EDMHomesforSale.ca Blog

 

Oct. 23, 2017

How To Make Sure You Don't Overpay For Your Home

How to Make Sure You Don't Overpay For Your Next Home

How To Make Sure You Don’t Overpay For Your Home

 (Scroll to the Bottom to watch the YouTube video for this episode)

#1 Get Educated about the market (Or Find Someone who is!)

If you aren’t educated about the current state of the real estate market, or if the Realtor you are working with isn’t knowledgeable about the current real estate market, this could potentially cause you to overpay for a property.

Being aware of what’s generally going on in the real estate market, and more specifically, being aware of what is going on in that region or that neighbourhoods’ real estate market are important pieces of information to consider when making a purchase.

Some of the metrics that matter:

1.       Sales to List Price Ratio

2.       Average Days on Market

3.       The Absorption Rate, or the Months of Inventory

If you understand what these metrics mean and how to calculate them, you will have a much deeper understanding of the real estate market. Deeper than some real estate agents to be honest.

When evaluating the market, you want to look at these metrics and stats for the city you are shopping in, as well as the neighbourhood, or region if the neighbourhood is too specific. If you only look at the city and try to use those metrics as backup in your negotiating arguments, you’ve got it all wrong.

Sometimes what is going on in the city is completely different from what’s going on in a neighbourhood or region of the city. It’s possible to have a neighbourhood or region that is a Sellers market, even if the city is a Buyer’s market. (As it is right now)

So, one of the things that happens, is people get the idea that the market is down right now and it’s a buyer’s market, so they think that every seller should be willing to sell their property for less because they think the market is down right now. These people can be in for a rude awakening if they go into one of the neighbourhoods that is still a seller’s market because of low inventory and high buyer demand.

That’s why it’s important to look at these market metrics at both the city level and the region or neighbourhood level. If you do that, you now have something to compare the neighbourhood to, which gives you a deeper understanding of what’s really going on. You can compare that neighbourhoods’ average days on market, sales to list price ratio and its absorption rate to the city, and now you will know if that neighbourhood is doing better or worse than the city in terms of whether it’s a buyer or a sellers market for example.

With this knowledge, you will have an edge when evaluating how aggressive you can be on price when making offers on a property, especially if it’s in a neighbourhood that is currently performing worse than the city.

So that’s the first thing that can prevent you from overpaying for a property. Not being educated about the market. I know that can be a little complicated to understand, but you really don’t have to worry about that stuff if you are working with me because I’ll do all that analysis for you.

#2 Don’t Fall in love with a property where you just have to have it

If you fall in love with a property, you might end up overpaying for it. Plain and simple. I’m not saying you will overpay for it, but you’ve increased your risk of overpaying for it. The reason you’ve increased your risk is because you are going to make your negotiating decisions differently if you’ve fell in love. Now you might be afraid of losing the property to someone else, or you might be willing to pay whatever it takes to get this property, because you need it now.

For some, there isn’t much you can do to prevent yourself from falling in love with a home. It’s human nature, we all make buying decisions based on how we feel about a property, not just if it meets our needs. Some people think you should only buy a home if you do fall in love with it at first site, and they believe that’s the best criteria for picking a home. I think there is some merit to that, but I also believe there are a whole bunch of things you can do to make a home your own with the way you paint, decorate, and furnish it. Sometimes what causes people to fall in love with a home is that they love the style of the current homeowner.

#3 Give yourself other purchasing options

If you have other options, you automatically put yourself in a better negotiating position. You are less likely to be motivated by the fear of losing a property or being stuck without a home if this one doesn’t work out. By giving yourself options, or broadening your search horizon if there isn’t much in that specific neighbourhood, or that has that specific thing you “Just had to have”, you have protected yourself from overpaying for any one property if it’s priced too high.

#4 Don’t assume the list price is a fair price or the market value of the property

What a property is listed for isn’t always a good indicator of what it’s worth. Every home seller and real estate agent prices properties differently for many reasons. Sometimes people intentionally price their homes above market value because they want to leave themselves “negotiating room” because they have a belief that everyone wants to negotiate the price down on a listing. Sometimes a property is priced above market value because of a stubborn seller who believes their property is worth more, or the real estate agent who listed the property thinks it’s worth more, or they told the seller it was worth more to get the listing.

