CREA’s Agreement With The Competition Bureau

I often get questions from people or overhear conversations about the changes in the Canadian real estate market since the agreement voted on in St. Johns on October 24th of this year.  I thought it’d be a great topic to write about since it seems the media is making it out to be a lot different than what it really is.

So….whats changed? not a whole lot.  Basically mls is still a member to member service.  You still have to hire a licensed realtor to put your home on mls you were always able to work out a commission or flat rate for this but now you have the option to not use the other services a realtor offers.  The realtor is still responsible for the integrity of the information on mls and the listing still has to meet the requirements of the mls system including the fact that  you have to provide a co-operating brokerage commission amount (this is the amount a buyer’s agent would get paid for selling the listing) there is no set amount for this but it has to be something.  Sellers hiring an agent for simply listing on mls will not be able to have their contact info posted directly on mls however, the listing can contain links to other sites that provide the info.

So now sellers have the option to pay a reduced flat fee to put their home on mls through a realtor and decide to handle the rest themselves.  Just keep in mind realtors do more than just stick your home on mls. They handle the buyer qualifications, viewings, open houses, marketing, negotiating, they know how to deal with multiple offers, they know what to do with a property that may have issues with zoning, encroachments, assumable mortgages and under/over pricing.  They are bound by a code of ethics which requires them to to disclose defects, clearly indicate who they’re working for and all conflicts of interest.  They know the right places to market a property, how to negotiate with the buyer and they are insured.

Discount listing companies have been operating a crossed Canada for years, that hasn’t changed.  They have been unable to capture more than 3 to 5% of the market collectively so just because its formalized now doesn’t mean they’ll instantly become successful. The value of a full service realtor still stays the same.  I hope this clears up some if the confusion and questions about these changes!!

 

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Preparing Your House For sale!

Here’s a question I get quite often…..”what should we do to get our house ready for the first tour and showings??” It’s a great thing to think about because how your home shows is a very important factor in getting it sold in the least amount of time for the most money possible.  Here’s a few things to think about when you’re preparing your home.

First you want to disassociate yourself with your home.  You’ve decided to sell so its time to look ahead and try to think of it as a house for sale, be ready to hand the keys over.  Now you want to de-personalize and de-clutter,  pack up all of your photos and family heirlooms.  You want the buyer to be able to picture this as their home with their belongings in it.  Also remove anything that could distract the potential buyer’s attention… remove books from book shelves, pack up knick knacks, clear everything off of kitchen counters, etc etc.  Think of it as getting a head start on your packing

Less is more! remove any unnecessary furniture, anything thats blocking paths or walk ways.  Remove the extra leaf from the dining room table to make the room appear larger.   Leave just enough furniture to showcase the rooms purpose and plenty of room to move around.  You’re also going to want to remove/replace your favourite items. If you have any drapery, light fixtures, etc that you would like to take with you its best to replace them before any potential buyer even has the chance to see them.  You then don’t have to worry about fighting over certain items at offer time.

Now that your home is looking bigger and more spacious make any minor repairs you can think of (replace cracked floor or counter tiles, patch holes, fix leaky faucets, etc.) Its also a good idea to paint the home neutral colours.  Now make it sparkle! wash windows and ledges inside and out, clean cobwebs, dust everything, re-caulk sinks, showers, tubs, polish chrome faucets and mirrors, vacuum often, replace worn rugs, hang fresh towels and make sure you take care of any odours lurking.

Now that the inside of the house is looking great head to the front.  Curb appeal is very important, its the first thing a buyer sees and a lot of times a buyer will drive by a house before they decide if they want to go ahead and book a showing.  Make sure your sidewalks are cleared.  rent a power washer and clean sidewalk, driveway and exterior of home.  Mow your lawn, plant some flowers, trim bushes and hedges and make sure theres no toys, bikes etc lying around .  Now your home is looking great and ready to show to potential buyers! I’ve seen first hand what a difference all of these things make!

Buying A Home- What you can afford and all the costs to expect!!

So you’ve decided home ownership is right for you???  Now its time to determine what you can afford and what you should expect to pay so theres no suprises, Read on to figure out exactly what you can afford!

Lenders follow two simple affordability rules to determine how much you can pay.

#1.Gross Debt Service (GDS) ratio- This is the percentage of gross annual income required to cover payments associated with housing. These payments include mortgage principal and interest, property taxes, heating and possibly condo fees.  Your GDS must be 32% or lower

#2Total Debt Service (TDS) ratio-This is the percentage of gross annual income required to cover payments associated with housing and all other debts and obligations such as credit cards, car loans, etc. These amounts can not equal more than 40% of your gross income.

First you’re going to need to add together all of your monthly debt payments.  These can include loans for properties owned, car loans or leases, personal loans or lines of credit, credit cards, student loans and any other loans or debts.

Once you have your monthly debt payment click here to calculate your GDS and TDS and find out what you can afford.  I highly recommend  speaking with a mortgage professional as well, this is just to give you a rough idea.  A mortgage professional can pre-approve you, qualify you, give you a rate which they will generally lock in for a few months while you search for your new home, give you payments amounts to expect and walk you through every step of the way.  I can recommend some great mortgage professionals for you as well.

Now that you have an idea of what you can afford you need to be aware of some upfront costs to expect so you can plan ahead.

Mortgage loan insurance- This insurance can be avoided by having a 20% down payment for your home.  Any down payment lower than 20% will require Canadian Mortgage and Housing corporation (CMHC) insurance.  The amount you pay will depend on the amount you put down and can be added to your final mortgage amount by your lender.

Deposit- When your offer is accepted you will be required to make a deposit which varies depending on your area and what was agreed upon in your offer.  This deposit will be held by the listing brokerage in a trust account until the day of closing and is then transfered to go down on your mortgage.  I can talk to you about how much to expect for a deposit before you begin your search.

Down Payment-The minimum down payment required is 5%.  Stay tuned for another post and I’ll explain to you how you can have Scotia Bank put the 5% down for you!

Property Insurance- Mortgage lenders require insurance for the home is in place by the day of closing as the house is security for the mortgage.

Legal Fees and Dispursements- Paid on closing, prices vary by lawyer.

You also have the option to hire a home inspector which is usually recommended.  The costs vary and can range from $350 to $500.