Overpay On Your Mortgage

Getting the mortgage paid off is the dream of every homeowner.  If your finances allow, pay extra on your mortgage.  Prepay or overpay as much as you can annually.  You’ll get your home paid off faster and avoid paying as much in the long run in interest.

Budget And Don’t Overspend

Renovating is an excellent way to boost your home’s value.  One of the mistakes lots of homeowners make when they renovate is that they overspend.  In fact, statistics say that almost half of Canadian home owners spend double their allotted amount on renovations!  Create a budget and stick to it when you’re renovating.  Also check to see if there are any renovation grants you might be eligible for.  Again, check both federal and provincial governments.

Manage Your Money

When buying a home, lots of people only think about the down payment and they don’t look ahead at the next few years.  The result is that they blow all of their cash buying the house and then don’t have the cash when they need it later.  But if you can’t make your mortgage payments, you’ll end up losing the greatest investment you’ll ever have.  Be careful and manage your money well after you buy.  Create a monthly budget with all expenses and all income and stick to it.  Use budgeting software if it’s really tough for you.

Keep Saving

Finally, put together a reserve fund and keep saving in it.  There will always be maintenance and repair needs along the way.  When they pop up, you’ll need to take care of them immediately or else they can get worse.  For example, roofing problems tend to get worse quickly if not attended to.  If you have a reserve fund set up for routine maintenance and repairs, it won’t be a financial hardship to you when these needs occur.

Home owners should always have a plan for their home that extends at least 5 years into the future.  Where will you be and what will you be doing then?  Keep this 5 year plan in mind and keep saving your money.  When it’s time to sell your house, you can get a great deal of money for it.

Staging basically sets the mood for your home.  If done right, it makes your house look bigger, cleaner, brighter, warmer and more inviting so that people will want to buy it.  It’s really a kind of troubleshooting that involves looking for problem areas of your home and removing them.

Why Do We Need Staging?

Why is it necessary to put the best face on a house?  It’s needed because there are so many houses on the market.  Because it’s so competitive, your home needs to be flawless.  People don’t always see the details but instead take in the “big picture.”  Once they get a general idea of the house, then they start looking more closely.  Staging shows them the home’s best side first and invites them to take a closer look.

Staging is similar to remodeling but there’s one major difference.  Whereas remodelers are likely to add new features to make a home look better, stagers are more likely to get rid of things.  It’s simple at the outset, but there is a lot to learn if you want to do it properly.  You have to know exactly what buyers are looking for and how your home will look to them.

The Basics Of Staging

Staging involves remodeling, getting rid of clutter, moving furniture and improving curb appeal.  Realtor Barb Schwarz, who is given credit for inventing the idea of staging, said that it was about the “3 Cs” – cleanliness, clutter reduction and color.

One aim is to make the rooms feel more spacious.  This is done by rearranging furniture and opening drapes and blinds to let the sunshine in.  Opening up your rooms makes the home seem bigger and more welcoming.  People want a home with an open feeling and not one that feels like a cramped space.

A stager might apply new oil to cabinets and other wood features.  This is done to prevent the wood from having a dry and worn look.  When nicely polished, the wood shines with a new luster.  This makes it more attractive and gives it a fresher feeling.

When it comes to furniture arrangement, wall art and knick knacks, the idea is to keep things simple.  Again, you want to avoid filling the home with too much and giving it a cramped or disordered feeling.  Only features that help define the spaces should be included.  Everything else should be removed.  Stagers may add knick knacks such as books or bowls of fruit, but they will do so sparingly.  They usually like to leave counters and other horizontal surfaces bare.

It’s not just about how a home looks.  Another element of staging is smell control.  You’ll want to make your home smell good and get rid of cigarette, pet or mildew odors.  These smells are often not noticeable to the homeowner because you get used to them.  The home should also be clean, especially because families may be looking at your home.  Would they want their baby crawling around on the floor?

You can do your own staging or hire a professional to do it for you.  Many realtors are skilled at this art form as well.  If you do it yourself, it takes a bit of study and expertise.  Pay close attention to the image your home projects.  The idea is to give your prospective buyer the right first impression of your home – a home that is open, clean and beautiful.

