Wednesday 15 October 2014

Mortgage News

Mortgage News


by Darrin DeRoches
September 18 - 24, 2014
It’s a busy time of the year for the real estate market and mortgage brokers and banks are hustling and bustling.  I recently spoke with a few mortgage specialists and a few comments got me thinking.  I was surprised to hear people are still shopping around their deals.  Of course you want the best rate out there even though the rates are so low — why not get the best.  Sometimes it does not come down to the rate — it comes down to service.

    It is really easy to go online and email several brokers looking for the lowest rate.  Sometimes you might save a few bucks and you might even believe you got the best deal but you may be sadly mistaken.  Personal service and creative ways to structure a deal can not only make or break a deal it can save you tons of money. An example of this is a person was bought a new house and went in firm with no conditions even though they had to sell their house to make the deal work. Weeks pass and their house does not sell. Six days to closing they call the bank and inform them about the deal and say that they need money to buy the new house. The bank had spoken with them two months ago and laid out a plan but they figured it would all work out and ignored the plan from the bank.  Luckily they have enough equity in their home they can arrange a short term mortgage with a line of credit and virtually “bridge” the two mortgages. Sounds good and they can move forward. The problem is that is comes with higher rates, costs and fees and will end up costing about five thousand dollars. Had they kept the personal contact with the broker, and not shopped around, he would have been able to set a line of credit for a new mortgage at a low rate and save them thousands and thousands of dollars today plus more in the future.

    People have to realize that some banks can do things others cannot and that some brokers will do some things others will not. A client of mine was told they are approved for half a million but only spent $400,000 but the broker could not “bridge” finance. This seemed a little out of sorts to me so when I presented it to their bank they were approved for a bridge mortgage in hours. Fortunately we did not need the bridge and their house sold in the first week but if we did need it and listened to the broker they may have lost their dream home.

    Work with those who work with the right people and you will not only get the best rates you can make deals others cannot.  When it comes to money — stop shopping on line — renew or create your relationships with lenders and brokers.  A great real estate broker knows when to call bullshit and help you find the right bank or broker!   V

    Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca

Be Ready To Sell

Be Ready To Sell


by Darrin DeRoches
September 11 - 17, 2014
When selling your property you must have “real expectations”.  The biggest mistake is to list your property at a price that you believe you need rather than the price that is right.  A real estate agent cannot create showings for your property out of thin air; the property has to sell itself. There are tricks to sell properties but tricks can be exactly that — tricks. 

    You can create urgency or inflate a property’s value but in the end everything you do to sell your home will have to answer to someone.  If you overprice your home and someone actually pays the exuberant price one would believe they will be laughing all the way to the bank but the bank may be laughing at you.  In today’s market banks are requesting more and more appraisals because the property may sell to some over eager buyer but the bank will not lend the money just because the buyer was “tricked” into the price.  Banks are approving a mortgage but when it comes time to hand out the money they are asking for appraisals to insure the numbers add up.  If they don’t the bank will require the buyer to come up with more money or they will outright refuse to provide the mortgage.  The mortgage clause use to be all about the buyer being approved but it is leaning more towards the property being approved. There was a time banks would not lend in certain postal codes but now they will not lend in certain price ranges in certain areas.

    Another real expectation is that it still takes on average about 45ish days to sell a property. That is an average so your property could be on the market for months if you are not realistic.  Everyone reads about how hot the market is but that does not mean your overpriced, bad location, beat up house will sell in days.  Sellers like to blame their agents when no one calls about their house but maybe it has to do with price and location.  You have to be realistic and work with your agent to get your house sold.  Instead of complaining about the progress, make some changes and create some momentum. 

    Be realistic about your property and listen to your agent.  It is easy to just keep dropping your price to get a property sold but it does not always work. You hired an agent to sell your property so maybe you should listen to them and follow their lead and experience.  Timing has a lot to do with it.  The last three weeks have been a little slow due to school, work etc. but the market is still strong and will be moving fast in the next month or so.  Be ready to sell now or you will find your property sitting on the market while everyone else is on the move!  V

    Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca

Pricing It Right

Pricing It Right


by Darrin DeRoches
September 4 - 10, 2014
I may repeat myself a few times in this article but one of the most important things to do is price it right. The market is moving fast and if your property sits too long no one will pay it any  attention. Pricing the property right the first time can make a huge difference in the final outcome.  I did a deal this week where the property was priced at $415,500. The property was on the market for over a month and we were pretty surprised when we viewed the property. It needed some work but you would have thought it would have had some action on it during the month. My clients were really interested in the property since it was on a great street and had all the must haves on their wish list. So they wanted to do an offer and we started to negotiate.

    I spoke to the neighbour and he gave me all the background on the property and what he thought it was worth.  A few things he told me were just his opinion but some of the information was very valuable.  I went back to the office and did a history on the property and then discussed our game plan with my clients.  We knew the house needed some work and factored that into our offer and then pushed the agent to do an offer on Labour Day.  Most people are relaxing and getting ready for the school year but we were trying to buy a property before the market starts to heat up once again.  The property had been reduced by ten thousand but it still was not priced right.

    The only reason no one had bought the property was it was over $400,000 dollars. If you look at the MLS site you can pick properties in increments and anyone looking for a house at $450,000 dollars would not consider this property since it is a $400,000 dollar house.  The people who can afford a $400,000 dollar house did not even see this property since it was priced at $405,000 and did not come up on their search.  Most real estate agents do not do searches over the approved amount for their clients since they may fall in love with them and then not be able to afford them.  The only real issue with this property was it was priced wrong.

    We had spoken to the agent and knew another price drop was imminent and we did the deal fast so the house would not come on the market under $400,000 and draw attention. We brought an offer far under the asking and settled five thousand less than my clients were willing to pay.  If the sellers had priced the property originally at $399,900 they would have had more interest and sold it for a higher price faster. Knowing your market and doing your homework can be the difference in this real estate market. V

    Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.