Don Burnham

How to get complete honesty and integrity when you need help making one of the largest financial decisions of your life.

Realtors can be an incredible wealth of knowledge and support when buying a home. Who you hire is a big decision, and of utmost importance is finding someone who is honest and has integrity.

Here are some suggestions to help make sure the realtor(s) you meet with are not going to try and “sell you something” but instead guide and support your selection process to ensure you get the best possible home for you or your family.

First you have to understand what motivates realtors to stay up late or get up early, miss a party or leave a comfortable chair on a Sunday to find you opportunities and ensure you are informed on the value, zoning, condition and price of the home you are considering buying. The two main motivators I see are incentive and pride.

Commissions are the incentive to entice realtors to show and sell properties. Pride in doing a good job improves the Realtors reputation and secures future referrals from you as a satisfied client.

The incentive for a realtor to find you a good home, secure the property for you (get your offer accepted) protect your interest (suggest and include conditions in the offer) and minimize the stress (do the legwork and explain the process) is starting to vary more now than I have seen in my 26+ year career. Here is my suggestion on how to level the playing field and make sure you get the honesty and integrity you are looking for in a realtor.

Ask your realtor what a buyers contract is all about. In a nutshell he or she should be able to explain: the contract states in all instances where the realtor's commission on the property you have agreed to view is the amount you and he/she agree is fair the realtor would accept that amount as payment.

In the event the commission is above that amount you agreed to, the realtor can give the difference back to you. In the event the commission is below that amount and the seller is unwilling to make up the difference you can avoid the property or make up the difference. This way the realtor knows if you buy a property he/she will eventually get compensated; their advice shouldn’t be influenced by fear of losing you after what often turns out to be months of viewing homes together.

This way the agent should be willing to take the time to educate you on what to look for and what to avoid, what similar properties have been selling for, on and off site influences that might affect your enjoyment and resale of the property and chances are it won’t cost you anything because most motivated sellers are willing to pay your realtor a fair commission to get their house sold A.S.A.P.

Don Burnham  

Prepare your house for sale

Plans for six months and one year in advance

By Don Burnham, Realtor

Whether you are thinking of selling this spring or a couple years down the road, the sooner we start preparing your house for sale, the better. Please read on for some of the top things I recommend you do. 

Six months from putting your house on the market

If you are thinking of selling your house this spring, here are three things you should be doing right now:

1)      Have a professional paint colour consultation. Hire a trusted colour expert whom, for around $150 will meet with you in your home and decide on how to best paint your home for a top dollar sale. You can ask me for a referral or ask at your favourite paint store for a recommendation.

2)      Freshen or replace your front door, fence and driveway. Get started on your home’s curb appeal.

3)      Start looking for bedspreads, towels and bath curtains that will complement your home.

4)      De-clutter and remove or store items that are no longer needed. It will give the home a more roomy feel and allow potential buyers to envision themselves living there. It will also make moving easier in the long run. (I don’t know how to nicely tell people to get rid of personal photos, etc.). Stagers recommend removing one third of the decor in your house including personal photos and collections—this will help potential buyers envision your home as their home-to-be.

5)      As spring approaches, plant annuals for colour—baskets or pots on the front porch and in the flowerbeds.

6)      Make sure your home maintenance is up to date and get the carpets, porches and gutters cleaned. 

One year from putting your house on the market

If you may be selling your home next fall or winter, in addition to the things above, you should:

1)      Take photos of your house in the summer. Photos of your garden and yard at their best on a sunny day will make your home stand out from the others on MLS in the winter months.

Also, watch for special times to capture photos, such as sunrise and sunsets, evening photos of the fireplace, the exterior of your house when it’s lit up with lights (times when buyers won’t normally view your home).

2)      Take a look at your roof. If it looks dated, check the warranty because it may not be as old as it looks. Perhaps it just some moss growth, which can be taken care of easily (there are some good products, available at home improvement stores, that can be administered with a garden hose sprayer). However, if your roof is near the end of its life, make a few calls for quotes on a new roof. I find this is one cost buyers tend to consistently overestimate and is a good investment for resale.

Lastly, no matter how serious you are about selling, or when you plan to do it, contact me for a free meeting. I will come look at your home and give you more personalized, detailed advice about how to make sure we maximize the sale price of your home. You deserve top dollar for your house, and I can help you get it.

Sincerely,

Don 

It's one thing to know where and what you want to live in and another to get there. You need cash to buy but most of your equity is tied up in your home.

