Do You Know Your Needs and Wants?

July 14th, 2014 by Everyday Real Estate Group

 

Begin your Search Here

Begin your Search Here

Similar to the list you develop to purchase groceries, why not develop your own list of needs and wants in a new home. This doesn’t mean you can’t have what you want in your home, but rather, that you have a priority list of the most important features.

You may not be able to obtain all the “want” items on your list, within your budget, but at least you and your real estate agent will have a clearer idea of what to look for. You may have to compromise on a few items to stay in line with your budget.

Here’s a review of example needs versus wants, 

NEEDS – could include:
Adequate square footage for comfortable living.
Sufficient bedrooms for your family
Sufficient bathrooms
Comfortable eat-in kitchen
Garage or basement for storage needs
Backyard for children’s play area
Easy access to schools

WANTS – could include:
Specific carpeting, paint, exterior color
Pool
Jacuzzi
Hardwood floors
Bay windows
Built-in entertainment center
Brass lighting fixtures
Skylights
A pretty view

Under CoverTry to establish a happy medium of your NEEDS and WANTS. That is, you’ll want to look for a home that includes all of your needs, with as many wants as practical, while remaining within your budget. Once you have this information in hand, your needs will be clearly defined from your wants. Having this knowledge will establish a clear direction for your new home shopping. 

Get the Most out of Your Mortgage

June 14th, 2014 by Everyday Real Estate Group
Mortgage Rate

Mortgage Rate

While you are shopping for a new home, do not forget about your mortgage. Take the time to shop at several institutions or ask your realtor for his or her recommendation for who is offering the best terms to suit your situation. Many real estate agents have developed a unique relationship with one or more lenders whereby the lender offers more favorable rates to the realtors clients than they would otherwise obtain. Compare terms, rates and payments. Small items like terms, rates and payments can cost you or save you thousands of dollars over the life of your mortgage. The following list makes some suggestions on how you can make your payments work harder for you.

Get pre-approved
It is fast, simple and free. Before you shop for your home, spend some time with a financial institution. You will receive a written, pre-approval for a specified amount. When you have found your dream home, there is no waiting, or objections to the seller.

Consider your comfort level
In some cases, you may qualify for more or less than the dollar amount you want to commit to each month. Take the time to calculate different payment plans. Be sure you are comfortable with this amount. Develop a budget. Leave yourself some breathing room for unexpected expenses.

Consider your long-term goals 
Before committing to a mortgage ask yourself these important questions: How long will you live in this home? Will interest rates rise or fall? Will your income rise or fall? Will you be able to commit to monthly payments? Being objective about these factors can make a difference to the type of mortgage that is best for you.

Review payment schedule and additional privileges
The more you can pay, the more often, the more you will save. For example, making weekly or biweekly payments can take years off your mortgage. This way, you lessen the amount of interest accrued over the term. Increasing your monthly payment can also reduce interest and term. Some mortgages allow you to pay a lump sum towards the mortgage at a specified time. Be clear about pre-payment privileges, as not all mortgages include them.

Make sure you Plan well

Make sure you Plan well

Consider a portable and assumable mortgage
You can take a portable mortgage with you, should you move. You will avoid paying discharge penalties and reapplying, unless you move to a more expensive home. You could also save in discharge penalties if you allow a buyer to take over your payments. In Alberta, most mortgages are assumable. Other provinces have stricter regulations – ask your lender or realtor for the details. This could work to your advantage, making it easier for a buyer to purchase your home.

As a Real Estate Professional, I can assist you in obtaining the best mortgage for your needs. Having worked with families in various financial situations, my experience and services can make a significant difference in the cost and effectiveness of the mortgage you obtain.

Why not put us to work today for you!

Low Cost Ways to Improve Your Home

June 8th, 2014 by Everyday Real Estate Group

iStock_000004296763SmallWhen it comes to the sale of your home, it is the little things that can go a long way to increasing the price you will receive. Most buyers respond positively to a clean, clutter-free home that is in good condition. The more effort you put into the appearance of your home, the more likely you will receive greater activity and multiple offers.

