Real Estate Today

Does a pool add value to your property?

According to Doug Ellwood of Appraisals Niagara Real Estate Appraisers Inc., In-ground pools have gained greater acceptance in the last 5 or so years. When it come to market value, we need to consider the fact that some people want in-ground pools and some do not. We all know that pools are expensive to install, but when it comes to added value, we would expect most-likely a range from $10,000-$15,000 as a contributory value. Having said that, if the pool is brand new, we would adjust the value higher accordingly. We do not consider above ground pools as adding value.

In our last survey regarding pools and landscaping, here’s what our survey participants had to say.

1. Would you buy a house with a pool?

2. What is a pool worth to you?

Average value $6,000

3. Rank in order of importance.

4. Would an above ground pool add value?

5. What shape of pool do you prefer?

Niagara Region Residential Home Sales Statistics for May 2019

For the Niagara Region: 01-May-2019 to 31-May-2019 vs. Same Time Last Year*

The market is balanced, which is good news for both buyers and sellers. It is a great time to upsize or downsize your home. To learn more about how the market might affect you contact Ashley Czinege or Barbara Grumme for a no obligation, no charge consultation.

The average sales price for residential properties in Niagara Falls in April 2019 has continued the trend of being higher. The average sales price for residential properties in Niagara Falls has been consistently higher than last year’s prices for the past 12 months. This is a trend that is likely to continue with a moderate, but steady increase in home values.

The average number of days to sell a property remain relatively consistent over the past 18 months.

*The above statistics are based in whole or in part on the MLS® System data owned by the Association.

It's Important to Know Today's Mortgage Rules

Confused About Getting a Mortgage Today?

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You’re not alone. Recently reports state that a majority of people (some 57%) are befuddled about qualifying for a mortgage. It has further been reported that the stress test causes some 47% of people additional confusion.

Mortgage Pre-Qualification Is More Important Than Ever

Why? Aside from the stress test, qualifying for a mortgage has become quite complicated. The website for Canada Mortgage and Housing (CMHC) includes an article called: How key inputs calculate a borrower’s debt service ratios. This can help to clarify some of the essential steps lenders have to look to today to qualify you or a mortgage. Here are the highlights of these key inputs.

What is GDS?

GDS or Gross Debt Service represents 32% of your gross income. So if you have a combined gross income of $100,000. Your GDS works out to $2,667 per month. This amount must cover the mortgage Principal and Interest, property Taxes and Heat. The acronym PITH is commonly used.

What is TDS and How Can It Reduce GDS?

TDS or Total Debt Service represents 40% of your gross income. At a gross income of $100,000 your TDS works out to $3,333 for all debts, or $667 more for Other Debt Obligations. Should other debt obligations be greater, they will reduce your GDS. So if your other debts are $1,133, this will reduce your GDS to $2,200 for mortgage, taxes and heat.

Condo Fees

If applicable, 50% of condo fees must be included in the calculation.

What’s Included in Other Debt Obligations

These include credit cards, lines of credit, car and personal loans. For this type of debt, the lender must calculate and factor a monthly payment of 3% of the outstanding balance. A balance of $15,000 works out to $450 per month.

What’s Different About a Secured Line of Credit?

For a line of credit that is secured on your property the formula differs. Here the lender takes the outstanding balance and calculates a monthly payment based on a mortgage amortized over 25 years at the benchmark rate if the contract rate is unknown. The benchmark rate, currently at 5.34% represents a cross-section of posted bank rates and is set by the Bank of Canada.

For example, a $20,000 secured line of credit based on the above would have a monthly payment of $120.22 to factor into the qualifying mix.

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Finally the Stress Test

For an insured mortgage, typically one with less than 20% down, the borrower must qualify at the benchmark rate of 5.34%, though the contract rate might be in the area of 3% for a five-year term mortgage.

For an uninsured mortgage, typically a mortgage with 20% or more down, the borrower must qualify for the greater of the benchmark qualifying rate or the contract rate plus 2 points.

What’s More,CMHC requires a recommended minimum credit score of 680. With all of these rules, knowing how much mortgage you qualify for requires the help of an expert before you decide to shop for a home.

7 Dangers in Overpricing Your Home

Overpricing in today’s market can be hazardous to your sale. Here are 7 reason why:

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1. You Might Lose Qualified Buyers

That’s because they won’t even look at the home because the price is either out of their affordable range or higher than the maximum price they want to buy in.

