Jack's Blog

How's The Local Market

2012-01-31T14:34:00.000-08:00

CREA STATS

Provided by The Canadian Real Estate Association

The Orillia & District Real Estate Board Inc.

Home sales stable in December.

Residential sales activity recorded through the MLS® System of the Orillia and District Real Estate Board held steady at the end of 2011. Demand in December matched levels in the previous two months, although activity did come in a little below levels in December 2010.

Residential sales numbered 44 units in December 2011, decreasing four per cent from the same month a year earlier. Sales of all property types numbered 49 units in December 2011, down nine per cent from December 2010.

On a seasonally adjusted basis, activity in December ran about even with levels in October and November, with these months marking the strongest three month stretch in 2011.

“A total of 865 homes traded hands over the Board’s MLS® System in 2011,” said Debbie Gilbert, President of the Orillia and District Real Estate Board. “While that was a decline of 10 per cent from 2010 levels, most of the weakness in demand was back in the spring. Since then activity has been on the rise. The fourth quarter of 2011 was actually the strongest quarter we’ve seen in a year and a half, so there’s definitely some good momentum heading into the new year.”

The average price for waterfront property sales was $307,500 in December 2011, down 27 per cent from a year earlier.

The non-waterfront residential average price remained unchanged from a year earlier at $222,879 in December 2011.

New listings on the Board’s MLS® System numbered 69 units in December 2011, up 19 per cent from December of 2010.

There were 342 active residential listings on the Board’s MLS® System at the end of December, edging down one per cent from the same time last year.

There were 6.9 months of inventory at the end of December 2011 on a seasonally adjusted basis, down slightly from 7.2 months at the end of November. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

The total value of all home sales was $9.8 million in December 2011, down 15 per cent from year-ago levels. The value of all property sales declined 19 per cent on a year-over-year basis to $10.4 million .

Incorporated over 40 years ago, the Orillia and District Real Estate Board offers its members the most advanced medium of selling real estate, by supplying to them the most efficient MLS® system available. The Board enforces a strict code of business ethics and standards of practice among its members, both brokers and salespersons.

The information contained in this report has been prepared by The Canadian Real Estate Association, in co-operation with the Orillia & District Real Estate Board. The information has been drawn from sources deemed to be reliable, but the accuracy and completeness of the information is not guaranteed. In providing this information, neither The Canadian Real Estate Association nor the Orillia & District Real Estate Board assumes any responsibility or liability. Copyright© 2012 The Canadian Real Estate Association. All rights reserved. Reproduction in whole or in part is prohibited without written permission.

Save up to 20% on your energy bills!

2011-12-03T05:38:00.000-08:00

To date homeowners who participated in the federal governements ecoENERGY Retrofit - Homes program have saved 20 percent on their energy bills.

The ecoENERGY Retrofit - Homes program continues until March 31, 2012 and as a homeowner you can receive grants up to $5,000 to make your home more energy-efficient and save energy costs.

The current program has two important changes.

Participants must now register directly with the program before booking an evaluation. Service organizations licensed by Natural Resources Canada to deliver this evaluation can be found here.

They must also provide receipts to their energy advisor at the time of the post-retrofit evaluation to confirm their eligibility for an ecoENERGY grant.

Only products purchased after June 6, 2011, and installed after a pre-retrofit evaluation are eligible for a grant.

Get more details and register at www.ecoaction.gc.ca/homes.

Is There a Best Day to List a Home?

2011-10-29T05:19:00.000-07:00

I saw a report that suggests that the day of the week you list your hame can have an impact on how well your home sells.

This is what the (U.S.) report revealed based on over a million listings over almost two years.

The results:
Homes listed on Sunday get marginally more online views.
Homes listed on Friday are toured 19% more.
Homes listed on Friday or Thursday sell for slightly closer to original list price.
Homes listed on Friday are 12% more likely to sell in 90 days.

Friday appears to be an ideal day which is based on the idea that since Saturday and Sunday have 2.5 times as many tours per day than Monday to Friday, homes listed on Fridays are the freshest in buyers' minds.

There are comments from real estate agents that indicate Thursday is a better day since some agents might line up their weekend showings early Friday and could miss a late day Friday listing, but a professional sales representative should always be checking for new listings for their buyers.

One downfall to this wait until Friday idea is the fact that the sooner a home is listed the sooner it can be advertised to potential buyers and if you wait a couple days to list, a seller could have their potential buyer putting in an offer on another home that is already on the market.

Although this is an interesting study that probably has more bearing on the amount of early traffic through a newly listed home, the fact remains that a home properly priced, maintained, showcased and located in an ideal neighbourhood will sell faster and closer to a reasonable listing price no matter what day of the week it's listed.

My thought is that you can't do much about location if you are the seller, but you are in control of price, maintenance and showcasing your home. Concentrate on these three key areas when listing, then take this study into consideration to fine tune your potential for a sale.

(Study Source Redfin)

Options For Homes

2011-10-06T14:04:00.000-07:00

After many years of planning, Options For Homes is coming to Orillia. Options For Homes has helped thousand of Canadians become home owners and you're invited to learn how they might be able to help you too.

Options for Homes is a non-profit company that strives to bring home ownership within the reach of families with incomes as low as $40,000. How is it done?

House prices are kept low by employing simple, no-frills designs and avoiding excessive marketing campaigns. Volunteers do the initial planning and the entire project involves a not for profit mentality to keep the cost of the home low.

