Archive for the ‘Chris’ Blog’ Category

WHAT HAPPENS AT A HOME STAGING CONSULTATION

Many of our Ottawa home sellers are nervous about home staging. Many do not understand the process. I thought I would clarify what it looks like with our team. We take a hands on approach and understand that every house has its own unique challenges. Here is an example of a staging consultation where the home was in good shape but making slight adjustments made it shine. A little can go along way in preparing an Ottawa home for market and our team knows what works. This home ended up selling for a record price in multiple offers.

ROOM BY ROOM ANALYSIS

Our staging team walks through each room with our clients and suggestions are made on everything from furniture placement, what to remove, what to bring in, paint colours, and minor repairs. Everything is from the perspective of how we can maximize the price and showing condition.

Based on our client’s circumstances we make a priority list to ensure the best possible results. Photos will be taken of each room for note-taking. Our clients do not have to take notes. Once the consultation is complete we email a detailed personalized report (usually within 24 hours) summarizing everything discussed.

Each page of the report discusses an individual room. It has a photo of the room along with a list of everything to remove, where to place furniture, exactly what to edit, and what our team will bring in if necessary.  The checklist is easy to follow. We want to make this experience as straightforward as possible for our clients.

Here is an example report:

DINING ROOM

• This room looks great. Please keep the bowl and the balls.  You said you also have some red ones that we will experiment with as well.
• We will bring a runner to break up all the wood

KITCHEN

• We can tweak the last-minute things in the kitchen on Sunday but just leave the red appliances and the coffee maker. Remove everything else.
• We can bring some greenery.
• Please keep your little blue and white pot with the greenery in it.
• Please leave the stools.

LIVING ROOM

• Please remove any signs of pets for photos and showings
• If possible, use the faux fur cushions just for the photos and then you can use your Christmas ones.
• Chris brought this area rug that will help warm up the space once everything else is added
• We have a tray and accessories to put on the coffee table
• Please remove everything from the end table and put the black lamp from the master bedroom on it
• Keep the little tree on the end table
• We will also bring some tan cushions that will tie in the area rug

• Please remove the mat under the red cabinet. You might want to put felt pads on the legs to protect the floor.
• We will tweak what is on top, but it looks good. Chris brought his big plant for photos.  Afterwards, it can go in the basement where the dog bed is now.  You can put your Christmas tree up by the window if you want after photos.

LOFT

• Please leave the furniture as we placed it today (before photo taken before we moved it).  Your artwork will go to the basement
• Keep the lamp on the desk. I will bring some greenery for the desk.
• Chris will bring in desk and grey chair
• Place one of your navy cushions on the chair.
• Keep the table, floor lamp and some books beside the chair.

MASTER BEDROOM

• This lamp should go beside the sectional in the living room.
• We will bring some lamps and cushions.
• Please remove the photo artwork but leave the large floral one.
• We will bring cushions for colour

MASTER BATHROOM

• We will bring accessories and artwork for this bathroom to complement the master bedroom.
• We always suggest buying rubber bins for the shampoos, toothbrushes etc. That way items can be removed and put in a closet.  You don’t want personal hygiene products showing for photos or showings.

MAIN BATHROOM

• We will bring artwork, towels (for show only) and accessories for the vanity.
• Please keep your shower curtain.
• Remove everything else off the vanity.

LAUNDRY ROOM

• We will bring artwork and accessories for this room.
• Please just remove anything on or in the machines for photos and showings.

BEDROOM TWO

• We want this room to appeal to an older child. I will bring artwork, cushions and accessories for this room.
• Please put your paddle from the dining room in the far corner by the window. It will fit in with the theme of the room.
• Please keep all the lanterns that you have around the house.
• Please remove the artwork.
• Keep the lamp.

BEDROOM THREE

• Please remove everything from this room except the cube storage unit.
• Chris will bring in bed and some staging acesories with Cars theme.

BASEMENT

• This room looks great. Ideally, I would love to bring the artwork closer together if the holes don’t show.
• Turn your movies around the shelves so you can’t read the labels.
• Remove everything from the top of the higher unit.
• Tidy the desk as much as possible.

