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Home Series: Selling Your Home During the Holidays – More Tips – Ask Bruce Coleman, Vancouver Mortgage Broker

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 Selling Your Home During the Holidays – More Tips

Attract homebuyers even during the holidays with these useful tips!

The holiday season from November through January is often considered the worst time to put a home on the market. While the thought of selling your home during the winter months may dampen your holiday spirit, the season does have its advantages: holiday buyers tend to be more serious and competition is less fierce with fewer homes being actively marketed. First, decide if you really need to sell. Really. Once you've committed to the challenge, don your gay apparel and follow these tips from FrontDoor.
 

1. Deck the halls, but don’t go overboard.
   Homes often look their best during the holidays, but sellers should be careful not to overdo it on the decor. Adornments that are too large or too many can crowd your home and distract buyers. Also, avoid offending buyers by opting for general fall and winter decorations rather than items with religious themes.
    
2. Hire a reliable real estate agent.
   That means someone who will work hard for you and won't disappear during Thanksgiving,Christmas or New Year's. Ask your friends and family if they can recommend a listing agent who will go above and beyond to get your home sold. This will ease your stress and give you more time to enjoy the season.
    
3. Seek out motivated buyers.
   Anyone house hunting during the holidays must have a good reason for doing so. Work with your agent to target buyers on a deadline, including people relocating for jobs in your area, investors on tax deadlines, college students and staff, and military personnel, if you live near a military base.
    
4. Price it to sell.
   No matter what time of year, a home that’s priced low for the market will make buyers feel merry. Rather than gradually making small price reductions, many real estate agents advise sellers to slash their prices before putting a home on the market.
    
5. Make curb appeal a top priority.
   When autumn rolls around and the trees start to lose their leaves, maintaining the exterior of your home becomes even more important. Bare trees equal a more exposed home, so touch up the paint, clean the gutters and spruce up the yard. Keep buyers’ safety in mind as well by making sure stairs and walkways are free of snow, ice and leaves.
    
6. Take top-notch real estate photos.
   When the weather outside is frightful, homebuyers are likely to start their house hunt from the comfort of their homes by browsing listings on the Internet. Make a good first impression by offering lots of flattering, high-quality photos of your home. If possible, have a summer orspring photo of your home available so buyers can see how it looks year-round.
    
7. Create a video tour for the Web.
   You'll get less foot traffic during the holidays thanks to inclement weather and vacation plans. But shooting a video tour and posting it on the Web may attract house hunters who don't have time to physically see your home or would rather not drive in a snowstorm. 
    
8. Give house hunters a place to escape from the cold.
   Make your home feel cozy and inviting during showings by cranking up the heat, playing softclassical music and offering homemade holiday treats. When you encourage buyers to spend more time in your home, you also give them more time to admire its best features.
    
9. Offer holiday cheer in the form of financing.
   Bah, humbug! Lenders are scrooges these days, but if you've got the means, then why not offer a home loan to a serious buyer? You could get a good rate of return on your money.
    
10. Relax — the new year is just around the corner.
    The holidays are stressful enough with gifts to buy, dinners to prepare and relatives to entertain. Take a moment to remind yourself that if you don't sell now, there's always next year, which, luckily, is only a few days away.

Home Series: 13 tips for selling your home in winter – Consult with Bruce Coleman, Vancouver Mortgage Broker

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13 tips for selling your home in winter

Sure, there are fewer buyers and the skies are gloomy. So warm and brighten up the place; make it look like a refuge from the weather.

What makes selling a home more stressful? Selling it in the middle of winter.

The lawn is brown, the weather is usually bad and, unlike the longer days of summer, you have less time to show it off during daylight hours.

But not everyone has the luxury of waiting until the traditional spring or summer home-buying season to plant that “for sale” sign. And while it’s true that in most areas you’ll probably have fewer buyers during the winter, you will have less competition from other sellers.

The season makes staging — the concept of showing your house at its best — even more important.

Be prepared to put a little effort into it. “It’s more difficult to make something look really appealing this time of year,” says Ron Phipps, broker with Phipps Realty in Warwick, R.I.

If you do it right, you can really make your house stand out.

1. Keep snow and ice at bay.
The top tip from agents: If the buyer can’t get in easily, the house won’t sell. That means keeping walkways and driveways free of the frozen stuff. Just like trimming the lawn in the summer, you want to make the home look like it’s been maintained. If you’re away frequently or live in an area that’s subject to bad weather, it can pay to hire a service to regularly salt or shovel the driveway and sidewalks.