Buyers unable to secure sufficent conventional financing can access a second mortgage through a sister organization, the non-profit Home Ownership Alternatives. The morgage can be used to finance the difference between the building cost and the appraised value of the home. What's very helpful in this second mortgage concept is that owners do not pay the principle or interest on the second mortgage while living in the home, instead repaying the amount owing when the house is sold. This enables families to finally have an option to get into home ownership through a working plan they can afford.

If you are interested in becoming a home owner, Options For Homes would like the opportunity to tell you about the homes they are hoping to build in Orillia. These homes will be designed by James Fryett Architect Inc. and are currently planned for a 2.3 acre property in west Orillia, between Bass Lake Sideroad and Highway 12. This location is close to shopping and is on a bus route.

The meeting planned is to get your input in the project. Basically, what would you like to see in your future home? Share your ideas and learn about the opportunities for home ownership.

Thursday, October 13th, 2011
7:00 – 8:30 pm
St. Paul’s United Church, Room 333
62 Peter Street North, Orillia

*Child Care Available
*Refreshments Provided

Please come and join the conversation!

Please contact Johanna at jhashim@shs-inc.ca if you are interested in participating in this focus group. Please let us know if you require any specific arrangements or accommodations to ensure full access to this event.

If you would like to learn more about Options for Homes, please visit http://www.optionsforhomes.ca/

SPEAK UP ABOUT HOME OWNERSHIP

2011-09-17T06:21:00.000-07:00

It's sad when I see a person/couple paying as much or more for rent than they would for a mortgage payment all because of the many additional costs associated with getting into a home. There are many who can afford a monthly mortgage payment, but they just don't have the necessary funds for everything else that faces them to secure the mortgage and to pay for the additional costs associated with the purchase.

As Ontario voters go to the polls in the provincial election, the Ontario Real Estate Associatio's (OREA) “Home Ownership Matters” campaign is promoting greater support for affordable home ownership to candidates, political parties and key decision makers. What's more, OREA has made it so easy for you to express your concern to local candidates with just a few clicks of your mouse.

Ontario’s home owners and those who one day dream of owning a home are not always top of mind with our friend’s at Queen’s Park. From the Land Transfer Tax to the HST, provincial governments have made life more expensive for Ontario’s home owners. We can stop this trend but "Home Ownership Matters" needs your help.

It only takes two minutes. Your personal information will appear in a pre-written letter to candidates running in your riding. You can make changes to the letter to perhaps tell your personal story if you want or just submit the pre-written letter, but once you’ve reviewed it all just click ‘Submit’ to send it to your local candidates.

Let’s make affordable home ownership an issue in the 2011 Ontario election. Tell your local candidates that “Home Ownership Matters” by clicking here: http://bit.ly/HOM-CFA and sending an email to your local candidates. I just did it. Will you?

Be sure to share this link with your friends.

How to get the funds to make that next home just right.

2011-07-23T06:15:00.000-07:00

Finding the perfect home can sometimes be almost impossible. However, there is a way to make that almost perfect home, perfect for you.

Case in point. Buyer (A) has been looking for the perfect home for months. They finally locate the almost perfect home, but because it doesn’t have a finished basement and they don’t have the additional funds to do the work if they purchased the home, they decide to keep looking. Buyer (B) has been looking for the perfect home for months as well. They locate the same almost perfect home with the unfinished basement (they too want a finished basement, but don’t currently have the additional funds to complete the work), but they put in an offer and it's accepted based on their terms of securing the home with a mortgage that will allow them to finish the basement.

Mark Goode at Mortgage Architects calls it the Purchase Plus Improvements Mortgage and here’s how he outlined it to me in recent email.

Steps to securing the Purchase Plus Improvements Mortgage

A detailed list of improvements, including a copy of contracts outlining the scope of the work and cost estimates is required.

An appraisal with two separate values will be required: current value of the property “as is” and the estimated value of the property once the improvements are completed.

Lender will lend based on the improved value as confirmed by the appraiser.

The entire committed amount of the mortgage will be advanced to the solicitor.

The solicitor will be instructed to holdback the cost of the improvements.

All improvements must be completed within 90 days or the funds will be recalled and applied back to the mortgage.

Once an inspection from an appraiser confirms ALL work is complete and a copy of the building permit (if applicable) has been received, the balance will be released.

EXAMPLE: Purchase price: $300,000 Improvements: $20,000

Total mortgage: $304,000 (95% of $320,000)

$284,000 will be released on closing date. $20,000 will be released upon completion of improvements i.e. improvements are 100% complete and a final inspection has taken place.

If you are finding it frustrating to locate the perfect home, check with your lender to see how this option might work for you. You can always include a condition in your Purchase Agreement about obtaining an acceptable detailed list of improvements from a builder of your choice along with the condition of mortgage when submitting your offer.

If I can be of any assistance you can always Get Jack here.

Lawn care during hot weather!

2011-07-19T11:57:00.000-07:00

We are currently into the dog days of summer. So, here are a couple of ideas from those in the know concerning your lawn during a hot spell.

First, when mowing your lawn think about this. Mow to a height of 7.5 cm (About 3"). This isn't just during the hot season, but all summer long. However, you will want to cut the grass less often during hot weather.

The main thing to remember is that during hot spells, do not cut the grass any shorter than 7.5 cm.

