Better Homes and Gardens Real Estate Signature Service

New Regulations shouldn't be a mystery

Mon, 24 Jan 2011 04:35:02 -0700

New home buyers have a sea of regulations, rules and guidelines to wade through on their way to purchasing their dream home. Those guidelines have just gotten an adjustment as Finance Minister Jim Flaherty has tightened up mortgage guidelines. While changes have been expected, many industry professionals are relieved that the changes are relatively minor.

Which isn’t to say those changes aren’t important.

A 5‰ minimum down payment is still required.

There are ways to qualify for a mortgage without the savings in place based on clean credit histories and minimum beacon scores. Some lenders are allowing cash back programs to be used as the down payment though they will be subject to higher interest rates. Flex Down payment programs are also available to qualified buyers which will allow them to borrow the down payment from a line of credit, personal loan or credit card.

The total amortization period allowed on an insured mortgage (a mortgage over 80‰ purchase price) has been reduced from 35 years to 30 years. While this might mean you have a little less purchasing power, it is not a dramatic change and still above the 25 year amortization period which had been the norm until recently. The good news is that while it might be a hard pill to swallow up front, you’ll save a significant amount of money in interest costs.

For current owners, there are changes that you should be aware of as well.

Presently, home owners can refinance their property to 90‰ of appraised value, but as of March 18, 2011 this will be limited to 85‰ . This means that once a home owner reaches a 15‰ equity position in their property it cannot be leveraged by restructuring their mortgage.

The new regulations also limit government insurance of home equity lines of credit to 85‰ of value of the property. This is the least restrictive change for those wanting to get into the housing market and further clarification will be forthcoming from lenders and governing bodies. This change will be effective April 18, 2011.

It is highly recommended that you have an honest and open conversation with a mortgage professional who can help determine how these changes will effect your opportunity for buying or refinancing your home. As a consumer, you have a right to free consultations with a mortgage professional. At Signature Service Financial we have mortgage officers who serve Saskatchewan and Alberta. We offer customized services that are tailored around your personal goals. We’re here to help.

Business Planning

Thu, 09 Dec 2010 02:19:57 -0700

Thanksgiving has come and gone and, while there’s shopping to do and parties to attend; Christmas isn’t here yet, so you have a few weeks to really process what changes you’ll make or strategies you’ll keep for ’11.

Now is also a great time to establish your marketing plans as we all know the holidays tend to slow down business. Think of this as a two week break to reflect over the past year and consider the future of your success. Whether it’s a focused two hour time slot each morning or three full days, commit this much needed time to regroup and gear up... you’ll hit the ground in 2011 running!

Start the process with reflection. The best way to move forward is to evaluate the past.

What worked for you over the past year? Whether it was a great drip email campaign, your new blog, or commitment to social media - keep it up! If it was beneficial to your business be sure to continue putting the same time and energy into those things, and don’t be afraid to bump it up a notch!

What didn’t work for you? Did all those postcards you sent out yield any type of return or are there any websites or services you’re paying for that don’t seem to be doing anything for you? If something is not working for you; don’t be afraid to drop it. Don’t spend the time, energy or money when you could be investing more in the things that do work.

Next, consider new things! Growing in your business will often entail trying new ways of marketing or a different approach entirely!

Below are a few of the Top Digital Marketing Trends for 2011 as pointed out by HorizonWatching that will help point you in the right direction if you’re not already there! And, while this site is geared more towards marketing teams; you’ll be able to take the key elements that you can use for your strategies.

Marketing Budgets Will Continue to Shift Towards Online: Customers and prospects are increasingly going online early in the buying cycle to gather information, form relationships, and make decisions about how they will buy. As a result, marketing leaders must move marketing mix budgets to mirror where the customers and prospects are - online.