2. Warm it up.
If you’re showing during the winter, think “warm, cozy and homey,” says Ken Libby, owner of Stowe Realty in Stowe, Vt., and a regional vice president of the National Association of Realtors.

Before a buyer comes through, adjust the thermostat to a warmer temperature to make it welcoming. “Sellers like to turn the temperature down because of heat costs,” says David Ledebuhr, president and owner of Musselman Realty in East Lansing, Mich., and a regional vice president of the National Association of Realtors. “But buyers who come in and aren’t comfortable won’t stay long.”

If you have a gas fireplace, turning it on right before the tour can give the house a little ambience, Libby says.

With a wood-burning fireplace, you’ve got to be a little more careful. If the house is vacant, don’t chance it. But if you’re still living there and will be there during the tour, it can be a nice touch.

Many times, sellers leave right before the agent and prospective buyers arrive. In that case, adjust the heat to a comfortable temperature and have the hearth set for a fire. Buyers feel the warmth and see the potential, and you don’t have to worry about safety concerns.

3. Take advantage of natural light.
“Encourage showing during the high-daylight hours,” Ledebuhr says. At this time of year, “if you show after work, you’re totally in the dark.”

Make the most of the light you do have. Have the curtains and blinds cleaned and open them as wide as possible during daytime showings. Clean all the lamps and built-in fixtures, and replace the bulbs with the highest wattage that they will safely accommodate. Before you show the house, turn on all the lights.

4. Get the windows washed.
“Buyers act on the first impression,” Ledebuhr says. Windows are one thing that many sellers don’t even consider. In winter, that strong southern light can reveal grime and make it look like the home hasn’t been well-maintained.

5. Play music softly in the background.
To create a little atmosphere, tune the radio to the local classical station. Turn it down so that you barely hear it in the background. “It’s soothing,” says Libby, who finds that soft classical music tends to have the most appeal to buyers. “I think people tend to stay around a little longer and look a little longer.”

6. Make it comfortable and cozy.
Set the scene and help the buyers see themselves living happily in this house. Consider things such as putting a warm throw on the sofa or folding back the thick comforter on the bed. Tap into “the simple things this time of year that make you feel like you’re home,” Phipps says.

7. Emphasize winter positives.
Is your home on a bus route or some other vital service that means it’s plowed or de-iced regularly in bad weather? Be sure to mention that to the buyers.

8. Set up timers.
You want your home to look warm and welcoming whenever prospective buyers drive past. But you’re not home all the time, so put indoor and outdoor lights on timers, Phipps says.

Look at the outside lighting around the door. Is there enough illumination to make it inviting? If not, either get the fixtures changed or have new ones added.

9. Make it festive.
Even if you’re not actually going to be present, greet your buyers as if they were going to be guests at a party, Phipps says. Set up the dinner table with the good china and silver. Have a plate of cookies for your guests, some warm cider or even chilled bottles of water.

“First impressions are so powerful,” Phipps says. “If it looks like you’re expecting me and greeting me as company, that’s a powerful impact.”

10. Give the home a nice aroma.
The No. 1 favorite? “Chocolate-chip cookies,” Libby says. “Just about everybody likes that smell.”

Other popular scents: cinnamon rolls, freshly baked bread, apple pie, apple cider or anything with vanilla, cinnamon or yeast.

“But don’t overdo it, either,” Ledebuhr says. Scented candles in every room or those plug-in air fresheners can leave buyers wondering what you’re trying to mask.

Watch the bad smells, too. Pet smells, smoke and musty odors can cling to curtains and carpets. Ask your real-estate agent or a friend to give it a sniff test. Then clean the house, air it out and replace drapes, carpets or rugs before you show it.

11. Protect your investment.
Some sellers (or their agents) will ask buyers to either remove shoes or slip on paper “booties” over their footwear before touring the house. Many buyers like that, Phipps says. It indicates a “pride of ownership and meticulousness that resonates with buyers,” he says.

12. Use the season to your advantage.
While the holidays are over (and the Christmas and Hanukkah stuff should come down), you can still use winter wreaths and dried arrangements around the door to spark interest. “Anything seasonally appropriate is fun,” Phipps says.

