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An important suggestion on making your home easier to buy

Posted on January 15, 2009 by Garth P Raven (Prudential Sussex Realty)

Not all pre-listing inspections eliminate the desire of the prospective Buyer of the property to have an independent inspection performed by their own chosen inspector. The Buyer may determine that their own inspection is less likely to be biased on behalf of the Seller. More importantly, the prospective Buyer may decide that their inspection is needed in order to make preliminary determinations regarding their proposed use and modifications of the structure in question. For example, the Buyer may want to know if the electrical system is adequate for its existing use and for any planned additions of a bathroom, hot tub, or the various use of power tools. Sometimes the Buyer’s and Seller’s inspectors will find different flaws and the Seller will have to contend with this issue at that time. Pre-inspections will usually uncover the major challenges though. Homeowners will often rationalize that the Buyer will get their own inspection anyway, so why should they go to the trouble and expense in getting their own? Exhibiting Scrooge-like behaviour here may not be the wisest choice. Spending a bit of money now could save on many sleepless nights in the future. Pre-inspections can literally buy some peace of mind and Sellers who reject the idea are sometimes setting themselves up for disappointment when their home fails the scrutiny of the Buyer’s property inspector. Think about this. When you go to buy a car, do you want the car dealership’s certification that your chosen chariot is in great shape or do you just take your chances and buy it “as is?” Some would go with the roll of the dice but the vast majority probably would want some written guarantees that the car has the capability of making it off the lot. It is no different with houses. The more assurances that Buyers have that your home is solid and unlikely to give them future

hassles, the more likely it is that your home will sell more quickly and for a higher price. While Sellers have called the shots for the past few years, that’s no longer the case. No problem – adjust. Make your home the best in the neighbourhood by using some pre-market prep – get a pre-listing inspection and if possible, fix the flaws.

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Market update!!

As most of you have heard, sales in the Vancouver real estate market have been down this year, the numbers vary from area to area. The strata market has been soft, while single family homes and building lots have been significantly better, again depending on the area.

The media types have been talking about a so called bubble, and a correction in the real estate market, as if there will be some dramatic shift in prices one day. I believe this is a misnomer. To the contrary, we’ve seen small corrections happening every day over the last few months to compensate for the smaller number of sales, as opposed to a sudden price drop. So in effect, the correction has already and is already happening on a daily basis. This doesn’t mean that it could not correct more, or less as time goes on. Some buyers believe that because of the slow market, they should automatically submit low ball offers assuming that home sellers should be desperately trying to sell and escape the market before this correction, however again this is wrong thinking, as there is a good chance that new home sellers entering the market have priced their home correctly, given the current circumstances.

I believe that because the interest rates have been so low for so long now, a lot of the new home buyers that could buy, did buy in the last couple of years, leaving a lack of new home buyers to drive the entry level market. There are however still a small number of new home buyers entering the market all of the time, and of course folks upsizing and downsizing, to continually add some buoyancy to our market.

Despite the market sales being lower this year, I’ve been very fortunate, so thank you friends, family, and valued clients!!

All the Best!

Garth

Who's Doing High Fives Now? SEPTEMBER/OCTOBER, 2007

If you think lenders make too much money, you are not alone........ However, it's very likely that you, the borrower, are an eager participant in all those profits. Billions of dollars are literally given away to the banks each year because of consumer pathy. Lenders know this and in fact they "bank" on it. What do we mean?

Well, a recent survey conducted by Canada Mortgage and Housing Corporation reveals that despite all the new mortgage products on the market, people looking to renew their mortgage will more often than not, revert back to their current lender. In fact, according to the report, 81% of them did. Does this make sense when the competition could be offering lower interest rates and better terms? It doesn't. There is some good news though. This same survey indicates that consumers are shopping around slightly more than they were in the past. People that were renewing their mortgage were faithful to their financial institution to the tune of 88% in 2000. By 2006 this dropped 7 percentage points.
This decline in lender loyalty was also very evident in repeat home buyers and people that refinanced their mortgage because of wanting extra cash to make home enovations or consolidate debt. In 2006 only 65% of these consumers went back to their current provider – well down from what it was in previous years. The only category that remained relatively stable was first-time home buyers.

57% of these buyers financed through their banking institution in 2000 and this remained almost constant - 58% in 2006. It would appear that first-time buyers are savvy and cautious when it comes to mortgage debt. Initially, they do their

research diligently when it comes to comparing lenders and what they can offer. However, these very same buyers that were so careful at the start, oon join the ranks of those that are "too busy" at mortgage renewal time to check out and compare lenders. Most people know that banking is a business. However, not all acknowledge that bank

employees are paid to look after the bank's best interests – not yours. In fact these employees have quotas to fill – big quotas! It is amazing that people will go to seminars sponsored by Lenders and expect to be told how to negotiate the best mortgage deal for themselves. Puh-leeze! That's like inviting a fox to the chicken coop to tell the chickens how to avoid getting eaten by him. It makes no sense whatsoever, yet that is exactly what people do. Even more remarkable is the fact that these potential customers believe they are getting sound and unbiased information and actually act on the

advice given by the fox. This can be a very costly mistake.

However, let us explore mortgage renewal in greater detail.

Mortgage funding is extremely competitive. Lenders spend an enormous amount of money just to get mortgage business in the first place and they certainly don't want to lose customers now or at any time in the future.

If homeowners would just take a few hours and shop around for several proposals from different lending institutions when their mortgage term is up, they might be pleasantly surprised about their findings. The chances are that they would quite possibly receive an offer from another Lender that is better in both interest rates and/or terms provided.

Lenders may even pay for all the set-up, transfer and legal fees when the mortgage business is transferred to them. Once a homeowner has different options in hand, the power to choose becomes theirs. They can accept this new favorable proposal or have their current lender match or better it. Odds are, your lender isn't going to be

willing to give up your business without a fight.

How much actual cash could be saved by keeping Lenders honest? Well, let's figure it out. A $300,000 mortgage calculated at 6% over a 25 year amortization period works out to monthly payments of $1,919.42. Conversely, at 5.5% and using the same criteria, the payments are $1,831.18. The difference is $88.24 per month. Now multiply that by 60 (five years of monthly payments) and you will see that by negotiating a better rate, rather than blindly accepting the first offer, you have saved $5,294.40. Really, with a little investigative effort, you could have put a stash of cash in your jeans or made a handsome contribution towards paying off your mortgage. Instead of the Lenders' CEO's counting profits and doing high fives around the boardroom table because of consumer apathy, you could be going on vacation. You may be trained to be loyal but hopefully, not tamed! Next time . . . shop around!

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