David Setton : Answers In Real Estate

Part of my presentation from a wine and cheese event my wife and I hosted last week. Let me know if you would like to attend future wine and cheese events.

My wife and I hosted a wine and cheese event last week. Here is a video of my presentation.

Market Update from the Vancouver Real Estate Board for May 2013

Download the full Report Here......

I always advise my clients to declutter before putting their home on the market. Believe it or not, this can add thousands to your selling price. As an added benefit, a big purge means that when it’s time to move, it’ll be easier and cost you less.

When faced with rooms full of junk and basements and storage lockers bulging at the seams, it's easy to feel overwhelmed. Even I sometimes don't know where do you start? The next question to pop into your head is "How do I get rid of all of this stuff?" I interviewed a few local professional organizers for advice.

Start the decluttering process at least a month in advance; longer if you have a large home or have been living there for a long time. Give yourself enough time. Most people underestimate how long it will take to declutter a home. Spend at least a couple of hours per day in the month leading up to the open house sorting and getting rid of stuff.

Before digging into the crawl space where you store old memories and photos, start with the present; with the stuff that you see every day and are less attached to like chipped dish sets, old clothing, and children's toys. After the first round you will be surprised at how good it feels to rid your self of these items.

Next it's time to get ruthless. Arm yourself with plenty of heavy-duty black garbage bags, then designate sorting areas: donate, sell or consignment, and toss.

Things like broken and rusty appliances or torn or stained clothing headed for the trash pile are the easiest to determine. Deciding what to keep versus what to donate, sell, or even recycle can be tougher.

Evaluate each item and ask yourself what purpose it serves. Is it irreplaceable? When was the last time you used it?

What are the chances that your next new printer will come without a cable? Recycle the old cables you held on to for years.

Only keep what you need, use, and love. People tend to use only 20% of their things 80% of the time. Most people live in fear of, "What if I need it?" It is important to get over this fear when decluttering and realize that less is more.

Once you’ve determined what to lose, start offloading your cast-offs before you lose momentum. Here are some resources to help you along your clutter-busting journey:

Things like expired medication, batteries, antifreeze, or broken appliances have to be disposed at the appropriate depots. Find out what goes where here:

Metro Vancouver Recycles: Select a material type and enter your postal code for a list of depots, charitable locations, and consignment stores near you. Or download their free mobile app.

Freecycle.org: Join people around the world getting rid of stuff on this grassroots community page.

There’s no shortage of charities to which you can donate clothing, household goods, and small appliances. Some of them, such as Big Brothers and the Canadian Diabetes Association offer free home pickup.

SCROLL DOWN TO SEE GRAPH

 Official Market Type Westside Detached: Balanced market at 16% Sales Ratio average (1.6 in 10 homes selling)

 Homes are selling on average 5% below list price

 Most Active Price Band* +/-$2 mil: $1 mil to $1.25 mil (2 in 3 selling); $2.5 mil to $2.75 mil (Balanced market)

 Buyers Best Bet* +/-$2 mil: Homes $1.75 mil to $2 mil; minimum $4.5 mil, Mackenzie Heights, South Granville and Southlands

 Sellers Best Bet*: Selling homes in Cambie, Kitsilano, Quilchena and maximum 2 bedroom properties

Market Update from the Vancouver Real Estate Board for April 2013

Download the full report here.....

Applying for a mortgage can be overwhelming. To help you feel more confident, I've put together a list of the top ten most common challenges and how to avoid them.

1. Not knowing your credit rating.

Lenders can use your credit rating to verify your repayment history. As part of your approval process, your lender will obtain and review your credit report. Should you want to review your own report ahead of time, you easily request a copy from either www.equifax.ca or www.tuc.ca.

2. Being unrealistic about how much you can afford to pay.

You may be under or over estimating how much you can afford to pay for a home. Start by checking my online mortgage calculator. You can input different down payment amounts to give you an idea of the maximum mortgage payment you can afford each month.

3. Not considering a firm mortgage pre-approval.

Knowing the mortgage amount you will be approved for gives you the confidence to begin looking at homes within your price range. Make sure that you are unconditionally and firmly approved.

