Wayne Cochrane's Real Estate Insider

INSIDER WAYNE COCHRANE’S REAL ESTATE

November 2012

Your Neighbourhood Real Estate Professional

Wayne Cochrane...www.mooving.ca

Inside this Issue:

How Much Can I Afford?

Choosing Your Ideal Neighbourhood

Real Estate’s “Loose Ends” Are Expensive

Staging With Superior Interior Design

Land Transfer Tax a “Bad Idea” Says Study

Five Pitfalls That Keep Buyers From Finding The Right House

Are you gearing up to buy a home? Now is a great time to make a move in the real estate market. Interest rates are at historic lows. Compare today's 30-year fixed-rate average of between 3 and 4 percent to the 13 to 18 percent rates of the 1980's and you'll see why everyone is buzzing about the great deals to be had!

Additionally, homes are now at their most affordable on record. This is because home values have dropped across much of the nation. There is also a huge supply of distressed properties on the market which sell for steep discounts.

With all these great deals it's easy to get carried away, but the lesson learned by millions of foreclosed homeowners is to buy within your means. Just because you're approved for X amount doesn't mean you should spend that much.

So, how much home can you really afford? Consider the following.

What is your monthly income?

If you have a salaried job, this can as simple to calculate as looking at your paystubs, but if you work on commission and tips, it's important you consider both high income and low income months.

What is your monthly debt load?

Consider the monthly cost of child support, alimony, student loans, credit cards payments, car loans, and other debts that must be paid each month.

Is your job stable?

Today's job market is still a little shaky. While the unemployment rate has improved, many still struggle to find jobs. What would happen if you were to lose your job? Would you still be able to pay your mortgage?

What are your monthly

expenses?

This is different than your monthly debt load. These are extra expenses inc luding: cable, internet, cell phone, gas, food, entertainment, clothes, travel, etc.

How long will you be staying

put?

Homes just aren't appreciating at the rate they used to. You will probably need to stay put for at least five years before you would break even on a sale.

How Much Can You Afford? Written by Carla Hill

Condominiums and

Townhouses

on the Halifax Common

www.ArmourySquare.com

96% SOLD

NOVEMBER ISSUE

How much do you have saved?

Lenders expect for today's buyers to have at least 20 per-cent to put down in addition to closing costs. A $200,000 house will require a $40,000 down pay-ment. Do you have this money in addition to an emergency fund? If not, you might want to consider a less expensive house or waiting to buy.

Neighbourhoods are as diverse and unique as the people who live in them. From close-knit communities to private and mature tree-lined streets -- there's a fit for every buyer.

Many young families seek communities brimming with amenities, such as pools and parks. Others place top priority on schools within a prestigious district. Still other buyers are m o r e i n t e r e s t e d i n neighborhoods within walking distance of restaurants, theaters, and other fun times!

It can be a tough map to navigate. Here are some tips for finding your perfect neighborhood!

School Districts: If you currently have, or plan on having children, it's important to research what local school district you wish your children to attend. This becomes even more critical if you are moving and wish for your children to remain in their current school!

Nose Factor: You may love the house, but will you love the road noise from the adjacent highway? Visit your potential neighborhood during different times of the day and varied days of the week. Some otherwise quiet streets become raucous hubs during the wee hours of weekend nights. Also check for train tracks, subways, roads, and airports!

Walk/Driveability: How close will you be to restaurants, grocery stores, doctors' offices,

parks, and other recreational establishments? Many families want to be close to the action -- so close that they can walk!

Favorite Activities: Do you love golf, boating, or spending your time at the gym? Research local amenities before deciding on which neighborhoods to search. It's no fun driving for hours to make it to your favorite activity.

Safety: Ask your real estate agent or local enforcement about the crime rate for a particular area. Some have higher levels of thefts and even violent crimes. A beautiful house can't make up for feeling unsafe.

Resale: Discuss the resale p o t e n t i a l o f a c e r t a i n neighborhood with your real estate agent. If you aren't planning on staying in your home indefinitely, then it's important to consider the long-term. Will you be able to sell a home in this neighborhood in 10, 15, or 20 years? Is it up-and-coming or has it come and went?

The neighbourhood you choose will have an impact on your day-to-day life, so it's important to make the right choice for your

Choosing Your Ideal Neighbourhood Written by Carla Hill

Give me a call...

Wayne Cochrane EXIT Realty Metro

[email protected] (902) 830-4761

family. Be sure to consider these tips when you're next in the market to buy!

