When you begin the home buying or selling journey, there may be several terms used that you’re unfamiliar with. Buyer’s market? Seller’s market? Balanced market? To help get you started, we’ve broken down the difference between a buyer’s market and a seller’s market below.

Buyer’s Market

This means there are more homes on the market than there are buyers.

In this type of market, buyers will spend more time looking for homes. There are more homes on the market, giving the small number of potential buyers more to choose from. The prices of homes can be stable or perhaps drop. Sellers will find that buyers have stronger leverage when negotiating.

Seller’s Market

This means there are more buyers than there are homes for sale.

With fewer homes on the market and more buyers, homes sell quickly in a seller’s market. Prices of homes are likely to increase, and there are more likely to be multiple offers on a home. Multiple offers give the seller negotiating power, and conditional offers may be rejected

Balanced Market

This means there are the same amount of homes for sale and buyers. 

When there is equal competition between buyers and sellers, this means that there are reasonable offers given by buyers and homes sell within a reasonable time. With less tension between buyers and sellers, the prices of homes remain stable. 

Before buying or selling a home, it is important to find out what type of market you are entering. Your listing price, negotiations and expectations will all be affected depending on whether it is a buyer’s market or a seller’s market.

Talk to a Real Estate Agent

Our team of agents are always willing to help with all of your real estate questions. Sandy, Ala, and Debbie know the local market inside and out, but they also have experience pricing and selling homes in your area.  Click here to connect with the Sandy Smallbone Team.

Article courtesy of RE/MAX Canada.

Real estate is how many of the world’s richest people became wealthy. It’s also likely how their children and their children’s children got rich. In fact, huge empires have been built from a single property purchase. American author Mark Twain once said “Buy land. They’re not making it anymore.” By that logic, real estate will always be in high demand. Building generational wealth by buying real estate is not a new strategy, nor is it reserved for the rich.

Risks and rewards of real estate investing

Like all investments, real estate comes with some risks.

Financing

Unlike other types of investments which require 100 percent of the capital up-front, many real estate investors take out a mortgage in order to buy their investment property. According to Ratehub.ca, properties with one to four dwellings are zoned “residential” so the mortgage application process is similar to that of a principal residence. Alternately, a building with five units or more is zoned “commercial” and the mortgage application process is more complex. Keep in mind that the minimum down payment to purchase a non-owner-occupied income property is 20 percent.

Regardless of the size of the building, or whether you choose to live it in or not, Canada has enjoyed a record-low interest rate environment for the last decade. The low cost of borrowing makes an investment property attractive to those who may not be able to pay for their investment outright, but through their investment strategy expect to be able to carry the mortgage and other ongoing costs, hopefully with some money left over to spend, save or re-invest.

Other factors impacting ROI

A variety of things may impact your real estate investment, including (but not limited to) population growth and housing demand, local and world economies, interest rates, policies such as the mortgage stress test, the foreign buyer tax and vacant land tax, supply of resale homes and the rate of new construction.

But as the saying goes: no risk, no reward.

The good news is that Canadian real estate has historically yielded solid returns when held for the long term. According to the Canadian Real Estate Association, the average home price in Canada in 1984 was $76,351. Today in some Canadian housing markets like Toronto, that’s what you’ll need just for the down payment. By 1996 the average house price in Canada was $150,899. Now fast-forward to January 2020, when CREA reported an average price of $504,350. Granted, some housing markets see property values increase (or decline) faster than others, but if you bought a home in Canada back in 1984 and you still own it, odds are that you’re in line for a pretty solid return on your initial investment.

As a bonus, few other investment vehicles allow you to buy and use your asset while you watch your equity grow. Then, when you sell a principal residence, the income generated is not subject to income tax. Double bonus.

While long-term resale value is one way to make money in real estate, smart investors explore opportunities that allow them to earn now. After all, why not get some help paying off that mortgage?.

Building generational wealth by buying real estate

The sale of a principal residence, in the right location and at the right price, can certainly provide enough to boost, if not fully fund your retirement. But if building generational wealth by buying real estate is your objective, don’t hold your breath for the next 30 years in anticipation of appreciation. Explore how your property can start generating income now and into the future, without you (or your children) having to sell it.

