Durham Region Real Estate Blog

How come everyone wants a piece of my pie and I can’t ever seem to get a piece of theirs? I’m sure plenty of us feel that way. Years ago I knew a girl who moved to northern British Columbia with her boyfriend. Nature freaks – both of them! (Good thing too, or they might not have survived!) Now I’m not talking northern B.C. like Prince George or Prince Rupert, but Atlin. And not even Atlin, they lived way outside of Atlin, just south of the Yukon border…..in a TEEPEE!! They bathed in a hot spring and got a great deal of food from the local indians!! Now if that is the way to keep a piece of your own pie, then I say, “You can have my pie”!

There is a better way. At 1.85%, a variable-rate product today may look as attractive as ever, but the five-year fixed-rate closed mortgage is falling fast. Brad Vokins, Mobile Mortgage Specialist with RBC Royal Bank is quoting a five-year-fixed-rate at 3.64%. What if the banks reduce the long-term rates even more!

In the past variable rate mortgages have benefited the consumer far better than fixed-rate mortgages, but the time may be turning. the central bank has raised rates a couple of times now and will likely continue to raise rates. No one expects that the next five years will follow the past five years, so you may be able to argue that it is a good idea to lock in now.

Bank of Montreal is forecasting another 25 basis point move in September and says rates will climb another 1.5 percentage points by the end of 2011. If this is correct, by 2012, the variable-rate products out today would come in at just above 3.75%, if the discounting remains the same. And some banks are forcasting that the variable-rate product you can get today will end up at 6% by 2015. Fears of such a scenario are driving people into fixed-rate products again. That, plus new mortgage rules that make it easier to qualify for a mortgage if you go for a fixed-rate product with a term of five years or longer.

The Bank of Canada is doing what it said and increasing rates. The prediction is that the increases will continue, so now is a good time to consider locking in for a term. It makes sense, but with variable rate still under 2%, it’s easy to see why people wouldn’t want to lock in. If you are secure in your financial situation, you might just want to keep riding the variable wave.

There just never seems to be a clear answer on whether to lock in or stay variable, but this much is clear. Mortgage rates are low. Really low. And with them so low, it’s a great way for you to increase your piece of the pie. Take advantage, negotiate the lowest rate possible, then keep your payments a little higher and watch the principal amount of your mortgage decrease every month. You’ll be mortgage free in no time!  Then throw a big party and eat your own pie!

As Realtors® we often forget how intimitating it can be to buy or sell a home. We do transactions and discuss the industry daily and forget that not everyone lives and breathes real estate. So this blog is hopefully a refresher course for those who need it and a few helpful tips for those new to the exciting world of home ownership.

It’s all over the papers that the market is cooling (and it is, but the sky is not falling….but that’s another blog!) and with a cooling  market it is that much more important to create a plan before jumping into the market.

Our neighbours to the south have experienced a housing burst but thankfully, we have not. More conservative regulations helped to prevent people from getting in over their heads. Yet another reason to be glad to be a Canadian!

But the market is different now than it was so anyone buying a house needs to be extra careful they have all their ducks in a row. Here are six things to remember to ensure you end up with the house of your dreams.

1. Build your team – You need a knowledgeable real estate agent, lawyer and mortgage broker. (Hopefully this is where you decide to call me! But really, just make sure you choose someone you can trust to help you make the decision that is right for you at this time in your life.)

2. Get a pre-approval – Having a great mortgage broker on your side can give you great peace of mind. They will lock in your mortgage rate for up to 120 days. Keep in mink that pre-approvals are almost always subject to certain conditions that you will need to meet before financing is confirmed. To protect and ensure that you can afford to buy the house of your dreams, it is a good idea to have a condition for financing on any offers to purchase a house.

3. Set a budget and stick to it – It’s hard not to let emotions take over during the home buying process. Your pre-approval amount is what the bank is willing to lend you and may not necessarily be an amount you can comfortably afford to pay, after taking into consideration your lifestyle needs. Do you have an active social life? Do you enjoy eating out? Are you planning on having kids? Are you saving for your RRSPs? When a bank provides an approval, they are based on CMHC guidelines, not the costs associated with your lifestyle.

For example, your financial institution will examine your gross debt servicing. Your monthly housing costs should not exceed 32% of your gross monthly household income. Housing costs include monthly mortgage payments, taxes, heating expenses and half of monthly condominium fees (if you are buying a condo). Your mortgage lender will also examine your total debt servicing ratio. This is your entire monthly debt load and it should not exceed 40% of your gross monthly income. This includes housing costs such as property taxes, heating costs and condo fees and other debts such as car payments, personal loans and credit card payments.