2. Buyers Comparison Shop

Buying is a process of elimination by comparing competing homes to each other. So over-pricing helps to sell other homes and the over-priced home only serves to reveal the better value of competing properties. Your listing strategy should be to position your home to attract prospective buyers, not drive or scare them away.

3. Today Lenders are Often Require an Appraisal

The mortgage companies lend on the appraised price or the price paid, whichever is less. So if the appraisal is less, the buyer would have to kick in any shortfall. In most cases, the buyer does not have the extra cash. What’s more the buyer tends to lose confidence in the purchase and walks away from the deal. This make it futile to price a property for more than it's worth.

4. The Property May Become Stale After a Time

Properties left on the market for extended periods can become shopworn and even stigmatized. Prospects may wonder why it has been on the market too long and think there is something wrong with the home, even after you lower your price.

5. A Longer Marketing Time Can Have Negative Consequences

It can affect a lower selling price than would have been otherwise attained. You lose a strong negotiating position when your home is on the market a long time, both financially and mentally! Prospects will not "rush" to make an offer on an overpriced property, and you may feel compelled to accept less when they finally do.

6. Over-pricing Reduces Motivation from Buyer Agents

In today’s world of Buyer Representation, selling salespeople are obligated to give their opinion of a home’s market value as part of the disclosure process. As well, salespeople will not promote an overpriced property because they risk losing their client’s trust. All this makes it less likely the property will be shown.

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7. The Selling Price is Simply a Function of Supply and Demand

The buyer ultimately establishes the value of a property. Yet, as a seller, you need a pricing consultation report, prepared by a qualified real estate professional that provides an analysis of facts and figures, available to real estate brokers and salespeople, to help you arrive at a proper pricing position in a competitive marketplace. Resist giving into an agent that gives you a price you want to hear. Most unsold listings usually expire and are taken off the market because of overpricing. Select your agent on his/her ability to help you price your home for best market price based on comparable sales.

5 Things to Avoid When Applying for a Mortgage

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Whether you are purchasing your first home or refinancing your mortgage, there are harmful things you can do to jeopardize your own approval. Here is our list of what to avoid and why:

Don’t change your job

Depending on how long you have to purchase or refinance, you could wait this one out, but typically mortgage providers are required to see you have stable employment. When you move between jobs, the mortgage provider will then need to wait until you are out of your probationary period. With probation often lasting about 3 months, this can hurt your purchase or refinance application in this window. Occasionally, if you have been in the same industry, the employer may waive the probationary period, but I wouldn’t count on it!

Don’t buy a car

This is a big mistake for many borrowers. When being qualified, mortgage brokers take all your debt, loans, and car payments into the calculations for your mortgage approval. Car payments themselves can range from $200/month to $800/month. With that in mind, these payments reduce your monthly cash flow, and in turn reduce the amount you can be eligible for in your mortgage. The best bet is to wait until after your mortgage funds to buy a car.

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Don’t extend credit balances further than when you were approved

With your mortgage approval, we are required to use a 3% payment on most of your debts (unless there are set payments such as car loans, or other set obligation loans).

Don’t miss any payments

When you are approved for a mortgage, the mortgage provider takes into account your income situation, your credit worthiness, and overall property to approve your mortgage. With that in mind, you do not want your credit situation to change – this means keeping all payments up to date and ensuring none slip to past due. Mortgage providers will usually do a final credit check right before funding to ensure everything is still in order. You do not want your mortgage approval getting cancelled last minute!

Don’t make unusual or large deposits between accounts

When you are approved for a mortgage, the bank requires 3 months of statements showing the accumulation of your down payment. When there are large deposits (typically over $3,000) which are not payroll deposits, these deposits must also come with 3 months of statements from the transfer account. That means if you are moving a lot of money around, this could be a headache to gather the appropriate statements!

Despite these things to avoid, the home buying process shouldn’t be challenging or alarming. Once your mortgage provider supplies you with your mortgage funds, you will be able to go buy that car you want, change your job, or extend credit card balances. But don’t neglect to make your mortgage payment!

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Sherri Vigna - Mortgage Agent

CENTUM Omni Mortgage Corp.

282 Geneva Street, St. Catharines, ON

T: (289) 337-1304

Niagara Region Residential Home Sales Statistics for April 2019

For the Niagara Region: 01-Apr-2019 to 30-Apr-2019 vs. Same Time Last Year*

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The market is balanced, which is good news for both buyers and sellers. It is a great time to upsize or downsize your home. To learn more about how the market might affect you contact Ashley Czinege or Barbara Grumme for a no obligation, no charge consultation.

