Moving on up: Should you buy or sell first?

Moving on up: Should you buy or sell first?In Canada’s evolving real estate markets, both buying and selling a home are very personal decisions. Add buying and selling at the same time, and the process becomes even trickier. The path up the property ladder is different for everyone and which to do first depends on your unique circumstances.

“Buying and selling a home at the same time is no small endeavour and involves extensive research and a clear understanding of all the steps involved,” explains Nicole Wells, vice-president of home equity finance at RBC.

Here are some things to consider before making a move:

Should I sell first? The upside of selling first is that you will know how much money you have to work with, and it’s also easier to get new financing when you need it. However, if there are delays or challenges finding the right new home for you, you may incur additional rent and storage costs in the interim.

Should I buy first? In this case, you will have time to plan your move and get your current home ready to sell. However, closing dates on both the purchase and sale may not line up and if your home doesn’t sell for a while, you’ll be stuck with two mortgages at once and a higher debt-to-income ratio.

Add a contract contingency. Whether you’re buying or selling, try to add a contingency to your contract that lines up the closing dates to bridge the in-between period. This isn’t always possible, as it depends on the market and whether the buyer/seller is willing to agree to an extended or reduced period of time.

Know the markets. Research prices in the areas where you’re buying and selling. Does the market favour buyers or sellers? This is the best way to decide which move to make first. As a rule of thumb, you want to sell first in a buyers’ market and do the contrary in one that favours sellers.

Consider rental revenue. Research the rental market in your area and calculate the cost versus profit ratio of renting out your home to tenants, rather than selling it. It could be financially advantageous, and real estate could be a great way to diversify your investment portfolio.

Find more information online at rbc.com/home.

www.newscanada.com

Your first home may not be your forever home

Your first home may not be your forever homeHome ownership is a goal for most of us, and millennials appear to be the most optimistic group. According to an RBC poll, two in five millennials said they intend to buy a home in the next two years. But the cost of home ownership and things like regulatory changes can make saving for a downpayment more difficult and, for many, put the dream of home ownership out of reach.

Sometimes, however, first-time buyers may not be looking at all their options. A little flexibility and compromise can help make ownership more accessible when considering the following:

Begin with a starter home. Few people spend 50 years in one home these days. Think about your lifestyle for the next five to 10 years and make a decision based on that. Your dream home in your dream neighbourhood may still be yours, just a bit later in your life.

Get a renter. Could you afford the home you want if you rented out part of it? Many people create a basement apartment or rent out a second bedroom as a way to offset their mortgage payments.

Consider co-ownership. Buying a property with family or friends is a great way to get your foot in the door. Discuss options with your mortgage specialist and be sure to establish a solid contractual agreement that will help avoid or mediate any future disagreements when selling the property, renegotiating terms or buying each other out.

Be realistic. Don’t expect perfection. Every home has some issues and you may have to compromise or decide what you can and can’t live with. What is a permanent feature versus something that’s an easy aesthetic fix? Set your priorities, but be realistic and flexible.

Be patient. Style your home slowly and resist the temptation to furnish it from top to bottom the day after you move in. Get creative with chic but less expensive, gently used furniture or pieces that may not last a lifetime but will save you money today.

Find more information online at rbc.com/home.

www.newscanada.com

Should you rent or buy a house for your student?

Should you rent or buy a house for your student?With high school students across the country deciding on their post-secondary education right now, where they will live while at school should play an important part in the decision. Given that more than two-thirds of post-secondary students plan to live away from home during their studies and parents often foot the bill, have you considered how much it will cost?

While many rent, some parents opt to invest by purchasing a home for their kids to live in while away. But when does this option make sense? According to Nicole Wells, vice-president of home equity finance at RBC, there are five questions you should ask yourself when deciding.

1. What is the market is like? The conversation will be different depending where the school is located. In a more urban market, prices may be high compared to smaller towns, where you might find a better deal. Is the market volatile or stable? Do your research first.

