Over the past two years, Calgary has emerged as one of Canada's fastest-growing real estate markets — outpacing the traditional high-demand markets of Toronto and Vancouver, where year-over-year growth has slowed due to higher prices, increased borrowing costs and market stabilization efforts.

Yet, despite increased prices and a low supply of housing options under $500,000, migration rates to Calgary remain historically high, and more people see Calgary as a compelling alternative to its coastal counterparts.

So, what makes Calgary a unique Canadian destination for home buyers and investors? This month’s blog breaks down the comparative pros of Western Canada’s largest city.

Affordability rules the roost

For many hardworking Calgarians, real estate price increases over the past two years have made ownership feel increasingly out of reach. However, the fact remains that real estate prices in Calgary are still considerably lower than in Toronto and Vancouver — which means for prospective buyers in those markets, real estate prices here are very appealing. 

What you might pay for a small two-bedroom apartment in downtown Toronto can still fetch you a reasonably sized, single-family home with a backyard in many of Calgary’s most desirable suburban neighbourhoods.

Additionally, Calgary’s relative affordability extends beyond housing. Due to comparatively cheaper costs on regular household expenses such as gas and insurance, lower property taxes and no sales tax, the overall cost of living in Calgary is also less than in many other major Canadian cities.

Life in the VAST lane

Calgary consistently ranks among the top of many quality-of-life surveys, and it’s easy to see why. Not only is the city more affordable than Toronto and Vancouver, but it also offers a perfect balance between urban amenities and natural beauty with an incredibly vast backyard.

A haven for outdoor enthusiasts, Calgary is just a short drive from the Rocky Mountains to the west and the beautiful and historic badlands and prairie landscape to the east — perfectly situated for skiing, afternoon hikes or weekend camping adventures.

Inside the city, Calgarians enjoy easy access to hundreds of kilometres of bike and walking paths along the Bow and Elbow Rivers and many sizable outdoor recreation areas and parks such as Nosehill and Fishcreek Park.

Renowned for its clean air, safe neighbourhoods and excellent education systems, many buyers from Toronto and Vancouver are also pleasantly surprised by Calgary’s sunny, albeit chilly, winters.

As many Calgarians profess, Calgary boasts more hours of sunshine per year than any other major Canadian city — making it a bright and vibrant place to live, a sentiment the city’s new slogan, ‘Blue Sky City,’ is intended to evoke.

Big city, small-town vibe

Calgary’s cultural scene is as diverse and vibrant as its rapidly growing population. The city hosts numerous cultural festivals, arts events, and live performances annually, celebrating its multicultural community.

Yet, despite being a large urban center with a food, restaurant, and entertainment scene that matches any major Canadian city, Calgary maintains a strong sense of community and village-mindedness that is often associated with smaller towns and typical of rural Alberta.

We’re proud to say our city’s residents are known for their welcoming nature, and the community spirit is palpable, especially during events like the Calgary Stampede. This strong community vibe sets Calgary apart from the hustle and bustle often found in larger cities like Toronto and Vancouver.

The promise of tomorrow

While Calgary’s strong, oil-based economy is typically associated with boom and bust cycles, summed by the humourous Alberta proverb: “lord give me one more oil boom, and I promise not to waste it,” There are positive signs Calgary’s economy is diversifying, making it more resilient to future swings in the price of commodities.

Quickly emerging as a tech hub, the city has seen significant growth in tech startups, and there are numerous initiatives to foster innovation and attract tech talent with lower operating costs compared to Toronto or Vancouver.

It’s also worth noting that the City of Calgary is investing in several sizable infrastructure projects, including the recently completed BMO convention centre, a new stadium for the Calgary Flames hockey team, a new Arts Commons building, and the Green Line — a north/south extension to the city’s C-train transit system.

Collectively, these capital projects are encouraging signs that the City Council is investing in Calgary's economic growth and regional influence.

Summary

While undoubtedly Vancouver and Toronto have a unique appeal, Calgary stands out for its strong sense of community, affordability, economy, and high quality of life.

Whether looking for a place to call home or a promising investment opportunity, Calgary offers a combination of benefits that are hard to find elsewhere in Canada. As the city grows and diversifies, its real estate market is poised for a bright future, making now the perfect time to consider Calgary your next destination.

If you’re interested in exploring Calgary’s real estate market or learning more about what this incredible city offers, don’t hesitate to reach out.

There’s no question that 2023 has proved to be an exceptional year in the Calgary real estate market. 

