Affordability chart

Based on 6.25 % 3 Year Fixed rate			CONVENTIONAL Lending 25 % Down Payment			HIGH RATIO Criteria 10 % Down Payment
INCOME LEVEL	Maximum Mortgage		Affordable Home	Down Payment		Affordable Home	Down Payment
$ 30,000	$ 110,731		$ 147,641	$ 36,910		$ 120,622	$ 12,063
$ 35,000	$ 129,185		$ 172,247	$ 43,062		$ 140,724	$ 14,073
$ 40,000	$ 147,641		$ 196,855	$ 49,214		$ 160,829	$ 16,083
$ 45,000	$ 166,096		$ 221,461	$ 55,365		$ 180,932	$ 18,094
$ 50,000	$ 184,551		$ 246,068	$ 61,517		$ 201,036	$ 20,104
$ 55,000	$ 203,007		$ 270,676	$ 67,669		$ 221,141	$ 22,115
$ 60,000	$ 221,461		$ 295,281	$ 73,820		$ 241,243	$ 24,125
$ 65,000	$ 239,916		$ 319,888	$ 79,972		$ 261,346	$ 26,135
$ 70,000	$ 258,372		$ 344,496	$ 86,124		$ 281,451	$ 28,146
$ 75,000	$ 276,827		$ 369,103	$ 92,276		$ 301,554	$ 30,156
$ 80,000	$ 295,281		$ 393,708	$ 98,427		$ 321,657	$ 32,166
$ 85,000	$ 313,737		$ 418,316	$ 104,579		$ 341,761	$ 34,177
$ 90,000	$ 332,192		$ 442,923	$ 110,731		$ 361,865	$ 36,187
$ 95,000	$ 350,647		$ 467,529	$ 116,882		$ 381,968	$ 38,197
$ 100,000	$ 369,103		$ 492,137	$ 123,034		$ 402,073	$ 40,208
$ 105,000	$ 387,557		$ 516,743	$ 129,186		$ 422,175	$ 42,218
$ 110,000	$ 406,012		$ 541,349	$ 135,337		$ 442,279	$ 44,228
$ 115,000	$ 424,468		$ 565,957	$ 141,489		$ 462,383	$ 46,239
$ 120,000	$ 442,923		$ 590,564	$ 147,641		$ 482,487	$ 48,249

This is a great guideline based on the rate of 6.25% with a minimum of 10% downpayment, since rates are always changing please contact your mortgage broker for up to date rates.

For more information on the Brampton or Georgetown real estate market drop me an email.

Credit scores explained

Credit Report / Credit File

Along with the credit histories of millions of other people, your credit history is recorded in files maintained by at least one of Canada’s three major credit-reporting agencies: Equifax Canada, TransUnion Canada and Northern Credit Bureaus Inc. – it is possible to obtain your credit file for free – please consult the agency’s website in order to obtain more information. These files are called credit reports. A credit report is a “snapshot” of your credit history. It is one of the main tools lenders use to decide whether or not to give you credit .

Your credit file is created when you first borrow money or apply for credit. On a regular basis, companies that lend money or issue credit cards to you – including banks, finance companies, credit unions, retailers – send specific factual information related to the financial transactions they have with you to credit reporting agencies .

Summary of methods to request your credit report and their respective characteristics

Credit Score

Your credit score is a judgment about your financial health, at a specific point in time. It indicates the risk you represent for lenders, compared with other consumers.

There are many different ways to work out credit scores and find out if you’ll qualify for that Brampton house you fell in love with. The credit-reporting agencies Equifax and TransUnion use a scale from 300 to 900. High scores on this scale are good. The higher your score, the lower the risk for the lender. Lenders may also have their own ways of arriving at credit scores. In addition, lenders must decide on the lowest score you can have and still borrow money from them. They can also use your score to set the interest rate you will pay.

Credit Rating

Some credit-reporting agencies report the lenders’ rating of each of your credit history items on a scale of 1 to 9. A rating of “1″ means you pay your bills within 30 days of the due date. A rating of “9″ means that you never pay your bills at all or that you have made a consumer debt repayment proposal to the lender. A letter will also appear in front of the number: for example, I2, O2, R2. The letter stands for the type of the credit you are using.

• “I” means you were given credit on an installment basis, such as for a car loan, where you borrow money once and repay it in fixed amounts, on a regular basis, for a specific period of time until the loan is paid off.
• “O” means you have open credit such as a line of credit, where you borrow money, as needed, up to a certain limit and the total balance is due at the end of each period. This category may also include student loans, for which the money may not be owing until you are out of school.
• “R” means you have “revolving” credit, where you make regular payments in varying amounts depending on the balance of your account, and can then borrow more money up to your credit limit. Credit cards are a good example of “revolving” credit.

