10 Worst First-Time Homebuyer Mistakes

10 WORST FIRST-TIME HOMEBUYER MISTAKES

Are you gearing up to buy your first place? Arm yourself with these tips to get the most out of your purchase and avoid making 10 of the most costly mistakes that could put a hold on that sold sign.

Not Knowing What You Can Afford
 What the banks says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same. If you don’t already have a budget, make a list of all your monthly expenses (excluding rent). Subtract this total from your take-home pay and you’ll know how much you can spend on your new home each month.

Skipping Mortgage Qualification
What you think you can afford and what the bank is willing to lend you may not match up, so make sure to talk to your mortgage broker and get pre-approved for a loan before placing an offer on a home. Beware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like finance a car purchase.

Failing to Consider Additional Expenses
Once you’re a homeowner, you’ll have additional expenses on top of your monthly payment. You’ll be responsible for paying property taxes, insuring your home against disasters and making any repairs the house needs. If you’re purchasing a condo, you’ll have to pay maintenance costs monthly regardless of whether anything needs fixing because you’ll be part of a building strata.

Being Too Picky
Go ahead and put everything you can think of on your new home wish list, but don’t be so inflexible that you end up continuing to rent for significantly longer than you really want to. First-time homebuyers often have to compromise on something because their funds are limited.

Lacking Vision
Even if you can’t afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home meets your needs in terms of the big things that are difficult to change, such as location and size, don’t let physical imperfections turn you away.

Being Swept Away
Minor upgrades and cosmetic fixes are inexpensive tricks that are a seller’s dream for playing on your emotions and eliciting a much higher price tag. If you’re on a budget, look for homes whose full potential have yet to be realized. First-time homebuyers should always look for a house they can add value to, as this ensures a bump in equity to help you up the property ladder.

Compromising on the Important Things
Don’t get a two-bedroom home when you know you’re planning to have kids and will want three bedrooms. Don’t make a compromise that will be a major strain.

Neglecting to Inspect
Before you close on the sale, you need to know what kind of shape the house is in. You don’t want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs.

Not Choosing to Hire an Agent or Using the Seller's Agent
Once you're seriously shopping for a home, don't walk into an open house without having an agent. Agents are held to the ethical rule that they must act in both the seller and the buyer parties' best interests.

Not Thinking About the Future
It's impossible to perfectly predict the future of your chosen neighborhood, but paying attention to the information that is available to you now can help you avoid unpleasant surprises down the road.

3 Classic Mistakes Sellers Make when Staging a Home for Sale

Posted by Carole VanSickle on Tuesday, October 11th 2011

According to numerous surveys, potential buyers make critical judgments that determine whether or not they are going to purchase a home within just minutes of entering that home. Some research indicates that they make that decision within seconds of opening the front door! In order to maximize a property’s appeal, it is vitally important to enhance the advantage initiated with good “curb appeal” by staging the interior of the home as well. You have probably heard real estate agents talking about baking cookies to give a home a, well, “homey” feel, but baking alone does not stage a home adequately in today’s competitive market. In this report, we’ll review some of the “classic” mistakes that people make when staging a home and how to fix them for optimal buyer appeal.

Classic Mistake #1: Mistaking Clutter for Décor

You know that you’re supposed to remove your personal items from a staged home when possible to make it easier for buyers to imagine living there themselves. However, you also should stick to minimalism when it comes to “décor” items. The seller’s personal taste should be as little in evidence as possible, which means that not only should the million “Precious Moments” figures be packed away for the sales process, but excessive containers, sprays of dried flowers and even lighting should be removed. Does this mean that you should eliminate all lamps and flour canisters? Not at all! But it does mean that the five tiffany lamps could probably be thinned to one or two and outside of the classic “flour, sugar, coffee and tea” canisters, extra kitchen storage should be out of sight as well. When it doubt, pack it up! Your buyers want to see clean, clear surfaces that are open for their own personal decorative interpretations.

