Buyers & Sellers

Tips to sell your house

When you are ready to sell your house you'll want to make your home as marketable as possible.  Here are a few tips:

Clean everything in and out of sight

With clipboard in hand, take a tour of your home.  Take note of every opportunity to remove clutter and dirt.  Rooms, closets and cupboards will appear larger and more inviting when you get rid of unnecessary stuff and tidy up what's left.  Remove bulky or unused furniture and rearrange the rest to make the best use of space.

Most of us are pack rats, so apply the following test to every questionable item:  Have I used this in the past six months, or will I need to use it soon?  If the answer is no, throw it away, store it elsewhere or sell it in a yard sale.

Be equally aggressive in disposing of dirt.  Pay particular attention to the two most important rooms in a buyer's mind: bathrooms and kitchens. And once you've removed all the dirt: keep everything clean, every day. You never know when the person who will ultimately buy your home will visit.

Repair as much as you can

During your home tour identify the things that are broken, cracked, stuck or just plain don't work anymore.  These can include: leaky faucets, holes in window screens, stuck or broken windows, lights that don't work, doors that squeak or don't close properly, missing or broken cupboard handles, cracks in the walls and ceilings, and dozens of other "little things" you've been meaning to do for years. Now is the time.

Certain items, such as roof or basement leaks, must be repaired, along with any water damage.  Electrical or heating system problems must be fixed.  Some repairs, however, may not be necessary.  Will that hairline crack in the driveway really make or break the sale?  How about a chipped floor tile in the entryway?  Some buyers will have their own ideas about how to deal with these problems.  You may find it easier to adjust your selling price to reflect the cost of these repairs, rather than pay for them yourself.

De-personalize your home

Your house reflects you.  It is decorated with your taste and your sense of style.  Unfortunately, that heart-shaped table lamp your grandmother left you may distract potential buyers from seeing the home itself.  Grit your teeth and store all personal items (framed family photos, trophies, etc.) out of the way.

If you have brightly coloured accent walls or heavily patterned wallpaper, consider repainting or wallpapering these areas with light, neutral colours that enhance a room's size and make it more flexible to receive any kind of furniture.  Remove area rugs, light fixtures and other items that buyers might find too difficult to imagine in "their home", even if you were not intending to include these in the sale.

Beautify the house and yard

Peeling, dry paint is relatively easy to fix or replace and can make all the difference in your home's appearance.  If your carpet or other floor covering is in really bad shape, consider replacing it.  The same holds true for badly tattered window coverings such as drapes and blinds.

Outside the house, weed the flower beds, remove dead tree branches, keep your lawn well-mowed and edged, trim the hedges, rake the leaves, sweep the sidewalks, fix and paint the deck or fence, plant a few flowers and do anything else you can think of to enhance your home's curb appeal.

It may sound like a lot of effort, but these tips, and the assistance of a REALTOR®, will help you sell your current home quickly so you can move on to your next dream house.


Buying a home:  What Can You Afford?

If you're thinking of purchasing your first home, you probably have a lot of great ideas about what you'd like - such as several thousand square feet of living space, a two-car garage, large fenced-in lot, one or two fireplaces and a panoramic view. But it may be time for a reality check.

Most first-time buyers want their dream home right away.  However, that dream home likely sells for several hundred thousand dollars and the down payment is more than you earn in two years.  Not to mention the mortgage payments - which are three times your monthly take-home salary!

The best way to deal with this reality is to match your financial capabilities with the home that meets as many of your needs as possible.

Many first-time buyers purchase what is commonly known as a "starter home."  There's nothing wrong with this approach.  In fact, it's good common sense to avoid buying a home that will stretch your budget to its breaking point. Remember, the starter home is just that - a way to get started in long-term real estate investment.

To see how much you can afford, you should take a close look at your financial situation. The vast majority of home buyers lack the funds required to buy a home without assistance from a bank or other financial institution (commonly called a "lender").  So, for most of us, buying our first home means combining our savings with money borrowed through a special type of borrowing arrangement called a "mortgage."

Borrowing to purchase is not only acceptable, it's desirable.  Even people buying millions of dollars' worth of real estate borrow to make the purchase

There are two types of costs in buying a home:

  • the amount of money you'll need for the initial purchase; this consists mainly of the down payment and other costs such as legal fees and taxes; and
  • the ongoing costs of paying back your mortgage, along with monthly operating costs for utilities, maintenance, insurance and annual property taxes.