If it doesn't rain for 7 to 10 days you need to water, but you can water too little or too much.

If you want to keep the grass green, water for 2 to 4 hours to provide 2.5 to 5 cm (1" to 2") of water. In the event of drought, water if possible, but do not water in the afternoon or when it is windy, because too much water will be lost through evaporation.

And, here's a note of caution. Light watering, e.g., for only 15 minutes, should be avoided because it promotes shallow roots that cannot reach the water table. The develoment of a shallow root system means an on-going problem of green grass quickly turning to brown grass.

Here's another link from CMHC concerning lawn care.

Improve Your Curb Appeal

2011-07-01T05:18:00.000-07:00

One of the most important parts of selling your home is how it looks from the street. We are always told to never judge a book by it's cover, but the fact remains that most people do, and in the case of increased showings on your home, curb appeal is the front cover of your home that will either perk the interest of a buyer or have them saying, "forget it."

Here are a five inexpensive tips to improve your home's curb appeal.

1) The front door: This door can work wonders in attracting the attention of a potential buyer. By adding an eye popping colour to a front door it will create some excitement and it can lift your overall exterior colour scheme to new heights. Consult with a colour expert for some ideas on what colours will work for your home.

2) Porch and front steps: If you have older concrete steps or a flagstone walkway consider some paint to breath new life into the appearance. Most home improvement stores carry paints and stains specifically made for concrete. If your porch and front steps are wood, invest in the stain or paint needed to make them look inviting. If you have a brick or stone entry, hose it down or power wash for a quick improvement.

3) The sidewalk: Naturally a new sidewalk of stone, or brick will totally enhance your curb appeal, but here's a simple solution to make your walkway much more inviting with little or no cost. Eliminate all signs of grass or weeds that might be growing through cracks in the walkway. Edge the side of the walkway to cut back the lawn or consider adding a small flower bed along the side of the walkway to enhance the framing of the walkway. Edging the walkway won't cost you a dime and even a small flower bed along both sides of a walkway with a few flowers is relatively inexpensive, but works wonders.

4) Accessories: The little extras around your front door such as new or freshly painted numbers for the home, a new or freshly painted light fixture and mailbox, a welcome mat at the front door and perhaps a potted flower arrangement all add to the curb appeal and that first impression as a buyer comes to your door.

5) The lawn: It's great if your lawn could win an award, but the most important things to remember include keeping the lawn cut, trimmed, and to weed your flower beds. If you normally cut your lawn once per week, change your schedule while your home is listed to once every five days to ensure it always looks neat and tidy.

How's The Roof

2011-05-30T05:51:00.000-07:00

"How is the roof" is a very common question from home buyers. No wonder, as it can be costly to replace depending on the problem. A quick look from the outside is one way to tell the condition of the roof, but there could be problems below the shingles as well, which is why a qualified, reliable home inspector is always recommended during a home purchase.

Did you know some asphalt shingles will need to be replaced every 10-20 years, despite manufacturer guarantees that promise 20 or 30 years or even 50 years. It's important to understand that there is a catch to the guarantees. Read about the catch with ashpalt shingle guarantees from Mike Holmes here.

If you need a new roof, there are many choices and you can read what Mike Holmes has to say about each here.

Mold!

2011-04-23T07:29:00.000-07:00

If you're like me, you don't like the sound of the word mold and certainly don't like to see it in a home. However, there are things that can be done to prevent it from starting in the first place, things you can do to get rid of it when it does show it's ugly face, and professionals who can step in when it gets out of control.

Here are three of the most common questions asked about mold and the answers from professionals to those questions.

1. Is It Dangerous?Although it doesn't hurt most people immediately, the truth of the matter is that mold can cause long-term health problems. Respiratory problems could very well develop if the mold is not removed.

2. Will It Go Away?Not on it's own. The truth of the matter is that if you do not takes steps to get rid of it, mold will spread. Mold needs to be eliminated as soon as it is detected or what starts out as a small problem, becomes a serious issue.

3. When Should I Get Professional Help?You first need to determine how much of a mold problem you have. If you notice only a small surface area, there is a good chance you can correct the problem yourself. However, if you suspect mold is on the insde of walls or areas you cannot reach, you should consult with a professional.

Best Prevention Tips

Be clean. Housekeeping is a must in the prevention of mold. Dirt and grime can aid in the growth of mold which is often the case around bathtubs and showers. Regular cleaning can stop mold from getting out of hand. This is critial in the bathroom, laundry and basement areas where moisture is present.

Be dry. Mold loves moisture. If possible use an air conditioner or a dehumidifier to reduce the humidity level in damp areas of your home. Other things to help in reducing humidity levels include exhaust fans, good ventilation in crawl spaces and basements and ensure dryer vents move the moist air outdoors.

Be uncluttered. Avoid storing boxes up against concrete walls or in direct contact with concrete floors. The moisture in a basement or any moist area will be attracted to enclosed boxes. In the same way your attic needs air movement, your basement, laundry room or any area of the home and everything in it needs to have air circualation around it.

Be proactive. If there is a moisture problem, you need to deal with it.

Do It Yourself Ideas

For small mould issues there are products on the market to help in a clean-up or here are two household products that work well.

