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3 Reasons Why a House Isn't Selling

Have you ever driven by a For Sale sign and wondered, “That house has been on the market for a long time, I wonder why it isn’t selling”? You might have asked that question because you were worried the same thing would happen when you put your own house on the market!

Often a home doesn’t sell for one of three reasons:

1. The price is too high.
Sometimes a homeowner will set the listing price exceptionally high in the hopes of getting lucky. What happens instead, however, is potential buyers stay away. In today’s real estate market, a house usually sells at a price that is close to its market value. Fortunately, the current market value of your house – and, hence, its approximate selling price – may be higher than you realize. It’s worth getting a free market assessment.

2. The house doesn’t show well.
Sometimes a house is strategically priced for the market but doesn’t show well. It’s difficult for buyers to look past issues, such as clutter, and see the potential. In those cases, prospective buyers who view the property, don’t like what they see, and move on. If you put your house on the market, make sure it looks its best for prospective buyers. De-cluttering and having your house “show room ready” is something I will be able to help you with!

3. The listing is poorly promoted.
Clearly, buyers won’t become interested in a property if they don’t know about it. The listing must be promoted effectively, and that involves more than a For Sale sign. That is why all my listings receive the full listing package! When listing a property it is advertised on MLS, Realtor.ca, on our personal website (http://www.rogerlevesque.net/realestate), on my business Facebook page (https://www.facebook.com/rlpseanlevesque/;which has over 4,000 likes/followers) and other buying and selling websites around Victoria! With your property being listed on all these website it will never be missed! Not only will the property be seen, it will be done professionally with 3D Walk-thru, Professional Photos and Professional Floor Plans.

Want more tips on selling your house? Comment, E-Mail or call us!

Choosing Your Mortgage Amortization

 
Selecting the length of your mortgage amortization period – the number of years it will take you to become mortgage free – is an important decision that will affect how much interest you pay over the life of your mortgage.
 
While the lending industry’s benchmark amortization period is 25 years, and this is the standard that is used by lenders when discussing mortgage offers, and usually the basis for mortgage calculators and payment tables, shorter or longer timeframes are available – to a maximum of 35 years.
 
The main reason to opt for a shorter amortization period is that you will become mortgage-free sooner. And since you’re agreeing to pay off your mortgage in a shorter period of time, the interest you pay over the life of the mortgage is, therefore, greatly reduced.
 
A shorter amortization also affords you the luxury of building up equity in your home sooner. Equity is the difference between any outstanding mortgage on your home and its market value.
 
While it pays to opt for a shorter amortization period, other considerations must be made before selecting your amortization. Because you’re reducing the actual number of mortgage payments you make to pay off your mortgage, your regular payments will be higher. So if your income is irregular because you’re paid commission or if you’re buying a home for the first time and will be carrying a large mortgage, a shorter amortization period that increases your regular payment amount and ties up your cash flow may not be the best option for you.
 
Your mortgage professional will be able to help you choose the amortization that best suits your unique requirements and ensures you have adequate cash flow. If you can comfortably afford the higher payments, are looking to save money on your mortgage or maybe you just don’t like the idea of carrying debt over a long period of time, you can discuss opting for a shorter amortization period.

Advantages of longer amortization
 
Choosing a longer amortization period also has its advantages. For instance, it can get you into your dream home sooner than if you choose a shorter period. When you apply for a mortgage, lenders calculate the maximum regular payment you can afford. They then use this figure to determine the maximum mortgage amount they are willing to lend to you.
 
While a shorter amortization period results in higher regular payments, a longer amortization period reduces the amount of your regular principal and interest payment by spreading your payments out over a longer timeframe. As a result, you could qualify for a higher mortgage amount than you originally anticipated. Or you could qualify for your mortgage sooner than you had planned. Either way, you end up in your dream home sooner than you thought possible.
 
Again, this option is not for everyone. While a longer amortization period will appeal to many people because the regular mortgage payments can be comparable or even lower than paying rent, it does mean that you will pay more interest over the life of your mortgage.
 