When lenders assess your ability to buy, they look at your ability to pay both types of costs in determining how much money they will lend you.  Before you ever visit a lender, you can predetermine this amount, using the same formulas they do.

Lenders use several factors in judging your ability to handle a mortgage, including your income, employment record and credit worthiness.  However, one way you can estimate the price range you can afford is to look at the amount of money you have available for a down payment.

The most common mortgage is a "conventional mortgage."  In this type of arrangement, lenders will loan up to 80 per cent of the "appraised" value (estimated market value) of the property or the purchase price - whichever is lower.  The remaining 20 per cent is the amount you will contribute as down payment.

If you want to buy a home that has an appraised value of $200,000, a lender may loan you 80 per cent or $160,000 on a conventional mortgage when you contribute a down payment of $40,000.

Most lenders say that your monthly housing expenses (mortgage payment and taxes), plus condominium maintenance fee, if applicable, would not exceed 30 per cent of your monthly gross family income.

This is called your Gross Debt Service (GDS) ratio. Some lenders will go as high as 35 per cent, depending upon a number of variables.

Lenders also use a second calculation in qualifying you for a mortgage. It's called the Total Debt Service (TDS) ratio. Generally speaking, no more than 40 per cent of your gross family income may be used when calculating the amount you can afford to pay for mortgage payments and taxes plus other fixed monthly expenses.

These other fixed costs are your ongoing commitments and can include auto, student or personal loans, as well as revolving charge accounts. Again, the 40 per cent calculation may vary slightly among lenders.

Please contact me if you need you like to find out what you can afford so you can make your home purchase with confidence.


Finding the right home for you

When you dream of your dream home, what do you see?  Each of us has a vision of what it will be, but getting as close to that vision as possible is a practical, step-by-step process.  I will be your best ally throughout the home buying process.  I can provide expert advice and help you determine how much you can afford, what kind of home you can buy in that price range, and where it may be located.

You've no doubt heard the phrase: location, location, location.  That's because it's the most important factor in making any real estate purchase.  To find the right location you must think of where you want to live both in broader terms and in more detail.  First of all what type of area do you want to live in?

Urban:  Urban communities offer the broadest range of housing types, but generally at higher prices than similar-sized homes in non-urban locations.

Suburban:  The suburbs are typically made up of newer neighbourhoods, schools and shopping centres.  Prices may or may not be lower than those of the central city, but you often get more square footage, larger rooms and bigger lots.

Smaller towns and cities: A slower-paced lifestyle and lower taxes and housing prices are often big draws to Ontario's smaller communities.  There are fewer types of homes available and the number for sale could be limited.

Rural:  A stream flowing over a few acres sounds appealing and your housing budget will often buy you more in a rural setting than any alternative above



Once you've considered the broader location options above, it's time to think about the features you need and want in a home.  Prepare a shopping list.   How many bedrooms and bathrooms?  One or two-car garage?  Large backyard or small?  List the features you are looking for as needs or wants.

Comparing homes and locations

Now its time to match the type of home you'd like with the location.  I will be able to give you an idea of the communities that best match your criteria for home and location.   I can also advise you of the availability of schools and shopping, recreational and religious facilities and discuss the drawbacks: highway noise, train tracks, airports and large industrial centres.  I’d be thrilled to help you for the home that’s right for you!


Is now a good time to sell your house?

Thinking of selling your home but not sure if now is the "right time?"

The most common reasons why people decide to sell their homes include changes to their financial status, an employment transfer, a growing family or retirement.  Today's low interest rates have also made it attractive for many homeowners to "move up" to a larger home.

Whatever your reason, selling a house is a complicated procedure so it's imperative to have a qualified real estate professional on your side.  Because selling a home involves large sums of money and complicated legal documents, my expertise can help you avoid costly mistakes.


Real estate cycles.

Buying your home was probably the best investment you ever made.  That's because over the long term, real estate has proven to be a sound investment while at the same time offering you and your family shelter and a feeling of pride of ownership.

However, real estate is subject to the law of supply and demand which creates cycles in the market.  A shortage of homes generally means prices rise.  This cycle is commonly known as a "seller's market."  Alternately, a surplus of homes can result in a slow down in home sales or even a reduction in prices and is often referred to as a "buyers market."

One of the most important services I provide is a market analysis.  Most people don't have the time it takes to conduct the comprehensive market research required to accurately price a home.  I can give you up-to-date information on what economic and other factors are impacting current market conditions.


Which market is best?

