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February 24, 2016 – Huffington Post Canada
How to make yourself mortgage-ready
Written by and with permission from:
Samantha Brookes

























What are Market Conditions?

The sales-to-new-listings ratio measures the balance between demand and supply. A ratio of above 55 to 60 percent for a sustained period of time points to the seller's market conditions. The buyer's market represents a downward trend in home sales and the sales-to-new-listing ratio of below 35 percent.

Seller's market
The number of buyers wanting homes exceeds the supply or number of homes on the market.

If you are a buyer, you will need to make decisions quickly, buy fast, and in such a market, prices tend to increase.





If you find a home that you just have to have in a hot market, you should try to secure a quick sale by offering over the asking price.

If a bidding war breaks out, set a ceiling based on your own financial position and recent market developments. Be aware that the seller may reject all bids and ask for additional money.

Offers with limited or no conditions have an add-value! Having a pre-approved mortgage can eliminate the need for a financing condition on your offer and you can easily get peace of mind by having a home inspection before writing up your more competitive, firm offer.

As a seller, you have more negotiating power and can usually obtain a higher selling price for your property. Offers with limited or no conditions are more apt to present themselves.


Balanced market
The number of homes on the market is equal to the number of buyers (supply equals demand).

As a buyer, you will have a satisfactory number of homes from which to choose.
For sellers, homes sell within an acceptable time period and generally prices are stable.


Buyer's market
The supply of homes exceeds the number of buyers.

Buyers have more time to look for a home and more negotiating leverage.

Home buyers are in an excellent position in this market to seek financial incentives for new home loans. Buyers' incentives can be as much as 6% of the price of the home and applying the incentive to non-recurring closing costs can save buyers tremendously on the up-front cost of closing on their new home.

As for negotiating leverage; size up the seller and then decide how aggressive you want to be with your offer. Try to find out why they are selling. What have comparable properties sold for? Remember, hard bargaining is one thing, insultingly low bids another.

If you are a seller, your home may take longer to sell and you will have less negotiating power in terms of the selling price since, in a buyer's market, there are many homes out in there competing.





Home inspections are a must.

For SELLERS, a professional pre-listing home inspection will disclose any major defects in the home’s physical structure (such as the roof, basement, foundation, walls, and ceilings) or in its electrical, plumbing, heating or cooling systems. Should any serious problems be reported, sellers may then elect to have them repaired before marketing to prospective buyers. The resulting physical and/or aesthetic improvements often greatly increase the home’s sales appeal. Correcting these problems early not only makes the property more attractive and desirable, it also simplifies the negotiation process, a favourable home inspection report confirms the buyer’s good feelings about the home, and helps to expedite the sale.

Another option, if the pre-listing inspection turns up major problems, is for the seller to set a more realistic asking price. Very often, people who have lived comfortably for many years in their home grow accustomed to conditions which may prove unacceptable to a potential buyer. An objective third party opinion helps to put a home’s true condition into a more realistic light.





What is your home worth?

Every reasonable owner wants the best possible price and terms for his or her home. Several factors, including market conditions and interest rates, will determine how much you can get for your home. The idea is to get the maximum price and the best terms during the window of time when your home is being marketed.

What is your home worth?
All homes have a price, and sometimes more than one. There's the price owners would like to get, the value buyers would like to offer and a point of agreement which can result in a sale.

In considering home values, several factors are important:

  • The value of your home relates to local sale prices. The same home, located elsewhere, would likely have a different value.

  • Sale prices are a product of supply and demand. If you live in a community with an expanding job base, a growing population and a limited housing supply, it's likely that prices will rise. Alternatively, it's important to be realistic. If the local community is losing jobs and people are moving out, then you'll likely have a buyer's market.

  • Owner needs can impact sale values. If owner Smith "must" sell quickly, he will have less leverage in the marketplace. Buyers may think that Smith is willing to trade a quick closing for a lower price -- and they may be right. If Smith has no incentive to sell quickly, he may have more marketplace strength.

