Top 10 Tips for Buying a Home

Planning on buying a home in 2015?   Maybe you’re thinking about buying your first home, trading up or downsizing?  Take advantage of the low interest rates. The housing inventory is starting to pick up and will be in full swing by spring.  Below are my top 10 tips for buying a home. (In no particular order)

1.  Hire a knowledgeable Real Estate Sales Representative. Your Real Estate Sales Representative is a valuable wealth of knowledge. They can help you negotiate the purchase price and guide you through the process of buying a home. 

2. Don't just rely on open houses to find your dream home.  Not all sellers want to host open houses.  Also, some properties are exclusive listings and only Real Estate Sales Representatives have access to them.

3. Get pre-approved.  Find out how much you can afford before you start looking.  If you don't have a Mortgage Agent, ask your Real Estate Sales Representative to refer you to one. Avoid the disappointment of falling in love with a home you can’t afford.  Save yourself the heartache.

4. When viewing a home it is important to look past the current owners decorating style. Paint, new flooring and light fixtures etc. can all be changed. You are buying the house not their design taste or furniture.  Instead focus on the layout of the house and its functionality for your current lifestyle; those are factors that cannot be easily changed.

5. Be clear about what you are looking for before you begin the process.  When you have a clear vision of what type of home you are looking for you are likely to recognize it when you see it.  This step can save valuable time and allow you to enjoy your new home quicker with less stress.

6.  Act decisively.  When you see the home that fits your lifestyle and budget, don't hesitate to put an offer together.  In a hot market it isn't uncommon to have multiple offers on a property. With all of the right information you can confidently move quickly.

7.  Be flexible.  It’s important to decide on the features that you absolutely must have and those features that you can live without. Ask yourself: Can this be changed? Is it relatively inexpensive to change? You can't pick up a house and move it 4 blocks (Well technically you can, but why not just buy a house in that area instead!) However, window coverings and the removal of wallpaper are a couple examples of quick and inexpensive fixes that can make a dramatic change to a living space.

8.  Be resilient. If you are in a multiple offer situation and you end up losing out to another buyer. I know it’s easier said than done, but it probably wasn't the house for you.  Something better is waiting for you.  Pick yourself up and keep looking.  You will eventually find the home that is perfect for you.  Saddle back up and keep on going. Just don't give up.

9. Choose quality over quantity. Narrow your focus and concentrate on the properties that are best suited for you.  This starts with #5, be very clear about what you are looking for.  Your Real Estate Sales Representative will work with you to find out what your needs are and help you find a home that is well suited for you.

10.  Have fun. You are buying a home that you will create lasting memories in, this is an exciting time.  With the right professionals beside you, you can rest assured that you are making sound decisions that will have a positive impact on your financial future.  Enjoy the experience. 

Why Canadian Interest Rates Aren't Going Anywhere Fast

There has been much speculation on whether or not we would see interest rates increase in 2015. Since Stephen Poloz, the Governor of The Bank of Canada, took the helm of our countries most influential player in promoting the well being of the Canadian economy, his next moves have been under scrutiny. The Bank of Canada has frozen the key lending rates since September of 2010.  Will 2015 be the year that interest rates finally increase?  The Canadian economy is said to be strong and in recovery from the economic crisis of 2008.  It is likely that if interest rates do increase, we are only looking at a few basis points,which would have a negligible effect on the Canadian economy and this is likely to occur in the fourth quarter of 2015. With the declining price of oil per barrel reducing the economic output, the low interest rates will serve to off-set the reduced revenues through solid household spending, strong increased exports and investments.

The five years of low interest rates has encouraged household spending and economic growth. Consumers spending has increased injecting more money into the economy. The Industrial and manufacturing sector has also expanded and created more jobs. While household spending is increasing because of the low cost of borrowing money, average household debt is also increasing year over year. With ballooning household debt, any drastic increases in the interest rate could be catastrophic for the economy. A drastic increase in interest rates could put a squeeze on households, leaving some households with insufficient money to meet payment to creditors and other household financial obligations. However, most households can handle an increase of a few points.  Most residential mortgages are a fixed rate. Households with variable mortgages and Industry would are likely to feel the effects.