There are a whole bunch of possibilities here, but the point is that you can’t take the list price at face value, further investigation of the value is required. Which brings us to the next thing you can do to avoid overpaying for a property.

#5 Evaluate recent comparable sales to establish the market value of the property

Hands down, one of the best ways and easiest ways to make sure you don’t overpay for a property is to evaluate the most recent comparable sales with a comparative market analysis (CMA) on the home you’ve got your eye on.

To complete a CMA on a property, you are going to need the help of a Realtor (Call me maybe? ????) who has access to the backend of the MLS system. When I complete a CMA for a client, I’m looking at homes that are as similar as possible to the home in question that have sold recently. That means they are the same type of home (SFH, Duplex, Townhouse etc.), the same style (Bungalow, 2 stories, Split Level etc.), close to the same size, and have similar finishes (Flooring, Kitchen, Bathrooms etc.). The best comparables are the homes that have sold in the last 3 months.

By analysing this information on recent sales, you can get a pretty solid idea of what a home is worth, and with this information in hand, you can walk into a negotiation with confidence and make legitimate arguments about the value of the home.

#6 Be patient, sometimes a seller needs time to reduce their price

Not all sellers are willing to part with their home for a price that you think is fair. You might end up in a situation where you think a higher price would be too much for a property and the seller thinks any less would be too little for the property. And sometimes the attitude of the seller will change if their property has spent more time on the market without a sale. This sort of situation is most common when a property is first listed on the MLS, when the property hasn’t had as much time to be exposed to buyers and the sellers are still testing the market or seeing if they can get a better deal if they hold out for longer.

Sometimes they do get a better deal if they don’t come down on price for you and another buyer comes along who is willing to pay more. And sometimes they don’t get another buyer and become more motivated to reduce their price as time goes on. It can go either way, nobody has a crystal ball, and it’s going to depend on a lot of different factors.

The question you should ask yourself is, are you willing to wait and risk losing this property to someone else? How bad do you really want it? Is the difference in price really going to make much of a difference to you in the long term?

#7 Be willing to walk away from a property if the seller isn’t willing to come down to a fair price

This one is almost an extension of #6, but I decided to keep it separate because this one can be used as a negotiating tactic as well as a protection mechanism in cases where you can’t come to a fair agreement on price with the seller.

If you aren’t willing to walk away from a property, and the seller isn’t willing to come down to a fair price, you are going to pay for it. You are motivated by the fear of losing the home and the desire to get the home and make it yours. The seller has you if you aren’t willing to walk away, no matter how unreasonable you might think they are being. Sometimes it doesn’t matter what you tell the seller, or even what their agent tells them, they might not be willing to budge on price.

That’s where you need to decide if you are willing to walk away and go for another property. Sometimes just being willing to walk away from a deal is enough to make a seller come around and reduce their price, because now they are afraid of losing you as a buyer and afraid no-one else will come along and their home will sit on the market for longer. Again, this can go either way, so whatever you do decide to do, you need to be willing to accept the consequences of your choice. That could mean moving on to another property if they still won’t adjust their price or if another buyer comes along. There is no way to predict this 100%.

#8 Work with a competent Real Estate Agent who can do all these things for you (Hint! Hint!)

The best and simplest way to make sure you don’t overpay for a property is to work with a competent REALTOR who can guide you along the way and do most of these things for you. Not all real estate agents take the same approach or have the same level of skill. To help you determine how a real estate agent might handle themselves, I suggest you ask them the same question. How do you make sure your clients don’t overpay for a home?

 

Oct. 20, 2017

2018 Mortgage Rule Changes - EDM Real Estate Secrets #2

Listen to this Episode:

Click Here to watch this episode on YouTube

Episode Transcript:

Hey guys, how's it going? It this episode, I'm going to be talking about upcoming mortgage changes and who that affects. Stay tuned to this episode to find out more.

