Category: Calgary (17)

IMG_0088My relationship to secondary suites began before I did. Ortona is a town in Italy that Canadian forces liberated and my parents were resided in the adjacent town of Fossacesia. WW2 left the area in ruins and it held little promise for a young couple to grow a family. When a relative sent news from Calgary and partly due to their fondness for Canadians, they set sail for Halifax. Arriving in Calgary with a few dollars to their name, they discovered accommodation was scarce and at a premium. They found a makeshift suite in the attic of a two storey home offered by a fellow immigrant. It was sparse and barely insulated, but in relative terms from the war-torn area they had just left, they were very happy to have the accommodation. My Mom would comment later in life that while living in that hobbled suite, they had some of the best times of their life.
Sometimes adversity is a blessing. During the war my father was interned in a prisoner of war camp, but the experience had taught him to speak and write English. As a result Dad got on quite well here and ultimately sponsored many of the Italian immigrants who wanted to start a new life in Canada. My parents would often share their suite with new arrivals until they landed on their feet and before long they were able to purchase a home on Child Avenue where I began my life. We always had a relative or friend living in the basement of that home which helped them all get started financially – it was just the perfectly normal thing to do.
A few years passed and my parents purchased a lot where they built a new home. It was a traditional raised bungalow perched high above Bridgeland with a walkout basement and a separate entrance for a secondary suite. At first we lived in the suite while my Dad finished the larger main floor area. In those days you paid for things as you had the money, so it took some time to build and pay for the home but in the meanwhile the suite provided comfortable accommodation. Once the main floor was finished we moved up and they set out to rent the suite. With no shortage of new immigrants moving to Calgary the suite hosted young couples from France, Denmark, Germany, Poland and Italy. As a child I was a curious participant in every activity around our home. I’m sure that I was mostly a nuisance to our tenants, but I always participated in their activities building or fixing everything imaginable. I fondly recall rebuilding engines, a ski-do (from scratch), and I was always made to feel like I was a big help. These wonderful people who resided in our suite became a part of my life and extended family. Outside our home our immediate neighborhood was almost entirely a community of new immigrants; Italian, Austrian, English, German, Polish blended with First Nations. We never thought twice about helping each other for any matter whatsoever. And it was more than perfectly normal to have a suite or let a room to someone who needed a place.
My parents always charged below market rent, so most of our basement renters stayed until they saved up a down-payment for their own home, which they all did. After they moved out we would see them nearly as often, as they frequently stopped by on weekends for dinner and a friendly game of cards.
In time, as the family aged, my parents preferred more privacy and the suite lent itself to teenage independent living. It was also a handy place for a rock-band to rehearse while shutting out those pesky parents. At times it just remained vacant, but always available for extended visitors or a returning child. Later still it would have provided perfect accommodation for a caregiver for my parents.
You see, I’ve always had nothing but good, positive experiences from secondary suites. To me they are a device that enables us to interact positively and directly with our neighbors – helping one another as we naturally would. It connects us and weaves a tighter fabric into our community. Suites provide adaptable spaces that can serve many purposes and extend the utility and value of our homes. (Did you know that the latest trend in home building is adaptable design?) They extend the life of our residence as an investment, allowing for greater return. They allow a new home buyer to purchase a home worth $200,000 more for the same monthly cost due to the rental income. They provide facility for people aging in place, saving both the resident and our government the cost of health care facilities. They provide affordable housing for new immigrants, students, temporary workers and caregivers. They provide elderly a resident eyes and ears to help look after the place (and help boost their retirement income).
When we look at affordable housing we often imagine a housing continuum from most to least affordable. It begins with shared accommodation and boarding houses (mostly extinct now); then secondary suites; apartments, townhomes and finally single family homes. Today, Calgarian’s have a dire need for affordable housing. With the cost of building at an all-time high it seems improbable that we will find a solution to construct apartments or townhomes that are affordable. If this accommodation does not exist, then the increased cost of living is passed on to employers and ultimately consumers and taxpayer – so we all pay or we simply don’t attract new workers and immigration and the accompanying burden this places on our economy.
We have a solution to affordable housing that exists today and costs little to implement. The answer has been right under our nose and yet somehow we have buried it, creating new rules that confuse and class existing suites illegal. And through nothing short of NIMBYism we have restricted the development of new suites. There is no question that the suites need to be safe and we would never argue on issues of safety, but somehow claims of unsafe suites and parking have been grossly exaggerated. A vocal minority has helped perpetrate these urban myths without substance and stymied an open debate where we lay the facts on the table. This issue over secondary suites now appears to have become a political dilemma for Councillors and we owe kudos to those who have shown leadership on this issue. Our City needs this accommodation and any outstanding issues can all be easily addressed but we all need to give our politicians the permission to do the right thing. The right thing now is to legalize suites in all zones. To appease the residents in single family zones, simply adding the provision that in existing single family areas suites shall be allowed only in owner occupied homes settles the score. Calgary is one of the only Cities in North America with such a restrictive secondary suite policy. It’s time we progressed back to our heritage, where suites are embraced as a vital and necessary part of our community.