• Remove the dog beds, the heater, the 4 pictures and the lamp. We might put the floor lamp from the loft here instead.
• Clear off the top of the bookcase and all the little pieces on the shelves except the books.

If you are curious about what we can do for you please feel free to get in touch.

WHEN SELLING MY OTTAWA HOME AND BUYING A NEW HOME IN OTTAWA, DO I PAY CMHC?

As an Ottawa realtor, I’m often asked by my clients that are both selling and buying a home, if they will have to pay CMHC again. It is an important real estate question and we want our clients to have all the answers before proceeding.

What is CMHC?

Canada Mortgage and Housing Corporation is insurance which protects the lenders and thereby allows buyers to put a lower downpayment on a purchase and in most cases allows more competitive rates.
Now knowing what CMHC is, we know it is applicable depending on the size of the downpayment and whether or not the lender would like the mortgage insured.

Here are some scenarios to help you better understand if CMHC would be applicable to you.

Staying With Your Current Lender

Conventional Uninsured Mortgage – If you are staying with your current lender and your new purchase will have a 20% downpayment or higher, you will most likely not have to pay CMHC unless your current lender requires it as part of their guidelines to be a Conventional Insurable Mortgage.

High Ratio Insured Mortgage – If you are staying with your current lender and your new Ottawa home purchase will have less than a 20% downpayment, you will most likely have to pay the top-up premium on the new amount. For example: Your home sells for $400,000. Your Mortgage amount owing is $350,000. You use the equity from the sale of your home for your new purchase of $500,000. This would approximately only be a 10% downpayment and would require you to pay CMHC and the top-up difference. The difference would be $500,000 (purchase price)-$50,000 (downpayment)-$350,000 (previous mortgage amount) = $100,000 (additional new mortgage amount). As of January 15, 2019, with a 90% L-T-V (10% downpayment) the premium on a top-up is 6.25%. So your top-up CMHC premium would be $100,000 x 6.25% = $6,250 (as a new premium would be 3.10% which would be $450,000 x 3.10% = $13,950) Also please note: your mortgage must stay at the existing amortization remaining on your current mortgage for the top up premium to be used in most cases.

Changing Lenders

Conventional Uninsured Mortgage – If you are changing your lender and your new purchase will have a 20% downpayment or higher, you will most likely not have to pay CMHC unless your new lender requires it as part of their guidelines to be a Conventional Insurable Mortgage.

High Ratio Insured Mortgage – If you are changing lenders and your new purchase will have less than a 20% downpayment, you will most likely have to pay the top-up premium on the new amount or full CMHC on the total loan amount. Whichever is less. This is where having a mortgage broker’s guidance can help answer whether it is better to pay full CMHC or the top-up premium.

ANNUAL REAL ESTATE REPORT: OTTAWA 2018

RECAP OF 2018

When I set out last year to undertake this exercise I was optimistic 2018 was going to be a good year. I could not predict just how hot our market was going to be. Early in 2018, there was a significant shortage of housing inventory across the city. This is usual in places like Westboro and the core of the city. This past year that shortage spread to the suburbs-especially in the west end of the city. The lack of inventory was apparent in almost every class of property and price range. The most active being between 300-450k. In many cases, our clients were offering against as many as a dozen or more other buyers. This is common practice in cities like Toronto but a newer phenomenon here in Ottawa.  The spring brought lots of new inventory and this helped stabilize things. It was still a seller’s market but as the year went on it became less competitive for properties. Instead of 12 offers on many of the listings, we started seeing 2-4 offers depending on price range. Let’s have a look at the numbers driving our market.

KEY INDICATORS 

AFFORDABILITY

Ottawa households have one of the highest household income averages in Canada. If you see the graph on the following page you can see that prices are still relatively affordable for Ottawa buyers. This graph looks very different for buyers in cities like Vancouver and Toronto.

IMMIGRATION

If you Google best places to migrate to in Canada, Ottawa seems to be the number one choice. I am seeing many more immigrants choose Ottawa as their final destination. Toronto and Montreal are of course popular but when someone researches where to live in Canada,  Ottawa comes out close to number one in almost all categories.

The common misconception out there is that these immigrants do not have the funds to purchase real estate. That is not always the case. In many instances, it is their credit or lack thereof that may be holding them back. In any case, these immigrants are coming at a record pace and will likely be purchasing real estate in the future.

