Edmonton Real Estate Blog

Here is an update that hopefully will clearly indicate the unexpected ‘buyer’s market that has now gripped us. Real estate prognosticator’s at the beginning of 2010 told us to expect a slow steady increase of about 6% in prices in Edmonton! They did not foresee that by mid-year there would be considerably more sellers than buyers; they failed to grasp that the motivated sellers would have to reduce their asking prices and offer other incentives just to attract buyers and, even then, there were no guarantees that an offer to purchase would be forthcoming!

On the MLS system (Aug. 23), there were 4025 single family homes for sale in Edmonton (including Sherwood Park and St. Albert). In the last 30 days, 1,263 new homes had been listed! Of that, only 648 had sold making for a 15% increase in homes for sale!

Condos showed a similar pattern. There were 2364 on the MLS system, with 649 of those being listed in the previous 30 days. In that same time frame 306 had sold making for a net gain of available condos for sale of 343 or 14.5%.

Besides the time on the market for homes/condos to sell is also increasing as buyers take longer to decide!

Buyers are now in an enviable position to seek out superior properties in their price range at the best prices. They can offer considerably less than the asking price and still have plenty of clout in the final negotiation price. As well, they ask for additional items from the seller that are not included in the list of goods on the listing sheet—a fish tank, a dining room table and chairs, a washer and dryer, and so forth.

Motivated sellers, at the same time, are now in a tricky position. They must list their price extremely competitively according to the market conditions that day and must be prepared every couple of weeks to freshly evaluate their position until their home sells. Adjusting the price downwards is a critical move. Another strategy may be to offer an incentive to buyer’s—for example, a carpet or painting allowance at closing to address a deficiency in those areas; they might also consider a cash incentive to the agent who brings them a successful offer—an increased commission amount or a specific cash amount—anything that will set your home apart from the competition.

Packing all your own items will save you money. It can also be quite stressful, so we came up with some simple techniques to make it easier. Remember, if you have any questions contact your personal Move Counselor .

Use the proper packing materials.
Sturdy boxes, packing tape, bubble wrap and packing peanuts can all be purchased at local moving or shipping companies. Wardrobe boxes plus other specialty boxes can also be found there.

You can’t move that!
Here is a partial list of common household items movers will NOT ship:

Acid
Aerosols
Ammonia
Ammunition
Batteries
Car batteries
Charcoal
Charcoal lighter fluid Chemistry sets
Cleaning fluid
Cooking fuel (Sterno)
Fertilizer
Fireworks
Frozen foods
Gasoline
Kerosene Lamp oil
Liquid bleach
Loaded weapons
Matches
Motor oil
Nail polish remover
Open foods
Paints Paint thinner
Pesticides
Plants
Poisons
Pool chemicals
Produce
Propane tanks
Weed killer

Tools and materials

* Razor, knife and/or scissors
* Dark, water-resistant marker
* Packing tape
* Styrofoam peanuts
* Labels (can include fragile, load first, load last, do not load)

One room at a time
It’s more efficient and less stressful if you pack one room at a time. Be sure and label each box appropriately (on top and side) with a description of its contents. Boxes containing breakable or sentimental items should always be labeled as “Fragile”. Keep a detailed list of what items are packed in each box to make unpacking easier.

Empty all drawers of breakable items or anything that might spill
Also, it’s a good idea to put all furniture knobs, feet, screws, etc. in one container so they won’t get lost or damaged.

Flammable/heat-sensitive
Do not pack flammable goods or heat-sensitive items like candles, records, audio and video tapes, computer disks, propane tanks, aerosol cans, oil based paints and certain cleaning fluids.

A little TLC
Wrap each item individually and always place a layer of crushed paper in the bottom of the box or carton for cushioning. Fill empty spaces with additional crushed paper. When wrapping glasses, carefully put paper in the glass as well.

Will you be storing anything?
If so, make sure your boxes are firmly packed with the heavier items on bottom. It’s a smart idea to pack according to the season(s) which your things will be in storage and mark the boxes appropriately.