Remember: a single rental property – purchased once, consistently well-maintained and smartly managed – can provide a source of income for generations to come.

Building wealth through rental properties

Want to know how to build wealth in real estate? A positive cash-flowing investment property means renting it out for more than you’re paying in the monthly mortgage, condo fees, property insurance, property tax, regular maintenance and those “unexpected” expenses that inevitably arise.

Before buying a property or narrowing down a neighbourhood, smart investors will have researched vacancy rates and average rents. A rising vacancy rate means more homes are available for rent – more competition for the landlord. A falling vacancy rate means there are fewer rental properties to choose from, giving an investment property owner the upper hand. Canada Mortgage and Housing Corporation release rental reports that provide a good high-level overview. It’s also a good idea to check local rental listings to see what properties are actually renting for.

Evaluating a location’s income potential requires a “bigger picture” perspective. Here are 12 questions to ask, according to Vancouver-based real estate research and consulting firm, Cutting Edge Research Inc.:

1. Is the average income increasing faster than the provincial average?
2. Is the population growing faster than the provincial average?
3. Is the area creating jobs faster than the provincial average?
4. Does the area have more than one major employer?
5. Will the area benefit from an economic or real estate ripple effect?
6. Has the political leadership created an atmosphere conducive to economic growth?
7. Is the Economic Development Office progressive and helpful?
8. Is the area’s infrastructure being built to handle the expected growth?
9. Are there any major transportation improvements in the works?
10. Is the area attractive to Baby Boomers’ lifestyle?
11. Is there a short-term problem occurring that may be rectified in the future?
12. Is there a noted increase in labour and material costs in the area?

Buy, rent, repeat. Pass it on. Sell it eventually… maybe.

Once you’ve landed on a good location, where the economy is chugging, the population is growing and demand is rising, tenants who pay the rent – and your mortgage – will follow. Barring any major upheaval, future generations who inherit the property can continue to earn on your initial investment.

Scottish-American industrialist, philanthropist and billionaire Andre Carnegie famously said that 90% of millionaires become so through real estate. There’s certainly something to this strategy. If you'd like to learn more about how to invest in real estate,  click here to connect with the Sandy Smallbone Team.

Article courtesy of RE/MAX Canada | Content Manager Lydia McNutt.

When owning a house there is always focus placed on the upper levels of the home. Now we’re turning the tables and talking about the lower floor, the basement! There are a lot of considerations you need to take when considering fixing up the basement.

Is it Worth it? Ask Yourself These Questions...

When finishing your basement it’s easy to get lost on Pinterest or in a design magazine when looking for inspiration. It’s in your best interest to take a step back and really think about what finishing this basement would do for you.

• A Second Income: Finish the basement and rent it out! This helps with affording property in the city that might otherwise be too expensive.
• An Extra Bedroom: Whether it is for kids when they come home from university, a live-in nanny, or extra space to host guests, it’s a definite bonus!
• Create a Separate Entrance: Having more entrances will make the basement more private. You won’t have to go through the main living area to access it.
• More Recreational Space: Kid's playtime or movie time might disrupt the main living space. Placing this all downstairs will keep your main rooms less hectic.
• Need an At-Home Office: Separate your living space from your working space.
• More Wine Storage: impress your guests with the latest vintages in your very own wine cellar.
• Extra Livable Space = an increase in house value!

What Is Your Budget?

Next on the list is how much money are you willing to invest in this project. It’s easy to outline the above and have an idea of what you want going into a project but making sure it’s all within a budget is incredibly important. Talking to an expert builder or renovator will help you determine what a good budget is, and will help determine with you what is doable within your price range.

Is Your Basement Water Tight?

This is one of the most important considerations when deciding whether or not to finish a basement. It is usually something you can check to see if there has been any water damage in the past. Check for stains on concrete or the foundation. It is also advised to fix this problem on the exterior of the home. There is some interior water fixing solutions but ultimately water will still be getting in which isn’t good. Degradation of the foundation is something you want to avoid given that it’s what supports your whole house [if] the foundation starts to break down, water gets in easier.  It can be a costly task but is usually necessary when attempting to finish a basement.

How Much Head Space Do You Currently Have?