Classic Mistake #2: Out of Sight is Not Necessarily Out of Sight

When you consider purchasing or renting, do you simply walk through a property and then leave? No! You look around; you open closets and you peer inside cabinets to check out the storage options. And in today’s competitive market, storage is huge. So you need to stage the interior of your closets and cabinets the same way you stage the rest of the rooms in a home: with clean, clear lines and surfaces. If cabinets are full of dishes, that’s definitely life. But you want it to be very clear to buyers that they will have plenty of room for storage. Pack up extra dishes, seasonal items and any non-uniform glasses or storage containers so that your cupboards are neat and organized. Is this the way your buyer likely lives? Probably not. Is it how they wish their cupboards looked? Probably so. And giving them the cupboards, cabinets and closets of their dreams could be the thing that pushes a buyer toward your property and away from another one.

Classic Mistake #3: Small Repairs can be a Big Deal

While it may not be necessary for you to oil the hinges on the front gate in order to get a good price on your home, it could make a huge difference in how a would-be buyer perceives your property. Often, sellers are so consumed with major repairs on their homes that they forget the little things. And, unfortunately, it’s the little things that buyers tend to notice. Hit all hinges with a little WD-40 and if you have cracks in the wall, dripping faucets or burnt-out light bulbs in the bathroom vanity, take a few minutes – or even a few hours – to address these tiny cosmetic details before a buyer comes to view your home. It will make the property more inviting and can even make bigger issues like the fact that you couldn’t afford to paint this year seem like something easily-remedied because the buyer has already started to imagine living there.

Staging is definitely a delicate “science,” and there are a lot of schools of thought out there on how to get the most out of your home when it comes to presenting it to buyers. Generally speaking, “less is more” in nearly all staging decisions, so if you opt not to hire a staging professional, just go with your gut when it comes to removing items from the general viewing area and not your emotional attachment to an item. Remember, you get to take that item with you, so if it attracts you personally rather than contributing to the look of a room you are better off removing it so that your buyer can better imagine themselves in that setting.

Thank you for reading this article in the Bryan Ellis Real Estate Letter’s Educational and Training Series.

lawlessbrown.com

Home ownership gets more expensive, but not to pre-recession levels

SUNNY FREEMAN
May 25, 2010 6:22 p.m.

TORONTO - Canadians will find it more expensive to own a home this year and in 2011, as higher interest rates are expected to chip away at affordability even as the rise in home prices begins to subside, two of Canada's major banks predicted Tuesday.

A report by RBC Economics Research released Tuesday said affordability would deteriorate throughout 2010 and 2011 as rising interest rates increase mortgage and other loan payments.

"Some erosion in affordability is going to come from higher interest rates... (meanwhile) prices continue to rise. Combine the two and I think the second quarter you should expect some further deterioration in affordability," said RBC senior economist Robert Hogue.

Canada's hot housing market is coming back into balance between supply and demand following a seller-friendly period in which buyers competed for — and drove up the prices of — the few houses for sale during the first stages of economic recovery.

As demand cools and supplies increase, the pace of price increases will slow, but won't fall fast enough to offset rising interest and mortgage rates, Hogue said.

"I'd be hard-pressed to see any kind of the recent pace in price increases being maintained, but it might not be an outright decline any time very soon," he added.

The RBC report found home ownership costs in Canada rose across all housing segments in the first three months of 2010 — the third quarter of increases in a row.

With the exception of Alberta, home affordability measures deteriorated across all provinces with significant declines in affordability in British Columbia, Saskatchewan and Manitoba. Housing affordability declined more moderately in Quebec, Ontario and Atlantic Canada.

Meanwhile, a new report from the Canadian Real Estate Association found that Canadian home prices are unlikely to undergo the type of sharp correction seen south of the border, where prices plummeted and foreclosures ensued.

The CREA report says the current period of high home prices is a natural part of the demand-driven market cycle.