MLS-listings
One impediment to any Home Buyer making their decision is that they reasonably want to ensure that they have been exposed to ALL the available listings to be assured that they did not miss a better home. Today your real estate agent has a host of technology available to assist home buyers in their search to ensure that all available listings are at your disposal and that a Buyer is not overburdened or confused by viewing property that does not fit their criteria. Your REALTOR® has access to your local Multiple Listing System (MLS®) where they post available listings for other cooperating agents to view and sell. This is a local private database which is available to REALTOR® members of organized real estate. For example, members of the Calgary Real Estate Board (CREB) host a local database of available listings from their over 5,000 REALTOR® who are required to abide by rules governing their use of data, business ethics and how they cooperate. This system enables members to have access to all the new listings immediately when they are entered into the system . Access to this system ensures that you have the most up to date information and can be assured that you are seeing all the listings available on the MLS®.

Your agent should be able to set up a custom search for you that will email you this information immediately. Alternately, there are many sites that allow to you locate new listings manually or allow you to sign up for automatic updates. Armed with this information and a great Agent, you can be assured that you will stay on top of all the new listings, the minute they come on to the market.

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Before you can make an informed decision about selling your home you often need to verify the “market value” or the price that you could expect to sell the property on the open market. Receiving an accurate estimate of the market value can be crucial if your next purchase depends on the equity in your existing home, or if your finances allow little margin for error. What then is the best method of obtaining the most accurate estimate of market value?

There are several routes to obtaining  an estimate of market value and a handful of methods which can be employed, most based on accepted practice of appraisal. One method would be to simply hire an appraiser to complete an appraisal report of your home.  Appraisers can prepare a market value appraisal and are typically bound to use similar comparable properties which have sold in the past six months. A market value appraisal is just that: an estimate of what the property would fetch on the open market and this typically is the most applicable. Other types of appraisals include income valuations, which are generally used in income producing property and replacement cost, which is applicable for insurance valuation. To have an appraisal prepared you would contact a certified appraiser from the Appraisal Institute of Canada.

Some homeowners base their value on their City Assessment and while this can provide a rough guesstimate, these values can range widely and should not be used as a reliable indicator or your current market value. City Assessments are based on a model of mass appraisal which estimates the broad value of similar homes in your surrounding area.

The third method would be to use the services of an experienced Real Estate Agent to evaluate the market value. The advantage of this method is that while Appraisers are bound to use historical methods to estimate the value of your home at the present time, an agent can draw upon a more broad base of comparable sales and can extrapolate into the the future. This is very important in a rapidly changing market (rising or declining values) where  you need to know the value based on the intricacies of a complex local market which is in flux. Using this local and up to the minute intelligence. an experienced agent can ensure that you extract every dollar of value and don’t leave money on the table.
The disadvantage of using an agent is simply the nature of the industry where there are hundreds of agents with a variety of skill sets and competencies competing for your business. This makes it important that you use the most knowledgeable, experienced and trustworthy agent to ensure that the agent does not simply “buy your business” by giving you a favorable number that appeases you and then lets you down later when the market provides you the stark reality of your homes value.