Despite regular increases in the cost of borrowing, the Calgary market has continued to soar, especially compared to other major Canadian markets like Toronto and Vancouver.  In fact, the average price for a detached home in Calgary increased from $637k to $707k from August 2022 to August 2023.

However, after a record-setting summer, many potential sellers are wondering what’s in store this fall and whether or not the fall real estate market will carry forward the momentum we’ve seen this year or dip in the direction of annual market trends. 

Here are a few things to contemplate if you’re considering entering the real estate market in fall 2023.

Seasonal Trends in the Calgary Real Estate Market

Historically, the most active months in the Calgary real estate market are April, May and June.  Both the increased daylight hours and more favourable weather make this an ideal time for property showings and showcasing a home’s curb appeal. 

Additionally, many buyers looking to make a purchase before summer vacation or before the next school year begins enter the market at this time, furthering the seasonal increase in demand. 

Thus, historically, the summer real estate markets tend to favour sellers, who can take advantage of the influx of motivated buyers. Whereas the fall and winter seasons present increased buyer opportunities with reduced competition.

What's Different Heading into Fall in 2023?

Generally speaking, the first signs of the seasonal market slowdown here in Calgary begin as early as mid-July, as many folks settle into their summer rhythms and holiday plans.

Yet the 2023 Calgary real estate market remained remarkably strong throughout the summer and, as of September 1st, continues to show signs it’s ready to buck many annual trends.

For some comparison, Calgary home sales for August 2023 were up nearly 28% over last year. And, thanks to a surge in the condominium market, August sales reached a record high of 2,729 units, with the benchmark price of a Calgary home reaching $570,700 — a 7.9% increase over last year. 

What’s behind all this? 

The short answer is immigration and inventory. With interprovincial and international migration, we have an average of 62 people moving to Calgary daily. At the same time, inventory rates are down 32% from August 2022. 

In addition, demand is still high as we head into the fall market, as many buyers still haven’t secured a home.  So despite a slight seasonal decrease in overall sales activity, we still have an 87 percent sales-to-new-listings ratio and only 1.19 months of supply — down a whopping 46.9% compared to last year. 

Here’s another way of thinking about it. Typically, inventory levels for August tend to hover around 6,000 units. This year, 3,254 units are on the market —nearly half the seasonal average!

Things to Consider if You Plan to Sell Right Now

Regardless of historical and seasonal trends, the Calgary market remains a sellers' market — and, with inventory so low, a strong housing market is likely to continue into Q4 of 2023. If you plan to sell your home right now, you can expect to get a high price, potentially even with multiple offers. 

That said — if you decide to sell your house this fall, make sure you have a plan for what you will do after you sell.

Are you going to be buying another home? Will the home you want be available in this type of low-inventory market? And, if you’re planning to rent while you look for a new home, have you considered how expensive renting is right now?

These are all critical questions to ask yourself as you contemplate whether or not to enter the current market. 

As always, if you need help, advice, or assistance determining your home's current market value, don’t hesitate to reach out!

When it comes to real estate markets, no one has a crystal ball. Real estate markets — like all markets — are inherently unpredictable.

While it’s difficult to forecast market behaviour with certainty, what we can do is make reasonable projections that help clients make informed decisions based on each buyer’s needs and circumstances.

So, what constitutes an informed decision?

We tell buyers and sellers to consider three essential things when weighing the pros and cons of potential real estate choices:

1. Consider any cautionary factors;

2. Get up to date with current trends in the local market;

3. Take into account your individual circumstances.

Let’s take a closer look.

Cautionary Signs to Keep in Mind

While consumer confidence in the Calgary real estate market is strong, there are still mixed signals about where the market is headed in the next 12-18 months.

Much will depend on what happens with interest rates.

Interest rate hikes continue to stifle the appreciation of average home prices, with projected growth sitting reasonably flat or a +/- 2% price change in 2023. So even with strong consumer confidence, home values aren’t likely to appreciate much in the short term.

In addition, it is always important to remember that local real estate markets are tied to the global economy.
Even strong consumer confidence can wither quickly based on what happens in international markets, especially in the United States.

Prevailing Trends in Calgary

Despite these cautionary notes, we should be optimistic about many prevailing trends in the Calgary market.

Firstly, the city’s population growth is beginning to accelerate. More affordable housing, competitive tax rates, cheap start-up costs for new businesses, and a revived oil and gas industry are attracting newcomers from across Canada who want to purchase homes in the city.