A lot of old houses were not made with the intention of being turned into a living spaces which means that there might not be enough head space to meet Ontario’s Building Code. This results in a larger issue where you will need to meet code in order to actually finish the basement. This is another time where it is essential to have an expert contractor that can help you determine what your best options are.

What Does Your Basement Look Like Right Now?

Get a head start and take a step into the basement to investigate what is required of you for this project and inspect for moisture damage. Check how much headspace is currently available, look for where any electrical/plumbing or other mechanical spaces are and see if it will inconvenience the project.

Go the Extra Step! Do the Research

Looking for some extra advice? Click here to connect with us and we can provide our POV specific to your situation.

Article courtesy of RE/MAX Canada. Produced in collaboration with Toronto Home Shows.

When first thinking about renovating our homes, we often get lost in daydreams and fantasies of new bathrooms, kitchens, walk-in closets, and a whole host of other great renovation ideas. Eventually, though, we come back to reality and the daunting thought of the cost associated with renovations. So, how do home renovations work? Let’s dig in.

Home renovations can run anywhere from a few hundred dollars up to hundreds of thousands of dollars, and there are many different ways to pay for them. While inexpensive upgrades such as new light fixtures, countertops and windows can be paid for using either a line of credit or a savings account, large reconstruction projects take far more time and money, often requiring home renovation loans to cover the cost.

How do Home Renovation Loans Work?

There are several different ways to finance your major home renovations. For starters, you could opt for what is called cash-out mortgage refinancing. This is where you refinance your existing mortgage for more than what you currently owe. For example, if you owe $250,000 on your mortgage, you could refinance for $400,000. This would leave you with $150,000 to put toward renovations.

The amount of money you can access using this option depends on how much equity you have in the home – this is the difference between the value of your home and the amount you owe on your mortgage. Typically, the amount of money you can free up is positively correlated to how long you have owned your home. You will usually be able to refinance to about 80 percent of the home’s value. In the example above, your home would need to be worth $500,000 or more in today’s market.

This option is advantageous because it will carry a lower interest rate and you’re using an asset you already have in order to pay for your renovations. The other benefit is that you are leveraging the current value of the home to further increase its value through the renovations.

A second option is a home improvement loan. Making home improvements is one of the quickest ways to add to your home’s value, while also increasing your enjoyment of it.

Home improvement loans are ideal because lenders can customize your loan, including your repayment plan, with an affordable interest rate. This is based on the borrower demonstrating that they can repay the loan and that their home carries a value worth funding.

Another name for a home improvement loan is a renovation mortgage. With renovation mortgage financing, some of the funds will go toward paying for the home or the balance on your existing mortgage, and the rest can be allocated towards making improvements to your home. Sometimes lenders will add specific instructions to these loan agreements. For example, you may be required to have a construction company on-hand to immediately receive the funds from the bank – this is done to ensure that the funds are used for their intended purpose.

When applying for one of these loans or mortgages, it is ideal to have your renovations planned out and have contractors and materials ready to go upon approval. This demonstrates to the lender that you will be using the funds appropriately.

Lenders will examine your employment history to ensure that you have a steady income and present a low risk of defaulting on your loan. Your debt-to-income ratio will also be taken into account; this is the amount of debt you carry in relation to the income you make each month.

Other Factors to Consider

When looking to get a mortgage renovation loan or a home improvement loan, there are a few factors that come into play. The first is how much money you require. The second is the amount of time it will take you to repay the loan. The third is the interest rate. The greater the number associated with any of these factors, the more you will spend paying back the loan. This makes each of them a key aspect to consider when comparing the full cost of the renovations versus your home’s increased value once they are completed.

As with any loan, it is important to remember that interest starts accruing from the day the renovation funds get deposited into your bank account, whether you use them to cover your renovation costs or not. Therefore, it is prudent to have everything pre-planned and coordinated, to allow you to begin as soon as you receive the funds.

Before making any financial decisions, consult with a professional to hear about all the available options that you qualify for and to make sure you are matched with a loan that adequately covers your needs.

• CMHC
• Loans Canada
• Manulife Bank

When thinking about how to add value to your home and increase ROI, sometimes it’s better to think small rather than big. Sure, a full kitchen reno would be nice, but there are plenty of more-economical upgrades that can bring up your listing price. Armed with just $1,000, here are five renovation ideas that will increase ROI – and the likelihood of a quick sale!