4. Thinking you won't qualify for a mortgage.

Not sure if you qualify for a mortgage due to your credit history being less than perfect? You should still seek to get formally pre-approved, as many banks can help find a solution.

5. Not knowing all the down payment choices.

You will be glad to konw that there are different options available depending on how much down payment you can afford. Low down payment mortgages (below 20% down) require mortgage default insurance and the premium can be added to the amount you borrow. First-time homebuyers are eligible to use up to $25,000 in RRSP savings per person for a down payment

6. Focusing too much on the interest rate, rather than the overall solution.

All too often buyers give more thought to interest rates than the mortgage solution itself. While rates are a valid consideration, the type of mortgage, payment structures, terms and flexibility will have a greater impact on your overall cost of borrowing.

7. Understanding your interest rate risk tolerance.

Choosing a fixed or variable rate term can be difficult. Get expert advice to help you decide which mortgage solution works for you based on your tolerance for interest rate increases. MOst lenders now have a combination mortgage which means you can enjoy the advantages of both variable and fixed rates.

8. Not choosing your own mortgage payment schedule.

Customize your amortization period depending on how much you can afford. If you decide to take a longer amortization, consider a strategy to reduce amortization of your mortgage by making extra payments along the way.

9. Forgetting about closing costs.

It helps to know what closing costs are so you can minimize last minute complications. When calculating costs, assume you will need approximately 1.5 per cent of the purchase price.

10. Not understanding the ongoing costs of owning a home.

A suggestion is to budget a least one per cent of the home's value for yearly maintenance expenses including heating, electricity, water, repairs and taxes. If you live in a condo, keep informed about future strata fee increases or assesssments.

Video Market Update from the Vancouver Real Estate Board for March 2013

Download the full Market Report

Welcome back to my 7 part home buyer's guide designed to teach you everything that you need to know about buying a home in Vancouver.

Whether you are purchasing your first home or your third, this series will help you to navigate the complexities and financial implications of your purchase. Part 1, Are You Financially Ready, can be found here. Parts 2 and 3, Consider your Mortgage Options and Mortgage Default Insurance, can be found here. Parts 4 and 5, Government Programs and Finding a Home can be found here. This newsletter contains the final sections, Parts 6 and 7, Making and Offer and Closing and Related Costs.

Part 6: Making an Offer

After seeing many different homes, you have finally found one worthy of an offer! What are the next steps?

What is an offer?

An offer is a formal, legal agreement to purchase a home and is legally binding once accepted by the seller. Offers to purchase a home can be made conditional on factors such as financing or a home inspection. If any of the conditions are not met, you can change or cancel the offer, even if the seller has already accepted it.

Do you have your money ready?

You will need to present a deposit within one week of having an accepted offer (after subject conditions are removed) or right away if you are writing a non-subject offer. The amount varies based on the home's purchase price and the market. It is usually around 5%.

Do you have up-to-date identification?

The federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act(PCMLTFA) requires REALTORS® to identify clients involved in the buying and selling of real estate. REALTORS® need to record your name, address, date of birth and occupation for their files which are kept for at least five years. They need to see valid government-issued ID. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) provides more information about the Act on its website: www.fintrac-canafe.gc.ca.

Part 7: Closing and Related Costs

Closing costs are the legal, administrative and disbursement fees associated with buying a home. Understanding these fees will help you budget more accurately. Remember these are additional costs over and above the price of the home.

How much land transfer tax will you have to pay?

The land transfer tax is a one-time tax levied by your province when you purchase a property. The tax is based on a percentage of the purchase price of the property, and varies from province to province. Some municipalities also charge a land transfer tax (for example, Toronto).

Have you budgeted for the associated legal costs?

Legal costs cover your lawyer’s fees or notary’s fees. These may include:

• Reviewing the terms of the offer

• Conducting a title search on the property

• Registering a new title

• Obtaining relevant documents, such as surveys and evidence of liens on the property

• Checking the statement of adjustments for taxes, utility and fuel bills, and other costs that have been pre-paid by the seller at the date of closing

Do you need a home inspection?