WAYNE COCHRANE’S REAL ESTATE INSIDER

Mortgage Rates

Fixed rates:

1 yr: 2.65%

2 yr: 2.69%

3 yr: 2.79%

4 yr: 3.09%

5 yr: 2.99%

Rates provided by Invis Mortgage

as of Novembe 5th, 2012

Subject to change without notice

Loose ends can unravel good intentions and well-laid plans. Compound this vulnerability with uncertain times, and you'll hear a lot of "if only I'dC" from those stricken with hindsight clarity. "Loose ends" result from procrastination, unfinished projects, incomplete research, or indecisive reactions.

Apply this reality to Home Equity Management, and loose ends can result in expensive lessons to learn the hard way, instead of becoming valuable opportunities.

"Home Equity Management," or HEM, is the term I've coined to describe the difference between:

• the market-driven equity see-saw, in

which the property owner is a spectator, and

• the conscious, deliberate management

of real estate using ownership strategies undertaken to deliberately build, preserve, and use equity, or the accumulated real estate value, and to take advantage of "up" markets and minimize "downturns."

As a real estate owner, do you consider yourself a Home Equity Manager, intent on increasing equity and decreasing costs to build your net return on investment? In the 600+ articles in this column, I've covered a lot of HEM strategies. Real estate professionals are knowledgeable resources for building or preserving equity, so there's lots of great content directed to equity management. Yet, I hear again and again from homeowners whining "if only I'dC" because their "wait and see" approach meant they missed opportunity, and may have lost equity and had expenses unnecessarily increase.

"Loose end"-Ending Strategies apply foresight to achieve benefits beyond equity security. Here are four examples of the shift in thinking involved:

1. Switch from linear thinking to cyclic to

deal with real estate cycles

Real estate markets don't keep going up and up. Markets are cyclic. They go up and down in response to a series of complex factors which are clearly visible in hindsight, but may be uncovered with foresight on a local level. (Ask local real estate professionals about this.)

Within each real estate cycle, only thinking linearly about selling or buying at the best price can shortchange you. Trying to time the peak to sell, or the best time to buy for less is a challenge. Although some sellers and buyers get close, those who wait for the peak can miss the moment. In this cycle, multiple offers which drove selling price over market value may still occur in a few sought-after neighbourhoods, but as markets slow,

multiple offers may draw market or below market returns. It is not the mechanism that drives the buying frenzy, but fear. Buyers' fear of losing out drives them to spend. As that buyer anxiety cycle fades, and is replaced by the fear of paying more than necessary, real estate professionals find their challenge is soliciting one offer, never mind 5 or 6.

Embrace the cyclic nature of markets, instead of just linearly focussing on what you'll get if you sell. No two neighbourhoods behave the same price-wise. Slowing markets can represent great times to sell when you calculate net gain in selling your current property, and buying as prices decline further.

2. Replace intentions with commitment

The intention of becoming debt-free, a common one for those approaching significant life-change like being able to quit the day job, is not enough to become debt-free, or even to reduce debt. Who's in charge of debt reduction at your house? Is the same person in charge of debt increase? Equity is eaten up by debt. Couples and families who foster unplanned spending, benefit from formal meetings to discover how where they stand financially, and how things can be improved. Solo spenders should also hold meetings -- a formal time and date to review all relevant details like credit card and income statements, so the actual financial situation can be summarized on one page. The next meeting will involve solutions and strategies to achieve debt reduction and to build equity. If intentions have been as effective as they are in most dieting efforts, contact an accredited credit counsellor for details on how to really achieve results.

3. Check the big picture to decide

The Bank of Canada again announced no change to The Bank Rate. Any decisions you make based on low interest rates, should include a thorough check into all factors and rules involved. Don't act merely because of the "low interest" mantra that shoppers are encouraged to chant. If you have to be told that credit card interest rates are ten times higher than any mortgage rate you'd consider, you have some shocking research ahead. Have you noticed banks inching rates up even though The Bank Rate is unchanged? If your mortgage will be upfor renewal over the next few months and your income is vulnerable to job layoff or the stock market, you may want to shop around and negotiate renewal now. Are there any other looming significant expenses to investigate just in case there are advantages that may disappear? Go beyond the obvious to

Real Estate’s “Loose Ends” Are Expensive Written by PJ Wade

NOVEMBER ISSUE

detect deal breakers and loop holes. Expect credit qualification criteria to tighten even if interest rates don't change for a while.

