One of the first things I do when Spring Cleaning time rolls around is check my smoke and CO2 alarms.  No problem; an easy switch of batteries and I was good to go.

 

This year it occured to me it had been a while since I looked at my fire extinguisher.  It looked fine - arrow is in the green portion of the dial.  However, I noticed that you could check to see if there had been any recalls on them at cpsc.gov/recalls  So I did.


And it was a good thing I did!  My extinguisher is a smaller one and has a plastic handle and tip.  Turns out those plastic handles have been known to jam and the tip is a danger for flying off and hurting people.  There had been one death reported due to problems.  So it has been recalled and needs to be replaced with a better one!  


So, long story short - check your fire extinguishers.  There would be no worse feeling than trying to put out a fire and have your extinguisher not work or injure someone.

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You've found the home of your dreams but unfortunately, these days a whole lot of people seem to have the very same dream!


Here are some tips for success in this Sellers' Market where multiple offers on the same property are the norm, not the exception.


1.  Work with an experienced agent who is familiar with the area and knows the other realtors in that area.  Offers that come through someone with a great reputation and good rapport with their colleagues gives you a headstart.


2.  When you get a call to come and look at a property, don't delay.  These days there is a short window of opportunity.  If you want to have a second visit and time to get your ducks in a row, act fast.


2.  Write an offer with as few conditions as possible to make it very attractive.  Make sure you've done your homework by:

     a) Having your financing all lined up with a pre-approval letter from your lender in hand showing that you are a capable buyer that can complete the deal without any hiccups.  A good mortgage broker can run your numbers taking taxes and maintenance fees into account to let you know your "bidding" limits

     b) Bring an inspector with you to your viewing if possible to sort out any possible challenges with the property's condition.

     c) Look at as much the documentation prior to viewings as you can.  Your agent can do a title search for you if one isn't available.  Ask for Strata Documents in advance (most listing agents will have them and if they don't, your experienced agent may well be able to lay their hands on at least some of them.)

     d) Check on insurance costs, proximity of fire hydrants, property conditions to ensure your ability to insure at a reasonable rate.


3.  Enclose a letter with photo (or even a short video!) of you and your family outlining why you love this property and how it so perfect for you.  Sometimes a tug at the heart strings is the deciding factor between two very similar offers.


4.  Go in with your strongest possible offer.  Don't be reckless but it's unlikely you'll get a second chance to win this home of your dreams so give it your best shot.





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Now that all the holiday decorations are coming down and our gray winter weather continues, many of us would like to brighten up our homes. January 10 is House Plant Appreciation Day for good reason! This is the time of year when healthy green indoor plants and flowers are especially useful. They even clean the air for us. Here are few pet friendly indoor plants that are inexpensive, easy care: Christmas Cactus, Boston Fern, Parlour Palms African Violets,                          


Garden centres are the best place to buy plants because they will have been well looked after and be in great shape.  Cedar Rim Nursery (www.cedarrim.com) has a terrific selection with excellent online instructions for plant choice and care.  West Coast Gardens (www.westcoastgardens.ca) Centre is closed until February 1, 2021 but you can still order online and have your plants delivered to your home.

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The days of wandering leisurely through a weekend afternoon's Open House just to browse at houses are gone - at least for the foreseeable future.  Here at HomeLife, our agents are asking all potential viewers to read, agree to and sign conditions that show they are indeed serious buyers and willing to take appropriate precautions to keep the homes they view safe for themselves and the sellers.


In order to be allowed to enter a home during this COVID19 pandemic, potential buyers need to have done a lot more homework to make sure it is in actual fact one they really need to see.  Selling agents are all doubling down on getting professional measurements done with floorplans for buyers to preview. Photos and video tours are provided to fully show a property's features.  Municipality bylaws and guidelines for a property's use should be pre-examined.  For strata properties all documentation needs to be ready prior to listing so prospective buyers can read through to see if there is any reason why they wouldn't be interested in buying the unit.  


Sellers and Buyers are all expected wear proper gloves and usually masks as well as use hand-sanitizer while in the home.  Properties will be pre-prepared for viewing by having lights on, doors and cupboards open so noone needs to touch anything.


In some instances, listing agents are doing Virtual Open Houses by walking through the home by themselves with a camera describing the features and answering questions as they come in.


It's different - very different.  But it's working to keep all of us safe while people who really need to buy or sell can reach their goals.  