A home inspector assesses a property’s condition and can tell you if something is not working properly, needs to be changed, or is unsafe. They may be able to identify where there have been problems in the past, such as a leaking basement or termite damage.

What other costs can you expect?

• Interest adjustments between date of closing and first mortgage payment

• GST/HST on a new home or a home that’s been extensively renovated

• Service charges from utility companies for hook-ups on electricity, gas, internet and telephone services

• Appraisal fees

• Moving costs

• Storage costs if you must leave your current residence before you are able to move into your new home

• Furniture and appliances

• Real estate commissions

VALUE POINT 1

REALTORS protect the interests of their clients

VALUE POINT 2

REALTORS are licensed

VALUE POINT 3

REALTORS are members of a professional association

VALUE POINT 4

REALTORS follow a Code of Ethics

VALUE POINT 5

REALTORS put their duties and obligations in writing

VALUE POINT 6

REALTORS listen and explain

VALUE POINT 7

REALTORS communicate

VALUE POINT 8

REALTORS meet mandatory education requirements

VALUE POINT 9

REALTORS use the MLS to help clients buy and sell properties

VALUE POINT 10

REALTORS explain the costs involved

LOCATION: Choosing Where You Live

1 Green neighbourhoods: Buy a home in a neighbourhood close to work, transit, shopping, community centres and other services.

2 Transit-oriented density (TOD): New, compact, complete green neighbourhoods are being built with transit as their focus. Instead of owning a car, join a car share cooperative, take transit, cycle or walk.

3 Lower Cost Luxury: If it’s features such as a gym or pool you want, buy a strata unit with these amenities and share costs.

4 Score your location: Walkable neighbourhoods offer health, environmental, financial and community benefits. Enter your address or the address of a home you want to buy at www.walkscore.com. This tool calculates a walkability score based on the home’s proximity to transit, grocery stores, schools and other amenities.

HOME IMPROVEMENT: Heating and Cooling

5 Get an energy audit LiveSmart BC will cover $150 of the cost.

6 Install a high-efficiency heating system Make sure it’s ENERGY STAR rated.

7 Weatherize your home From windows (BC Hydro provides grants of $60-$120) to doors to insulation and weather stripping. Don’t forget to seal your ducts.

8 Insulate your pipes It will prevent costly heat loss. Here’s how.

9 Insulate your hot water heater Buy a pre-cut jacket or blanket for $10–$20. You’ll save up to 10% on heating costs.

10 Install a programmable thermostat Set it lower at night and during the day when you’re away. Lower the temperature. Each degree below 20C saves you 3-5% on heating costs.

11 Clean your furnace filter This optimizes performance.

12 Get the most from your fireplace Here’s how to make it efficient.

13 Use curtains In the daytime during summer, close to help cool your home.

14 Install ceiling fans The energy it takes to run a fan is less than an air conditioner. In summer, make sure the fan’s blades are rotating anti-clockwise for a cooling effect. In winter, the fan should be running clockwise, pushing the warm air down.

15 Use an electic fan Skip the air conditioning. On hot summer days, place a bowl of ice in front of a fan to cool down.

WATER

16 Fix leaks. Fix leaking taps One drop per second equals 7,000 litres of water wasted per year.

17 Install a filter Stop buying costly bottled water which adds to the landfill.

LIGHTING

18 Change your light bulbs Lighting accounts for 15% of your energy bill. Replace old bulbs with ENERGY STAR rated bulbs. Check for rebates.

19 Sensor lights Turn lights off outside when not in use.

20 Keep it dark: Light pollution is an increasing problem. Turn off outdoor lights to save energy and encourage night life such as bats and frogs. A single bat can eat tens of thousands of mosquitoes nightly. If you have safety concerns, use motion detector lights – which come on, only as needed.

21 Holiday lights Use LED lights.

KITCHEN

22 Replace your fridge An old energy guzzling fridge costs you about $85 a year to operate. Replace it with an ENERGY STAR fridge. BC Hydro will rebate you $50. BC Hydro will also not only come and pick up your old fridge free-of charge, they’ll rebate you $30.

