Can I Afford to Buy a House?

 
When is enough enough?

Today’s real estate market is all about competing offers. It seems most properties are being listed with a time period in which no offers will be considered. This is ideal for the seller, allowing everyone who might be interested in the property the opportunity to view the house, and decide if they want to make an offer. For all the buyers out there, it’s not quite so ideal, as it creates a situation where a buyer is almost assured of being in competition to buy a home.

When a buyer finds a home they want to buy, the first question they ask their REALTOR® is “How much should I offer to be sure I get this house?” Unfortunately there is no easy answer to that question.

In competition, houses quite often sell for more than their market value, which makes it a bit of a guessing game. Your REALTOR® can tell you what the property’s market value is, but they cannot anticipate how much someone will to pay to own a particular home.

When deciding how much to offer, a good test is to find the price point at which you as the buyer can say, “I would not be upset if someone else bought it at that price”. If the seller is asking $400,000 for example, and you as the buyer decide your top price for the home is $500,000, ask yourself, would you be upset if you learned someone bought it for $510,000? $505,000? If you can say to yourself, ”no I would not be upset”, you have reached your top price. If you say, I would have paid that much, you have not topped out on what you believe you would pay.

That said, listen to your REALTOR®. They will caution you not to offer so much that you put your financing availability at risk. Also, buying a house at any price is not the answer either. If in the example I mentioned above, you are able and willing to pay $500,000 for a home, be sure there is not another property on the market that you have not looked at because it is listed higher that you we thinking of buying.

As always, if you are thinking of buying or selling a home, be sure to speak to a REALTOR® first. Call one of our Coldwell Banker Community Professionals reps. They are very knowledgeable, and will help you determine what is the best decision for YOU, right now.

Oh No! I Sold My Home!

ce4a9f30cb42bf341ab2aa815aed136a_real-estate-sold-sign-lindsay-house-sold-sign-clipart_1000-750Are you afraid to sell your home in case you can’t find one to buy?

This seems to be the impasse  many potential sellers are stuck at. The market right now has such a low inventory of homes to buy, many people are putting off selling, even though they have many reasons that now would be a good time to sell.

If you are in this position, you have a lot of things to consider.

By not moving, are you putting off plans that would be better for your family?
Financially, is now a good time to sell?
If you haven’t sold your home, can you buy your dream home if it came on the market tomorrow?
If you can’t find your dream home, are you willing to rent a property until you find the right one?
Are you tired of carrying the household costs on large home that is more than you need?
Can you afford to own two homes?

If you are being held back by one of these concerns, or another not mentioned, take some time and determine whether there is a answer should you sell your home and become “homeless”.

Are you fortunate enough to have a second home where you could live temporarily while waiting for the right home to come on the market?
Are you prepared to rent accommodation while looking for the right house?
You might be able to negotiate a long closing on your current home, to allow you time to find the right home.
Do you have family members with extra space for you to stay with if the need arises?
Is there another solution which would enable to you move now?

Not everyone is prepared to put their home on the market without knowing where they are going next, but maybe you are.

Being homeless is not as bad as you might think. I sold my home last summer, and am currently renting a home while I look for just the right property. Is it perfect?, no, but it provides the freedom to be in control when I do find the right property. As a buyer with no home to sell, and the ability to match most any closing date a seller might request, I am in a good negotiating position.

So, are you ready to put your home on the market? Be sure to call one of our Coldwell Banker Community Professionals to discuss what your options are.

Is Now a Good Time to Buy a Home?

arraignment-clipart-question-mark

There is no “one size fits all” answer to this question. It is not always a good time to buy depending on your stage in life and your future plans.

The recent changes in the mortgage qualification rules have either taken some buyers out of the market entirely, or reduced the price of the property they are qualified to buy. This has prompted some buyers to become creative, whether by having family or a friend go on title of their new property, and be included in the mortgage calculation, or by borrowing money to increase the downpayment to over 20% to avoid the higher threshold of qualification. Both of these approaches have their risks, and should be carefully considered before using one of them to buy a home. It is possible that now is not the time for you to buy. Perhaps taking more time to increase your downpayment, or time to consider what you really need in your new home is the right approach. It is possible that a lower price home may be the right fit for you right now.

Some ‘experts’ are predicting that home prices will ‘adjust’ (as in decrease) due to the new mortgage rules, as fewer buyers will be able to qualify at the current price levels. We have not seen this happening in the market as of yet, but it is possible. We are seeing less competition for homes compared to the frenzy we saw through the spring and summer.

If you are fortunate to not be subject to the rules for less than 20% down, now may very well be a great time to buy a home. If you are at the stage in life of downsizing, you can maximize your sale price on what is likely your biggest asset, and reinvest in a lower price home. If you are upsizing, it is hard to beat the current mortgage rates that are being offered. One of the big banks just increased their mortgage lending rate, but we have not seen any others as of yet. The Bank of Canada has indicated that they may even decrease the bank rate, which might result in lower still mortgage rates (hard to imagine!)

If you are an investor, with mortgage rates where they are, and the number of people in the rental market, now is a great time to buy that duplex/triplex etc.

As you can see that answer to the question I posed is perhaps. There are many things to consider. How long do you intend to live in the home you are buying? Are you starting a family? Are you retiring soon. These are just some of the questions to ask yourself. The best way to find out what is the right answer for you is to call one of our Coldwell Banker Community Professionals and discuss your current wants and needs, and perhaps even more important discuss your future plans. They will help you determine what you can afford to buy, and if it is right for you. It costs you nothing, but may very well save you a lot of heartache in the future.