4. Factor in closing costs -  Far too often people are surprised when they get the final statement of adjustments from their lawyers and are left scrambling to come up with thousands of dollars to cover the shortfall. On top of the purchase price, there are also land transfer tax and legal fees. For example you must pay the Provincial Land Transfer Tax (first time buyers are eligible for a rebate), lawyer fees, maybe land taxes and an oil tank fill up. If you are buying in a new development, you may also be responsible for development charges, such as education levies and fees for enrolment in Tarion Warranty Corporation and installation of hydro meters. My advice? When negotiating the purchase of a new home, you should put a cap on all these extra charges. For example, if you capped all your developments charges and levies at $3,000, this is the maximum the builder could charge you at closing time, regardless of what the actual fees should be.

5. Title Insuance – Title insurance and identity theft coverage offer peace o fmind and protection. Although real estate title fraud is far less frequent than other forms of identity theft, it is a violation that can have devastating and long lasting effect on its victims.

And finally, once you are happy and settled in your new home, the journey is not over, it is just beginning. The goal is to pay off your mortgage as soon as comfortably possible. Try this:

6.  Bump up frequency of your payments – To save substantially on your interest costs and pay off your mortgage faster, set your payments to rapid weekly or bi-weekly mortgage payments options instead of monthly. The total outlay is only slightly greater than if you coose to pay monthly, but the impact on the bottom line is amazing. For instance, if you started with a 25 year amortization, by making rapid bi-weekly payments you would pay off your mortgage in 21. 4 years instead of 25. This saves tens of thousands of dollars in interest costs!

Regardless of where we are in the economic cycle or how robust the real estate market is, we all need a home, Finding the right home to suit your budget, your lifestyle and your aspirations is always a challenge. But with the right team, the right tools, a little patience and a little luck, you may be moving into the house of your dreams sooner than you ever imagined!

Each season it is your well-maintained entryway that gracefully welcomes friends and family to your home. The fact that most passers by can see it readily provides plenty of incentive for homeowners to make this first impression a good one.

Clean and clear walkways, pretty landscaping and plenty of lighting will all enhance your home’s main feature, a gracious entrance. But here we will focus on the doorway itself.

Have you thought about replacing your front door? If is is poorly hung or has an improper fit, not only will you have a disappointing first impression, it could contribute to energy loss and security risks. In these cases, the door requires replacing. You may wish to consider a complete entry system, instead of just a door exchange. With the system, the door is pre-hung in its frame, with each of its components designed to work reliably together – your best bet when it comes to dependable energy efficiency and overall strength.

Your existing door may be in great shape, so a simple update may be all that is required. Painting will allow you to change the colour in the future, while staining a wood door will lend to a sophisticated, formal entrance.

In choosing a paint colour for the front door, it is important to decide on the overall look and feel you wish to achieve. Do you want to draw attention to the entrance as a bold focal point? Then choose a standout colour that contrasts (but is complimentary) to the exterior of the house.

If you prefer to have a discreet front door, then opt for a more subtle colour. Choose this option if your door is awkwardly placed so as to avoid disturbing the overall balance of your home.

Classic black makes a formal and grand statement. Navy blue and deep green work beautifully with terracotta brick exteriors, while stone or siding in grey looks best with a selection from the red family. Keep in mind that secondary doors and garages should not compete with the front door. For these areas, use an entirely different colour or one that blends closely with the exterior.

And don’t forget the hardware. As your top priority choose security over aesthetics. You want protection for any forced entry attacks. But there are several great options in the market today. Coordinate door knockers, kick-plates, house numbers, mail slots and light fixtures for a harmonious appearance.

An improved appearance pays dividends in enjoyments and will increase the resale value of your home. Buyers will spend some time waiting for their agent to open the lockbox to obtain the key for your home. You want them to be able to see a pretty door, that is well-maintained, giving them a preview of what to expect when they see the inside of your home. So go ahead and splurge a little. You never get a second chance to make a good first impression!

I’m a real estate salesperson, so I think it’s a given that my answer to this question is, “Yes”! But let me go a little further with my answer. The real estate market has always been a good, long term investment so whether you buy in an up or down market, if you hold onto your property long enough, you will see a return (and sometimes a substantial return) on your investment. Is that true of just about every investment? Likely, but I’m not a stock trader, so you’ll have to go elsewhere for that answer!