 Welcome to EDM Real Estate Secrets. The podcast for Buyers and Sellers in the Edmonton real estate market. You are now a part of a small group of people who are trying to learn the ins and outs of real estate, without the fluff. This podcast will give you an inside look at the daily life of a REALTOR and what I do to figure things out and get deals done for my clients. My name is Trevor Tardif. Welcome to EDM Real Estate Secrets.

Hey guys, welcome to another episode of EDM Real Estate Secrets, the podcast for buyers and sellers in the Edmonton real estate market. Today, what I wanted to talk to you guys about was some things to consider if you are planning on buying a home in the next few months. There are some new mortgage rule changes that are gonna be taking place as of January 1st, 2018 I believe. So, there's a couple more months before that. But, these mortgage rule changes are going to affect people that are putting 20% down or getting a conventional mortgage, which is essentially a mortgage with 20% down or more.

Basically, they're adding more stress tests, so it's going to make it more difficult for people to qualify, or if they can qualify, They likely won't be able to qualify for as much as a mortgage. So, if you're looking at buying a house in the next few months, you might want to get it done before the beginning of January if you are putting 20% down or more. That's who that's going to affect. So, I don't know all the details of everything yet, I will cover it more in depth when I've had a chance to talk to a couple of the mortgage brokers I work with a little bit more closely to fully understand it. But, it sounds like it could potentially reduce someone's buying power by about 20% again in some cases.

I think I heard that the stress test will either be the benchmark posted rate, so whatever the Bank of Canada benchmark posted rate is, you either have to qualify at that, which is very similar to what people with 5% down have to do anyway. But, I'm hearing you either have to qualify at that benchmark rate or the rate that you're actually getting on your mortgage plus two percent. I don't know exactly what the benchmark rate is right now. A while ago it was 4.64% interest. Assuming that's what it is now, which I know it has probably changed, it might have gone up actually.

 I'm not really sure. But, if that was the benchmark rate, and let's say you were getting three percent interest on the mortgage you were qualifying for, if what I've heard is true, that additional two percent stress test would actually make it so you would have to qualify as if you were going to be paying five percent interest. So, higher than what I believe might be the Bank of Canada benchmark rate. So, that's just a hypothetical. I don't know exactly, like I said, what the benchmark rate is. But, I did hear one mortgage broker say that it will be whichever one is the higher stress test essentially.

So, whatever you're getting plus two percent. If that's higher, than that's what you qualify at. Or if the benchmark rate is higher then whatever you're getting plus two percent, then you still have to qualify at that amount. So, It's going to make it for people, even when you have a good down payment with 20% or more, more difficult to qualify and likely you won't be able to qualify for as much once 2018 comes around.

If you're looking at buying a house in the near future, you might want to look at that really closely and get in touch with your mortgage broker to find out how that's going to affect you. It's better to look into it and be diligent about it instead of just assume that you'll be okay or it won't affect you because you might be surprised. Hopefully that all makes sense. I'll try to have a more in depth video on this at some another point. Maybe after I've talked with my mortgage brokers. But, that's all for now. Hope you guys have a great day.

Would you like to look at all the homes and condos currently for sale in Edmonton? If so, go sign up for a free account on my website at EDMHomesForSale.CA. Once you've signed up, you get detailed property information and pictures on all MLS listings. Plus daily email alerts with new listings and price changes. And you can save your searches to view later and track your favorite properties. Just got to EDMHomesForSale.CA to complete your first search and sign up for an account.

Oct. 19, 2017

Episode 1: Welcome

EDM Real Estate Secrets Logo

Welcome to the very first episode of EDM Real Estate Secrets, the podcast for buyers and sellers in the Edmonton real estate market. The reason that I put together this podcast is I wanted a way to document some of the insights that I have about real estate, just working day to day with clients buying and selling properties. Up until now the only way that people will be able to get my perspective on any of these things is if they were actually working with me one on one as a client. If you're not currently in the process of buying or selling a piece of property with me, you would have no way of getting that.