"The Canadian housing market is now widely thought to be at, or very near, the top of a cycle, and the ratio of home prices to incomes is currently high," said its chief economist Gregory Klump.

The CREA report said the income-to-house price ratio will soon revert to its long-term average as it always does as part of a normal housing market cycle.

"History suggests, however, that it will not do so by means of a significant correction in home prices. The more likely scenario is that home prices will stabilize, giving incomes a chance to catch up again," Klump said.

Unlike their U.S. counterparts, Canadian mortgage holders have borrowed conservatively and are accelerating mortgage repayment, which will give options to those who may face financial difficulties when they renew their mortgage at a higher rate, the report said.

A report on housing affordability by CIBC World Markets on Tuesday suggested about 1.5 million, or 17 per cent, of houses in Canada, are currently overvalued.

CIBC senior economist Benjamin estimated that, on average, Canadian home prices are now around 14 per cent over their "fair" value, adding there would likely be a five to ten per cent price correction in the next few years.

"This pace of appreciation has been quicker than justified by housing market fundamentals such as income, rent or demographic changes," Tal wrote in the report.

"While the booming housing market is starting to come back to earth, the fact that prices are overvalued today does not necessarily mean that they will crash tomorrow," he added.

Tal's report found the average price of a house has risen by nearly 23 per cent since reaching recent cyclical lows in January 2009. And the erosion of affordability — as interest rates rise faster than prices drop — could cause problems for the most vulnerable segment of the population, he said.

CIBC's new home ownership affordability index found that home ownership is increasingly difficult for families with household incomes less than $50,000, who on average spend close to 60 per cent of their gross income on mortgage payments, property taxes and electricity costs.

The report found that Canadians today spend 15.6 per cent of their average gross personal income on mortgage payments, which is about the same as 10 years ago. When adding in electricity bills and property taxes, it rises to about 22 per cent of gross income.

Tal predicted that in the second quarter of the year, affordability will continue to deteriorate, even as prices level off. He added that home prices will fall in the second half of the year and in to 2011, which will improve affordability.

"I don't think affordability will be a major issue over the next two years. I think it will be relatively stable with interest rates rising, but prices actually going down a little bit," he said.

lawlessbrown.com

Recession finally over, but recovery won't give Canadians much to celebrate

JULIAN BELTRAME, THE CANADIAN PRESS
THE CANADIAN PRESS, 2009

OTTAWA - Politicians and economists are warning of tough times continuing despite data released Monday that signal Canada's short and sharp recession ended in June and the current summer quarter will produce the first quarterly growth since last fall.

June's 0.1 per cent output gain was lower than consensus expectations, and other indicators suggest the economy is still not poised for the kind of bounce-back that would set champagne corks popping, analysts noted.

More worrisome, several economists said a double-dip slump was still a possibility for next year once extraordinary U.S. government spending peeters out.
The sobering outlook served to pour cold water on what a few months ago would have been considered shockingly good news - that after almost a year of contraction, output actually increased, and is likely to continue to grow throughout the year.
Technically, the recession will not be declared over until complete numbers on third quarter activity, the July to September period, are known later this year.
But economists say that is a formality, since enough is known about how the economy fared in July and August to make growth in the third quarter a foregone conclusion.
Technically a recession is defined as two successive quarters of economic shrinkage. Canada's economy began contracting in the 2008 fourth quarter and continued the stagnation in the first and second quarters of this year.

Merrill Lynch chief economist Sheryl King said the rebound could actually hit three per cent in the third quarter, far higher than the Bank of Canada's call for a 1.3 per cent annualized advance.

For Transport Minister John Baird, any sign of growth was a welcomed, but he too cautioned that the recovery remains "tentative and fragile.""
"This is and will continue to be a difficult year for the Canadian and global economy ... we are not out of the woods yet," Baird told reporters in Ottawa, warning the opposition parties against triggering an election that would disrupt needed government spending on construction.