2. Do I want to be a landlord? If you’ll be renting to your kid’s roommates as well, make sure you look into the logistics and legalities of being a landlord. Are you prepared to handle the maintenance on the house? What if someone doesn’t pay their rent on time?

3. When do I plan to sell? Will you sell as soon as your child finishes school, or continue to rent it out? You may get more value by holding on to it as a rental unit. Being a university town, there likely won’t be a shortage of renters.

4. Who will benefit? Is this a short term play, or are you planning ahead for other siblings that might go to the same school? Think about holding onto the property for longer to gain more value and plan ahead.

5. Have I run the numbers? Calculate the break-even point and when you would see profit. Don’t forget to include “extras” such as maintenance, repairs, taxes and insurance. You also need to put yourself first and ensure you aren’t drawing on retirement savings that might put your future in jeopardy.

Find more information online at rbc.com/home.

www.newscanada.com

How to avoid real estate fraud

How to avoid real estate fraudAs housing prices climb in many markets across the country, real estate fraud can become a much more enticing prospect for scammers. While it’s one of the lesser known kinds of fraud in Canada, its impact can be devastating.

There are two types of real estate fraud that may result in financial losses — title fraud and foreclosure fraud.

Title fraud happens when a fraudster steals the title to a home — usually after stealing the owner’s identity — then sells the home or applies for a new mortgage against it.

Foreclosure fraud happens when homeowners having difficulty making their payments mistakenly turn to a fraudster, who convinces them to transfer their property title in return for a loan. Often, the fraudster keeps their loan payments and resells or remortgages the victim’s home.

Protect yourself from becoming a victim of real estate fraud with these simple tips:

Safeguard your personal financial information.

Contact your mortgage lender first if you are having difficulty making your mortgage payments.

Consult your lawyer before giving another person a right to deal with your home or other assets.

Research the company or individual who is offering you a loan.

Do a land title search with your provincial or territorial land registry office. This search will show the name of the property owner and any mortgages or liens registered on the title.

Consider buying title insurance to protect against title fraud.

Find more information online at canada.ca/money.

www.newscanada.com

Must-have guide for selling your home

Must-have guide for selling your homeWhen you put your home on the market, you want to be offered top dollar and enjoy a smooth seamless sale from start to finish. For the best experience, use this guide full of expert tips from the Ontario Real Estate Association.

Start with an expert. Realtors are experts in your local housing market; they know the current market conditions, local data and details about other houses in your neighborhood. A Realtor will help you price your home competitively and, if you plan to renovate, they can advise whether the expected return on investment is worth your time, money and effort.

Prepare your home. Create an environment that allows potential buyers to imagine themselves living happily and comfortably in your home. This means removing personal mementoes and photographs, presenting a clean and organized space, and keeping the décor neutral. If you’re selling during the winter, snow can hide backyard imperfections and the cooler weather is a great opportunity to showcase how cozy your home can be — light the fireplace, stockpile fuzzy blankets and use lightly scented candles.

Close wisely. Work with your Realtor to make sure the buyer’s paperwork is in order and any clauses are reasonable. Choose a closing date that’s convenient for you — for example, consider a closing date during the spring when the weather is nicer or on a long weekend so you have more time to move.

Find more information about selling your home and using a Realtor by visiting www.orea.com.

Attention editors: This article is for distribution in Ontario only.

www.newscanada.com

Buying a home? 5 forms you need to understand

Buying a home? 5 forms you need to understandIf you’re house hunting this season, you want the process of finding and buying your dream home to be an enjoyable, stress-free experience. To help, we’ve made a list of five essential forms that you’ll encounter along the way.

Buyer Representation Agreement. If you’re being represented by a brokerage then you’re considered their client and this form outlines the legal agreement between you and your brokerage. It contains an explanation of the many items, including the services the brokerage will provide to you, fees for those services, the obligations you have as a client and the expiry date of the agreement.

Customer Service Agreement. If you prefer not to enter into a client contract with a brokerage, then you may choose to be a customer and will receive a different service than if you were a client. As a customer, you will be treated fairly & ethically and will be provided honest information while your Realtor takes care not to misrepresent any facts.

