Prices are high, inventory is low, and there are multiple offers for over asking price for nearly every home that sells. We are, without a doubt, in a seller’s market.

This is a challenging market to be in for any buyer, whether you’re a long-term investor or a first-time home buyer, the complications are the same. 

The Canadian real estate market is hot, in particular, the Vancouver Island and Greater Victoria area.

If you’re looking to purchase a home in this area you need to be prepared well in advance.

Here are a few tips on how to buy a home in a seller’s market: 

Pre-Approval

Pre-approval is a must-have when purchasing a home in a seller’s market.

Knowing the amount which you can afford to spend on a home will allow you to make offers accordingly and stay within your budget.

Also, many sellers will turn down an offer that doesn’t include pre-approval. They see this as a risk that the deal may not close as scheduled and they would prefer to have a ‘done-deal' regardless of the amount offered. 

Be Prepared for Bidding Wars

A seller may receive numerous offers which in turn, gives them the negotiating power. In this case, be prepared with your counteroffer if you really like a home and don’t want to miss your opportunity.

Searching for homes below your max budget will ensure you have room to increase your offer and give you more opportunities to get the home of your dreams in the case of a bidding war.  

Make Strong Offers from the start

Putting in a strong offer from the start will give you a better chance than you’ll have in a bidding war.

Wasting your time with low-ball offers in this market will only work against you.

Come in strong from the start and remember, unconditional offers are a seller’s preference. If you’re able to make a strong offer with no conditions, your chances will increase substantially. 

Write an offer letter

A handwritten letter submitted with your offer may not win you your dream home. However, if it comes down to 2 or 3 offers that are close in price, your chances will increase greatly with the added personal touch.

Tell the seller why you like the home so much, what your plans for the home are, and how you envision you and your family making memories here.

If you’re a first-time buyer, advise the seller of the struggles you’ve faced in your attempts to buy a home in such a hot market, also let them know why you’ve fallen in love with their home.

While all sellers do want the best price for their home, not all of them are so focused on the almighty dollar. Many sellers want to know the home is going to be taken care of and enjoyed by the new owners.

A letter doesn’t guarantee you anything, but it definitely won’t hurt your offer! 

Expand Your Search Area

Expanding your search will give you access to different styles of homes, neighbourhoods, and opportunities.

Looking into new builds on the outskirts of the city or other property types is another way to expand your home search in a hot market.

If you’ve been looking for a detached home, but everything in your area is receiving dozens of offers, a large townhouse might be something you’d be open to considering.

Your dream home may just be sitting an extra 10-minute drive away!

Work with a Trusted Real Estate Agent

A trusted agent can help you in difficult situations. They have the experience, knowledge, and know-how to handle a Seller’s Market and will advise you accordingly when it’s time to back away from a home or to increase your offer.

Working with an agent you trust also means you won’t be touring homes that aren’t in your budget or to your liking. They may also be able to present properties to you that are not yet listed or new neighbourhoods that are in the planning stages and not publicly marketed. 

Buying a home in a seller’s market can be extremely challenging, however, these tips should help to ensure your offer gets noticed and that have the best opportunity to close the deal. 

You’ve likely been told that making a few extra mortgage payments each month is beneficial as you’ll pay your mortgage off faster and save thousands in interest.

However, instead of making extra principal payments, a savvier choice could be to put that money to use elsewhere — it all depends on your unique financial situation.

Yes, having a mortgage does mean you’re in debt, but it is often considered “good debt” because it’s backed by a tangible asset with real, growing value.

This means, if sell your house tomorrow you will immediately pay off your mortgage, however, this is not the case with other types of debt, such as credit card, student loan, or car debt.

Here are the top 5 reasons why you shouldn’t make extra mortgage payments: 

High-Interest Debt

Rather than paying down your mortgage which has an extremely low-interest rate, use the funds to pay down your high-interest rate debt.

While the amounts may be smaller, the interest rates are surely higher than your mortgage rates and due to compounding, high-interest debt just snowballs into a bigger and bigger number the longer you wait to pay it off.

Retirement Savings

If you haven’t started saving for retirement yet, or you’re not maxing out your annual retirement contributions, you may want to prioritize that over making extra mortgage payments.

Saving for retirement also includes compounding interest, however, unlike debt, savings compounding will assist in growing your money.

Your money will grow by leaps and bounds in these retirement accounts while, at the same time, your house will be appreciating in value, a financial win-win situation! 

Annual Tax Bill

If you’re not making monthly payments towards your taxes, you may want to save these funds for your annual tax bill.

Property values are increasing every year and with that comes tax increases. You want to be prepared to pay any higher tax bills each year. 

Emergency Fund

If you’re like most people, your savings fund was depleted when you purchased this home.

Rather than make an extra mortgage payment, build up that savings account again. If your furnace breaks in the middle of winter or your roof starts leaking in the fall, you’ll be extremely grateful that you have these extra funds to cover the costs.

Moving Soon

Moving is expensive, even if you’re making a large profit on the sale of your home.

You’ll need to pay, in advance, for inspections, repairs, maintenance, and much more before listing your home.

Having a nest egg of savings to cover these costs or to make your next down payment will be a lifesaver when the time comes. 

Paying your mortgage off as fast as possible is something we all strive for, although, ensuring you’ve taken care of all other financial aspects in your life first may make more financial sense in terms of interest rates, savings, emergencies, and such. 

Real Estate commissions can be a little unclear and confusing and we want to clear that up.

Many buyers and sellers are unsure what they are actually paying for, so we’ve put together this list to review the main costs, covered by the realtor, to explain what your funds are going towards.

Brokerage fees

The majority of brokerages charge a 50% fee on all commissions.

