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Your House Didn’t Sell – Now What?

“… The first thing to do is take a step back and analyze the situation…”

You put your home up for sale and it simply didn’t sell. Undoubtedly, this has created a lot of stress, inconvenience and anxiety for you and your family. Perhaps you already bought another home. Maybe you needed this home sold because of a job change. Regardless of the reason, it’s certainly a burden! What Should You Do?

The first thing to do is to take a step back and analyze the situation. Try to assess what factors led to your home not selling. Below are the top four reasons why homes tend to languish on the market:

Is The Property Overpriced?

Overpricing your property is usually the number one reason it did not sell. Assuming your neighborhood or area has homes with similar features (number of bedrooms and baths, lot size, etc.) on the market for a lower price, buyers will naturally buy those properties first. The price of your property should be competitively priced with these other homes. That means if you want to sell your home, price the home at or slightly below the comparables. Your real estate agent will help you establish the best price based on the competition. Again, pricing your property above comparable properties can easily cause it to languish.

Another problem with pricing higher than competitive properties is the price reductions. Most homeowners will reduce the price once they realize their home is priced higher than the competition. When your real estate agent enters the price reduction in the MLS® System, the property is probably at or near where it should have been priced in the first place. The problem now is you missed a lot of the buyers the first round that bought comparable homes for the same price you have just reduced your home to.

To overcome this situation, you are going to have to make sure your new, reduced price is extremely competitive. If your price reduction still leaves the asking price of your home higher than any comparables, your home will probably continue to languish. Your real estate agent will help you assess the competition and help you establish an asking price that will get the home sold.

Condition Of The Property

All of the cosmetic things, such as paint, landscaping, window coverings and flooring should be in good shape. The house should be spotlessly clean inside and out! It’s amazing how most buyers refuse to see “through” superficial, cosmetic shortcomings. To illustrate this point, most buyers can walk into a “perfect” home that is priced below market. However, if the house is cluttered, the carpet is worn, or the house has a strong pet odor, they move on to look at the next house. And making these cosmetic improvements costs little… mostly your time! To get the house sold, make a small investment in:

  • Landscaping: Make sure lawn is in good shape and trees and shrubs neat and trimmed. Make sure gutters are clear. If you don’t have the time to do it, pay someone.
  • Exterior of home: Make sure there is no chipping paint, dirty windows, or clutter in the yard. Most importantly, remember that most buyers will notice the condition of the front door when they walk in.
  • Interior: Make sure the carpets are clean and attractive, the walls painted (if it needs it) and clean (no smudges!), the kitchen clutter-free and the windows are spotless. Also, remove excess furniture (rule of thumb is put half the furniture in storage or the basement). Excess furniture makes rooms appear much smaller. Make sure all clothes are off the floor and organized in closets. And finally, make sure the smell of the home is appealing. Vanilla scent works very well with most buyers.

Was Your Property Aggressively Marketed?

Another primary reason for homes languishing on the market is a simple lack of exposure. In a very hot market, a listing in the Multiple Listing Service alone should generate an adequate number of buyers. However, if your market is anything less than red-hot, the amount of inventory will increase and your home needs aggressive marketing.

Most buyers work with real estate agents. A good real estate agent will make sure your property is exposed to the active real estate agents in your areas by presenting your property to many of the area offices. Also, most active real estate agents have a strong network of other agents, and they’re usually on the phone pushing the property to the other agent’s buyers.

Make sure your property is advertised in home magazines. Many buyers pull these off the racks of grocery, convenience and drug stores when they are actively looking to buy a home. Most importantly, make sure your property is advertised in heavily trafficked web sites like REALTOR.com/MLS.ca. Well over 80% of buyers use the Internet to look for homes!

Finally, and Most Importantly, Did You Hire The “Right” Real Estate Agent?

Like any profession, there are very effective and ineffective agents. Many agents work hard and employ strong marketing techniques. Many agents have a strong network and access to buyers. Many agents work hard to get your home sold. However, many do not. Did your agent simply place the house in the Multiple Listing Service? Or, did she or he inform their network of buyers about your property? How about presenting your property at sales meetings both at her or his office and other company offices? Did she or he promote your property at the local real estate board meeting, where many agents gather to share inventory? Did she or he use aggressive advertising, including real estate magazines and heavily trafficked Internet web sites?

Ask yourself, was your agent passionate about selling your property? If not, now is the time to find the agent who will get your home sold.

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How Much Should I Expect to Pay On Closing Costs?

Whether you’re looking to buy your first home, or trading up to a larger one, there are many costs – on top of the purchase price – that you must figure into your calculation of affordability. These extra fees, such as taxes and other additional costs, could surprise you with an unwanted financial nightmare on closing day if you’re not informed and prepared.