Confirmation of Co-operation and Representation. This form confirms representation or customer relationships between the brokerages and the buyers and sellers. This form also details remuneration to be paid. You’ll be asked to sign a CCR before making an offer or any negotiations on a property.

Agreement of Purchase and Sale. This form is used initially by a buyer when making an offer on a property. Once the offer is made and accepted, the offer becomes a legally binding contract. Be sure you understand what’s in your offer before you sign it. Agreeing on a price is important, but make sure you speak to your Realtor about other details like the possession date, conditional terms, and which chattels or fixtures will be included or excluded with the home.

Listing Agreement. This form is the agreement between a seller and their real estate brokerage. The Listing Agreement forms the basis for drafting an offer on a home and includes directions about negotiations.

Find more information about essential forms and using a Realtor by visiting www.orea.com.

www.newscanada.com

Top tips to create an ideal income suite

Top tips to create an ideal income suiteFrom the condominium craze to the rise of multigenerational living, the climbing cost of homeownership across Canada continues to spawn new trends. The transformation of basements into rental suites is a big one that can help offset mortgage costs. There are plenty of advantages, as well as some important considerations to ensure the best result.

Do your homework. Check zoning, bylaws and adhere to your local building code. As with any new construction or renovation, building permits must be obtained, and all work must be code compliant. This will protect you and any future tenants.

Waterproof it. Check the interior foundation and floors for existing moisture issues, water damage or mould problems. Address any primary moisture issues before finishing the space.

Insulation is key. As a landlord, it’s wise to invest in smart renovations that can improve efficiency and bolster your bottom line. For the best results, insulate well. I recommend installing a rigid board insulation, like Rockwool ComfortBoard 80, against the concrete foundation before you stud the wall. The board is mechanically fastened or adhered to the concrete foundation wall, which prevents thermal bridging through the studs, providing better thermal performance. Finish with a moisture-resistant and dimensionally stable insulation between the studs, like R14 Comfortbatt, to protect against common basement issues such as mould, mildew and rot.

Consider fire safety and soundproofing. Select building materials with a high fire-resistance rating that will not off-gas or contribute to toxic smoke in the event of a fire. Soundproofing is also a must when you plan to share space. Install sound absorbent insulation between floors with resilient channels to reduce sound transfer between living areas. Contractors love stone wool fire and soundproofing insulation, because it protects against fire and noise and is easy to install.

Spend wisely. Keep the renovation budget reasonable. Spending no more than two years’ worth of rent to convert your space is a good general rule of thumb. Forego high-end finishes. Instead, create focal points that will “sell” the suite.

Scott McGillivray is the host of the hit HGTV series Income Property and Moving the McGillivrays, a full-time real estate investor, contractor, author, and educator.

www.newscanada.com

Moving? How to find the right neighbourhood

Moving? How to find the right neighbourhoodThe search for the perfect house begins with the search for the perfect neighbourhood, which can be daunting. Searching for something so open-ended and with so many variables can be an overwhelming task, but it doesn’t have to be. You just have to know where to start your search and where you can take it from there. Get ready to find that dream neighbourhood.

Search yourself. You can’t really know what to look for in a neighbourhood until you know exactly what you want. Make a list, take your time. Write down the things that really matter to you. Decide priorities. Order your list from most to least important. Moving in with your partner? Have them do the same, and see where your priorities line up and where you diverge. Now that you know what you want, it’s time to go get it.

Search the streets. Don’t underestimate the importance of this step. You really can’t know a neighbourhood until you’ve walked its streets at several different times of day. Get a feel for the level of traffic and noise, decide if you’re okay with it. See how the streets feel. Are they lit enough at night? Would it be nice to go for a run through your neighbourhood? Make sure you visit each of your candidate neighbourhoods.