Social Media Marketing Is Maturing: Those in the marketing profession can sense that we are in the middle of an important transition to the use of social media for marketing purposes. While the past few years many marketers have been experimenting with social media tactics, in 2011, leading marketing teams will be executing social tactics that are fully integrated into the overall marketing strategy. An overall social media marketing process will emerge that has firms following a never ending cycle of

1) Research, 2) Plan, 3) Engage and 4) Measure.

Social Video As A Marketing Tool Gains Momentum: Video is an incredible way to connect with people online. Until the Internet, the only way to get your video message to a mass audience was to pay for a TV commercial. Today, social media sites and video go hand in hand. Distributing video via your social networks is a powerful way to imprint your images into the memory of your customers and prospects. Video strengthens the relationships you have with existing customers and it helps prospects get to know you better.

Search Engine Optimization Gets More Complex: Customers naturally use search engines as their primary vehicle to find information on products and services. But its not a one search engine game anymore as Google’s been joined by Bing and there are important local players like China’s Baidu and Russia’s Yandex. On top of that, social sites like Twitter, Facebook, and LinkedIn are increasingly becoming an important source for searching.

The final step is to put your plan into action! While there can be different phases to your marketing plan as you budget for 2011, the goal is to get the ball rolling. If you begin now, you won’t be scrambling after the excitement of the holidays wears off; you’ll be ready to go!

If you still aren’t quite sure where to start, we’d love to help! We offer business planning with a strong emphasis on your marketing, so that you are freed up to do the job that you need to do, and more importantly, know when it needs to be done! From enhancing your online presence, to real estate blogging, drip email campaigns, social networking, listing marketing, branding, and everything in between; we have training that will help to make 2011 your most successful year yet!

Are you prepared for next year?

Mortgage Brokers Can Save You Money

Thu, 18 Nov 2010 04:29:15 -0700

Choosing the right mortgage can be overwhelming. Although going to your bank might be the logical move, you don’t know if this will net you the best mortgage plan for your budget, lifestyle and prospects. And searching by yourself can give you the feeling that there is just too much to know.

That’s why mortgage brokers seem to have become an increasingly popular channel for consumers to find the right mortgage for them. According to the Canadian Association of Accredited Mortgage Professionals Fall 2009 Canadian Mortgage Industry Snapshot, 23% o all mortgages in 2009 were handled by a mortgage broker, including 32% o all new mortgages.

Albertans lead the trend, with 34% o all mortgages in that province being handled by brokers. Most Ontarians and those living in the Atlantic Provinces prefer going through one of the Big Five Banks. And Credit Unions/Caisses Popularies are strongest in French Canada and the Prairies.

It appears that young people are the ones driving the success of mortgage brokers. In 2009, 28% o mortgages amongst 18-34 year-olds were through a broker, while only 17% o Canadians older than 55 used one. This is likely because young people are more uncertain about how to choose the right mortgage and because brokers are still relatively new to Canadians.

The most important finding from the research is that Canadians use brokers for new mortgages, but they tend to neglect them for their renegotiations. This could be a mistake. The data in this report shows that brokers can be an effective way to get lower interest rates. Those Canadians who renegotiated their mortgage through a broker reduced their interest rate by 125 points compared to the 114 point reductions consumers got when they went through a Bank or Credit Union.

Rob Daniel, the Managing Director of Maritz Research Canada (the group that conducted the research), had this to say: “The Broker channel has done a good job marketing the effectiveness of its service for originations, but Canadians are defaulting to their lender or Banks when it comes time to renegotiate. Brokers need to let their customers know that their services are very useful – and financially beneficial – during the renegotiation process as well.”

Of course, using a broker may not always be in your best interest, particularly if you have a good relationship with your bank, and are confident you are getting the best rates. But if you have any doubts, getting a mortgage broker might be one of the best ways to save you money in the long term.

Contact Signature Service Financial today for more information.

www.signatureservicefinancial.com

Image: Stefano Valle / FreeDigitalPhotos.net

Thinking of Flipping? Make sure you consider all the costs.