Over time, we become accustomed to our homes, often overlooking the eyesores and the list of honey-dos that were never completed. Clutter accumulates. We think nothing of the low light and the pale and cracked paint.

An unbiased opinion is a wonderful idea. A Real Estate Professional has the knowledge and experience to know where you can improve your home. At the same time, he or she is familiar with other homes in your neighborhood. He or she is familiar with repairs that should be completed. Your Real Estate Professional can recommend larger items to complete, such as painting, flooring upgrades and the like. However, there are numerous smaller, inexpensive things you can do to greatly improve the showing of your home. With a little elbow grease, and a little creativity, it is easy to keep your home in prime showing condition.

Prior to the listing, have a garage sale. The rule is “less is better.” Clean. Organize. Discard. Donate. Pack all that you can. Clean out closets and storage areas. Donate old clothes and furniture to local charities. This will create a sense of greater space — and mean less to move. What about all those books and magazines that you don’t want? Perhaps you can donate them to a local library, hospital or charity.

Set the stage. Take full advantage of the areas in your home. Set the table with your best china. Create warmth and coziness in the living room, with a crackling fire. Put a pair of wine glasses and a vase of flowers on the coffee table in front of the fire.

Eliminate the odors. Buyers respond less favorably to smells. Use cleansers of all kinds to make the home smell fresh, from carpet freshener to potpourri. Deodorize your cat’s litter box. Scoop litter daily. Put cedar chips inside the closets. Use the sense of smell to your advantage by having fresh-baked cookies or other baked goods on the kitchen table. People have both allergies and concerns when it comes to animals. If you have a pet, make arrangements to have it elsewhere when a home is being shown.

Create space. Ensure that all doors, cabinets and drawers open all the way without bumping into anything or sticking. Clean out the entry closet. Move oversized furniture to a storage facility or garage. Entrances to all rooms should have an open flow.

Make the most of your views. Put a screen or a basket of flowers in front of a fireplace if not in use. Make sure there is enough room for visitors to view out the windows. Remove any clutter around window areas. Clean windows.

Create counter space. Store away extra appliances. Put away dish racks, soap dishes and other clutter. Remove magnets from refrigerator.

 

 

Virtually Staged

Virtually Staged

Aim for netural decor. De-personalize your teenager’s room, the family room or other areas by removing wild posters or items that could be construed as offensive.

Increase the wattage. Pay attention to the laundry room, kitchen and bathrooms. Prior to showing, turn on the lights in every room.

Family photos. Place family photos throughout your home, especially living room, bedrooms, and family rooms.

After you have completed these inexpensive items, stand back. Ask a friend to view your home. What do you feel? Is it warm and inviting? Does it look comfortable and spacious? Is the aroma pleasant? When you create a positive, warm environment it is likely your buyer will feel the same way.

When you are ready, we are ready to help you. Give us a call or contact us by email. Put our experience to work for you.

Don’t Forget about these Costs

May 14th, 2014 by Everyday Real Estate Group

iStock_000008538351Large

Buying a home is a milestone, whether it’s your first, third or fourth. In addition to the price of a home, there are some other costs you’ll incur. Some of these costs are one-time fixed payments, while others represent an ongoing monthly or yearly commitment. Not all costs apply to every sale or purchase. However, when you are aware of the following items you won’t be hit with any surprises on closing day.

Inspection fee 
An inspection performed by a professional inspector is a sound investment. For $300 – $500, you’ll receive a written report on areas that are structurally sound and those where repairs are required.

Appraisal fee 
When you apply for a mortgage, your lending institution will ask for an appraisal of the property. Budget approximately $300 -$ 500.

Survey fee 
When you purchase a resale home, you are also required to have a Real Property Report which assesses any changes to the home and property. Normally the Seller would provide this in which case it costs you, as the buyer nothing, but can be added to your costs if the seller does not have a copy and the Financial Institution requires it. Budget around $400 – $600.