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This general Information relating to Deferred Mortgage Payment Programs was provided by Lynn McLellan, Dreyer Group Mortgages with Verico  I hope it's of some help in understanding the situation a bit better.  For more in-depth knowledge, contact your lender or mortgage professional.



1.  Deferred mortgage payments are discretionary.

     Lenders maintain the legal right to timely repayment of their mortgages and mortgage payment deferral programs are offered at their sole discretion and each lender has different policies on how they handle these requests.  Note: These programs are generally restricted to "institutional" lenders only.  Private mortgages do not qualify.


2.  No lender is going to forgive your mortgage payment.

     A deferred payment program allows you to roll a defined number of mortgage payments into your mortgage, however, you are still expected to ultimately pay all of the money you owe, with interest.


3.  True financial hardship must be demonstrated.

     These programs are for customers who are genuinely struggling to make their next mortgage payment.  They may have lost their job(s) and/or a portion of their income and they do not have the cash reserves necessary to draw on.  If you are not in this group, you are not likely to be eligible.  However, if you do make the decision to request a payment deferral, please be prepared to submit a detailed breakdown of your personal assets, current income and expenses.


4.  If you do not currently fall into this distressed category, please do not call your lender at this time.

     Lender phonelines are overloaded right now with many calls being from customers who are worried but are not in a situation as per #3 above.  If you are still receiving your normal income and have enough money to make your next mortgage payment, please delay a call to your lender until you are in that situation.  Or better yet, contact the mortgage professional you originally worked with when you obtained your mortgage.  They will be happy to review all of your options with you!


5.  Deferring mortgage payments will not hurt your credit score.

     A lender-approved deferment is not a missed payment and it will not appear on your credit bureau report as such.  Lenders are also typically offering to waive any fees associated with these types of programs during the Covid-19 crisis.


6.  Deferred Payment Programs are typically capped at six months.

     Deferring the first payment will be easier than deferring the second one, and so on.  Right now, six months is about the longest deferment you should expect to receive, but no lenders will do this all at once.  Most of them will require that you reach out with a request for each individual payment that you are going to miss.


7.  Communication is key.

     If you are going to miss your mortgage payment, contact your lender first!  Be honest with them about your circumstances and have a plan for how you are going to get back on track.  If you are about to miss a payment and cannot get through on the phone lines, send your lender an email.  Lenders may waive NSF fees if you miss a payment but can demonstrate that you attempted to notify them in advance.


8.  A mortgage deferred payment program is for your mortgage payment only.

     Property tax installments and insurance premiums are entirely separate from these programs and must continue to be paid.  If municipalities and insurance programs offer similiar programs (which most municipalities are currently doing), they should be contacted separately.


9.  Other options may be available.

     In addition to rolling missed payments back into your mortgage for a specified period of time, lenders also have the ability to refinance your mortgage to pay out other debt (subject to qualification), restore your original amortization (which lowers your payment amount), hold a payment (during a temporary suspension of income), or offer you a reduced payment for a specific time.  We recommend that you contact your mortgage professional to review these other options.  Note: Interest-only payments are usually not available under these programs.


10. Rental property investors may also be eligible.

Property investors with tenants who have stopped making their rent payments will also be considered; however, they will be assessed by the same rigorous standards as noted in #3 above.  Note:  Some provincial governments have introduced tenant relief programs. Rental-property owners can also encourage their tenants who have been adversely impacted by Covid-19 to apply for these programs if available.


Please remember that these are challenging times for not only customers but for lenders themselves.  They are all working extremely hard to try to provide all their customers with first class service and to help those borrowers who are being adversely impacted by Covid-19.  It may take a significant amount of time to reach a customer service representative at your particular lender, so when you do finally get a live person on the other end of the phone, remember that they are doing their best in difficult times and treat them with the respect they deserve.

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Here's a portion of what the Insurance Brokers Association of BC had on their website regarding recent changes in the insurance scene for Strata Corporations:

STRATA INSURANCE RATES ARE RISING 

Over the course of 2019, strata corporations across Canada either received notice of a premium and/or deductible increase on renewal of the building insurance policies, or were advised that they should budget for increases on their next renewal.


In BC's Lower Mainland region, where an estimated half of its total 2.7million residents live in strata-titled property, these increases are having a widespread impact. Some renewals have reportedly increased anywhere from 50% to 300% and the deductibles to cover claims have also increased substantially, from $25,000 per claim to as high as $250,000 and $500,000; at least one building has had its deductible increased to $750,000.