Fri, 08 Oct 2010 09:23:29 -0700

You may have read articles about flipping properties and thought it sounds like a good idea. But have you thought of how, exactly, you are going to make a profit off of it? Although some people who flip homes suggest it is a relatively easy and effective way to make money, the cost implications can be daunting. Before you think about flipping, consider all the potential expenses you can incur.

Inspection Fee

Any house that has been previously owned will need to be inspected. You wouldn’t want to buy a property and find its roof is leaking, discover that it is uninsurable because it has knob and tube wiring, or see that it has roaches. Good inspectors will find these things for you; they will also cost you in fees.

Appraisal Fee

When you are getting your mortgage, your bank may require you to get your new home independently appraised to determine its value.

Survey Fee

This fee can be avoided if the previous owners of your home have already done one. However, if there isn’t a recent one completed, you’ll have to get a new one done. A survey will tell you how your home is situated on your property. It will also tell you if any part of your home is on your neighbour’s property, if any part of their home is on your property, and if your home meets the current zoning regulations.

Legal fee

When you are claiming the title of your property, you will need to have the title searched. Searching the title is undertaken to ensure that you aren’t buying a property that has any claims on it and to make sure that the seller actually has the right to sell the home. Although you can use a paralegal (except in BC and Quebec, where a lawyer is required), a lawyer is advisable.

Title insurance

To ensure that you are protected from the possibility that the seller doesn’t actually own the title to your home, you’ll have to get title insurance. It sounds like an unnecessary expense, but you definitely wouldn’t want to find out you’ve paid several hundred thousand to a person who doesn’t actually own the house you are buying.

Other costs

And there will be other expenses: moving costs, gas and time to look at all the houses you are interested in, costs to replace those terrible drapes, etc. Generally, these costs are an understandable and necessary part of buying a home. And these costs will be recouped by you if you live in a house for several years, and the house naturally appreciates in value. However, it is unlikely that you will recoup these costs if you try to flip the house immediately.

In other words: flipping is only for the brave. For the rest, real estate is a great long-term way to invest your money.

How Effective Was the Home Renovation Tax Credit?

Wed, 15 Sep 2010 03:55:20 -0700

If you were planning on using the government’s Home Renovation Tax Credit, you’ve unfortunately missed your chance: the program ended at the beginning of February. However, now that is over, we are starting to get an idea of how it affected the real estate industry.

A recent report released by the Toronto-Dominion Bank tries to do just that. It argues that the tax credit did encourage people to renovate, and helped boost the economy. Diana Petramala, the author of the report, estimates that the credit encouraged $4 billion to be spent on renovations.

However, the bad news is that most of the money spent was from loans. Petramala says, “We believe that the stimulus measure likely borrowed $3-billion of demand from the future.”

This is bad news, because it suggests that demand from these consumers might be weaker in the near future as they try to recover from their debts. There will be some lingering benefits from the renovation spending – these projects will likely push up activity throughout 2010. But as Petramala notes, “the pace of growth will diminish over the course of the year and into 2011 as payback from the tax credit occurs.” This will have a dampening effect on Canada’s economic recovery.

Even more worrying is the fact that interest rates are expected to rise. If many of the home renovators are putting these expenses on credit card debt, rising interest rates could really knock consumption. And we’re deep in debt. In 2009, home indebtedness reached the historical high of 140% of income.

As well, these renovations might be encouraging the recent upswing in the housing market. If householders are going into debt to pay for renovations, they might feel they need to sell quickly in order to dig themselves out of credit card debt.

Nevertheless, we shouldn’t get too upset about these sorts of analysis. It’s always difficult to predict what the market will be like next month, let alone a year from now. In the end, what matters is not whether most people have wracked up large credit card debts – the problem is whether you have. Try to keep your spending in line, and let the future take care of itself!

Are You a Client or a Customer Know the Difference

Wed, 01 Sep 2010 11:10:57 -0700

The real estate industry sometimes uses language that appears at first glance to be clear, but do you as a consumer know what some terms really mean? At first glance, the words “Client” and “Customer” seem pretty clear-cut, but they mean completely different things to a REALTOR®. It also means a tremendous difference in how seriously you are taken as a Buyer.