Today the market in the Durham Region is great. News reporters are going to tell you that the market statistics are down and the “bubble” has burst because they sell based on sensationalism. Do they think we can’t remember that they were saying the bubble had burst at the end of 2008? I don’t think there ever was a bubble and most real estate analysts will tell you the same thing. We have had a slow and steady increase in sales and prices within the Durham Region and any dips we saw at the beginning of 2009 have been regained. There are always going to be ups and downs in the market, just as in any business.

So should you buy a house now? Or for that matter, are you thinking “Should I sell my home“? Sure, maybe you will get a little less for your home this month than you would have received last month, but the house you buy is going to be worth less also, so it’ll all work out in the end. And if you are buying now, don’t worry that the house might have been $5,000 less if you waited another 30 days, instead, buy your own home, start paying your own mortgage and building up the equity in your house. In five years, you’ll wonder why you ever hesitated. Mortgage rates are still really low. Go to my website and see a banner/link to Kyle Erickson’s website for amazing mortgage rates. He has lenders that he saves just for my clients and you won’t believe the deal he can get for you!

So call and see what type of mortgage you qualify for, then call me and we’ll go find the home of your dreams!

Have you been listening to the reports on the European economy? It appears that they have bought themselves some time from those vicious currency and bond speculators (for a small some of one trillion dollars!). And this has all reflected by making individuals a little more relieved about their finances. Investors were lulled into a false sense of security during April as volatility fell to the lowest level since July, 2007, and May brought a spike in volatility that really shocked most people.

For now, most are over the shock and are returning their interests to thier own pocketbooks and investments. What does the job and income situation look like? Are financial plans still intact? What about that mortgage coming due next month?

Do you dread your mortgage decision? Despite the signs of an impending rise in the general level of interest rates and warning from government officials, there still seem to be a lack of conviction among Canadians as to whether they should lock in their mortgages at prevailing rates, versus holding on to a floating rate mortgage.  So what are the facts?

Despite the recent jump in rates, we still look to be in the middle of a downward trend in mortgage rates since 1981. Do you remember that year and its five year term that was in excess of 22%? It came at the same time that North America fell victim to a painful double-dip recession. Inflation was sitting around 12% at the time. Many families lost their homes, but today we are in just as precarious a situation as households are holding a much higher debt ratio than we were in the past and that makes us more susceptible to disaster.

The prime rate hasn’t budged from 2.25%, set in April, 2009, so your variable rate mortgage is still an attractive option. Many lenders are offering a variable rate that is tied directly to the prime rate, thereby saving homeowners choosing this route to really take advantage and pay down their mortgages early. The five year rate, however, has been a different story. Conventional five-year rates (posted rate) fell to a low on 5.25% in April, 2009, only to increase to 5.85% throughout the summer, then we saw a reprieve in the early months of this year. That all changed toward the end of the first quarter as the economy was looking better and inflation fears began to creep back in to the market. The mortgage rates went from a low of 5.35% in March to a high of 6.25% by late April. There has now been a 15 basis point reprieve to 6.1%.

So what is the point of all this? Whether you choose a fixed or variable rate (or a combination of the two) mortgage, there are plenty of options out there for you. And with the real estate market in the Durham Region strong, very strong; 819 sales in February, 1,110 in March and 1,185 in April, you might want to consider a move, whether it be into your first home or into your perfect retirement place. I have access to mortgage rates much lower than the posted rates. The variable rate is 1.65% and the five year fixed rate is 4.25%. Very attractive considering the current posted and discounted rates! Contact me to find out more details.

Your bathroom is an important room in the house and should never be underestimated. Often it’s in the smallest room in the house that we get to mke the biggest impact. And bathroom renovations can bolster the saleability of your home. No longer just a place to wash and go, bathroooms can provide sanctuary from the chaos of life. So let’s start with a few – Absolutely Do Not Do items.

1. Carpets. These nasty fibers can hold a multitude of fluids so opt for surfaces that can be wiped clean.

2. Coloured fixtures. Avocado is not back in style! A chocolate brown toilet is not the way to go. Stick with white fixtures and inject your colour elsewhere.

3. Cheap laminate flooring. Some of these products are nothing more than a photograph of wood grain on top of compressed fiber board or chipboard. When you add water they expand. Opt for water-resistant products.

4. Toiletries on display. No one wants to see how many pills and potions you use. Ick! Choose a mix of open and closed storage so your Chanel toiletries will be on display and your unmentionable creams won’t!