Going forward, economists expect output to experience a spurt during this quarter, in part because the second quarter was weaker than expected, and in part because of the auto sector restart in July.

But most agree any fast sprint from the stand-still of the past 11 months will be illusory, and that growth will be sluggish the rest of this year and through much of 2010.

As the Bank of Canada has warned, the resurgent loonie, if the strength persists, will weigh down on the export sector. As well, household indebtedness in the U.S., and to a lesser extent in Canada, will keep consumer demand in check.
Meanwhile, the back-up of unsold goods in factories remain high, which is expected to keep employment and production growth weak even if demand picks up.
Since October, 414,000 net jobs have vanished in Canada, and by some estimates, another 100,000 could well be lost through the rest of the year before employment begins to revive.

"The rise in GDP in June and a lot of other indicators we have do indeed suggest the recession ended around mid year," said Douglas Porter, deputy chief economist with BMO Capital Markets.

The bigger issue is how robust and sustainable the recovery is. This could be a very halting recovery that's not going to feel a whole lot better than where we were a few months ago," he added."

Scotiabank's Derek Holt added a new caution, that stock markets may trend lower because they had expected a bigger bounce back.
"Even the most bullish forecast has been priced in much more aggressively into markets than is justified," he said
Most global markets retreated sharply Monday, including the Toronto exchange, which fell more than 100 points. The loonie also traded lower as the price of oil decline US$3.10 to just over US$69.
Holt believes a double-dip recession next year remains a risk, since U.S. consumers, hung over from years of debt and spending, won't have the cash to sustain demand once government stimulus is exhausted.
If the recession is indeed over, the data shows it was among the most precipitous falls since the Great Recession, but also relatively short, lasting just over three quarters.

Statistics Canada revised the first quarter contraction from 5.4 per cent to 6.1 per cent, making it the steepest three-month plunge in output on record, beating the 5.9 per cent fall-off of the early 1990s. The second quarter decline also came in lower than expected at negative 3.4 per cent annualized.

But because of its short duration, the downturn was not the worst since the Second World War, as it has been in many advanced countries.

From peak to trough, the Canadian economy contracted by 3.3 per cent, less than the 4.8-per-cent plunge of 1981-82, according to the TD Bank.
It was also predominately a recession imposed on Canada by the more massive retreat in global markets, which not only depressed demand for Canadian exports of autos, parts, wood products and oil and other commodities, but also prices.
Statistics Canada put the decline in exports in the second-quarter at 5.2 per cent, after falling 8.7 per cent in the first quarter. They have shrunk about 30 per cent since the start of the U.S. economic downturn at the end of 2007.
As TD economist Diana Petramala noted, the impact on Canadian business has been profound, with business investment in structures, machinery and equipment dropping about 17 per cent in the second quarter alone.

By contrast, the domestic economy only saw a modest slump and actually showed renewed signs of life as early as the spring, with both consumer and government spending, as well as personal income, turning positive in the second quarter.
"The big story in the second quarter was that the economy was still facing extreme weakness imposed on it from abroad. We had this deep decline in exports and we had businesses responding to that by really cutting back on capital spending and inventories," said Porter

Victoria BC Housing Assessments

Assessments to reach homeowners next week
A majority of properties face the same or lower assessed values
Andrew A. Duffy, Times Colonist
Published: Friday, January 02, 2009

