Frank Steinhausen, Broker
FSteinhausen@REMAX.net
RE/MAX Rouge River Realty Ltd., Brokerage
Phone 905-428-6533
Fax 905-668-1850
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Archive for the 'Buying real estate' Category
Home Scene: Where memories are made
May 31st, 2010 Categories: Area interest, Buying real estate
After laughing at Shrek in 3D Sunday evening, I relaxed in bed with a book. I could hear Jeremy talking to someone on line with his new PS3 game in the living room. The girls had been tucked into bed: Kailey tired after a soccer tournament and Grace after 3 hours of homework and the movie.
There was a quiet knock on the door and Nancy calls Grace to come in. She immediately stretches her arms out to welcome our baby into them. Grace sees scary people whenever she closes her eyes. My wife reminds her that Shrek wasn’t scary and that maybe we shouldn’t be watching scary shows on television. Grace tells us a story about how a couple of years ago, Jeremy made her watch Grunge on television and it still scares her. He made you, my wife comments. He sat on me.
That could be true, and Grace is scared and tired, and so are we. Nancy offers to have her sleep with Kailey (she has a big bed). She gets Grace a favorite stuffed animal. Kailey rolls over and asks what’s going on. Grace is going to sleep with you; she’s scared. Okay.
We relax back in bed with the ceiling fan cooling our skin.
That’s home.
Want one? Call me.
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Canadian Real Estate Association says “Canada’s hot resale housing market starting to cool”
May 28th, 2010 Categories: Buying real estate, Real Estate News, Selling real estate
(OTTAWA – May 17, 2010) Home sales activity in Canada came up short of the record for the month of April and new listings continued to climb, according to statistics released by The Canadian Real Estate Association (CREA).
PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month. The Canadian Real Estate Association has previously released these separately.
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The Limitations of a Home Inspection
April 22nd, 2010 Categories: Buying real estate, Home Inspection
The Home Inspection Defined
A general home inspection is a visual inspection for system and major accessible component defects and safety issues. The inspection is not technically exhaustive. A “general home inspection” and a “home inspection” are the same thing.
A home inspection is designed to reflect, as accurately as possible, the visible condition of the home at the time of the inspection. Conditions at a home for sale can change radically in only a day or two, so a home inspection is not meant to guarantee what condition a home will be in when the transaction closes. It’s not uncommon for conditions to change between the time of the inspection and the closing date.
Above: an overloaded outlet with no cover
It’s a Visual Inspection
A “visual” inspection means that a home inspection report is limited to describing conditions in those parts of a home that an inspector can see during the inspection. Obviously, parts of the home that are permanently hidden by wall, ceiling and floor coverings are excluded, but so are parts of the home that were inaccessible during the inspection for some other reason. Some reasons might include lack of an access point, such as a door or hatch, or a locked access point, or because an occupant’s belongings blocked access, or because of dangerous or unsanitary conditions.
There can be many more reasons. The point is that if an inspector can’t see a portion of the home, the inspector can’t assume responsibility for ensuring that a safe and proper condition exists or that systems are operating properly in that hidden space.
Safety
Safety can be a matter of perception. Some conditions, such as exposed electrical wiring, are obviously unsafe. Other conditions, such as the presence of mold, aren’t as clear-cut.
In the example of the possible existence of mold, it’s difficult to accurately call it out during a general home inspection because mold sometimes grows in places where it can’t be readily seen, such as inside walls, making its discovery beyond the scope of the inspection. Also, the dangers to human health are from the inhalation of spores from indoor air.
Most people with healthy immune systems have little or no problem with inhaling spores. A few people whose immune systems are compromised by lung disease, asthma or allergies can develop serious or even fatal fungal infections from mold spore levels that wouldn’t affect most people. Every home has mold and mold colonies can grow very quickly, given the right conditions. Mold can be a safety concern, but it often isn’t. The dangers represented by mold are a controversial subject. Other potential safety issues also fall into this category.
Above: the cutting torch and gutter system of roof drainage management
System Defects
Although the majority of the inspection is visual, the InterNACHI Standards of Practice do require inspectors to operate space and water heating equipment, and air-conditioning equipment, if it can be done without damaging the equipment.
Inspectors will also examine the major accessible components of certain systems as required by the Standards of Practice. Furnace air filters are one example.