5. Wallpaper. Yes, there are papers out now that can handle the humidity levels in your bathroom, but why would you when there are so many great paints on the market? Add drama with great towels or artwork, storage boxes or candles. All these can easily be rearranged or changed to suit your mood.

So what if you have some issues with your lavatory and can’t afford to change the big ticket items? Work with what you’ve got. If you have a gold toilet, tub and sink, go with it! Make them poart of your colour scheme.

Match dominant colours to create a uniform and calming look. Bright colours that compete can create a chaotic mood. Do you have dark brown tiles? Get a luxurious chocolate brown shower curtain in canvas and some brushed nickel accessories for a streamlined hotel look. Keep your eye out for great towels in neutral colours that don’t compete with your bold fixtures. Candles and hand-milled soaps can offer an inexpensive decorative touch.

Before you know it, you’ll have a bathroom to envy whether you are selling or staying put!

If you’ve read or listened to the news at all, you know that the Harmonized Sales Tax (HST) is on it’s way here in Ontario. The provincial government has announced that it intends to combine the eight percent Provincial sales Tax with the five percent federal Good and Services Tax, creating a thirteen percent HST.

The HST is not yet in effect. The provincial government has indicated that it intends to bring the HST into effect beginning on July 1, 2010, however there are transition rules in place. The HST will not apply on the purchase price of a resale home, but it will apply to services such as moving costs, legal fees, home inspection fees and Realtor® commissions. The HST will apply to the purchase price of newly constructed home however, the Province is proposing a rebate so that new homes across all price ranges would receive a seventy-five percent rebate of the provincial portion of the single sales tax on the first $400,000. For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system.

So it is important to remember that sales of resale residential housing and long-term rentals or residential housing will be exempt for HST purposes, but you will pay HST on the other services related to the sale or purchase of a house (real estate commissions, lawyer fees, moving services, home inspections, etc.)

Most of us have a home owners policy, but have you ever done a home inventory? Whether you’re an apartment renter, a high-rise condominium dweller or a home owner, everyone is subject to theft, fire or natural disaster. As an exercise, try to take a mental inventory of just one junk drawer, and then imagine having to do that for your entire home after a fire. You might have an elephantine memory, but trying to remember everything after it’s gone is a monumental task. Getting started is the hardest part. Use these tips to make the most of your efforts.

1. You must count everything. Include any item of value, not just large appliances and electronics. Don’t forget to document toys, the contents of your closets and anything in your kitchen cabinets.

2. Get organized. Taking the time to record serial numbers, collect receipts and take photographs now can save you a lot of time later. Insurance claims are processed more quickly and are more likely to receive full compensation when they are supported with visual evidence of ownership.

3. Schedule a photo shoot. In addition to making a list of items, take pictures of rooms and large or important items. On the back of each photo, make a note of what is shown, its value, make and any serial number or special identifiers.

4. Round up the troops! Enlist the help of the entire family. Assign a room to each family member, or use a camcorder and have each person take turns describing items for the camera.

5. Move it! Conduct a home inventory when you move. As you pack your items for each room, take photographs and note the serial numbers. This way you’ll also have detailed information in the case that something is lost or damaged during the move.

6. Keep duplicates. Make a copy of your inventory to keep in a fire-proof safe at home, but most importantly, keep another copy in a safe-deposit box, at your office or any safe location away from your home.

7. Consider extra coverage. If you have special items such as expensive jewelry, fine art or rare antique collections, you may wish to purchase extra coverage (a rider or endorsement) to protect these items.

There is a variety of personal finance software packages that include home inventory features and a number of free or inexpensive programs are available for download online. Just make sure that you burn a copy of the file to CD for off-site storage.  Check out www.mycroftcomputing.com/eiown.html or www.knowyourstuff.org

Get started today! Don’t be daunted by accumulated items – a partial inventory is better than nothing! And remember to update your inventory list annually, as well as each time you make a major purchase.

Is your home causing you to suffer from sniffles and a sore throat? Dust mites, mold, cockroaches and pets can wreak havoc on those who suffer from allergies.

Dust mites tend to dwell in the bedroom and feed on the shed skin of us and our pets. Then the pets themselves can be a big cause of the sniffles. Proteins from dander – the skin flakes that you dog or cat sheds – cause allergic reactions in many of us. Mold can be found in any area of your home with high humidity or where water accumulates. Kitchens, bathrooms and basements are the best examples of such rooms. Mold thrives around cracks where water seeps in; around leaks in hoses, dishwashers and toilets; and under carpets that are frequently exposed to moisture. And then there are the nasty cockroaches, though they are not what we are allergic too, it’s their droppings that cause the reaction. Unfortunately, the protein in their dung is a primary trigger of allergic reactions and asthma symptoms.