Think we’re splitting hairs? The words “Client” and “Customer” and the way they relate to the REALTOR® as individuals make a tremendous difference in the types and level of service you receive. After you read why, you’ll know absolutely whether you want to be one or the other.

First, let’s start with a little history. REALTORS® have always worked with home Sellers to list their homes for sale on the market. Along with this service comes the responsibility to advertise the homes, network with other REALTORS® to find a Buyer, negotiate the sales contract and guide the Sellers to successful closings. Because of the time and expenses incurred by the sales representative and broker which will not be reimbursed until the closing of the home, Sellers have always been required to sign a listing contract. This contract enables the sales representative/broker enough time to properly market the property, find a Buyer, negotiate a contract and get the property to closing within the time frame allowed. It also protects the agent from home owners who wish to use services without fairly compensating the professional.

The real benefit, however, is for the home owner. Once the home owner has signed the contract, the sales representative/broker has the fiduciary responsibility to get the highest price possible for the home and to protect the Seller’s interests above all else. The sales representative must also follow provincial and federal mandated regulations as to ethics and legalities that are enforceable by a provincial council in conjunction with the local Real Estate Association. In other words, the contract is legally binding with the REALTORS® performance at stake.

Now that a contract has been signed, the home owner is a “Client” of the sales representative/broker, and enjoys the full privileges of a close, working relationship.

Buyers have historically worked with REALTORS® too, but it wasn’t until fairly recently that they have been asked to sign ”Buyer Representation Agreement.” This is a change that has come about because of two reasons…abuse to Buyer’s agents and increased consumer awareness.

Without a contract the Buyer’s agent was particularly vulnerable to working without getting paid. Too often, Buyers would ask them to show them house after house, and then buy from another sales representative. One favourite Buyer trick is to attend open houses without their REALTOR® and tell the listing sales representative they aren’t working with anyone. Buyers mistakenly believe that they are learning about more homes without a sales rep. at their side, or that they may possibly get a better deal. The truth is…they don’t! They usually pay more for the home than they have to when they buy from the listing sales representative directly.

Then consumer awareness dawned. Buyers began to realize that whoever represented them at the closing table was on the side of the Seller, not theirs. They realized that they deserved to have a true advocate, and the Buyer’s agent was born. The only way was to create a binding agreement that protected both parties.

Good REALTORS® didn’t want to be burned again so the ”Buyer Agency Agreement” (now called the Buyer Representation Agreement) was created. Again, it was a protection for the REALTOR®, but it generates much more benefit for the Buyer. The main advantage is that it releases the agent from a fiduciary responsibility to the Seller and enables the agent to pursue the Buyer’s goals without any agenda.

Once the contract is signed, the sales representative goes into motion searching the MLS® for homes, and seeking homes through other avenues – foreclosures, FSBO’s, and their own database. At negotiations, the contracted Buyer’s agent becomes a “bulldog for the Buyer”, unrestricted by the Seller or Seller’s agent. Now they can make more demands, get a better price and better terms of sale for the Buyer.

Despite these advantages, some Buyers are still reluctant to sign. They don’t want to be “tied down” or they may mistakenly think that getting several REALTORS® to work with them will get them a better home or deal. They won’t. Part of the strength of the industry is the REALTOR® communication network. A Buyer working with several sales rep’s will quickly become a joke.

Without a contract, the Buyer is clearly not a Client. He/She is a “Customer” and when a good listing comes on the market either by word of mouth, e-mail from another REALTOR®, or on the MLS®, who do you think the Buyer’s agent will notify first…the uncommitted Buyer (Customer) or the contracted Buyer (Client?).