New Coat Of Paint

Realtors say that painting is one of the most profitable upgrades that you can do.  This goes for both the interior and the exterior.  Slap on a new coat of paint and your house’s value shoots up a notch.  Just be mindful of your color choices.  Make sure the colors are tasteful and the painting is done well.

Your New Kitchen

Kitchen renovations are also quite profitable.  They tend to be more expensive, but there are always ways that you can save on them.  New countertops are a good option, or even something as simple as new nobs and handles.  When doing kitchen renovations, make sure that your kitchen maintains a consistent theme and that it matches with the rest of the house.

Your New Bathroom

Bathroom renovations are also wonderful.  Very simple surface alterations can add value to this part of the home.  You don’t have to go all-out and install whole new bathrooms.  The aim of your bathroom remodeling should be to create gleaming white surfaces and the impression of a clean room.

Upgrade Your Flooring

Changing your flooring is also not a major undertaking but it can add quite a bit of value.  Options include carpeting, ceramics and hardwood floors.  Like all of your upgrades, it should harmonize with the rest of the house.  The only tricky thing about flooring upgrades is that taste in flooring options changes every so often.  It’s tough to predict what might be nice looking a few years from now.

Doors And Windows

Replacing doors and windows can be done at minimal cost.  When choosing new doors and windows, go for styles that are symmetrical.  Symmetry is pleasing to the eye and, especially with your front door, it will attract prospective buyers.  Also keep in mind energy efficiency.  Upgrading to windows and doors that are more energy efficient gives an excellent boost to your home’s value.

Lighting Upgrades

Most old homes can stand to use some upgrading as far as lighting is concerned.  Clean up your old lights or get rid of them entirely.  Go for something contemporary and focus on adding lights where the lighting is low.  Brightly lit homes sell for much more than dark, spooky houses.

Room Additions

Although it’s a big undertaking, adding rooms can really increase your home’s value.  Lots of home owners add family rooms to the main floor.  Family rooms are great because they increase the living space without making the house awkward.  Sometimes, when you add too many new bedrooms or bathrooms, it’s a little too much and it makes the house harder to sell.

Fireplace Upgrades

Why not add a fireplace?  This is one of the top amenities among Canadian home buyers and if you’ve ever spent the winter in a chilly house, you’ll know why.  Fireplaces add value and coziness.

Finish The Basement

Finally, renovating basements is popular.  Lots of people feel like a home is not a home without a finished basement.  Turn it into a space that is comfortable, warm and dry with plenty of light.

This can never be stressed enough – when you do home upgrades, make sure they match the style of the rest of the house.  If an upgrade doesn’t fit with the overall style, even if it’s a sure-fire value booster, it will make your home harder to sell.

Why So High?

First of all, there is a common misconception in the real estate world that realtors take too much of a bite.  As all home sellers know, you are expected to pay the commission and it’s not cheap.  The truth is that realtors get very little of it actually.  A sizable portion goes into marketing the home and advertising it.  What the realtor pockets is not so much at all.

Sell It Yourself

The best way to save on realtor commissions is to sell the home yourself.  In fact, you end up paying nothing at all!  The problem with this method is that it means then that YOU are in charge of doing everything the realtor does.

Much of what realtors do is aimed at spreading the word about your home.  This means placing ads and listings.  Now that we’ve got the internet to help us out, it’s easier than ever to handle this aspect of home selling yourself.  There has been a sharp rise in For Sale By Owner homes in Canada in the years since the advent of the internet.  There are sites where you can list homes yourself.

Flat Free Listing

You can also save on realtor commissions by hiring them for specific services only.  This option is called a ‘flat fee listing.’  A change in Canadian law in 2010 allows you to use the Multiple Listings Service (MLS) yourself.  This means that you can hire a realtor only for specific services rather than hiring them to do the entire listing for you.  They simply list it for you in the MLS, and you handle everything else yourself.

Negotiate With The Realtor

Most people don’t realize that you can negotiate the commission rate with realtors.  Everything is negotiable and most realtors will play ball; in fact, they general expect some negotiation with sellers.  You can shop around with a few different realtors and see if they’ll give.

However, there is one downside to negotiating that you should be aware of.  There’s almost always a little give and take.  Since most of the commission money goes toward marketing, they may knock some of the price off but this will mean your home won’t get as widely listed.  Keep this in mind when you’re negotiating and don’t cut corners if the listings are important to you.