Obviously, you will want to sell your home quickly and for the highest possible price.  In a "seller's market," you often see many buyers competing for the same house resulting in top prices -- sometimes even over the original list price.  However, if you are planning to purchase another home after the sale, chances are you will be competing in the same seller's market faced with higher prices.

In a buyer's market you may find you have to wait longer to sell your home for a fair price.  The upside to selling your home in a buyer's market is you'll have more selection and pricing options when you go looking for your new property.

Although the current market cycle should influence your decision to sell, remember there are trade-offs to selling in either a buyer's or seller's market.  Some people are concerned that if they trade up to a larger home in a buyer's market they will lose some of their home's equity in the sale.  But, while you may sell your home at a "discount," it's likely you will purchase your larger home at an even greater discount.  The advantage is you then own a larger asset with even greater potential for appreciation.



In Ontario, changing seasons and the weather can affect buyer demand. For example, fewer buyers may be out looking at homes during the cold and snowy winter months, but as a seller you will be competing with fewer homes on the market.  Spring tends to be an attractive time for real estate sales as gardens start to look nice again and people come out of hibernation.  Buyers with school-aged children like to purchase in the spring so they can move in over the summer.  However, homes sell throughout the year so think of the season as only one factor in deciding when to sell your home.

There are many important issues that come into play when deciding to sell your home.  I would be happy to help determine if now is the best time for you.


Investing in a second property

If you're thinking about buying a piece of real estate as an investment property, market conditions are definitely in your favour.  While the resale housing market has seen a tremendous amount of activity from first-time buyers in the past year, it's also a perfect time for existing homeowners to invest in secondary residential properties.

With record-low interest rates and significantly lower prices it's hard to go wrong - unless, of course you lack the financial means to make the investment.  After all, you have to be ready to meet all the obligations that come with owning more than your principal property.

For instance, keep in mind that if you intend to rent out the second property, you'll also have to be prepared to deal with tenants and handle maintenance costs.



Secondary home ownership is an attractive investment option because it gives you even more leverage than you have with your principal residence.  Leverage is when a relatively small amount of your money controls a much larger asset - like a property.  The more leveraged you are, the greater the financial return on your down payment becomes if the value of your property increases.  There are very few other investments which can be purchased with such a small percentage of your own money.  For instance, let's say you acquire a second property for $100,000, with a $15,000 down payment, and during the first year that you own it, the property increases by a value of three per cent for a $3,000 gain. As a result, the return on your down payment of $15,000 is 20 per cent - $3,000 divided by $15,000.


Other Investments

By comparison, let's say you were to buy a term investment of $100,000 (in cash) for one year and it increased by $8,000 over the course of the first year.  Since it cost you $100,000 in cash to buy it, the return on your investment is only eight per cent before taxes.  Obviously, leveraging is a powerful way to make your money work for you.


Getting Financing

You should be aware that many lenders place non-owner occupied deals in the high-risk category and it's not that unusual to find lenders who will not finance rental units at all - or those who will only finance them if they are insured.  Obviously, lenders will want to know whether the property will carry itself.  (Is there sufficient rent to cover the mortgage payment?)  Don't make the mistake of assuming that a rental income of $500 per month will carry a mortgage payment of $500 per month.  Only a portion of the rent is used to pay the mortgage; the remainder must cover taxes, maintenance, vacancy, bad debt and expenses.  (Many inexperienced purchasers think that owning rental properties will allow them to "get rich quickly" and when this does not happen, the owner becomes disillusioned and loses interest in the property.)



You should also be aware that the cost of obtaining a mortgage (for legal and appraisal fees) on a non-owner occupied property can be higher than the cost of obtaining a mortgage on an owner-occupied property, when more than one unit - such as a duplex or triplex is involved.  Interest rates charged on rental properties might also be higher because some lenders view these properties as being a higher risk.  As mentioned above, the main responsibility of having a second property is being able to carry it financially.  And if you're like most people, you'll probably have to rent it to someone as a result.

This is also a great deal of responsibility because you will have to maintain the property in addition to your own principal residence, and you'll be responsible for finding tenants who you trust and feel comfortable with.

Some parents with grown children ready to go off to university or college choose to purchase secondary properties for their offspring to live in while they attend school.  This gives them an excellent investment and they are assured that the occupants will take good care of the home.  If you'd like more information about purchasing a second property, please give me a call.


Jodi Galloway

Jodi Galloway

Sales Representative
CENTURY 21 Millennium Inc., Brokerage*
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