This covers administrative costs, some marketing, advertising, and some signage.

As each brokerage is different, so will be the fees and services included, but for the most part, you can expect that your agent is paying the brokerage 50% of the commissions they’ve earned.

Photos and videos

Professional photos, video tours, and drone videos are at the sole cost of the agent. This often also includes costs associated with staging your home.

Hiring a professional photographer will ensure your home shows its best and is marketed first-rate, gaining the interest of as many buyers as possible.

MLS, Real Estate Board, Licensing, etc.

Realtors using the MLS system are required to pay an annual fee. MLS is the most well-known home searching website and your agent will need access to this to ensure a quick sale.

Realtors are also required to pay licensing and insurance fees, which are renewed every 2 years.

Additionally, agents need to pay annual dues to their local real estate board and are required to complete numerous educational courses, at their own cost, each year to ensure their license remains in good standing.

Advertising

Any additional advertising by your agent will be at their costs. If your agent offers to advertise on their social media pages, they are likely paying a social media manager or using plenty of their free time to ensure your listing is shared as widely as possible.

Signage

While some brokerages offer signage, not all of them do. And if your agent wants personalized signage, this will come at their cost.

A simple sign can cost upwards of $150, this would not include any additional text, logos, or photos. 

Additional costs

Many realtors will create flyers or brochures to hand out at open houses or around the neighbourhood, the time spent to create these, printing, and distribution are all at the sole cost of your agent. 

While it may seem that agents are making extremely large commissions, they are also extremely high expenses, and we haven’t even touched on paying taxes, employment insurance, etc.

There are countless costs that your agent will need to pay on a per listing, monthly or annual basis that you may not be aware of. It’s always best to have a conversation with your agent about the costs in advance so that you’re aware of everything upfront. 

Saving money for a down payment on a home can be one of the most difficult things to do. It takes an immense amount of discipline and often includes making numerous sacrifices.

If you are already paying a mortgage on another home or paying rent, the process can be even harder. Thankfully, there are plenty of ways to save, some that you may find quite surprising, and others where you may need to make some lifestyle changes.

Whether you’re a first-time homebuyer or a long-term investor, these tips can help you to save for a down payment. 

Subscriptions

Automatic payments can be easily overlooked or forgotten about.

Sit down and go through all your recent credit card and bank statements to get an in-depth look at where your money is going.

Cancel monthly subscriptions that you do not use or need and change your monthly plans to more affordable options, if possible.

A few dollars of savings on each canceled account can add up quickly and you’ll be surprised with how much you can save each month.

Affordability

Knowing how much you can borrow to purchase a home will help you determine how much you need for a down payment.

Seek a financial advisor, lender, or mortgage broker to review all your finances and assist you with the pre-approval process.

This process will also give you an idea of how much you can expect to pay each month when you do purchase a home, inclusive of mortgage payment, taxes, insurance, and any condo/homeowner fees.

Start a Down Payment Fund

Set up a TFSA or RRSP account with your bank where the funds will be saved and you can easily make monthly contributions.

Resist Temptation

Set a timeline to save your down payment and stick to it.

It may be very tempting to see the funds growing in your bank account and you feel the urge to treat yourself to something, but this will only set you back and extend your deadline.

Stay focused on your end goal and know that buying a home will be the ultimate gift to yourself.

Less luxuries

With saving always comes the sacrifice of a few less luxuries.

Instead of going out for dinner every weekend, start cooking at home, this can save hundreds of dollars each month. 

Pack a lunch to take to work and you can save about $15 per day. Make your own coffee and skip the daily trip to Starbuck and you can save upwards of $150 per month.

Be aware of the small luxuries that you’re spending money on and try to find ways to work around them. You don’t want to give up all the things you love in life, you simply need to find a new and affordable way to enjoy them! 

You’ve likely heard the term “Bully Offer” numerous times but what is a bully offer? How does it work? And who does it benefit?

In a seller's market, which we are experiencing now, there are more buyers than there are homes listed for sale. This means sellers have a strong negotiating position with often more than one buyer showing interest or offering on their home.

Bully offers, also referred to as pre-emptive offers, occur when a Buyer tries to short-circuit the process set out by the Seller and re-take control.

What is a bully offer?

A bully offer is an offer from a buyer to the seller to purchase a home and the offer is submitted before the date that the sellers have indicated they will look at any offers.

Many home sellers make the decision when they list their home to “hold offers” and wait for a certain date and time to review them.

For example, a seller lists their home for sale on Thursday but has agreed not to review any offers until Monday, giving buyers time to view the home and prepare their offers prior to submission. However on Friday night, after only 1 day on the market, the real estate agent calls to tell the sellers that they have a bully offer and it’s only good until Friday at midnight. This is the meaning of a bully offer in real estate.

What are the benefits of a bully offer?

A bully offer is typically well above the asking price and unconditional.

A buyer submitting a bully offer knows they need to make the offer as irresistible as possible to grab the buyer's attention.

Sellers are not obligated to accept bully offers, however, your agent is obligated to present all offers to you. That said, bully offers are often very attractive and many sellers will accept them for the simple facts of the high purchase price offered and the ease of closing.

Is a bully offer bad?

While it may seem unfair or unethical, there are no written laws stating that they are illegal.

They do, however, push many buyers out of the market and increase the price of homes in the market. Accepting a bully offer is completely up to the seller, there’s no right or wrong answer.

When to avoid a bully offer?

A bully offer should be avoided when:

• The offer is not well above asking price.

  
  

• The offer has conditions on it, meaning it will be sold conditionally.

  
  

• The property has had a ton of interest, showings, and excellent feedback, meaning you can likely expect a large number of offers on offer day.

  
  

• Your agent doesn’t have enough time to notify all other interested buyers that an offer has been submitted.