Still, regardless of which amortization period you select when you originally apply for your mortgage, you do not have to stick with that period throughout the life of your mortgage. You can always choose to shorten your amortization and save on interest costs by making extra payments when you can or an annual lump-sum principal pre-payment. If making pre-payments (in the form of extra, larger or lump-sum payments) is an option you’d like to have, your mortgage professional can ensure the mortgage you end up with will not penalize you for making these types of payments.
 
It also makes good financial sense for you to re-evaluate your amortization strategy every time your mortgage comes up for renewal (at the end of each term of your mortgage, whether this is three, five, 10 years, etcetera). That way, as you advance in your career and earn a larger salary and/or commission or bonus, you can choose an accelerated payment option (making larger or more frequent payments) or simply increase the frequency of your regular payments (ie, paying your mortgage every week or two weeks as opposed to once per month). Both of these features will take years off your amortization period and save you a considerable amount of money on interest throughout the life of your mortgage.
 

Single Ladies Buying Homes


It’s becoming increasingly apparent that a greater number of women are now taking the reigns when it comes to home purchases. There’s a growing trend among single women – and, more precisely, professional single women – who are becoming independent homeowners. While many of them may be putting off marriage, they’re not waiting around for Mr. Right before taking the plunge into homeownership.

It’s believed that around 20% of homebuyers in North America are single women based on a 2011 report released by the US National Association of Realtors. Harvard University’s Joint Center for Housing Studies also released a report that said single women are buying in record numbers.

There’s no equivalent data for Canada, but an abundance of anecdotal information has led to the creation of shows like HGTV’s Buy Herself, which follows single women making their first real estate purchases.

Women are looking for ways to become financially independent, and investing in real estate and building equity for themselves are ways to invest in their future – building financial security.

Women are taking advantage of historically low interest rates and recognizing homeownership is often more affordable than renting.


Seeking expert advice


One of the amazing things about women looking to invest in real estate is that they’re getting more advice before they make the decision to enter the market. They’re seeking out mortgage experts and real estate agents, and building a plan for the perfect entry into the market. They’re making lists of areas in which they’re interested in purchasing, itemizing amenities they would need in their ideal neighbourhoods, ensuring they have all the facts around closing costs and fees associated with making the purchase, and securing a mortgage.

Buying a home is likely one of the largest purchases you’ll ever make in your lifetime, and can feel overwhelming. That’s why working with a professional mortgage agent, real estate agent, home inspector and so on is essential. You’ll be working with these professionals closely – possibly for months – so interactions should feel comfortable, and they should be knowledgeable and responsive even to the smallest question.

The more prepared you are, the smoother the experience will be so do a little research on your own over the Internet to get a good idea of what types of properties and areas are of interest to you. Make a list of questions to ask your mortgage agent or realtor – and keep it on hand so you can add to it as more questions arise.

Interest rates are the lowest they’ve been in history and they have nowhere to go but up. Industry professionals believe that as rates begin to rise, they’ll continue to rise for some time. There has never been a better time for women to make the decision to get into the real estate market to find the perfect place to call home.
 

The Bank of Grandma and Grandpa needs to toughen up.

It’s one thing for seniors to plan inheritances for family members and provide cash gifts when affordable.
 
Where they must set limits is in co-signing or guaranteeing loans for relatives.
 
Seniors guaranteeing loans is bad business and it also comes dangerously close to elder financial abuse, an unseen but serious problem that can leave seniors destitute.
 
Click here to read more from the Globe and Mail.

 

What does home mean to you?

We work in an industry that revolves around homes. Houses, condos, investment properties and so on but for the most part our clients are here to get help purchasing, refinancing or building a house. So when that’s all done, what is it that actually turns a house into a home? Is it what you put inside of it? The decor, the furniture and the paint on the walls might be a small part of it but it’s often the people that are in those four walls that accelerate that vital transition from house to home. 
 
I think as a society we often get caught up in the race of always wanting more. More space, more furniture and better toys. Then you read an article like the one about Edie Schnell’s award winning essay on what home means to her and you start to appreciate how much you really do have. Edie is a grade 4 student in Calgary who won a national writing contest, originally from Ethiopia but adopted to a Canadian family when she was seven years old.  “With all that I have been through, home is different to me than a lot of other kids. Home means a person, place or thing that makes you feel good when you are around them.”   She says.   Edie talks about the lack of food, clean water and shelter in Ethiopia and how as a girl she didn’t get to go to school. The prize for winning was $60,000 to her chosen Habitat for Humanity affiliate, which she sent to her local affiliate in Southern Alberta.     
 
