Archive for category Real Estate
Mortgage Bits: Putting the Fear back into the Home Ownership Market
Posted by Top Home Loans in Economy, Mortgage News, Real Estate on November 18th, 2009
Over the lst year, the media and the real estate market have been pushing people into home ownership in Canada. The reason being is low interest rates. It is true, interest rates are at the lowest that they have ever been, and they are not expected to go higher for several months. This has spurred on first time home buyers to purchase houses like crazy; however, recent news articles are doing the opposite to market.
The newest wave of real estate articles have been doom and gloom articles that discuss about a mortgage bubble that is growing in Canada that is worse than the US. It states that as people build a dependance on cheap money, when interest rates go up, then people will have plenty of trouble paying their bills with higher interest rates. Another fear element is declining demand, the amount of new home buyers can only create real estate transactions for a certain duration of time before the demand subsidizes. Also, unemployment continues to be a growing problem in both Canada and the US.
These are some of the more immediate threats, while future threats including: global warming, baby boomers, and other major issues stand to destroy the fragility of this economic recovery.
So, what is it? Should you buy or should you continue to sit on the sidelines? Unfortunately, the answer is not the same for everyone. The decision is based on why you are purchasing. If you are purchasing based on speculation or investment, then it may not be the best time to purchase. Your dream positive cash flow property may quickly turn into a negative cash flow investment when the interest rates reset. On the other hand, if you are purchasing for the long-term, then you may be able to achieve the results you are looking for.
The best way to ensure security in your investment is by using hypothetical situations. For example, can you afford the payments at 5%, 6%, 7%, etc. With rates eventually increasing, and real incomes declining, then it may be possible you will see yourself in a cash crunch if you purchase beyond your means.
What would you do if interest rates increased dramatically? Did you plan your mortgage before taking it out?
Welcome back!
Mortgage Bits: Socialized Housing; A Positive or Negative Future
Posted by Top Home Loans in Economy, General Business, Real Estate on November 10th, 2009
In Canada, we have many essential services socialized. For example, you can get free health care if you need it, roads and infrastructure are designed for public use, and welfare and employment insurance systems provide the unemployed with income.
Even though, many essential human needs have been met, there are still several human needs that people are required to fend for themselves. These include the most basic of needs; food, water, and shelter. Shelter being one of the most necessary of the minimum requirements of life; however, how would a socialized system of housing work?
The first thing that needs to be discussed is how this social service would be paid for, and the obvious answer is taxation on an increasing scale depending on ones annual income. Low income families would generally pay less while high income families would have to pay more. Due to the limited number of full-time permanent employees in Canada, many people would be required to pay for more than their own property. This would demoralize the need for hard work in a way since you would receive a hand out. To avoid this, one may only provide public housing if they are gain fully employed.
What would social housing look like? Social housing would provide the bare minimum to each person who is part of the system. This means a location for one person would have enough room for the necessities. This means, that they may only have a few hundred square foot space.
Also, depending on the family size the property will be bigger to accommodate. Ie. 4 people living together will get a location that is 4 times larger than one person living alone.
Clearly, not everyone wants to live in socialized housing in Canada. Some people earn much more than the average household, and in turn, they would want a much bigger and more extravagant house. With a two tier housing system, this would allow for the well off individuals the ability to purchase more expensive dwellings; therefore, the option would still be able to accommodate those who want something more expensive.
The unfortunate fact of socialized housing is that many would abuse this system. Too many would work a lot less if things were given to them. For the time being, our society has not evolved into a strong sense of community yet, and until we do so, we will continue to have issues with social services.
What do you think of socialized home ownership? Would you prefer it? What else could be socialized?
Mortgage Bits: The Highest Bidder doesn’t always Win when Selling a Property
Posted by Top Home Loans in General Business, Real Estate on November 8th, 2009
When you hire a real estate agent, you hope that they will be working in your best interests. You hope that they will get you top dollar for your property, and make the sale easy and stress free. You would never expect your realtor to be under handed or do something that is less than ethical.
However, the fact is at the end of the day, the realtor has to look our for themselves, so what key factors will a realtor look for when selling your property?
Selling Speed: realtors love quick closes and no conditions on the mortgage. This means they get paid faster and with less hassle. If a realtor has an open house, and the offer falls though, then that means they will have to start from scratch. A realtor is willing to take a lower bid with less conditions over a higher bid for your property.
Commission Amounts: a realtor will make a certain amount of commission on the sale of the property. When there is both a buyer’s agent and a seller’s agent, the commission is shared between the two agents; however, when the agent is shared by both the buyer and the seller, then the real estate agent gets both commissions.
In most cases the realtor would take a lower bid to get a higher pay cheque. This is true in most professions, so it is true in the real estate world as well.
How can you protect your bottom line as a seller? Keep your house on the market longer, refuse more bids, etc. Have a target price for your property and don’t settle for anything less.
What strategies did you use when selling your house? Did you get more or less money than you expected?