Commissions may be high, but remember that they don’t just go into the greedy realtor’s pocket.  Consider the above options for saving on commissions, and you can sell your home faster and, best of all, keep that commission money yourself.

The Benefits Of Selling Your Home Privately

Before we get to the tips, here are some reasons you might want to consider selling your own home.  First of all, the realtor commission is usually around 4 to 7 percent of the sale.  Do some quick math and you’ll see that it’s a huge amount of money.  When you consider the average price of homes in Canada, the average commission is anywhere from $15,000 to $20,000.  When you sell yourself, that’s money that you save.

Selling privately, you can also sell it at a lower price.  The savings are passed on to your buyer.  Because you can sell at a lower price, you can also sell the house much faster.  You can to do all of the negotiating yourself and you have total control over your home’s advertising and presentation.

How To Sell Your Own Home

It’s not as tough as some realtors will tell you, but it takes some work and study on your part.  First of all, make sure that you completely understand the steps involved in selling your house.  Know what needs to be done at each step and the best way to do it.  You’ll be handling each of these steps yourself.

When you’re listing your home, set a realistic price that takes into account the house’s condition.  Lots of sellers shoot themselves in the foot because they ask for too much for a home that’s not in great shape.  Even if the buyer accepts the price, the deal won’t go through because the mortgage lender’s appraisal will push the price back down.

You’ll have to do your own staging.  Staging means tweaking your home so that it shows its strengths to potential buyers.  Your home should be staged so that it’s clean, clutter-free, open and comfortable.  Spend some time working on your home’s presentation.  Another really important part of this is curb appeal – how your home looks externally to potential buyers driving by.

When it comes to repairs and maintenance, decide what you can do and what you need to hire help for.  Don’t try to tackle it all yourself.  Budget for repairs and maintenance, and don’t be afraid to spend a little money here.  It will push your house’s price up considerably.

At some point, you’ll have to hire a real estate lawyer.  There are legal matters that most folks can’t handle on their own.  It is not required that you hire a lawyer, but highly recommended.  They’ll handle contracts, tell you what you need to disclose to buyers, act as escrow agent for funds, and perform other tasks.

Then, there’s advertising to consider.  Put ads in the paper and online, and spread the news by word of mouth.  Word of mouth is still the most powerful advertising strategy in the real estate world.  Spend the money necessary to have extra-nice For Sale By Owner signs.  Don’t cut corners here because presentation is everything.

Finally, have a Plan B just in case it doesn’t sell as fast as you thought it would.  Don’t get discouraged; just create a new plan of attack.  It’s not easy to sell your home privately but with what you can save on commissions, lots of sellers think it’s well worth it.

Common knowledge says that spring and early summer are the best times.  The snow is thawing and the “For Sale” signs are coming out.  This is the busy season in the real estate world.  It’s nice outside and just perfect for showing houses.  Everybody takes for granted that it’s the best time, but common knowledge may not know as much as you think.

Actually, the best time to sell your home is the winter holiday season.  The last two weeks of December and the first week of January, when most folks are home for the holidays with family, is actually the best time.  House prices are at their lowest and this is when there is the smallest buying pool.

Buying On The Off-Season

During spring and summer, all of Canada’s prospective home buyers are just like you – enjoying the nice weather and looking at houses.  On the “off season” when everybody’s cozy in front of the fire, nobody’s out there looking.  That means you’ve got your pick of the homes for sale.  Competition raises prices because home sellers are holding out for the best deal possible.  During the dead season, nobody’s buying.

But there’s one tremendous downside about buying in January that must be considered.  In most parts of the country, everything is covered in snow and ice.  This means that it’s impossible to get a really good look at the yard and some parts of the house.  If you buy during this season, you might have a few surprises waiting for you after the first thaw.

Economic Downturns Are Good For Buyers

When the economy isn’t doing well, it’s a buyers’ market in the real estate world.  Even though the Canadian housing market always does well, the recent economic downturn has driven home prices down a bit.  This is not a good thing for homeowners whose homes are their life’s greatest investment, but prices are expected to go up again eventually.  In any case, if you’re looking for the best time to buy, wait until the economy slows down.