For the full story on her award winning essay click here
 
Habitat for Humanity has been around in Canada since 1985 and consists of over 50,000 volunteers. It’s a national, non-profit, organization working towards the goal of safe and decent housing for all. They promote affordable homeownership as a way to break the cycle of poverty and here at West Isle Mortgages we have partnered with MCAP, one of our lenders to be a part of a program called “Key to Hope”. Key to Hope is an exciting new program supporting Habitat for Humanity and if you have a mortgage through MCAP it’s as simple as adding a donation of your choice to your mortgage payment.   Even better MCAP is committed to matching dollar for dollar all donations made by consumers.
 
We are all here to help you achieve your dreams of home ownership and now we can help Habitat partner families realize those dreams too! 
 
 

Immigrants, young buyers to buoy home sales, CIBC says

Benjamin Tal of CIBC put out a report on Thursday in which he argued that Canada’s population demographics are working in favour of the country’s housing market.

 

Canada is facing a well-documented demographic pinch over the coming years, as Baby Boomers retire and seek to cash out their homes to finance their retirement. Experts have gotten increasingly concerned on the impact this boomer bulge will have on the job market and the housing market.

 

But beneath the numbers, Tal sees some reasons for optimism. Although the 55- to 74-year-old age group will see the largest population increase in the next decade, the second-largest will come in the 25-44 group. That’s the prime home-buying demographic, with recent research suggesting 18% of that group buys a home in any given year.

 

Click here for the full CBC News story.

 

Perspective on New Mortgage Rules

Now that the dust has settled a little on the new mortgage lending rules, it’s time to put them into perspective.
 
 
This isn’t the first time mortgage amortizations have been limited to 25 years.
 
 
Industry veterans know people still bought homes before the amortization rules were relaxed and their main goal was to pay off their mortgage as soon as possible.
 
 
More recently, attitudes have changed, and these new rules will help us regain that focus and help us to avoid carrying a mortgage into our retirement.
 
 
Click here for the full Calgary Sun article.

Condo Frenzy

Canada’s condo building frenzy showed no sign of abating last month, as housing starts surged to their highest level since 2007.
 
While some analysts had predicted housing starts would weaken after a particularly strong March, starts in April rose to an annualized rate of 244,900, readily beating predictions of 204,000 made by most economists.
 
“This report reflects unbelievable strength in Canadian housing starts, and all of the gain was in multiples again, which reflect the ongoing Canadian condo craze,” said Scotia Capital Economist Derek Holt.
 
Multiples, which include apartments and condominiums, posted the second-highest number of starts on record for the month of April. In total, multiple urban starts in Canada rose by 27% to 158,500 on a seasonally adjusted basis.
 
Click herefor the full Financial Post article.

 

Now is the time to get ready for an interest-rate increase

The future is unknowable, but it doesn’t stop people from guessing about it.
 
And when it comes to interest rates, this seems especially true. Haven’t you heard? Interest rates will probably be going up, making debt payments unaffordable for some Canadians, who will lose their homes, causing a popping of the housing bubble, which could result in a recession.
 

Three annoying things that banks do to customers are about to become history.

Following up on commitments made in the past two budgets, the federal government has announced measures that will stop banks from mailing unsolicited credit card convenience cheques to customers, and that will reduce the holding period on newly deposited cheques. The banks will also have to stop being so secretive about the penalties clients must pay when they want to get out of a mortgage early.
 
 
These measures represent some good work by a government that has been under pressure lately as a result of the robo-call affair. Strangely, the measures were announced on a Sunday and, therefore, didn’t get the initial attention they deserve.
 
 
The sharp decline we’ve seen in mortgage rates over the past few years has prompted many people to think about breaking their mortgages in order to lock in lower borrowing costs. A mortgage penalty must generally be paid in this situation, but it’s exceedingly difficult to find out how much it is and how it’s calculated.
 
 
 
Click here for the full Globe and Mail article.

Your Mortgage Penalties may be Tax Deductable....

There’s one piece of good news about mortgage prepayment penalties: The cost of the penalty can be used as a tax deduction if you’re breaking your mortgage to move 40 km or more to be closer to work.
 