In the winter, with the leaves off the trees, you might also have a nice view that isn’t as apparent in the spring and summer months. It’s a great time to sell waterfront properties, Phipps says. “You can see the views better this time of year.”

13. Consider the area.
In some parts of the country, such as ski areas or warmer regions where the snowbirds flock, winter weather can actually be a selling point. “We’re right in the middle of our selling season,” says Libby, who is located in Vermont. “It’s not always spring and summer.”

By Dana Dratch, Bankrate.com

Mortgage Consumer Research from Maritz – Consult with Bruce Coleman, Vancouver Mortgage Broker

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Thirty-year mortgages remain a focus for OSFI – Consult with Bruce Coleman, Vancouver Mortgage Broker

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TARA PERKINS – REAL ESTATE REPORTER

Canada’s banking regulator is still monitoring 30-year mortgages, the head of Canada’s financial regulator told a conference of mortgage brokers in Toronto on Monday.

In recent years there has been a shift in the marketplace, with lenders offering more 30-year amortizations, and that’s something that the regulator is studying, Julie Dickson, the head of the Office of the Superintendent of Financial Institutions said.

“We are getting more information and talking to institutions about that,” she said.

While Finance Minister Jim Flaherty changed the mortgage insurance rules in July of 2012 to cut the maximum amortization of insured mortgages to 25 years, uninsured 30-year mortgages are still available for consumers who have a downpayment of at least 20 per cent.

Roughly half of all new uninsured mortgages now have 30-year amortizations, Ms. Dickson said.

“This is a market that continues to bear very close watching,” Ms. Dickson told the conference during a speech, referring to the country’s housing market broadly. “We continue to closely monitor real estate lending.”

She noted that the regulator considered tightening the mortgage-lending rules that banks must follow, known as “guideline B20,” this spring and decided not to make any changes at that time.

“Prudent lending practices should not change over time,” she said during her speech.

“It’s a dynamic mortgage market, so we’re constantly monitoring and getting a lot of information still,” Ms. Dickson told reporters afterwards. “We’re still analyzing and I expect that we’ll continue to do this for a long time, but we need to be ready to act if we feel we need to act.”

Ms. Dickson said the regulator will not weigh in on whether or not a bubble has formed in Canada’s housing market, because to do so could encourage banks to lend more or create an unnecessary slowdown.

“The continued strength of housing prices across many Canadian cities in the second half of 2013 is undeniable,” she said.

“Some might suggest that all is well in the mortgage market because delinquencies are low and credit score of borrowers are high,” she said. “However, delinquency rates and credit scores are lagging indicators that can deteriorate rapidly if economic conditions worsen. So OSFI encourages financial institutions to pay considerable attention to the quality of borrowers, both in the current environment and potential future environments.”

That being said, Ms. Dickson did point out some ways in which Canada’s mortgage lending is more prudent than in some other countries.

Meet the interest rate that really affects your life – Consult with Bruce Coleman, Vancouver Mortgage Broker

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BRYAN BORZYKOWSKI – Special to The Globe and Mail

Alex Thomas, a Toronto public relations professional, was smart to have locked in a 3.39-per-cent mortgage interest rate in July. Rates have increased since then. ‘By the time we got our mortgage, the rate had already gone up twice.’
(J.P. MOCZULSKI FOR THE GLOBE AND MAIL)

Alex Thomas couldn’t have chosen a better time to lock into a five-year, fixed-rate mortgage. The Toronto-based public relations professional locked in a 3.39-per-cent rate for 120 days at the beginning of July. He bought a house in October, but if he had waited any longer, his monthly payments would likely have gone up.

Why? Because Canada’s long-term interest rates have been steadily climbing since June. When Mr. Thomas locked in, the 10-year Government of Canada Benchmark Bond – the rate that’s most closely tied to mortgage rates – was about 2.4 per cent. It has steadily been rising since then, hovering around 2.6 per cent.

“I’m glad we got preapproved,” he says. “By the time we got our mortgage, the rate had already gone up twice.”

When it comes to interest rates, most of the attention is on the Bank of Canada’s overnight rate, which governs short-term lending. But it’s long-term fixed income rates that have the most affect on people’s wealth. Rising five-year, 10-year and 30-year yields impact everything from mortgage rates to portfolio returns.

Unlike the overnight rate, which the Bank of Canada is responsible for moving, the long-term rates shift based on what’s happening around the world.