What do Strata Insurance Policies typically cover?


Owners of individual units in the strata building all own a proportionate share of the common property. To help ensure that all owners' equity is protected, the Strata Property Act requires strata buildings to be insured for full replacement value of all common property, common assets and fixtures. This includes the original construction. Insurance valuations must be based on recent appraisals.


Becasue of the ownership structure of stratas and their commercial-grade systems (plumbing, boilers, elec-trical, heating and ventilation) strata buildings are insured with a commercial property insurance policy, which is modified for strata property.


Strata units owners insure their contents, plus upgrades made to the unit, under a "condo" homeowners' policy. These policies include 2 crucial coverages: a) liability insurance to cover damages from losses that origiante in the unit and extend to the common areas or other units, and b) coverage for a portion of the strata building's deductible in the event of a major claim.


How does this impact owners of strata units in BC?


If your strata corporation is faced with a substantial increase in insurance rates, the cost will be reflected in your annual budget that determines your annual strata fees. If the deductible is dramatically increased it means that any claims under that deductible are not covered by insurance and, subject to your bylaws, each owner is likely responsible for the cost to repair common property.


So coverage for owner liability is more important than ever. Unit owners will want condo homeowner insurance that covers their liability in the event of a claim for damages to their unit, as well as the cost of a deductible or the risk of being sued by other owners if they cause a claim.


WHAT CAN YOUR STRATA DO TO LIMIT THE RISK? 

Strata Councils:

1) Be aware that being able to demonstrate long-term stability and a proactive approach to building maintenance will put your building in the best light for risk assessment. In these current market conditions, switching insurance brokerages or insurers may not be in your Strata's long-term best interests.


2) Review your Strata's Depreciation Report to ensure your Strata is meeting regulatory requirements, and that the Report's recommendations are reflected in the building's maintenance and repair plan for items that pose a risk such as roofing, water linese, and drainage systems.


3) If the Strata Corporation is faced with a change in insurance, dramatic increases in cost and deductibles, or the possibility of no coverage, immediately give notice to all owners regarding the changes. Early disclosure helps owners understand the situation & work together to find a solution. Provide the new summary of insurance as soon as it has been renewed so owners can amend their unit coverage accordingly in a timely manner.


4) If your building fails to obtain insurance, contact a lawyer to identify potential liabilies and risks for owners and council members and what next steps you should consider.


5) Repair access or building issues that may risk an injury. Address broken sidewalks, or security issues.


6) Work with owners to manage these common water damage risks:


a) Ensure owners have access to the water shut-offs in their units so they can quickly shut off water

b) Verify all units with washing machines have upgraded their hoses to braided steel.

c) Remind all owners that soft water in Lower Mainland means they can use less soap or with later model appliances, they can use high-efficiency soap. Excess soap suds can build up and block pipes.

d) Regulate or discuss owner activities such as smoking, barbeques on balconies, balcony gas heaters, insuite hot water tanks, and storage of flammable materials.


7) Update your bylaws. Bylaws that present a risk to human rights complaints also increase your risk. Comply with the Strata Property Act and enforce your bylaws.


All Owners:

1) The Strata Council and all owners should work closely with your insurance broker. Invite your broker to your Annual General Meeting to explain the changes to building's insurance.


2) It is imperative that you as a unit owner have property condo insurance for your unit. Your Strata Corp-oration is required to provide all owners with details of all building insurance policies and warranties in effect. Be sure you understand your Strata Building's coverage, limits, and deductibles, and how the Strata and/or your Strata Bylaws may apportion or assign responsibility for deductibe or under-the-deductible losses. Relay those conditions to your insurance broker, who will explain your coverages and options.

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It’s a sure sign of the beginning of the New Year when the BC Tax Assessments for our properties arrive in the mailbox. 


For many years, when the market was robust, the values climbed each year … and in some areas, climbed dramatically.  This year, however, we’re generally seeing a decline in the tax assessment values, particularly in detached homes, while some townhouses and apartments are staying the same or rising slightly.  The situation changes from neighbourhood to neighbourhood – Surrey’s property value change is -4% according to the BC Assessment while Metro Vancouver is -11% on average.