Sano Stante and Associates is a family business providing premium real estate service to discerning Calgary area clientele for nearly 30 years. If you are thinking of selling, call us to receive an expert market evaluation of your home.

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With national forecasts citing an overheated market in decline and calling for a further correction in real estate values, it’s curious to watch the Calgary Real Estate market out-perform most every other City and region in the country. Much of this performance is due to the hang-over from the recent run of strong net in-migration, due to a buoyant job market in Alberta. The question is when will the hang-over end and will Calgary succumb to the negative national trend despite our favourable geography and oil economy?

Calgary employment  growth for 2013 is forecast to decline, yet remain positive at 2.3% with net migration for Calgary expected to slow to just over 15,000 over the next two years. This steady stream of new residents has fueled an increased demand for rental accommodation resulting in an apartment vacancy rate under 1.3%. This all points to a positive, yet somewhat reduced pace of activity that fuels the Calgary real estate market.

With the recent surge in rental activity and subsequent increase in rental rates one could be tempted to purchase rental property based on the recent higher returns, but are these rents sustainable for the long term? We advise that any rental properties are evaluated using conservative rent estimates especially those based on furnished rentals. Also note that vacancy for furnished rentals is similar to that of Hotel properties (in the 20-40% range) so don’t be fooled into using unfurnished vacancy rates and applying these to furnished properties, despite our current hot market. One exception could be buying rental properties that have a high component of land value, especially in inner city communities. These properties could derive good income from the building for many years, yet the land value may surpass its’ income value, if the trend toward inner-city community development continues.

Farmland also has potential as a solid income producing vehicle, but be sure to know what you’re buying. While crop rents have increased dramatically (proportional to crop prices), soil types, local geography, irrigation and overburdened crops all have a profound effect on the return a farmer can extract from a section of land. Again there may be other exit options for farm land such as future development potential or subdivision to smaller parcels. This can yield large returns but not for the faint of heart or uninitiated. If you are not the expert, be certain to obtain expert advice (the cost of which could yield you the best return for your investment).

One of the best strategies today for those who already hold real estate is to optimize your investment. That means reducing your operating costs and improving efficiency of the property. Some of the greatest benefits can be derived from reducing the energy requirements and  greening your real estate. This not only reduces your consumption and cost of energy, but also improves the desirability of your property. Green Calgary offers a valuable home audit that provides excellent advice on greening your home and reducing its energy footprint. With the cost of solar electric continuing to decline we are now coming into an age that photo-voltaic systems are becoming cost effective. It won’t be long before you may be asking “how much energy does this property generate and how much income does it produce?” Don’t overlook these possibilities and the potential value of solar exposure when evaluating your next  property.

Overall, it appears that the market may reduce from a rolling boil to a slow simmer over the next few years which calls for a return to a more sober, long term view of any real estate investment. Reducing operating costs could help you weather future bumps in the road, and exploring alternate exit strategies can add tremendous value if the need for Return Of Investment becomes more important than the need for Return On Investment.

Hot-Real-Estate-Market
Wondering what YYC real estate is doing in 2013? We checked out the latest trends and  hot spots to keep you riding the wave.

