First impressions count!
When you bought your home, did you just know you’d found the right place the minute you walked in the door? You might be surprised how many buyers feel this way. In fact, in the experience of our buyer agents, the majority of buyers will know if they’re going to buy a place within ten seconds of viewing it!
Switch now to a seller’s perspective. If you’ve had loads of showings but no bites. Your MLS® listing must look good and your price must be right because buyers are coming to see the place… So what can you do to turn a showing into an offer?
Those first ten seconds after a buyer enters a house are crucial-you have to make them count. The decisions made then are just gut feeling; either they picture themselves in the home, or they don’t. And if buyers are walking into a poorly lit, crowded entryway with a smell of kitty litter, chances are they’re not picturing this as their dream home-no matter how good the rest of the house looks.
**Great tip from one of our agents: It may sound insignificant, but make sure you have a nice big entryway mat put out. That way your buyers and their agent aren’t all crowded on one small mat as they take off their shoes. Making your buyers uncomfortable is definitely not giving them a good first impression.
The entry is worth the extra effort. Make sure to ask your REALTOR® about what you can do to improve your home’s first impression. And if you’d like to invest in professional help, we’re pleased to now offer a premium level of service, which includes a consultation with a professional home stager. Give us a call to find out more.
Ghost Listings in the Spring
In late winter as we gear up for the spring, one of the biggest things that sellers need to look out for are ghost listings. These are the listings that didn’t sell last summer, so their owners took them off the market in the fall, with the intent of putting them back in the spring. In many cases, they’ll have done some work to the property over the winter.
By the end of January this year, Edmonton’s inventory was sitting about as low as it had since 2010. However, we’re already starting to see the market pick up. Generally most ghost listings come back on the market in through spring… so we’ll likely see the inventory increase significantly March through May.
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Active month end Edmonton residential inventories
*Feb 2013 Statistics as of Feb 26 2013 |
There is still good news for sellers: depending on the home you’re selling, you might not have a lot of competition. For example, I visited a home in Sherwood Park a couple of weeks ago. I was surprised to see that there were only 12 other comparable houses within that price range! This seller is going to have a serious advantage, especially since they’ve listed early in the year.
If you’re thinking about selling your home this year, I urge you to do it early; the window of opportunity for sellers to take advantage of lower competition usually closes by late March. Give us a call, and I’d be happy to help you with a strategy for selling your home this year.
Understanding Mortgage Differences
Getting financing can be a daunting process. It’s time consuming (and sometimes intimidating) going from bank to bank, and can be disappointing when you can’t afford the home you were hoping for… Or when you are refused financing. To help us out with this post, we’ve asked Narish Maharaj, a Mortgage Associate with Dominion Mortgage Pros, for advice on finding a mortgage that works best for your situation.
“All Canadian lending institutions follow national lending rules, but where they differ is with their own internal lending policies. Often times, borrowers are denied a mortgage or take out a smaller mortgage than what they can otherwise afford purely because of policy… which can be different from one bank to another”, Narish explains. “As a mortgage associate, as much as we’re able to shop around to give you the best rates, we truly add value in understanding lending policies at different institutions.”
Getting the right mortgage for your needs can be a lot of work
Here the main lender policy differences that we consider when a broker is looking for the right institution for you:
- Mortgage Insurers: There are three insurers for high ratio mortgages in Canada; CMHC, Genworth, and CG. There are a few mortgage lenders the use all three whey you’re applying with them, but most mortgage lenders only use either one or two. Depending on which insurer(s) a lender uses, they may see your application in a different light. For this reason, we see instances where an individual might be approved by one insurer, but previously declined by another.
- Debt Servicing Ratios: Typically, the banks like to see that 32% of your gross income will cover your principal, interest, taxes, and heat. But some trust companies look for a ratio of up to 35%. Sometimes borrowers can afford more than they are able show on paper, as is often the case with self-employed individuals. This can mean the difference in getting the property they want and having to go with one the banks think they can afford.
- Different Credit Scores: It’s most commonly thought that a 600 beacon score on your credit report is the cut-off for getting AAA mortgage rates. In fact, some lenders go as low as 590, while others have moved their credit cut-offs to 620 or 650. So applying with one lender and having a 617 beacon score would lead to a decline. More often than not people think the decline by one lender means they won’t be approved anywhere. Not true.