Second, inventory is low, and supply/demand ratios in the resale market are the tightest they have been since February 2006. In the early months of 2023, we are seeing a more substantial pullback in new listings that may be tied to low inventory — i.e. homeowners may be tentative about listing a property when they know inventory is low and buyer competition is high.

In new home construction, sustained demand has prompted housing companies to hold on to higher prices to maximize their profit margins.

All of this means that Calgary home prices have fared reasonably well, particularly when compared to other major markets like Toronto and Vancouver.

What about you?

We tell clients the most important things to consider in any market are their individual needs and circumstances.
Right now, it’s a great time to buy — so long as you are comfortable holding onto the property for the next 5+ years and don’t overextend yourself.

Suppose you are a prospective buyer priced out of the Toronto or Vancouver markets. In that case, the Calgary market may be a viable option where you can capitalize on more affordable housing compared to the average income. That said, don’t let the fear of missing out compel you to purchase beyond your means.

Townhomes and condos are showing resilience in this market. So if you’re looking for a more affordable home, or downsizing or right-sizing, this might be a better option.

And it’s important to remember that with lower inventories, finding the right house that checks all of your boxes might take a little longer than expected. So, if you want to make a quick purchase, you may have to compromise on price.

Ultimately, doing this kind of due diligence will help you make an informed decision about whether or not a real estate move is right for you in 2023.

Need some additional help making an informed decision for 2023?Don’t hesitate to reach out.

This month we were featured in a blog on the realty site Zoocasa about Calgary neighbourhoods. The interview was great. It also got us thinking a bit more about some things we've learned helping folks buy homes in Calgary over the years.

There are many things to consider when searching for the right neighbourhood. Do you want to live close to family or friends? Would you like to be close to schools? What do you do for fun? What are the walking or biking scores in particular communities?

But have you thought about how some of your biases or preferences may influence your decision?

Here are two trends we've noticed that are particular to Calgary.

North versus south versus east versus west.

In Calgary, folks tend to align themselves with a quadrant of the city and stick to it, especially if they grew up here.

There's nothing wrong with buying in an area of the city you feel comfortable in or have lived in before. What you want to try and avoid is letting your preference for the familiar shut you off to other potential areas that might have a lot to offer.

Instead of drawing out boundaries by east and west or north and south, try drawing out boundaries by school catchment areas or commuting times from school or work.

Don't miss out on finding a home that checks all your boxes simply because you didn't pop a specific quadrant of the city into your search criteria.

Inner city or outer limits.

Similar to a preference for city quadrant, most folks have reasonably strong feelings about whether or not they want to live close to downtown or farther out in a newer community.

Each has a stigma; not always deserved.

Some buyers are surprised at just how much they can get in a quiet, suburban-feeling inner-city neighbourhood that's still close to the river, the pathways, and social hotspots like Inglewood, Bridgeland or Kensington.

At the same time, people who prefer the inner city are sometimes shocked to discover just how much newer and more suburban communities have to offer.

Scout it out before you doubt it.

Before you conclude about any neighbourhood or the other, take the time to check it out. We mean really check it out.

Spend a day in the life of someone who lives in that community: do some of your regular shopping errands at a few nearby shops, drive around to different schools, or head out for lunch or dinner at a restaurant in the area.

This due diligence will help you make an informed decision about whether or not a neighbourhood is right for you.

Finally, ensure you use a professional and experienced Calgary Realtor® who intimately knows our city's diverse and exciting neighbourhoods.

Need some help? Don't hesitate to reach out.

If you're typing "cheap homes for sale in Calgary" into your search browser, here is something novel to consider: nobody really wants to buy a cheap home. 

We know…who doesn't want to get something…anything…cheap? But wait, hear us out a second. 

When we say nobody wants to buy a cheap home, we actually mean nobody wants a house built cheaply in a neighbourhood where home values are stagnant.

What you do want is to invest in an affordable home in a proven neighbourhood that fits your needs and will appreciate in value over time, right?

So here are a few things to consider if you're on the hunt to buy a cheap house in Calgary.

Talk is cheap. That doesn’t mean your house should be.

First, take the word "cheap" out of your vocabulary. 

When shopping at a lower price point, you can still buy with quality and value at top-of-mind.  
Using the word cheap to describe what you are looking for can imply that you're willing to settle for something that has less value, is constructed poorly, or no one else wants to buy. 
The word 'cheap' can also adversely affect buyer behaviour. Potential buyers can overly focus on the sticker price instead of other essential features contributing to the home's long-term value.  
For example, $10,000 savings on the purchase price of a cheap home could amount to very little — if any — savings in the long term when compared to a slightly more expensive house in a better neighbourhood. 