What I want to do is document this, so I can address some of these things and share them with everybody so that they could get value out of it as well. If you are currently in the process of looking at buying or selling a home in the future I think you will get value out of this podcast, or if you're just interested in real estate in Edmonton I think you'll get value.

I'll definitely be adapting this depending on what people want to learn more about, and the kind of feedback that I'm getting, but generally I'm just going to be talking about whatever is going on in my business if I think it could be valuable to you. You'll be able to watch this as a video in most cases as most episodes will start out as a video and that'll be available on YouTube as well as Facebook. I'm also going to be taking the audio from this and uploading it as a podcast to iTunes as well as Google Play. If you want to be able to listen to it while you're on the go or if you just prefer consuming information that way, you'll be able to get it as an audio podcast.

Now the way to find all of this, it'll all be put together on my website, EDMrealestatesecrets.ca. From there you'll be able to subscribe on iTunes, or link to the YouTube channel, or to the Facebook videos. Also, a cool feature that I added on there, I want this to be as interactive as possible so that I'm giving people what they actually want to know more about. If you've got a real estate question you'd like to ask me, or something that you're interested in learning more about, what you can do is you can go to that website as well. Once again it's EDMrealestatesecrets.ca. There's a spot on there where you can actually record a voicemail for me, right from your phone or right from your computer if it's got a mic built in as well, and that'll send it directly to my email.

If I like your question, and I think that it will be valuable for me to answer for other people as well, then I might answer it here in one of these episodes. That'll get sent out to everyone so that I can directly address something that you're interested in learning about. This will be a learning experience for me as well as I find out more about the kind of things people actually want to know about real estate and what's going on in the Edmonton real estate market.

Yeah, so welcome to the very first episode of the show. I'll be trying to do these often as possible. We'll see how manageable it is to do it on a regular basis but I want to get it out there so that I can start teaching people what I know about the Edmonton real estate market. Alright, well I hope you guys have a great day and I'll see you on episode two.

Want my help buying or selling a property in the Edmonton area? If so give me a call or send me a text on my cellphone at 780-819-5508.

March 30, 2017

How to Increase the Perceived Value of Your Home

Beautiful home with nice landscaping

If you're embarking on a search for your second home, it can be an intimidating process. The second time around is much more complicated than it was the first time. Not only do you need to search for a new place for yourself, you need to make sure your current home sells. You don't just want it to sell, but you want to get the most value out of your investment so you can  use that in or toward your next home.

There are many things you can do to increase the value of your home. These things range from small, relatively inexpensive fixes to more elaborate and more expensive remodeling. It all depends on how much time and work you are able to put into it. You want to make your house stand out and sell in a timely matter so you can move into your next home. Make sure you begin planning early. You don't want to feel rushed into selling your house.

Quick and Inexpensive Fixes - Indoors:

1. Clean your house thoroughly.

The first step in getting your house ready to put up for sale is to clean it. Even if you hardly ever dust for yourself, you need to when you're planning on showing your house. You need to not only sweep your hardwood floors, you need to use cleaner as well. This cleaner will make your floors shine. Move and clean under all of the furniture. Do a deep clean in the bathroom and kitchen. This includes floors, counters, sinks, appliances, bathtubs and toilets. Don't forget to clean heaters and vents as well as these are magnets for pet hair.

2. De-clutter your house.

Make sure to put away any clutter in your house, such as extra blankets, movies, clothing and any extra kitchen appliances. You want your kitchen counters to look roomy, so only have out necessary kitchen items, such as the toaster, coffee maker and microwave. Everything else including blenders and toaster ovens can be put away out of view. Any clothes should be put away in closets and dressers as well.

3. Depersonalize your house.

People viewing your home need to be able to envision themselves and their family living in your home. This is harder to do if you have a lot of personal items and pictures displayed. Put away any pictures and other personal items. Leave up paintings that could be in any home.

4. Make sure it smells good.

This means that you need to make sure that any garbage has been taken out and your carpet should be shampooed to avoid any pet smells. It's a good idea to use an air freshener in your home or candles to give it a more pleasant aroma. Sometimes people will bake cookies and other goodies to give the house a more homey and pleasant smell.