- Rental Calculations: Make sure to ask your mortgage lender how they compute rental income if you have existing properties, keeping the one you’re in as a rental, or purchasing a rental. Most major lenders use a 50% income inclusion. This means that very little of your rent gets applied against the cost of the property, leading to a lower borrowing ability. Some lenders use high rental offset or spreadsheet calculations which can favor the amount of rents used to offset the debt and have minimal impact on your ability to purchase. Too often we see clients sell their existing property because they’re advised they can’t keep it and buy a new principal residence at the same time. This is bad financial advice as it may be in the client’s best interest to keep the property from a long term investment strategy and they may have been able to do so if they worked with a mortgage lender that considered more rental income into the approval process.
- Lending Limits/locations: When buying in remote locations or high end properties, it’s important to understand how lenders view this. Some won’t discount the rate as much, others may scale back on the amount they lend, and others may simply not do it. Shop around to make sure you’re finding the best offer.
Thanks to Narish Maharaj, from Dominion Mortgage Pros for his help with this post! If you’re in need of lending advice, applying for a Mortgage or just trying to get a better rate, we highly recommend enlisting their mortgage team’s help.
Contact Narish
Toll free: 1-866-890-5227
Email: nmaharaj@dlconline.ca
It’s that time of year again
Every year around this time we hear from sellers nervous about the lack of activity… They’re worried their home won’t sell or that something is wrong. It’s important that you understand that this is normal. As we move toward December and January we will see fewer buyers. Actual sales numbers are proof of a slower market with only 327 recorded sales so far on the MLS System in November.
So the question that always comes up is “should we wait until spring to sell?” The only time I answer yes to this question is when I’m absolutely certain that the spring will bring an environment where home prices will rise-and as of right now, I’m not certain that this will be the case.
But there are a couple very positive things to keep in mind:
- Most buyers in this market are feeling discouraged, and many will take their homes off the market. That leaves you with less competition and more opportunity to stand out.
- The weather also dictates that those wanting to see your home are absolutely serious about buying your home. So even though we may have fewer showings the odds of that showing turning into a sale improves dramatically.
The greatest risk of taking your home off the market until spring is that values may slip. In fact, we often see values slip slightly right up until April or May and by then it may only stabilize. My thoughts on where prices will be in the spring is for anotherpost, but as I’ve said to you all before, the current environment is such that there is a risk of home values slipping.
In the spring there are definitely more buyers just as there are more sellers, but that doesn’t mean you won’t sell in the winter. And if you have the patience to wait until spring, then sitting on the market shouldn’t be an issue.
But what if you can’t wait? Then you may have to be more aggressive in your pricing and it may require that you put some effort into improving your property’s presentation. More importantly, you need to communicate your desire to sell quickly to our team so we can better advise you on what’s needed to make that happen.
Too much information
We’re living in an exciting time where information is more accessible than ever. Got a question? Google it. Home repairs? Instead of waiting for a repair man, you check out Youtube to see how it’s done. It’s the information age, and the answer to any question is just a few key strokes away.
We can be self-made experts in almost every subject matter there is. And many people are using this to their advantage when buying or selling a home. They’re doing their own research online, and now they also have easy access to MLS® data. If information is power, then anyone should be able to sell by owner these days. But the fact remains that many people are still uneasy about selling by-owner… and those who do sell by owner will statistically get less for their houses, and take a longer time to sell. Why?
Though information is plentiful, it becomes overwhelming after a while. Many people become bogged down in a sea of statistics and reports and forecasts and other people’s opinions… and they lose track of what information is actually relevant to them. Worse, they’ll look for information that suggests a best-case scenario, and ignore warning signs.
This is why, even with lots of cheaper options out there, most people still choose to work with a REALTOR®. They realize that selling a home isn’t just some do-it-yourself project like painting your walls or a quick oil change. We’re talking about probably one of the biggest and most important investments you’ve ever made: your home. And that’s exactly why you need an honest and ethical REALTOR® there to ask the right questions and deliver accurate and unbiased answers.
Are you getting your best mortgage rate?
Did you know that nearly 70% of Canadian borrowers renew their mortgages without shopping around for more favorable rates? By not shopping around or failing to negotiate better rates, Canadians are paying thousands of extra dollars every year.
Generally it is a good idea to start shopping for a new term four to six months before your current mortgage term expires. Many lenders send out your renewal letter very close to the time that your term expires, giving you little time to arrange for a mortgage term through a different lender.
So don’t leave it to the last minute to try to save money on your mortgage. Before you even hear from your lender about renewing your mortgage term, make sure you shop around for your best rate, or find someone who will.