For most of last year and until late May, the 10-year Government of Canada bond rate was in the 1.6 per cent to 2 per cent range. Then, U.S. Federal Reserve chairman Ben Bernanke said that he might slow down the U.S. government’s quantitative easing program – it’s been buying $85-billion (U.S.) worth of its own bonds since last fall.

That announcement caused long-term bond rates to rise around the world.

“The Bank of Canada had nothing to do with that,” says Darcy Briggs, a portfolio manager with Franklin Templeton Investments. “These rates are greatly affected by events occurring outside of the bank’s control.”

For house hunters like Mr. Thomas, the most obvious impact of rising rates is higher fixed-mortgage costs, says Mr. Briggs. According to Ratehub.ca, in May Canadians could get a five-year fixed rate for 2.64 per cent. That rate is now closer to 3.4 per cent.

Variable mortgage rates are based on the overnight rate, explains Mr. Briggs, so those costs haven’t increased this year.

Rising rates have also had an impact on certain investments, but especially on bond values, says Allan Small, a senior investment adviser at HollisWealth. When yields rise, bond prices fall, he explains.

“If a bond issue today is paying 6 per cent and an old bond is paying 5 per cent, then who would want the bond that’s paying less?” he asks. “That lower-paying bond then gets sold at a discounted price.”

In June of 2012, the Government of Canada issued a 10-year bond for about $100. Because rates have risen, that bond is now worth about $90.

“People in retirement have flocked to bonds because they’re low-risk investments,” Mr. Small says. “But over the last couple of months, they see their portfolio down, even though the stock market is going up, and they’re wondering what’s going on.”

However, it’s not just falling bond prices that have affected wealth. Certain equities are affected by higher rates, too. Investors who hold real estate investment trusts and utilities will have noticed that returns have fallen.

These two sectors typically offer higher-than-average yields, which is attractive in a low interest-rate environment. When bond rates rise, though, the risk and return properties of these stocks become less attractive. It starts making more sense to own a more stable fixed-income instrument than an equity investment, Mr. Briggs says.

“At 1 per cent, that bond doesn’t look as attractive, but it gets better at 2 per cent,” he explains. “That makes the outlook for other investments not as bright.”

This doesn’t matter as much to investors who are solely in the market for income, says Mr. Small. Hold a bond to maturity and you’ll still get the same return as you would have when you originally purchased it.

If you want to sell a stock or bond, or want to see your portfolio rise, then you may be out of luck.

“If you’re concerned about the value of your portfolio, then you have to be mindful of the risk.”

To minimize the impact of rising rates, Mr. Small avoids bond funds, which don’t have a maturity date and often fall when rates rise. He buys the actual bond for clients because he’s able to hold the security to maturity and receive the full payout he was entitled to when he purchased the bond.

“I know at some point in the future, it will reach its maturity date, so I don’t care about the price,” he says.

Some investors may also want to pare back their exposure to real estate investment trusts, utilities and other interest-rate-sensitive stocks, Mr. Small says. If rates continue to rise, then these stocks could be hit again.

Instead, consider owning some bank stocks. Financial institutions also pay attractive yields, but they benefit from rising rates – higher rates allow them to make more off the dollars held in savings accounts.

For Mr. Thomas, the only affect rising rates would have had on him would have been on his mortgage. He doesn’t yet invest, but he’s planning to start. When he does, he says he will keep his eye on where rates are headed.

“I’m reading about what’s going on with rates,” he says. “That could impact where I put my money.”

Canadian homes slip in affordability – Ask Bruce Coleman, Vancouver Mortgage Broker

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TARA PERKINS REAL ESTATE REPORTER — The Globe and Mail

Higher mortgage rates and house prices have eroded the affordability of Canadian homes for the second quarter in a row.

But the impact was largely confined to the markets for detached bungalows and single-family homes, which are becoming more of an unaffordable luxury in many parts of Toronto, Montreal and Vancouver, Royal Bank of Canada’s economics department suggests in a report to be released Wednesday.

Condos, on the other hand, saw only a small deterioration in affordability, as an abundance of new supply is keeping prices in check.

The difference between ownership costs for single-family houses and condos hit near-record levels, with the measures of affordability for the two types of dwellings registering the second-widest gap since the mid-1980s during the third quarter of this year, according to RBC chief economist Craig Wright.