Bully offers can be fantastic for buyers, they are usually ridiculously high, unconditional, and work around the seller's desired closing dates.

However, as a competing buyer, they may seem unethical and can drive the prices of homes up. 

When thinking of marketing your home for sale, the thought of a few updates may cross your mind.

Most updates will be greatly appreciated by buyers and will increase the value of your home.

But not all of them…there are a few updates, that may not appeal to the masses. And when selling your home, you want it to be attractive to as many buyers as possible.

Exterior

Unless all the houses in your area are painted bright, vibrant colours, this is definitely something that should be avoided. A bright red or aqua blue home can look out of place and may leave buyers thinking about repainting it.

With how quickly homes are selling these days, buyers are looking for something they can settle into right away without the added costs and hassle of repainting.

Interior Paint

Brown, drab dining rooms and vibrant red kitchens are also top of the list for colours to avoid on the interior.

If you stick with neutral or warm colours, then you can save the bright, fun colours for drapes, backsplashes, and such.

Inconveniently Placed Appliances

The thought of ‘hiding’ a microwave in a drawer may seem like a great idea, however, most buyers find these a bit inconvenient and far too low for their liking. Stick with the traditional microwave placement above the range or in a space above the countertops.

Backyard

Expanding living space into the backyard is something that many buyers are looking for today. Having extra space to cook, relax, practice hobbies, etc. is ideal for everyone, particularly with so many of us working from home now.

Yes, many buyers will have children or will plan to have children, however, having a backyard that looks more like theme-park than a family space may be a turn off to many buyers.

Try to keep the children’s play area in one section of the yard rather than the entire yard. This will give buyers the ability to envision themselves living here and making memories with their families.

These suggestions may not apply to all homes or all buyers, however, they will appeal to the majority of buyers and that will ensure your home sells as quickly as possible.

When beginning the renovation process on your home, there are typically two goals that cross your mind; the first is improving your home’s livability and usability, and the second is how this renovation will improve the value of your home. 

With the kitchen being the most focal point in the home almost any updates in this room will provide you the best return on your dollars invested. 

The key to a kitchen renovation is to keep it somewhat simple. Remember, you don’t need to spend $60,000+ to renovate your kitchen, an update with new appliances can be much more affordable if done carefully. 

Replacing appliances can be pricey, however, it can also be very profitable. You do not need the most expensive appliances on the market; modern, stylish, and energy-friendly appliances can be purchased at fair prices and will improve the look of the room drastically. 

Replacing the flooring can also prove an excellent return on your dollar. Be sure to choose flooring that is long-lasting and easy to clean. Hardwood floors are definitely something that should be avoided in the kitchen area as it can easily stain and deform if it gets wet for long periods of time. 

Updated hardware is an easy and extremely affordable fix, these items can be purchased at your local hardware store and often installed by yourself. Be sure to avoid flashy or coloured hardware, these are short-term trends and will look dated within just a year or so. 

If your home has older oak or wood coloured cabinets, you can simply sand these down and paint them in a bright neutral colour, white is often the preferred choice in kitchens. By doing this task yourself or even hiring someone to take care of this will save you thousands in replacing them. 

When looking at your walls, you may want to choose a fun, bright, and lively colour, however, if you’re planning to sell your home in the near future, you’ll want to choose a neutral shade that will appeal to the masses. Remember, you can always choose more colour, design, and style with your backsplash. 

Last but definitely not least, is your countertops. Yes, we all dream of the perfect marble countertops, but these are extremely expensive. Giving granite countertops consideration, which is durable, looks fantastic, and comes in many styles, will save you thousands of dollars and won’t decrease the value of your kitchen in comparison to marble countertops. 

When planning your kitchen reno there is so much to consider; colours, styles, livability, usability, and much more, it’s no wonder that you may have some questions. Please reach out to us at JP Real Estate as we would be more than happy to take a look at your kitchen and give you some ideas of what may work best for your home. 

Buying a home can be exciting, scary, intimidating, and liberating all at once. It brings about many emotions that are unexpected and also reassuring.

You may feel a sense of comfort knowing that you’re ready to take this leap into homeownership and settle into a place for years to come. Or you may feel nervous, wondering if you can financially manage the responsibilities that come with buying a home.

If you can truly answer “Yes” to each of these questions, then you are ready to jump into homeownership and all the ups and downs that go along with it:

Do you have a stable income?

Having a stable income is extremely important when purchasing a home. A lender will shy away from giving you a loan if you are known to change jobs frequently. They want to see stability and commitment from you with your income and savings. 

Do you want to stay in the area long-term?

If you’re planning to move to a new area or city in the next year or two, it might be best to rent a home. Taking into consideration the closing costs (realtor fees, lawyer, etc.) that you will be spending to purchase and then sell home the home in a couple of years. What might seem like a good idea now, may not look so profitable when you add up the additional costs.

Are you comfortable managing your debt?

Having no credit can be nearly as negative as have a poor credit score in the eyes of a lender. They have no evidence to review of you paying your debts regularly in a timely fashion. If you don’t have any credit at this time, we suggest applying for some credit with low limits or a secured loan. This will assist your mortgage application process in the future.

If you have poor credit, you should start paying down debt as soon as possible, and always on time! 

Do you have an emergency fund?

After 2020, we all more than aware to expect the unexpected. Having an emergency fund can help you if you find yourself in a situation of a job loss or health emergency.

You’ll also need to have savings for home repairs, as a homeowner you can no longer call your landlord if the fridge stops working or there’s a water leak in your home. These repairs are your financial responsibility and unfortunately, they are rarely cheap.

Have you saved a Down Payment?