Search the stats. While you hunt at street level, make sure you take your research to a bird’s-eye view at the same time. You would be amazed at the kinds of things you can learn about a neighbourhood just from its census data. How old are people there? How many kids are in the neighbourhood? How many people are home owners? How much are the average monthly costs to live there? What languages are spoken in the neighbourhood? Combine your research with your street-level hunting and you’ll soon find yourself walking through the perfect neighbourhood for you and your family.

Find more information at www.statcan.gc.ca/census.

www.newscanada.com

What millennials want in a home

What millennials want in a homeWhen entering the residential market, it’s important to appeal to as many people as possible, especially young, first-time homebuyers. They’re one of Canada’s fastest-growing markets, but their tastes and priorities are quite different.

“The next generation of first-time homebuyers knows exactly what they want in their first major investment,” explains Christopher Alexander, regional director at Re/Max Integra. “Sellers need to be strategic before putting their home on the market to appeal to these needs.”

Here are the top three factors influencing millennials’ purchasing behaviour:

Location, location, location. It’s widely known that finding a home in the right neighbourhood can significantly increase ROI long-term, and millennials are taking extra note. But homes in communities where new schools and amenities are being built are attracting young buyers looking for “what’s next,” rather than what’s hot now. Up-and-coming neighbourhoods that are slated to receive investment from the city or are under redevelopment are prime for real estate investments as smart millennial buyers realize their value will only continue to rise. If the neighbourhood is walkable, that’s a bonus.

Smarter living. With exciting advancements in the ever-growing tech industry, preparing your home to appeal to a hyper-connected millennial market is easier than ever. From installing fridges that text you when you’re low on milk to wireless light switches, sellers who make even a small investment in a smarter home will instantly attract tech-savvy first-time buyers. Adding innovations such as a programmable thermostat will not only make your home appealing to the eco-conscious young buyer — the remotely adjustable tech can also help lower your utilities bills as you wait for your closing date.

Looking ahead. As a home is typically the first major investment most millennials make, it needs to be able to suit their growing list of needs. While young buyers may not have children now, many are already considering multi-bedroom homes and properties with backyards in anticipation of a soon-to-be expanding family. Investing in backyard landscaping and clearing out clutter to make space for a possible play area or nursery is a great way to appeal to young families looking for a home they can see themselves grow in.

www.newscanada.com

Questions every homeowner should ask about their property

Questions every homeowner should ask about their propertyDid you know that homeowners are responsible for the maintenance and replacement of service lines on their property when they fail? The costs associated with digging up, repairing or replacing service lines can run into thousands of dollars. More than that, any damages to trees, shrubs and driveways due to repairs must be paid out-of-pocket by homeowners.

Alarmingly, many homeowners are not aware that service line failures — including water, sewer, septic, electrical and telecommunications lines — are not covered by most home insurance policies.

“Every homeowner needs to be knowledgeable on what they’re covered for and what they’re not,” advises Isabelle Bientz, insurance expert from Aviva. “Most service lines run underground, making it easy to forget the importance of getting them checked for repairs. A lot of homeowners are also not aware that they own the outdoor service lines from their property line to their house, and behind their house to a well, septic tank or out-building.”

Before the unexpected break, leak, tear, rupture or collapse occurs, homeowners need to ask themselves these questions about their service lines:

1. How old are your pipes? The average lifespan of water pipes is 25 years, but the average age of pipes in many areas in Canada is over 50 years old, and several municipalities have water systems of comparable age. Knowing the age of your own water pipes will help you determine whether they’re due for a repair or replacement.

2. What are your pipes made of? Depending on what your pipes are made of, the life expectancy will differ. It’s important that you check the material of your sewer and water pipes in order to make an educated assessment, or consult an expert to see when they’re due for a repair or in need of a replacement.

3. Do you have mature trees near your property? If you own a home with mature trees on or near your property, the roots could cause serious damage to your service lines. Clay pipes, which are most commonly used to build water and sewer lines in older homes, can be easily penetrated and damaged by tree roots. If you suspect a tree root problem, contact a professional to investigate before the situation worsens.

Not sure if you need coverage for your service lines? Find more information from your insurance broker or online at www.avivacanada.com.

www.newscanada.com