The divergence speaks to the degree to which rising house prices, as opposed to other factors including rising mortgage rates, are having an impact on affordability.

RBC’s housing affordability measure, which looks at what proportion of a typical household’s monthly pre-tax income must go to the cost of owning a home, rose 0.7 percentage points to 43.3 per cent for detached bungalows; 0.6 percentage points to 48.9 per cent for two-storey houses; and only 0.1 percentage points, to 28 per cent, for condominiums.

“Even though affordability of all housing categories remains within manageable levels overall in Canada, single-family homes represent more of a stretch for home buyers than they have historically, whereas condo apartment affordability is closer to its historical norm,” the report states.

“By the third quarter, stronger resale activity across Canada heated up home prices a few degrees, though primarily in single-family home categories,” Mr. Wright said. “At the same time, Canadian bond yields rose in tandem with those in the U.S., climbing in anticipation of the Fed tapering its bond-buying program. These factors translated into the first notable increase in mortgage rates in Canada this summer since the second quarter of 2011 and, ultimately, contributed to a slip in affordability.”

Mortgage rates have risen by more than three-quarters of a percentage point since May.

The increases in home prices and mortgage rates overshadowed income gains, but “the lessening of affordability that resulted from this combination of factors was mild overall and did not pose any immediate threat to the general health of the housing market,” the report said.

RBC economist Robert Hogue said he expects house prices to be flat next year, although they might maintain their upward trajectory during the first half of 2014 before weakness sets in. The near-term strength comes as demand for homes has slightly outpaced the degree to which sellers are putting up new listings.

But he expects that bond yields will drift upward over the course of the next year, contributing to a further slight increase in mortgage rates.

“Across the country, housing affordability continues to be the poorest, by far, in the Vancouver area, where the latest RBC measures are significantly above their long-term average,” the report said. “At the other end of the spectrum, affordability in Alberta and the Atlantic region still looked reasonably attractive for the most part in the third quarter.”

Ottawa to introduce ‘risk fee’ on CMHC insurance – Consult with Bruce Coleman, Vancouver Mortgage Broker

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Canada will impose a “risk fee” starting Jan. 1 on mortgage insurance provided by the country’s housing agency to compensate taxpayers for potential losses in the housing market.

Canada Mortgage & Housing Corp. said the fee to the government will be “3.25% of premiums written and 10 basis points on new portfolio insurance written,” according to a financial report today for the three months ended Sept. 30.

“We certainly don’t expect it to have any impact on the availability or cost of mortgage funding,” CMHC chief financial officer Brian Naish said on a conference call with reporters today. “We don’t see it as a material event.”

The fee is the latest attempt by Finance Minister Jim Flaherty to rein in the agency amid concerns the nation’s housing market may be overvalued. The government-owned agency insures mortgages against default, and its insurance is fully backed by the federal government. By law, Canadian mortgages that have less than a 20% downpayment must be insured.

Private-sector mortgage insurers already pay a levy of 2.25% on their premiums, said Stephanie Rubec, a spokeswoman for the federal finance department. The government set the CMHC fee higher, at 3.25%, because it guarantees 100% of CMHC insurance, compared with only 90% backing for private insurers, she said.

Risk Compensation

“The fees compensate the government for risks stemming from its guarantee of mortgage insurance,” she said in an e- mail. “This measure supports the government’s continuous efforts to reinforce the housing finance framework.”

The move may raise mortgage rates by as many as 10 basis points, or 0.10 percentage points, an increase that probably won’t have a major impact on housing demand, said National Bank Financial analyst Peter Routledge.

“What the government’s trying to do is really lean into the interest-rate wind and, in a very targeted way, keep the cost of borrowing” for households steady, he said by phone from Toronto. “They’re trying to tighten the interest-rate environment in one very targeted segment of the economy.”

Portfolio insurance refers to coverage on mortgages with a downpayment greater than 20%. Financial institutions often buy such insurance in bulk so they can repackage home loans as securities for investors.

Under a law governing the agency, the government has the authority to impose fees to “compensate for exposure,” Naish said, adding the fee will result in an annual payment to the government of about $50-million per year.

The agency is reviewing the impact of the fee on the portfolio insurance it offers to lenders, he said.

CMHC had $560-billion in outstanding mortgage insurance at the end of September, down 6.3% from the end of last year, it said today in its quarterly report.

www.bloomberg.com