Some of these costs are one-time fixed payments, while others represent an ongoing monthly or yearly commitment. Not all of these costs will apply in every situation, however it’s better to know about them ahead of time so you can budget properly.

Remember that buying a home is a major milestone. Whether it’s your first, second or tenth home, there are many important details to address during the process. The last thing you need are non-budgeted financial obligations cropping up hours before you take possession of your new home.

Read through the following checklist to make sure you’re budgeting properly for your next move.

Appraisal Fee

Your lending institution may request an appraisal of the property, which would be your responsibility to pay for. Appraisals can vary in price from approximately $175 -$300.

Property Taxes

Depending on your down payment, your lending institution may decide to include your property taxes in your monthly mortgage payments. If your property taxes are not added to your monthly payments, your lending institution may require annual proof that your taxes have been paid.

Survey Fee

When the home you purchase is a resale (vs. a new home), your lending institution may ask for an updated property survey. The cost for this survey can vary between $700- $1,000.

Property Insurance

Home insurance covers the replacement value of your home (structure and contents). Your lending institution will request proof that you are insured as it protects their investment on the loan.

Service Charges

Any new utility that services your hook up, such as telephone or cable, may require an installation fee.

Legal Fees

Even the simplest of home purchases should have a lawyer involved to review all paperwork. Shop around, as rates vary greatly depending on the complexity of the issues and the experience of the lawyer.

Mortgage Loan Insurance Fee

Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type of insurance will cost you between 0.5% -3.5% of the total amount of the mortgage. Usually payments are made monthly in addition to your mortgage and tax payment.

Mortgage Brokers Fee

A mortgage broker is entitled to charge you a fee in order to source a lender and organize the financing. However, it pays to shop around because many mortgage brokers will provide their services free to you by having the lending institution absorb the cost.

Moving Costs

The cost for a professional mover can cost you in the range of:

$50-$100/hour for a van and 3 movers, and

10-20% higher during peak demand seasons.

Maintenance Fees

Condos charge monthly fees for common area maintenance such as grounds keeping and carpet cleaning in hallways. Costs will vary depending on the building.

Water Quality and Quality Certification

If the home you purchased is serviced by a well, you should consider having your water checked by your local experts. Depending upon where you live, determines whether or not a fee is charged, to certify the quantity and quality of the water.

Local Improvements

If the town you live in has made local improvements (such as the addition of sewers or sidewalks), this could impact a property’s taxes by thousands of dollars.

Land Transfer Tax

This tax is applied whenever property changes hands and the amount that is applied can vary.

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Selling Your Calgary Home Yourself

If you ask anyone who has ever tried to sell their home themselves, they’ll tell you that from the moment the “For Sale by Owner” sign goes up, the phone begins to ring. Unfortunately, many of those calls will not be from prospective buyers but rather from real estate agents looking to obtain your listing.

Obviously the idea of not having to pay a commission to a real estate agent is attractive to any home seller. But because of all the issues involved in the process, selling a home on one’s own can be as challenging as many home sellers will attest to. The key is to be properly prepared. If you are not, your home could remain on the market longer than you expect because you are not attracting and getting offers from qualified buyers. This can be the point where many homeowners become frustrated and consider giving up their dream of selling their home themselves.

However, there are sellers who successfully accomplish selling their own homes. You can be one of them. This industry report has been especially prepared to assist home sellers, such as yourself, understand the elements involved so you, on your own, can sell your home quickly for the most amount of profit.

To help you prepare, here are 10 inside tips that you should be aware of before you make the decision as to whether or not this is the right approach for you.

Price it Right

Correctly setting your asking price is critical. Setting your price too high can be as costly as setting it too low. Home prices are determined by fluctuations in the marketplace, not by your emotional attachment or by what you feel your home is worth. In order to establish a realistic price for your home, objectively compare the price, features and condition of all similar homes in both your neighborhood and other similar ones that have sold in recent months. It is also important for you to be familiar with the terms of each potential sale. Terms are often as important as price in today’s market. Carefully budget your selling costs and prepare a net proceeds sheet to calculate your best estimate of what you will take away from your home sale. Prospective buyers may also request this kind of analysis of buying costs.

Prepare your Home for Sale

First impression is crucial. Make sure your home makes a positive statement by carefully inspecting all details and viewing it through the objective eyes of a buyer. Don’t gloss over needed repairs and fix-ups, as your prospective buyers won’t. Your job is to ensure that your home stands out favourably from the competition.