The BC Property Tax Assessment is used by tax authorities to determine the portion of municipal and provincial property taxes homeowners will pay and is based on what is considered to be the fair market value of your property as of July 1 in the prior year.  It doesn’t take into account forces that act within the real estate market such as seller motivation, buyer motivation, and variations in the market within the six months prior to release of the tax assessment notice.  The BC Assessment Department doesn’t rely on individual appraisals of properties when making their recommendations as to value; they source information from land titles, permit applications and approvals, zoning changes, drive-bys, models of apartments buildings to ascertain views and other factors not necessarily related to your individual home.


So when pricing a home to sell (or buy), relying on the Tax Assessment isn’t the wisest thing to do.  Oftentimes in years past, the assessment was significantly lower than selling price because the market was hot.  Now that the market has softened, you’ll see selling prices lower (in some cases significantly lower) than the tax assessed value.  Any property’s value in real estate terms is what a buyer is willing to pay for it.


If you have questions about your property’s assessment, go to www.bcassessment.ca  . Or call 1-866-valueBC (1-866-825-8322 or 604-739-8588).  If you wish to challenge the assessment and file a Notice of Complaint, the deadline for your appeal is January 31, 2020.

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Trish Fedewich, Notary Public with Fedewich & Witt came to our HomeLife Benchmark Realty sales meeting today to share some tips on dealing with Escrow Closing Agreements.


Escrow Closing Agreements come into play when a real estate contract cannot be completed because all the terms agreed upon can't be met.  In some cases, the contract can be extended to allow more time for those conditions to be fulfilled, if all parties are in agreement.  Here are some examples of when an Escrow Agreement might be used:


1)   Sale of a New Residential Property from a Developer to a Buyer when no Registered title is Available on the agreed Completion Date. 


If a strata plan or subdivision hasn't been registered in time for the contracted completion, the Seller may want to mitigate his risks and ensure the Buyer is satisfied and with an escrow agreement. This allows the Buyer to move into the property and the Seller doesn't receive payment until title is transferred.  Some contracts for new homes already include the terms for an escrow agreement in case it may be necessary.  Both parties' legal representatives draft an Agreement that will protect both sides of the contract.  Special care needs to be given in cases where lenders are providing a mortgage for the purchase.  The Buyer needs to ensure the mortgage won't expire prior to the deal being completed and the Seller needs to ensure there is appropriate insurance taken out on the property seeing as the Buyer doesn't actully own the property outright.


2)  Sale of a New Residential Property from a Developer/Builder to a Buyer where there is no Occupancy Permit issued by the Completion Date:


Sometimes there is no final occupancy permit but the Buyer wants to take possession of the property.  This is extremely risky and generally not recommended.  If the City or Fire Department is not satisfied with the property, they can order the Buyer to vacate the property.


3)  Sale of Home from an Estate where Propbate hasn't been granted by the Completion Date or the Seller becomes incompetent and has no valid Power of Attorney.


Title cannot be transferred after a single owner's death or a couple who hold the property as Tenants in Common without Grant of Letters Probate.  If that owner has a partner in ownership in Joint Tenancy, the surviving partner can sell without Probate.


If a Seller becomes ill and/or incompetent between the time the contract is written and completion, and has no power of attorney, the Completion Date may have to be delayed while an applicaiton for Committee of the Seller is obtained.


3)  Sale of Home and A Mortgage Cannot be Released by Completion Date:


Occasionally a Seller may have a very old mortgage on title to the property that is paid out but has never been discharged.  If the lender was a corporation no longer in business or a private individual no longer alive, there's nobody to sign the discharge by the Completion Date.  



There are definitely risks involved in entering into an Escrow Agreement as well as advantages.  Seeking strong legal advice is the best way to proceed in decision making.  


The most important thing I took away from this morning's discussion was the importance placed in looking even more carefully at the Title of a property prior to listing it.  I always look for easements, covenants and charges.  From here on in, I'll also be looking for older mortgage charges and checking them out with the Seller.  I'll also be asking the Seller(s) and Buyer(s) if they have a Power of Attorney. 


The best way to help my clients solve problems is to do my best to help avoid them in the first place.

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You've just received an offer to purchase your home ... and it's low ... really low.  At least it feels really low to you, the seller.  Now what?


1)  Don't take it personally and respond negatively. 

While it may be really difficult to keep your emotions in check, there's no point in getting insulted at a lower offer than you expect or feel isn't fair for your home.  It has been a sellers' market for a few years now but the tide has turned and buyers are in the drivers seat.  Any offer you receive is an opportunity to move on with your plans.


2)  Check again for comparables in your area of homes that are similiar to yours.  

