SHOULD YOU HIRE A REAL ESTATE AGENT?

You want to sell your home. Now what? Do you list it privately or go with a real estate agent? It truly depends on your timeline, energy, asking price, the amount of commission you're willing to pay, etc.

Relying on a realtor’s guidance can greatly reduce stress and save you time and energy. They arrange all the showings and navigate negotiations. Their industry expertise can increase your home’s appeal to potential buyers. You can leverage their network of contacts to find trusted inspectors, contractors, attorneys, etc. Finally, they handle all the paperwork!

Whether you get a realtor or not, these tips for selling your home will still be helpful.


TIPS FOR SELLING YOUR HOME #1: KNOW THE MARKET

The real estate market is complex. One of our tips for selling your home is to know the climate of the market and understand who has the advantage – the seller or buyer. Lower inventory combined with quick sale rates gives the seller the advantage. Higher inventory combined with slower sale rates gives the buyer the advantage. This can fluctuate based on the economic situation, national interest rates, your location, and many other factors.


TIPS FOR SELLING YOUR HOME #2: DECIDING A LIST PRICE

Before listing your home, one of the tips for selling your home is to evaluate its worth to determine your list price. The best way is by using a Comparative Market Analysis (CMA). A CMA is often provided by a realtor at no extra cost. This analysis will consider factors such as the features in your home, significant upgrades or renovations, the tax-assessed value of your property, and the selling price of comparable homes in your area.


TIPS FOR SELLING YOUR HOME #3: PICK THE RIGHT SEASON

There are many variables surrounding your home-selling journey, so choosing the right time of year to sell will be unique to you. Here are some tips for selling your home considering the real estate market trends in each season.


Winter typically has lower inventory, making it easier to attract buyers and bids. There are some disadvantages to selling in the winter, though. Major snowfall can make it difficult for potential buyers to see important home features including the foundation and landscaping. Try to list before the first snowfall to avoid this challenge. Read our blog about moving in the winter.


Spring and summer are the busiest time for the housing market. An active market will have more listings, and more competition for you as a seller. You may have to list during this time out of necessity. If that’s the case, consider listing your home at a more competitive price to attract more bids.


If you are not in a rush and want to avoid a lot of market competition, autumn is the ideal time. There are fewer homes on the market, making it easier for your home to stand out. You also have the gorgeous weather and fall colours to enhance the beauty of your location.


TIPS FOR SELLING YOUR HOME #4: STAGING & MARKETING

Before you list, you need to create a strong first impression for potential buyers. This is where staging and marketing come in. Before having photos taken, you will need to stage your home. Staging allows viewers to easily envision it as their own when you remove clutter, and de-personalize the space. You may hire a home staging company, but you don’t have to be a pro to do it well. 


To market your home well, include these important details in the listing:


  • Good-quality, professional photos
  • Photos of your home’s exterior and yard (in various seasons)
  • Aerial photography and videography of property and neighbourhood (can increase the potential sale of your home by 64-85%)
  • Share major selling features and unique details about the home (fireplace, finished basement, rental potential, custom cabinetry, etc.)
  • Provide information about local amenities (parks, schools, public transit, shopping, etc.)


TIPS FOR SELLING YOUR HOME #5: SHOWING YOUR HOME

Most interested buyers will want to see your home in person in some capacity. There are a few ways you can do this – allow them to book a private home showing, schedule an open house for multiple viewers, or arrange for a virtual tour.


TIPS FOR SELLING YOUR HOME #6: OFFER TIME

Ideally, you will get multiple offers and choose the best one for you. You can accept, counter, or reject any offers you receive. Look out for offers with contingencies where certain conditions must be met for the sale to go through. They buyer’s conditions may require a home inspection, an appraisal, secured financing or sale their home.


When you have found the right buyer and are ready to accept it, review the offer carefully with a lawyer. There may be additional requests such as the inclusion of appliances or a request to repair an outstanding issue before they agree to take possession. Your lawyer will help ensure that all the paperwork goes through to transfer ownership.


Now that you’ve reviewed our tips for selling your home, you should be well on your way to getting some great offers. If you are also purchasing a new home or making significant renovations, contact a BIG broker today. Our BIG team is always here to find you competitive rates, answer any questions, or update your home insurance policy.

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The uncertainty between rising house rents and being able to afford to purchase a home is a looming one.


In case you missed it, the Canadian government increased the policy interest rate yet again to 1.5 per cent.