23 Replace your dishwasher Buy an ENERGY STAR appliance. BC Hydro will rebate you $25.

24 Replace your freezer Buy an ENERGY STAR appliance and BC Hydro will rebate you $25.

BATHROOM

25 Low flow shower Hot water accounts for 25% of your energy costs. For a $15 investment you can save half the water of a standard shower say experts.

26 High efficiency or dual flush (you choose the amount of water used) toilets These are now required in new homes because of water savings.

OFFICE

27 Use smart strips Also known as power bars, this lets you power off all equipment at the same time.

28 Buy energy smart electronics There are rebates available.

29 Recycle your old electronics Here’s how.

YARD IMPROVEMENT

30 Conserve water Fresh water comprises just 3% the world’s total water supply, so conserve. Get a rain barrel and harvest water you can use in your garden. Local governments such as Vancouver and Richmond will subsidize the cost.

31 Drip irrigation It saves water compared to sprinklers.

32 Elbow grease Don’t power wash your driveway. Sweep it or use a scrub brush and pail.

33 Less lawn Lawns waste water. Instead conserve and beautify using indigenous plants such as ferns, tiger lilies and hostas.

34 Grow your own How much more will you spend on food this year? Even a few miniature fruit trees and a small vegetable garden in a raised bed or in containers will help keep you healthy and save you dollars. Lettuce, spinach, tomatoes, cucumbers, strawberries and blueberries thrive in our climate. Here’s how.

35 Preserve your produce Invest in home canning jars and equipment and a small freezer and enjoy your produce year round – at considerable savings. Here’s how.

36 Bee friendly We need bees to pollinate, so get a few plant beefriendly annuals such as asters, marigolds, sunflowers, zinnias; or perennials such as clematis, foxgloves, hollyhocks, roses or shrubs such as Buddleia.

37 Go chemical-free “Get rid of weeds without using chemicals that harm us and our pets,” advises REALTOR® and Richmond City counselor, Derek Dang, who led the way to a bylaw banning cosmetic pesticides. His suggestion, “Use dish detergent or weed by hand.”

38 Plant fruit trees They’ll give you shade and fruit. Plum, apple, pear and more.

39 Compost It will make your garden grow and divert waste from the landfill.

GREEN AND CLEAN

40 Clean green Vinegar, baking soda and lemons clean as well as expensive, chemical-filled cleaning supplies for a fraction of the cost.

41 Green Laundry detergent Use phosphate-free, biodegradable detergent.

42 Upgrade your washing machine Replace your old washing machine with an ENERGY STAR washer that gets clothes clean using cold water and BC Hydro will rebate you $75. Wait until you have a full load instead of washing clothes as you need them. Clean your lint trap after every use.

43 Install a clothesline Dryers use a huge amount of energy.

44 Get a rack If your neighbourhood or strata prohibits clotheslines, buy a small drying rack.

LIVING GREEN

45 Recycle Replace your old washing machine with an ENERGY STAR washer that gets clothes clean using cold water and BC Hydro will rebate you $75. Wait until you have a full load instead of washing clothes as you need them. Clean your lint trap after every use.

46 Buy local Your food doesn’t travel long distances, you support local farmers and the local economy and you consume less pesticides.

47 Don’t use paper or plastic Use cloth bags when you shop or reuse your plastic bags.

FINANCING

48 Borrow green Most financial institutions offer “green” mortgages, including:

• BMO Eco Smart Mortgage offers home buyers a 3.89% rate on qualifying green properties.

• RBC Energy Saver™ Mortgage gives home buyers a $300 rebate for a home energy audit and a five-year 4.34% rate.

• TD Canada Trust offers a Green Mortgage and Green Home Equity line of credit. For each green mortgage TD donates $100 to the TD Friends of the Environment Foundation.

• Vancity offers a Bright Ideas home renovation loan at prime +1% to home buyers and owners making green renovations.

• The City of Vancouver with Vancity offers a home energy loan program for home buyers and owners making energy efficient upgrades at 4.5% fixed rate over 10 years. The loan program is a 12 month pilot project with a goal of 500 homes participating. It will wrap up October 21, 2012. For more information attend a loan info workshop or call 604-374-0507.