Make sure this offer is  actually a "low ball" offer.  If you've been on the market for a while, there may have been lower sales since your first set your price.  Once you're reacquainted yourself with what current prices and conditiions are, you're in a better negotiating position. 


3)  Assess the offer from all sides. 

Is the buyer's agent a seasoned one or inexperienced? Is the buyer's agent from out of the area and not aware of your property's value in neighbourhood, school catchment, etc.?  Is the buyer an investor to whom this is strictly a numbers game.  (If so, they're likely not going to counter and will just move on)  Are there other factors beyond strictly price that you can work with to be more favourable for you.  For example, moving completion dates up if you've already bought elsewhere or extending them so you won't have to rent while you look for a home and move twice.


4)  Respond with what you'd have used had the offer been acceptable. 

There's nothing to be gained by refusing to talk and quite possibly, something to gain.  The buyer may have just been "trying the price" in case you were desperate.  By responding in a matter of fact manner, you're establishing that you're knowledgeable and willing to negotiate reasonably.  Mention a few relative comparables and features that make your home stand out compared to others.  Be prepared to go back and forth a few times and above all, be patient. 

 

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The latest regulations around the Speculation Tax have been a major topic lately.  This is an Opt-Out tax so even if you don't have to pay the tax, you still have to fill out the appropriate forms to receive an exemption or you could see a hefty tax bill in your mailbox. 


This video outlines a few of the things you need to remember:

1) watch for your letter and if you don't receive it make sure you find out how to get one

2) note the individual codes in the letter required for you to fill out the form online

3) have your Social Insurance Number handy along with the codes

4) all parties on title have to register for each property

5) if you have any questions, call the toll free number 1(833)554-2323 open from 8 til 8 seven days a week.


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The other day I stopped by to pick up a copy of the most recent Seniors Resource Directory for a client.  Over the Christmas holidays, it become more apparent to her and other family members that her Mom was having trouble keeping up with housework, grocery shopping and generally just getting out to enjoy life since her husband had passed away.


When she asked my opinion about selling the house and moving her Mom into a residence, I suggested talking it over as a group with their Mom first and seeing if they could find ways for her Mom to stay where she was.  I mentioned that Come Share was a terrific resource for help in many areas.  Everyone (including Mom!) agreed that staying in her current home was the best option for now if she had some day-to-day help with managing chores and activities that she and her husband had shared.  The family will look it over online while Mom is more comfortable with the paper directory to read.


If you are having some challenges with helping an older family member manage daily life, check out Come Share at www.comeshare.ca   The Society has been actively working with and helping seniors and their families since 1977 and doing a terrific job.  Directory resources and more details are available online.

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It's cold and rainy here on the West Coast (often referred to as the Wet Coast in winter!) and the idea of cleaning gutters is less than appealing.  However, unless they're properly cleaned and maintained, clogged gutters can cause damage to your home.  You're likely up there on a ladder hanging Christmas lights anyway, so take a look at the gutters and do the needful to avoid problems like the following:



Damage to Building's Foundation


Gutters are meant to help keep water away from the foundation of your house.  If water doesn't follow the right path, it could end up pooling close to walls and travel down into your crawlspace or through basement walls.  And that's never a good scenario.                                                                                          .                                                                                                        



Unwanted Guests


Debris in clogged gutters attracts birds, insects and rodents.  Wood fascia boards and roof materials will rot if left sitting in pooled water.  Birds like woodpeckers love to eat insects in rotted wood and will make holes in walls and the roof to get at them   

                                                                     .     


Seeds from plants and nearby trees will sprout in the accumulated dirt and debris in gutters.  The extra weight

will further weaken and damage your gutters and roofing system.

                                                                                                    


Ice Out


Ice damming is the back-up of water against the roof, lifting shingles and other roofing materials, damaging both the roof and interior ceilings and walls by pushing up inside.  In most cases this occurs during cold weather where pooled water in gutters is further blocked by partially freezing.  The worst case scenario is peeling paint, rotting insulation and wood and possibly the growth of mold inside your building.


                         




So, by all means, clean those gutters.  Once they're cleaned of debris, flush them with water from the hose to make sure they're flowing freely and working properly.  If you don't already have them in place, install splash pads where downspouts meet the ground to keep water away from your foundation.                                                                                                                                                 

                                                                                       



If you don't want to clean those gutters yourself, there are lots of companies who can do the job for you.  Just make sure they have insurance for both their Worker's Compensation and Liability.  Call me if you'd like some names of reputable firms to chose from.

