Happy New Debt Free Year!

by Darrin DeRoches January 2 - 8, 2014

The New Year is upon us and most people are carrying debt.  Debt is part of everyone’s daily life but how we choose to deal with it could make a huge difference in the coming year.  When it comes to real estate, debt can cause you to lose your house or even stop you from ever owning a home. Depending on whom you work with and how you deal with it, you can come out ahead of debt in 2014.     There is a new company that just started in our area whose main goal is to help you with your debt and real estate.  Hundreds if not thousands of people lose their homes to the bank and debtors every year because they do not know who to call or how to handle the situation.  Debtors force homeowners into foreclosure or power of sales but you can take control of the situation and actually come out ahead. Let me use a recent client as an example.     The client was days away from losing his home, being put out on the streets, and owing thousands of dollars to the bank, credit card companies and debtors. Luckily he called the right person who stopped all of the phones calls and threats and not only saved him thousands of dollars, but he walked out ahead ten grand.  The bank was about to power of sale his home when this company stepped in, negotiated with the bank and his debtors and took control of the situation.  This company is not a “buy homes for cash” or “second or third mortgages”.  They are a group who is comprised of a mortgage broker, real estate broker, trustee and debt counselor.  Individually they can help you with a part of the problem but together they can solve the problem.     The client owed more money than his home was worth and he could not keep up with his mortgage payments, credit card payments and everything else.  The debt counselor contacted all parties involved and put together a consumer proposal which enabled him to pay off the debt once the mortgage broker was able to secure a line of credit on his home.  The trustee went over the whole scenario and concluded that this can go forward once the real estate broker sold the property.  The home was sold for above market price, the debts were then paid and the homeowner walked away with ten thousand dollars in his pocket.     Sixty days prior to this, he was looking to hand in his key to the bank, sleep on a buddy’s couch, still owe tens of thousands of dollars to his debtors, and have no credit and a bleak future.  Working with the right group made everyone happy from the bank, debtors, and credit card companies and most important, the homeowner.  If you or someone you know has a similar situation, give us a call or email and we can connect you with this group who will not only save you from what seems like an impossible situation, they will set you up for a great future – debt free!  Happy New “debt free” Year! 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.

Stated Income Mortgage

by Darrin DeRoches December 26, 2013 - January 1, 2014

If you are self–employed and looking to buy a home in the new year and are wondering how to make it happen – think ahead.  A lot of people nowadays do not have a tax return that states a high income.  Most self–employed people look to show as little income as possible so that they pay very little tax. This becomes a problem when they want to lease a car or buy a property but things are slowly changing.  In the past, you would have to go to “private lenders” who would charge you a high interest and high signing fees to get any type of mortgage.  Today you can get with a bank and negotiate the same mortgage with less fees and lower rates.     I was speaking with CIBC mortgage manager and asked him how one of my clients can prepare himself to buy a property when he has a very low stated income.  There are several ways to accomplish this but the best may be to be incorporated.  If you start a company and have it for over six months, you can then justify to a bank that you are a legitimate business and use their stated income program.  Let’s say you are a plumber who works for a builder and they pay you cash. It would be very hard to prove your income even though you make a good living.  If you started a company that does plumbing or even plumbing consulting and you took that cash and deposited in the company account for three months to show income, you could then prove to a bank that it is a “legitimate company” and state your income. The bank knows your history as a plumber and now sees three months of a company making money; they now take this information and accept how much income you make even though you may show the tax man a different scenario.     In their stated income program you need to show income statements for three months, a license for your business and a business card verifying what you do for this company. This with a 10 per cent downpayment then they can the approve you for an appropriate mortgage.  If you have a license to do anything from a plumber, bartender to a stripper you can create a company and prove your income. The banks realize that you work in a cash business but are able to sufficiently pay a mortgage but you just need to have the right paperwork in order.  So if you are looking to buy a property in the new year, take time to set things in the right direction and in a short period of time you can arrange a mortgage and own your own home. The rates are a bit higher and it will take time and money but it will be worth it. If you need to establish credit it also can happen in the same time period and you just need to make a plan.  Give us a call and we can help you own your home in 2014. 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

