Monthly Archives: October 2016
So You Want to Buy a Vacation Property…
Just because summer is over doesn’t mean you should stop thinking about sun and sand. Fall is actually a great time to start thinking about next year’s vacation and where you’re going to stay. Cottages are a big part of the Canadian vacation experience, and buying one might be a great investment if you go about it the right way.
Smart investment or luxury item?
The answer? It’s a bit of both. An inherited cottage or one you bought decades ago during the golden age of affordable lakefront properties could make you a pretty penny today. If you’re in the market to buy though, you have some factors to take into consideration that will drastically affect the price. Buying a property that is accessible, usable and desirable year-round is a much better investment than a property that you can only get to in the summer, isn’t insulated and doesn’t have any merit in the winter. Take advantage of winter sports enthusiasts, as their options for winter rentals are usually pretty limited.
Being less than a 2-hour drive from a city is also going to command a higher price tag, but don’t be afraid to go a little off the beaten track or settle on a smaller lake. There are still deals to be had if you look a little further out and are willing to put in some work. There’s always going to be more work involved with maintaining a cottage, so keep that in mind when setting a budget. Don’t put yourself into a “cottage-poor” situation where you can afford the cottage, but not all the other fun accessories that go along with it, like building a dock for a boat.
Want all the perks of a cottage without all the costs? Fractional ownership might be the answer. Of course, the catch is that you only “own” the cottage for half the year. Fractional ownership may not be for everyone – but it is certainly something to consider if it suits your needs and wallet. Buying a property with friends or family may be a way to put cottage ownership within reach. While it sounds like a great way to pool resources and leverage your buying power, have a lawyer draw up an agreement that clearly states who is allowed to use the cottage when and other expectations such as upkeep, mortgage payments and property taxes and how to manage other unforeseen expenses. Also make sure you come to an agreement about the rules on renting out the property during the weeks you “own” the property, but aren’t using it. The best way to maximize a cottage purchase is to maximize the income potential.
Owning a cottage is an amazing idea but before you sign on the dotted line, do your homework. Cottages, unfortunately, are not exempt from taxes, and just like at home, require regular maintenance, cleaning and grass cutting. And while it’s hard to put a price on those summertime memories by the lake, making a smart investment should be your number one goal.
Inexpensive staging tips guaranteed to help you sell your home.
1. De-clutter & De-Personalize:
Buyers generally want two main things out of a potential property: they want it to be roomy, and they want to be able to see themselves living in it. Neither of these things can happen if the house is full of your stuff. Clear out a minimum of 50% of your personal belonging when you stage your home – more if possible. Take down all family photos and mementos. Clear out closets as much as possible. Take the kid’s drawings off the fridge. The cost? A few hours and some boxes for storage.
2. Clean, Clean and Clean Some More:
I’ve toured hundreds of properties and there have been times when I wouldn’t touch anything. And while I can see past the pink slime in the shower, dirty doorknobs, and carpet full of pet hair, a lot of prospective buyers can’t. Your home may have tons of potential, but if it’s dirty, the percentage of buyers who can see that potential drops significantly. Clean like you’ve never cleaned before. And when you think it’s as clean as it can get, clean it one more time.
A fresh coat of paint helps your cause in two ways: First of all, it can neutralize rooms (such as a very pink little girl’s room) so that buyers can picture it as what they’ll need it to be. Secondly, new paint always makes a home look cleaner. Painting isn’t a big financial commitment if you do it yourself. And, the time it takes to paint will pay dividends when buyers walk through your neatly staged home.
4. Minor Repairs (change light bulbs, fill holes, repair screens, clean up exterior):
You might not care that one of your vanity lights is burned out or that your attempt to hang a painting resulted in six holes in your living room wall, but those little things can be a huge red flag for potential buyers. The biggest advice I have is just don’t be lazy. Take the time to replace a window screen or a cracked outlet cover. The cost is minimal and it shows that you take pride in your home. And, maintaining the small things can help reassure buyers that you’ve maintained big tickets items, like your roof or HVAC system as well.
5. Every Room Has a Purpose:
A lot of people have spare space in their homes that are turn into “dead zones” – rooms, closets, corners where “stuff” ends up getting thrown. But when you’re prepping to sell your home, not only should every nook and cranny be clean and clutter-free, they should also have a purpose. That spare room with your old treadmill and drum kit could be staged as an office space. If your basement is unfinished, put up some inexpensive shelving units to showcase how much storage is available. Buyers shouldn’t have to work to picture a rooms as functional for their needs.
1. “I have a buyer for your home.”
Whether it’s delivered in a letter or by phone, this a common trick some real estate agents use to get their foot in the door with a potential home seller.
“When I first started in real estate, that was one of the first things we were taught,” says Carl Seier, a real estate agent with Sigmar MacKenzie Real Estate in Winnipeg. “They told us that there’s an agent out there who will have a buyer for that area, so technically you’re not lying. But that’s not the reason to hire a real estate agent. You want one with the best marketing plan.”
If a real estate agent really has a buyer for your home, he or she should arrive with an offer. Otherwise, that agent is probably just trying to get your attention – and your business. What you really want is an agent who’s willing to price your home competitively and market it to sell.
2. “This is definitely the property for you – but it probably won’t last.”
Good real estate agents don’t sell houses; they help buyers through the process of finding the best home they can afford. So, if you feel serious pressure from your agent to buy a particular house, something’s up.
