Archive for the 'First Time Homebuyers' Category

February 11, 2019

Valentine’s Day is almost here, the most romantic time of year — using you’re flying solo. If you’re alone, there’s no need to feel sad. Why not take your date in a different direction — say, to the office?

It’s possible that your love of real estate has been dwindling lately. With tougher market conditions, colder weather, and higher home prices, you may have lost the spark you once felt. This Valentine’s Day it’s time to bring back that loving feeling once and for all.

Instead of wining and dining your significant other, why not wine and dine yourself and jumpstart your business at the same time?

Here are the oh-so-romantic ideas you won’t want to miss:

  1. Set up an open house for singles.

Chances are high that you’re not the only one spending this Valentine’s Day alone. So how about making the most of it? If you have an available property on the market, schedule an open house for February 14 and advertise it as a singles mixer. Break out the champagne and chocolates, put on some feel-good music, and perhaps even set up a dance floor or a movie.

You could spark a love connection or make the sale!

  1. Play matchmaker with clients.

The real estate agent who pairs up the single mom and single dad living two blocks away from each other sounds like the romantic comedy of our dreams. But that’s not all that we’re talking about here. (Although if you have done this, please, let us know. We’ll help sell the rights to Hollywood!)

Today’s housing market is shifting, and more people are opting for buying homes together in the non-traditional sense. Take for example these two friends who bought a home in Niagara Falls, or these real-life Golden Girls.

Do you have a few clients who want to break into the housing market but just aren’t sure how they can afford it? You could be their real estate cupid!

  1. Have a “no bad ideas” brainstorming session.

Being a real estate sales professional is a busy job that involves a lot of nitty-gritty details. While those are necessary, they can sometimes suck the fun out of work.

Take the night to remember why you fell in love with real estate in the first place. Pour a glass of wine or sparkling water, light a candle, and make a list of your most creative ideas for revitalizing your business. Give yourself a number to hit — say between 20 to 50 — and don’t stop until you’ve filled out your list. No ideas are off limits; the wackier and kookier, the better.

Steve Jobs used to have his staff brainstorm 100 ideas and then narrow the list down to three. It’s how Apple developed so many great products. You can do the same!

  1. Remind yourself of past loves.

No need to walk down the ex memory lane. That’s not what we’re getting at here.

Instead, open up your old reviews and testimonials to remind yourself of past successes and happy clients. If you haven’t started an “I’m the best” folder yet (where you save all emails, notes, clippings, etc. from people complimenting you) take the time to build one now.

  1. Look for divorce leads.

Valentine’s Day is viewed as the most romantic day of the year but it’s also statistically one of the days with the highest rate of breakups. Couples getting divorces are highly motivated to sell for obvious reasons… Start thinking about a marketing campaign now and set the wheels in motion.

Admittedly this idea isn’t quite as romantic as the others on our list, but you’ll be feeling the love if it results in a sale so we’re calling it even.

  1. Find someone new.

You know those relationships where you give and give and give, but no matter how much you put into it you always end up… disappointed? This can happen with real estate, too!

If you’ve been putting the majority of your effort into single-family homes, for example, but are finding that the market is dwindling, it may be time to get a wandering eye — only unlike a real relationship, you won’t be breaking any hearts by exploring your options.

There are a lot of great new prospects on the market these days. Condos, multi-family units, even commercial spaces. Look at your listing opportunities with an open mind and an open heart. What areas are calling to you?

If you want to get scientific about it (online dating algorithms have nothing on you) you can access property data to really understand the potential opportunities in your area.

Need a date for Valentine’s Day? GeoWarehouse is happy to be your plus one. Contact us to learn more about our property insight data today. Call 1-866-237-5937 or visit www.geowarehouse.ca. We also won’t say no to a flower delivery 😉

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August 27, 2018

Helping Clients Find A Down Payment They Can Afford

One dollar isn’t that much money in the grand scheme of things, but when it comes to buying a house it can make all the difference.

Back in February of 2016, Canadian mortgage rules tightened concerning mortgages over $500,000. The Canada Mortgage and Housing Corporation (CMHC) announced changes to the required down payments.

This is how much down payment is required per house purchase price:

Purchase price of home: $500,000 or less

Minimum down payment required: 5% of the purchase price

Purchase price of home: $500,000 to $999,000

Minimum down payment required:

  • 5% of the first $500,000 of the purchase price
  • 10% for the portion of the purchase price above $500,000

Purchase price of home: $1 million or more

Minimum down payment required: 20% of the purchase price

Those who are self-employed or who have poor credit history may be required to provide a larger down payment. With new mortgage stress test rules, it may be beneficial for a client to put down a more significant down payment to pass the stress test.