Housing prices in the GTA have remained strong. With demand exceeding supply there has been an upward pressure on home prices.  I suspect this will continue well into the third quarter of 2015. The low cost of borrowing has made home ownership, in this competitive market, possible. The low interest rates over the last 5 years have played a key role in this thriving housing market.  There is a strong correlation between housing prices and interest rates. Because most people have to finance the purchase of a home, they have to be able to carry the monthly loan obligations, if interest rates are high this increases the monthly obligation and could make carrying the same property in a low interest rate environment impossible. When interest rates increase, fewer people will be able to qualify for a mortgage which could create a soft housing market.  Any sudden increases to the interest rate would be a set -back to all of the progress made thus far.  Changes to interest rates are likely to be gradual over the next couple of years.

The declining price of oil has decreased the value of the Canadian Loonie, which sits at around US$0.89.  It has long been thought that there is a strong positive correlation between energy prices and the inflation or deflation of the Loonie.  Oil and gas make up a little over a third of Canada’s net exports, with the US being a consistent, stable purchaser of Canadian crude oil. The downward pressure on the Loonie will continue until oil production is adjusted to stabilize the price.  The depreciating Loonie will increase export revenues in 2015. Significantly increasing the interest rates would appreciate the Loonie. The Loonie would then be less competitive and export revenues would decrease.  This would not be advantageous for the Canadian Economy because it is already facing a projected over a $5Billion dollar reduction to GDP, according to one of Canada’s largest banks, due to declining price of oil.  Strong exports and foreign investment in the Canadian economy will cushion this blow.

Over Promise and Over Deliver In life

Under promise and over deliver.  This is a common saying that is both cliché and uninspiring. I think many of us use this saying without really thinking about it. Set a challenge that is beneath your true potential and then accomplish it.  Where is the growth in that?  Why not stretch yourself this year and set the bar high.  Dare to be ambitious and make huge promises to yourself. Take the leap and over deliver.  I guarantee you will experience exponential personal and professional growth.  To begin the journey of over promising and over delivering you have to be willing to examine your weaknesses and put in the necessary work to turn them into strengths.  You must also embrace your unique talents and gifts to distinguish yourself  from the pack. 

Part of being able to over promise and over deliver comes from getting better. Improving your weaknesses are the fastest means to improving your overall performance.  Setting goals that are outside of your comfort zone are only achievable if we are willing to work on our weaknesses.  Our current strengths will only take us so far, but the incremental improvements in our weakness will push us forward to achieving our biggest goals.

We all have unique talents and gifts. Embrace your uniqueness to help you stand out and leave a positive lasting impression with everyone you meet. What are your unique gifts and talents? How will you use them to help you make leaps and bounds above the crowd.

Make this your best year ever.  Challenge yourself whenever possible. Set high standards in your personal and professional life. Over promise and over deliver. you owe it to yourself.

5 Tips For Successful Real Estate Investing

Many successful real estate investors create systems that rely on certain key fundamentals. Although each investor may have different goals, the fundamentals are the same.

1. Create A Team of Experts: Successful real estate investors understand that having a team of experts is critical to their success. They find experts in all areas to provide them with all the information they need to make the best decisions. Lawyers, Insurance Agents, Contractors, Real Estate Sales Representative, Accountants are a few of the key Members of their team. Using experts will exponentially increase your chances of success. When you hire an expert you save time and can focus on the areas of your business that you excel at.

2. Know The Market:. Another important key to successful real estate investing is understanding the local market that you plan to invest in. What are the demographics of the area? What are the major employers in the area? Is this a thriving economy that can support the local real estate market? What are average rents?  Don't be afraid to ask questions. Do your research.

3. Select Properties That Generate Positive Cash Flow: When your portfolio consists of properties that generate positive cash flow regardless of the market conditions, it provides you with a safety net. Banks are also more likely to loan you additional funds to grow your portfolio. Positive cash flow investment properties can relieve some of the stress that comes with real estate investing and also help you attain financial freedom sooner.

4.  Understand That Patience Pays: Be sure to set realistic timelines for your goals.  Allow yourself enough time to perform a through due diligence before you jump into any real estate deals.  Always know what you are getting into and analyze the numbers very carefully.