Shut the Front Door!

We all know first impressions are important, so the first step is making sure your home’s front door is in tip-top shape. You can do this by replacing the door outright ($1,000) or repainting it ($75 for paint and tools).

Rolling up your sleeves and pulling out the sandpaper is definitely the most frugal option if you’re up for it. Opt for a bold colour that will stand out from the street and add curb appeal, such as ruby red or yellow. Also, look for an easy-to-install decorative door knocker to give the door an elevated, decorative vibe. If the door needs more than a coat of paint to revive it, spending extra replacement cash will pay off. Installing a brand new front door — especially a steel one — can increase ROI by thousands of dollars.

Totally Floored

If your home has outdated flooring, such as wall-to-wall carpet or linoleum, bring it into the modern age. Talk to your local flooring company about how much square footage they could replace, staying within your $1,000 budget.

There are some surprisingly cost-effective options out there thanks to material advances, such as tongue-in-groove laminate wood or eco-harvested bamboo. New flooring is always appealing to prospective buyers because it gives the house a clean-slate feeling. In fact, a new floor could increase ROI enough to double your original cost when pricing out your property.

Brass Tacks

Look around your house and if you spot the shine of 1980s brass fixtures, replace every last one of them. This once-popular faux metal makes a home look instantly outdated and, well, cheap. In fact, if any of your home’s knobs, pulls or faucets are older than 10 years, now’s the time for an upgrade.

Ranging in price from $2 to $50, look for brushed nickel, oil-rubbed bronze or black or white fixtures – and keep the same treatment throughout. Even if the items they’re attached to are a little worse for wear, new hardware will instantly increase ROI.

Bright Ideas

To showcase your home in the best light and increase ROI, consider installing new overhead light fixtures throughout your home. Creating a cohesive lighting plan by matching fixtures and shades, and adding floor and table lamps will catch the eye of discerning buyers.

With a revamp budget of $1,000, set aside $100-$200 per fixture and $10 per room for packages of soft, incandescent light bulbs. Also, replace standard light switches with energy-efficient dimmer models ($10-$20). Cutting utility bills is important to buyers.

Deep Clean

Though it might be hard to believe, cleaning the front of your home could increase its value by several thousands of dollars. Renting a power washer can cost less than $100 per day, allowing you to remove dirt and mildew from top to bottom.

If you have no interest in getting down and dirty, hiring a house maintenance company will probably set you back around $200. Go the extra mile — and increase your ROI — by also repainting the trim and fascia boards for $1,000. Paying a professional cleaning or painting company to refresh the face of your house will add instant value.

If used strategically, a $1,000 investment could pay for itself – and then some! – when it’s time to list your property. Click here to reach out to the Sandy Smallbone Team for more information.

Article courtesy of RE/MAX Canada and HGTV.ca

Prepping your house for sale can often require an investment to bring it up to current standards and help it compete in the hot real estate market. Especially if you’ve lived in the house for several decades, you may be blind to your home’s shortcomings. Here, we examine the top home renovations to ensure your return on investment.

Paint

Painting is probably the most under-appreciated home improvement. It provides a high return for a relatively low investment and minimal effort. When putting your home on the market, consider a professional painter who can help select the right palette, skim the walls, seal trim and repair minor damage before applying top-quality paint that’s appropriate for each surface (matte for living areas, eggshell or semi-gloss for trims and doors and proper ceiling paint.)  It doesn’t seem like the most glamorous of renovations or promises the most dramatic before-and-after, but it instills freshness and can flatter your home in ways you’ve never imagined. It’s like dressing for your body type, a colour expert can help select the perfect shades to work with the lighting in your home and ensure it puts its best face forward!

ROI: A fresh coat of paint typically garners a 60% return on your investment.

By the Numbers: Budget for a 2,000-sq.-ft. home: approximately $10,000-$15,000

Good “Bones”

When contemplating a profitable renovation, nothing “sinks” a sale price quicker than a house that’s taking on water. Especially in this market, where strong sale prices are being paid for homes with “good bones,” ensuring that the roof and windows are in good shape, gutters and drains are functioning properly and the foundation is dry is crucial to realizing the potential value in a home. Consider items like vinyl windows, a new roof or even waterproofing the foundation. Buyers are wise to structural issues, and learning that a homeowner has done their homework and made the proper investments to prevent flooding and leaks will go a long way in a buyer’s eyes (and offer!).