Prepare Yourself with all Necessary Legal Documentation

Not surprisingly, there are many important legal contracts and documents that you must assemble, complete and understand. A partial checklist of forms that you will require for prospective buyers and for legal documentation is as follows:

  • Seller’s Disclosure
  • Buyer’s Advisory
  • Purchase Contract
  • Preliminary Title Report
  • Termite Inspection
  • Mortgage Payoff
  • HOA Disclosures & Restrictions
  • Loan Application Forms
  • Lead Based Paint Disclosures
  • Property Profile Fact Sheet
  • Buyer’s Cost Sheet
  • Home Warranty Order Forms
  • Personal Property Exclusion List
  • Property Survey (if applicable)
  • Home Inspection Order Forms
  • Market Your Home Effectively

Beyond the sign you will put on your lawn, you should find effective ways to spread the word about your home. Local buyers can be reached through the newspaper, but this is only a small part of the market you are after. Be sure you include the many buyers who could already be working with a REALTOR®. To locate them, target as many top agents as possible in your market to see if the criteria of their buyers match those of your home.

Because out-of town buyers are also important targets, you should create a strategy to reach these people as well. Above all, you should be very service-minded and make it easy for pre-qualified buyers to view your home. Ensure there is always someone available to answer the phone, check messages frequently, and be ready to give qualified prospects a tour of your home as soon as possible.

Remain Objective During a Showing of Your Home

Keep emotion out of the sale of your home, and the best way to do this during a showing is to remain physically in the background. If a prospective buyer says something negative about your home, it is better to counter-balance this point of view by illustrating the positives rather than becoming defensive.

Pre-Qualify Your Prospects

Don’t waste your time entertaining buyers who could never afford your home. Research their financial steadiness with respect to job security, salary, debts, liabilities and credit standing.

Negotiate Effectively & Knowledgeably

There will be many details to resolve before a sale can be considered final: price, terms, inspections, possession date, buyer concerns and objections. Make sure you fully understand the contract you have drawn up so you can in turn explain details and ramifications to the buyer and make any amendments to the sale that are necessary. The contract you use should be thoroughly examined by your real estate attorney. Some real estate brokers may be willing to help you do this. While this is going on, manage the buyer’s interest in your home so that it doesn’t wane during negotiations.

Know Your Buyer

Your objectives during negotiations are to control the pace and set the duration. Try to determine what your buyer’s motivation is. Does he or she need to move quickly? Do they have enough money to pay your asking price? Knowing this information will give you the advantage in the negotiation because you will know up front what you will need to do in order to get what you want.

Don’t Move Out Before You Sell

Studies have shown that it is more difficult to sell a home that is vacant. It looks forlorn, forgotten, simply not appealing. It could even cost you money. If you move, you’re also telling buyers that you have a new home and are motivated to sell fast which can, of course, gives them an advantage at the negotiating table.

Know Why You’re Selling and Keep it to Yourself

The flip side of “understanding your buyer” is to “understand yourself”. Your reasons for selling will affect everything from your list price to how much time and money you will invest in getting your home ready for sale. Your motivation will help you determine what is more important to you: the money you walk away with, the length of time your property is on the market, or both. Different goals will dictate different strategies. As someone who wants to sell without a real estate agent in an effort to save the commission, it is likely that money is one of your primary considerations (see inset box below). Whatever your reasons, however, it is very important to keep them to yourself so as not to place yourself at a disadvantage at the negotiation table. When asked, simply say your housing needs have changed.

How to Assess Your Net Gain

To analyze whether or not you will end up ahead by choosing to sell on your own, consider the fact that most buyers do use a real estate agent because it doesn’t cost them anything for this service (i.e. the seller pays the agent’s fee). Be cautious as buyers, investors and speculators who seek out For Sale by
Owners are typically those in search of a bargain. The low-ball offers from these types of buyers will often net you much lower in the long run. What you will have to judge for yourself is the following:

  1. Be as prepared as possible with your marketing, negotiations, evaluations, showings and all legalities.
  2. Consider what it will cost you to effectively market your home and assemble all necessary materials from the “for sale” sign to any contracts?
  3. What price will a buyer offer you as a For Sale by Owner minus the costs identified in point 2 above. Is this net price higher than the price an experienced agent could net for you minus his/her commission?
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Saving Money – A Guide to Saving Thousands When Buying a Home in Calgary

Buying a home is one of the most expensive purchases you’ll ever make, and by following some simple guidelines you can stand to save thousands of dollars. If you’re like most people shopping for a home you’re probably trying to match a home that fits your needs perfectly, with the lowest possible price.

When looking for a home yourself, it’s important to know how previous successful homebuyers have purchased their homes for thousands of dollars below a seller’s asking price. Skills like negotiation are handy, but the fundamentals are often overlooked. This report will cover the following:

  • Steps for saving thousands when you buy a home
  • How sellers price their homes

Some simple steps that will save your thousands when you purchase a home

Going into the home-buying process with some basic knowledge in the area can make all the difference. The following are some simple, but often overlooked, points that every homebuyer should take into account.

Be sure about what you want

This seems like a simple point, but many people make the mistake of confusing what they need with what they desire. Obviously the goal of shopping around is to find a property that fulfills both, but it’s important to know that in the real world this situation doesn’t always occur.