Property insurance 
Insurance on your home covers the replacement value (structure and contents). To protect their investment on their loan, financial institutions require this coverage. Allow for $500 – $1,000.

Service charges
There will be an installation fee for utility services, including telephone, water, electricity, gas and cable. Hook up fees range from $50.00 – $175.00 depending upon the service.

Legal fees 
A lawyer should review every real estate transaction. Fees are determined by the complexity of the issues involved. Shop around and ask for an estimate prior to hiring any lawyer.

Mortgage loan insurance fee 
Depending upon the down payment, some lending institutions require mortgage loan insurance. Budget between 0.5% – 3.5% of the total amount of the mortgage.

Mortgage application fee 
Some financial institutions charge a mortgage application fee to process your application. If your request for a mortgage is turned down, most will return the application fee to you. Each time you renew a mortgage some institutions also charge a fee.

Moving costs 
Costs for professional movers range from $65.00 – $100/hour for a van and two movers. Prices may be higher during peak moving times.

Local improvements 
In some cases, the cost of local improvements made in your area (sewers, sidewalks, alleys) could be added to your tax bill.

Closing costs 
With the purchase price of a resale home, the closing is always ‘subject to usual adjustments.’ This means that any amount that the seller has already prepaid will be adjusted so that the home buyer pays the excess amount back to the seller, and vice versa. These adjustments can include: municipal property and school taxes, monthly condominium maintenance fees, first and last month’s rental for rental properties where renters may be in the home, and utilities such as hydro, water and fuel oil, including GST.

Interest adjustment costs 
Most lenders expect the first mortgage payment one month after closing the purchase, however, if you close mid-month, some lenders expect the first payment at the beginning of the next month, two weeks before you would normally expect. Or they charge a pro-rated interest to make up the difference.

Land transfer tax 

Image courtesy of FreeDigitalPhotos.net

Image courtesy of FreeDigitalPhotos.net


Most provinces levy a one-time tax based on a percentage of the purchase price of the property. Your professional real estate agent can advise you on which service provider would be the most cost efficient and give you the best service for your particular purchase situation.

If you are interested in knowing how these fee’s affect your situation, please feel Free to contact us.  Put our experience to work for you.

Canadian Economy Grows in 2013

February 28th, 2014 by Everyday Real Estate Group

BCREA ECONOMICS NOW

Canadian Real GDP Growth - February 28, 2014

The Canadian economy grew 2.9 per cent at an annual rate in the fourth quarter, and 2 per cent for all of 2013. Growth was led by strong household consumption expenditures and an uptick in exports of goods and services. However, an accumulation of business inventories also contributed significantly to growth in the fourth quarter, which may reverse to start 2014.

The Canadian economy grew at a robust average rate of 2.8 per cent in the second half of 2013. Stronger growth, along with the recent acceleration in inflation and a steep decline in the loonie, will likely quiet speculation of a Bank of Canada rate cut. We are forecasting that the Canadian economy will further improve in 2014 growing 2.5 per cent with the Bank of Canada on the sidelines until 2015.

For more information, please contact: 

Cameron Muir Brendon Ogmundson
Chief Economist Economist
Direct: 604.742.2780 Direct: 604.742.2796
Mobile: 778.229.1884 Mobile: 604.505.6793
Email: cmuir@bcrea.bc.ca Email: bogmundson@bcrea.bc.ca

The British Columbia Real Estate Association (BCREA) is the professional association for more than 18,500 REALTORS® in BC, focusing on provincial issues that impact real estate. Working with the province’s 11 real estate boards, BCREA provides continuing professional education, advocacy, economic research and standard forms to help REALTORS® provide value for their clients.

Real estate boards, real estate associations and REALTORS® may reprint this content, provided that credit is given to BCREA by including the following statement: “Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information.

BC Home Sales – Strongest October in Four Years

November 15th, 2013 by Everyday Real Estate Group

For the complete news release, including detailed statistics, click here.