So do you sell first and rent till the right one comes along?

Do you buy first and hope yours sells before you have to complete the puchase?

Do you make an offer suject to the sale of your home and hope your offer doesn't get bumped before your house sells?

Do you arrange financing so you can buy first and sell later?

I can help you decide what the best route for you is and how to make a plan to get you from A to B with the least stress possible.

Don Burnham Realtor

Remax Camosun Westshore

250-516-1510                                           

August 1st real estate statistics show market stability in Greater Victoria. Click here for more 

Please click here for a link to my summer 2012 newsletter,

July 21st 2012
This morning, the Minister of Finance announced changes to the standards governing government-backed insured mortgages:
• the maximum amortization period was reduced from 30 years to 25 years;
• the maximum amount Canadians can withdraw in refinancing their mortgages was lowered to 80 per cent from 85 per cent of the value of their homes;
• the maximum gross debt service ratio was fixed at 39 per cent and the maximum total debt service ratio at 44 per cent; and
• the availability of government-backed insured mortgages was limited to homes with a purchase price of less than $1 million.
CREA has continually stressed the need to avoid changing the minimum down payment. Today’s announcement confirms Canadians will continue to be able to purchase a home with five percent down.

The changes announced today will come into effect on July 9, 2012. Details of the announcement can be found here.

Of note, the VREB REALTOR® Market Survey shows that an average 23% of purchasers in Greater Victoria required insured mortgages in the first 5 months of 2012.