  • Sale prices are not based on what owners "need" or how much you paid for it months or years ago. When an owner says, "I must sell for $300,000 because I need $100,000 in cash to buy my next home," buyers will quickly ask if $300,000 is a reasonable price for the property. If similar homes in the same community are selling for $250,000, the seller will not be successful.

  • Sale prices are NOT the whole deal. Which would you rather have: A sale price of $200,000, or a sale price of $205,000 but where you agree to make a "seller contribution" of $5,000 to offset the buyer's closing costs, pay a $2,000 allowance for roof repairs, fund two mortgage points, re-paint the entire house and leave the washer and dryer?

Check around your neighbourhood for comparable homes for sale. Get to know what homes are selling for what amounts. You can, alternatively, employ the services of a professional appraiser. An appraiser will assess the value of your home in your local real estate market. Going to neighborhood open houses is another way to gather information and compare findings. So is doing research online. Two caveats: It's not easy to be objective about your own home and you shouldn't assume that the listing price on a for-sale necessarily reflects the home's true market value.

TIP: Price per square foot is a time-honored method of real estate valuation and not a bad rule of thumb. However, it doesn't account for a choice location, a move-in-ready home or personal criteria and you should factor in how the property was measured and whether the square footage includes the garage or other detached buildings on the property.

One good way is simply to rely on real-estate agents. They’re not likely to talk you into asking too little; after all, their commissions are tied to the final sales price, so they have every incentive to sell your home for the highest possible figure.

Typically, a real-estate agent will perform a "comparable market analysis," in which the agent looks at recent sales prices of similar homes in the neighborhood to get a feel for what the market will bear. Agents also can bring other knowledge to the table, including a sense of how many similar properties are listed on the market. If there are lots of comparable homes available in your area, they might advise you to lower your price a bit to make the home more competitive.

Because experienced REALTORS® have handled many transactions, they're familiar with the terms and conditions that went into individual sales, not just published sale prices which may not reflect various premiums, discounts and adjustments.






Setting a price for your home.

In setting the list price for your home, you should be aware of a buyer’s frame of mind.

Consider the following pricing factor: If you set the price too high, your house won’t be picked for viewing, even though it may be much nicer than other homes on the street. If the home is overpriced, potential buyers looking in a lower price range will never see it, and has the bulk of the activity or interest surrounding a house is as soon as a home comes on the market, pricing it right from the start is crucial.

If you miss out on the early activity, gradually the price will come down to market value, but by that time it's been for sale too long and some buyers will be wary and reject the property. On occasion, the price is dropped below the market value because the seller runs out of time. The property can sell for less than it's worth.

If you price too low, you'll short-change yourself. Your house will sell promptly, yes, but you may make less on the sale than if you had set a higher price and waited for a buyer who was willing to pay it.

The single most important decision you will make with your REALTOR®, is determining the right asking price for your property. REALTORS® are not likely to talk you into asking too little; after all, their commissions are tied to the final sales price, so they have every incentive to sell your home for the highest possible figure.

The benefits of pricing right:

  • Your property sells faster, because it is exposed to more qualified buyers.
  • Your home doesn't lose its "marketability."
  • The closer to market value, the higher the offers.
  • A well-priced property can generate competing offers.
  • Other Real Estate Professionals will be enthusiastic about presenting your property to buyers.

No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market. Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood like yours. Your REALTOR® can furnish data on sales figures for those "comps", and analyze them for a suggested listing price. The decision about how much to ask, though, is always yours.

The list of comparable sales a REALTOR® brings to you, along with data about other houses in your neighborhood presently on the market, is used for a "Comparative Market Analysis (CMA)." A CMA often includes Days on the Market (DOM) for each comparable house sold. When real estate is booming and prices are rising, houses may sell in a few weeks. Conversely, when the market slows down, average DOM can run into many months. Your REALTOR® can tell you what are the market conditions in your area.

Offering incentives

Sometimes cash incentives are as effective as lowering the price, especially in the lower price range where buyers may be "cash poor." You may offer to pay some or all of a buyer's closing costs and discount points required by the buyer's lending institution. If you haven't had much traffic through your house and you’re in a hurry to sell, you may want to add the offer of a bonus to the selling broker, in addition to their commission. An example of the wording for such an offer may be "to the broker who brings a successful offer before Christmas."