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The average sales price for residential properties in Niagara Falls in April 2019 has continued the trend of being higher. The average sales price for residential properties in Niagara Falls has been consistently higher than last year’s prices for the past 11 months. This is a trend that is likely to continue with a moderate, but steady increase in home values.

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The average number of days to sell a property remain relatively consistent over the past 18 months.

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The number of residential sales, total listings, new listings and expired listings follow a fairly consistent pattern with a slight drop in sales and new listings in the December - January time frame which is expected in the winter season.

*The above statistics are based in whole or in part on the MLS® System data owned by the Association.

Average Prices versus Home Price Index

Tremendous Gains in Home Prices Since 2016

Buyers from the greater Toronto area continue to buy in the Niagara region and it’s a real financial benefit for sellers. Over the last few years home prices have made tremendous gains. As a reflection of this phenomenon, and though these percentages may differ in diverse parts of the region, our records, drawn from MLS sales, indicate the following overall average price increases:

  • In 2016, the overall average price increased by about 18% compared to the year before;

  • In 2017 the average price increased by about 23.8% versus the previous year;

  • In 2018 the average increased by about 3% over the prior year.

  • Though not a strong metric, the 3-month year-to-date average to the end of March, 2019 indicates an overall average price increase of about 6%. This, of course, is subject to change over the following months.

The Internet’s Role

Through the internet, today’s buyers research homes for sale in any area. They can also shop different regions, cities and towns to compare prices. This ability to comparison shop has played a significant role in attracting people to Niagara. With this increased demand on a limited supply, prices have soared.

Let’s Take it One More Step...the HPI

Through the MLS® Home Price Index (HPI), we REALTORS® have the ability to track changes in home prices by comparing price levels at a point in time with price levels in a base (reference) period. The base period value is always 100.

The composite benchmark price for the Niagara Region is shown below as is the HPI. The HPI base period having a value of 100 is 2005. So the MLS® HPI composite value for homes in March 2012 is 122.1. This means the value of homes is up 22.1%, compared with the 2005 base period (122.1 − 100 = 22.1%). The chart below gives both the benchmark price and the HPI index to March 2019. The composite price is made up of the various styles of homes.

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How Does the HPI Differ from Average and Median?

CREA’s “MLS® HPI is based on the value home buyers assign to various housing attributes over time. Price changes, hence, are less volatile than average and median prices, which can swing dramatically in response to changes with high-end or low-end sales volumes over time. This is a great tool.

Should You Sell First or Buy First?

Whether to sell or to buy first depends on market conditions, affordability, and your tolerance for risk.

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In a balanced or buyer’s market, offers conditional on the sale of the buyer’s home are fairly common. Today in Niagara, we are again starting to see conditional sale contracts.

In a seller’s market, sellers favor purchase contracts free of a condition to sell the buyers property. Sellers often have the choice of accepting an offer with the fewest conditions possible. This is especially true if the home’s list price is based on a valuation that reflects market pricing.

Regardless of Market Conditions...

The most desirable homes tend to be positioned in seller’s market territory. These are homes that are competitively priced, appeal to and are affordable to the highest concentration of buyers. Also, the supply and demand of homes varies within different price ranges. For high-end homes the market can shift to a buyer’s market as seen below. Market conditions can be measured by the months of inventory, also known as the absorption rate.

Months of Inventory Analysis For Homes Listed for Sale

Under 5 Months Supply = a Seller's Market

5 to 6 months supply = a Balanced Market

7 to 9 months supply = a Buyer’s Market

Over 9 months supple = an Extreme Buyer’s Market

As an example, in a recent St. Catharines study of MLS listings and sales over three months, the following clearly makes the point: .5 months of inventory at $250,000 or less; 8 months at $250-$350K; 2.3 months at $351-$450K; 4.5 months at $451-$650K; 9 months at $651K +.

Anything under $650 indicates a seller’s market in varying degrees while anything above $650,000 points to a buyer’s market.

So How Does this Relate to Whether to Buy or Sell First?

  • There are buyers who have to know where they’re going before they can sell and those who have to sell before they’re ready to buy.