Understand the sub-market.

When shopping for a home at a lower price point, you will also want to understand how that particular submarket is behaving compared to the broader Calgary real estate market. 
Right now, the market for lower price point homes is still very active with low inventory. 
This is in part because the high cost of renting, and high occupancy rates, are pushing many people towards home ownership as an alternative to renting.  
Though this doesn't consider how the most recent interest rate hike will affect lower price point homes, buyers in this market can still expect to find a reasonably competitive landscape, with stabler prices and limited supply. 

Compromise in the short term so you can thrive in the long run. 

When you purchase a home at a lower price point, be prepared to compromise on some items on your "wish" list and beware of the lure of the "cheap" home that is advertised as having it all for less. 
We often counsel our clients to focus on location for long-term appreciation. Consider whether the house would be suitable as a rental property when you grow out of the home. 
These are the types of factors that are going to determine the future value of your home. 
You may not be able to "have it all," but you can make smart, conscious decisions that ensure your home will be a good investment well into the future.  
Above all else, do not hesitate to consult a professional. Any advice from your real estate agent comes at no cost to you, and we have your best interests at heart. Contact the Trung Bien Real Estate Team

Now that Calgary’s housing market is taking the lead from other major markets across the country and beginning to cool off, many prospective buyers are wondering what to do in a softening market.

During any prevailing market trend —hot or cold —I like to remind clients that much of our individual investing behaviour is influenced by the behaviours of others in larger social groups. 

This phenomenon is called herd mentality.

Herd mentality can motivate people to make decisions that feel instinctive but are sometimes irrational. This fact is especially true in both finance and real estate. 

Just as herd mentality can motivate people in a hot market to be overly optimistic about future circumstances, it can also cause prospective buyers in a cooling market to be unnecessarily doubtful about making a purchase.

So, if you’re getting ready to buy a home, here are a few good reasons to consider grazing against the grain. 

1 - Think temporary sale, not total collapse. 

Dips in the market are not doom and gloom signs of its impending collapse. They are corrections and temporary opportunities to buy into the market at a lower price.It's my experience that during market slowdowns, many investors tend to forget the value of the real estate market as the most stable investment one can make over the long term.   
This trend is an excellent example of herd mentality. 
It helps explain why buyers in cooling markets tend to become more risk averse, despite lower home prices.
Instead, try thinking of it this way: when interest rates rise, it does cost you more to borrow money to buy your home. However, the house you are getting costs you much less than it would in a more active market.  

2 - When prices are down, the selection is up.  

Another advantage to buying a home in a softening market is that selection is up. Herd mentality can lead you to believe you’ll miss out on your dream house if you don't act quickly. 
The truth is the past two years have been difficult for buyers.   
Many have found themselves entangled in bidding wars and committing to purchases without conditions only to purchase a home that didn't check many boxes on their wishlist.  
As sales decrease, inventory can catch up with consumer demands.  
Buyers can take their time, take a breath and choose from an increased selection while leveraging their increased bargaining power to purchase the right home at a great price. 

3 - There is time to plan your timing.

 With prices down and inventory up, this gives you, the buyer, more time to plan exactly when you think is the absolute best time to purchase.
The market has been incredibly hectic this last year partially because herd mentality took over when people anticipated interest rates were about to rise. 
In some cases, buyers pushed their purchases through before the federal government made significant announcements regarding prime lending rates. 
Now that interest rates have risen, and the market is showing signs of cooling off, potential buyers can time the market more strategically before making a purchase.

So what should I do?

Ideally, you want to find that sweet spot where prices are still low, inflation has cooled down, and interest rates are stabilizing. 
The key to timing any market and avoiding the herd mentality is to stay informed and do your research. Follow local news for updates on the Calgary housing market, and keep your ears open for signs or announcements from the Bank of Canada regarding interest rates. 
But remember that in any market, you should purchase within your means and not over-extend yourself.  
As a general rule of thumb, I suggest to clients that they should feel loosely confident their homes will suit their needs for the next eight years — or longer. 
This way, clients can ride out any turbulence in the market and minimize unwanted transaction costs or losses that come with buying a new home every time their needs change. 
Above all else, do not hesitate to consult a professional. Any advice from your mortgage broker or real estate agent comes at no cost to you, and we have your very best interests at heart. 

As the Bank of Canada has just raised its benchmark interest rate by the largest amount in more than 20 years, Calgary home buyers and homeowners are increasingly interested in interest. And, who can blame them?