Estimating net proceeds
Once you’ve been given an estimate of market value by your REALTOR®, you can get a rough idea of how much cash you might walk away with when the sale is completed. This can be particularly useful as you start looking for another home to buy. From the estimated sales price, subtract:

Payoff figure on your present loan(s)
Broker's commission
Any prepayment penalty on your mortgage
Attorney's fees, if any
Unpaid property taxes

As far as closing costs are concerned, you and your eventual buyer may agree on any arrangement that suits you, no matter what local practice dictates. Your REALTOR® will assist you in estimating what your final closing costs will be.





Showing your home.

Selling a home in today's market is getting tougher and tougher. There are a ton of homes on the market to choose from, so what are the chances a prospective buyer will decide yours has more to offer than the others? Here are 10 areas to improve your chances of finally making that sale.

1. Clean It Up, Inside and Out
Before putting your house on the market, take as much time as necessary (and as little money as possible) to maximize its exterior and interior appeal.

Nobody likes to visit a house where the yard is a disaster and the interior is even worse! The first thing that comes to the minds of these buyers is the amount of work they're going to have to put into the home just to have it meet their standards. Additionally, buyers feel more comfortable purchasing a well-cared for home because if what they can see is maintained, what they can't see has probably also been maintained. From experience, REALTORS® also know that a "well-polished" house appeals to more buyers and will sell faster and for a higher price.

Click here to print a task list of things you can do to show your house at it's best.

2. First Impressions Work
When preparing to put your home up for sale, your first concern is the home's exterior. If the outside, or "curb appeal" looks good, people will more than likely want to see what's on the inside.

If you are home when the buyers are looking with their realtor, welcome them warmly into your home. If you are not home during a walkthrough, make your entrance way as appealing as possible. Try painting your front door a bright and welcoming color, or clean it thoroughly if it is a wooden door. Well-tended flowers and plants also showcase friendliness and lend a genuine atmosphere. If you don't have any, season permitting, plant some. Store toys, bicycles, roller-skates, gardening equipment and the like out of sight. Have at least the front of your house and the trim painted, if necessary. After dark, turn on your front porch light and any other exterior lighting. You will want to make sure the buyers looking at your home are left with the best possible impression.

Of all the rooms inside your home, pay special attention to the kitchen and bathrooms. They should look as modern, bright and fresh as possible. It is essential for them to be clean and odor free. A fresh coat of paint just may do the trick.

3. Springtime is Best
Although the current market is extremely stingy, experts still say that the best time to sell your home is in the spring months. This is the time of year flowers are in bloom, so your yard will look as pleasing as ever, and the home purchasing bug is as abundant as the pollen collecting on your car. Plus, the weather is the best for home shopping. Nature's rebirth is a sign for things to be renewed, and that includes purchasers looking for a new home!

4. Spend Money to Make Money
This is a topic that can generate some groans! The reality is, nobody wants to purchase someone else's headache, so repair the things you know about before putting your home on the market. If you have an upstairs bathroom leak that stains the basement's ceiling tiles, get the leak fixed and replace the tiles with new ones. Fixing visible leaks will help your home's probability of selling sooner rather than never. A home with no repairs needed is instantly move-in-able and that's exactly what today's buyers are looking for.

There is a big difference between making minor and inexpensive "polishes" and "touch-ups" to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen. Ask your realtor for advice, if I have worked in your neighborhood, I can advise you specifically on what improvements need to be made to fulfill the expectations of buyers in your neighborhood.

5. Get a Second Opinion
Now that you have tended to the yard and scrubbed your bathrooms and counters to a gleam, your home looks spotless, right? How do you feel about what you see? Does the home seem inviting? Well-maintained? Would you want to buy this home? Your answer should be an enthusiastic yes!

Picky buyers definitely will notice-and likely magnify -- minor maintenance problems you've ignored for months or even years. Have a trusted friend or co-worker stop by for a fresh perspective on your property. Ask them if there are any areas of concern that you may have missed. That pile of leaves in your back yard may not look so bad to you, but to a buyer, it may scream that the current homeowner is lazy and can lead buyers to question whether you've taken good care of your home.