  1. Tighter Inventory and a faster moving market: While the rest of the world took a real estate holiday the Calgary real estate market has been chugging along quite well (thank you very much) and steadily chewing up any over supply of  inventory left over from the 07 bump. Inventory has been steadily dropping across all categories but most noticeably in the single family mid-range market.
  2. Gentrification is the new normal: Mature, inner- city communities and those with plenty of walkable amenities are blushing with all the attention they’re getting. Buyers are not shy about knocking down modest homes on good lots or renovating homes that have the bones and adequate floor plate.
  3. Mortgage rates will remain low: However, banks have not opened up the taps to ease the flow of cash to new buyers. This is keeping the brakes on the market nationally and puts a squeeze on first time buyers or those who need to refinance. This keeps a lid on the entry level market but upper end buyers have capital so expect some cautious expansion in the premium and luxury arenas.
  4. An ample supply of starter homes and apartments: Condo prices rose the least over any other sector this past year due to a fairly competitive market and a good supply of new developments. Developers are upbeat and many national developers are focusing their effort in Calgary bringing some fresh products and new innovation to this market.
  5. Price Increases will be moderate for Condos: The condo markets experienced a 3% increase last year. Expect that this steady price increase will continue and likely accelerate this year. Rising construction costs and the depletion of cheaper land will bear on the prices as developers have nowhere to go except pass on these increases to buyers.
  6. Rental Boom: There, we said the B word, and it applies right now to the rental market. A tighter mortgage market lends to a better rental market. It also appears that many of the new local hires are provided a leased property to supplement their 2 or 3 year employment contracts. As a result, the market for both bare and furnished rentals has boomed over the past couple years. This had the positive effect of absorbing some excess inventory that Buyers purchased in 07, and keeping many properties off the market that otherwise would be currently available for sale. Be cautious to purchase investment property based on inflated rental rates unless you have good reason to believe they are  sustainable. Keep an eye on this trend, as it will be interesting to see what our real estate market will look like in 2015-16 when many of these rentals come back to market.
  7. Bedroom Communities are wide awake: Developers have discovered that it’s cheaper and easier to develop in neighboring communities than more expensive and onerous Calgary subdivisions. With City Hall levying higher taxes on suburban builders to more reflect the real cost of services they tap into, Developers are voting with their feet and developing where they can get the best leverage. This means more focus on these bedroom communities outside the City and that’s where we saw much of the action this past year. Expect this to continue in the short term until these bedroom communities start to realize they face the same challenges as Calgary (and implement similar solutions to pay for infrastructure).
  8. Infills get better: Attached is the new normal and three storey infills become more common. Accompanying this trend, look for builders to provide (roughed in) elevators as a new standard to accommodate a broader demographic of Buyer. Cottage homes above garages will receive more attention, as well as underground basement access from the home to the detached garage. These tunnels can be used for additional space, storage, wine rooms and such and don’t add to your development footprint.

For more insights into the Calgary real estate market or your Calgary neighborhood contact us

City-Calgary
Each year the City of Calgary updates their assessment on the value of your home in order to ensure a fair and equitable distribution of the civic tax burden. You likely received your assessment notice in the mail for the upcoming tax year. Note that the Assessment for the upcoming year is based on the market value of your home as of July 1 of the previous year. If you have questions about the value of your assessment the City now has a website that allows you to compare assessments of other properties to compare your assessed value. There is consultation period listed on your assessment within which you may discuss the stated value with your local City Assessor and understand their rationale for the valuation. If you do not agree with the assessment then you have the option of contesting the value before a board that will listen to your evidence. You must be prepared to provide evidence of recently sold comparable properties to the board.

If you would like assistance understanding the myriad of factors that influence the value of your home, please contact us. Sano Stante and his team have has nearly three decades of experience evaluating Calgary real estate.

calgary-sunsetCalgary real estate resembled a more vibrant market in 2012 with a good kick start in the early months of spring and finished the year with strong, yet cautious momentum. This sales trend was most noticed in the Luxury home category which picked up dramatically in the spring and has recently coasted into a bit of a lull. The mid and lower end home market gained traction and has calmed in recent months but remains the bread winner. A drop in the number of available MLS listings in this low/mid category has kept the supply in check and prices relatively firm. Condo apartment prices crept up 3% year to date and the recent influx of new condo builds is maintaining a good supply of product and holding the prices competitive. Continue reading ..

calgary-skylineThe media has been ripe lately with stories of how the real estate market in Canada is over-valued and is now cooling. If you lived in Vancouver of Toronto, you would think that this is a pretty accurate indication of reality. However, if you reside in Alberta or Saskatchewan, you are probably wondering what kind of drug these reporters are on because their world is bustling with jobs and activity. So what is the real story in the local Calgary real estate market?

