David’s Newsletter

APRIL 2014

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As we move into April, we finally see ourselves leaving the Polar Vortex behind us! Soon, we will bounce into the spring real estate market but anyone living in an area impacted by military transfers will certainly be looking at a different market in 2014.

As you have likely heard, the federal budget is being cut in a variety of ways and, of course, the biggest government department is the Department of National Defence (DND). Hence, cutbacks will affect our military, especially in the area of personnel postings. Therefore, in the area surrounding CFB Trenton there will be less buyers for people selling a home in 2014. In general, most folks employed by DND spend more than the average buyer in this area. Given that the average sale price in this real estate board in 2013 was $221K, one can only surmise that owners of higher-priced homes may feel the greatest ‘pain’ this year.

While some realtors® may ‘pull back their horns’ in this type of market, we have gone out harder to get our clients’ homes sold for top dollar and with minimum stress to their families. A few of the ways we are ‘getting it done’ for our clients include professional photographs, handyman labour, home staging, posting listings to multiple websites, and putting our listings on the front page of the base newspaper.

To see what’s happening within our Real Estate Board, have a look at the numbers below. They certainly reflect a challenging Quarter, as well as a challenging month of March. Although not shown on the chart, the Residential portion of the March sales was 151 compared to 187 in 2013. With the days getting warmer and the snow starting to disappear, now is the time to have a closer look at what the market has to offer or to get your house listed for sale. Be sure to give us a call. We’re never too busy to help with your Real Estate needs.

 

2013 2012 %Change
Total # of Listings in March 671 803 -16.4%
Total # of Sales in March 190 219 -13.2%
Total Sales Dollar Volume in March $41,494,898 $48,485,072 -14.4%
Total # of Listings (Year to Date) 1,787 1,953 -8.5%
Total # of Sales (Year to Date) 485 518 -6.4%
Total Sales Dollar Volume (Year to Date) $102,676,965 $113,794,659 -9.8%

As always, check out our Blog and follow us on Facebook for updates on the national and local real estate markets. Be sure to ‘Like’ us and you’ll automatically be entered in our annual iPad draw which takes place in January of each year. If you missed our earlier Facebook posting, congratulations once again to Hugh Ruff, the winner of the 2013 draw as shown on our Giveaways page.

Thanks again to all our loyal clients and friends who continue to support us over the years. Seen below are Team Weir, our significant others, and our Royal LePage colleagues enjoying an evening at the 2013 Royal LePage ProAlliance Awards ceremony.

Awards2013 Awards2

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CMHC TO INCREASE MORTGAGE INSURANCE PREMIUMS

CMHC recently announced that it will increase its mortgage loan insurance premiums for homeowner and 1 – 4 unit rental properties effective May 1, 2014. This increase does not apply to mortgages currently insured by CMHC and it is not expected to have a material impact on the housing market.

CMHC Purchase (owner occupied 1 – 4 unit) mortgage insurance premiums will increase by approximately 15%, on average, for all loan-to-value ranges. For the average Canadian homebuyer requiring CMHC insured financing, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment.

Loan to Value Ratio Standard Premium (Current) Standard Premium (May 1, 2014)
Up to & including 85%
1.75%
1.80%
Up to & including 90%
2.00%
2.40%
Up to & including 95%
2.75%
3.15%
90.01% – 95% – non-traditional downpymt
2.90%
3.35%

What is Mortage Insurance?

• Mortgage loan insurance helps protect lenders against mortgage default and enables consumers to purchase homes with a minimum down payment of 5% with interest rates comparable to those with a 20% down payment. Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price.
• CMHC mortgage loan insurance premium is calculated as a percentage of the loan based on the loan-to-value ratio. The premium can be paid in a single lump sum but more frequently is added to the mortgage principal and amortized over the life of the mortgage as part of regular mortgage payments.

 

THINKING OF BUYING A CONDO?

When buying or selling a resale condominium, the most important document in the deal is the status certificate. It answers such important questions as:

• Do I own the parking or locker?
• Are pets allowed?
• What are the pool hours?
• How much is in the reserve fund to look after future repairs?
• Are there any special assessments because there isn’t enough money to pay for needed repairs?
• Is anyone suing the condominium and is there enough insurance to pay for it?
• Who is the property manager?

Most deals are conditional on the buyer’s lawyer reviewing all of the condominium documents, including the status certificate. You should definitely know about the reserve fund. A reserve fund might have over $1 million dollars in it, but the building could need over $2 million in repairs. Another building might only have $200,000 in the reserve fund, but could have completed all repairs that would be needed for years to come. In some cases, the Canada Mortgage & Housing Corporation (CMHC) can decline to provide mortgage insurance for buyers if they’re not satisfied with a condo’s financials. Or, a board might have to borrow money for repairs if there isn’t enough money in a reserve fund. The money can be paid back over time through increases in your maintenance fees.