VinegarVinegar is the safest and one of the most effective ways to clear mold on just about any surface and with no fumes it's a safe choice for your health. It is recommended that for bathroom moulds to mix 3 parts of white vinegar with 3 parts water. Use a sponge to soak the moldy area and let it set for a few minutes. Wipe down the area with a dry cloth after.

Chlorine BleachThis works best for nonporous surfaces like counter tops and tiles. Check manufactures recommendations for recommended mixures and ensure you have good ventilation before using the mixture. Place the solution inside a spray bottle and spray on mouldy surfaces. Let it soak for a few minutes and then wipe off until mold in completely gone. Although bleach is a good mould cleanup solution, it can be very dangerous when
inhaled and because of the strength of the liquid you should first test a small, inconspicuous area to see how the surface reacts to the bleach.

Check http://www.doityourself.com/scat/moldmildewc for more information on mold and how how to deal with it.

Best Colours To Paint A Home For Resale

2011-04-16T05:54:00.000-07:00

According to one professional home stager, this is it!

It amazes me how many home buyers do not look past the colour of a room to see the potential of a home. However, the more I think about this situation it's not about the colour as much as the feeling the home gives a potential buyer and colour projects a powerful feeling.

That being said, to take the time to repaint before you put your home on the market can be a good investment, especially if your home has been decorated to a personal taste that doesn't necessarily match the majority of home buyers.

Have you ever wondered what a home decorator or home stager would suggest for colours to make your home more appealing when it comes time to sell? I came across the following information that I found very helpful. The article is from a professional home stager and provides great colours to use. The key thing to remember is you are not repainting your home to your liking, but to ensure your home provides the right feeling for the majority of potential home buyers.

Barely beige CC-140 (see It here ) is one colour that Professioinal Home Stager Dana J. Smithers has found to be the best to sell a home.

The information below provides you with other suggested colours. I hope this helps you with the sale of your home and if I can be of any assistance please contact me.

Regards,

Jack

Best Colours To Paint A Home For Resale

In the past 5 years the Exterior and Interior colour trends have not changed much. Look around at any of the new developments or house improvements in your area and you will start to get an idea of what the trend is.

If you are in the market now or the next few years the colour trend will stay the same.

By trend I don't mean trendy as 'heretoday, gone tomorrow' I mean trendy in the sense of being 'most popular' at this time period. This too will change but not for a few years yet.

Exterior and Interior Resale Paint Colour Trend

Neutrals - Grey Tones - Mat Finish (semi-gloss fordoors and trim)

I highly recommend that you check out these websites and take a look at some great choices on the web:

•http://www.benjaminmoore.com/
•http://www.behr.com/
•http://www.prattandlambert.com/
•http://www.parapaints.com/
•http://www.generalpaints.com/

They have some very fun and interactive choices for you to see what their colours will look like on the exterior or interior of your house.

NB These colours will not be exact but will give you a very good idea of what your home could look like in neutral, softer, less stressful colours.Remember though since 'your home is for living in and your house for selling' do not get too attached to the colours. Keeping them neutral will appeal to more buyers and you can add colour by useful tasetful and colourful accessories such as art, cushions, area rugs, pottery, throws, etc.

My favourite store to work with is Benjamin Moore because as an Interior Decorator/Redesign Stager they provide me with a very professional 'architectural kit' which has large colour samples to work with. However, you can buy or they will lend you their Designer Classics Collection and this is primarily what I use for choosing redesign staging paint colours. As mentioned in a previous newsletter I alwayscoordinatewith the flooring as that is what is staying. You can add colour with your accessories.

My standard selection from the Designer Classics Collection is:

BEIGE -Yellow Undertones(toned which means they all have grey added to them)
•Brandy Cream CC 60
•Natural Linen CC 90
•Muslin CC110
•Barely Beige CC 140
•Stone House CC 120
•Sandy Brown CC 150
•Honey Harbour CC170
•Summer Harvest CC 190
•Delaware Putty CC 230
•French Vanilla CC 248

BEIGE - Pink Undertones
•Dusty Road CC 310
•Sandpiper Beige CC 368
•Stone Castle CC 396
•Old Montreal CC398
•Old Stone CC424
•Bone China CC 426
•Smoky Taup CC 490
•Rocky Road CC 470

GREENS
•Maid of the Mist CC 728
•Killarney CC 698
•Tea Light CC 610
•October Mist CC 550

TRIM
•Cloud White CC 40 (this is the only one I use!)

TIP You can buy testers and do your own colour boards. Many of the Benjamin Moore stores now carry pre-made Designer Classic colour boards 18 x 18" which are the perfect size to see what the colour looks like. Always check the colour morning, noon and night time to get the whole colour picture as colour is most affected by lighting.

I have many clients who in the beginning do not like the neutral colours that I have chosen (Barely Beige CC 140). However there is no denying that the end result is what helped sell the house!

*******
Dana J. Smithers is an expert in the fields of Home Staging and Home Redesign. Dana has taught 1000s of people her 'Secret Success Home Makeover Formula' for living and selling. She teaches a 5 Day PRES® (Professional Real Estate Stagers) Home Staging & Redesign course in Western Canada. She is the Founder & Creative Director of both Sun On My Back Redesigns and PRES Staging Resource Centre. Look for her book Home Staging Made Easy: Getting Ready for an Open House in 10 Easy Steps!

Student Housing

2011-03-30T14:26:00.000-07:00

The City of Orillia & Office of the Fire Marshal has just released three brochures for the Spring of 2011 concerning student housing. Get in the know with these links on...