A down payment can be extremely hard to save for. With home and living prices increasing, it’s becoming harder for people to save funds, especially tens of thousands of dollars.

If your family is planning on helping you with the down payment, you’ll need to ask them to transfer the funds to you well in advance as your lender will need to see these funds in your account for a period of time before approving your loan. 

Do you know how much you can afford to spend on a home?

Having an idea of the type of home you want is fantastic, but can you afford it? You should work with your lender to obtain pre-approval financing which will let you know the maximum amount of money they will give you. From this amount, you’ll then want to calculate monthly mortgage amounts and decide on an amount that you’re comfortable with. Just because a lender has offered you a certain amount certainly doesn’t mean you need to spend that much.

Having a good handle of your personal finances, expectations, and savings will serve you when purchasing a home. 

Are you willing to make sacrifices to become a homeowner?

As with any large purchase, homeownership comes with sacrifices too.

Are you willing to give up eating dinner out every weekend? Can you give up that beach vacation every year or your annual trip to Vegas?

Buying a home is a large responsibility and while you don’t need to find yourself mortgage poor, you do need to ensure that you can meet your financial commitments and save for emergencies.

If you were able to answer ‘yes’ to all these questions, you are very likely ready to take the leap into homeownership.

However, if you weren’t able to answer yes to all of them, that is OK too. There are ways to work around certain things, ways to improve credit, and much more.

JP Real Estate is here to help every step of the way. We offer advice, assistance, and can help you prepare yourself for buying your first home. 

Selecting a Real Estate Agent is one of the most important decisions that you can make when buying or selling a home.

Your goal when you’re ready to choose a real estate agent is to find someone who you communicate well with, and who shares your same goals—not just about buying a house, but doing so in a way that prioritizes your needs as a buyer and gets you the best home possible for the best price possible.

Here are a few things to take into consideration when finding the right agent for you:

Know your needs

How urgently do you need to sell or buy a home? What style and size home are you looking for? Do you know are you’d like to be in? Are you looking to sell ASAP or are you willing to put in some extra time and work to maximize the value of your home prior to selling?

When you understand your needs, you can ask the right questions. If agents have a clear idea of what you’re looking for, everyone starts on the same page. Then, you can learn how each agent will adapt their real estate services and process to work for you.

Agents must be tech savvy

A Realtor's success depends on how well they find and market homes. Online advertising and property websites are now a basic requirement in modern home buying.

Take a look at the agent’s social media accounts to ensure they are used regularly. Check to see if they are using professional photographs and drone videos to showcase their listings. Having an agent with a strong understanding of the latest technology and how to market your home digitally will ensure a much more successful sale for you.

All Realtors aren’t equal

While all agents become certified in the same foundational program, this only covers the theory and foundations of the business. Real estate changes daily because of new laws and market trends. Ask Realtors what additional training, experience, and local connections they maintain to make sure their knowledge is always up to date. Ask them about the local real estate market, their predictions, and for advice, this will assure you that your agent is up-to-date and fully qualified.

Communication is key

Having an agent who is available to you when you need them is key. Not all questions can be asked and answered between 9am and 5pm. Also, be sure to discuss your preferred method of communication with your agent in advance, you may want daily emails with updates or a text message after each showing. Ensure that your agent is willing to communicate with you on your terms.

Ask for their strategy

A professional and experienced agent will have a tried and true marketing strategy in place. Review this with your agent in advance, ask questions and discuss any concerns that you may have.

Ask around

The best way to learn about an agent is to ask someone who has worked with them before. An experienced agent will be happy to provide client testimonials. Also, be sure to check their website and social media pages for comments from clients.

Agent support

Ask your agent about their support system, whether it be marketing, research, or administration, knowing your agent has the resources behind them to ensure your successful sale or purchase will give you peace of mind.

Also be sure to ask your agent about their access to community connections such as mortgage brokers, inspectors, appraisers, contractors, etc. that may be needed throughout the process. An excellent agent will have countless contacts that they work with on a regular basis.

Pricing

Don’t select an agent solely based on how high they price your home; make sure to understand their method. An overpriced home can linger on the market and require price reductions in the future, giving buyers the idea that you’re rushing to sell and are willing to accept an even lower price. When a home is priced right, it sells fastest for the most value. An experienced agent will review comparable properties in the neighbourhood and recommend a fair price for your home.

Trust your gut

It’s got you this far! Always follow your gut instinct, if you find an agent that you are comfortable with, genuinely like, trust and feel will represent you best, then choose that agent. Your feelings throughout this rollercoaster process are extremely important and you want to be working with someone you are comfortable with.

If the 2021 Real Estate market were a card game, it would be stacked with wildcards!  

The global pandemic has caused seismic shifts in the market, creating a high demand for more square footage, thus creating a strong desire for larger suburban homes. 

Interest rates are low, but so is inventory, and there's been an unexpected influx in new-home buyers getting into the market recently. 

When we look at all things combined, there are some surprising changes excepted in the 2021 real estate market, here are a few of this year's predictions:

Increase of New-Home Buyers
With interest rates at an extreme low, this is an ideal time for first-time buyers to get into the real estate market.  One of the biggest fears many new buyers have is finding themselves 'mortgage poor' but with today's low-interest rates, many buyers will find their mortgage payments equal to or possibly even lower than their current rental rates. 

More Competitive Offers
Properties will likely sell faster than ever before. With such a low inventory, the opportunity for buyers to make an offer will need to done quickly and with little or no conditions. A seller is going to be much more inclined to accept a cash offer over an offer than includes mortgage, inspection, and other clauses. Also be prepared to offer over asking price, with plenty of buyers and not many homes on the market, buyers are likely to find themselves offering higher prices for their offers to even be considered.  