The most common ratings are “R” ratings. These are known as North American Standard Account Ratings and are the most frequently used. The “R” indicates that the item being described involves revolving credit. If you always pay on time, it will be coded an R1. If an amount was written off because you never paid it back, it is coded R9. The R ratings are a coding system that translates “on time”, “one month late”, “two months late”, etc., into two-digit codes.

Source: Equifax

For more information on Brampton or Georgetown real estate drop me an email.

Don’t price your home too high!

Because of the constant changes in Brampton real estate market conditions, more sellers are competing for fewer buyers. And most buyers are not jumping at the first property they fall in love with.
“The initial asking price is NOT that important because it can always be lowered later.”

Wrong! The original asking price is very important. Specially when working with the new generation of buyers who are well informed on the market conditions. But many homeowners still believe over pricing a listing is the way to go. And they couldn’t be further from the truth. It is a myth. It’s a time wasting myth.

Find out more…

But most buyers are now looking at prices online, to get an idea of what is for sale and at what prices. Even if they saw your ad for the first time because of another type of advertisement (newspaper, sign in your front yard, flyer, etc) as soon as they decide to make an offer they will make a Market Comparison Search and find out the home is over priced compared to other Brampton properties. What would happen next? The homeowner will most likely receive a low ball offer from the buyer.

When the buyer comes with another agent

That buyer’s agent knows the current market and will know of other properties that DOES fit their needs.
Buyer’s agents are not swayed by advertising. They look at their client’s needs; location, condition, and most importantly … PRICE

If your house is overpriced, agents are going to show similar homes in Brampton that are priced more attractively and as a result, your listing will get passed over.

Agents pay MOST attention to homes newly on the market, and since they new ones are fewer, it is easier to keep an eye out for what is NEW, compared to the vast number of current listings. New listings are on the “hot” sheet circulated in real estate offices. The MLS computer identifies new listings. A lot of attention is focused on what is NEW. With agent’s looking at newly listed homes so aggressively, a properly priced home gets attention.

An overpriced home gets passed over.

You may be thinking, “But I’m willing to negotiate!”

Buyers aren’t thinking in advance about how much you are willing to negotiate. They are comparing your asking price to other asking prices. Plus, when your house is new on the market, you may not be willing to negotiate as much as you will later, once you’ve realized your error.

So what happens if you overprice in the beginning and get more realistic later?

A price reduction later in the listing cycle often gets overlooked. It is just one of many listings, not one of a few new listings. As time passes, you could actually become desperate to sell because perhaps you now really NEED to sell. That is a recipe for receiving lowball offers, so you could end up selling for less than if you had priced the home correctly in the first place.

Agents know this stuff, but many sellers still mistakenly believe they should “price it high” because they can lower the price later, if necessary.

Overpricing a listing is NOT the best strategy.

To get an idea on how much your Brampton or Georgetown house is really worth drop me an email.

Are open houses a waste of time?

Do you see a lot of open house signs in Brampton? The weekend open house is a time-honored tradition in real estate sales, but has it outlived its effectiveness? Quite possibly, according to a new survey conducted by the Real Estate Center at Texas A&M University. The survey results hint at the notion that public open houses may be more beneficial for the agents themselves than for the home sellers.

 

Almost all the agents who responded to the survey (97 percent) had held public open houses, but only 41 percent believe those events help sell the home that’s being showcased. Thirty-two percent believe public open houses attract many potential buyers for other Brampton properties, but nearly three-fourths also believe those buyers are more likely to buy a home other than the one being held open. And 62 percent say most people attending open houses aren’t serious buyers at all.

Also, nowadays everyone is searching for real estate on the internet. An internet lead is more qualified then an open house lead. An internet lead already knows the price of the house, the size, how it looks (from the pictures / virtual tour) before they call the agent. An open house visitor has no idea about any of those things when he walks into the house. Just to be polite they’ll make compliments and usually leave a wrong phone number.

Even though open houses may be of only marginal benefit for Brampton sellers, they aren’t necessarily a total loss for sharp agents. In addition to bringing in buyers for other homes, open houses create opportunities for agents to sign listing agreements with neighbors who stop by to see the open home. Fifty-five percent of the survey respondents agreed with the statement that open houses help them generate new listing contracts. Public open houses also present a security issue for home sellers and agents. “Whether or not to hold an open house is a concern among agents,” says Jack Harris, a research economist with the Texas A&M center. “Agents must be on-site for the duration of open houses. Safety is a growing concern because there is no way to know whether a visitor is a serious buyer, just curious or has more sinister motives.”