  • Not everyone can afford to buy a house before they sell theirs as you might have to qualify for two mortgages. Can you afford to hold two properties if your current home sits on the market and does not sell for a few months? If so, consider an open mortgage that can be paid off at any time. Once your home sells, lock into a fixed mortgage.

  • Have a detailed conversation with a mortgage broker and your REALTOR®. Strive to understand your options and costs.

  • Be ready to put your home on the market. Repairs take time, as does staging and listing a home for sale. Time is precious when you’ve got a pending closing date quickly coming up.

  • Ideally, you should be ready to list within 48 hours of signing paperwork to buy. You should also have had the property evaluated by your sales representative.

  • Selling first might mean temporary accommodation but eliminates the risk and cost of owning two homes. It can also give you a strong negotiating position.

  • Bridge financing can only be obtained when you have a firm and binding sale on your home.

Rooting Out Fraud & Tax Avoidance

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13% of Canadians Would Lie Applying for a Mortgage

A survey by Equifax Canada, a leading consumer credit company, indicated the following regarding mortgage fraud:

  • 13% of Canadians felt when applying for a mortgage, a white lie to get the house they want is okay.

  • 16% believe “mortgage fraud is a victimless crime.”

  • 8% “admitted to misrepresenting the facts on credit or loan application.”

Equifax further noted that since 2013 there has been a 52% increases in “suspected fraudulent mortgage applications.

What is Mortgage Fraud?

CMH defines mortgage fraud as deliberately misrepresenting in order to obtain a mortgage. It cites the following 8 deceptive acts::

  1. “Misstating your work position, your income or the length of time you’ve held your job

  2. “Stating you’re a full-time salaried employee if you are not

  3. “Misrepresenting the amount or source of your down payment

  4. “Claiming a rented property is owner-occupied

  5. “Not disclosing other mortgages or debts

  6. "Omitting information to inflate the value of the property

  7. “Adding purchasers’ names on the mortgage application who do not intend to take responsibility for the mortgage

  8. “Acting as or using a “straw buyer” – a person whose good credit is used to get a mortgage for someone else”

Fraud May Create Liability and Criminality

Such acts, CMHC warns, make the borrower liable for financial shortfalls should default occur, and they can be held criminally responsible. Aside from some borrowers inflating their income, CMHC believes that notices of assessment from Canada Revenue Agency can be printed and easily falsified.

CMHC Asks CRA to Verify Incomes

CMHC recently asked CRA to take a more active role in verifying income borrowers are claiming on mortgage applications. CMHC sees this association as necessary due to sophisticated increases in fraudulent threats. So CRA is looking into secure ways to share information with financial institutions conditional on client consent. Such direct access by lenders should speed up income accuracy and verification, speeding up the approval process.

Budget: CRA to Crack Down on Tax Avoidance

To address tax non-compliance in real estate, the Feds are giving CRA $50,000,000 to create audit teams to ensure the following:

  1. Taxpayers report the sale of their principal residence,

  2. Any capital gain from a property sale is identified & taxed,

  3. Ensure money on real estate flipping is reported as income,

  4. Commissions earned are reported as taxable income,

  5. Builders of new residential properties remit the appropriate amount of tax GST/HST to the CRA.

To Deter Financial Crime in Real Estate, including mortgage fraud and money laundering, the Budget is strengthening enforcement by expanding its “outreach and examinations in the real estate sector.”

Share Equity First Time Buyer Incentive

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To Help First Time Buyers: the Liberal Government Budget included a First Time Home Buyer Shared Equity Incentive, and an increase in the RRSP Home Buyer Plan.

1. The First Time Home Buyer Shared Equity Incentive: One catch about this new initiative is that details of the plan won’t be out until sometime in September of this year, 6 months down the road. This may actually cause first-time buyers to wait it out until more details become available on how the plan will work.

The basic information: Through Canada Mortgage and Housing, the government will contribute 5% for a resale home and 10% for a newly built home to bring down the mortgage on a shared equity basis. The money is interest free and there is no monthly payment. You can choose to pay it back at any time or when you sell the home down the road.

What still needs to be unraveled is how the money is to be paid back. Will you simply be required to give the money back without interest or will the repayment include an equity share in the home’s value? With the second option, if for any reason the home’s value goes down will CMHC take a proportionate share of the loss?

To qualify the down payment required is 5%, the minimum for an insured mortgage and a household income of $120,000 or less. As well, the mortgage including the equity loan is restricted to 4 times the household income. So at an income of $120,000, the maximum mortgage loan would be limited to $480,000. A household income of say $100,000 would qualify for a mortgage loan of $400,000.