If you are wondering why, here’s the reason.


The inflation rate in Canada has been on the rise. Many people across all provinces in Canada can attest that their favourite grocery and household items now cost a bit more than they did a couple of months ago due to inflation.


One of the ways the Canadian government is trying to keep things in check and bring back some form of normalcy is by increasing interest rates. This economic policy of quantitative tightening aims to curtail excessive spending and money circulation and, in turn, combat inflation.


However, with interest rates increasing, Canadians are facing the heat of higher lending costs. Lending rates pegged to the policy rate, such as variable mortgage rates, line of credits, or other variable rates, are increasing and are expected to continue on this path.


More recently, fixed mortgage rates are also beginning to reflect the increase in policy rates and the current state of the economy. Two years ago, a 5-year fixed mortgage for 25 years was as low as 2.34%. In 2022 similar mortgage agreements are seeing rates as high as 4.94%.


Higher mortgage rates aren’t the only housing financial struggles that the average Canadian is facing. The real estate industry has been buzzing with everyone talking about the substantial increases in the prices of residential homes.


It’s no news that house prices in British Columbia have been exceptionally high. Home ownership has been accessible to only a few residents. The current increase in house prices has exacerbated the inaccessibility of home ownership.


Most people who hoped to purchase homes are discouraged by higher home prices and increasing mortgage rates. The decision to buy a house or keep renting has become even more difficult.


Should you buy a home, or should you keep renting?

Suppose you have crossed the hurdle of saving up the down payment for a home purchase. Higher housing prices and mortgage rates mean two important things.


The price of the home you initially wanted to purchase may have gone up, and so would the required down payment. Also, closing on a house would cost you more in terms of interest rate payments than it would have a year ago. Essentially, more money is leaving your pockets for the same house.


Additionally, you need to consider the stress test. The stress test is one aspect of buying a house that most people tend to sideline. With higher interest rates, many Canadians would be qualified for homes with lower values.


What this means is that, given your income level, if you would have qualified to purchase a home of about $500,000, higher policy interest rates will result in you qualifying for a lower valued house, say at $350,000.


The circumstances around higher home prices and increasing interest rates almost force you to ditch the idea of purchasing a home. Buying a home means you would need a higher down payment and also pay higher interest rates.


While the decision to keep renting may seem like the more feasible choice, the question remains — would rental costs stay the same?


With the increasing inflation rates, landlords may gear towards increasing rents. In fact, the average cost of renting a one-bedroom unit in Vancouver has increased by 18.12% year-over-year to $2,334 as of May 2022.


The uncertainty between rising house rents and being able to afford to purchase a home is a looming one.


On the one hand, home ownership allows you to build equity in a real estate property, but you are constrained by higher home prices and caught up with higher mortgage interest payments.


On the other hand, while renting may be the more feasible option, you can only hope that landlords do not continue to increase rents substantially.


In the end, as the name suggests, the personal finance decision to buy a house or keep renting is personal. Owning a home comes with additional financial responsibilities such as home maintenance, property taxes, and house insurance, amongst others. If renting is a cheaper option for you, then, by all means, choose the best option for your financial situation.




Article By: Adeola Ojierenem

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For investors that want to diversify and protect their portfolios against the wild oscillations of the public markets, Canadian real estate could provide a high-quality source of long-term performance, according to TD Asset Management’s Head of Global Real Estate Investments.

“Real estate in Canada is amongst the highest-quality real estate in the world from a market perspective,” Colin Lynch told Wealth Professional in a recent interview.

While the real estate sector’s strength can also be impacted by other variable economic factors, Lynch says it also derives significant strength from demographic trends. The Canadian market, he says, benefits significantly from Canada’s pro-immigration policy, which creates significant demand for housing on top of raising productivity in the labour force.

Real estate investments also benefit from the perspective of stability. While there’s no challenging the role of stocks and bonds as mainstays in the average investor’s portfolio, the performance record of equity and bond markets can vary significantly depending on the period that’s being evaluated.

Looking at a six-month period versus a 12-month period, Lynch says, could spell the difference between a public market index being up 20% and being down 30%. And while asset prices can turn quickly in the public markets based on reports of earnings, policy declarations, and other headlines, the performance of real assets is a lot less elastic, thanks in part to the more patient nature of investors that allocate towards it.