First, the real estate market is local. Like the weather, listening to a report that the Canadian real estate market is preforming poorly is like hearing that the weather in Canada is bad. Certainly Calgary is influenced by the national economy, just as we are by the global economy (now more than ever). However, real estate is a local story. Calgary is leading the nation in job growth and net in-migration, which leads to demand for residential real estate. While the rest of the nation (even the western world) is struggling to create jobs, we can’t seem to find enough people to fill the posts. So, when you hear that the real estate market is cooling down, its akin to having your head in the freezer and your feet in the fire. On average your temperature is may be moderate or dropping, but it doesn’t accurately reflect what’s happening locally.

Our research indicates that we will continue to have strong demand for residential real estate for the next two years. Price gains should be gradual and moderate, however lately we are concerned about a reduction in available listings, bringing our months of inventory to under 3 months for single family and townhouse listings. If inventory continues to decline, this could cause some pressure on prices to increase. Keep in mind that although prices have been rising, they have been stable for the past quarter.

This local/national example also applies to your local neighbourhood and what is happening in Calgary does not always reflect what is happening in your local community, or your particular street. If you zoom into this level the trends that we’ve witnessed generally are:

  • In increase in demand and firming of prices in the inner city
  • Increased demand for lifestyle properties and walkable communities
  • Increased demand in adjacent, bedroom communities like Airdrie
  • Cooling of demand and softening of prices in the outlying suburbs.
  • Slowing demand for acreage properties
  • A trend to smaller, more practical and energy efficient homes

As well there are the usual seasonal trends, and of course you could discover trends for pockets within your community. An experienced real estate expert can assess all of these variables that affect the value of your property and more. If you would like to stay current on the values in your local neighborhood, we will send you updates of the sales and listing activity monthly in a convenient email report. If you would like a current market evaluation of your property, simply call us and we will be pleased to provide this for you, so can make the best most informed decision on your real estate investment.

 

mortgage-clamp-down-Sano-Stante-Real-EstateIn an effort to cool the consumers appetite for debt in this current low interest climate, the Fed’s have further tightened the screws on Bank lending. The Canadian Government’s “Financial Stability Board” has published new guidelines for underwriting mortgages. Following is a summary of the proposed changes which may take effect by September 2012:

  • Lines of credit should not exceed 65% of the homes value. While a customer can still borrow 80% LTV, at least 15% will need to be in an amortizing segment. Existing clients may be grandfathered but there will be some cases as it relates to structural changes in an existing loan plan where the new rule may apply.
  • For debt service coverage (TDS) at a minimum. the qualifying rate for all variable interest mortgages regardless of the term and fixed rate mortgages with a term of less than 5 years should be the greater of the contracted mortgage rate of the five year benchmark rate (Bank of Canada).
  • GDS Calculations will require supporting documents (tax, utility bills, etc) or clear and consistent benchmarks that adequately assess these additional costs.
  • Banks will be required to clearly define “non-conforming loans”. This may include some forms of equity, low documentation etc. In these cases LTV should not exceed 65%.

If you are contemplating taking a HLOC at 80% LTV now is the time to get your application processed before the new guidelines take effect. You may not need to use all the money, but better to have access to it and not use it, than to be clamped down to 65% LTV.

For more information on this, or other Calgary real estate facts call us anytime 403-289-3435

commission-moneyWhile you may think that receiving two or more offers on your home is a great situation to be in, actually it has some disadvantages. For properties that sell with a single offer, the fallout rate is 10 percent. For properties where there are two or  more offers, the fallout rate increases to 50 percent.

The reason there is such a significant difference in closing  rates is that Buyers often feel they were unduly pressured by the multiple-offer  situation. After Buyers have time to reflect upon the situation, they may end  up resenting both the Agents and the Seller. To minimize the hard feelings as well as the potential for litigation, here are 10 guidelines for  handling multiple offers that maximize your odds for success.