The type of interest rate you choose will inevitably affect your monthly household finances for the next several years. Just a few percentage points change to your interest rate can mean thousands of dollars in increased savings or spending in the long term.

One thing you can undoubtedly expect this summer is that despite recent rate hikes and signs that major housing markets like Toronto and Vancouver are slowing, the Bank of Canada will continue raising interest rates to combat inflation.

With these expectations, many brokers, bankers, and real estate agents advise clients to adhere to the age-old mantra: if you think interest rates are going up, lock in.

While there is merit to fixing interest costs when you expect the price of borrowing to rise, many borrowers continue to select variable interest rates over fixed ones.

Why is that? Well, there are several reasons. Here are some things you might not know about variable interest rates.

Ride the wave or lock in to save?

Firstly, when comparing fixed rates to variable rates, you should consider that you are not exactly comparing apples to apples.

Fixed rates give you predictability and certainty when you expect interest rates to rise. However, certainty does not necessarily mean savings.

Many studies have shown that borrowers are likely to pay less total interest with a variable rate loan — even during periods where interest rates rose. Over the last thirty years, variable mortgages have led to lower interest costs in most 5-year periods compared to fixed mortgages.

Also, when comparing fixed and variable rates, ensure you measure them against the Prime Rate, which currently sits at 3.70%.

For example, right now, you can secure a fixed 5-year term mortgage between 5.15% and 5.3%. Following the recent increase to the overnight rate — which affects costs on variable mortgages — a variable rate for the same term is between 4.3% and 4.5%** So essentially, if you lock into a 5-year fixed rate today, you still need interest rates to rise approximately another 1% - 1.5% before you begin earning any savings on the fixed rate you selected. Should interest rates begin to come back down during the term, any savings you earned begin diminishing.

This rationale does not mean you should choose a variable rate. It does, however, help you to forecast different possible financial scenarios depending on what experts anticipate to happen to interest rates.

Want more buying power? This is the hour.

Another thing many people do not know about variable rates is that they usually get you significantly more purchasing power. This is because the stress test qualifying guidelines for a variable rate often allow for a bigger mortgage than a fixed rate.

Currently, using an average family income of $100,000/year, a buyer could expect to receive approximately $418,000 with a fixed rate mortgage and $470,000 with a variable rate.

But buyer beware. Two things are likely to happen that will affect the purchasing power of variable rate mortgages:

1. Policy analysts expect the Bank of Canada will continue to raise its overnight lending rate by the end of 2022. This will probably push the stress test higher, reducing your maximum allowable purchase price.
   

2. Experts also expect the Government of Canada to change the details of the qualifying rate, further reducing a person's ability to borrow funds.

So what should I do?

While I think it is worthwhile considering the advantages of going with a variable rate, even when interest rates are rising, ultimately, there is no right or wrong decision.

When selecting which option works best for you, consider factors such as your financial situation, ability to tolerate risk, and potential plans over the next few years.

Here is a list of questions I often ask clients to consider:

• How long do you plan to live in your home?

• How aggressively are you paying down your mortgage?

• What percentage of your monthly income goes to housing costs?

• Do you have room in your monthly budget to accommodate changes to your interest rate?

• What is your ability to tolerate risk?

The only thing you can be sure will not hurt you is doing your proper due diligence, investigating the available options, and making an informed decision.

Above else, do not hesitate to consult a professional. Any advice from your mortgage broker or real estate agent comes at no cost to you, and we have your very best interests at heart.

I hope you found this article helpful. Do not hesitate to reach out if you are 'interested' in talking more about interest.

**Information sourced from RBC and TD Canada Trust July 14th, 2022.

The Main Mistake People Make When Buying Their Dream Home.

Why you might reconsider always trusting your first impression.

There are several mistakes people make when buying homes: searching for houses without being pre-approved for a mortgage; failing to have the home inspected before they buy; making an offer based on the asking price and not the market value.

But if you can believe it, one of the main mistakes buyers often make is placing too much value on their initial instincts.

Wait? You ask: Isn’t the first impression everything?

Well, yes and no. First impressions are definitely important. There’s a certain logic that tells us our instincts are reliable and that when we see ‘the one’, we’ll know it. This mindset has actually been cited as the single most influential factor in guiding people’s choice to buy, or not buy, a home.

Yet despite this fact, the ‘first impression’ approach to buying can be problematic. And, with so many people in Calgary buying homes right now, we think it’s important to debunk this myth — just a little bit.

The problem with the ‘trust your instincts’ approach is that buyer’s tend to see houses subjectively, and not objectively.