Prices may hit a new high
We are, without a doubt, in a seller's market. The low inventory and the high number of buyers will push the home prices up as the need to buy becomes stronger.  This is not all bad news, while you may be paying over asking price and a larger deposit now, the low-interest rates mean that you will be paying less for the home over the term of the mortgage and will keep your payments affordable. 

Square footage is key

With more and more people working from home, square footage is top of the list. Our needs for a simple home have changed to a home with space for home offices and home learning for children and students. Working from the dining room table was fine for a few months, but with the ongoing pandemic and a strong turn to a work-from-home culture, buyers are looking to have the extra SF to set up a proper ongoing workspace. 

Say hello to the suburbs
Again, due to the pandemic and our new work-from-home lifestyles, buyers are looking for that extra space which they may not find in the city. Think large yards with extended living space, home gardens, and extra space for hobbies.  

Intergenerational living
Most of us couldn't wait to move out of our parent's house, however, with the increased price of homes and new-home buyers being a few years older than recent years, we are seeing a turn towards intergenerational living. You may begin to see young couples looking to purchase a home with a mortgage helper, with their parents, or a home that can be easily renovated into two separate living spaces and the entire family living in the home together. 

2021 will bring us many unexpected turns and new real estate trends as we learn to adjust to living amidst a global pandemic, increased home prices, and low inventory. 

Please keep in mind these trends are nationally based across Canada and therefore may not be seen as widely on Vancouver Island. 

Buying a home during a seller's market can be extremely tricky, prices are high, inventory is low, and homes are selling faster than we can see them. 

So when is the right time to buy? When you're ready. That's the simple and most honest answer anyone can give you. 

Buying during a Seller's Market may make things a little more complex, however, we've put together a few tips to help you find the right home at the time that's right for you: 

Expand your search

The price of homes is always higher in the trendy neighbourhoods, but if you're willing to expand your search area a little, you may find an excellent property on the outskirts of your desired area for a much more affordable price. Another tip is to look at areas that haven't been through the gentrification process yet, you could find an excellent deal here and watch your property value increase over the years as the neighbourhood improves. 

Customize your Offer to Purchase

It's not always about the price, some venders want to sell and move out as soon as possible, whereas others may want to have an extended closing date or an opportunity to rent-back the property until they can find a new home. Have your agent speak to the selling agent to find out what the vendor's goals are, aside from price. 

Forget the low-ball offers

Unfortunately, a seller's market is not the time to be making low-ball offers. Chances are, the vendor will receive multiple offers, each of which will be asking price or more. Offering below asking price is a great strategy in a buyers market, but when homes are selling in a day or two of coming onto the market, the chances of this working in your favour are extremely low. 

Cash purchase

If possible, make a cash offer. Sellers prefer cash offers as they can close faster and they eliminate any chance of the mortgage not being funded. Cash offers also give buyers a little more negotiating power with regards to closing dates, prices, and inclusions. 

Get pre-approved by your lender

If other offers coming in are equal or similar, a seller will likely choose a buyer who has been approved as this means a better chance of the loan being funded and the transaction closing in a timely fashion. 

A Seller's Market can be very frustrating for a buyer and you may feel pressured to buy a home quickly, however, JP Real Estate is here to help you choose your next home confidently, on your terms, and when you're ready! 

If you have any questions or would like some guidance in regards to the real estate market, please feel free to contact me at your convenience, I'm always available.

As always, JP Real Estate is looking forward to being of value to you. We are more than a real estate company, we are a community, a friend, and a family. We look forward to connecting you with greatness!

As the New Year rolls in, so do the new trends and styles! 

2021 predicts some very popular trends fading out as we require more functionality and organization in our homes these days. 

At the end of the day, it's your kitchen and you're free to decorate and style it exactly how you want, however, if you're planning to sell in the next year or so, you may want to avoid these trends:

Cool Gray Paint

While this neutral colour is extremely versatile and looks fresh, it doesn't offer the warm, cosy feel that buyers are looking for these days. Turn your focus to warm, neutral colours that give that 'homey' feeling. 

Open Shelving

This unorganized and cluttered look is definitely fading. Not only do your dishes collect dust, grime, and grease, it can be very unsanitary if not cleaned regularly. Buyers want to see storage space, and that includes cupboards, they do not want all their dishes exposed. 

Farm-House Style 

A well-loved trend by many, this popular style can often come across as cluttered, dated, and unorganized. Think clean, crisp, easy to clean, especially when it comes to cabinets. Predictions for 2021 cabinets are sleek, flat-faced with bold lines. 

Ornate Hardware

Flashy is officially a thing of the past when it comes to kitchen hardware. No more gold, fancy designs, or funky hardware on cabinets, going forward we're looking to simple matte finishes. This new style gives a modern industrial look and is very easy to keep clean and in good condition. 

Basic Backsplashes

Rather than your basic backsplash that only reaches the bottom of the cupboards, think full wall slabs or tiles. If you plan on tiling, try using different shaped tiles instead of the standard rectangle, this will add some texture and a modern look to your kitchen. Also, try to use warm neutral colour palettes which will provide you with extended longevity. 

Navy Cabinets

The navy painted lower cabinet trend is leaving as quickly as it arrived. The darker look on the bottom cabinets is still going to be around but think in terms of forest greens, warm dark greys, or even black. The trend is still here, it's just the navy colour that's fading out. 

There is no hard and fast rule on kitchen trends and you're always encouraged to style your home in a way that works for you, these are simply a few ideas of things to avoid if planning to sell in the near future. 

We understand how frustrating it can be to try to keep up with the trends and it seems we are always one step behind. This list is simply for your information and a guideline of what you may want to avoid if planning to do some renovations and updates in the near future. 