A home inspection is not technically exhaustive, meaning that systems or components will not be disassembled as part of the inspection. For example, an inspector will not partially disassemble a furnace to more accurately check the condition of the heat exchanger. Inspectors typically disclaim heat exchangers.
Hazardous Materials
Asbestos, mold, lead, water purity, and other environmental issues or potential hazards typically require a specialist inspection, and may additionally require laboratory analysis.
Home Inspectors are Generalists
Home inspectors are not experts in every home system but are generalists trained to recognize evidence of potential problems in the different home systems and their major components. Inspectors need to know when a problem is serious enough to recommend a specialist inspection. Recommendations are often made for a qualified contractor, such as a plumber or electrician, and sometimes for a structural engineer.
Above: the result of subfloor movement
Inspector Qualifications
Very few home inspectors have been in the inspection industry for their entire working lives. According to an InterNACHI poll, about half the home inspectors have a background in the building trades. Those with a construction background started with a general idea of the systems and components that they might find installed, as well as how those systems age and fail.
This doesn’t mean that inspectors with a background in something other than the building trades are not qualified – only that they started in the inspection industry at a relative disadvantage. Building the skills and developing the judgment to consistently recognize and interpret evidence correctly and make appropriate recommendations are things that can be improved with practice and continuing education.
Above: improper electrical splice
Managing Expectations
Part of a home inspector’s job is to manage the expectations of their client. This is especially true when a client has never dealt with a home inspector before. Explaining the limitations of a home inspection to a client will help them develop realistic expectations concerning what to expect from a home inspection report, and what lies beyond the scope of the inspection.
When a home buyer is interviewing inspectors, the buyer should ask about how the inspector handles special safety concerns.
Disclaimers are portions of an inspection agreement or report in which an inspector notifies the client that the inspector will not accept the responsibility for confirming the condition of a portion of the home or of a particular system or component.
Creating realistic expectations in a client’s mind will help prevent misunderstandings and promote smooth real estate transactions.
Borrowed from International Association of Certified Home Inspectors
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In The News
April 6th, 2010 Categories: Buying real estate, Real Estate News, Selling real estate
In Keeping Matters Current this morning, they highlighted that it matters what you read when it comes to understanding the real estate market.
I can’t present this any better:
Whenever a market is evolving rapidly, the most difficult thing to do is keep up with the changes. A home seller or a home buyer in today’s real estate market must make sure that they understand what is happening and why it is happening. They can then guarantee that they are making an informed decision in regard to what is best for themselves and their families.
The Goal
Keeping abreast of what is happening in today’s real estate market is no easy task. You may feel that you are doing a good job of staying on top of market fluctuations. You may read all the pertinent data and stories from all the best media sources. However, it is not just having the information but also being able to analyze the information that truly matters. And that is not easy.
The Challenge
Let’s look at two headlines from last week and a quote from each article:
Home Price Index Edges Up – Wall Street Journal 3/30/2010
The seasonally adjusted (prices) increased 0.3% in January from a month earlier, the eighth consecutive monthly increase. … The report “indicates that the worst of the declines are behind us and we can at least move forward from here,” said Adam York, an economist with Wells Fargo Securities.
Home Price Dip Extends to 4th Month – CNN Money 3/30/2010
After a five-month run-up in home prices starting last spring, prices have now fallen for four consecutive months … The market seems to have pulled the rug out from under housing industry hopes for a sustained early recovery.
I purposely left out to which report each article was referring in order to make a point. Each article was using as the foundation of their headline and story the SAME REPORT – the S&P/Case-Shiller Home Price Index of 20 cities.
So here we have the Wall Street Journal and CNN Money reporting on the same exact news but coming up with widely opposite conclusions. One used the month-over-month numbers and one used the year-over-year numbers. Will most people understand the nuances and be able to determine what they mean?
The Solution
In today’s market, whether you are buying or selling, you need a dedicated professional to help you analyze the preponderance of information available.
You need someone that is willing to take the time to understand what is happening and why it is happening. They must also be willing to sit down and simply and effectively explain what it means to you and your family.
As Dave Ramsey, the personal finance guru, said:
“When getting help with money, whether it is insurance, real estate or investments you should always look for someone with the heart of a teacher, not the heart of a salesman. About eighty five percent (85%) of the people in the financial world know how to sell and tell you what to do. They don’t know how to teach you what you are doing. Stay away from them.”