What does this mean?

Well, when a buyer visits a home they are susceptible to details that really do not have all that much to do with whether or not the home is the right fit for them. Things like, are the rooms messy or clean, has the home been staged, what color the walls are painted.

Bad decor choices or untidy rooms aside, some homes — although they may pique your ‘this is the one’ spidey sense — could actually suit your needs and offer you a structurally sound base to build off. Likewise, it’s not advisable to jump at a home just because you love the owner’s sense of decor!

Here’s a simple story that serves as a good example.

I once took a client to a home that checked all their boxes. But there were several holes in the walls, the carpets were stained, and the owner’s belongings were scattered everywhere. Before we’d even made it to the upper floor, my client wanted to leave. She was convinced this home wasn’t ‘the one’.

After several weeks of looking I convinced her to return to the home, except now the owner had moved out, the walls were fixed, and the carpets had been removed. Two days later, we closed on the sale.

What changed?

Well in my mind, nothing. In the client’s mind, everything.

The moral of the story is to trust your instincts, but to also trust your Calgary Realtor®. A hot Calgary real estate market can make you feel pressure to jump on the first home that even remotely sparks your interest.

There are several mistakes people make when buying homes: searching for houses without being pre-approved for a mortgage; failing to have the home inspected before they buy; making an offer based on the asking price and not the market value. 

But if you can believe it, one of the main mistakes buyers often make is placing too much value on their initial instincts. 

Wait? You ask: Isn’t the first impression everything? 

Well, yes and no.  First impressions are definitely important. There’s a certain logic that tells us our instincts are reliable and that when we see ‘ the one’, we’ll know it.  This mindset has actually been cited as the single most influential factor in guiding people’s choice to buy, or not buy, a home. 

Yet despite this fact, the ‘first impression’ approach to buying can be problematic.  And, with so many people in Calgary buying homes right now, we think it’s important to debunk this myth — just a little bit. 

The problem with the ‘trust your instincts’ approach is that buyer’s tend to see houses subjectively, and not objectively. 

What does this mean? 

Well, when a buyer visits a home they are susceptible to details that really do not have all that much to do with whether or not the home is the right fit for them.  Things like, are the rooms messy or clean, has the home been staged, what colour the walls are painted. 

Bad decor choices or untidy rooms aside, some homes — although they may pique your ‘this is the one’ spidey sense — could actually suit your needs and offer you a structurally sound base to build off.  Likewise, it’s not advisable to jump at a home just because you love the owner’s sense of decor!

Here’s a simple story that serves as a good example.

I once took a client to a home that checked all their boxes.  But there were several holes in the walls, the carpets were stained, and the owner’s belongings were scattered everywhere.  Before we’d even made i t to the upper floor, my client wanted to leave.  She was convinced this home wasn’t ‘the one’. 

After several weeks of looking I convinced her to return to the home, except now the owner had moved out, the walls were fixed, and the carpets had been removed.  Two days later, we closed on the sale. 

What changed? 

Well in my mind, nothing. In the client’s mind, everything. 

The moral of the story is to trust your instincts, but to also trust your Calgary Realtor®.  A hot Calgary real estate market can make you feel pressure to jump on the first home that even remotely sparks your interest. 

A good real estate agent is a master of looking at things objectively, so they can talk you down from overspending on an impractical home that “looks pretty” or help you see the hidden pluses of a home that doesn’t at first scream out that ‘this is the one’. 

At the end of the day buying a home is a balance between instinct and reason, initial appeal and future potential, and first impressions and second visits. 

Why don’t you let us help with that? 

 Trung Bien 

You’ll need to look at sales of comparable properties, and factor in additional data such as the condition of the property, the current market, and seller circumstances.  With this information in hand, you will be able to determine a fair price range and, from there, establish the price you’re willing to offer. 

Concentrate on the following areas to help you determine an offer price: 

Comparable Sales

      • Compare prices of homes that are similar to the property you’re considering in the following areas:  number of bedrooms and bathrooms, square footage, lot size, type of construction, and garage space.

     • The most comprehensive and in-depth information can be accessed through the Multiple Listing Service (MLS).  Your Realtor, who will be working closely with you to set your offer price, can help you navigate this service.

Property Condition

      • Observe how the property compares to the rest of the neighbourhood.  Is it average, above average, or below         average?

      • Look at structural condition:  walls, ceilings, windows, floors, doors.

      • Pay close attention to:  bathrooms, bedrooms, condition of plumbing and electricity.

      • Also check the fixtures:  light switches, doorknobs, drawer handles, etc.