1. Make sure a Manager is present    Your Agent’s company may have a variation on this policy; still it is smart to request a Manager or third party be present. The Manager may ask the buyers’ agents and you to come to their office since they will be overseeing the  multiple-offer process. This gives your representative Agent the best control of the situation as well as insuring that your Agent will have all the tools they need to handle the  situation.

2. It may be legal to  shop your offers, but is it the right thing to do?    Whether it is legal or not to tell the Buyers how much the competing offers actually are, it may be simply unethical to disclose the  contents of competing offers to others. First, ask you Agent about the regulations in  your area. Even if you do have the right to disclose the other offers, creating a bidding war may often results in buyer remorse that can increase the odds of your sale falling apart later. Instead, ask all Buyers to bring back their best offer.  This increases the probability that your deal will actually close.

3. Logistics    Your Agent should explain the presentation guidelines to each party who  presents their offer prior to hearing the offer. This includes deadlines for counteroffers and how they will be presented. If the buyers’ agents are presenting  their offers in person, allow them to present their offers privately, one at a  time.

4. It’s the sellers’  house, and it’s the sellers’ decision    You (the Seller) decide which offer you want to accept or if  you want to counter all the offers. If you decide to make a  counteroffer, you should only counter one offer at a time.  Although Sellers may counter offers any way you choose, be  advised that if you make too strong a counteroffer it increases the possibility to have both sets of buyers walk away from the situation. Remain sensible about the real value of the property in light of your apparent windfall of interest.

5. When the Listing Agent has their own offer    If your Listing Agent has their own offer on the property, ensure that you receive a prior explanation of Agency and how all the parties are being represented. In these instances it is usual to have the Brokerage Manager present to ensure that other Buyers had their offers presented in an unbiased fashion.

6. Avoid selling your listing twice    If you have an existing pending offer that is subject to a Buyers condition (ex. sale of their home) and that allows you to continue to market the property, or if you choose to accept a backup offer, ensure that you insert the correct language in your offer to protect you from selling it to two parties. Make certain that you (the seller) accept any subsequent offers with a written provision that your acceptance is conditional upon the collapse of the existing pending offer.

7. Don’t make it a race    Have all parties agree on when to reconvene to consider the  buyer’s responses to the seller’s counteroffer. Turning a multiple-offer  negotiation into a race doesn’t benefit the seller and it greatly increases the  likelihood that the transaction won’t close. Usually 18-24 hours is sufficient.

8. Ask for the Buyer’s best offer    Advise the Buyer that the Seller will be making his final decision on the multiple offers at this second meeting. Ask the Buyer to bring back their best offer.  If you need to clean up some minor points, an  additional counter may be appropriate.

9. No verbal negotiations    Always make sure that everything is done in writing. Sometimes in a single offer situation the Agents agree on the terms until they can physically meet to sign the documents, but this is only a trust condition between the Agents, is not legally binding and can be precarious. Furthermore, Agents should not sign on behalf of the  Seller except with prior written authority– always best to use one of the digital document signing services, scan and email it, or even fax it.

10. Proceed with caution    If you have a counteroffer out and you receive a new offer  that is better than the one on which you are negotiating, you have two options: rescind the current offer or wait until it expires. In some cases, a better course of action may be to allow the existing counteroffer to expire and inform both Buyers that they are in a competing offer situation, and to present their best offers.

When the market is ripe for multiple offers one can see that there are many (more than the above) tactics that a Seller needs to be aware of to ensure that they extract the best price while ensuring their sale closes without issue. There are likely to be as many permutations to this situation that can arise as exist tactics, and by far the best tactic is to have the most experienced Agent on your side. In a heated market (that germinates multiple offers) this is where the real value of an experienced Agent proves out.  Call Sano Stante Real Estate Group and put over 27 years of expert knowledge and experience to work for you.