“In the private real estate market, you have similar sets of institutional or individual owners transacting at a far lower frequency, with some transactions based off of valuations, discounted cash flows, and other factors,” he says.  

“There’s a lot more going on in the public markets, where aside from institutions, you have individual investors and computer-based algorithms driving and competing for investment flows.”

The other benefit in the Canadian context, Lynch says, is the high quality of the market. A survey of the different commercial real estate segments across Canada, he says, reveals many players that will benefit not just from tailwinds like the post-COVID reopening and the continued demand for e-commerce, but also due to the inherent strength of their portfolio holdings and the quality of their balance sheets.

“Now, that doesn't mean the market can't fall. Certainly, we would say there has been depreciation in the market,” he says. “But I would say from a fundamental perspective, we have a very strong outlook of demographic growth in Canada, which does provide a bit of a bastion of stability and long-term performance.”


Article By: Leo Almazora

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Canada’s largest bank might be its largest real estate bear after last month’s sales. This week RBC explained to investors that a Canadian real estate correction is here. Following downward revisions to the bank’s forecast, key markets reported further erosion. They see the correction spreading wider, and may be the deepest in half a century. 


Canadian Real Estate May See The Deepest Correction In 50 Years

Key Canadian real estate markets reported last month’s sales, and the data wasn’t great. Toronto and Vancouver both reported sharp drops in sales and price, as we’ve discussed this week. Other large markets are also starting to show eroding exuberance as well. 

“The housing correction now runs far and wide across Canada,” said Robert Hogue, assistant chief economist at RBC. “In the Toronto and Vancouver areas, the decline in activity is quickly becoming one of the deepest of the past half a century.” 

Higher interest rates were the catalysts for the correction, according to the bank. However, the sudden realization that prices can’t rise forever has tempered exuberance. After such a rapid climb, buyers aren’t likely to respond very quickly to falling prices.

RBC suggests markets that have seen smaller price growth may be better off, but that’s a big maybe. Even more affordable markets like Calgary and Montreal are feeling the impact.


Not Just Toronto and Vancouver, But Smaller Markets Are Slowing

Key indicators for Toronto and Vancouver real estate show a correction has begun. Hogue says Toronto is now the slowest in at least 13 years, excluding April 2020 lockdowns. In addition, active listings are up 58% and Toronto’s MLS HPI down 13% since March — about $178,000 lower. Just the drop in July was $47,000, and the market has only been in free fall for a few months. Already sentiment has turned on a dime.

Vancouver real estate is doing only slightly better, according to the bank. Seasonally adjusted activity is down 40% over the past four months, according to the bank. Greater Vancouver home prices have dropped 4.5% ($57,000) since April. It might sound small so far in contrast to Toronto, but RBC sees that changing soon. 

“We think this correction [in Vancouver] is still in its early stage. Buyers in the Greater Vancouver area—the most sensitive to interest rates in the country—face further pressure as the Bank of Canada pursues its hiking campaign and affordability reaches suffocating levels,” says Hogue.  

More affordable large markets weren’t expected to see much of a slowdown, but it may not be the case now. Calgary home prices reached a cyclical peak in April, explains the bank. Montreal has yet to release MLS HPI data for July, but the bank sees the median price as a turning point.

“This development took place across the region, suggesting a broad-based price correction may be underway,” he warns. Adding, “We expect property values will continue to ease in the near term as the market adjusts to higher interest rates.”


Canadian Real Estate Correction To “Intensify and Spread”

The correction has barely made a dent in recent gains, but is expected to pick up speed in the coming months. The bank is forecasting the Bank of Canada will hike rates by another 75 basis points in the Fall. It’s expected to “keep chilling” the market, as inflation forces more credit throttling.

“We expect the downturn to intensify and spread further as buyers take a wait-and-see approach while ascertaining the impact of higher lending rates.” 

The data comes a few days after RBC made downward revisions to its Canadian real estate forecast. Typically the country’s markets have been resilient in a downturn. Markets have managed to avoid any significant national price correction since the 90s. The bank warns that luck has run out.

RBC now forecasts a “historic” correction for Canadian real estate. It  might sound like bad news, especially for one of the country’s largest mortgage lenders. However, they don’t see it that way. They said it should be a “welcome” event after the run over the past two years. Higher shelter costs have been diverting capital from the productive economy. This will lead to a permanent slowdown for economic growth, which is much worse than a few points off housing.



Article by: Daniel Wong

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