Selling is more than sticking a 'For Sale' sign on your lawn

How long will these stupid low rates last?

 

July 2011 - A client made that comment last week, it made me laugh but at the same time it aptly summed up the last few months in the mortgage industry.   It seems as though lenders are scrambling to get the business out there.  We have had some rate hikes, but they are at best temporary, with not all lenders following suit.    

The low rates are attributed to the limited amount of home financing/refinancing in the Canadian market place.  But once again Calgary bucks the trend; in June 2011 sales were 7.6% over May 2011 and 3.06% over June 2010.   This attributed to confidence in our market, due to business expansion, new hiring and in-migration to our city. 

How do I take advantage of these low rates?

I literally have done only one floating/variable rate mortgage in the last 12 months.   The consensus among clients seems to be that free ride is soon to be over with the low prime.   With signs of economic recovery and the first signs of inflation an increase in prime is emanate.  Prime was to increase in September but it was felt the strong Canadian dollar was doing enough to curb inflation.   

So many of us have secured lines of credit.   Depending on the lender these are floating any where from prime plus 0.5% to prime plus 2%.   Translating this to actual rates this means these loans are floating at 3.5% to 5%.   Today this is relatively inexpensive financing, but what about in the next year?  With 5 year fixed money as low as 3.49%, why not convert to a fixed rate.    The other issue with secured lines is although they have most flexible repayment options, the majority of people only make interest only payments.   Once you have combined these with a traditional mortgage you can start to make some head way against principle.  

When rates are low it makes sense to consolidate consumer debt.    Consumer debt, car loans credit cards can all vary in rates from 8% to 22%.   The benefit of transferring them to a rate as low as 3.49% makes obvious sense, especially if you are just making minimum payments.   The other impact is on your monthly payments.   

	Amount	Payment
Current mortgage at 5.19% 30 yr am	$293,000.00	$1,597.00
Credit Card 1	$5,491.00	$178.23
Credit Card 1	$9,318.00	$279.54
Car  Loan	$35,000.00	$566.00
Total	$342,809.00	$2,620.77
New Mortgage at 3.49% 30 yr am	$342,809.00	$1,532.66
Decrease in monthly payment		$1,088.11

Refinancing literally saves thousands of dollars in interest and these savings can be easily quantified.   These savings can easily out weigh the penalty in breaking your current mortgage.

Renters should be comparing rent versus mortgage.   This is their opportunity to get a foot hold in the Calgary market place and take advantage of building equity and appreciation in the next few years.  At the 5 year fixed rate of 3.49%, 30 year amortization, a $150,000 mortgage will cost you $670.63.   Factor in condo fees and taxes; it may be equivalent to rent.

Greg Gullekson, Mortgage Broker
Dominion Lending Centres Westcor
403.244.9133
www.greggullekson.ca

Selling a home is more than just sticking a ‘For Sale’ on your lawn

July 2011 - At the end of June there were 6767 single family houses and condos were for sale in Calgary, of those 1979 sold.   Why did those 29% sell?  There are a number of factors that create home sales such as low interest rates, changing demographics and a thriving economy.  But the big question is if you are selling your property what REALLY sells it? How does your property stand out from the rest so that it falls into that 29%? 

When I sell a house (def. a building for human habitation) I’m a selling a home (def. a refuge).  Essentially I’m really selling a feeling or an experience.  Anyone can walk into a house and like it but that’s never enough, the buyer must LOVE it! They need to see themselves there and picture that home holding their happiness and their future memories.  So, what must a REALTOR® do to ensure a home will sell when it is listed on the market?

It starts early in the process of pricing it right.  Many people have the idea that their house is worth considerably more than comparable properties.  A comparable is a recent ‘sold’ property found in the same community.  An active listing is not a true comparable as this price can be easily inflated and as a result it can sit on the market forever.  A REALTOR® should always present a Comparative Market Analysis (CMA).   The CMA provides a suggested list price range and from there the Seller can decide what the home should be listed for.

Next, what about commission?  Keep in mind that those that offer discounts on commission may not offer the best service,  in fact they may provide no service at all!  Your goal is to have your home sold and this means the REALTOR® should work hard to make sure this happens.  While commission is negotiable, it is up to you and your REALTOR® to ensure that you truly get what you pay for.

What about a marketing plan?  Signing the listing contract and then sticking a ‘For Sale’ sign on your front lawn does not make for a plan.  I call this Placebo-Marketing. Maybe it will work; mostly it doesn’t.  In a competitive market such as Calgary’s, a Seller should not be deceived by a smoke and mirrors approach.    An active, proven and reliable marketing plan MUST exist and the REALTOR® should present this to their clients and then stick to it.   Will there be open houses?  What will the feature sheet look like? Will they advertise and where?  Ask all the questions and make sure you are happy with the answers.

So, all the paperwork is done – now what?  A REALTOR® can assist with staging, recommendations about how to prepare the property, and referrals to other professionals that may be needed.  Communication is key between a REALTOR® and Seller.  A Seller should always know exactly what’s going on.  As real estate professionals we should never answer for our clients without consultation.  Feedback on all showings, if provided should be communicated quickly.  If a Seller calls, emails or texts their REALTOR® they should hear back from them in a relatively short period of time.

If you decide to sell, choose your REALTOR wisely.  They may be the only difference between a ‘SOLD’ sticker and a dusty, tilting ‘FOR SALE’ sign on your front lawn.

Jacqui Williamson, REALTOR, Certified Condo Specialist
Century 21 Bamber Realty Ltd.
403.245.0773
www.jacquiwilliamson.com