the current market, but any future advice beyond a month or so really comes down to thoughts with fingers crossed and hopeful expectations. So Marian, I would suggest taking a look at your personal situation and made a decision if now is the best time for you and your family to make a move and if so get the process started. If not, maybe waiting might be a good position to take if it best suits your family. The market today is healthy, active and exciting, but again as I have mentioned before, we are in a “price war and a beauty contest”, so the better you price your home and the more it shines will have a big factor in how fast a sold sign appears and how good the terms are. Hope this helps Marian and for more tips go to www.soldbylindsay.com
Ask Your Agent - Oshawa This Week Wednesday Edition Sept 17, 2008 Question Answer: So what are the pros and cons of buying or selling first? For those who buy first and then sell later, the pros are that they get exactly what they want for their next home and typically buy the home a bit cheaper given that they are buying without a condition of sale. They get to choose their closing date. If the deal isn’t perfect they can choose not to buy. The cons are when they sell they need to match closing dates which might get a bit tricky and may require some extra financing. The big risk is their home taking a long time to sell and possibly not selling for what they had hoped. The pros of buying first on condition your home sells, and then selling is that you get exactly what you want in a home, and a closing date that you can work with. You also get the protection that if your home does not sell you get your deposit back and risk little. That is the upside, the downside is that many buyers becomes emotionally attached to the home they have bought and have a short window to sell their home and the possibility exists that they may lose their dream home to another buyer. Typically to get a home sold in record time, a lower price needs to be set so in many cases they take a bit less for the home they are selling and when offering on the new home because of their condition they may pay a bit more. Selling first, and then buying later is another option. This is the way of making a move with the best chances of getting top value on your current home and also on the home you purchase. When you sell first you can be less flexible on negotiating the price of your home due to the fact that if you don’t sell, you have no other home to worry about matching up closing dates. Then once your home is sold, you can offer without a condition of sale making your offer stronger. However, the downsides of this method is you sell your home and cannot find the perfect home to move into or you find a home with a different closing date. Over the past few years I have had many sellers refuse offers with a home sale condition. This past week I had an offer on one of my listings with a condition on the sale of a home and the owners, after much discussion and direction chose not to accept it. The home had only been on the market 3 days and we chose to keep the property open with no conditional offers to hinder the sale. Buying and selling is stressful. Adding risk to the process causes some people added stress yet other buyers seem to deal with risk with ease. I would suggest you consult with a realtor you trust and whose advice and approach helps you to come to a decision that best suits the needs for you and your family. I hope this answers your question Christine and more info and tips can be found at www.soldbylindsay.com Ask Your Agent - Oshawa This Week Wednesday Editiion Sept 10, 2008 Question: Debbie Y. Answer Price your home higher than current market value. Insist you need a certain dollar value, or that your home is much better than the three others that were similar and sold for $20,000 less. The right buyer will come along and see the value, no matter how few showings you have right now. Present your home on the marketplace without cleaning or staging it properly. “It’s our home and we live here” is your attitude. “Why clean it, paint or re-carpet it? The buyers might want to do that themselves and what if we pick the wrong colours?” Besides the next owner will probably have teenagers too and they will feel right at home in your son’s room (which smells like tennis shoes, a hockey bag and is decorated with the Sports Illustrated bikini issue.) Keep those odors lingering in the house. Make sure the last nights dinner smells overpowers the cat’s litter box which is housed in the bathtub. Just before showing the house spray a lot of strawberry scented room deodorizer to cover up the cigarette smoke smell. Allow the animals to stay during the showing. After all, it’s their home too and you really don’t have any place to take the dogs during the day. Fluffy and Skipper really don’t bite thru the skin. They usually only bite men on the ankles, not the women. Make sure you leave the nose prints on the sliding doors….. you wouldn’t want the buyer to make a mistake and walk through the clean glass! Keep ALL of your collections out for buyers to look at. 300 sets of salt and pepper shakers, your husband’s bowling trophies and all of your kids and grandkids school pictures are important to you. Besides if you took them off the walls you might need to repaint. You are proud of your family and want the buyers to see what a wonderful family you have raised in this home. Keep the unusual wall colours and décor experiments intact. HGTV has really allowed your creativity to come out and you have tried many of the decorating ideas you have seen on Trading Spaces. Perhaps the black kids room will appeal to a buyer’s teen. You don’t want the home to look bland and like every other home the buyer will go through. Besides it is just a coat of paint and if the buyers don’t like the colour they can choose their colours. You have already moved and the home is vacant. The buyer should understand that the pool might be a bit green and the house dusty. Can’t they just see past a bit of dirt? Trying to maintain two homes is just too painful to do every day, let alone pay someone to keep it looking fresh. Also, there isn’t any reason to let your Realtor know if you go away. If an offer comes in the buyer will be patient while your Realtor searches high and low to find you. Obviously I have written this in an attempt to humorously covey the things we as Realtors are told by sellers as we attempt to attractively position their home in the current marketplace. With the inventory of homes growing like weeds it’s critical for a home seller to put their home on the market in saleable condition and price it properly. The best marketing in the world will not sell an unattractive, overpriced property. Someone said recently we are in a “price war and a beauty contest”. I firmly believe this to be true. If your home is priced right and shows in the top 10% of your price range you will have buyers coming to you. Hope this help’s, Debbie, and for more helpful hints go to www.soldbylindsay.com