For immediate release

BC Home Sales Post Strongest October in Four Years

Vancouver, BC – November 15, 2013.  The British Columbia Real Estate Association (BCREA) reports that a total of 6,673 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during October, up 26.5 per cent from October 2012. Total sales dollar volume was 34.5 per cent higher than a year ago at $3.6 billion. The average MLS® residential price in the province was $540,432, up 6.3 per cent from October 2012.

“The fall housing market is shaping up to be the most active in four years,” said Cameron Muir, BCREA Chief Economist. “Persistently low mortgage interest rates and an element of pent-up demand have driven home sales higher in the province’s large Lower Mainland and Vancouver Island markets.”

“While the rebound in consumer demand has been significant, home sales are trending near the long-term average and any continued acceleration will depend on stronger economic and employment growth,” added Muir.

Year-to-date, BC residential sales dollar volume was up 8.2 per cent to $33.6 billion, compared to the same period last year. Residential unit sales were up 5.1 per cent to 63,020 units, while the average MLS® residential price was up 2.9 per cent at $533,321.

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For more information, please contact: 

Cameron Muir Damian Stathonikos
Chief Economist Director of Communications and Public Affairs
Direct: 604.742.2780 Direct: 604.742.2793
Mobile: 778.229.1884 Mobile: 778.990.1320
Email: cmuir@bcrea.bc.ca Email: dstathonikos@bcrea.bc.ca

BCREA represents 11 member real estate boards and their approximately 18,500 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education.

To demonstrate the profession’s commitment to improving Quality of Life in BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.

For detailed statistical information, contact your local real estate board. MLS® is a cooperative marketing system used only by Canada’s real estate boards to ensure maximum exposure of properties listed for sale.

6 Weeks – 42 Days!

November 13th, 2013 by Everyday Real Estate Group

Don’t you get annoyed when someone reminds you how close we are to Christmas? You go to the Mall or other store and you are already hearing Christmas music. American Thanksgiving isn’t even finished yet. I’m like that so why am I writing about Christmas when there is still 6 weeks to get ready? I just want to remind you of some things that could help your Christmas season be safer and more enjoyable.

ChristmasVactionHouseChristmas Lights – Who out there likes Christmas Lights? I remember as a Kid growing up, that there always seemed to be a street where everyone got really involved in the Christmas spirit and set up thousands of lights. In fact, at Christmas, I sometime like to drive by that neighborhood to see if they have carried on the tradition. Alas, it doesn’t appear that they have but I want to remind you that my recommendation is that you put up your lights early. Don’t wait until the calendar says we only have 2 weeks or 14 days.  You might not like the weather we will be having. We still have a few days where we will have reasonable weather and that is one thing I remember not liking was putting up the lights when the wind and the rain were swirling around me and it seemed like I was doing it in a mini Hurricane. My advice; Don’t wait for the last weekend to do this. You don’t have to turn them on right away but at least you can stay warm and comfortable knowing that you are ahead of the game.

Christmas Tree’s – Each year, around the beginning of December, usually the first weekend.

Image courtesy of FreeDigitalPhotos.net

Image courtesy of Suat Eman at FreeDigitalPhotos.net

We would go to the Christmas Tree Farm, search for our special tree, have the attendant cut it down and take it home. Once we got the tree home, I would cut the base again and place it in the stand and ensure that our tree had a continual supply of water. I didn’t want it to dry out and leave a trail of needles when we dragged it out of the living room. Every year, it dried out and we had a trail of needles. It took months for the vacuum to find them all. What I was more fearful of, was that this tree would become a fire Hazard. (By the Way, Have you replaced the battery on your smoke alarm? The battery powered one I mean.) I have linked a video of what I mean to the picture of this beautiful tree. Just click on the tree and it will take you to the video. One year I took our tree, which had been watered everyday to the back yard. I Lit one match. Held the match to the needles and within seconds this tree had exploded into a ball of flame. I was indeed made very aware of the danger of a live tree in the house. The next year, we replaced our traditional live tree with a fake one. They make them so good now, I don’t even know if I can tell them apart.  Please be very aware of the risk associated with a live tree.

