Three Housing Predictions for 2014

As 2013 comes to a close, it’s time to look ahead to see what trends we may see in the housing market in 2014. 1. More inventory at higher prices. All the distressed property from the last 5-7 years is starting to dry up. Sellers will likely see better profits than they have in years. Homes right now are priced to cater to sellers, and we will likely see the end of the “buyer’s market.” 2. Mortgage rates will continue to rise. Mortgage rates have risen over the past few months and the positive trend seems to likely continue throughout 2014. 3. Mortgages will be easier to get. Higher mortgage rates have cut refinancing activity and pushed banks to ramp up their purchase lending. There are also new mortgage rules coming out in 2014 that may cause banks to be more willing to lend. What are your predictions for the 2014 housing market? #CobblestoneRealty #RealEstateTips #SouthFlorida #HousingMarket
		Categories: Markets/Economy, Loans, House and Home, Helpful Tips, General Real Estate, Finance, Contracts/Legal, Service/Services, Real Estate Practices, Real Estate News, Other, New Trends, National Topics

Should You Buy a Distressed Property?

Many houses on the market right now are distressed properties. Distressed properties include those whose owners have defaulted or are about to default on their mortgages. In many cases, distressed properties can be less expensive that comparable homes for sale. There are a number of different types of distressed properties: Short Sale. In a short sale, the homeowner can't afford to maintain the mortgage. Rather than foreclosing on the home, the lender agrees to the sale of the property for less than the balance of the loan. Short sales give both lenders and homeowners an option other than foreclosure. Foreclosure Auction. Banks and other lenders will auction off properties that have been repossessed from homeowners who have defaulted on their mortgage loans. Foreclosure auctions are usually held at public facilities such as courthouses. The auctions are generally best left to investors with cash available to spend. All bids have to be backed up with the money for the entire sale price up front. Also, houses usually purchased at an auction are purchased site unseen. REO (real estate owned) Foreclosure. When people describe a distressed property as a “foreclosure,” they are usually referring to an REO foreclosure. These are bank or lender owned properties that you purchase directly from the lender in a process that is similar to a typical home sale. The advantages of purchasing a distressed property: A distressed home will sometimes be priced significantly lower than it would be sold for if it were not a distressed property. That doesn’t mean all distressed homes will be cheaper than all other homes that aren’t distressed, however. If there are a lot of foreclosures in an area, prices of non-distressed homes tend to be lower, too. In some cases of distressed properties, you can offer to purchase the home for less than the asking price. There is little to no emotion involved with a seller on distressed properties since you’ll be dealing with the lender instead. The disadvantages of purchasing a distressed property: Distressed homes take more time and effort to purchase. They require a lot of paperwork, and you might end up waiting a long time just to have your offer rejected. Depending on the property, it may need many major repairs. Many distressed properties have been vacant for a while with no continuous maintenance. Lenders generally sell distressed homes as-is. There is often a lot of competition when purchasing distressed properties with other buyers and investors. More competition leads to higher prices. If you have any questions about purchasing a distressed property, contact us today. We can guide you through the home buying process and help you determine if buying a distressed property is right for you.
	Categories: Opinion, National Topics, Markets/Economy, Loans, House and Home, Helpful Tips, General Real Estate, Finance, Contracts/Legal, Other, People, Real Estate News, Real Estate Practices