A note from the chiropractor
Put heavy items in small boxes so they’re easier to carry.

When packing the truck
Make sure the items you need first are loaded last (e.g., kitchen items, telephone and radio). Use common sense, keep in mind the size, sturdiness and weight of your boxes.

It pays to plan ahead
Pack a separate bag with toiletries, a change of clothes, etc., for the first couple of days after your move.

SOURCE: moveadvocate.com/tips/packing.asp

The experts are forecasting that the Bank of Canada will raise their posted rates by the end of July 2010. The immediate spin-off is an increase in mortgage rates. So… if you are considering locking in a mortgage in the near future, NOW IS THE TIME TO SECURE A FORMAL AND WRITTEN MORTGAGE PRE-APPROVAL!!

Edmonton Real Estate continues to ride the roller-coaster.  The good news is that single family house prices have risen almost 6 per cent from one year ago to an average selling price of about $391,500.

However that upward trend has been tempered by a 37 per cent decrease in sales compared to June 2009.  1,539 residential sales were recorded in June 2010.  In other words, half of the realtors in Edmonton did not register a sale in the previous month!

It also should be noted that the listing inventory at the end of June was 9,406 which is only 500 shy of the record set in September 2007.  Buyers will be happy with the large selection.  Sellers, on the other hand, need to be aware that in this over-supplied marketplace, price and condition have become huge issues in this ‘buyer’s market.’  Only if a home is priced right and shows well will it have a reasonable chance to sell!

The Realtors Association of Edmonton is now forecasting a slowdown in sales and falling prices in the next few months!

A stable marketplace is nowhere in sight!

Did you know that carbon monoxide is the leading cause of accidental poisoning deaths in Canada. Since 2002, 35 people have died in Alberta from the poisonous gas?   Because it has no smell or color, carbon monoxide has been called the ‘silent killer.’

Did you know that a $40-$80 investment can largely prevent you or your family from becoming another tragic statistic?

If you are thinking about buying a condominium, it is absolutely essential that you place the following condition on any and every purchase contract: ‘Subject to the Buyer’s satisfactory review of the Condominium Documents by such and such a date.’  The Alberta Real Estate Association contract provides an ‘Appendix’ which specifies those documents.  While the list may not apply to every condominium, the majority will!  Ensure that the current seller provides you with a COMPLETE SET of documents to review!  If you feel uncomfortable in reviewing these documents yourself, there are lawyers and individuals who, for a set fee, will do this professionally.  Surely, you want to make a wise investment upfront and avoid the catastrophic ‘Surprise! Surprise!’ scenario  down the road.

For example, in your due diligence you will want answers to the following questions before you purchase a condominium [understanding that this is not an exhaustive list]:

1. What are my initial impressions of the condo complex?  Is it well-maintained?  Lawns cut?  Litter-free?  Attractive to the eye?  Show ‘pride of ownership?

2.  Can I live within the current bylaws?  Are there age or pet restrictions that might impact me?

3.  How many parking stalls come with the unit?  Are they titled or assigned?

4.  Is the condominium a ‘conventional’ type or a ‘bareland’  [I own some land] type?

5.  What is the current ‘reserve fund’ amount?  Is the amount sufficient to address all of the maintenance and repair work specified in the Reserve Fund Study?  Or, will the monthly condo fees increase in the near future?  If so, by how much and when?  Has a ‘Special Levy’ been levied against each unit in the complex or is it being considered?  [If it is already been assessed, ensure that there is written agreement that the current owner will pay it out in full on or before possession date].

6.  What is the percentage of owners versus renters?

7.  Is the complex self-managed or professionally managed?  If the latter, what is the name of the professional management company?  Further, what is the name of the person in that management company responsible for this complex?  [I suggest that any potential buyer contact this person, as part of their due diligence, and ask them, 'Do you have any reservations whatsoever, in recommending this complex to me?  Will the condo fees be increased in the next twelve months?  What are the major challenges facing the complex in the next year?'