Buying a new home is an extremely exciting experience, whether it's your first or your 10th. 

There are a few etiquettes when purchasing that should be followed and your real estate agent will likely remind you of them, however, there are also a few trade secrets that you may not be aware of. 

Take these tips into consideration when purchasing your next home:

Commentary

Refrain from commentary when touring a new home, whether it be positive or negative. While buyers may not be home, there are plenty of ways for a buyer to hear what you're saying with smart home technology or nanny cams. If a buyer knows how much you love their home, they may not be willing to negotiate much on the price, whereas if they know how much you dislike about it they may be hurt and offended. 

Neighbours

Speak to the neighbours, find out what the neighbourhood is actually like, and more importantly, what they are like. You don't want to buy your dream home and find out that the neighbours are extremely nosey or practice playing the drums at 2am on a regular basis. Speaking the neighbours will give you peace of mind with regards to the area and them, it's a win-win conversation to have. 

The 85% Rule

If a home meets 85% of your requirements, it's suggested that you put in an offer. The chances of finding a home that is 100% are extremely slim. Depending on what the home is missing, chances are you can do a few small renovations and bring up to that 100% very easily. 

Agent Interviews

Having a friend or family member recommend a real estate agent to you is a great way to find someone reliable. However, it is suggested that you still interview them and ensure that their work ethic, strategies, and accessibility are what you're looking for.

Floors

Always check the floors of a home, this can tell you a lot about how well a home has been cared for. If you notice the majority of the floors are covered with area rugs, simply ask your agent remove them so you can inspect the floors carefully. 

Emotions

Buying a new home can be extremely an exciting and emotional time, however, try not to get too attached to a certain home as it can affect your business negotiations. Try to keep a clear head and think logically about the deal through all stages of the transaction. 

Buying a home can be a tricky, especially when you add in all these "rules" but having a great agent that's willing to go over and above, will help you greatly in all aspects of this process. 

Buying a home is one of the most important, and expensive, purchases many of us will make, and should not be taken lightly. 

You may spend years saving up for the deposit and making sure your credit remains in good standing, then shopping lenders to get the best rates. And yes, you are doing everything correctly, however, there are a few other things that you should and shouldn't be doing during this time that you may be unaware of. 

Here are a few tips on finances and budgeting while trying to purchase a home: 

Additional Credit Cards

If you've been pre-approved for a mortgage, do not apply for additional credit cards, loans, accounts, etc. during this stage. This could negatively affect the approval process and your loan could fall through. 

New Job Offer

Don't change jobs while in the loan application process. This may affect your stability and credit rating in the eyes of the lender and again, your loan could fall through. If you've been offered a new position, ask your new employer if they could wait until your loan is secured or speak with your lender to confirm this job change will not affect your loan. 

A Good Agent

This may not be what you think...a good agent will not only look at your pre-approval amount but will also sit down and ask you how much you're comfortable paying each month. There are plenty of costs, such as strata fees, taxes, homeowners association fees, etc., in addition to your mortgage each month and a good agent will factor these in to make sure you stay within your budget. 

Bidding Wars

Bidding Wars and paying over asking prices seem to be the norm these days so keep this in mind when looking for homes. Searching for homes below your budget will give you plenty of wiggle room when making an offer, and hopefully, leave some funds for updates or renovations. 

Comparables

Nothing can tell you the true value of a home like looking at the comparable properties in the area. A skilled agent can provide you excellent comparables and advise you if a home is priced correctly or not. 

Mortgage Broker

Having a mortgage broker shop your loan around to various lenders to get you the best rates is a no-brainer, especially if you have less-than-perfect credit. A mortgage broker will look at less conventional lenders and find different ways to have your loan funded that you normally wouldn't have access to. 

There are so many ins and outs when purchasing a home that having a professional on your side is in your best interest. 

To say that 2020 threw us an unexpected curveball would be a large understatement. Every aspect of our lives was affected, including the real estate market.

We never expected to spend so much time at home and be working at home. In turn, what we wanted in a home a year ago was completely different than what we're needing in our homes today and going forward.   

Moving towards 2021, the predicted real estate trends are much different than previous years, although, very expected considering the circumstances. 

Here are a few of the real estate trends predicted for 2021: 

Home Office

Demand for a home office has increased substantially. With many people continuing to work from home on a regular basis this feature will be happily welcomed by potential buyers. Keep in mind, a home office can also be used as a learning centre for students who are studying at home. Having a private, quiet, bright room with a desk, chair and the required communication connections will appeal to families as well as singles when selling your home. 

As we're spending more and more time at home, we're beginning to look at new ways to be creative and change the look of a room. Try not to think of your grandmother's textured walls of butterflies and teapots, think of fun, artistic designs that add colour and personality to a room.

Another popular trend prediction will be wood on walls, whether it be an entire room or just an accent wall, the look of bringing wood flooring right up to the top of the wall is proving to be quite popular. 

Cozy

In recent years, many homeowners chose to shy away from the cozy look and went with a modern, clean, crisp look. However, as we've all become homebodies this past year, we are seeing the trend towards comfort and warm colours increasing. When a buyer comes to view your home and immediately 'feels at home' they will begin to envision themselves living there and their belongings in your home, turning a viewing into an offer to purchase very quickly! 

Outdoor Living Space

We've mentioned this in a few previous blog posts and it especially rings true for 2021, buyers crave outdoor living space. A place to spend time, relax, and entertain outdoors almost feels like added square footage to the home. An outdoor cooking area, seating area, and fire pit will impress even the most indoorsy of buyers!  

While we can't guarantee that these features are exactly what all buyers are looking for, we can assure you that it's something that will tick the boxes of the majority and they are the top 4 real estate trend predictions for 2021.