It's not exactly Sears catalogue day, but the first official working day in January no doubt has postal workers doing a few pre-work stretches as they prepare to handle the 1.85 million assessment notices being sent out across the province.
B.C. Assessment will send the notices out starting today meaning homeowners around the province will start seeing the envelopes in their mailboxes early next week. But homeowners anxious to check out the assessment of their homes may be able to do so online at www.bcassessment .bc.ca starting today.
This year's assessment notice will be slightly different than in years past.
That's because the provincial government decided earlier this year to maintain assessed property values for the 2009 assessment roll at the July 1, 2007 valuation date -- the same date used for the 2008 assessment roll.
The goal of this was to give property owners more certainty in response to the downturn in the real estate market.
New construction in 2008 will be assessed at a value as if it existed July 1, 2007.
The 2009 notices will show two assessed values -- for July 2007 and July 2008. The lower amount will be the official assessment.
About 94 per cent of property owners will receive an identical or lower assessment this year than last, according to B.C. Assessment. Of that group, 82 per cent of properties will have the same assessment, 12 per cent will be lower, and the rest applies to less common property classes.
For Greater Victoria, that means the assessed value of all homes should be close to last year's $83.7 billion which was an increase of $10 billion from the year previous.
According to Brian Hawkins, assessor for the region, last year's numbers reflected a steady increase with the majority of homes in the region having increased between eight and 12 per cent in a year.
This year's assessment will also come with a market trend graph for specific areas around the province, both big and small, that will show what the market has done in the last year and a half.
Anyone wishing to appeal their assessment has until Feb. 2 to make the request.



From Krista and Sherri,

We have received our housing assessments in the mail and all are the same as last year. If you have any questions about them or how to use the equity you have in the house to make money for you, call us and let us show you how. You can also find free information and sign up for our newsletter on our website.

www.lawlessbrown.com

Happy Holidays

Just a quick note to wish everyone Happy Holidays. May you enjoy this holiday time with your family and friends and here's to looking forward to 2009!!
Krista and Sherri

www.lawlessbrown.com

Real Estate Investing in Victoria

The funny thing about investing in Victoria is that it hasn't really been hurt by this market. The prices have gone down however the rental market is still hot. Only 5 in every 1000 rental suites are vacant and rents are high.

So we both invest in Victoria and between us we have eight rental suites and two vacation rentals. We have yet to have one of the suites vacant for more than a month and have been extremely lucky with tenants.

Some of the rentals have interest only mortgages with variable rates which make sense when they are truly income properties. Some of them have variable rates and pay off principle and well we keep researching to see what the best mortgage is for our needs. We love having rental properties and know that these will be our nest egg in the future.

We also love to show people how to be real estate investors. Once you have everything set up..they basically take care of themselves. We can show you how and tell you about the pros and cons.

The best thing we did was join the Rental Owner's Management Society. The other cool thing we did is follow our passion and become mortgage brokers. The real estate market is fascinating so why not work in an industry you love?

So over dinner one night, the Lawless Brown Mortgage Brokers came to life. Thank you so much to Arlene Modderman for helping us become part of Mortgage Depot. What a wonderful company full of knowledgeable people to assist us in being the best that we can be. The other wonderful thing we did was hire a dear friend of ours to help us design our website and between her and our dear friend Janis, the following was designed

www.lawlessbrown.com

We loaded it with free info and a free newsletter. We hope the info on it will motivate people to invest in the Victoria Real Estate market and set themselves up for a financially independent future.

Who we are!

Back in 1993 after too many years of snow and sub-zero temperatures in Northern Ontario, Krista made the move to beautiful BC and began working in the restaurant industry while attending Camosun College.

Again in 1993 after many trips to Australia, New Zealand, Fiji, Mexico and so on Sherri decided that she should settle back down to work, plan and pay for her next adventure.

In 1994 we found ourselves working together at a local restaurant becoming fast friends. Much history and many stories were made throughout those four years and even after we parted ways work wise, the friendship remained strong.

During the years at the restaurant we both found our prospective partners and after approving each other’s choices in husbands we helped plan and stood up for each other on our wedding days. After many years of friendship, 2 weddings and 5 baby boys later we have chosen to work together again, this time as mortgage brokers.

Our two families are very close and enjoy spending time together, skiing at Mount Washington, motorbike riding, travelling and camping together.

It only seemed natural that our friendship should blossom into a business relationship and it is the best decision we have ever made.

www.lawlessbrown.com

www.lawlessbrown.ca