4. Expect the unexpected

Lenders know that temporary loss or disruption of income can lead to mortgage default and that worries them. The most commonly acted on "default" involves the borrower failing to make regular repayment because of job loss, divorce, or illness. Lenders have legal remedies for default that can leave the borrower without real estate and a credit rating. When you find yourself faced with financial vulnerability for these or other reasons, don't wait until its too late to correct the problem. Read your mortgage documents to discover which mortgage insurer has covered lender losses for your mortgage. Investigate homeowner assistance or relief programs designed for temporary financial problems by that mortgage insurer.

What real estate issue is at the top of your procrastination list? What are you avoiding, that may come back to haunt in hindsight? Wouldn't you prefer to concentrate on succeeding through foresight?

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Word Scramble:

smiontpusa


Staging with Superior Interior Design Written by Broderick Perkins

The housing market is improving and that's good news for you if you are a seller who has been waiting on the sidelines for higher prices.

Housing prices are on the rise and the good news gets even better if you are ready to sell and heed sale-price-maximizing tips from a top-rated interior designer.

Interior Design magazine named Winter Park, FL-based Marc-Michaels Interior Design the No. 1 U.S. residential design firm not only because founder co-CEO Marc Thee is the best at what he does for homeowners staying put.

He also knows how to prepare a home to sell for top dollar.

Thee says staging is worth the money, but if you are short on cash that doesn't mean you can't give your listing a model home look to boost your selling price.

Here's just a sample of Thee's trade secrets:

• Rent a portable storage unit. Clear the clutter and move what you want to keep into a portable storage unit. It's a lot easier to park a portable storage unit in the driveway than the two-step approach of loading a truck and unloading it at storage facility. You need to clear the clutter to turn your home into an appealing and spacious canvas for the buyer's imagination.

• Work room by room. Start at the front door. Make it open and welcoming with simple accessories, say, an open console to contain the shoes, umbrellas and backpacks. Consider a large mirror over the console and a pair of candlestick lamps adds brightness and reflectivity.

• Liven up the living room. Look for a good anchoring "focal point" - a terrific view of a garden, lake, ocean, or

fireplace wall to "celebrate." Rotate furniture to orient toward the focal point. Give rooms a more spacious feel by "floating" furniture on an area rug instead of placing furniture against the walls. If your room lacks a focal point, create one with art or color blocking -- painting an accent color in a large square or rectangle to make smaller art appear larger when you hang it within the painted area. Be aware of the energy of paint.

"Don't make it too crazy - you are trying to please a potential buyer so a calm neutral color is likely to be the best choice," says Thee.

• Kitchens sell houses. Get rid of those silk plants, roosters, cat clocks and clown platters. Put away the toaster, the mixer, the canisters, the spoons in the jar. Make room in the cabinets for these items by storing the extra utensils, glasses, plates, cups in the storage container. Purchase a really big bowl for a single display of seasonal fruit such as apples, oranges, or pineapples for the countertop or kitchen island. The more you put away, the better the kitchen will look. Counter space sells kitchens. A few simple clusters of cookbooks, oils and vinegars on a tray and a chic spice rack is all you need to hide the electrical outlets.

• Spruce up the bedroom. Lose the patterned bedding in the bedroom. Instead use a fresh white duvet or cotton blanket. Simplicity sells. Busy patterns distract. Repaint bold bedroom colors with tranquil pastels, or light grey and putty neutrals. Light and airy also sells. Remove heavy curtains and nightstand clutter, add matching lamps and add a few art books. If you don't have drawers, buy a simple lidded box to contain the remote control, Kleenex package, and tattered paperback.

• R e - m a s t e r t h e m a s t e r bath. Replace Old World gold and amber light fixtures with more contemporary clear or frosted white glass. Use a tray to anchor odds and ends that collect on elongated counters. Use artful boxes or containers to conceal frequently used items such as contact lens solution, hand lotion, and hairspray. Small glass jars for swabs, cotton balls, and small soaps make for an attractive and practical display. Replace pink, grey, black, toilets with a white one. Hire a tub re-glazing specialist if your tub's color is dated.

• Use photo stylists' secret weapon. Bring on the live plants. Orchids, succulents, and air plants make a huge difference on a coffee table, dining table, or nightstand. It is also inexpensive and incredibly chic to cut branches or large tropical leaves and place them in large vases on a fireplace mantel, kitchen island or dining room buffet. Only use silk flowers that appear so authentic even touching them leaves doubt.

"I have seen a few faux orchids or succulents that fooled me - but I still strongly recommend live plants over silks," Thee says.