No Stress Test Relief or 30-Yr Mortgage

The hope prior to this announcement was that the government would ease up on the stress test and/or increase the amortization to 30 years from 25 years. Instead the stress test to qualify for a mortgage remains unchanged and the maximum amortization stays at 25 years. Here is a comparison in savings if the government had simply increased the amortization to 30 years vs. the Equity Plan of 5% & 10%:

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A Significant Savings with 30-Yr Plan

The 30-year mortgage gives a savings of $247.85 versus $119.88 and $239.65 per month. The 30 year versus the 5% assistance for resales ($247.85 - $119.88) gives a savings of $127.97 more per month. That would be especially significant for first-time buyers.

2. The RRSP Home Buyer Plan for first time buyers now allows a withdrawal of up to $35,000 per individual to purchase a home. Two first-time buyers in the same household can withdraw up to $70,000 for a downpayment to be repaid over 15 years.

People in marriage or common-law partner breakdowns will also be able to participate in the Home Buyer Plan as of this year.

Niagara Region Residential Home Sales Statistics for February 2019

For the Niagara Region: 01-Feb-2019 to 28-Feb-2019 vs. Same Time Last Year*

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As seen in the above charts, the real estate market in the Niagara Region is very stable. The number of sales year over year are consistent and generally the prices are increasing at a steady rate. There are a few noticeable % changes (positive and negative) in several municipalities, but the fluctuations can be easily explained by the small sample size. When looking at the 12 month rolling average prices, the market shows a steadier increase in prices.

The market is balanced, which is good news for both buyers and sellers. It is a great time to upsize or downsize your home. To learn more about how the market might affect you contact Ashley Czinege or Barbara Grumme for a no obligation, no charge consultation.

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The average sales price for residential properties in Niagara Falls in February 2019 has continued the trend of being higher. The average sales price for residential properties in Niagara Falls has been consistently higher than last year’s prices for the past 9 months. This is a trend that is likely to continue with a moderate, but steady increase in home values.

*The above statistics are based in whole or in part on the MLS® System data owned by the Association.

Niagara Region Residential Home Sales Statistics for January, 2019

For the Niagara Region: 01-Jan-2019 to 31-Jan-2019 vs. Same Time Last Year*

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As seen in the above charts, the real estate market in the Niagara Region is very stable. The number of sales year over year are consistent and generally the prices are increasing at a steady rate. There are a few noticeable % changes (positive and negative) in several municipalities, but the fluctuations can be easily explained by the small sample size. When looking at the 12 month rolling average prices, the market shows a steadier increase in prices.

The market is balanced, which is good news for both buyers and sellers. It is a great time to upsize or downsize your home. To learn more about how the market might affect you contact Ashley Czinege or Barbara Grumme for a no obligation, no charge consultation.

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The average sales price for residential properties in Niagara Falls in January 2019 has continued the trend of being higher. The average sales price for residential properties in Niagara Falls has been consistently higher than last year’s prices for the past 8 months. This is a trend that is likely to continue with a moderate, but steady increase in home values.

*The above statistics are based in whole or in part on the MLS® System data owned by the Association.

Video/Audio Surveillance of Buyers: Not Cool!

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What Buyers Want Viewing Homes

Most buyers, when viewing a home, want to feel comfortable and relaxed so they can focus on looking at the home and what it has to offer.

Anything that makes them feel discomfort or at all uneasy will detract from the showing.

Four Behaviours Seller Should Avoid:

  1. When the sellers are home, buyers can feel constrained as they can’t speak freely with their sales representative or between themselves.

  2. Even if sellers do their best to stay out of the way, buyers might take less than the time needed to have a good look and get a good feel for the home.

  3. In some cases the sellers’ dog follows the buyers around. In spite of the sellers’ insistence that the dog is friendly one of two things can happen: the buyers are looking down and behind not sure whether the dog might nip at them; or they give the dog playful attention.

  4. To add to the discomfort, some sellers shadow the buyers and follow or lead the buyers around pointing out all the wonderful things they’ve done to the house. They seem unaware that they are coming off somewhat aggressive and, if anything, turning the buyers off.

Today’s Surveillance Technology in Homes Calls for Caution

Home surveillance devices are becoming increasingly common and this too can make buyers uncomfortable. What’s more, if buyers and their reps aren’t aware of video and/or audio scrutiny, they might say something that can give sellers an advantage when negotiating; or even say something that might offend sellers.