When purchasing a home you need to have good credit, a solid downpayment, and you may even need to limit the conditions you put in your offer to purchase for buyers to accept it.

It may start to feel like it's all about the numbers and for the most part, it is, however, there is one added personal touch that you can include with your offer that may sway buyers in your favour...a personal, handwritten letter.

Most buyers don't have the time or the desire to sit down and write out a letter explaining to the sellers exactly why they want to purchase this specific home.

By writing a letter, you can explain to the homeowners all the little details that you love about their home, how you intend to care for the home, and your plans for creating family memories here.

If you are a young couple or first-time buyers, be honest in your letter and let them know about the struggles you've faced when trying to purchase a home, such as unconditional offers or offers over asking price beating out your offers.

A handwritten letter will give you the opportunity to connect with the sellers on a level that most buyers won't have. And including a few details about your future plans for the home will resonate with them and may make them more comfortable.

What many of us don't realize is that even though the seller is selling their home, it's still their home, they still have countless unforgettable memories that they will always tie to this home, and they want to ensure that it's loved and cared for just as much as they did.

This isn't a guaranteed method, by any means, and cash is still king, but it just might be the one thing that pushes your offer to the top of the pile!  

Have you made an appointment to see a property only to find out that it's been sold before you even have a chance to get there? Are you finding that your offers are getting beat out by unconditional offers? 

So, what exactly is an unconditional offer? Well, it's essentially purchasing a home 'as is' and agreeing to purchase it without approval from your lender, insurance provider, or having any inspections completed.

Is it risky? Absolutely! However, if you are extremely familiar with the real estate market and have a savings account that you can lean on if you find there are some problems or your lender backs out, then it might be the right move for you.

Here are a few of the risks you should weigh before entering an unconditional contract:

Property Inspection

Without having a property inspection completed, you may miss some serious problems that are unseen to the naked eye. By having a property inspection done, all problems will be found, noted, and give you the opportunity to negotiate the price with the seller or walk away from the deal. A  property inspection will catch asbestos, mold, foundation and structural issues, age and efficiency of HVAC systems, hot water tanks, and much more. 

Title Review

A title review is another extremely important aspect of purchasing a home. You need to be aware of all Rights of Way, Utility Agreements, covenants, etc. that are registered against your property. You also need to be assured that the seller's lawyer undertakes to payout and discharge any mortgages, loans, or liens that are registered against the property. 

Insurance

The chance that your insurance provider will agree to insure a property without a property inspection, is quite slim. It is, of course, a possibility, but it's likely going to cost you a pretty penny as the premiums will be extremely high. Insurance providers want to be guaranteed that what they are insuring isn't going to cost them money.  

Financing

If your lender is unable to fund the loan or can not fund on time, there's a risk that you will lose the home and your deposit. Many lenders will also want to review the property inspection and insurance documents prior to funding the loan, and if you've made an unconditional offer, you might have a hard time getting all these documents together to satisfy your lender. 

5. Under Valuation 

Having an appraisal completed on the property you are purchasing will give you the most reliable idea of what the home is actually worth. If the seller has under-valued the home, this could have negative impacts on you, as your lender will likely lower your approved loan amount, meaning you will need to come up with the difference.

Homes are selling fast and it's hard to keep up with the market these days, so being aware of the risks that come along with an unconditional offer to purchase is extremely important.

Purchasing a home is an expensive process, there are many costs to factor in such as lawyer fees, insurance, inspections, and much more. 

The thought of skipping a home inspection may cross your mind, it's a few hundred dollars that you may not want to part with. However, having a home inspection completed, can save you a world of problems and money later. 

Below are a few reasons that having a home inspection completed will be worth every penny and possibly save you a lot more in the future!   

Safety 

A home inspection will find things that you can not see, such as radon, carbon monoxide, mold, and much more. You want your new home to be as safe as possible and without a thorough home inspection, these may not be found. 

Negotiating

If during your home inspection, some problems are found, this gives you an excellent opportunity to negotiate with the sellers. You can request a discounted price or ask that the seller fix/repair the problems prior to closing. 

Insurance

Many insurance companies will not insure a home without reviewing the home inspection first. They need to be assured that what they are insuring is in good condition. Always check with your insurer prior to declining any inspections. 

Mortgage funding 

If you are depending on your bank to lend you the funds to purchase your new home, then you need to ask them if they require a home inspection. Many lenders will require a review and approval of the inspection prior to releasing any funds to you. 

Future costs

A proper inspection will give you an idea of the age of your roof, hot water tank, HVAC systems, and much more. Each of these will then give you a better idea of how to budget for future repairs and replacements. If you don't have a large savings account but have plenty of upcoming costs that are needed, this may not be the right home for you. 

Deal breakers 

Your home inspection will give you an idea of anything that will be a deal-breaker for you. It may be that the foundation of the home is cracked, or that the roof needs replacement within the next year or two, whatever it may be, the inspection will give you a better understanding of the condition of the home and help you decide if you should move forward with this purchase or find something more suitable to you and your budget.  

We understand the market is quick and homes are often selling before you can even put in an offer, however, we want you to be aware of the risks that you could be taking should you skip a home inspection when purchasing your new home.

You only have one chance to make a first impression!

Preparing your home for sale in advance will improve your home's marketability, ensure it shows well, and assist in getting you the best price for your home! 

The majority of buyers are looking for move-in-ready homes where they can simply bring their belongings and start enjoying life. They are not looking for fixer-uppers or work projects that need to be completed. 

By taking care of the 5 things mentioned below you will ensure your home is ready to sell, show, and is worth every dollar you're asking for...and more! 