What Real Estate Agents Wish You Knew

For Buyers: 1. When looking to buy a home, do not get any new loans or use credit cards heavily. The preapproval letter is just the beginning of the process. Once you get preapproved, don’t run out to start buying things for your new home on credit. Just before closing, most lenders will pull your credit again to re-examine your financial situation. If your credit has changed since the preapproval, you may have a higher interest rate, or even worse, you may not get the loan. It’s best to maintain your frugality even after living in the home for a few months to get an idea of how much it will cost you to live in your new home. 2. Prequalification does not mean preapproval. In a prequalification, the lender generally doesn’t verify all the buyer’s information. A preapproval required third-party verification. If you are a serious buyer, get preapproved before looking at homes. That means you’ve already applied for the loan, your financial information has been verified, and you’ve been given a specific loan amount and interest rate. For Sellers: 1. Selling a home usually takes longer than you think. Most people underestimate the time it takes for a house to sell due to unrealistic expectations. These unrealistic expectations can often cause more stress. Make sure you communicate your expectations with your real estate agent then be open to suggestions and advice and a more realistic timeline. Give yourself a minimum of four to six months to sell your home. 2. The little details make a big difference. Your home needs to look good, feel good, and smell good when you are preparing to sell it. The home should always be ready to show. Messy rooms, poor staging, and odors will turn prospective buyers off quickly. Always leave a warm, comfortable, and inviting impression.

Categories: Service/Services, Real Estate Practices, Real Estate News, People, Other, Opinion, New Trends, Markets/Economy, Marketing, House and Home, Helpful Tips, General Real Estate, Advertising

What’s lurking behind the walls of your dream home?

For most Canadians, a home is the biggest investment they’ll ever make. It’s critical that homebuyers do their research and know what they’re buying before they sign on the dotted line. Having the information they need can help prevent surprises that can be costly to fix, dangerous, or even invalidate home insurance. “A home doesn’t come with a money-back guarantee, which is why it’s so important to be aware of potential issues before you buy,” says Henry Blumenthal, vice-president and chief underwriter, TD Insurance. “New homeowners need to know what they’re buying and ensure they can maintain and protect their most valuable asset, because once the ‘sold’ sign goes up, the buck stops with them.” Equally important as a home’s curb appeal is the cost to repair and maintain it, and the potential insurance implications that come along with it. The best way to understand a home’s condition is to hire a professional home inspector. A home inspection analyzes the structure and major systems: roof, exterior, electrical, heating, cooling and plumbing. By sharing the details found in the inspection report with your insurance provider, your insurer can help identify problem areas that could increase premiums, prevent you from qualifying for home insurance or require additional riders. “We provide homebuyers with information they need to make an educated decision,” says Bob Dunlop, president, Carson Dunlop. “Because every buyer is different – one person’s fixer-upper is another person’s nightmare – it’s not a question of whether a house passes or fails, it’s whether it works for a particular buyer’s needs.” When assessing risk, insurers are primarily looking at two factors: the frequency with which a particular problem tends to occur and the potential magnitude of the loss associated with the problem. Water damage is one of the most common home insurance claims and has the potential to cause major damage. Five years ago, water damage represented a quarter of the claims TD Insurance paid out; today it’s up to half. On average, water damage costs policyholders more than $7,500 to repair. A home inspector assesses a home’s vulnerability to water damage and can flag items like poor maintenance of eaves troughs and downspouts, improper installation of a basement backup valve, cracks in the foundation or an aging roof. “With a roof that’s 20 years old, the only guarantee you have is that it’s going to leak at some point,” adds Blumenthal. “An insurer’s unique insight and experience can help you make your buying decision. If your insurer isn’t comfortable with an item in the home-inspection report, you should take a closer look before you buy.” Other common items that a home inspector will look at that could ultimately impact your insurance premiums and eligibility include: » Plumbing and electrical. An outdated plumbing or electrical system can be a potential hazard if it hasn’t been properly maintained or updated. » Heating. An older heating system, such as an oil furnace, could leak and cause damage to your home and the surrounding area if not maintained properly. » Liability exposure. A pool that isn’t properly fenced creates a higher probability of an accident. » Previous renovations. If renovations were clearly the work of a corner-cutting do-it-yourselfer, they could pose a safety threat. » Smoke detectors. Without functioning smoke detectors there’s a higher potential for significant damage from a fire, including danger to you and your family. » Alarm systems. A functioning alarm system is a theft deterrent that could help lower your insurance premiums. “The inspection identifies what repairs need to be made and at what cost,” adds Dunlop. “Depending on your financial situation, what comes out of our report could have an impact on your purchase decision. It could even give you some bargaining power with the seller.” According to Canada Mortgage and Housing Corp., a typical home inspection is in the range of $500, depending on the size and condition of the home. “Buying a home is exciting and it’s easy to get carried away and overlook the details, but the most important thing buyers can do is take time to ask questions so there are no surprises,” says Blumenthal. “That way, they can feel confident that their new home is a safe investment and a safe haven.”