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One Good Reason To Buy That Home Now
March 24th, 2010 Categories: Buying real estate, Mortgage
There are any number of reasons that a realtor will give you to buy a home now. And looking back over the past year, if you had listened, your home could be worth up to 10% more than you paid for it last spring.
This spring things aren’t much different, except mortgage interest rates have never been so low.
There are now whispers about the possibility of interest rates going up. And quite honestly, there is no where else for them to go. When that happens affordability comes into question.
The following table shows you how a 1% increase in interest rates will dramatically change your monthly costs, or decrease the value of the house you can buy.
Interest rates will be going up. Will you be ready?
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8 Tips to Guide for Your Home Search
March 14th, 2010 Categories: Buying real estate
1. Research before you look. Decide what features you most want to have in a home, what neighborhoods you prefer, and how much you’d be willing to spend each month for housing.
2. Be realistic. It’s OK to be picky, but don’t be unrealistic with your expectations. There’s no such thing as a perfect home. Use your list of priorities as a guide to evaluate each property.
3. Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and closing costs. Then, talk to a lender and get prequalified for a mortgage. This will save you the heartache later of falling in love with a house you can’t afford.
4. Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion, but be ready to make the final decision on your own.
5. Decide your moving timeline. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area? All of these factors will help you determine when you should move.
6. Think long term. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in this home for a longer period? This decision may dictate what type of home you’ll buy as well as the type of mortgage terms that will best suit you.
7. Insist on a home inspection. If possible, get a warranty from the seller to cover defects for one year.
8. Get help from a REALTOR®. Hire a real estate professional who specializes in the area you are looking in and will represent you. Unlike the listing agent, whose first duty is to the seller, a buyer’s representative is working only for you. Buyer’s reps are usually paid out of the seller’s commission payment.
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9 Ways to Lower Your Homeowners Insurance Costs
March 10th, 2010 Categories: Buying real estate
1. Raise your deductible. If you can afford to pay more toward a loss that occurs, your premiums will be lower.
2. Buy your homeowners and auto policies from the same company and you’ll usually qualify for a discount. But make sure that the savings really yields the lowest price.
3. Make your home less susceptible to damage. Keep roofs and drains in good repair. Retrofit your house to protect against natural disasters common to your area.
4. Keep your home safer. Install smoke detectors, burglar alarms, and dead-bolt locks. All of these will usually qualify for a discount.
5. Be sure you insure your house for the correct amount. Remember, you’re covering replacement cost, not market value.
6. Ask about other discounts. For example, retirees who are home more than working people may qualify for a discount on theft insurance.
7. Stay with the same insurer. Especially in today’s tight insurance market, your current vendor is more likely to give you a good price.
8. See if you belong to any groups—associations, alumni groups—that offer lower insurance rates.
9. Review your policy limits and the value of your home and possessions annually. Some items depreciate and may not need as much coverage.
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The Financial Post states that Mortgage changes target ‘reckless’ buyers: Flaherty
February 26th, 2010 Categories: Buying real estate, Mortgage
Here is an explanation of the new mortgage rules:
OTTAWA — Jim Flaherty, the Finance Minister, says he is targeting “reckless” speculators who buy up multiple condominium units in the country’s biggest cities with new rules introduced yesterday that will make it tougher for Canadians to get a mortgage….
<…>
“The measures will not affect the ability of a Canadian family to buy a house. It will affect those who are speculating,” the Finance Minister said. “What we’re getting at is the speculation in multiple condominium units in particular which we see in Vancouver, Montreal, Toronto and in some other places in Canada.”
Home builders were taken aback by the measures introduced, saying they could result in “severe implications” for the condo and housing markets.
The changes, scheduled to come into effect on April 19, will make it harder for first-time buyers to qualify for government-backed mortgage insurance — from either Crown agency Canada Mortgage and Housing Corp. or private-sector providers — which is required if down payments are less than 20% of the property’s value.
Borrowers now have to meet standards for a five-year fixed-rate mortgage, even if the buyer wants a shorter-term, variable rate product.
Some analysts, however, indicate the shift is not as big as it appears. Eric Lascelles, chief economist at TD Securities, said the revamped rule likely means the minimum household income cutoff for Canadian mortgage applicants would be about $5,000 to $8,000 higher.
Further, Ottawa has raised the minimum down payment on rental income properties — where the buyer does not plan to live — to 20% from 5%.