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 When you purchase a home, there are many additional costs over and above the price of that property.  See the selection below and be sure you've taken them into consideration to avoid any nasty surprises at completion time! This informative graphic and follow up list was supplied by one of the best mortgage brokers I know and one I often recommend for my clients, Lynn McLellan at Dreyer Group Mortgage Brokers.


 

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Do Christmas decorations help or hinder your sale?  It's always a good idea to think about their effect on potential buyers.  In most cases, less is more.  


While your home is for sale, keep the decorations relatively simple and blending well with your current decor so buyers can see your home's best features instead of being distracted by that 100 piece Christmas Village on your mantle. 


If you decide to do your usual full-tilt decor to keep the family happy, be sure to have your photos done before you decorate.  That way buyers can see what the home looks like under regular conditions and, if the listing doesn't sell quickly, you're not stuck with pictures of Christmas trees in your living room in March!

 
Outdoor lighting definitely makes your home appear brighter, warmer and more inviting -- particularly if all your neighbours have bright lighting.  You don't want your house to the only "dark" one on the street.  However, if you plan on using inflatables in your display, ensure they stay inflated.  There's nothing attractive about a wilted, deflated pile of nylon on your front lawn for a buyer's first impression.
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This is a brief synopsis of activity in the South Surrey White Rock area.  What you see is the first page of a quarterly newsletter I send to all my clients and sphere.  If you'd like to receive it and the ongoing information about the market, please call or email to let me know.  Let's connect!
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Everyone wants to be sure they, their family and their belongings are in a safe, secure environment.  Here are a few steps you can take to reassure yourself:


1)  When you buy a home, work with a local realtor who has personal knowledge of the different neighborhoods to guide you in making a wise choice.


2)  Check local crime statistics.  I follow the South Surrey RCMP site that provides maps of monthly break-in and theft locations throughout the areas in which I help clients buy properties.   The map above shows B&Es for businesses (red squares), and residences (blue squares) and others (gray squares).


3)  Look for Block Watch signage.  If an area has an active Block Watch program, it's likely there's a proactive, cooperative group of neighbors that make a practice of looking out for one another.


4)  Drive around the neighborhood and look for signs of vandalism, graffiti and other indicators.


5)  Talk to people nearby on the street.  There's nothing better than a quick chat with people who currently live there to give you a good feel for the neighborhood.

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People who haven't bought or sold a property in any other market other than the slightly over-heated one of recent years are finding this slower market a challenge.  Why do some houses sell quickly and others not?


How do the homes that are still sitting there stack up in comparison to the ones that seem to "fly off the shelf"?  Several factors come in to play:


1)  Layout:  Size matters but convenient layouts and flexible space will trump square footage.  Today's buyers want to be able to change up the use of the space as their circumstances change.  Clearer spaces without excess "stuff" show how rooms can be better used.


2)  Location:  Buyers can change a home's appearance, even the floorplan, but they can't change the location.  Proximity to traffic and other unwanted elements will make a big difference.


3)  Condition & Upgrades:  Kitchens, bathrooms, windows, heating systems and roof upgrades are major selling points for buyers these days.  Without upgrades, cleanliness and evidence of good maintenance is a must!


4)  Access:  How easy is it to view the home?  Restricted viewing times can dampen buyer enthusiasm.


5)  Marketing:  Today's first impressions are often made online.  Listings need excellent exposure with professional photos, video, floor plans and well crafted descriptions.  Attractive brochures with colour photos and floor plans along with the factual descriptions for buyers to take home after a viewing make your home more memorable.


6)  Price:  Buyers want value for their dollar more than ever.  Today's market demands competitive pricing and proof of value.


If you have questions about selling your home, give me a call.  I'm happy to share what I know with you.



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I read an article recently in Business Negotiations by Katie Shonk about four major challenges that come up again and again in negotiations between buyers and sellers.  I think she's absolutely right about all four; I see it in my real estate practice all the time.  As Katie says, "By bing more mindful of these traps, we can learn to avoid them and get better deals."  I've paraphrased her full article below.  You can read more of her work at Harvard Law School's Program On Negotiation Daily Blog at https://www.pon.harvard.edu

 

 

Pitfall #1:  Overvaluing Your Possessions


Why is it some homes are plucked off the real estate listings within mere days while others sit for months or even years?  Location, condition and curb appeal have something to do with it, but there's another factor -- one that sellers can avoid --  which is the tendency to overvalue one's property.  Some sellers ignore the best advice of their real estate agent's carefully determined valuations and ask for much more than they should.