ROI: Renovations that will save homeowners money, in the long run, will draw a higher return, around 75 percent, depending on the scale of the reno.

By the Numbers:

• All-new, good-quality vinyl windows for a 2,000-sq.-ft. home: approximately $15,000
• Stripping and replacing the roof with quality asphalt shingles: $8,000 to $10,000
• Proper waterproofing of the exterior of a foundation: approximately $60-$80/linear foot

The short answer is yes and yes. Even in a hot seller’s market, smart sellers seek out ways to give themselves an advantage. This includes engaging an experienced, professional real estate agent, evaluating market demand and comparables, setting the right price, and then staging the property to appeal to the biggest pool of buyers.

What is Home Staging?
Home staging is the process of preparing a home for sale by increasing its appeal to a wide range of homebuyers. Home staging isn’t as involved as a renovation, and can involve decluttering, depersonalizing and deep-cleaning; painting the walls in a fresh, neutral hue; updating hardware and lighting; rearranging existing furniture or renting some new pieces to help show the home in the best possible light. When a buyer can see your home as their home, they are more likely to make a competitive offer.

Since the majority of home buyers start their home hunt online, it’s critical to make a good impression through your digital listing photos. Buyers will weed out the homes that don’t meet their criteria and proceed to an in-person tour of the homes that they are seriously considering.

Decluttering and depersonalizing the home of family photos and other personal items can help. Also, consider that potential buyers need to think beyond what their eyes are showing them. Staging helps them to visualize themselves living in and using the space. Is the home an ideal place for a growing family, as a live-work space, for recreational pursuits or to enjoy retirement?

According to a study by the Real Estate Staging Association, staged homes spend 73 percent less time on the market than their un-staged counterparts. Truthfully speaking, even an un-staged property can sell under the right market conditions. A seller’s market, characterized by high demand and low inventory, generally means buyers are likely to scoop up what they can get. In a buyer’s market, there are more homes for sale than there are buyers, which means competition is greater among sellers and buyers have the upper hand. Under these circumstances, staging your property could tip the scales in your favour.

The same Real Estate Staging Association study revealed that 85 percent of homes analyzed sold for five percent to 25 percent above the listing price. The answer to this question isn’t always black and white, as the final selling price can depend on a number of factors, including buyer demand, competition and the condition of the property. With all else being equal, a staged home is more likely to leave buyers with a better impression than one that hasn’t been staged, with the potential to fetch higher offers.

A new twist on home staging is “virtual” staging, which leverages technology to digitally enhance photos in order to demonstrate the possibilities. Virtual staging is ideal for vacant properties, which poses added challenges for sellers and buyers who are trying to imagine it as their new home. Virtual home staging eliminates the need, effort and cost associated with renting or buying furniture and accessories.

Staging a home doesn’t have to be complicated. Evaluate every room and be critical, because prospective buyers will be. Viewing your own home objectively can be difficult, especially for those who have lived in their home for a long time. A professional home stager and your real estate agent can give you an honest opinion as to what works in your home, what doesn’t, and what the seller might consider changing in order to appeal to homebuyers.

When you’re ready to sell, The Sandy Smallbone Team can help identify market demands, navigate conditions and turn that For Sale sign to SOLD.  Click here to get in touch.

Written By: Linda McNutt | Public Relations & Content Manager | RE/MAX Canada

You are about to make a move to a home that better fits your lifestyle. Congratulations, it’s an exciting time! But before you can do that, you need to sell your home.

The goal of any seller is to get the highest sale price in the least amount of time. If that is your goal, you’re going to want to say hello to staging.

The numbers speak for themselves: according to a study from the Real Estate Staging Association, staged homes spend 73 per cent less time on the market, and staging your property could net you 25 per cent over the asking price.

Staged homes can sell quicker and for a higher price, because they showcase the home’s best features, impress buyers, and downplay the home’s weaknesses.

What is Home Staging?

Staging is not about decorating. Decorating reflects your personal style and taste. Staging does the exact opposite of decorating, making your home appeal to as many people as possible.