So how do we combat all these allergens and make our homes allergy-proof? Well, it will take a little more than a spring cleaning and you might want to where a mask to cut down on the allergens that you inhale.

In the bedrooms, wash your sheets weekly in very hot water (130°F). Wash your other bedding regularly in very hot water and dry in a hot air dryer at least every eight weeks. Vacuum your box spring and mattress and encase each in an anti-allergen covering and wipe off with a clean, damp cloth. Dust and vacuum all surfaces weekly and keep your pets out of your bedroom.

Your kitchen can be a hot spot of allergens. Clean the inside and outside of your fridge monthly. Clean crumbs, grease and water from the stove, flooring and countertops regularly. Empty trash cans daily and clean them on a regular basis. Clean the area under your sink, keeping it dry and reducing clutter. Dispose of any paper grocery bags as they are a favorite hiding place for roaches. Keep food containers tightly sealed and wash and dry dishes as soon as possible after eating.

In your living and dining rooms make sure to vacuum at least once a week (more often if you have pets) and if possible, use a vacuum with a HEPA filter in order to keep fewer allergens from circulating into the air. Clean light fixtures and fans monthly, using a clean, damp cloth. Vacuum upholstered furniture regularly and steam clean furniture and carpets at least once a year. Keep your fireplace clean and maintained and don’t store mold-prone firewood indoors.

Bathrooms have a high humidity level, so take extra care here. Clean showers and bathtubs weekly, making sure to clear out soap scum in the process. Wipe up water around showers and bathtubs after every shower and keep the shower door or curtain open during the day so that the walls will dry. Use an exhaust fan or keep the windows open during showers to lower humidity in the room. Wash towels and bath mats often. And don’t forget to regularly clean the area under the sink and repair any leaks immediately.

Around the house, be sure to clean often. Allow natural sunshine in to reduce mold growth. Seal any cracks around the walls, floors or cabinets to keep the insects out. Use window coverings that you can easily clean and then make sure to clean them regularly.

If you take care of your ventilation, you’ll be one step closer to an allergy-free home. Clean the ductwork regularly to prevent allergens from building up in your central heating and air systems. And don’t forget to clean or change the cooling and heating system filters monthly.

You’ll be healthier in your clean home and when it comes time to sell it, you’ll have a home that is ready for market. Buyers love a clean home so you’ll be one step closer to selling your home for top dollar!

If you have read my past blogs, you know that I am opposed to the new Harmonized Sales Tax (HST), and I did try to get as many people as possible to write all the politicians they could, in order to have the new tax defeated.  This didn’t work and it looks like we are going to have the new tax, like it or not. So let’s embrace the new tax!

The Ontario provincial government has announced that it intends to combine the eight percent Provincial Sales Tax wit the five percent federal Goods and Services Tax, creating a thirteen percent HST. The tax is not yet in effect, but will start on July 1, 2010. While the new tax will not apply to the purchase price of a re-sale home, it will apply to services such as moving costs, legal fees, home inspection fees and Realtor® commissions.

There are transitional rules that will apply to HST and Realtor® commissions. The HST will general apply to services, expressed as a percentage, that the services are performed on or after July 1, 2010. However, if 90% or more of the services are performed before July 1, 2010, the HST will not apply.

For example, if I am selling your home and list it on June 1, 2010, receive an offer on June 15, 2010 and the transaction closes on July 2, 2010 then, since more than 90% of my services were performed before July 1, 2010, only GST will apply to the commission at that time.

In another example, let’s say that my services to sell your home are performed from May 1, 2010 to July 31, 2010 with the sale of your home closing on July 31, 201o. Since 2/3 of my services were performed from May 1, 2010 to June 30, 2010, only 1/3 of my services were performed after the July 1, 2010 HST start date. You would be charged GST on 2/3 of the commission and HST on 1/3 of the commission.

Sure, the new rules are a little confusing, but we’ll figure it out. You should keep in mind that while my topic covers how HST will affect home sales, it will also affect all business owners. Keep in mind that if you have a GST number and are able to get GST rebates, you may want to hold off on large purchases that are currently subject to 8% PST. If you buy the item after the HST comes into effect, you can apply for the HST rebate.