Average selling prices can be misleading
The average selling price is a good economic indicator, but remember to take it with a grain of salt. Remember, this number only reflects what’s actually sold, and it says nothing about what the average house actually looks like.
In a buyer’s market there are more properties to choose from, so they can afford to be picky. That’s why moving into the slower fall market we may see an average price misleading many sellers. Right now, only the best, most attractively priced houses are selling, and that’s what the average price is reflecting. In other words… if you’re trying to sell what you think is an “average house” be warned that you might have to sell it for below market average.
Sure, now might be a great time for buyers, but if you’re selling we can give you the tools to make you competitive. For example, if you want to set a more competitive price, the money you save using one of our selling plans can seriously help you out. As a matter of fact, last year our sellers saved an average of $10,000 over what they would have paid with a traditional agent. Call us to find out more.
You only save if you sell
In the past, selling your home tended to be expensive. But things have changed. These days, you can post your home on the MLS System® for very little money with a for-sale-by-owner company. Lots of people have benefited from this option. Really, why pay thousands and thousands in commissions if you can get all the MLS® exposure that a REALTOR® can offer for just a few hundred dollars? You could save thousands!
There’s the trick. You could save thousands. As in, you’re only actually going to save money if someone buys your home. Selling with a REALTOR® is pricey, but you only pay when your house sells. Typically, when you use a for-sale-by-owner company, they take their fee up-front when you list. So, while for-sale-by-owner companies have the potential to save you thousands of dollars, the reality is: you’re only saving money if you sell.
If these savings are really just “potential” savings-that implies there’s a risk of losing that money you paid your for-sale-by-owner company to list your home. Let’s look at what kind of risk we’re talking about!
A lot of sellers go into the market thinking that because their house is for sale, someone will buy it… eventually. Actually, the way the market sits right now, if you and your neighbour put your houses up for sale today, at least one of you will still be trying to sell this time next year. Those are your odds (based on this year’s selling statistics as of July): a 49% chance of selling – that’s if you’re working with a REALTOR®.
Ok, so if you pay your money up-front, and a for-sale-by-owner company puts your home on the MLS System® for you… What are your odds then? Go to the first for-sale-by-owner company website that you can think of. Check out how many houses they’ve actually listed and how many they’ve sold over the last month. The large outfit that we looked at was selling about 30% of their houses. Does that sound good enough to you?
Of course selling successfully really doesn’t come down to chance. Yes, MLS® exposure is important, but by no means is it enough to guarantee a sale. Selling your home comes down to understanding your home’s true value and the market you exist in-and knowing how to position yourself correctly. Having a good, honest REALTOR® will help you there. How do we know? At SellerInvite.com, we strive to provide all our sellers with the information, understanding and exposure they need to be successful-and we sell over 70% of the homes we list.
Getting ready to sell in the fall market
With fall right around the corner, we’ll see a natural cooling to the housing market. For this reason, many people shy away from selling in the fall and winter months. Though it’s only August, this is happening already: there are fewer residential sales in both Edmonton and Calgary as compared to last month, but we’re still seeing a strong listing load. In other words, there are a lot of houses on the market, but fewer interested buyers. Selling in the fall isn’t always ideal, but it doesn’t mean you can’t sell. If you want to sell now, here are a few key things to keep in mind:
1. You need to be first to market. Think about selling your home as you would about selling stocks. When the value of your stock is on the decline, you’ll want to sell it before you incur losses, right? The coming months may come with a natural decline in prices. The earlier into fall that you can list your home, the better.
2. You need to be priced well. The other side to being first to market is that you need to be off the market quickly too. And chilly winter market isn’t the only thing you need to be wary of: uncertain market conditions also put you at risk. So you need to price your home aggressively now. If you’re uncertain about price, your REALTOR® can help position your home competitively in the market.
Of course, pricing aggressively isn’t the easiest thing to do. But you do have options. For example, SellerInvite.com offers significant savings to our sellers, which helps out if you’re trying to price aggressively.
3. You need to present well. Finally, fall means fewer daylight hours. That combined with snow (remember where you live) and your home won’t show quite as well as it did in the summer. So you need to put in that extra effort to get your home ready to show. Take care of any lingering projects, get out the old mop and bucket, and consider hiring a professional stager.
Selling in the fall and winter is not impossible; it just means that you’ll have to put in some extra effort. If you don’t, remember, your competition certainly will.
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