5. Repaint and touch up paint in all of the rooms that you can.

A fresh coat of paint can do wonders for how your home looks. Avoid anything too bold. Stick to more neutral and lighter hues. These will brighten up your home and let people imagine what colors they may like to paint it later on. By using more neutral colors, it will make your house look more pleasant overall.

If you have rooms with a sloppy paint job, you may need to touch up or repaint the ceilings as well. This will help the entire house have a more clean and crisp look.

Quick and Inexpensive Fixes - Outdoors:

1. Display potted flowers.

One great way to make the outside of your home look more pleasing is by adding some hanging or potted plants to the front. This is a great way to add color and a fresh look without having to actually plant anything.

2. Mow.

Whenever you have showings you need to make sure that your lawn is cut. People will judge anything that is overgrown and it will look much better if your lawn and other plants are trimmed. If your yard looks like a mess, people will be turned off because it will make it look like even more work for them if they were to purchase your home.

3. Clean up the yard.

Pick up any branches and remove any leaves that are in your yard. It's important that your yard look as tidy as your house because it is also a major selling point.

4. Invest in new mulch.

A new dose of mulch around your house and certain trees can do wonders for its look. This will give a fresh and crisp look to the outside of your house. Curb appeal can help a great deal when selling your house. This is the first impression that people will see and you want it to be a positive one.

More In-depth Fixes - Indoors:

1. Determine problem areas.

We are a great resource to help you identify any problem areas in your house. As experts in buying and selling houses, we know what turns people off from a house. If you already have someone you have been working with, you won't have a problem getting this person to come take a look. Your realtor will want you to get the most for your house.

Go through each room and take a hard look at it. Since you see things in your house every day, you may overlook things that potential buyers won't. This is also a great reason to have an outside perspective.

2. Repair any cracks in the ceiling.

While these cracks may be purely surface, people may think that there's something structurally wrong with your house. It's important to clean these up to make sure these don't turn people off.

3. Catch up on maintenance items.

If there are things that you've been meaning to do around the house, now it the time to do them. Maybe you've been meaning to re-caulk the tub or replace the shower head. Things that you've noticed are sure to be noticed by potential buyers. Now is the time to get those done.

4. Complete minor repairs.

If there are other repairs around the house that can be easily fixed, make sure those are done as well. You don't want to miss out on potential offers because of something that could have been easily fixed before a showing.

5. Hire an interior designer.

To really step things up, consider hiring an interior designer to take a look and redecorate your home. A designer can help you attract additional interested parties by making sure that your home is up to date and has the latest styles. Modern and open concept homes are popular. Making your house look professional and pretty will do wonders for attracting additional people with your pictures.

6. Keep the home clean and tidy for showings.

While it may be hard to keep your home spotless, it's important to clean up before any showings. Since you're still living there, make sure to go through the house and fix anything that may turn people off. By simply tidying up and cleaning as best you can, it will put your house in a much better light.

7. Stage it.

If you're able to empty out your house of most of your belongings, you may consider renting furniture and bringing it in. This can really help brighten up your home and show its true potential.

 

More In-depth Fixes - Outdoors:

1. Do more thorough landscaping.

If you're up for it or have the money for hiring a landscaping service, you can step up your curb appeal even further. This is the time to clean up or pull out different plants as well as plant new ones to attract additional buyers.

2. Make your garden presentable.

If you have a garden that you've been neglecting, now is the time to clean it out. For buyers that are interested in having a garden, it is best to have one that is cleaned out and ready for them to use. Maybe you've let it become overgrown. Make sure that you make having a garden easy on the next occupants. If a garden is important to a buyer, this person may decide it's too much work if yours is a complete mess.

3. Repave your driveway.

If you have a gravel driveway or a paved one with a lot of cracks, now is the time to get that fixed. A freshly paved driveway will make your house even more appealing. This way people won't have to deal with gravel or plants growing in the cracks.

Selling your home is a big endeavor and one that you want to get the most out of. By following the tips above, you can make your house more appealing to buyers and help get the price that you're looking for.

 

 

Posted in Selling