Categories: General Real Estate, Helpful Tips, House and Home, National Topics, Real Estate News, Real Estate Practices

3 Reasons to Buy a Home During the Winter

The majority of homes are usually sold during warmer months, but buying a home during winter could mean getting a bigger bargain. Here are 3 reasons to buy a home during the winter: 1. There are fewer units on the market and fewer buyers looking. You can often use this to your advantage to get a good deal. Fewer buyers means less competition. Don’t be afraid to negotiate the price or the inclusions within reason. 2. In many cases, sellers need to move. Often, people who list their homes during the winter are moving out of necessity. Job transfers or financial hardships are some reasons that sellers list during the winter, which can often lead to a better bargain for the buyer. 3. Faster processing. Because there are fewer real estate transactions during the winter months, real estate agents usually have more time to dedicate to your home search and transaction. Lenders generally get you approved and process paperwork faster during the colder months. Don’t let the cold keep you away from your new home search. Many homebuyers who purchase their new home during the winter find that they can usually use the slow season to their advantage to get a favorable deal.

Categories: Advertising, Competition, General Real Estate, Helpful Tips, House and Home, Markets/Economy, Other, People, Real Estate News, Real Estate Practices

Pooling Financial Resources to Buy a Home

Q My wife and I would like to purchase a condo but the initial downpayment is an issue. My mother and uncle are new immigrants to Canada and have approached us to buy a condo together. What do you think of buying a condo with family members? Tse, Scarborough

A The pride of home ownership is a dream for most Canadians. Unfortunately, this may only be a dream for many and may never become a reality.
Some individuals may have difficulty qualifying for a mortgage, even with the creativity of many financial lenders. Rule number 1: Buy what you can afford, not what you can borrow. Price increases in the Toronto real estate market easily outpace the marginal increases in salaries of the average Toronto household.
Pooling the financial resources of several family members can be an excellent opportunity for first-time buyers to get into a home. Eventually, you can save sufficient equity to have your own dream home. Obviously, this does not come without making sacrifices and concessions. A dream home can quickly become a nightmare, particularly when your mother-in-law may not be your first choice in roommates.
Extended family arrangements are not uncommon for many immigrant families that have three generations under one roof. For some cultures, this is the norm. However, this form of living arrangement is not for everyone. Most couples marry to start a family, not to inherit two generations of families.

Food for thought that may help you make a decision:
›› Discuss the financial arrangements with your family member(s) before making a commitment. Are the downpayments equal? How will the equity of the condo be divided in the event of a sale? Are the mortgage payments divided equally? What about condo fees? What happens if one partner wants out? Whose names goes on title?
›› Does the extended family get along? Family relations can deteriorate faster than an old home with termites! Discuss these arrangements thoroughly with your spouse.
›› A meeting with a lawyer beforehand can ease tension later. Sometimes, it’s good to write things down and not have regrets later. Make no mistake, this is a business relationship.
›› Family financial resource pooling can be very successful for real estate and stock investments. Some of Canada’s wealthiest owners of real estate and public companies are family owned. It sometimes pays to keep it “all in the family.”
›› Your tax adviser can explain some pros and cons of pooling from a tax perspective. Compare the tax advantages of having extended families under one roof, with the loss of other tax credits and government programs.
›› How is the credit rating of the other family members? Pooling can help family members with less than excellent credit re-establish themselves.

Family dynamics are an important ingredient when families pool their financial resources. Real estate prices will always rise and fall, but families are priceless.

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