When you stage a home, you help homebuyers picture themselves in the space. When they move through the kitchen, you want them to feel like they can effortlessly cook a meal here, for example. They need to see it as their dream home. This emotional connection makes the house a must-have.

Home Staging Tips to Sell Faster

Homebuyers want who are looking for a turn-key home do not want a project. Here’s what you can do to appeal to this type of buyer, and stage your home to sell.

1. Focus on the Key Rooms

There are several areas that homebuyers are zeroing in on when they look at your home, with the living room, kitchen, primary bedroom, and dining room topping the list.

If you can’t get to every room, make sure that you spend your time, energy, and money on these rooms.

2. Clean, Clean, Clean

If you have spent any time looking at homes for sale online, you have undoubtedly encountered some sellers who skimped on the cleaning. We’ve all seen the kitchen photo where that morning’s breakfast is still on the counter. Avoid that. Please.

If you can’t stage every room in your home, you can still clean every room. It’s essential. It signals pride of ownership and that you have cared for the house over the years.

Ensure that appliances are spotless and the bathrooms sparkle. You will not regret cleaning.

3. Declutter your Home

Decluttering is something that you can do without having to hire a stager. It gives your home an open, airy feel, making it feel more spacious.

On the flip side, an overcrowded home is distracting. There is no room for buyers to imagine. Instead of potential, they see restrictions and a shortage of storage space.

Go room by room. Organize your items in piles: the things you want out of your life and the ones that can go into storage, until you’re ready to move.

4. Depersonalize the Space

While you are decluttering, be sure to remove any personal items from display. Buyers want to picture themselves in the space, and your family portraits can make it hard for them to imagine.

Photos, your kids’ artwork on the fridge, knick-knacks from that trip to Italy – sure, they have sentimental value to you, but not to potential buyers. Remove these items are replace them with more generic artwork that will appeal to potential buyers.

5. Add Plants

Freshen up your space with live, thriving plants. They can do wonders to make your home feel more inviting. Do not crowd any area with plants, have them dispersed throughout the space.

6. Give Rooms a Purpose

Just because you use that spare room as a gym, home office and the guest room does not mean that a potential buyer will see the practicality of it. They want each room to have a single, defined purpose. A bedroom is a bedroom. An office is an office.

Defining the purpose of each room will maximize the appeal and contribute to that open, clutter-free feel that buyers want. Giving each room a purpose allows buyers to envision how they too can make use of the space.

If you can add office space, do it. With so many people shifting to remote or hybrid work, it allows them to see themselves working in that space.

7. Fresh Paint

According to the RE/MAX Canada Renovation Investment Report, 36 per cent of RE/MAX brokers surveyed said buyers want a fresh coat of paint. A fresh coat of paint can certainly go a long way. When you head to the hardware store, be sure to choose light, neutral colours. People’s colour preferences vary widely, and bold choices may scare people away.

8. Let There be Light

You want your home to feel bright and inviting. Lighting plays an essential role. Open your curtains and blinds to let the natural light pour in. Turn on all the lights. Bring in a lamp to let your home shine if you need new lighting!

9. Furniture

When it comes to furniture, less is more. Don’t clutter a room with too much furniture. The starting point for most professional stagers is getting rid of furniture. Often, they will remove about half of the furniture in the home. The goal is to make your house look bigger. Furniture takes up space and can make the home feel cluttered.

If you need to upscale your furniture, you can rent the right pieces to make your space more inviting.

10. Boost the Curb Appeal

The exterior of your home is a great place to start your staging efforts. Some sweat equity over a weekend can turn into real equity in your bank account.

Make your home sparkle with a power washer. If you don’t have one, rent one. Remove dirt and grime from your siding, roof, fascia and gutters. Give your deck a scrub too.

If your shutters or front door needs some paint, be sure to freshen them up. Pay attention to the little things like the house numbers, mailbox and welcome mat.

Attract Potential Buyers, Start Staging Today

As you can see from this list, staging a home doesn’t have to be complicated. Go room by room and be critical about what will appeal to prospective buyers.

Make sure to talk the Sandy Smallbone Team. They do not have a personal attachment to your home and can give you an honest opinion on what works and what doesn’t. Click here to get in touch.

Article courtesey of RE/MAX Canada