1. Student Housing, City of Orillia

2. Fire Marshal Safe Student Accommodation 101 - 10 Tips

3. Fire Marshal Parent's Guide to Safe Student Accommodation

Wet Basement!

2011-03-26T06:37:00.000-07:00

It's that time of year when the sump pump works overtime.

There are some things you can do to prevent basement water problems or in the case of an older basement even minimize the water problems.

It's amazing how many homes I visit where I see the eavestroughing has come undone during the winter and the spring run off is flowing right down the side of the house instead of away from the basement wall.

A quick walk around your home can prevent some issues, but Jon Eakes as a professional has some tips that might help you at this time of year.

Read Jon's article here.

The HST Story When Buying A Home

2011-03-23T14:15:00.000-07:00

Bad Advice

2011-03-20T04:17:00.000-07:00

It's amazing how many people tell me that a mom or dad (or both) are in a nice retirement home or will be going into a retirement home, but the family is concerned that their parent(s) won't be able to stay in the desired location because the money is going to run out.

When it comes time to sell the family home to provide the cash for retirement home living, just what should a person do? I'm no financial expert, but I came across an interesting article from Garth Turner that provides some advice on this topic.

Garth Turner's article....

At 78 she was forgetting her kids’ names, using a walker, and almost microwaved the cat. So the family decided it was time to sell mom’s house and stick her in a nice retirement home. The trouble with that: mom had no income save the public pension plan pittance, and the new digs cost three grand a month.
But once the house deal closed, there was $400,000 to play with. And that’s when armed conflict broke out.

Mother wanted to stick it in GICs because that’s what TNL@TB had told her. And she’d always listened to her in the past. But four hundred large invested in a five-year GIC paying 2.3% would give just $760 a month. Actually, it would return nothing at all until maturity, meaning the kids would have to upfront things. Nix that.

One of the sons pushed for mutual funds (he sells them), but everybody else figured out pretty fast his trailer fee might be bigger each year than mom’s cash flow. Screw that.

Then a daughter hooked up with an insurance guy who proposed a sweet deal. Give me the $400,000, he said, and I will guarantee you (did you hear that word, ‘guarantee’?) monthly payments of $3,500 every four weeks for the next ten years. Best of all, he continued, there will be no tax payable on this income stream, which means the old lady gets taken care of, with enough cash left to have Jack Daniels visit regularly.

And that’s what they did. They took the annuity. Nobody could imagine, after all, that she’d live more than the ten years.

This is a small but fine example of how people get skanked. The insurance company, of course, just took the money and then agreed to hand it back in 120 installments. Those $3,500 monthly payments add up to $420,000 over a decade – which is a 1% return on $400,000 (the exact amount is $418,140). Meanwhile, you can be sure they gave out the four hundred as a loan or mortgage at four times the rate.

Why would anyone possibly agree to hand their money over so it can be handed back? Because it seems safe. It’s predictable. It’s guaranteed. And most people are fools.

This, of course, is also why we buy guaranteed investment certificates and put our TFSA money into ‘high-yield’ savings accounts paying less than inflation. Let’s face it. Most Canadians haven’t a clue about investing, which is why they’re road kill for mutual fund salesguys and ravenous bank employees.

A few days ago I gave you a small primer on bonds. I showed you how they not only pay regular interest and guarantee your principal, but are capable of coughing up a nice capital gain – like during this past week.
More on that soon. You should also know about preferred shares. I’ve written about these things here often in the past, but it’s time for a review. That is, if you’re interested in making 300% more than with a GIC, at low levels of risk, while paying 80% less tax.

Preferred shares are more like bonds than stocks. Companies issue them to raise capital (same as bonds) and then pay the owners a regular stream of income so long as they own the preferreds. With bonds, the stream is called interest. All the interest you earn – 100% of it – is taxable (as with a GIC). But preferred shares pay you in the form of dividends, which are taxed far less. Point one.

Companies also issue common stocks, which we call ‘equities’, trading on places like Bay Street and Wall Street. Corporations like to keep shareholders happy by giving them a share of the profits. But these dividends can fluctuate significantly depending on the business cycle and the profitability of the company. Not so with preferred shares. Their dividends must be paid before any money goes to common shareholders. Better still, the dividend does not fluctuate. It’s fixed. Point two.

The preferred shares I like the most are the ones issued by the bedrocks of the financial system – Canadian banks and insurers (regulated companies like utilities are also cool). So it’s ironic that you can go and give a major bank your life savings and the GIC they place it in will yield 2%, and be illiquid until the day it matures. Or you can buy preferred shares in the same bank, and collect a dividend of 5.35%, which is paid to you regularly, while the shares themselves are 100% liquid – they can be sold in minutes. Point three.

By the way, if you’re in the middle federal tax bracket and earn $5,000, your tax bill is $1,100 if the income comes as interest, but just $217.50 if as dividends from preferreds. This means a dividend paying you 5.35% would be roughly equivalent to a GIC yielding 6.5%. And have you seen any of those lately? That are cashable?

What are the downsides? If interest rates rise then the price of preferreds (as with bonds) declines. But, of course, the income stream continues – so most people don’t get too fussed about that, especially when rate increases are likely to be gentle. And if we have another financial meltdown, then preferred values will also decline along with everything else – but the income will carry on. We had a chance to witness this in 2008-9, and bank preferreds bounced back in price quickly. By the way, not a single bank missed a single dividend payment. Investors who counted on income, not capital gains, never noticed a thing.