Stuffed Animals - Christmas Traditions

Stuffed Animals – Christmas Traditions

Christmas Traditions – I’m sure that many of  you had a family tradition that you had to go through and these always make Christmas more enjoyable. Well most of the time, they are enjoyable. Sonya has a tradition, where she likes to pull out a Jig Saw Puzzle and over the course of a couple of weeks, we have this puzzle spread out on our coffee table. I don’t like Jig Saw Puzzles. Sorry. Just can’t do them. The traditions I like are the ones on how we get together. Jenny, our daughter in law, is from El Salvador. It is their tradition to celebrate Christmas on Christmas Eve. I know some of our other friends it is the same. For me growing up it was always Christmas morning and we had to have breakfast first before we could even look at the presents under the tree. I think next year, I would like to establish a new tradition for Sonya and I. Christmas in the Tropics. How does that sound?  Sounds good to me but I really think that I would like to do something with more meaning and significance. So many people are in need in our community and around the world and many of us have so much. I think that we should each look in our heart and see what it is that we would be willing to do for someone that doesn’t have anything. Give the gift of hope to someone this year.

Christmas Dinner – I could have put this one in with the previous paragraph because Dinner around our place seems to have become a dinner of epic proportions. What I mean is that, It is so important for us to have everyone together, that we are willing to change the date and time to accommodate the schedules of others. This year will be a bit disappointing since our Daughter and her family will not be able to make it. It will give them an opportunity to establish a new tradition of their own. Our new tradition, should include me not eating so much! But it all tastes so good! I just can’t help myself. Reminds me of Christmas one year at my Grandmothers home. Mom’s side. Everyone always was there on the afternoon of the big day and Christmas dinner was a big deal. After all we had a big family. There was always ton’s of food and  you would think that we wouldn’t run out of any thing except this one year, my cousin and I were sitting together and we were probably around 12 or 13 years old. You know the age, when boys seem to have hollow legs and could eat enormous amounts of food. Well that year, the stuffing got passed to only two people. First to him and then to me. I definitely ate too much that day.

Image courtesy of FreeDigitalPhotos.net

Image courtesy of hin255 at FreeDigitalPhotos.net

I know it is a bit early to talk about Christmas but it has this way of sneaking up on you. And on that thought, I have one other piece of advice for all the husbands out there. Don’t wait till the 24th. I know it is a Tuesday and the stores will be open late but you don’t need the extra stress in your life. Listen to your wife and decide early what you are going to get her. Research where it will be. Be discreet and one day, say December 2, casually announce that you are going out and quickly get the desired object. I hope to be able to report that I successfully used this strategy rather than wait till the last minute and be relegated to wandering through the mall with all the other hapless men.

That concludes my advice for this time around. Enjoy the season this year and I really encourage you to establish a strong tradition of helping someone else out who is less fortunate than yourself. Most of us are able to do that without to much difficulty. Watch for my upcoming Post were we will be offering our forecast for what the Real Estate Market in 2014 will hold. If you need some advice or information before then, please feel free to contact me at in your own time. All the best.

Don

 

Random Acts of Kindness!

October 28th, 2013 by Everyday Real Estate Group

As we near the end of October, we traditionally begin to see our inventory levels go down 2 Billion hours spent volunteeringin anticipation that we are entering into the Holiday Season and people tend to have their focus on other things. Not always the case as sometimes we cannot always control when we need to move or stay put but generally a reasonable assumption. November is usually noted for containing the Day known as Black Friday and it is one of the largest retail shopping events North America seems to enjoy. The day, week and month after US Thanksgiving seem to be when our focus is on celebration and anticipating great times to be held with our family and others that we care about. Excessive amounts of time are spent searching for those elusive perfect gifts, at least they seem to be elusive to me, massive amounts of money are exchanged for them and then they are taken home and carefully wrapped and prepared to be given to those individuals that we care about.