	MORTGAGE RULES AND INTEREST RATES Banks have been forced to stress test buyers at a full 2 percentage points higher than the interest rate of their mortgage. This can impact purchasing power by almost 20%.  I see the need for this but as house prices rise in major market centres there has been plenty of pushback. Interest rates have been slowly rising and this has put pressure on affordability for some buyers. If this trend continues it will have an impact on the market for sure. With the economy being more sluggish, the need for further increases may be curbed.
	LOCAL ECONOMY Ottawa has always been an underrated city in my view. We have a strong local economy with one of the highest median household income averages in Canada. Our unemployment rate is at historically low levels. It is a prototypical government town that has a growing technology sector and lots of solid, high paying professional jobs. It is only a matter of time before our prices surge and we become a global player in real estate. For a world-class capital city our prices still might be a bargain. Time will tell!
	ELECTION YEAR Housing affordability has climbed up to be one of the top issues for millennials. This makes it an election issue. A recent poll found that 64% of millennial voters want the government to do something about climbing prices. We will see the politicians respective platforms later this year. My prediction is that some of these platforms will have policies that will make it easier or more affordable for buyers to purchase. It could mean the return of 30-year amortizations. The stress tests might be eased or there could be a new policy altogether. Something to watch for sure.
	VACANCY RATE This year renters are facing a 1.3% vacancy rate in Ottawa. This is an all-time low. It has made finding a rental very competitive. Often times renters are actually in multiple offers for rental properties. There is a similar pattern in other major market centres across Canada. As house prices increase it is forcing some people to rent rather than buy. Might be a great time to purchase a property to rent out.
	GROWTH AND INFRASTRUCTURE Ottawa is growing and maturing into a world-class city. We should all be grateful to live in a city with such a high quality of life. By March we will have light rail going right downtown that will make life easier for commuters. This will just be the start of a much broader transportation plan. We have a super hospital that will be coming online in the years to come. Lebreton will eventually get the green light for redevelopment. Lots to be excited about. These will help fuel our economic growth in the years ahead.

2019 FORECAST

I believe it will be another strong resale year for Ottawa homebuyers and sellers in 2019. There is still pent-up demand and lots of buyers looking to purchase. This was reinforced just before Christmas as our team was involved in 2 multiple bid situations in the Fairwinds area. The targets were modern semi-detached townhomes, one that we sold for a record price with 3 offers. This is not the kind of activity you would typically see just before Christmas. It is indicative of the market in the entry level price points. The $350k-450k market will continue to be red hot this year. I have spoken with a few builders who had record years. Next year many homebuyers will be on the move to their newly built homes. This will hopefully create some much-needed inventory in 2019.

I predict we will have another seller’s market that will slowly slide to a balanced market by the time 2019 is complete. Barring an international crisis, it will be another great year for the Ottawa Real Estate market.

If you are curious about your homes worth please fill in this form for a no-obligation market assessment.

OTTAWA MARKET UPDATE FOR NOVEMBER 2018

The Ottawa real estate market has been so interesting to track over the past 12-18 months. It simply continues to stay heated while other major markets in Canada cool.

Here is great insight from our board president Ralph Shaw:

“When you look at what’s happening in real estate markets across Canada, Ottawa’s market performance is the polar opposite, Our market fundamentals are very strong, and we have experienced steady growth for many years, and indeed decades.”

This is kinda what I have been saying in all my recent newsletters. The foundation of our market is so solid with record unemployment and high consumer confidence. Affordability is still very good in relation to our incomes. As we examine November sales numbers we see the drop in sales by 7.2% Over November of last year. This is a reflection of the lack of inventory available to buyers, not any type of cooling in the market. Good inventory is tough to find. Keep in mind most sellers also need a good property to purchase before they put their houses for sale. I think next year we will see some easing of this inventory challenge.

OTTAWA MARKET UPDATE FOR OCTOBER 2018

Each year CMHC releases detailed reports on each of Ottawa’s major market centres. Interestingly, Ottawa is the only city to experience continuous growth in both sales and prices since 2015. We are outperforming other markets because of our healthy economy and relative affordability. The unemployment rate is at its lowest rate in a decade. CMHC suggests prices will continue to climb in both 2019 and 2020 in Ottawa. Which makes me wonder why everyone does not have an investment property.