The Canada Revenue Agency has a provision that allows you to deduct the costs of moving if you’re doing so for a job or for full-time study at a university, college or other type of course at a post-secondary level.
 
You can claim other costs associated with selling your old residence as well: advertising, notary or legal fees, real estate commission as well as that dratted mortgage penalty “when the mortgage is paid off before maturity.”
 
Keep the receipts and fill out form T1-M Moving Expenses Deduction. For tax purposes, the mortgage penalties get lumped under “other selling costs, specify” on Line 16 of the T1-M form.
 
Click here to read more from The Star.
 

 

Cheap money fuelled another buoyant year for real estate in 2011.

That helped housing values climb a wall of worry (prices rose another 4.6% year-over-year as of November) despite numerous predictions of a correction. Mortgage balances went along for the ride, growing another 7%.
 
 
2011 was a year marked by new mortgage regulations and a rate market that continually surprised most observers. Among all of the various developments, however, there were five mortgage stories that stood above the rest.
 
 
Click here for the top five mortgage trends of 2011 from CanadianMortgageTrends.com

Is Canada in a Recession....?

A surprising majority of Canadians – 70% of them – say the country is in the middle of an economic recession, even though economists will tell you Canada hasn’t been in one since 2009, and is nowhere close.
 
The results, from a new online survey sponsored by the Economic Club of Canada and conducted by Pollara Strategic Insights, highlight a growing disconnect between how financial professionals quantify and measure the health of the economy, and how Canadians feel about their every day prospects.
 
Michael Marzolini, chairman of Pollara, called the results the most pessimistic in 16 years.
 
“Canadians are more self-centred. They believe themselves under siege,” he said at a breakfast presentation hosted by the Economic Club in Toronto that included top economists from Canada’s Big Five banks.
 
Click here for more details from the Financial Post.

 

HOLIDAY HOURS

With Christmas fast approaching our hours will be as follows for the holiday season:

December 19th-22nd 10AM-4PM
December 23rd-26th CLOSED
December 27th-29th 10AM-4PM
December 30th-January 2nd CLOSED
January 3rd Resume Regular Hours (Mon-Fri 9-5)

Wishing you and yours a wonderful holiday season!
 
 

Champagne Taste - Beer Budget...?

If you can’t live within your means in your working years, there’s no reason to believe you'll pull it off in retirement.
 
So let’s start familiarizing ourselves with the options for retirees who didn’t save enough to live the kind of lifestyle they want. One is to go back to work. Easy to say, but hard to do unless you can consult or have an affinity for fast food.
 
Another is to rent out a basement apartment or sell the family home and either buy a cheaper house or rent. Moving is a non-starter for many retirees because they still enjoy their homes and want to have a place for kids and grandchildren to stay.
 
This brings us to two options for borrowing against the equity in your home, one of which, reverse mortgages, was covered last week (read that column here). The other option is the home equity line of credit, which a lot of people will set up and use long before they retire because it’s an efficient way to borrow.
 
Click here to read more in the Globe and Mail.

 

It's beginning to look a lot like Christmas!

 

 Our reception area in the office - Not a lot of room under this tree though.... 

 

Age Old Question...

The oldest dilemma about mortgages - Whether to go with a fixed rate or variable rate?  Well historically, the variable rate has performed better then the fixed rate however since the US meltdown, the new reality has changed all that.  Presently lenders/banks have reduced and in most cases eliminated the discounts on variable rates.  Prime being at 3.00% and a 4 year rate being offered at 3.39%, it is fair to assume the bank of Canada will increase the prime rate by at least by .5 to 1% in the next 2 years making it more expensive than the fixed rate. 
 
One strategy is to ride the variable rate until it goes up and switch to a fixed rate at that time, the downfall is most of the time the fixed rate has already increased.  All that to say, presently the balance is tipped in favour of the fixed rates.
 
To read more see this article from Globe & Mail

Debt's Dirty Dozen Danger Signs

Your credit report is important and, because of that, a lot is written about it as well as talked about over dinner or as topics of water cooler conversations. 
 
Although some of the advice comes from well-meaning people trying to help, misinformation or failing to go to trusted sources could make for some unfortunate surprises if you were to later view your credit score.
 