Another focus that changes, is our philanthropic focus. We seem to become a little bit more aware that there are people out there that are not as blessed as we are and that some might need some extra help. That this time of celebration is not generally a happy time for them and adds excess stress to their lives. I would like to encourage us all to not forget about these persons. They are part of the fabric of our society and due to whatever circumstances that they find themselves in, they need some help. I want to encourage us all to participate in those endeavors that offer some relief to those in need. There are a number of ways that we can help out  that might not even cost us very much money.

Here are 10 Random Acts of Kindness that cost less than $10.00 (reprinted from Brian Buffini IOV Oct/Nov 2013)

1. Put change in someone else’s parking meterScott Adams Quote

2. Pay for the coffee of the person behind you in the line at the coffee shop

3. Buy a few extra groceries and drop them off at the nearest food bank

4. Pay the toll of the car behind you

5. Give a homeless person a large plastic storage bag containing a bottle of water, a couple of granola bars, tissues, a comb a toothbrush and toothpaste. ( I saw some packages at Safeway that were perfect gifts for some homeless person. Some for $5.00 some for $10.00)

6. Send a handwritten note and small memento to a friend, family member, neighbour or someone you haven’t spoken with in a while. It’s sure to make their day.

7. Offer your change when the person in front of you at the register is short of cash.

8. Buy an inspirational book for a friend who needs encouragement.

9. Buy a dozen daisies or sunflowers to give to the women at your office or to strangers on the street.

10. Surprise a friend loved one or coworker with their favourite beverage or snack.

Try some of these out! you might find them fun to do!

November and December might be the time for celebration, but we are also coming to the time early in the New Year when some of us try to make the decision on whether it is time to stay put or time to move on. If you are contemplating a Real Estate move in the future or know of someone that is, why not give me a call. Put my 29 years of Real Estate experience to work for you. My desire is to be able to provide you with accurate information and insight into our market place and how that impacts your real estate decisions so that you are able to make informed ones. If you think you might find yourself in this position, it is not too early to start the ball rolling. Being prepared in advance is a good way to position yourself and your property to take full advantage of our generally more robust Spring Market. Being aware of market conditions as they are and trends that may be develop are all part of this process.

Just drop me an email, and I can begin the preparation for you. mailto:dgoertz@remax.net

 

Renovation Paybacks – Buy? Sell? or Stay Put?

October 7th, 2013 by Everyday Real Estate Group

Our Markets have seemed to be on a bit of a Roller Coaster ride of late and sometimes we don’t know if we should Buy, Sell or Stay put. Traditionally, for most Canadians, a home is a solid, familiar investment. Over time, your home will increase in value at a steady, safe rate. This is important to consider when you are trying to answer that question of Buy or Sell. Here is some info that we found might be useful to you as you ponder your needs.

Make sure you Plan well

Make sure you Plan well

Some renovations can help to improve the value of your home. Whether you are updating that 40′s style kitchen, removing green shag carpeting from the bedroom, or adding exterior curb appeal by applying attractive, maintenance-free siding, you will increase the market value of your home.

When renovating your home, here are few things to consider.

If you are financing an improvement, consider your budget. Keep your monthly payments within your limit.

Consider the type of renovation. You could overdo a good thing if you spend too much on less favorable items. Perhaps you are planning to move in a few years and hoping to recover the costs. Canada Mortgage and Housing Corporation suggests the following as a payback range of typical renovations:

  • Kitchen 68-74%Assembling kitchen units.
  • Bathroom 64-71%
  • Interior painting 62-66%
  • Exterior painting 62%
  • Main floor family room 49-56%
  • Finished basement 50-52%
  • Upgraded heating system 48-50%
  • Landscaping 45-49%
  • In-law or rental suite 40-42%
  • Central air conditioning 38-43%
  • Energy-efficient upgrades 33-39%

craftsman dogWhen you are considering purchasing a home you can also use a Mortgage program from CMHC that will allow for the financing the renovation of a home you have found to buy. Your Mortgage professional will be able to help you out with this type of mortgage but it can be useful if you are starting out and have the money for a down payment but not the extra cash to renovate that Great “Handyman” special that you found.