“Agents want to make a sale. A lot of agents are living paycheck to paycheck, so the quicker they can close a buyer, the quicker they get paid,” Seier said.
Plus, in some provinces, agents may be looking to “double-end” a real estate deal. This happens when they represent both the seller and the buyer, and therefore cash in on both commissions. This isn’t necessarily a bad thing, but if an agent pressures you to buy one house over another, you should be wary.
3. “If your house doesn’t sell, I’ll buy it.”
Offering to buy an unsold house is another common tactic some real estate agents use. It isn’t dishonest (sellers will have to sign a contract with all the details), but while it may help agents attract more clients, it isn’t all it’s cracked up to be. The problem? The price you’ll get for the home in this case is much lower than list price – often as little as 85 percent of the home’s appraised value, Seier says.
“It’s not a reason to list your home. List your home because your agent has devised a thorough marketing plan,” Seier said.
4. “This price will get you a bidding war.”
A bidding war happens when buyers get competitive with each other while making offers on a property. This often drives the home’s price up well beyond list price. This is an outcome many sellers (and, let’s face it, agents) fantasize about, but Seier cautions that it’s exceedingly rare. Plus, the strategy often involves listing the home for less than it’s worth, and that, says Seier, is a big risk to take.
“Agents are promising bidding wars, but when they don’t happen, the agent increases the home’s price. That’s the kiss of death,” Seier said. “Choose a list price you can actually live with, not one that might get bid up.”
5. “I’m the biggest, I’m the best.”
Every city has at least one big-shot real estate agent. Maybe it’s someone who’s been working in the business for decades. Maybe he or she has invested a lot of time and money into high-quality advertising. Or maybe that individual is just a great agent who gets a lot of referrals. Or…maybe not. While a lot of clients can be a sign of an agent with a track record for getting the job done, it might also be a sign of what you might call “incumbent advantage”. Everyone likes a winner, so they pick the biggest agent, the one everyone else is hiring.
The problem is that this can often mean poorer service. If an agent is listing 40 to 50 houses at one time, chances are he or she isn’t going to have much time for you. Plus, many of the biggest agents use a team approach. So, while you might think you’re hiring the guy whose face you see on bus benches, what you really get is one of his assistants.
Forget the Gimmicks
So, with all these sales gimmicks, how can you find a real estate agent you can trust? You probably didn’t (or shouldn’t) hire your accountant or financial advisor (even your hairdresser) on a whim. Your real estate agent’s no different. Whether you’re buying or selling a home, you’re dealing with big money. A good agent can make a big difference; a bad one can make for a very bad experience. So shop around. Ask your friends for referrals. Look for reviews online. Then sit down with your top prospects and ask them what they’ll do to make sure you’re informed, you’re advised and that you get the most for your money – or the most money for your house. Accomplishing that isn’t a gimmick; it’s hard work. And that’s something worth paying for.
Talk to any real estate agent, and they will tell you that there are certain seasons that are more favorable to sell your home than others. Often, the best time to list and sell a single family detached home is in the spring, followed by early to mid fall.
Most families want to make the purchase of their home and complete the transaction before the summer months, when the kids and family are on summer vacation. Parents are keenly aware that school registrations need to be dealt with — and who wants to be loading a moving truck in the middle of August?
Sensibly, spring also offers the best time of year to showcase your home. After a long winter, the first hints of cherry blossoms and crocuses seem to trigger the “moving bug” in many people. Gardens tend to look their best in fresh bloom, when the leaves are on the trees. Homes appear more appealing when the weather is warming up and buyers tend to be in high spirits.
It’s also usually easier to get your home ready for sale at this time of year — from painting inside or out, to the simple ability to keep the house cleaner without the winter muck being traipsed throughout every time someone walks through the front door. Just remember, when you sell at the busiest time of the year you will face more competition, so make sure your home shows at its best!
If you’re selling anything over a certain price (and that depends on where you live — but we’ll say anything in the top 20% price range of your community), expect the summer months to be particularly slow. Expensive homes require buyers with big pockets — and where are they in the summer? Most likely away on vacation, not looking for a home….so that’s where the early to mid fall selling season comes in.
Fall is considered the next best time to list your home on the market– especially if it’s a nice long Indian summer. Linked to the “back to school” mentality, with the leaves turning fabulous colors and nice cool crisp temperatures, you’ll have another good shot at selling a family home — often to someone who’s already in your neighbourhood. That being said, be prepared to keep up thatcurbside appeal as the weather changes.
Some properties will sell at any time of year — such as those aimed at first time home owners, especially condominiums and town homes. Often these buyers are not faced with the constraints of school catchments, and are much more interested in amenities like underground parking, recreation facilities and the nearest coffee shop. These buyers are happy to shop at any time of year, so sales will often be a bit steadier throughout.
Vacation properties always do their best in the spring and summer months, because that is when buyers visit these destinations. They benefit from the fact that vacationers will actually be where these listings are, and not just looking at pictures online or in a brochure. It’s also hard to imagine water skiing when the temperature is hovering at zero and the cottage for sale has had the water and power shut off for the season.
Having said this, there really is no wrong time to list your home, because if you price your home right, and make every effort to present it in a superior way, chances are you will sell your property in a timely manner. However, if you find that you have to list in December because of a change in career or what have you, remember to be realistic. The holidays in particular can be the hardest time to sell, when everyone’s minds are on other things. Don’t be frustrated though — you never know. After all, one of my listings sold last year on Christmas Eve.