      • What is the condition of the front and back yards?

Home Improvements 

     • Cosmetic changes can be largely ignored, but any major improvements should be taken into account.

     • Take special note of:  room additions (especially bedrooms and bathrooms).

     • Items such as swimming pools may be taken into account, but usually won’t affect your offer.  Your Realtor can offer your guidance in these matters.

Market Conditions 

     • Seller’s Market:

A seller’s market is considered a “hot” market.  This type of market is created when demand is greater than supply—that is, when the number of Buyers exceeds the number of homes on the market.  As a result, these homes usually sell very quickly, and there are often multiple offers.  Many homes will sell above the asking price. 

     • Buyer’s Market:

A Buyer’s market is a slower market.  This type of market occurs when supply is greater than demand, the number of homes exceeding the number of Buyers. Properties are more likely to stay on the market for a longer period of time. Fewer offers will come in, and with less frequency.  Prices may even decline during this period.  Buyers will have more selection and flexibility in terms of negotiating toward a lower price.  Even if your initial offered price is too low, Sellers will be more likely to come back with a counter-offer.

     • Balanced Market:

In a balanced market, supply equals demand, the number of homes on the market roughly equal to the number of Buyers.  When a market is balanced there aren’t any concrete rules guiding whether a Buyer should make an offer at the higher end of his/her range, or the lower end.  Prices will be stable, and homes will sell within a reasonable period of time.  Buyers will have a decent number of homes to choose from, so Sellers may encounter some competition for offers on their home, or none at all.

Comparable sales information helps you establish a price range for the home you’re interested in.  Adding in the additional factors mentioned above will guide your decision of whether you consider a “fair” price to be near the upper or lower limit—or the middle—of that range.  Keep in mind, this price should be the one you’d be happy with once all negotiations are said and done.  The price you decide to begin with depends on your particular style of negotiation.  Most Buyers begin the negotiation process with a number lower than the “fair” price they’ve come up with. 

Budgeting for a new home can be tricky.  Not only are there mortgage instalments and the down payment to consider, there are a host of other—sometimes unexpected—expenses to add to the equation.  The last thing you want is to be caught financially unprepared, blindsided by taxes and other hidden costs on closing day.  

These expenses vary:  some of them are one-time costs, while others will take the form of monthly or yearly instalments.  Some may not even apply to your particular case.  But it’s best to educate yourself about all the possibilities, so you will be prepared for any situation, armed with the knowledge to budget accordingly for your move.  Use the following list to determine which costs will apply to your situation prior to structuring your budget:

1. Purchase offer deposit.

2. Inspection by certified building inspector.

3. Appraisal fee:

Your lending institution may request an appraisal of the property.  The cost of this appraisal is your responsibility.

4. Survey fee:

If the home you’re purchasing is a resale (as opposed to a newly built home), your lending institution may request an updated property survey.  The cost for this survey will be your responsibility and will range from $700 to $1000.

5. Mortgage application at your lending institution.

6. 5% GST:  

This fee applies to newly built homes only, or existing homes that have recently undergone extensive renovations.

7. Legal fees:

A lawyer should be involved in every real estate transaction to review all paperwork.  Experience and rates offered by lawyers range quite a bit, so shop around before you hire.

8. Homeowner’s insurance:

Your home will serve as security against your loan for your financial institution. You will be required to buy insurance in an amount equal to or greater than the mortgage loan.

9. Land transfer (purchase) tax:

This tax applies in any situation in which a property changes owners and can vary greatly.

10. Moving expenses.

11. Service charges:

Any utilities you arrange for at your new home, such as cable or telephone, may come with an installation fee.

12. Interest adjustments.

13. Renovation of new home:

In order to “make it their own,” many new homeowners like to paint or invest in other renovations prior to or upon moving in to their new home.  If this is your plan, budget accordingly.

14. Maintenance fees:

If you are moving to a new condominium, you will likely be charged a monthly condo fee which covers the costs of common area maintenance. 

It is essential that your home possess a certain “drive-up appeal.”  Remember, a potential buyer’s first impression of your house is formed while s/he is still sitting in the realtor’s car.  So, first you need to view your house from this perspective.  Go stand on the opposite curb and observe your property.  Compare it to surrounding properties.  Concentrate on the following three areas:

Landscaping: 

How does your landscaping measure up compared to the rest of the neighbourhood?  If you guess it would rate below-average, make a few adjustments.  You might want to consider buying some bushes and planting them around the property.  Do not buy trees, however—mature trees are expensive, so you will not see a return on your investment.  And immature trees don’t tend to significantly improve the immediate appearance of your home.

