Category: estate homes (4)

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

Difference between home staging and decorating

Staging vs Decorating

Staging is important to ensure your home stands out above others in a crowded real estate market – so what is the difference between decorating and staging?

Simply put, decorating is furnishing a home for you personally to live in and enjoy for your personal taste. Staging is decorating a home for the current market. Staging is about taking your personalized spaces and making them welcoming, calming and memorable, from a buyers perspective. There’s no doubt that you would furnish your home quite differently from how you would stage a home and this is often where Sellers put up some resistance, not wanting to lose their personalized touches and the things that they’ve become comfortable with.

The first step in any home staging process is always to de-cluter. This can sometimes take a bit of time and work because it requires letting go of possessions that you discover you no longer require or have room for. Enter each room with a fresh pair of eyes and envision the room empty. Now critically ask yourself what should belong in the room if you were staging it to make the room look its best. Then remove everything but these select pieces with an eye to being as minimal as possible.

Make sure to clean out all storage areas and closets leaving only seasonal clothes on the rack. Since you will be moving, start packing away items in boxes and store them in a corner of the garage or fill a container or Pod and then have it stored until you move into your next home.

Next step is to de-personalize the home by removing all personal photos and items. The rationale is to encourage the buyer to feel more comfortable envisioning themselves in the home. Often this stage uncovers some maintenance and paint that may be required to spruce up the house once the excess items are removed. Be sure to consult with a professional Stager, decorator or your real estate agent to ensure you make the best color choice for resale.

Often a seller may work to this point themselves and this is where they will bring in a professional to see how much further they should go in staging the home. This could involve swapping out furniture if the existing pieces do not work for the room, or installing particular pieces. The Stager will often rent these pieces or furniture for an initial design fee, plus a monthly rental cost.

It is clear that we decorate our homes for comfortable day-to-day living and that this is not always the homes best face when selling. So remember that although your home may be well decorated, it most often requires staging to show the home in it’s best light and to extract the best price from the market. Leave yourself enough time in the pre-selling period to ensure that your home is decluttered, de-personalized and staged properly. At Sano Stante Real Estate we include primary staging and coordinate advanced staging services for all our valued clients. Call us for the best real estate service.

Multiple Offers

Multiple Offers

While you may think that receiving two or more offers on your home is a great situation it actually presents 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 often get cold feet sensing they were pressured or paid too much. To minimize the fallout and improve your chances of success here are a few tips on how to best handle multiple offers when you are the Seller.

1. Try to have a Manager present. 

Your Agent’s company may have a variation on this policy; still it is good practice 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 your 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 counter-offer, 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 aggressive a counter-offer 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 common to have the Brokerage Manager present to ensure that other Buyers had their offers presented in an unbiased fashion.

6. Avoid selling your Home twice.

If you have an existing pending offer that is subject to a Buyer’s 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 counter-offer 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 counter offer to expire and inform both Buyers that they are now in a competing offer situation, and to present their best offers.

When the market is ripe for multiple offers there are many (more than the above) tactics that a Seller can use to ensure that they extract the best price while ensuring their sale closes without further issue. There can be as many permutations of these situations that can arise as exist tactics, and by far the best strategy is to have the most experienced Agent on your side. In a heated market (that generates multiple offers) is where the real value of an experienced Agent proves out.  Call Sano Stante Real Estate Marketing and put over 31 years of expert knowledge and experience to work for you.