RECO (The Real Estate Council of Ontario) has advised salespeople “to caution homebuyers…that there may be a recording device in the home.”

Buyers Deserve a Little Time, Space and Privacy

In most of these scenarios, buyers are distracted from looking at the house. With surveillance, they can also feel a bit creepy. Their reason for being there in the first place is to determine whether the home suits them and is worth buying. So they might find surveillance offensive.

With homes being the biggest purchase in most people’s lives, they deserve a little privacy and freedom to view without feeling impaired. They are, after all, accompanied by their licensed real estate person. What’s more, most often they have looked at the pictures, read the information and discussed the property before viewing. Now they simply want to take a hassle-free look, see whether they get a positive feel for the home, as well as voice concerns or questions their REALTOR® can get answers to in a timely manner.

Realtors® are Wise To Advise Sellers

REALTORS® already ask sellers not to be present during showings. They should also ask whether they have video/audio devices that buyers should be told about in advance of seeing the home. Understanding honoring that buyers prefer a certain level of privacy is also a good marketing practice and can promote showings. Looking over a buyer’s shoulder by any means is anything but cool. Allow them to converse with themselves and their salesperson while viewing, even opening the cupboards to see how much room they would have for storage.

Niagara Region Residential Home Sales Statistics for December, 2018

For the Niagara Region: 01-Dec-2018 to 31-Dec-2018 vs. Same Time Last Year*

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As seen in the above charts, the real estate market in the Niagara Region is very stable. The number of sales year over year are consistent and generally the prices are increasing at a steady rate. Looking at the December comparison chart, although there are significant swings in several municipalities, when looking at the annual averages (2018 versus 2017) the data shows a steadier market. Only Niagara-on-the-Lake and West Lincoln have shown an annual average drop in sales prices and that can be misleading due to the small sample size and number of sales.

The market is balanced, which is good news for both buyers and sellers. It is a great time to upsize or downsize your home. To learn more about how the market might affect you contact Ashley Czinege or Barbara Grumme for a no obligation, no charge consultation.

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The average sales price for residential properties in Niagara Falls in December 2018 has continued the trend of being higher. The average sales price for residential properties in Niagara Falls has been consistently higher than last year’s prices for the past 7 months. This is a trend that is likely to continue with a moderate, but steady increase in home values.

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The annual average number of days on market in Niagara Falls is 36 with a slightly slower December which is historically consistent with previous Decembers. The spring 2017 was a very active market, but it has evened out to a steady pace. This is great for people who are looking to sell and buy a new property, giving you time to find the right property for you.

*The above statistics are based in whole or in part on the MLS® System data owned by the Association.

5 Ways to Prepare Your Home to Sell in 2019

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­­­It takes time to prepare your home for the marketplace. Here are 5 ways to get your home market ready, attract buyers and fetch your best market price with the fewest hassles.

1. Stage Your Home for Maximum “Showability”

This includes cleaning and getting rid of clutter; depersonalizing by removing an over abundance of family photos; decorating inexpensively such as applying a fresh coat of paint as it can make a big impact; performing maintenance and repairs on the home’s systems (plumbing, heating, air, etc.); and maintaining your home’s exterior curb appeal by keeping the lawn cut and trimmed, even touching up exterior paint.

2. Prepare for a Home Inspection

This step is important because a home inspection can cause a buyer to change his mind or ask for a price reduction. Here are just a few of the items from our 29-point checklist. Divert all water away from the house by making sure the grading slopes away from the house and all downspouts and drains are in proper working order. Paint all weathered exterior wood and caulk around the trim, chimney, windows and doors. Avoid quick, cheap repairs as they can raise questions, unfairly causing great concern to buyers and inspectors.

3. Perform Prelisting Research

A good agent will take the time to make sure important aspects of the home are properly researched. Here are a few of the questions that need to be answered to create transparency and a sale that closes with the fewest hassles, if any. Are the legal description and property taxes correct? Is the lot rectangular or irregular? Are there any encroachments, registered easements, or rights-of-way? Are zoning regulations and uses complied with? Are there any conditional sales contracts, leases, rental agreements or service contracts for furnace, alarm system, hot water tank, propane tank, etc.? If you made any renovations, additions or improvements to the property, was a building permit obtained and has a final inspection been approved? Are you aware of any deficiencies with any fixtures and appliances?