5. Create A Tax Plan:Tax planning should be set up in the beginning.Your real estate investment plan should be structured to maximize your returns while minimizing taxation. You should know what all the tax implications are for all the different scenarios that you may encounter. Use the expertise of your Property Tax Accountant.

The True Costs of Using Discount or Flat-Fee Real Estate Brokerages

source: illustrationsource.com

Over the recent years there has been a rise in the number of discount real estate brokerages that promote the idea of home owners privately selling their homes, without the professional guidance of Real Estate Sales Representatives. They charge a flat- fee or a discounted real estate commission for limited services. Property Guys, ComFree and Grapevine are among the many discount brokerages that sell the idea of saving money by selling your home privately, when in fact using a discount real estate brokerage is very costly to home owners. The business model of discount real estate brokerages rely on quantity over quality.  Discount real estate brokerages make money is by signing up as many For Sale By Owners (FSBO) as possible and turning them over quickly.  They don't have the marketing dollars or time to ensure maximum exposure of your home and will often convince you to take the first offer, regardless of the quality of the offer.  Once they take your money, you never hear from them again. Leaving you to fend for yourself, without any professional guidance or support. Discount real estate brokerages are the "Wolves of the Real Estate". Sellers beware. Real estate discount brokerages do not provide any advice, information or negotiation tips to home owners. It is no surprise that 90% of FSBO will end up hiring Real Estate Sales Representative to help them sell their home. What real estate discount brokerages don’t advertise are the true costs that are associated with selling your home privately; limited market exposure, costly legal liabilities and money left on table.

Representing yourself when you are selling your most valuable investment could end up costing you more than you bargained for. Real Estate Sales Representatives statistically bring a higher market value offer in a shorter period of time. The common business standards of co-operating with other agents representing, qualified buyers, increases the pool of interested buyers for your home. It is a known fact that the more potential, qualified buyers for any product, the more likely a seller is going receive top dollar for their product.  FSBO listings tend to attract unqualified buyers.  Unqualified buyers haven’t been pre-approved by a mortgage professional and often do not know how much they can afford to spend on a house. These unqualified buyers end up creating false hope in the FSBO, tying up the property for qualified buyers and wasting time. Wasted time is wasted money.  A Real Estate Sale Representative will ask the right questions to qualify buyers so that no valuable time is wasted.

FSBO listings also attract astute investors that are looking for their next bargain deal. Investors typically have more market knowledge than the average home owner and will use their knowledge to present a deal that is beneficial to them. Investors take advantage of the fact that FSBO are not being represented by a Real Estate Sales Representative. The average home owner when negotiating with an investor will end up leaving their hard earned equity on the table.  

I've seen first hand the emotional stress that many FSBO experience. They start out hopeful and then reality sets in. After empty open houses, countless deal that have fallen through, by "potential" buyers, they are exhausted and frustrated.  Selling your home can be a very stressful event if it is not managed properly. Many homeowners recognize this and hire a Real Estate Sales Representative to guide them through this life changing event. For the few that attempt to sell their homes on their own, they experience firsthand the difficult task of juggling all of the details required to sell a home for top dollar and efficiently. Marketing your property, answering phone calls, booking viewing appointments and putting together the legally binding paper work on top of your other responsibilities in life can be challenging. The job of selling your home and balancing life's other responsibilities can take its toll on relationships, finances and your well being. This in turn can result in you losing money and chipping away at your financial future. The longer a house sits on the market, the less likely it is going to receive a full price offer and the more it appeals to the bargain house hunters.

Selling your home isn't over once the agreement is signed and the keys are handed over. Sellers should be aware of the legal liabilities that could arise when selling their homes without the help of a Real Estate Sales Representative. Non disclosure of latent defects is one of the issues that may arise. Latent defects are hidden defects of the home that cannot be on normal inspections. Often times, sellers do not intended to hide  latent defects.  They may think they are immaterial or not even recall certain events that have caused the latent defects.  Regardless this could end up costing them thousands of dollars in legal fees and awarded damages paid to buyer. Real Estate Sales Representatives know the right questions to ask to ensure that all relevant information is disclosed to the potential buyer to avoid legal ramifications.  Real Estate Sales Representatives will also advise you to contact your lawyer for further advice if they feel that additional counsel and protection may be needed.