When the purchase price of an item exceeds $10,000, people commonly let emotion and desire play a big role in their decision-making processes. When you’re looking at home you’ll find that you’re drawn to certain properties for completely different reasons; some based on needs, and other based on desires. Is it better to buy the house with the basement suite for rental possibilities, or the one with more bedrooms to better accommodate a growing family? Many people make the wrong decision at this step and end up regretting their purchase for years.

It’s vital that you satisfy your needs first, and your desires second. Oftentimes writing down both can aid in the home-buying process.

Shopping with powerful help

You should make sure that your agent offers a buyer profile system to get you all MLS® System listings that meet your exact requirements. Using one of these systems can greatly increase your chances of finding that perfect home as you will be made aware of all existing and new listings that meet your requirements.

Understand how sellers set their asking price

Sellers price their homes in several different categories and it’s important to consult your agent about the price of a property. Keep in mind that roughly 75% of all homes on the market are priced 5-10% above fair market value.

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Stop Paying Rent – Becoming a Homeowner Rather than a Home Renter

From basement suites to full houses, renting is a huge business in this country. If you currently rent, you know that paying out those hundreds of dollars every month to line the pockets of your landlord is not a pleasant task. However, like most renters you probably feel stuck in a home that isn’t even yours simply because you can’t save up that down payment for your own home.

This report contains details on how you can stop paying rent and start contributing to your own financial future, rather than that of your landlord. By knowing some valuable information about the real estate industry, as well as some tips and tricks about property ownership, you’ll be able to start on the road from renting to owning. This report will tell you how you can:

  • Save for a down payment for your property
  • Make best use of your financial institution, and other loan sources
  • Consider reversing the rental roles

7 Little-known Facts That Can Help You Purchase Your First Home

Purchasing your first home can be challenging. Your monthly cash flow may easily cover the proposed mortgage costs, but perhaps accumulating the down payment is what you find difficult. Or maybe you have financial reserves, but cash flow is what’s holding you back. Whatever the reasons, purchasing a new property can still be accomplished, regardless of your financial standing. Consider the following facts:

The down payment on your property doesn’t have to be as large as you think

Several programs exist to help first-time buyers enter the property market. These programs require that you have never purchased a home before, and that you meet basic qualification standards. It is important that you consult a professional real estate agent who is familiar with these programs, so that you may make best use of them.

In some areas it is also possible to assume a mortgage. If this is an option in your area, your real estate agent will be able to perform search on listings requiring small to no down payments.

Your lender may help you with your down payment and closing costs

Depending on your financial standing, you may have assets worth equal to or more than your needed down payment. If this is the case, your financial institution may be willing to lend you the extra cash needed for your down payment, while securing it against your assets.

The seller may assist you in purchasing your home

Some sellers may be willing to lend you money to purchase the home. This is known as a ‘seller take-back’ and is essentially a loan from the seller to the buyer. Instead of your monthly mortgage payments going to a financial institution, they would go directly to the seller. This loan works in exactly the same way as any other, and is subject to the rules and regulations outlined upon instantiation.

You may be able to borrow without going into debt

Options exist for you to borrow for certain investments to a specified level, and using those investments to leverage a significant tax return. This process can be further coupled with a first-time homebuyer’s plan, and turned into significant equity.

You can also borrow against savings in an RRSP, and if repaid in a certain time period, avoid any interest payments.

While purchasing, consider becoming a landlord yourself

If you’re interested in subsidizing your mortgage payments with some supplemental income, why not consider becoming a landlord yourself? Houses and condos with extra bedrooms and living facilities are often not much more expensive than those without. If you have been pre-approved for a mortgage that allows you to purchase a larger property, why not consider renting out the extra space and having a tenant pay your mortgage?

You may be able to secure a loan even with a lower credit rating

Oftentimes it is possible to secure a loan, even with a poor credit rating. If you have enough equity to borrow against, your financial institution may consider lending you money to purchase a home.

It is also possible to use a ‘seller take-back’ loan for the purchase, using the seller as the lender.

Secure a mortgage before you begin your searching

Before you begin looking for a property, you should get pre-approved for a mortgage. It is important to make sure that you know your budget, as well as your monthly payments to make sure that they are within your means. Enlisting the help of a professional mortgage specialist is a good idea when it comes to locating a loan that meets your needs. Oftentimes a professional will be able to locate more competitive mortgage rates than those offered by a single financial institution. There is usually no obligation, and the benefits of knowing your buying power while shopping for your home reduce stress and wasted time.

Where to go from here?

This report is designed to illustrate that you have options other than paying large monthly payments to your landlord. It is clear that with a little creativity and help from a real estate professional, you can make the break from renting to owning.

Make sure to consider your options – this report is not designed to make you feel obligated to purchase a home. If you’re interested in more information, please contact your real estate agent.