FREQUENTLY ASKED QUESTIONS (From Department of Finance Canada)
Q. Why is the Government making these changes at this time?
A. These measures will support the long-term stability of the Canadian housing and mortgage markets and promote savings through home ownership. They are intended to be timely, targeted and measured. The measures will reinforce the importance of borrowing responsibly and using home ownership as a savings vehicle. The Government actively monitors developments in the housing market and is committed to taking action when necessary.
Q. What will be the impacts of the adjustments to the rules for government-backed mortgage insurance on the Canadian economy?
A. The adjustments to the rules for government-backed mortgage insurance will provide significant benefits to the Canadian economy by supporting the stability of the housing market and promoting savings through home ownership. The short-term impact on the housing market is expected to be manageable, given that the majority of Canadian families are already taking a prudent approach in managing household debts. In the long term, these measures are expected to have a positive impact on the economy through higher savings and a lower number of financially vulnerable households.
Q. When do these measures take effect?
A. The new measures will take effect on July 9, 2012.
Q. Are further measures expected?
A. The Government actively monitors developments in the housing market, consumer debt and the economy, and is committed to taking action when necessary to support the long-term stability of the housing market and protect the investment of Canadian families.
Q. Do these measures apply to multi-unit buildings?
A. These standards apply to mortgages on residential property with four units or less.
Q. Why is the Government lowering the limit on refinancing again?
A. The new measure announced today will reduce the maximum amount on refinancing to 80 per cent from 85 per cent of the value of the home. Limiting the amount of refinancing will promote saving through home ownership and limit the shifting of consumer debt into mortgages guaranteed by taxpayers.
Q. Why is the Government lowering the maximum amortization period again?
A. The new measure announced today will reduce the maximum amortization period to 25 years from 30 years. Limiting the maximum amortization period will reduce the total interest payments Canadian families make on their mortgages, helping them build up equity in their homes more quickly and pay off their mortgages sooner.
For example, reducing the amortization period from 30 years to 25 years on a mortgage would result in a moderate increase in the monthly payment. However, over the life of the mortgage, this modest increase would result in a significant reduction in the total interest payments. For a $350,000 mortgage at 4 per cent interest rate, the interest savings could be over $45,000.
Q. Why is the Government limiting the maximum gross debt service (GDS) and total debt service (TDS) ratios?
A. The GDS ratio is the share of the borrower’s gross household income that is needed to pay for home-related expenses, such as mortgage payments, property taxes and heating expenses. The TDS ratio is the share of the borrower’s gross income that is needed to pay for home-related expenses and all other debt obligations, such as credit cards and car loans.
The new measure announced today will set the maximum GDS ratio at 39 per cent and reduce the maximum TDS ratio to 44 per cent. These debt service ratios measure the share of a household’s income that is required to cover payments associated with servicing debt. Both measures are already used by lenders and mortgage insurers to assess a borrower’s ability to pay. Setting a GDS limit and reducing the TDS limit will help prevent Canadian households from getting overextended and reduce the number of households vulnerable to economic shocks or an increase in interest rates.
Q. Why is the Government introducing a maximum allowable price for insured mortgages?
A. The new measure announced today will establish that government-backed mortgage insurance is only available for a new high loan-to-value mortgage if the home purchase price is less than $1 million. Because homes priced at or above $1 million would not be eligible for government-backed high ratio insurance, borrowers for these homes would require a down payment of at least 20 per cent.
Introducing a maximum allowable price will ensure that government-backed mortgage insurance operates the way it was originally intended: to help working families and first-time homebuyers. This measure is expected to have a negligible impact on working families and first-time homebuyers as the vast majority of these borrowers purchase properties priced below the threshold.
CONCERNS ABOUT BORROWERS
Q. I already have an insured mortgage. How will these changes affect me?
A. Mortgage insurance is good for the life of the mortgage. Borrowers renewing their insured mortgages will not be affected by these changes. For example, if a borrower had a 30-year amortization and there are 27 years remaining on the mortgage, the mortgage can be renewed with a 27-year amortization, as long as no new funds are being added to the mortgage.
Q. What is required to qualify for an exception to the new parameters?
A. The new measures will apply as of July 9, 2012. Exceptions will be made to satisfy a binding purchase and sale, financing or refinancing agreement where a mortgage insurance application has been made before July 9, 2012. While the changes come into force on July 9, 2012, any mortgage insurance applications received after June 21, 2012 and before July 9, 2012 that do not conform to the measures announced today must be funded by December 31, 2012.
Q. Will a purchase and sale agreement dated prior to July 9, 2012 be considered binding if there are outstanding conditions that have not been fulfilled prior to July 9, 2012?
A. Yes, if the date on the purchase and sale agreement is earlier than July 9, 2012, and a mortgage insurance application has been made prior to that date, the new parameters will not apply, even if the conditions of the agreement have not been waived.
Q. Will the new refinancing rules allow a borrower with a mortgage above 80 per cent loan-to-value (LTV) to refinance by extending the amortization period?
A. No. Effective July 9, 2012, borrowers will not be permitted to refinance a mortgage above an 80 per cent LTV, unless the borrower has a binding refinance agreement dated prior to July 9, 2012, and a mortgage insurance agreement has been made prior to that date.
Q. I have a written mortgage pre-approval from a lender, dated before July 9, 2012 with a 30-year amortization. Will I still be eligible for a 30-year amortization if I don’t sign an agreement of purchase and sale until July 9, 2012 or later?
A. No, a mortgage pre-approval without an agreement of purchase and sale is not sufficient to qualify for a 30-year amortization. You may have a 30-year amortization only if your agreement of purchase and sale is dated before July 9, 2012 and you have made a mortgage insurance application before July 9, 2012. You may wish to discuss with your lender to revise your mortgage pre-approval using the new parameters announced today.
Q. Will the new parameters apply to assignment (“switch” or transfer) of a previously insured loan from one approved lender to another?
A. No. As long as the loan amount and amortization period are not increased, the new parameters will not apply to a switch/transfer/assignment of the mortgage to a different lender.
Q. If I sell my current home and buy another, will the new parameters apply if I transfer the outstanding balance of my insured mortgage to the new home?
A. As long as the outstanding balance of the insured loan, the LTV ratio and the remainder of the amortization period are not increased, the new parameters will not apply when the mortgage insurance is transferred from one home to another.
Q. What if I need to increase the amount of my insured loan when I sell my current home and buy another?
A. In this situation, the new parameters will apply for any insured loan.
Q. If I bought a condo that is not expected to be built for another two years, will the new parameters apply?
A. If you bought a condo and have made a mortgage insurance application on or before June 21, then the new parameters would not apply.
If you buy a condo and make a mortgage insurance application after June 21, the new parameters will apply if the mortgage loan is not funded by December 31, 2012.

The larger than average inventory of homes for sale begs the question: Is it a good time to buy or sell? It probably is a good time to sell if you are going to need to sell in the next six months and intend to purchase again soon, as prices aren't expect to rise in the near term and the selection is great.

Is it a good time to buy ? If you can get a great house in a great location that may not be available six months from now: yes.

It's better to buy a good house in a good location at a fair price than buy a not so good house in a not so good location because it looks like a great price. For one, a big portion of the cost of improvements can be lost in the wrong location.

Call me for more details on what type of property might make a good investment and home in this current market.

Don Burnham 

250 516 1510

email daburnham@shaw.ca