So, if mom’s $400,000 had been put into the preferreds of a few banks, she’d pay for her digs ($36,000 a year) and still have $200,000 left a decade later.

This is why children are so overrated.

( The above article is from Garth Turner at http://www.greaterfool.ca/ )

Garth Turner

Read what others had to say about this in the comment section of Garth Turner's greaterfool website .

Spring Tips From Home Inspector

2011-03-10T12:38:00.000-08:00

Ed Novosky passed along the following information to me directed to first time home owners.

It may not feel like it some days but spring is right around the corner. Many of your recent clients may be first time homeowners and wondering, "What should I be looking for in my spring maintenance routine?"

Here are a few tips that any homeowner can follow to help keep their propoerty in tip top shape. Please feel free to share these tips with your clients.

Check for loose or leaky gutters. Improper drainage can lead to water in the basement or crawl space. Make sure downspouts drain away from the foundation and are clear and free of debris.

Low areas in the yard or next to the foundation should be filled with compacted soil. Spring rains can cause yard flooding, which can lead to foundation flooding and damage. Also, when water pools in these low areas in summer, it creates a breeding ground for insects.

Use a screwdriver to probe the wood trim around windows, doors, railings and decks. Make repairs now before the spring rains do more damage to the exposed wood.

From the ground, examine roof shingles to see if any were lost or damaged during winter. If your home has an older roof covering, you may want to start a budget for replacement. The summer sun can really damage roof shingles.

Shingles that are cracked, buckled or loose or are missing granules need to be replaced. Flashing around plumbing vents, skylights and chimneys need to be checked and repaired by a qualified roofer.

Examine the exterior of the chimney for signs of damage. Have the flue cleaned and inspected by a certified chimney sweep.

Inspect concrete slabs for signs of cracks or movement. All exterior slabs except pool decks should drain away from the home's foundation. Fill cracks with a concrete crack filler or silicone caulk. When weather permits, power-wash and then seal the concrete.

Check wood decks and porches for loose or deteriorated wood. Replace worn out boards as needed.

Check outside hose faucets for freeze damage. Turn the water on and place your thumb or finger over the opening. If you can stop the flow of water, it is likely the pipe inside the home is damaged and will need to be replaced.

While you're at it, check the garden hose for dry rot.

Have a qualified heating and cooling contractor clean and service the outside unit of the air conditioning system. Clean coils operate more efficiently, and an annual service call will keep the system working at peak performance levels. Change interior filters on a regular basis.

Check your gas- and battery-powered lawn equipment to make sure it is ready for summer use. Clean equipment and sharpened cutting blades will make yardwork easier.

Courtesy of,

Ed Novosky

Certified Home Inspector

AE Home Inspection Services

8 Common Mistakes first-time homebuyers make and how to avoid them.

2011-03-09T12:49:00.000-08:00

Julie Emery with RBC Orillia passed along a great article to me that I though I would share for first-time homebuyers. Thanks Julie.

8 common mistakes most first-time homebuyers make and how to avoid them

Becoming a homebuyer and applying for a mortgage can seem overwhelming, especially if it’s your first time. With the help of one of our expert and dedicated mobile mortgage specialists, it can be easy. They’ll meet with you any time to guide you through the process and help you find the best mortgage for your specific needs.
To help you feel more confident and prepared for becoming a first-time homeowner, we’ve put together a list of eight of the most common pitfalls, which our mobile mortgage specialists can help you avoid.
1. Thinking you won’t qualify for a mortgage Dreaming of owning your own home but not sure if you qualify for a mortgage? Even if your credit history is less than perfect, we can help you find a solution.

2. Not knowing all the down payment choices You’ll be glad to know that there are different options available depending on how much of a down payment you can afford:
Conventional mortgage or RBC Homeline Plan® (20% down payment)

Low down payment mortgage (minimum 5% down)

Low down payment mortgages require mortgage default insurance. The premium can either be paid up front or added to the amount you borrow.

Under the federal government’s Home Buyer’s Plan, first-time homebuyers are eligible to use up to $25,000 in RRSP savings per person ($50,000 for couples) for a down payment on a home. The withdrawal is not taxable as long as you repay it within a 15-year period. To qualify, the RRSP funds you plan to use must have been in your RRSP for at least 90 days.

3. Focusing too much on the interest rate, rather than the overall solutionAll too often, first-time homebuyers give more thought to interest rates than the mortgage solution itself. While rates are a valid consideration, the different types of mortgages, their payment structures, terms and flexibility will have a much greater bearing on the overall cost of homeownership.

Fixed rate mortgage
Fixed rate mortgages offer the security of locking in your interest rate for the term of your mortgage, and your payment amount stays the same, providing ease of budgeting.
The main advantage is that the interest rate stays the same during the term of the mortgage and that you know exactly how much of your payment is applied to principal and interest.

Variable rate mortgage
With a variable rate mortgage, your payments remain the same, regardless of fluctuating interest rates. When rates go down, more of your payment goes to pay the principal and less to interest, enabling you to pay off your mortgage sooner. When rates go up, the reverse happens: less of your payment goes toward the principal and more to interest, extending the amortization period.
Many experts believe variable rate mortgages offer the greatest potentialfor long-term savings on interest costs.