It is not mandatory for a board of directors to use a management company, but it should raise suspicions if there isn’t one. Board members aren’t generally qualified to make these types of decisions or handle large budgets.

In general, townhouse condominiums do not require as large a reserve fund as highrise condominiums, because they will not have as many future repair requirements. The unit owners are responsible for everything inside their units. It is thus important for everyone buying a townhouse to also include a condition for a home inspection, to check everything inside the home before you commit to buying.

Article written for the Toronto Star by Mark Weisleder, a lawyer, author and speaker to the real estate industry.

 

TOP 5 MISCONCEPTIONS ABOUT HOME INSPECTIONS

Myth 1: All home inspectors and inspections are pretty much the same.
The Truth: Only three provinces – BC, Alberta and Saskatchewan currently license home inspectors and even those three don’t require much training. There are variations in the quality of service you will get from each inspector and a license doesn’t ensure a professional inspection. Comparing home inspectors can be difficult and you need to perform your own due diligence to protect your interests!

Myth 2: Inspectors will find everything wrong with a property.
The Truth: Home inspectors look for costly issues with major home components including the roof coverings, structure, heating and cooling systems, insulation, electrical and plumbing systems. A home inspection is not technically exhaustive. Inspectors offer an opinion of the overall condition of a home, do not scrutinize small or cosmetic details, and cannot always predict failures … especially in the absence of visible defects or deficiencies.

Myth 3: Inspectors will “pass” or “fail” a home.
The Truth: Inspectors report on the existing conditions in a home, and it’s up to the buyer to decide if they want to proceed with the sale. Home inspectors should not comment on the price or recommend that the client buy or run.

Myth 4: Inspectors provide repairs or quote repair costs.
The Truth: Inspectors should not use the home inspection as a vehicle to obtain other work on the property. Professional home inspectors do not make repairs, and ball-park cost estimates are offered only as a point of discussion or as a courtesy. It’s best to contact the applicable service provider directly for an actual cost.

Myth 5: Home inspections cost more than they should.
The Truth: With average house prices increasing, a professional home inspection is an extraordinary value costing less than 1% of the asking price. The reputation and experience level of a home inspector always determines the outcome of an inspection, not the price tag. Many homeowners find out too late that trying to save $50 to $100 on a home inspection can result in an inadequate report.

Article courtesy of Gil Strachan, Certified Home Inspector

 

7 WAYS TO AVOID BASEMENT FLOODING THIS SPRING

1. Gutters & Downspouts – Keep gutters free of debris and position downspouts away from the foundation. The goal is to drain storm water at least three feet away so, if necessary, consider running extensions or troughs.
2. Foundation Cracks – Inspect the exterior foundation as well as the walls and floors of your basement. Use epoxy to fill any foundation cracks and if warning signs are detected, apply masonry sealer indoors. For more serious problems, call a professional.
3. Sump Pumps – If you have a below-grade sump pump, check to make sure its well is free of debris. If you have a portable pump, position it in the lowest part of the basement and be sure it’s connected to a power source.
4. Sewers & Septics – If you haven’t had your sewer inspected or your septic tank cleaned, spring is a good time to address these concerns. During periods of prolonged, heavy rainfall, clogged sewers and over-taxed septics are disasters waiting to happen!
5. Window Well Covers – If you have below-grade basement windows, install window well covers that will fasten securely to your home’s foundation. Clear acrylic covers allow light to enter, even as they keep out rain, leaves, and pests.
6. Generators – Remember a sump pump only works if you have power. If you live in an area plagued with frequent storms and power outages, a generator may be a long-term investment worth considering.
7. Insurance – Review your property insurance policy and consider additional coverage, especially if you have a finished basement. Usually, homeowners’ insurance does not cover flooding or sewer backups!

Information Courtesy of bobvila.com

 

DID YOU KNOW?

  • The word ‘Easter’ comes from Ishtar, the Babylonian goddess of love and fertility, also known as Astarte. Easter was a pagan springtime celebration before it became a Christian holy day.
  • The egg is a symbol of rebirth in many cultures. The exchange of eggs at Easter is a popular custom among both religious and secular groups and long predates Easter.
  • The Easter Rabbit was first introduced to North America following the Civil War when Presbyterians found the story of the resurrection of Christ a source of renewed hope following the death and destruction of the war.
  • The custom of Easter baskets originates from the Catholic custom of bringing Easter dinner food to mass to be blessed. This custom may also be related to ancient agrarian customs of bringing first crops to the temple.
  • You can find the world’s largest decorated Easter egg in Vegreville, Alberta!

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