Your best bet is to contact a realtor and seek their expert opinion.  Like all markets, the real estate market does funny things.  They can predict if prices will continue going down or not.  If prices are dropping and they’re sitting at rock bottom before starting their rise again, that’s when you want to seize the moment and make your purchase.

The Real Best Time To Buy

Actually, there is a simple, clear cut answer to this question – the right time to buy is when your finances are in order and you’re ready to make the down payment.  You’ve got at least a 5 year plan and there’s enough money left over after the down payment to start paying (and if possible, overpaying) on your mortgage.  Once you find the perfect house, it’s time to close the deal.  And don’t forget – be patient; the best things come to those who wait.  Even if you’re ready to move in today, shop around until you find the one house that really feels like home.

It doesn’t take the expertise of a licensed realtor to help you increase your curb appeal.  All houses have their good and bad external features.  The goal here is to enhance the good features and minimize the bad ones.  Here are just a few simple things you can do to make them stop and pay attention.

Test Your Curb Appeal.  Try driving by your house yourself and ask yourself, “Would I stop?”  Park your car across the street and take a good look.  Does your house stand out from all the others?  Does it look bright, open and inviting?  This is a great way to troubleshoot your home’s appearance.  If it doesn’t grab your attention, it won’t grab your potential buyers’.

Focus On Symmetry.  A big factor in curb appeal is symmetry, especially at the front door.  Align the lighting fixtures and other features so that everything is symmetrical.  Symmetry is more pleasing to the eye and it makes a home look more attractive.

Make It Shine.  Make sure everything is tidied up, cleaned well and polished to a shine.  It should look like someone is giving it their tender loving care.  The last thing you want is to present a home that looks neglected and grubby.  It needs to really sparkle in order to get people stopping.

Light Landscaping.  The same goes for your yard.  It should look clean and well-maintained.  Make sure you’re doing some regular light landscaping such as mowing and trimming.  If you really want to boost your curb appeal, hire a landscaper and have them give it the once-over.

Use Lighting To Your Advantage.  Lighting can also help you accentuate your yard’s good features.  Install some yard lights to increase your home’s curb appeal at night.  Make sure that when you’re looking at the home from the street, you can see light coming through the windows.  This gives it a bright, open feeling.  Investing in decorative lighting can also help.

You’d be surprised what an impact curb appeal (or lack of it) can make.  It is estimated that a huge percentage of buys are directly affected by the home’s first appearance when seen from the street.  It’s really simple – if it looks good outside, they’ll stop and want to have a look inside.  Take a good look at your home and yard, and get it looking great.

Real Estate Investing Is A Long Term Strategy

Investing in real estate is a long term strategy.  This is because, although homes appreciate in value and get you a great return on your investment, home prices are high to begin with and this makes the initial purchase difficult.  Because of this high cost, realtors in Canada are generally of the opinion that house flipping is not a great idea.  You’re much better off making it a long term strategy.

Borrowing Mortgage Funds From RRSPs

One way to fund your investment is to borrow mortgage funds from RRSPs.  Borrowing from Registered Retirement Savings Plans means taking money from your or someone else’s retirement accounts to use today.  Millions of Canadians have these and they are often used as mortgages for property purchases.  However, be warned that it can be slightly risky; if you fail to make payments, you could lose your retirement fund.

Renovations Increase Your Home’s Value

One great way to add value to your investment is to renovate.  Perform upgrades on your home and you’ll see a dramatic price difference when it’s time to sell.  Renovations take some investment of time and money on your part, but even small upgrades can get you big money.  Great upgrades include things like adding rooms, painting, upgrading lighting, renovating kitchens and bathrooms, and changing your home’s flooring.

The Renting Option

Another idea is to rent your property out to tenants.  This gets you a capital gains as well as a monthly income.  Even if you don’t make much money from the rent, your home will still be increasing in value.  The downside is, of course, dealing with tenants.  You have to either become a landlord or hire someone to manage the property for you.

The Benefits Of Hiring An Agent Before You Buy

If you’re buying property as an investment and you want to see it bring you high returns in the years ahead, it’s always a good idea to hire a real estate agent.  Your real estate agent is your investment advisor.  They can use their experience and knowledge to predict for you how much a property is going to increase in value in the coming years.  You can also hit the books and learn about real estate market trends yourself if you don’t mind putting in some serious study time.