This might be a miniscule difference when it is on a smaller scale, however, it can quickly increase.

Take for instance a client who wants to purchase a $400,000 house vs. a $600,000 house ($20,000 minimum down payment vs. $35,000 minimum down payment). Or a client who wants to purchase a $900,000 house vs. a $1.1 million house ($65,000 vs. $220,000 minimum down payment).

It’s possible that real estate sales professionals might not even feel this impact because people are getting declined when looking for mortgage pre-approvals, therefore they never engage a real estate agent.

How can you help a client who wants to buy, and is on the line?

  • Independently check the values of interest properties. Make sure the property values are in line with the price being advertised.
  • Look for pockets where the client could get into the market – different neighbourhoods, dwelling types, etc. One neighbourhood might be out of their range, but they could get the same-sized house a little further away.
  • Review different scenarios with the client so they set realistic expectations. For instance, while the $1.1 million house may have different features from the $900,000 house, the down payment would cost at least $155,000 more. Similarly, the $400,000 may not have all the features as the $600,000 house, the down payment would be at least $15,000 less.

GeoWarehouse has the tools that make you the property expert. Help your clients find the properties and neighbourhoods where they can make the minimum down payments with ease.

Learn more about our property reports and neighbourhood search features at www.geowarehouse.ca.

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Ontario closing costsYou have probably represented many first time homebuyers. First time homebuyers are in a unique position because, depending on where they buy, they could have the opportunity to benefit from significant tax breaks.

Closing costs can be challenging because there are so many of them – but fortunately for you, if you are representing a first time homebuyer, their closing costs won’t reach the level of someone who has already owned a home in Ontario.

Here is a little summary of closing costs in Ontario and first time homebuyer tax credits and rebates.

  1. Legal fees and disbursements: if there is a mortgage to be registered the legal fee and disbursements will be greater.
  2. Insurance: your client will need fire insurance, and if there is a mortgage, they should look at mortgage insurance and possibly life insurance too.
  3. Property tax: if there is an overpayment on the tax bill at the time you buy, you will have to repay the amount on closing. Also, if your client is getting a mortgage and the mortgage will be collecting their tax payment monthly, there may be a property tax holdback of 3-6 months that will also have to be paid on closing.
  4. Appraisal: if the lender has requested an appraisal, your client can expect to pay $300-$400 if the lender has not agreed to pay for it.
  5. Home inspection: this could range anywhere from $400 and upward depending on the company.
  6. Interest adjustment: there will be an interest adjustment applied from the date of closing to the date of first payment date, this will have to be paid on closing.
  7. Land transfer taxes: these can get complicated with all the rebates and exemptions available.

In Ontario your client will have to pay land transfer tax equal to:

  • 5% of the value of consideration for the transfer up to and including $55,000.
  • 1% of the value of the consideration which exceeds $55,000 up to and including $250,000.
  • 5% of the value of the consideration which exceeds $250,000.
  • 2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.
  • Check here for more details: http://www.fin.gov.on.ca/en/tax/ltt/rates.html.
  • If the buyer lives in Toronto:
    • 5% of the value of consideration for the transfer up to and including $55,000.
    • 1% of the value of consideration from $55,000.01 to $400,000.00.
    • 2% of the value of consideration over $400,000.00.

Now here is where first time homebuyers get a break:

In addition to these rebates, and aside from first time homebuyers, you have some other clients who stand to benefit from land transfer exemptions as well. According to this publication by Schwartz Law, these exemptions include:

  • Transfers between spouses
  • Transfers where there is no consideration (this has many conditions)
  • Transfers of land between affiliated corporations
  • Transfers of land to a family business corporation
  • Of course, all of the above have some conditions so you are best to speak with a real estate lawyer to find out if your client qualifies

Ok, so back to first time homebuyers – in addition to all the first time homebuyer rebates that exist, there are also first time homebuyer tax credits. There is a tax credit for certain first time homebuyers that acquired a qualifying home after Jan 2009. You can find complete details here to see if your client qualifies: http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html.

We have to remember that clients, especially first time homebuyers do not know as much as you about real estate. Many times people simply miscalculate their closing costs, and when this happens the result in closing could surprise – but this is usually not the best scenario. The best way to avoid any kind of a surprise on your closings is to make the effort to know more, learn more about LTT rebates and credits. Also investing in tools that you can use to investigate applicants and properties like GeoWarehouse can be very useful.

For more about how to help your clients save big bucks on closing, or to get the most information available, please visit www.geowarehouse.ca.

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