Click here to read five lies about your credit score from CanadianFinanceBlog.com.
 
If there’s one plaintive cry you tend to hear again and again from credit counsellors, it’s this: “If only our clients had come to see us sooner.”
 
By the time many people actually ask for help, their debt problems are so huge that their credit ratings are in tatters and some solutions may no longer be an option.
 
With that in mind, click here for a few of the early warning signs courtesy of CBC News that are pretty good indicators that people may be on their way to financial disaster and should seek help.

Buying a Condo: New or Resale?

When it comes to buying a condo, what’s a better investment? Buying one that’s already built and is being resold, or buying on the hype of a new building that’s yet to be constructed?
 
Jana Masiewich considered both a resale and pre-construction condo before deciding that buying a condo prior to it being built presented a better opportunity for her to make money on her investment. The 29-year-old, who lives and works in downtown Toronto, was looking for a condo property that met her criteria, in particular one in an up-and-coming area of the city. But she also had to discuss with her advisers whether she had the cash to purchase a yet-to-be built condo now.  
 
To land confidently on her decision she consulted with her financial planner, her realtor, and did her due diligence on the developer building the condo. Masiewich says she understands there is some risk in buying pre-construction, but if you do your research, and go with a credible builder, then you significantly reduce the chance of a bad investment. 

 Click here to read more from the Globe and Mail.

 

Bank of Canada Holds Rates Steady

With all the uncertainty surrounding many of the world’s economies at the moment, there was a semi-sure bet- that they Bank of Canada would stay put, given the strength of the headwinds blowing against our borders.
 
Yet again, Mark Carney is holding the overnight rate at 1 %. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
 
To read more click here

BC Minimum Wage Increases Again

B.C.’s minimum hourly wage took its second of a total of three increases this week making it $9.50, ($8.75 for alcohol servers). All part of Premier Christy Clark’s plan to increase the minimum wage to $10.25, (9.00 for alcohol servers) by May 1, 2012. Leaving business owners concerned about how it will impact their bottom line in an already uncertain economic climate. "This is part of a bigger picture of how tough it is for them," said Shachi Kurl, the B.C. director of the Canadian Federation of Independent Business.

On the other end of the spectrum of concerned business owners are the employees who while I’m sure they are welcoming the increase, it’s really just a drop in the bucket. Looking at what a “Living Wage” is for our area is at approximately $18.81/hour, even with the new increases there is still a fairly large gap.
 
There is also a lot of debate on whether or not the tiered program for alcohol servers is fair or not. Having someone rely on their earning of tips could have their income sufficiently jeopardized on slow nights.   
 
To read more click here

Is Saving Money Enough Motivation to Read a Long Contract?

When buying a home you have just made the largest purchase of your life based on borrowing more money than ever before. Bothering to read that 25 page contract is not high on peoples list. But it should be. It could save you thousands of dollars down the road.      
 
The ambiguity in mortgage contracts has landed more than one consumer in trouble they didn’t anticipate and now it has spawned a class-action lawsuit against one of Canada’s largest banks.
 
Kieran Bridge, a Vancouver-based lawyer with the Construction Law Group, has filed a lawsuit against CIBC over what he describes as vague language over early payment of mortgages. The suit was filed in British Columbia and Ontario this month.
 
Click here for the full Financial Post article.
 

Update from Roger

It is time to go to paper and tell you what's new! A brand new office at #119-2745 Veterans Memorial Parkway. A new website to better share important information, Facebook and Twitter account to share with my clients interest rates and Real Estate news as it comes. It is time that I become the ultimate point of contact for expert advice for any questions you may have on mortgages or real estate
 
You can find links to Twitter and Facebook here on the new site. Stay tuned for updates, video and blog posts on all things real estate and mortgage related including events around the community here at Rochar Financial.
 
You are very welcome to stop by and say hello at anytime! Your continual support is very appreciated.
 
Thank you,
Roger Levesque

Mortgages

Roger Lévesque

Personal Real Estate Corporation,
CD, B.Sc., M.B.A

Victoria, BC
Cell: 250-380-8048
Fax: 1-866-467-7881
Toll Free: 1-866-231-3624

MBABC - Mortgage Brokers of Association of BC