8.  What do you learn from reading the monthly condo board meetings for the past year?  the last annual general meeting?  Do you sense any red flags?

9.  After a careful reading of the 'Reserve Fund Study', do you have any questions in your mind that demand answers?  Or, can you move confidently forward in your decision?

10.  What has been the re-sale history in the complex over the past year?  How long have the individual units sat on the market before a sale?  Are the prices increasing or decreasing?  Does the lack of a sales history indicate a stability among the current owners?

As a further step, you may want to visit the complex and chat with some of the current owners to garner their perspective.  You could ask them questions like: 'How long have you lived here?  Are you considering a move in the near future?  What do you like and dislike about the complex?  Are there any problems of which I should be aware?'

If after doing a lot of personal research [The condition of condo doc review should give you a time-span of five working days], you decide to proceed with the purchase, there is one more piece of advice I have regarding condo documents–KEEP EVERY DOCUMENT.  Place the package you received from the last owner in a separate file.  Then add to it as more documents come your way: monthly condo board meeting minutes, annual general meeting minutes, annual financial report, and so forth.

By being a ‘hoarder’ of every written piece of information pertaining to your unit, you will spare yourself a bill from the management company for missing documents if you ever decide to sell your condo unit!  That bill can amount to hundreds of dollars [$500 or more is not uncommon!].

Condominium living may well suit your lifestyle options.  Care taken in advance of a purchase together with diligence while living there [Why not allow your name to stand for nomination to the condo board and thereby gain the inside track on the affairs of the complex of which you are a part-owner?] will allow for piece of mind and general enjoyment!

I am happy to include a guest article by Stanley Popovich. I know you will profit from his advice!

Many people deal with the anxieties of buying or selling a home. This process can be confusing to many people. As a result, here is a list of ways that a person can use to manage the anxiety of purchasing or selling a home.

The first step is to determine your goals in purchasing or selling a home. Determine what you want to accomplish. It will save you a lot of time and money in the long run if you know what you are looking for. Sit down and think about the overall goal of what you are looking for and convey this to your real estate agent. Some people like to write down their goals on a piece of paper so they have something to go back to when they get stressed.

Educate yourself on the steps of purchasing or buying a home. Go to your local bookstore and find some books that will explain the process of buying or selling a home. There are many books available that can inform you of the process and will help reduce the anxiety of the situation. Most importantly, you will be able to make smarter choices that will save you time and money.

Find a reputable real estate agent that can help you accomplish your goals. Ask some of your friends on who they recommend and get in touch with them. Referrals from people you know are a great way in finding a good real estate agent.

Get your finances organized. Make sure you have an idea on what you can afford and also make sure that your credit is good. The financial aspect of buying or selling a home does not have to be scary if you have a sound business plan and a realistic budget. Some people may buy a home that they can’t afford and this can cause problems down the road. Determine what you can afford and develop a budget where you will be able to keep up with your bills.

In addition to using the services of a good real estate agent, try to get a friend who is more experienced to help you. Chances are good that you know someone who has purchased or sold a home. You could ask them for their assistance and ask them questions on what to do and what not do. Having a friend who can assist you along the way can really help reduce the anxiety of the process.

Read the fine print on everything before signing and do not assume anything. Ask questions if you are uncertain on some aspects of buying or selling a home. A good real estate agent will not mind if you ask questions, however you should do your part and try to educate yourself on the entire process.

There will be times when everything happens all at once. When this happens, a person should take a deep breath and try to find something to do for a few minutes to get their mind off of the current situation. A person could take a walk, listen to some music, read the newspaper or do an activity that will give them a fresh perspective on things. Once you calm down, you will better able to make the right decisions.

Purchasing or selling a home does not have to be a bigger deal than it has to if you take the proper steps. There is help out there if you get stuck or confused. The most important thing is to do your homework. Determine your goals, educate yourself on the steps to reach your goals, ask questions, and take it one step at a time. If you follow this advice you will be better able to reduce the stresses of purchasing or selling a home.
You can read more of Stan’s work at http://www.managingfear.com.