Despite the potential for meeting prospects, many agents find open houses troublesome, dangerous and generally a waste of time. The first lesson for home sellers is: Unless your home in Brampton is unusual (i.e., difficult to sell), you might want to spend your weekends enjoying your own backyard, rather than turning your home over to your real estate agent.

A lot of the times you will just get nosey neighbours wanting to see how your house is decorated or people just out for shopping in Brampton will drop by because they want to know how much to price their house when it’s time for them to sell. MLS is the most effective way to get qualified buyers.

For questions on the Brampton or Georgetown real estate market drop me an email.

 

 

Pricing your Brampton house to sell

When the time comes to price your Brampton home for sale, you may be tempted to start with the price you paid for it, add a healthy markup and call it a day. Unfortunately, that strategy is unlikely to result in a true reflection of your home’s market value.

Here are six strategies to help you figure out how much your home is worth:

1. Abandon your personal point of view. How much will a ready, willing and able buyer be willing to pay for your home? Buyers don’t care how much you paid for the home, how many memorable moments you and your family shared in the home, how much cash you need for the downpayment on your next home or how much time and money you’ve invested in your home’s hardwood floors, fresh paint, lush landscaping or other improvements.

2. Get a couple of CMAs. Invite at least three real estate agents to visit your home and give you their opinion of its likely selling price. Ask for a “comparative market analysis” (CMA), which shows the prices of comparable recently sold homes, on-the-market homes and homes that were on the market, but weren’t sold. The on-the-market homes are the “competition” for your home. Ask the agents why each home was included in the CMA and whether any other comparable homes were eliminated from the CMA. Price recommendations based on CMAs aren’t gospel. Some agents will tell you to under-price your home in hope of sparking a bidding war. Others will suggest a flatteringly high price to “buy” your listing only to demand a price reduction a few weeks later. There are many really good agents in Brampton, finding 2-3 to interview wouldn’t be difficult.

3. Do your own market research. Go to open houses in your Brampton neighborhood and try to make an impartial assessment of how those homes compare to yours in terms of location, size, amenities and condition. Assuming all the asking prices were the same, would you buy your home or someone else’s? Also keep in mind that these homes are currently for sale and they haven’t really sold yet. The sold price is what you are after. Ask a local Brampton agent for sold prices of specific properties.

4. Calculate the price per square foot. The average price per square foot for homes in your neighborhood shouldn’t be the sole determinant of the asking price for your home, but it can be a useful starting point. Keep in mind that various methodologies can be used to calculate square footage.

5. Consider market conditions. Are home prices in your area trending upwards or downwards? Are homes selling quickly or languishing? Will your home be on the market in the spring home-buying season or the dead of winter? Are interest rates attractive? Is the economy hot or cold? Will you be selling in a buyer’s market or a seller’s market? Is the local job market strong or are employees fearful of staff reductions?

6. Sweeten the transaction terms. Some buyers have needs that go beyond the bottom line. If you’re willing to close quickly, you’ll attract buyers who want to move in right away. If you can offer seller-financing, your home will appeal to buyers who need to stretch their financial resources. A lease-option can help first-timers who need downpayment assistance. The more creative and flexible you can be in meeting the buyer’s needs, the more success you’ll have in pricing your home to sell.

For questions on the Brampton or Georgetown real estate market drop me an email.

Confused about commissions?

Confused about real estate commissions? You’re not alone.

There’s no question a good real estate agent can be a valuable resource when it comes to buying or selling a home. But how much is that help going to cost?

First of all, if you’re the one buying the home in Brampton ( or actually anywhere in the GTA), it isn’t going to cost you anything. The agent’s commission comes out of the selling price. That means it’s deducted from the amount the seller receives, not added onto the amount the buyer pays. Of course, it can be argued that as a buyer you are indirectly paying the commission by virtue of the fact that it’s included in the price. But following that logic, all homes for sale by owner should cost less than those being sold through an agent, and if you’ve called on FSBO ads in Brampton you know that certainly isn’t always the case.

Second, if you’re the seller, you don’t have to pay an agent anything up-front to market your home. A real estate agent generally doesn’t receive any commission until closing, at which time they will receive the amount stipulated in their contract — commission rates vary from city to city and from agent to agent. But chances are (unless you’re in a particularly hot market) your agent is going to have to work hard to earn that commission by investing a lot of time and effort into marketing your home. And they’re going to have to give a cut of that commission to both their brokerage and the buyer’s agent (unless they represent both the buyer and the seller).