If the problem with your yard isn’t a case of too little greenery, but rather too much, get out the pruning shears.  The purpose of landscaping is to complement the home, not hide it.  Overgrown shrubs should be sheared to a height near the bottom of the windows.  Remove any ivy clinging to the side of the house.  Tree limbs should be high enough that you’re able to walk beneath.  Trim any branches that bar the way.  

Your lawn should be freshly cut and watered, and an even colour.  If there are brown spots, make sure you begin to remedy this well in advance of putting the house on the market.  You may want to re-sod areas, and you need to make sure these spots are given enough time to grow, so they will match the existing lawn.  Also, if you decide to use fertilizer, you’ll want to allow enough time for it to take effect.  Rake up any leaves or grass cuttings. 

Planting a few flowers is an easy way to add colour and vibrancy to your yard, enhancing the first impression of your home.  Invest in a full flat of mature, colourful flowers, such as petunias or periwinkles, which last the length of the growing season.  Do not buy bulbs or seeds—they won’t necessarily grow enough by the time you begin showing to achieve the desired effect.  If you don’t have an area in which to plant flowers, consider purchasing a few flower pots for your porch and planting flowers or blooming plants. 

If you have a pool, keep it sparkling and leaf-free. 

House Exterior: 

When you view your house from across the street, does it appear weathered or faded?  If so, it’s probably time to treat it to a fresh coat of paint.  This is usually a sound investment; new paint can do wonders to increase a home’s perceived value. 

Stay away from unusual or loud colours.  The new colour should fit in with surrounding houses, and complement the style and structure of your house. 

Examine the roof closely.  Old or leaking roofs should be replaced.  If there are leaks, you’ll have to disclose this detail to the homebuyer anyway, and they will want it replaced.  If there isn’t any apparent damage, however, wait for word from the home inspector before making repairs.  

The Front Door and Porch: 

The front door and surrounding area should look particularly fresh and welcoming, as this will be the buyer’s first up-close impression as they enter the house.  If you paint nothing else, at least give the door a new coat.  Replace the doorbell if it is broken and polish the door fixture until it gleams.  Wash the mail box.  Keep the porch swept and buy a new plush door mat.  All of these little things will contribute to the overall effect of a well cared-for and welcoming home. 

Ensure the lock works smoothly and the key fits properly.  When a homebuyer visits your house, the Realtor will open the front door with a key.  You don’t want the buyers’ first experience to be of waiting on the doorstep while the Realtor fumbles with the lock. 

An experienced Realtor has the knowledge, skills, and connections to help you through the process every step of the way.  Consider the following benefits of working with a Realtor: 

Professional Experience: 

With knowledge and training in marketing strategy, negotiation tactics, and the workings of the current real estate market, a Realtor will be able to guide you through the steps of the home-selling process and be able to explain exactly what to expect.  S/he will make you aware of your rights and responsibilities, work with you to strategize the best moves according to your own goals, discuss financing options, and point you in the direction of other specialized professionals who will aid you in different stages of the process. 

Best Price: 

Realtors have their fingers on the pulse of the current real estate market, and will know what comparable properties in your area are selling for.  They have the resources and knowledge to establish the best asking price and to attract the highest selling price.  With access to their company’s professional marketing resources and connections, they will ensure potential buyers are immediately made aware of your home and market the property to sell as quickly as possible and for the most money. 

“Showcasing” Experience: 

Your Realtor will know the importance of a property’s first impression.  S/he will have experienced first-hand, for example, the impact a property’s “drive-up appeal” has on the rest of a potential Buyer’s experience of your home.  Your Realtor will be able to offer you tips and information on how to get your home in the best selling shape possible, in order to sell your property quickly and for top dollar. 

Access to Qualified Buyers: 

Realtors save time and effort by dealing only with qualified buyers.  They have access to a pool of pre-screened and pre-qualified buyers who are serious about buying a home in your neighbourhood.  Realtors work hard to develop this base of qualified buyers which will become an invaluable resource for you. 

Negotiation Skills: 

Realtors serve many functions, but perhaps the most important is their role as primary negotiator on your behalf.  Your Realtor realizes your goal is to sell your home as quickly as possible, and for the most money possible, and will work closely with you during the negotiation process to facilitate this goal.  Realtors bring to the process the knowledge and skills to draw up legally binding contracts, to assist in negotiating offers and counter-offers, and to offer counsel and perspective as you work toward your selling goals.