Surprisingly, with forecasts of a gentle increase in prices, the monthly report of the Edmonton Real Estate Board dispelled all those rumors. Single family homes sold for an average of $388,473 [up 4.7% from the previous month and up 11% over March 2009]. Condominium prices were also up 8.4% over February 2010 and 10.5% over March 2009 to an average price of $252,416. The price of duplexes dipped slightly from the previous month but were still 10.4% higher than the same month in 2009.

Residential listings were 30% higher than March 2009. 3,728 new listings were added to the inventory in March 2010 while sales for the month totaled 1,571 [over 50 each day]–a figure which was 15% higher than March 2009.

It seems that home-buyers were hurrying to take advantage of their pre-approved mortgages which boast very low rates. They were also propelled to action by the coming revised mortgage pre-approval rules.

All in all, it seems that Edmonton’s balanced real estate market will be very busy this year.

In the fast-paced Edmonton Real Estate market, it is vital that every serious buyer secure a written mortgage pre-approval from their lender in advance of ever looking at properties.  This will reveal what price range is within your grasp and will lock in a guaranteed interest rate for a period of 90-120 days.  Make sure, in advance of April 19, that your lending institution match a current mortgage broker’s discount rate!

The documents that you should take to your lender should include: (1) An employment letter from your company, dated and signed on company letterhead, which will indicate your employment history, the salary paid, the number of hours worked each week, the number of hours of overtime worked each week if applicable, and the employment prospects for the future.  The letter must be written after the company ‘probation period’ has expired; (2) A current pay-stub which shows your year-to-date income; (3) A T-4 slip for the most recent two year period together with your ‘Notice of Tax Assessment’ form; (4) Copy of your current RRSP investment statement that could be used to verify a source of the needed 5% [or more] cash down-payment and/or closing costs of 1.5% of the mortgage; (5) Copy ofyour previous three month’s bank statements; (6) ‘Void’ cheque to use when deciding the account out of which the mortgage payment will be made; (7) The name and address of your lawyer that the lender will use to forward mortgage documents to at closing; (8) If you are a current homeowner, a copy of your most recent mortgage statement indicating the amount owing and the monthly mortgage payment amount.

Hope this is helpful.  Many thanks to Norman Summerton for these important ideas.

Recently in Edmonton, I have been involved in several multiple offer situations on properties that have been on the Edmonton Real Estate Board listing site on the first day.   This is not an uncommon scenario in March 2010.  Many buyers are looking for homes ahead of the proposed mortgage changes coming in April.  This situation says two things to me.

First, a word to sellers.  It is a great time to be selling!  However to get the kind of activity that I have just described, your home must be in tip-top shape and priced aggressively.  Serious buyers have been searching for some time and are very familiar with good value and ‘over-priced’ listings.  Priced right at the beginning gives you a competitive edge.

Second, buyers need to be prepared to enter a real estate environment where the advantage is tipped in favor of the seller for the best properties.  In order to compete, buyers MUST have secured a written MORTGAGE PRE-APPROVAL in advance.  Next they need to be as flexible as possible to fit in with the seller’s wishes.  Then they must be prepared to put a substantial cash-down-payment of at least $5000 as part of their offer to purchase.  Furthermore, they must be prepared to put as few conditions to their offer to purchase as possible [eg., financing and a home inspection] and have them removed as quickly as possible [4 0r 5 working days].  Finally, on select properties, they must be prepared to offer more than the listing price.

How much higher should you offer?  The answer to that question depends on: (a) what your financial restraints might be; and (b) whether or not you can comfortably walk away from that home or condo if the other offer [or offers] out-bid you!  It would not be unheard-of to have an offer $5000 or more above the asking price.  If you lose one offer, move on quickly to the second with your realtor!

In this market, it is fun to be a seller and aggravating, at times, to be a buyer!

Need some professional help?  Call me!  I will be happy to guide you to a successful conclusion!