4. Price the Home to Attract Qualified Buyers

A good agent will take an upfront approach when pricing your home to achieve best market price, and will take steps to determine if buyers are ready, willing and financially able to buy. He/she won’t under-price the home, or over-price the home scaring buyers away. He/she will properly research comparable sales and competing listings, then combine experience with appropriate valuation methods. Aside from market conditions, your motivation or reason for selling is a key to your setting a competitive price.

5. Choose the Agent

The importance of a good salesperson has already been mentioned. Moreover you want a full time professional to represent you, one who will provide an array of marketing tools, possess market and product knowledge and employ good negotiating skills on your behalf. You want an agent that is patient, flexible and a good listener, a pro you can count on, and who will cooperate fully with all REALTORS® and their buyers.

Contact Barbara Grumme or Ashley Czinege for your no obligation, free market assessment of your property.

Niagara Region Residential Home Sales Statistics for November, 2018

For the Niagara Region: 01-Nov-2018 to 30-Nov-2018 vs. Same Time Last Year*

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As seen in the above chart, the real estate market in the Niagara Region is very stable. The number of sales year over year are consistent and generally the prices are increasing at a steady rate. The drop in average sales price in four of the municipalities this month compared to the same time last year is not completely representative of the general market. Though there is some balancing out in some areas, sometimes the average prices can be skewed depending on what did or did not sell in a particular month.

The market is balanced, which is good news for both buyers and sellers. It is a great time to upsize or downsize your home. To learn more about how the market might affect you contact Ashley Czinege or Barbara Grumme for a no obligation, no charge consultation.

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The average sales price for residential properties in Niagara Falls has been consistently higher than last year’s prices for the past 6 months. This is a trend that is likely to continue with a moderate, but steady increase in home values.

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The number of days to sell a residential property in Niagara Falls has been relatively consistent over the past 12 months. The feverish market in the spring of 2017 has calmed and on average, your home in Niagara Falls will sell in approximately 38 days. This is great for people who are looking to sell and buy a new property, giving you time to find the right property for you.

*The above statistics are based in whole or in part on the MLS® System data owned by the Association.

Is Cannabis Still a Stigma When Buying?

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What is a Stigmatized Property?

In real estate a stigmatized property can be one that buyers, even tenants, may reject, prefer to avoid or devaluate for reasons not related to its physical condition. Stigmas can include murder, suicide, any criminal activity and some negative public perception not related to a home’s physical condition.

Despite the legalization of marijuana many sellers and buyers view it as a negative. According to a recent survey:

  • 64% of Sellers felt that smoking marijuana in the home would harm its resale value and 57% believe growing the legal limit of four plants would impact on their home’s value negatively.

  • 52% of Buyers said they would not consider buying a home that grew the legal limit.

So, smoking and/or growing cannabis in a home is viewed as a stigma for a majority of buyer and sellers.

Built-in Protections

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More and more, brokerages include a typical clause in agreements in which sellers represent and warrant that during their ownership, the buildings and structures on the property have not been used for the growth or manufacture of illegal substances. We have amended the clause to include the growth or manufacture of legal substances as a reference to marijuana’s new status and its continued negative perception with both buyers and sellers.

How Does This Warranty Effect Rental Property?

As or April 1st, 2018, landlords must use the new mandatory lease agreement for any tenancy from that date forward. Ontario also gives landlords the option to include as a schedule to the new agreement that can include a clause that prohibits the smoking, vaping or growing of cannabis. This restriction, however, cannot be added to tenancy agreements existing prior to April 1.

The Warranty When Selling Income Property

Recently an offer to purchase was presented on a four-unit apartment that included the clause referenced above about the property not being used for the growth or manufacture of legal or illegal substances. As part of the counter offer, the seller and his lawyer deleted the clause for valid reason. As rental units the seller was unaware of the tenants’ activities regarding cannabis. What’s more, with legalization, tenants with rental agreements prior to April 1 are entitled to grow up to four cannabis plants per household, and the landlord has little recourse if any.

Enforcement of Legal or Illegal Limits

Even if a new mandatory lease were in place that included the cannabis restriction, how could a seller warrant that the tenant did not abuse the agreement? It would be risky to do so as enforcement by the Seller is not easy.

Even enforcement by the landlord of limiting growth to four plants might be difficult in some instances.