A contract makes a difference in other ways. For example, there are things the Seller may not want disclosed to the Buyer such as their urgency to sell, which could compromise their bargaining position. A REALTOR® who then discloses this information is in ethical violation and can be brought before the Real Estte Council of Ontario (RECO) on charges. Some offenses are serious enough to have a REALTOR® license to practice suspended or revoked completely.

But the Buyer has no such protections without a contract! Anything they say to an un-contracted REALTOR® may be passed along to the Seller. Why? Because, any REALTOR® who works for the Buyer without a contract automatically becomes a sub-agent for the listing broker, and is therefore working on behalf of the Seller.

Surprised? It’s all spelled out – in the listing contract and in the “Buyer Representation Agreement.”

A contract makes the difference in whether you are a “Customer” or a “Client” in a real estate transaction.

Which do you want to be?

Five ways to achieve financial stability towards home ownership:

Thu, 26 Aug 2010 01:36:10 -0700

Although many Canadians feel comfortable taking on debt, household debt has doubled in the last 20 years, to a record of $1.41 trillion. That means, on average based on everyone living in Canada, each person would have about $41,740 worth of debt.

It is important that each household works towards maintaining a plan, so that one day owning a home can be attainable, and not just a dream. The first most significant step towards home ownership is to achieve financial stability.
Here are five ways to achieve financial stability towards home ownership:

1. Start your own personal budget plan:

Regardless of whether you are looking to buy a home, planning to save for retirement, or just looking to balance your finances, it is important to create a personal budget. In an average month, those without budgets would probably have great difficulty in being able to estimate how much they spend on various amenities. For a one month period, create a household budget which not only will categorize spending, but show actual figures of what your household spends money on.

Once that month is over, it is important to take a look at the finances and see what is being spent and where. Seeing these numbers written down is typically more effective because you can begin to allocate money to different sources if need be. For example, if you find that your household is eating out too much, allocate some money towards monthly groceries, and the other money can be used towards saving up for a down payment on a home, or perhaps paying down existing debts.

Creating a personal budget is crucial in order to be able to effectively save up for a down payment and afford a home. If you need help creating your budget plan you can email: info@ssfi.ca for a complimentary sample budget plan.

2. Examine your current debt:

It is important to be aware and fully understand the current debts that you have. Take a look at not only the type of debt, but how likely it is that these debts can be paid off and how quickly.

In terms of credit cards, only use them if you know you can afford the payments on them. You should also be aware of payment dates, as missing payments will adversely affect your credit score. Having a lower credit score makes it more difficult when obtaining mortgage financing, auto financing, or even future credit card financing.

3. Determine your financial goals:

Find out exactly what you want to achieve financially. Without a goal in mind, it makes it much harder to follow through with saving up and paying down debts. If you want to own your own home, own a car, or save up enough for a trip, it is important to visualize what you want.

If you’re just looking to become more financially stable, consider a target budget that you can slowly work towards. It is also important to look at your income compared to your debts to see if there is any room for improvement.

4. Eliminate higher interest account balances:

High interest account balances can really hinder plans for home ownership. Credit cards promoted through various companies that typically offer “No interest” or “Don’t pay for 90 days!” also come with a hefty price tag. Big box stores that have in-house financing also typically have the highest interest rates for credit cards.

If you are trying to pay down debts, focus on paying off those with higher interest rates first before moving on to the other accounts. Another tip would be to contact your credit card company and ask for an interest rate decrease. Individuals who have good repayment history and have been with the credit card company for a significant amount of time can sometimes successfully receive a lower interest rate just by asking.

It is important to keep two active trade lines in order to maintain a strong credit score. This can be two credit cards, a credit card and line of credit, etc. Typically, having too many credit cards makes it difficult to keep track and could potentially cause missed payments.

5. Find out your best mortgage financing options:

Shopping around for a mortgage is no easy task. There are many mortgage products available currently, and it is important to speak with an accredited mortgage professional to see what the best option for you is.

Many mortgage brokerages offer their services for free. Many also receive discounts from top lenders therefore are able to offer more competitive rates compared to going with a traditional lending institution, such as a bank.