Whatever you decide to do, we can help. With nearly 30 years of experience in the field of Real Estate, we have come across many different circumstances and can help you evaluate what might be the best answers in your situation. Please contact me for a more personal look into your Real Estate Needs, Wants and Desires.

Don Goertz

dgoertz@remax.net or 604-807-4442

You and Your Mortgage

August 27th, 2013 by Everyday Real Estate Group

So a big question today in the minds of many people is “what is going to happen to mortgage rates in the near future?” The answer to that seems to have the country pretty evenly divided.  46% of Canadians think that rates will remain low for the next 12 months and 49% expect the rates to remain low through to 2014. (source CIBC + RBC) That follows that for the last couple of years we have seen (and enjoyed) some very low interest rates. Recently we had a bit of a spurt where the rates went up. This was apparently do to something happening in the bond market that I don’t understand. You need to contact your financial guy on that one for an explanation. All I know is there doesn’t seem to be as much downward pressure on our interest rates as their used to be. Our Federal finance minister, Jim Flaherty, is encouraging banks not to lower interest rates too much

Mortgage Rate

Mortgage Rate

because we don’t want Canadians to accumulate too much debt. Neither do I!! ;-) I used to joke that the banks weren’t about to offer to pay us to borrow their money. So it seems Interest rates have pretty much bottomed out. The only way for them to go would be up but how quickly. It is amazing how many people remember the days of the early 80′s when rates skyrocketed to 21.75%. Many of you might not have been born yet but I remember. Sonya and I had pretty much decided that we were never going to be able to afford a house. The thing that people don’t always remember is that house prices had virtually doubled in price. Now those of you that are younger than 30 will probably laugh when I tell you that you could have bought a pretty nice house at the peak of that market cycle for the extravagant price of around $100,000.00.iStock_000008538351Large Then within a very short time the prices dropped to around $70,000. So much for a bit of History.

So what about today. What could happen and what will happen are really  up for grabs here but I thought I might be able to add a bit of perspective for you. Supposing that you are wanting to purchase a 500,000 house. Not an unusually high price for a nice house in Abbotsford. You have accumulated a 10% down payment and are looking at mortgages. While  you are looking and considering when is the right time to buy, that bond market does something crazy and it drives mortgage rates up by another 1%. All of a sudden, unless you have a brilliant Mortgage broker (Click Here if you Don’t have one) that has given you a rate guarantee, you will now have lost about $40,000 in buying power. Conversely the opposite would be true if mortgage rates dropped by 1%. your buying power would increase by about $40,000. Another way to put that would be that that 1% is either an increase in your payment by about $270.00 or a decrease in you payment. I think that is why our prices have remained relatively firm in light of our sagging market. Even though we have been in a buyers market for the past several years, prices have been maintained because with the low interest rates, the payments were still in reach and reasonable for the average family to absorb. As stated earlier, whether or not that will continue, only time will tell. It is interesting to note that the last 20 years our rates have averaged below 10%. For the 20 years prior to that they were averaging over 10%.

As each person or families situation and housing requirements are different I think that it is important to get some solid advice from your real estate professional as well as your mortgage specialist on how these scenarios will impact you. Whether buying or selling or just remortgaging, there are always things that will be more significant for you than they may be for the guy down the street. When you are mortgage shopping, it is also important not to just shop for the lowest rate. Sometimes there are disadvantages to one plan vs the other depending on your circumstance. Sometimes your prepayment privileges are quite different and should your circumstances change, you might find that you are unable to make the changes that you would like. That is why it is always a good practice to get all the information before you make an important decision.

If I can be of any help to you, either with more info or an evaluation of your current real estate needs, let me know. I am only too pleased to be of service.

Don

mailto:dgoertz@remax.net

604-807-4442

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