 

There's a name for this pitfall -- it's called the Endowment Effect.  Basically we all overvalue just about anything we own, no matter how trivial, simply because we own it.  If we were looking at buying a similiar article from someone else, we would have no interest in paying as much as we are asking.  Think about the ads you see on Craig's List for old furniture with high price tags that you think should likely be given away or taken to the dump.  See what I mean?

 

Sometimes the best thing to do, if you don't believe your real estate agent and/or a buyer, is have an appraisal done by an objective third party.  

 

 

Pitfall #2:  Focusing Too Much on Price

 

What's your most important goal when making a sale?  If you're like most of us, getting the best price possible is foremost in your mind.  It's normal for sellers and buyers to place a high premium on meeting their target price in a negotiation. 

 

Sometimes that focus becomes so competitive and focussed that the end goal of actually making the sale or purchase gets lost in only looking at the price.  Perhaps there are other sources of synergy that could enhance the agreement (and the bottom line) such as possession dates, inclusions of fixtures, etc.  When you find buyers or sellers are obsessing strictly about price, try brainstorming ideas for adding more value to the deal on both sides.

 

Pitfall #3:  Compromising Your Ethics


Whatever it is that you are selling, you know far more about that item than potential buyers do.  Because of what Katie refers to as this information asymetry you need to be careful not to take advantage of the buyer because of this when negotiating.  Anything that should be disclosed must be disclosed.  Do not compromise your ethics.  It's extremely tempting to "not mention" the leaky roof in the middle of a hot dry summer, and tell yourself that it's "buyer beware".  If you are found to have been dishonest, you can pay a whole lot more down the road in legal suits and damage to your reputation than you gained in price.


Pitfall #4:  Making Unappealing Offers


Many buyers pride themselves on making "lowball" offers just to show their negotiation skills.  Unfortunately, that often insults the sellers, they become intransigent and negotiations go downhill fast from there. 

 

It's difficult in some cases to provide a reasonable offer that doesn't look like a "lowball" if the seller's price is too high.  (See Pitfall #1!)  But in those cases, provide carefully thought out comparable sales examples and then present your offer in the best light.  Try framing your offer as a gain over the status quo by showing that your offer is at least better than  the one received down the street for a comparable property.  Or mention the provisions you've included that don't address price directly but enhance the agreement in other ways that can effect the bottom line (See Pitall #2!)

 

Awareness of common sales negotiation pitfalls is the first step in overcoming them.  It takes practice and effort but we can all get better results by removing the negative effects of the pitfalls mentioned above.

 

 

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Clients getting ready to sell their homes often ask me to do a "walk through" to let them know what needs to be done prior to selling.  The first thing we talk about is always

de-cluttering.  


The second thing we talk about are there are a few little fix-ups that are easy to do and make a real difference in making the house look clean and inviting. 

 

Fix Up #1:  Replacing Stained or Cracked Caulking around sinks and tubs.  


Removing it is easy with a metal or plastic tool. Hardware stores sell specially designed plastic ones that are inexpensive and super effective.


                       

The tricky part is getting the caulk back in place evenly.  I've found that putting down painter's tape on either side of where I apply the caulking makes it easy, quick and very professional looking. Just be sure to remove the tape before the caulking dries!


 


Fix Up #2:  Change Light Bulbs and Update Light Fixtures


You want your home to be bright and well-lit.  Take your ceiling fixtures down, wash out the little bits of dust and bugs that have accumulated and replace burnt out bulbs with new ones. 


If your fixtures are old and out of style, consider a quick trip to Home Depot or Rona to get an inexpensive replacement from Home Depot or Rona.  It's amazing what a difference it can make in bringing your home up to date. 

  



Fix Up #3:  Painting.  When you Paint Your Walls, Consider Painting over that                           Dingy, Dirty Brick or Stone Fireplace


Not every brick or stone fireplace is created equal.  Some are lovely and could even be brought back with cleaning.  Some just are not.  If you have an fireplace in a family room that just doesn't work, think about painting over it. 


 


These are just a few ideas to get started on now.  I'll add more soon.  In the meantime, each of these is easy to achieve, won't break your budget and will really help to show your home at its best when it comes time to go on the market.

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