6. Brighten It Up
Nobody wants to live in a dungeon, so don't allow your prospects to walk into one. Replace your light bulbs with the highest wattage bulbs permitted by the fixtures and make sure your lampshades, light diffusers and covers are all well-cleaned. This is extremely important for buyers who like to look at homes at night. Plus, get rid of your bedroom's blood-red walls. It's proven that neutral colors not only brighten up the space, but they make the room more appealing to buyers.

7. Make Your Home Warmer
When buyers walk into a home, they want it to feel like a home, meaning, they want it to feel warm and cozy - and I'm not talking about the temperature! If your home has a lived-in and loved feel that presents an atmosphere of comfort and joy, then prospective buyers will know it. Introduce lifestyle accessories and make your home as attractive as possible. Set the dining room table with your best dishes. Put out your only-for-company towels. Make up the spare bed. Hang some fresh curtains. Put some logs in the fireplace. Use your imagination.

6. Make a History for Your Home
Your prospective buyers are going to have a ton of questions for you. Questions like:

When was the home built?
How old is the roof?
How old is the air conditioner?
Does the basement have water issues?
Finding the answers to these questions and more can require some legwork on your part, but it will show buyers how much thought you put into them if you have a nicely detailed printout for them to take with them detailing your home's history.

9. Sell Before You Move
If you can manage it, sell your home before you move. Buyers have a harder time picturing themselves living in a space when the home is bare. If your furniture is still there, it gives them decorating ideas and allows them to visualize how their furniture will look in the home. Once they begin making these types of associations, subconsciously they are making a purchasing decision.

10. Be Open for Negotiation
In this turbulent market, coming off as non-negotiable to a buyer will have terrible implications. The last thing a buyer wants to hear from your realtor is that the price is "firm." You immediately pigeon-hole yourself and erase a wide percentage of your prospects. Place a reasonable price-tag on your home and work around it. By being flexible, you can increase your chances of selling. But you don't have to compromise too much. By following the first nine steps listed here, you can also have a better chance of keeping the final purchase price as close to your original listing price as possible.





Migration issue.

If you are buying or selling a home in Nova Scotia you will hear about Land Registration(LRA) and migration of title. This is a system for registering property that came into effect in the Halifax area in November 2004. In order for property title to change hands the title of the property must now be moved to or " MIGRATED" to this new electronic system from the old system. There is a one time cost to do this and an additional amount of time involved. The cost can vary considerably. The average cost as of Jan 2008 is about $600 plus HST. This cost is usually paid by the seller. There is additional time to transfer title as well. The way the system works is the lawyer enters the title information online and a government official checks the information and either approves it or asks for changes. If changes have to be made then the lawyer must make them and submit the information again. The process can take a few weeks or more. What this could mean is a closing cannot be completed as fast as before so closings of less than a few weeks are almost impossible unless the property is already migrated. Sellers can migrate the title before the property is sold and many do just that. On the mls listing information sheet for a property there is now a section that states whether the property has been migrated or not.






The services a realtor can provide

With the advent of the Internet, more homeowners chose to bypass a real estate agent and sell their property themselves. This is typically designated as FSBO, or For Sale By Owner. The obvious benefit of for sale by owner (FSBO) property is that there are no commissions or fees to pay that are normally associated with listing through a real estate agent.

Conversely, however, there are a number of drawbacks to selling your own property. Learning all of the ins and outs of the process can be a full-time commitment that most sellers don't have time to thoroughly embrace. With a day job, doing what it takes to learn how to sell a house properly,

Before the house hits the market, it's imperative to do the ”due diligence“ fact finding for many important reasons. Incomplete and/or erroneous information bears the highest liability for you as the seller and could cause a sale to fall, or worse yet, a lawsuit from the buyer. Some information you must obtain includes getting the legal description and tax information on your property; getting a property disclosure form. Get your mortgage pay-off information from the lender; Investigate public records to determine if any liens (i.e. federal income tax, etc.) or other legal actions are posted against the property. You don't want to be surprised here since it could prevent you from selling the property; and get information about your current homeowner's insurance (premium paid, exceptions to coverage, etc.). This is especially important if real estate in an area is tough to insure. Or perhaps the individual house is a potentially higher insurance risk since a buyer may be able to obtain insurance coverage quicker and at cost savings if they use your current carrier.