• CMHC offers a 10% Mortgage Loan Premium refund and possible extended amortization for buyers purchasing an energy-efficient mortgage or making energy saving renovations.

RESOURCES

49 Green Tool Kit BC Real Estate Association’s Green Tool Kit provides information, references and links. It also provides comprehensive information on rebates and incentives.

COMING SOON

50 Loan programs Pay-as-you-Save (PAYS) loan program will help home owners and businesses finance energy efficiency improvements through a loan from BC Hydro or FortisBC. Expected to launch in 2012.

Video Market Update from the Vancouver Real Estate Board for February 2013

Download the full Market Report

Welcome back to my 7 part home buyer's guide designed to teach you everything that you need to know about buying a home in Vancouver.

Whether you are purchasing your first home or your third, this series will help you to navigate the complexities and financial implications of your purchase.Part 1, Are You Financially Ready, can be found here. Parts 2 and 3, Consider your Mortgage Options and Mortgage Default Insurance, can be found here. This newsletter contains Part 4, Research Government Programs and Part 5, Finding a Home.

Part 4: Research Government Programs

The federal government has assistance programs to help homebuyers. Research government program requirements to see if you are eligible.

Government programs can change over time. For the most up-to-date information, refer to Service Canada’s website:www.servicecanada.gc.ca.

First-Time Home Buyers’ Tax Credit

First-Time Home Buyers’ Tax Credit — a $5,000 non-refundable income tax credit on a qualifying home. The credit provides up to $750 in tax relief to assist first-time buyers with purchase costs. For more information, check the Canada Revenue Agency’s (CRA) website: www.cra-arc.gc.ca.

Home Buyers’ Plan

Home Buyers’ Plan — a one-time withdrawal up to $25,000 from a Registered Retirement Savings Plan (RRSP) by first-time buyers to help purchase or build a home. Generally, you have to repay all withdrawals from your RRSP within 15 years. For more details, visit CRA’s website at: www.cra-arc.gc.ca.

CMHC Green Home program

CMHC Green Home program — when you use CMHC-insured financing to buy or build an energy-efficient home or make energy-saving renovations, you may qualify for a premium refund of 10% on your mortgage default insurance and a premium refund for a longer amortization period (if applicable). Check outCMHC’s website for more information: www.cmhc.ca.

Part 5: Finding a Home

Finding your perfect home can be a long process. I will help identify the right type of home for you and continually research new listings in neighbourhoods that meet your needs.

Check out this webpage to see how I make the home buying process easier for you!

Where do you want to live?

• Urban, suburban or country?

• Will you need to commute? Do you need access to public transit? How much will commuting cost?

• Are there schools nearby? How will your children get there?

What type of home do you prefer?

• Single-family detached homes stand alone on their own lot.

• Single-family semi-detached homes are joined on one side to another home.

• Duplexes contain two single-family homes, one above the other.

• Row houses (townhouses) are several single-family units, located next to one another and joined by common walls.

• Other types of homes include stacked townhouses, link or carriage homes, condominiums and co-op apartments.

What are the types of ownership?

Freehold

You own the land and house and are responsible for everything inside and outside of the home.

Condominium ownership

You own your unit and share ownership of common spaces. The condominium association is responsible for upkeep of the building and common interior elements, such as halls, elevators, parking garages and the grounds. You pay a monthly fee to the condominium association to cover maintenance costs. The fee varies but can often include utilities, TV services and taxes. You may also have to buy or rent your parking space.

Condos often have strict rules regarding noise, use of common areas and renovations to units. Be aware of your condo’s rules before putting in an offer.

Co-operatives

Similar to condos but instead of owning your unit, you own shares in the entire building or complex with the other residents. Co-op residents pay for maintenance and repairs through monthly fees and are subject to the rules and regulations of the co-op board.

Be aware that if you decide to sell or rent your shares, the co-op board has the right to reject your prospective buyer or tenant. Read the co-op’s rules before making an offer.

For parts 6 and 7 of the series click here...