Combined fixed and variable rate mortgage
With the RBC Homeline Plan, you can enjoy the advantages of both variable and fixed rates by diversifying your mortgage. That means the variable portion allows you to take advantage of potential long-term savings, while the fixed rate portion protects you if rates rise.
Your mobile mortgage specialist can help you decide which mortgage solution works for you, based not only on your budget but also on your future plans.

4. Being unrealistic about how much you can afford to pay for your home You may be under- or over-estimating how much you can afford to pay for your home. Our online mortgage calculators make it easy for you — all you need to do is log in to www.rbcroyalbank.com/mortgages and click on the "How much home can I afford?" link. Enter your income and expense information, and the calculator will tell you the maximum mortgage payment amount you can afford each month.

Or you can click on "Mortgage Calculators" to quickly figure out monthly payments for different mortgage amounts and rates. You may find out you can comfortably afford more than you originally thought.
For a more personal touch, contact one of our mobile mortgage specialists. They can quickly help you
determine how much you can afford and answer any questions you might have.

5. Not considering a mortgage pre-approvalKnowing the amount you will be approved for gives you the confidence to begin looking at homes within your price range. Real estate agents will serve you better because they know you’re a serious buyer. You can easily make an offer to purchase as soon as you find the right home.
At RBC®, your pre-approved mortgage rate will be guaranteed for 90 days1. If rates go up during the period, you’re protected. If they go down, you will automatically get the lowest rate for the term selected.

6. Not choosing your own mortgage payments scheduleCustomize your amortization period depending on how much you can afford. Paying off your mortgage sooner saves you interest costs, while a longer amortization period (up to 35 years) reduces your regular payment amount and gives you more room to manage your cash flow.

Because extended amortization means increased interest costs and paying down a mortgage more slowly, this option isn’t for everyone. A 25-year amortization period should be the starting point for your consideration as stretching the amortization to 35 years can increase your total interest costs by 50% over the life of the mortgage.

If you decide a longer amortization is appropriate, consider a strategy to reduce amortization over the life of the mortgage. RBC’s money-saving options, such as Double-Up®, accelerated payment, 10% anniversary payment and annual 10% increase in payment amount, can get you back on track to a 25-year — or even shorter — amortization period.

Regardless of the mortgage option you choose, buying and owning a home is likely to be one of the biggest financial investments of your life. Creditor insurance can help protect that investment from life’s uncertainties and help give you the confidence that comes with knowing your investment is well protected.

HomeProtector® life and disability insurance can pay your outstanding mortgage balance up to $500,000 in the event of your death, or can make your regular mortgage payment — up to $3,000 per month for up to 24 months — if you become disabled.

See www.rbcroyalbank.com/products/mortgages/home_protector_insurance.html for details of coverage.

7. Forgetting about closing costsBy this time, you’ve selected a house, picked your mortgage options and are getting ready to finalize everything and make an offer. This means getting down to certain details and their associated costs. It helps to know what these are up front so you can minimize any last minute complications. When calculating closing costs, it’s fairly safe to assume you’ll need an additional 1.5% of the purchase price to cover such things as:

Lawyer or notary fees:
Make sure you work with an experienced real estate lawyer/notary so that all legal aspects of your house purchase are properly completed.
Land transfer tax: Most provinces levy a one-time tax, which is based on a percentage of the purchase price.

Property tax/utility bill adjustments:
The purchase price of a resale home is always payable subject to the usual adjustments at closing. This means that any amount that the seller has already prepaid will be adjusted so you pay the excess amount back to the seller, and vice versa. The most common adjustments occur on property taxes and utility bills that have been paid ahead of time.

Property insurance:
Your home is probably the biggest investment you will ever make in your life. Property insurance is all about protecting the things you value: your home, your personal belongings and even your financial future. When choosing an insurance company, make sure they offer a range of choices allowing you to personalize your insurance to suit your needs.

Moving costs:
Budget for a professional mover, decorating costs and fees for setting up your cable, telephone and other utilities.

Ongoing costs:
Don’t forget to budget for the cost of maintaining a home, such as heating, electricity, water, repairs and taxes. A good suggestion is to budget at least 1% of the home’s value for yearly maintenance expenses.

Professional home inspection:
Always make an offer conditional upon a home inspection. As long as your offer is conditional upon the home inspection, you can have the purchase price reduced to offset the cost of needed repairs or cancel the agreement. You should also inspect the home before moving in to make sure its condition has not changed. A newly built home is usually covered by a builder warranty program.
Owning your own home is a milestone as well as an exciting experience! How often do you get to live in and enjoy your investments? Your mortgage specialist is always available to guide you through the process.

8. Not knowing your credit rating A credit rating is a record of your credit history and current financial situation, which typically translates into a credit rating score. Lenders can use your credit rating to verify your repayment history.
A good credit rating can improve your ability to get loans and mortgages.
If your credit rating needs improvement to help you qualify for a mortgage, you can improve your credit rating by always making at least the minimum payments on your credit cards, loans or utility bills on time.
Checking your history is easy! Simply ask for a copy of your credit rating at either http://www.equifax.ca/ or http://www.tuc.ca/.

How many tenants for student housing?

2011-02-26T05:17:00.000-08:00

People in the City of Orillia who rent to students or anyone, need to know the new rules to protect both the landlord and the tenant.