Case Study: Disclosure of Leak and Remedies

A Leak was Discovered, Corrected and Disclosed

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After the deal was firm, the seller noticed a water leak in the basement. He then discovered a crack in the basement wall and had it corrected with a 25-year transferable warranty to the buyers. The insulation on half the height of the basement wall was partially removed and subsequently taped back once the correction to the wall was made. The seller now disclosed it to the buyers.

The Buyers Inspected; Seller Declined Request

On inspecting the remedial work the buyers noticed sweating on the insulation inside the vapor barrier. They became suspect and wanted the seller to remove all of the insulation on the damaged wall, to see whether other cracks existed. The seller declined the request and would not allow the buyers any further inspections. Though not agreed to in the contract, the seller felt they had already generously given the buyer a number additional inspections to measure the kitchen for a renovation quote, and to measure for flooring and other updating plans.

Extended Warranties are Unlikely

The seller said that once the deal closed and the buyers owned the property they could open it up themselves. If by chance other cracks were discovered, which they doubted, the seller suggested they could contact the concrete subcontractor that built the basement and/or the builder of the home. Typically, however, the basement subcontractor gives a 2-year warranty on the foundation and at this point the house is 10 years old. Though unlikely, if any such extended warranty existed, the seller should produce written evidence of its existence and transferability.

The Deal Closed with No Additional Problems

The buyers were instructed to talk to their lawyer. They, however, said that they didn’t want to complicate the matter with lawyers and wanted the sales representatives to help work it out. The respective sales reps, though, could do no more as the seller was firm on his position. On consulting with their lawyer, the buyers closed on the deal and subsequently no further problems were discovered.

Some Take-aways

The seller was forthright in making the buyer aware of the leak, the crack and the fix. As advised, the buyers were wise to close. Under our system, if additional cracks were found they could go after the seller, though the onus would be on them to prove the seller was aware of other cracks. If the buyers chose not to close they could be sued for breach.

Before Closing

Before closing lawyers typically ask if the buyers have performed a final viewing and whether they noticed any issues compared to when they initially saw the house. The buyers then tell about the crack and fix…as well as other concerns should they have any.

Some Possible Solutions:

  1. They can try to negotiate a holdback until they discover if other cracks are present.

  2. They might attempt a price reduction.

They could threaten not to close, leaving them open to legal action: a risky idea. Closing was the right approach.

Are Niagara Region House Prices Dropping?

It’s a Commonly Asked Question Today

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One of the questions homeowners continue to ask lately is, “Are prices dropping?” A legitimate question when they notice “New Price” and “Reduced” stickers on any number of for sale signs, not to mention homes lingering on the market, unsold compared to last year.

To date the answer is “no,” at least prices, that is to say, have not gone down overall. To the end of September, versus the same time last year, the number of sales is down by about 13% to 15%, yet average and median sale prices indicate positive numbers as follows:

  • The overall average price year-to-date for the Niagara Region is up by about 2.6%, and

  • The median price by and large is up by about 4%.

Of course average and median prices cannot determine how any one home or neighbourhood has performed. They do, however, point toward general market conditions and trends. As well, in certain districts within the region and in high-end properties average and median prices are down somewhat.

What has been going down are list prices

The hot seller’s market of 2017 brought about a sizable increase in sale prices. By the end of December 2017, the overall average sale price for the region was up by about 23.8% and the overall median price by 21.2%. Homeowners still have the benefit of this appreciation.

Yet in many cases, sellers this year have overextended their asking prices, possibly thinking that prices were going to continue to rise to a similar degree as last year. Such a strategy has not served them; hence the noticeable number of price reductions and listings that remain unsold. Market conditions change and experience has shown that there is often a delayed reaction to such shifts on the part of sellers.

Some of the following have contributed to this shift:

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  1. The mortgage stress test introduced in January of 2018 caused some buyers to opt out of the market;

  2. Home price increases contributed to reduced affordability;

  3. The number of out of town buyers coming to the region has dropped as sales of single family homes in and around Toronto have gone down as well as their average prices.

  4. Interest rates continue to inch up shrinking affordability and creating buyer concern.

In spite of this, and to reiterate, prices for the most part have gone up, and properly-priced homes continue to sell. Even during the hot seller market overpriced listing prices did not result in a sale. Today properties have to be priced to attract buyers and their representatives.

Fear Can Drive Many Buying Decisions

In a hot seller’s market buyers fear they might lose out. In a slower market buyers fear they might pay too much. They question whether their home purchase will maintain its value.