Ask Your Agent - Oshawa This Week Edition September 3, 2008 Question: Q: Lindsay, at what point in the selling process does Realtor experience become most valuable? Gary C. Answer: 1) Pricing the property. Having the knowledge to price the property at a value that will cause it to sell for the highest value in a reasonable time period takes skill. There are dozens of decisions to make in between pricing and the sold sign. Designing a marketing program, using web tools to attract buyers, well written newspaper ads, networking with other agents and to other buyers who may contact you on other properties. These all take skills and experience and how effective your realtor is will dictate how smooth and speedy the buyer arrives. The last point; dealing with an offer is the time when the ability shows. Your realtor should be able to guide you thru an effective negotiation process, offer advice and strategies to obtain the best terms and assist you in making decisions that best suit your situation. There is a funny saying in business when describing a person with years of experience yet few skills; “does he have 20 years of experience or 1 year experience 20 times”. Make sure you do your homework and choose a realtor who offers solid selling skills a proven track record and an advisory relationship with the goals to get you top price and terms. You can find more tips on choosing a realtor at www.soldbylindsay .com
Ask Your Agent - Oshawa This Week Wednesday Edition August 20, 2008 Question:
Nicole Laframboise Answer: People fall in love with homes, that is why the one in 20 homes they walk thru will get them excited. But to “spread this love” you need to choose the agent who will market the home in creative and interesting ways at a price that will excite buyers, have the home available for showings and when the buyer walks thru the front door you need to have them go “wow”! Hope this helps Lindsay Ask Your Agent - Oshawa This Week Wednesday Edition August 13, 2008 Question: I keep hearing in the papers and on the radio that the Toronto market is still booming. Is that true and how does the Oshawa/Whitby and Clarington area compare? Harry Zoltan Answer: In the Oshawa/Whitby Clarington areas the year to date comparison of homes for sale/ sales, when compared to July of 2007 looks like this: Listings Sales The statistics in the East York area in Toronto this year over last look like this: East York +6% - 16% Over the past 23 years I have been a broker, Real estate has changed dramatically but certain business models do not change. Supply and demand are what control the market in any location. The above statistics show that our market is experiencing a calming effect as most of the GTA is feeling, but with an average of 5.5% fewer sales in our area vs -16% in the East York area we seem to be doing just fine. At a recent conference I attended in the US a broker said her market was “in a price war and a beauty contest”. This saying is an accurate description of where we are in the summer of ’08. In the past 10 days we have had 11 properties sell at full asking price or for more than asking! I bet if you toured these homes they would be the best priced and in the top 10% of the real estate beauty contest. Some things never change, well priced homes that show well seem to end up with sold signs. Hope this answers your question. Lindsay Smith, Broker Ask Your Agent - Oshawa This Week Wednesday Edition August 6, 2008 Question: Lindsay, I recently sold a home that I co-owned with my best friend. I plan on purchasing another home soon and I would like to withdraw money from my RRSP for the downpayment and I am not sure how much I can use or even if I can do this. Initially I was told the the home buyers plan is for a first time buyer. What are the rules? Answer: - You cannot have participated in the plan in previous years. So to answer your question it would depend on several things. Firstly was the home you recently sold occupied by you as a principal residence? That is the most important question because if it was viewed as your principal residence you would not qualify as a first time buyer. If the home you recently sold was an investment property or one you did not live in as your principal residence you would appear to qualify for the Home Buyers Plan. A good reference guide can be found at www.cra.gc.ca Just put Home Buyers Plan into the keyword search and you can get the entire Government description of the program. Hope that helps and if you have any other questions just email me thru www.soldbylindsay.com Lindsay Smith Ask Your Agent - Oshawa This Week Wednesday Edition July 23,2008 Question: Lindsay, I have heard the term “staging” used over and over when people talk about selling a home. What exactly is staging and how important is staging with getting my home sold? Sarah Green Answer: Sarah, thanks for the great question. Staging is a newer term that describes what has been done by many successful sellers for years. It can be defined as: beautifying the home prior to selling. Cleaning, rearranging furniture or adding coordinating pieces and updating décor and or flooring. Staging is important when the market is slower and the competition of other homes increases and or in a busy market, to try to maximize your selling price. Most changes to impress a potential buyer and achieve the sale can be made at a reasonable cost, especially when compared to the likely extra profit on the sale or having to drop the price in order to sell. Costs in staging and presenting a property should be relative to the price of the property, possible extra profit to be made, its potential market and location. Staging can be as little as cutting the grass and shoveling the snow but for most homes it requires shifting furniture, dealing with outdated décor, removing household items to make spaces appear larger and having the home cleaned professionally. I recently had the experience of having a home on the market with carpeting throughout most of the home in a colour that was quite outdated. I had recommended to the sellers to have it changed and they decided to sell leaving the original carpeting. After several months, and many showings the homeowner took the home off the market, changed the carpets to a current colour and the home was sold within 2 weeks of relisting. Location, location, location was the saying we have used for selling real estate for years, however in todays market it is more like Pricing, condition and location. Hope this answers your question but if you have further questions visit my web site for tips or go to www.canadianstagingprofessionals.com
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