1. Schedule a Deep Clean

You want to showcase your home at its best and scheduling a deep clean will guarantee it's ready for showing. Have the walls washed, drapes or window coverings cleaned, all those hard to reach places, behind and alongside the appliances, and those forgotten corners. Your home may be extremely clean already, but you want to make sure it's sparkling and there are no spaces forgotten.  

2. Refresh the floors

If you have carpeting in any rooms, have them professionally cleaned and stains removed. You should also wash and wax any other flooring until it's shining and looking near new. If you have stains or scuffs on the floor that can not be removed, be upfront with potential buyers about them, don't try to hide them. There's a high probability that they will be willing to work with you on a plan to fix or repair the stains or floors prior to closing. 

3. Fix the broken stuff

This sounds like a no-brainer, but most of us have something broken in our home that's been broken for so long that we've forgotten about it and it doesn't bother us anymore. Don't expect your potential buyers to feel the same way! Leaky faucets, closet doors that don't close properly, cracked electrical covers, and such, are quick, affordable, and easy fixes that can affect the sale and price of your home. 

4. Paint

You don't need to paint the entire house, but freshening up the walls in those high-use areas will make a huge difference. We also suggest putting a fresh coat on the front door and entryway as these are the first area's a buyer will see when viewing your home. If you've painted a specialty room or your child's room in a bright, funky colour, we suggest repainting it to a neutral colour for the sale of your home, as these fun colours may not appeal to all buyers. 

5. Mind the lighting 

Replace any burnt-out lightbulbs, inside and outside! If you have a room or two with poor lighting, buy a couple of lamps to brighten them up.

Also, ensure that each lightswitch is actually connected to a light and works. A buyer doesn't want to be fumbling around with numerous light switches just to get a good look at a room. 

Remember, you will only have one chance to impress potential buyers with your home so you want it looking its very best.

If buyers think there's a lot of work or repairs to do, they will likely move on and your chance of getting them back is extremely slim.

Preparing your home in advance is a huge benefit to you; it's less work at 'showtime', it will increase the value of your home, and it will improve your home's marketability. 

As we all know, very few things in life are tax-free and, unfortunately, taxes are also part of selling your home. 

The Canada Revenue Agency has been extremely strict recently on home sellers who, the CRA feels, are inappropriately claiming the Principal Residence Exemptions (PRE). In particular, the CRA is focusing on owners who are flipping homes, ie: fixing them up and selling them at a large profit, in a short amount of time. 

If the CRA determines that you are continually buying and selling homes, you can be denied the PRE. In this case, you can be taxed on any profits as 100% taxable business income, rather than 50% taxable capital gains.  

Here is the story of what recently happened with an Ontario couple who bought and sold numerous homes over a 6-year time span. 

Home 1

In August 2006 a couple purchased a home and completed some upgrades such as painting and small renovations. Unfortunately, this home was located near an industrial site and they found the noise and vibrations from the large trucks passing by to be a disturbance and decided to sell. They sold the home just ten months later at a profit of just nearly $70,000.

Home 2

The couple then constructed and moved into their second home in September 2007, however, once again, the couple was unhappy with their neighbourhood and sold the home. The home sold in August 2008 for a profit of over $273,000

Home 3

The couple then moved into another home they had constructed in September 2008. They had no intentions of moving, however, the realtor who had sold them the home, approached them with an offer they couldn't refuse. They sold this home in September 2009 for over $400,000 profit. 

Home 4

They then purchased and moved into a beautiful new Townhouse. The neighbours quickly began to complain about their large work vehicles, parking issues, and social gathers. The couple opted to sell once again and moved in January 2011, this time at a profit of over $54,000. 

Home 5

Later finding what they thought was the perfect home, they moved into home #5. After completing some renovations and landscaping, they realized this was not their dream home and, again, decided to sell in July 2012. The profit from this sale was over $187,000. 

They are now in home 6 and have resided here since its purchase in 2012. 

CRA decision

When reviewing these types of cases, the courts traditionally consider the following factors:

• The nature of the property sold and how the taxpayers used the property.
• The length of ownership.
• The frequency or number of similar transactions by the taxpayer.
• The work expended on the property.
• The circumstances giving rise to the sale of the property.
• The taxpayer's motivation regarding the sale of the property at the time of purchase.

The couple argued that they purchased each home without the intent to sell. They stated that they would not have put so much time, money, and work into each home if their intentions were to sell it shortly thereafter. They also stated that legitimate reasons, beyond their control, had led to the sale of each home. 

The couple also argued that it was too late for the CRA to reassess the taxes on the homes sold in 2007, 2008, and 2009 and they should be considered "statute-barred". Unless it can be proven that a taxpayer made false statements attributable to the misrepresentation arising from carelessness, neglect, or wilful default, the CRA is generally prohibited from reassessing a taxpayer after more than 3 years. 

While the judge agreed that simply because a taxpayer has adopted a position that contradicts the CRA's position it does not mean in itself that the taxpayer has made a misrepresentation that would allow the CRA to reassess after the normal period, therefore, the sales of Homes 1, 2 and 3 were precluded from reassessment. 

The couple was not as lucky with Homes 4 and 5, as the judge was of the view that they had purchased these homes with the primary intention of selling them at a profit. The judge also stated that selling them at a profit may not have been their primary intention, it was certainly a secondary intention in motivating them to purchase both homes. 

The judge ruled that Primary Residence Exemption did not apply to the gains on the sales of homes Homes 4 and 5 and they were to be properly taxable as business income, costing the couple a large sum of money. 

While the rules regarding PRE are not written in stone, there are some guidelines that should be followed. 

Since 2016, sellers are now required to report all dispositions of a principal residence on Schedule 3 of your tax return, withing holding this information may be seen as neglect or wilful default.