All the information you can find will be important not only for yourself, but also the prospective buyer.

Are you prepared to write a contract and open escrow?

The investment of time is the primary reason many people list their property with a real estate agent. If you can't spare the time to gather information thoroughly up front, it may indicate that you need the help of a full-service real estate agent. Have you thought of the logistics of showing a home seven days a week? The less work put into selling a home, the slower it's going to sell and will sell at a lower price.

Another factor that bites into potential savings is the cost of marketing a home. You will need to spend some money to get marketing exposure, and this gets into the BIG hidden costs of marketing your home on your own. You're much more likely to get multiple offers on a home when it's professionally marketed.

Promoting a property involves good marketing and advertising strategy, which can be expensive. Seller has to bear all these costs. In order to have the property listed on the MLS, one has to pay.

A real estate agent can advertise your home through multiple home listings, making it more visible. This kind of exposure casts a much wider net and greatly increases the odds of getting multiple offers. Multiple offers translate to a higher likelihood of your house being purchased in a timely manner and at a better price.

FSBOs take longer to sell and don't receive as much per square foot as similar homes sold through an agent. There's all sorts of reasons for this but the primary one is that a buyers agent is much less likely to show a FSBO home or to sell the buyer on the home. It's harder for the agent to work with an amateur, so many will avoid it.

If the seller does not have negotiation skills, the entire transaction can be a loss. One of the main knocks against FSBO is that the owners will often times have a high asking price, which will inevitably scare away any prospective buyers. Even if you were to price your house at a reasonnable price to open the door to prospective buyers; It as been noted that prospective buyers offer 6-10% less on For Sale By Owner offers because they know that there's no added commission. You would then have your interested buyers, but not necessarily at your target price.

When a buyer considers a home being sold directly by an owner they are going to discount any offer they make in recognition that there is no commission. FSBOs tend to attract investors and bargain hunters seeking a steal. Besides looking for a commission discount they're also looking for FSBOs that have priced their home below market value. Put yourself in the buyer’s shoes. Wouldn't you?

Closing the deal can be nearly impossible.Can you keep your emotions in check when dealing with a buyer who offers you $50,000 less than your asking price? it's not enough to find a buyer. After an offer is received and accepted there are many things that can go wrong and kill a deal. You need a good real estate agent to shepherd the sale all the way to closing.

More importantly, if the seller does not adhere to every legal obligation in the selling process, he can end up in a mountain of legal trouble.

Not only can the often overwhelming hassle of selling a house be managed by someone else, but that real estate agent will also safeguard the seller from all of the numerous legal entanglements that property selling brings.

Security and safety concerns and the higher risk of liability when a homeowner sells on their own. Sometimes homeowners flying solo have an overly simplistic view of what's required to successfully sell a home. There is a reason why real estate agents are required to be licensed by the state.

A realtor brings out the best in any home, making it more appealing to a prospective homeowner. Are you ready to open your home up to complete strangers and literally let them walk around in your house and look in your closets and bathrooms withoutmaking them uncomfortable? Are you prepared, emotionally and timewise, for home, and termite inspections, and walk throughs?

The real estate agent will advice you what they feel is an adequate asking price for your property, list it on multiple listing services (MLS), advertise in the appropriate media outlets, find prospective buyers, show the property, and handle the bulk of the paperwork involved in the transaction. A real estate agent should significantly reduce the amount of stress on you during the sale of your home.

When planning to sell your home the best approach is the one that yields the highest net price within your time frame. An overemphasis on avoiding or lowering the commission without understanding what methods get the most amount of money in a seller's pocket is an all too common mistake. Don't make this mistake, before deciding to sell on your own do some research. You may conclude that like so many other services we utilize on a daily basis, hiring a professional may be your best and most profitable option.



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