• Have second thoughts about selling. Your for-sale home do-over should be so compelling you want to stay.

Is Nova Scoti a approximately half-way between the equator and the

North Pole?

Word Scramble: nodw mypaten

Go to www.mooving.ca - ‘About Wayne’ and click on ‘Monthly Newsletter Trivia’ for the answers.

8888888888888888888888.Brain TeasersBrain TeasersBrain TeasersBrain Teasers……………………………………….

Land transfer taxes are a bad idea that have a negative impact on both homeowners and the governments that enact them, says a new report by Benjamin Dachis, senior policy analyst for the C.D. Howe Institute.

The tax measure reduces the number of homes that are sold, particularly in the lowest price ranges, and inhibits household mobility, says Dachis. As a revenue source for governments, they are not reliable because of the volatility of the real estate market, and they distort the residential and commercial markets where they are in place, he says.

Dachis studied the Toronto Land Transfer Tax (LTT), which he says adds an additional tax of about $11,400 to an average detached Toronto home. That's in addition to the provincial land transfer tax of $12,100. The city is the only municipality in Ontario to have a double LTT, which ties it with Philadelphia for the highest statutory transfer tax rate in North America.

Dachis says other municipalities in Ontario have been looking at similar LTT schemes, but he says, "This is one bad idea that should not spread."

Toronto's LTT was introduced in 2008, and within the first eight months of its existence, it reduced single-family dwelling transactions by 16 per cent, and reduced the average sale price in Toronto by 1.5 per cent, he says. Dachis also studied the tax in a 2008 report.

The new study says that from 2008 to June 2012, even though Toronto enjoyed a real estate boom, "the number of real estate transactions was reduced by about 16 per cent in Toronto relative to sales elsewhere in the Greater Toronto Area" and that "the most pronounced effect on the market was in areas with relatively low sales values."

Dachis also says the tax caused many homeowners to choose to renovate their existing homes rather than to relocate.

"The existing economics literature suggests that reduced mobility might increase unemployment in places with an LTT, starve firms elsewhere of employees, deter workers from switching

to more productive jobs, and result in homeowners keeping homes they no longer desire," he says in the study.

In addition to Ontario, there are land transfer taxes in British Columbia, M a n i t o b a , N e w B r u n s w i c k , Newfoundland and Labrador and Prince Edward Island. Quebec requires municipalities to collect an LTT of a maximum of 1.5 per cent for homes valued at more than $250,000. In Montreal, there are two higher LTT rates for homes priced more than $500,000 and $1 million. Some Nova Scotia cities also have their own LTTs.

The Toronto Real Estate Board (TREB) l a u n c h e d a w e b s i t e (www.LetsGetThisRightToronto.ca) to get out its message opposing the LTT. The board commissioned a poll by Ipsos Reid that says 60 per cent of Torontonians support a commitment by Mayor Rob Ford to repeal the tax. In another poll, in 36 of the city's 44 wards, at least half of the residents supported repealing the tax, says TREB.

The first poll also found that 25 per cent of Torontonians expecting to move in the next two years are planning to leave Toronto for the areas around the city that don't have the extra LTT. Only three per cent of residents from those areas say they were planning to come to Toronto.

Dachis says an LTT "is likely more politically appealing to politicians than is a broad-based property tax because few residents are directly subject to an LTT in a given year, compared with the population of homeowners generally."

TREB says: "Other taxes do not share the same flaws as the LTT. For example, because property taxes are paid by all, they are fair and put more pressure on the city council to think twice about its spending decisions or about raising taxes."

Although one of Ford's campaign pledges was to repeal the LTT, Toronto is struggling to pay for a crumbling infrastructure and a number of social services that have

Land Transfer Tax a “Bad Idea” Says Study Written by Jim Adair

NOVEMBER ISSUE

been downloaded on municipalities by the province. In 2011, Toronto collected $319 million from the LTT, which represents three per cent of that year's operating budget. Without a large property tax increase, that money would be hard to replace.

Montreal is in a similar position. In 2011 it collected $100 million from the tax - 2.7 per cent of its operating budget.

To replace the tax, TREB says To-ronto should continue to watch its spending and maximize the value of its large number of real estate hold-ings across the city. It should sell assets it does not need to own or operate, says TREB, to pay down its capital debt, and it should use existing city assets creatively to generate income, such as selling air rights above city-owned parking lots.