To help take the mystery out of real estate commissions, we provide the following answers to a few of your most common questions.

Q. Who pays the commission?
A. The seller. It is paid out of funds received from the sale of the home.

Q. Does the commission go entirely to the seller’s real estate agent?
A. No. The broker whose firm lists the house sets the commission. The listing broker then offers part of the commission — to the broker whose firm represents the buyer. Both brokers then share their portion of commission with the agents who work with the seller and buyer. The agents’ share may be as little as 50 percent or as much as 100 percent, depending on their arrangement with the broker. If either brokerage is part of a franchise, it may also pay part of the commission as a franchise fee. Bigger Franchisees such as Remax and Royallepage may charge monthly Franchise fees but the agents get the benefit of being associated with the top brands in real estate.

Q. Is it possible to negotiate the real estate commission?
A. Yes. An agent may be willing to negotiate his or her commission in order to get your business. This is especially true if the agent is independent and doesn’t have large operating costs. In some cases, both agents might agree to cut their commissions in order to bring down the price of the home if the buyer’s offer doesn’t quite meet the asking price. From my experience in Brampton I’ve seen and heard everything.

Q. Will I pay less if I buy a house without using a real estate agent?
A. You might be able to negotiate a reduced price. Since the listing broker won’t have to share the commission with another agent and broker, he may agree to a reduced commission and pass the savings on to you. This may also be possible if you use the same agent as the seller — for example, if you toured an open house in Brampton and retained the listing agent. This is called dual agency. Yes there is a chance that if you went to the listing agent direct you might save some money because that buyer’s agent commission can now be negotiated in the price. But keep in mind that at the end of the day the listing agent is still working for the seller. So be sure to double check everything you sign.

Q. Is a real estate agent likely to push me to buy a more expensive home so he can make a higher commission?
A. There isn’t a big incentive for an agent to push you to buy a more expensive home because of the way commissions are divided. For example, your agent may be entitled to 65 percent of his broker’s share of the commission — perhaps 2.5 percent of the sale price. Under that scenario, if you were to buy a home for $260,000, rather than $250,000, your agent would earn only an additional $195. That is really not a money, and certainly not enough for the agent to lose your trust over.

I charge one percent commission for myself and 2.5 percent for the buyer agent (industry standard – especially in Brampton). Therefore, the total commission you pay with me is 3.5% for full service. For questions on the Brampton or Georgetown real estate market drop me an email.

Can you work with multiple agents?

With any service or product, it’s a good idea to shop around before making a commitment. It’s particularly important to find a qualified, knowledgeable REALTOR who can help you sell your home quickly or find the perfect home in your price range. But with so many agent in the Brampton / Georgetown area how do you decide who to work with? and what’s really wrong with working with more then one agent?

Most REALTORs prefer to work under an exclusivity agreement, which means they are the only REALTOR you are working with to handle either buying or selling your home. The agreements are normally for a set period, often two to six months (can vary from agent to agent), and they are designed to ensure the REALTOR is paid for the work they do for you.

Working with more than one REALTOR at a time isn’t usually a good idea, even if you haven’t signed an exclusivity agreement. Since REALTORs work on commission and get paid only when they buy or sell a home, a REALTOR may not be motivated to work hard for you if you’re using more than one.

While working with one REALTOR is good practice, it doesn’t mean you have to use the same REALTOR to buy and sell a home at the same time. Many REALTORs specialize in either buying or selling, so they represent only one half of the deal. REALTORs also tend to specialize in certain communities, and you want to make sure you have one who knows the Brampton community you are either buying or selling in. In these instances it’s usually better for you to work with two REALTORs, one on each side of the sale.

Unless you have signed a contract, you are free to talk with as many agents as you want. But tell them you are doing this up front. It may spur them to work harder for you. Just remember that the best REALTORs are often busy and may not agree to this arrangement. A new agent might have more time available for you and might be willing to agree with everything you say but the downside is you don’t get the expertise, skills, and confidence that can only come from experience.

For questions on the Brampton or Georgetown real estate market drop me an email.

Hardwood flooring 101

The richness of a natural hardwood floor can add warmth and charm to any room. Today’s hardwood floors come in more species, widths and colors than ever before and more durable. With proper care and cleaning hardwood floors can last more than a lifetime and will add value to your home.