Mr. Flaherty said one goal is to protect Canadians from overextending themselves financially as interest rates are likely to climb from present historic lows. The other, he added, is to root out speculation in real estate, which he suggested was happening with greater frequency based on prebudget consultations….
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SUMMARY OF CHANGES
*Borrowers must qualify for a five-year fixed rate mortgage instead of a three-year loan when calculating gross debt service and total debt service ratios.
*Refinancing will be capped at 90% for government-backed high-ratio mortgages versus 90% previously.
*A down payment of 20%, instead of 5%, will be required for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.
WHAT CHANGES MEAN FOR A $337,000 HOUSE
*The difference between a three-year mortgage rate and a five-year mortgage rate is currently in the range of about 50-100 basis points. The average house in Canada costs $337,000, which means that this change will require that mortgage applicants have the capacity to absorb an extra $2,500 per year in mortgage costs than in the past, according to calculations by Eric Lascelles at TD Securities. Effectively, the minimum household income cut-off for Canadian mortgage applicants is now about $5,000-8,000 higher than it was previously, to fulfill the new rule.
Financial Post
pvieira@nationalpost.com
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When to buy or sell? Is Now a Good Time, or Not?
December 10th, 2009 Categories: Buying real estate, Selling real estate
All over the United States, realtors and home owners are looking at the recovery of the Canadian real estate market and are wondering how we did it. Some areas in the US are still experiencing the bust that the market became since 2007. Canada’s housing market has recovered with such rabid fervor, it has left many of us scratching our heads.
With seasonally adjusted monthly sales hitting an all-time record and prices five percent higher than the peak in 2007, homeowners selling now are flush with Christmas cash.
“Extrapolating this trend echoes Buzz Lightyear’s mantra, ‘to infinity and beyond!’ Back here on earth, however, this latest housing cycle raises a number of concerns,” says Pascal Gauthier, an economist at TD Bank Financial Group.
The challenge with the run in a market like this is that homes become over-valued and increase faster than personal income. That pushes affordability beyond many consumers.
“In all likelihood, as affordability declines in response to higher prices and rates, demand will soften and price increases will moderate,” says Sal Guatieri, senior economist for BMO Capital Markets. “However, if prices continue to leap-frog incomes in coming years, the odds of a market correction will escalate, especially if interest rates exceed neutral levels.”
Mr Gauthier responds saying that the danger isn’t that the real estate market will coast more than expected in the near future, but “the risk is rather that the market remains as hot as it currently is for too long, eventually running head-on into monetary policy tightening (and longer term bond yields rising). There is more than adequate time for the housing market to cool before then, but history suggests that if it fails to do so, the ensuing adjustment would be a rude awakening.”
The real estate market could slow for a number of reasons: pent-up demand from the earlier stall is erased; an increase in the supply of listings will help to moderate prices; and buyers waiting for the flurry to die down or trying to cash in while interest rates are still low.
Both economists are concerned about rising household debt in Canada (it was in the paper again today). Guatieri has watched household credit grow twice as fast as personal income since 2002. Gauthier warns that the cost of debt will be rising during the next few years, and “while most households can handle this rebalancing act, those already overstretched or getting into homeownership on th margins of affordability would do well to plan ahead by building up equity and saving through other means.”
Nothing is certain. And the crystal ball is cloudy. Deciding to buy or sell a home is a personal decision. Whatever the market is doing, educate yourself and make the best decision for you.
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GTA REALTORS® Report Mid-Month Resale Housing Market Figures
November 19th, 2009 Categories: Area interest, Buying real estate, Real Estate News, Selling real estate
TORONTO, November 18, 2009 - In the first two weeks of November, Greater Toronto REALTORS® reported 3,666 sales – up 84 per cent compared to the first two weeks of November 2008. The average price for these transactions was up 10 per cent year-overyear to $415,066.
Increased interest in ownership housing has been widespread throughout the GTA and across all housing types,” said Toronto Real Estate Board President Tom Lebour. “However, it is important to point out that we are now making comparisons to the fall of 2008 when we experienced a marked decline in sales and average price”
Year-to-date sales, at 78,233 are up 11 per cent compared to 2008. Average price, at $393,180, is up by three per cent.
“Sales and average price in the GTA this winter will be well above levels reported throughout the fourth quarter of 2008 and the first quarter of 2009,” according to Jason Mercer, TREB’s Senior Manager of Market Analysis.
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