OTTAWA MARKET UPDATE FOR SEPTEMBER 2018

The average sale price for homes in Ottawa continues to rise over last year’s numbers. In September we saw a 7.9% increase in the residential class property and in the condo property class we saw an increase of 7.6% over September 2017. These are very impressive numbers. Even with a continued low inventory in Ottawa, the number of homes sold is at an all-time high over the past 5 years. If we had more listing for sale we would have shattered the record in September. In September the residential and condo property classes there were 1,393 homes sold.

The $300,000 to $449,000 range remains the most active price point in the residential market contributing to 46% of homes sold. The $175,000 to $274,999 price range was the most active price point for the condos market in Ottawa, accounting for almost 57% of the units sold. If you are interested in finding out the market trends in your neighbourhood, please feel free to get in touch.

OTTAWA MARKET UPDATE FOR AUGUST 2018

CANNABIS LEGALIZATION AND ITS IMPACT ON INVESTMENT PROPERTIES

As an owner of Ottawa investment properties, the upcoming legalization of marijuana is another element that needs to be considered when finding tenants. When this law is passed it would grant the right for individuals to grow up to four plants in their home. I certainly don’t want them growing those plants in my investment properties. It can pose health risks from the potential growth of mould, fire risk, and the significant damage due to high humidity requires. Most importantly your property value could plummet if the house was deemed to be a “grow op” This is not a label you want. Also, smoking marijuana can be worse than cigarette smell in terms of getting rid of the bad odours.

It remains for the courts to determine if a tenant’s right to smoke marijuana for medicinal purposes is greater than a neighbour’s right to not smell it, and a landlord’s right not to have it happen in their property.  Especially since there are alternative forms of medicinal marijuana including pills, capsules and oil. I am sure there will be lots of upcoming cases that examine this complicated legal question. Something to watch for.

So how can you protect yourself?

Having strong clauses in your lease agreement is important. Here is one example:

Smoking, which includes tobacco and marijuana, any electronic versions and anything smoked for medicinal, recreational or remedial purposes, and growing plants of any type or quantity which includes marijuana, cannabis and hydroponics, are not permitted to be grown or cultivated anywhere in or on the premises, including common areas and the tenant’s rented unit.

I also am a big believer that the due diligence process is an important step. To be honest, if I suspect they are smokers I will not rent it to them. Even if they say they would never smoke in the house. I just don’t take the chance.  Besides the credit checks, I will ask previous landlords if they were smokers and I often try to find pictures of them through facebook etc to get a sense of who they are. Might sound excessive but once your tenants are in they are hard to get out! For the record there is nothing wrong with smoking weed, I just don’t want people to smoke or grow it in my investment properties.

INVESTING IN OTTAWA REAL ESTATE

I think everyone should have at least one real estate investment. Something brick and mortar in their portfolio. I have learned that many of the high net worth people I have met include real estate as an integral component.

I am a big believer in Ottawa real estate. I truly believe that in 25 years from now people will be reflecting back on 2018 and saying “We should have bought a few investment properties, they were so cheap back then!”. Much like if we look back and see that a house in Ottawa 25 years ago was only $150,000.

Ottawa is a growing city with awesome economic fundamentals and lots of future growth. Our city ranked number 2 in Canada as the best places to live in the country. It was number 1 last year.
I hope people who live here understand just how amazing Ottawa is for the quality of life. We are so fortunate to live here. It can be easy to take it for granted. It also means there are some great real estate investment opportunities here. Especially as Ottawa grows with light rail and other major projects like Lebreton Flats.
As investors outside of Ottawa look for new opportunities many are turning to Ottawa. I am seeing lots of investors in our market especially in the $300k-$400k price range. Many from Toronto and overseas. Unfortunately, these investors might eventually spoil it for the rest of us. The timing is now. Prices are still reasonable and the vacancy rate is the lowest it has ever been. There are multiple bids in the rental market!

If you are thinking of investing in real estate, please feel free to reach out. Always happy to help!

OTTAWA MARKET UPDATE FOR JULY 2018