With home values constantly on the rise, investing in real estate in Canada is almost always a lucrative venture.  Keep these things in mind when you invest and you’ll see serious returns on your properties.

The Pros Of Renovating

The biggest reason home owners renovate is to increase the value of their home.  Even small, simple changes such as painting or installing new lights can make a huge price difference.  It doesn’t have to cost a great deal of money but it can get you great returns when it’s time to sell your home.

Renovating can also make you feel like you’re living in a new home.  More drastic renovations like adding rooms or changing the flooring can make you feel like you’ve moved when you didn’t go anywhere at all.  Renovating is also obviously much cheaper than buying, even if you make major changes.

The Cons Of Renovating

Although it’s cheaper than buying, it can still get you into a world of financial trouble.  Most people who renovate go way over their budget and this can cause lots of problems.  It’s really hard to budget correctly for your renovations because there are always little unexpected surprises.

Sometimes, renovations can actually hurt your ability to sell.  For example, adding too many rooms can turn your home into an unsellable monster.  It narrows the market of home buyers who might purchase your house.  If your renovations make drastic changes that make your home the odd man out in your neighborhood, this will also hurt your chances of selling it.

The Pros Of Buying

When you buy a new house, you’re making a major investment and, in any kind of investment, it’s all about equity.  A new house gets you more equity than your old one.  Paying your mortgage each month is like putting money into an extremely lucrative savings plan.  You can often get bigger returns on your home investment by buying a new home because house prices tend to rise in Canada.

The Cons Of Buying

First, the obvious downside – it is extremely expensive to buy.  Your home is the biggest purchase of your life.  Not only do you have the down payment to think of, but you also all of the little expenses that pop up along the way.  There are always things you forgot to include in your budget such as buying new furniture.

Although you can get bigger returns on your investment, buying is a much bigger undertaking than renovating.  Even the most complex renovating jobs are nothing compared to the time, effort and expense it takes to buy a new home.

The real question you should ask yourself is – “How much do I want to pay and how much am I willing to do?”  If you’re not sure you’re up for the massive expense and undertaking of buying, try renovating and see what you can do to your home’s value.

Take Your Time

The bank’s ready to lend you the money and you’re tired of renting; you’re in a hurry to get the deal closed and start moving!  But hold on a second.  One of the biggest mistakes home buyers make is that they buy the first good house that comes along instead of waiting for their dream home.  Take a deep breath and relax!  Think carefully about what you want in a house and neighborhood, and spend some time looking before you buy.

Budget For Your Down Payment

The down payment on your home will be anywhere between 5% and 20% of the total cost.  Do you have that money on-hand?  While paying less for your down payment might seem like a good idea, it’s not such a great plan in the long term.  It’s better to make a bigger down payment because you’ll get the house paid off more quickly.  Also, if you can pay 20%, you can avoid paying insurance costs that are added by the Canadian Mortgage and Housing Corporation.

Budget Beyond Your Down Payment

Keep in mind that it’s not enough to just pay the down payment.  Make sure you have some extra money saved for all the little expenses that will come up.  You should also have a plan for the next few years.  You’ll have mortgage payments to make.  Your emergency fund should have around $10,000 in it to protect you in case there are any surprises.

Consider Getting A Buyer’s Agent

You don’t need to get an agent, but it can really help.  Make sure that you get a buyer’s agent and not a seller’s agent.  A buyer’s agent is one who works for you and not the seller.  They’ll help you by actively searching out and finding listings, and they have access to listings that are not available to the public.

Pre-Approved, Not Pre-Qualified

Lots of buyers think that getting pre-qualified means that they’re guaranteed the house.  This is not the case at all.  Instead, you need to get pre-approved.  The first step is to get pre-qualified.  This means that you’ve given your financial information to the bank or lender, and they’ve determined how much you can qualify for.  But this is no guarantee of anything.  It just gives you an idea of how much you can afford.  When you get pre-approved, this locks your loan in to an exact amount and sometimes provides you with a specific interest rate.  This is not a requirement but it offers a huge advantage because it makes you look much better to sellers.

Quit Looking

Finally, once you close on your home, quit looking!  Get out of the habit of checking out houses because you might find something you think is better.  It’s just a case of buyer’s remorse and it doesn’t mean anything, but why ruin the wonderful feeling that you’ve just closed on your new house?