Dachis says Toronto should "repeal its LTT and replace lost revenue by increasing its residential property tax, for which it has fiscal room." He says Mon t rea l , Quebec and the municipalities in Nova Scotia should also repeal their LTTs and offset the lost revenue with "less economically damaging property tax adjustments."

Buying a home is like searching for a mate. You'll go on many first dates and in the end, the one that has most b u t m a yb e n o t a l l o f t h e characteristics that you want, will win your heart.

However, first-time buyers and sometimes even serial homebuyers are disappointed by how long the process takes. Yet they may not understand how their expectations, beliefs, and lack of action may be causing the delay in finding the right home.

Here are five pitfalls that buyers can fall into that cause them to let the right home slip by.

Seeing a home "as-is". I don't mean that buyers should not view homes on the market that are listed for sale "as-is"; rather I mean not being able to see beyond the "as-is" home. In other words, some buyers walk into a home and are immediately turned off by something as simple as the color of paint which can be easily changed, or maybe it's the carpet or wallpaper. Regardless, when buyers see the home "as-is" without the ability to envision it differently, they do themselves a huge disservice and fall into a pitfall of thinking that the home is not right simply because of the condition they are currently seeing it in.

Not working with an expert agent. Buyers can weed through the paper and click around the Web looking for open houses and listings but a quality agent can help identify the best-suited properties much faster. An expert agent also often knows about other listings that are about to come on the market and would not be in the paper or on the Web yet. It's worth it to spend time interviewing agents to find the right one who can help you find the right home. If you fall into the

pitfall of trying to do everything on your own, you're likely going to miss seeing some of the houses that might offer the best match for your wants and needs.

Letting the important things slide. We've all done this when making an expensive purchase. We compromise on something that is important simply because it's less expensive. Later we regret it. Whether it's a new car, new house, or flat screen TV, when you're making large purchases, you need to know which things are important and non-negotiable and then stick to that list. Of course, there may be some small, less important things that you'll compromise on, but if you compromise on something big that is important to you, you're likely going to be disappointed down the road.

There is a reason you were searching for a three-bedroom home. So, for instance, when you fall in love with that quaint, cozy two-bedroom home, remember that you had specific reasons for needing an additional bedroom. If you've clearly defined your living needs and wants before you begin house hunting, you'll have guidelines to keep you on track.

You might find that the smaller home has a secondary unit on the property and, while it's not a third bedroom, it will suit your needs. So, yes, be flexible and think of the possibilities, but do remember your list of what you originally deemed important. The tendency is to get caught up in the moment, either because a home is so charming or because it appears to be such a good deal that you start to say, "Well, I can make-do without that." Maybe you can...but you'd better be certain before you close escrow

Five Pitfalls That Keep Buyers From Finding The Right Home Written by Phoeboe Chongchua

Living strictly in the moment. Most of the time I write about practicing living in the moment because so many of us lead hectic lives. But when you're buying a home, you'd better be thinking about the future. What's good for you today will likely need to be good for you for many years to come. So, do your homework to find the right home. Work with your agent to find out how the neighborhood is changing. What future plans are there for the community? Pay attention to the congestion of an area and to the types of retail shops and restaurants that are coming into the community...then compare that to your future plans. You can't always know what lies ahead but many times you can see what types of projects have been proposed for undeveloped land in the area.

Skipping an inspection. I've written a lot about this one. Inspections are critical. They're the equivalent of taking a car you want to buy to your car repair shop for a look before you buy. Just like you don't want to end up with a lemon for a car, you don't want a home that has too many and too costly repairs needed. Inspections give you a "health" check of the home. They let you know what you're in for should you buy the home. You'll be glad you have a report to help validate your reasons for wanting to purchase this home over others.

Avoiding these pitfalls will help you more quickly find the right home and the right investment for your future.



Note: This is not intended to solicit clients currently under contract.

The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA.

Wayne Cochrane Real Estate Professional

902-830-4761 [email protected]

More homes listed and sold by Wayne - view these homes at:

www.moov i n g . c a

unless noted otherwise

List Today and EXIT Tomorrow!

767 Parkland Ave #205

Glen Arbour

15 Skye Crescent 45 Haverstock Drive 18 Glen Arbour Way

76 Millwood Drive

Millwood

129 Magnate Court

$538,900

Glen Arbour

$599,80

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Kingswood North

12 Tradewind Court 593 Lakeview Avenue

Kingswood North

Middle Sackville Halifax

Highland Park

$537,50

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$374,80

0

$349,80

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$599,90

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$309,80

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