For a very easy to understand explanation on whether you require approval for having tenants within a home listen to the audio I recorded at a meeting held February 24th, 2011 where Terry Duff (City of Orillia Fire Prevention Officer) and Jill Lewis (Senior Planner, City of Orillia) explained the new rules for the City of Orillia.

You should always consult with the City of Orillia if you are considering any rental situation just to protect yourself, but if you have more than 4 people paying rent even if the rent is in services rather than dollars it's a must.

The new rule is basically the owner and four other paying customers can live in the home without any changes required, however once the number of paying customers increases to five the new bylaw comes into effect.

For more information contact the City of Orillia

New Parameters Regarding the Application of the Government Guarantee for Mortgage Loan Insurance

2011-02-10T13:16:00.000-08:00

On January 17, the Government of Canada announced new mortgage insurance parameters regarding the application of the government guarantee. The News Release and Backgrounder issued by the Department of Finance, summarizing the new rules, is attached for your information.

Consistent with the parameters, CMHC will:
Effective March 18, 2011

•Limit the maximum amortization period to 30 years for a mortgage loan with a loan-to-value (LTV) ratio above 80%. (The maximum amortization period will continue to be limited to 25 years for chattel loans insured under CLIP and for on-reserve loans secured by a Ministerial Loan Guarantee.)

•Limit the loan to value ratio to 85% for the refinance of an owner-occupied residential property with 1 to 4 units.
Effective April 18, 2011

•Mortgage Insurance for non-amortizing housing loans (lines of credit) will no longer be available. (CMHC Mortgage Insurance will continue to be available for amortizing housing loans with loan to value ratios of up to 80, with single or multiple components, secured by a collateral mortgage).

CMHC supports the Government of Canada’s on-going efforts to maintain a strong Canadian housing market and encourage Canadians to save through homeownership. Consistent with the parameters, CMHC will no longer offer insurance for mortgages falling outside the scope of the new parameters after the effective date. Similarly, only mortgage loans that fit within the scope of the new parameters will be eligible for CMHC securitization programs.

Home Inventory

2011-02-05T07:02:00.000-08:00

One of the most neglected tasks by homeowners is the upkeep of a personal inventory for insurance purposes. Those who do keep a list of possessions will often keep the list in a place where it's just as vulnerable to fire, theft, or other loss.

AllMyThings.com is an online service which allows members to keep a secure inventory of personal assets. Backed by the same security protocols used by online banks, All My Things allows members to easily keep a searchable inventory online. Insurance companies require that claims are substantiated by purchase price, age of items, status of warranty, and condition at time of loss, and All My Things helps members keep that information just a few clicks away.

Basic membership is free. A full service membership costs $29.95/year and allows users to attach files and use some of the reporting features on the site.

If you're looking for an easy, free way to track your valuables, this is the site for you. You won't realize how valuable this information can be until you need it.

Good Service Survey

2011-01-29T04:58:00.000-08:00

If you live in the Orillia, Severn Township, Oro-Medonte or Ramara area, could I ask you to take a couple minutes to complete a very short 10 question survey surrounding good service for home repairs.

When my real estate clients ask me for names of people to do specific home repairs, I like to provide them with the names of highly recommended individuals and businesses. Good service/work deserves to be recognized and here's one way to do it.

Only respond to those questions that you can offer a recommendation and leave any question blank if you don’t have a recommendation for that specific trade. You can also provide more than one name for a specific trade if you want.

Could I also ask you to pass this survey link along to your friends? The more people to respond to this survey the better. Just copy and paste the link to forward to others. http://www.surveymonkey.com/s/LRXVPY2

In the future if you have renovations to be done around your home and would like a recommendation for someone to do the work, please drop me a line and I'd be happy to share the results of this survey with you.

Your answers remain CONFIDENIAL and only form part of the total survey results.

Click here to take survey

Help For First Time Home Buyers

2011-01-28T14:16:00.000-08:00

Julie Emery from RBC Royal Bank let me know about a new plan to assist first time home buyers. Here are the details. If you would like more information contact Julie and let her know where you heard about this new plan. Julie's contact information is available at the end of this blog.

New RBC lending programs for homebuyers with limited down payment

RBC has recently launched two mortgage programs that can help get purchasers who have limited down payment and a solid credit history into a home sooner. Through these programs, buyers with limited funds for down payment may be allowed to use borrowed funds or Mortgage Cash Back offers to assist them in meeting the 5% equity requirement for default insured mortgages.

Other important details of these new programs include:

Available for home purchases only
The property must be a owner occupied primary residence and all mortgage applicants must reside at the property
Mortgage Cash Back and funds borrowed for down payment cannot exceed 5% of purchase price
Available to clients for one mortgage only

I’m here to help your clients get the right advice

Understanding home financing options and affordability is especially important to first time buyers and other purchasers with limited funds for down payment. That’s where I can help by working with your clients to provide mortgage pre-approval, and offering tailored advice that meets their needs for today and the future.

For more information about how RBC can assist your clients with their home financing needs, please contact me today.

The following is a link to our Home, Mortgage and Lending Advice Centre. http://www.rbcadvicecentre.com/

Your new home doesn't come with mortgage advice. I do.

Contact me today:Julie Emery
Residential Mortgage Specialist
RBC Royal Bank
(705) 323-9910
julie.emery@rbc.comhttp://mortgage.rbc.com/julie.emery