Frozen

atlanta-frozen-pipeSadly I am not referring to the Disney movie of the same title…

Each winter we hear news reports of homes that have had the pipes freeze in the severe cold weather we experience. Everyone seems to be forecasting for us to have a colder than average winter this year, so I thought I would touch on this early enough for preventive measures to be taken.

Generally when pipes freeze it is because they either run through an uninsulated area, such as a garage, crawl space or an attic, or are located on exterior walls of the house without adequate insulation between them and the wall. Another unexpected, but common cause can be an outside hose that is left connected to an outside faucet. When it freezes it puts pressure on the interior pipes, and can cause them to break, so always disconnect your garden hose at the end of the season. Also, always turn off your outside faucets and drain the last of the water out of the spigot.

If your water pipes run through an uninsulated or poorly insulated area, you can purchase foam wrap for the pipes. If you are concerned that the pipes will be exposed to the full cold, you can also wrap the pipes with a heat tape that will maintain a minimum temperature to prevent them freezing.

For pipes running in exterior walls, the only effective way to correct the problem is to open up the walls and improve the insulation. On very cold walls, you may actually need to reroute the pipes to a less exposed location.

It may seem like a lot of work to do on the chance that the pipes may freeze, but broken pipes will lead to larger repair bills down the road, including the potential for mold removal.

If you are buying an older home, be sure to have your home inspector check where the water feed is in the house. It is always better to know before winter strikes whether you may have a problem…

Also remember if you have a home with a lawn sprinkler system, have the water blown from the system at the end of the season.

As always, one of our Coldwell Banker Community Professionals will be happy to speak with you about this and other home ownership concerns.

At Coldwell Banker Community Professionals, we don’t strive to be the biggest, we strive to be the best!

Flip or Flop

Flip-or-flopThere’s lot’s of money to be made flipping homes!

That may be true if you know what you are doing. HGTV makes it look easy… buy that neglected home, rip out the kitchen and bath… throw down that hardwood floor and you can make thousands, if not hundred of thousands of dollars…

It’s not that easy, as many renovators will tell you. In a hot market, the first challenge is to find that property listed at the right price, in the right neighbourhood, that you can renovate quickly, and not have to enter into a bidding war to purchase. Nothing to it, right?

Flipping houses truly comes down to the math. What you buy it for, plus the cost of renovations, plus the cost of carrying it while renovating, plus the legal and real estate fees, and plus your profit. The last item is the most important one. You cannot be flipping houses without having a reasonable profit built in. And keep in mind, that profit is taxed as income when you are in the business of flipping homes.

Still think flipping homes is a good idea? Call one of our Coldwell Banker Community Professionals, and have them help you find the right property at the right price to renovate.

Some Like it Hot!

imagesBut some sellers don’t like a hot market!

The question many sellers ask their sales rep in this market is “What if I under price my home?” Experience would tell us that the bigger problem in a hot sellers’ market would be “What if I over price my home?”

In the type of market we are currently experiencing, under pricing a home will result in many showings and likely a number of competing offers. By under pricing, I mean being close to market value, but just under. Buyers know the prices in the market and can be put off by a seller grossly underpricing their home as easily as by a seller grossly over pricing their home. If the sellers price their home too low, buyers may assume the seller is just fishing for a sky high offer, and wait to see what happens. Buyers don’t like to guess what the asking price should be.

Speaking of over pricing… Some sellers believe that they can’t over price their home. They believe that there are so many buyers looking that one of them will buy their home regardless of the asking price – they just have to wait for the right buyer. The buyers looking in our current market are well versed in prices. Odds are they have lost out at least once in competition, and know the market almost as well as their REALTOR®. They may be prepared to pay top dollar, but they will not pay well over market just because the seller is asking. By pricing their home too high, sellers take the risk of being ignored by the buyers. The buyers will wait for the seller to drop the price, and often by then the seller’s home has been sitting on the market long enough that buyers perceive that there is a problem with the home. Over pricing the home at the start can result in the seller receiving less money for their home than they would have, had they priced it closer to the market value initially.

If you are considering selling your home, call one of our Coldwell Banker Community Professionals. They can help you determine what your home is worth today!

It’s Too Hot!

 

images-3Am I talking about the weather or the real estate market? This year it could be either one.

Let’s start with the weather. In my opinion it’s never too hot! I just have to think about winter, and immediately the heat and humidity feel delightful. I didn’t even need to book a flight to get the island weather!

Moving on, let’s talk real estate… (pun intended). This year so far has been a tough market if you are trying to buy a home. Multiple offers have been the norm, and sadly missing out has happened too many times to too many buyers. Sellers are even hesitating to put their homes on the market… what can they buy? will their home be worth more if they hold on another month – 2 months – or more?

The ‘experts’ all have opinions on where the market is going. Some suggest 2017 will be an even hotter market than 2016, and yet others are still talking about the balloon that’s going to break and spiral us all into a quagmire of overpriced homes. The government keeps suggesting they need to intervene in order to slow our ‘out of control’ market.

Experience tells us that the market will correct itself. There are many reasons why people move, and they can only put it off so long. New jobs, adding to the family, retirement, divorces, to name a few. Sooner or later, sellers will decide they are not waiting any longer, and more houses will come on the market. Prices likely won’t decrease, as there are a lot of buyers waiting to absorb the available properties.

As a seller, if you are thinking about selling, now is a great time. It is a strong seller’s market, and summer sometimes sees fewer homes being put on the market.

Either way you look at it, this summer is HOT! Make sure you are part of it. Enjoy the weather, and good luck if you are trying to buy a home.

If you are looking for a great agent to help you, look no further than Coldwell Banker Community Professionals. Call us today to see how we can help you.