Hamilton Is Rising

by Darrin DeRoches December 19 - 25, 2013

Remax issued a report that Hamilton is expected to have the highest appreciation in housing prices in the whole country this year. That is big news when you think about the whole country, not just the province. They say the year will end up with a 7.5 per cent increase in property values and this beats out any predictions from the beginning of the year where most experts looked for a modest increase of two or three per cent. We beat it by double and then some. The average house sale for 2013 will be $387,000 dollars in our fair city. They expect it to break over $400,000 dollars in 2014 and that should be easily obtained. These numbers may not seem like a big deal to those from around the country but the homeowners in this city are making money.     I recently looked into re–finacing one of my income properties and the bank asked me what it was worth and, being a real estate broker, I figured I would go a little lower than I thought. Most people tend to over state the value but I thought $275,000 was a fair number. The appraisal was done and it came out as $291,000. The bank tends to value the properties a little lower than full value since they are lending out the money. If I was to go back year to year on the property it has valued up every year since I owned it. This year alone the property made $20,000 in value plus the amount paid down by tenants.     Five years ago, the average home in Hamilton was valued at $280,000 dollars. Next year this same home will be worth over $400,000 dollars. If this person had negotiated an interest only mortgage and did not pay down one red cent of their mortgage – they just made $120,000 dollars. If they sell it today, after costs they will still walk away with $100,000 for living in a home. If the same buyer bought any type of investment property in the same five years and had the tenants pay down the mortgage, they would stand to make another $30,000 dollars off the mortgage. They actually made $150,000 dollars in five years since they took the chance and bought a second property.     The moral of the story is that Hamilton is going to have the highest return in the country and maybe you should think about taking the money you have made in your home — re–finance it as I am — and invest it into more real estate so that in five years you will be up at least another $150,000 times the two properties (yours and the new one) so you will actually make over $300,000. Give me a call and we can help you find the right property and have one of our mortgage brokers get the equity out of your home and into a second property. 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.

Time To Talk Real Estate

by Darrin DeRoches December 12 - 18, 2013

A popular topic of conversation over the holidays seems to be real estate. Some people like to quote the increase in their homes value and others like to talk about their plans for 2014. The holidays are usually spent with family and after you talk about how your year was, real estate seems to creep into every conversation. This may be a good time to talk to your family about “gifting” funds to help you buy your first home or to “invest” with you in your future. If you are considering a real estate purchase next year, and need a down payment, you can be “gifted” the money from your family. Banks allow your family to give you money for a down payment since they are helping you in your future. These funds cannot be borrowed but a gift of money is fine. Instead of asking for some big ticket item for Christmas, consider asking for your down payment.     Real estate has increased in value in the area of seven per cent for the last couple of years. Ask your family how their GICs have paid out, two per cent, maybe. You can also inform them about using their RRSP to invest in real estate up to $25,000 dollars each. This money will not be taxed when it is used for real estate and the increase in value of real estate will more than cover the money earned in an RRSP. Plus, you cannot live in an RRSP. I am not suggesting that you hit up every family member you meet over the holidays, but a little bit of knowledge can be dangerous. Everyone likes to talk about how their investments have paid off this year and some people have extra money at the end of the year that they are looking to invest with. Again, real estate is paying off and is pretty safe when investing. Consider buying condos in 2014 and you will be able to make a good return on your investment. This past year, certain projects made speculators in excess of 60 grand per unit where others may have only made seven per cent but that is still a better return than GICs and less risky than the ever volatile stock market.             There are a lot of great projects coming up next year and picking the right one can make you a great return. Over the holidays, take time to consider your next move in the real estate market. It may be time to buy your first home, invest in a second property or upgrade your present home. Talk to your family and see how well they have done in real estate over the years and see if they want to grow with you in the future. The market looks strong for the next few years so use the holiday time to consider your next move. Then give us a call to find you the right property in the right area to maximize your biggest return on investment. The right broker can make you a lot of money. 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.

Broom Swept Condition

by Darrin DeRoches December 5 - 11, 2013

When you are selling your property you have to leave it in “broom swept condition.” This means that the property must not have any debris left and must be completely empty.  If you are unable to remove that old desk or forget to take out the garbage, you may be sued.  You would think that most people are happy to sell their house and would leave it in good condition but you would be surprised.  If an agent suspects that the property will not be cleaned or debris may be left, they will set up a walk through on closing day.  This is when they will check out the property to make sure that the seller has removed all belongings and it’s clean before the new owners take possession.     I have had an agent call me on closing day to accuse the seller of stealing the curtains and would not close the deal. After a heated exchange between the agent and myself, I had to explain to her what would happen if they did not close the deal. The reality of the situation was that the curtains were not stolen and they were in fact the exact curtains that were there when they viewed the property.  They were looking for a $500 reduction for the curtains and I had to explain that they were not getting a reduction and if they did not close the deal then I’d be calling the lawyer. I would make sure they would lose the house and their deposit.     You would think it would be a waste of time and energy for a buyer and an agent to view the property on closing day to try to squeeze more money out of a deal.  In some cases agents will split the cost from their commissions to get the deal done.  Good agents will not fall into such a pathetic tactic and actually stop the deal from closing and will make the selling agent pay for the costs plus the cost of wasting their time.  In some cases the seller is actually in default and can be sued for leaving the property in a condition that may have costs involved.  They can stop the closing and the cost may have to be negotiated.  I have dealt with this situation and it can be pretty touch and go.     The property must be in “swept condition” and if they leave a bunch of debris, they will have to pay. I have spoken with sellers daily on  the week of closing with them assuring me it is just a couple more trucks to the dump and it will all be taken care of.  Closing day comes and the house is still a dump. The buyer’s agent calls and we have to work out a deal, call the lawyers and make an adjustments to the closing costs.     Take it seriously when closing a property and make sure you are prepared to leave the property in good condition and maybe even go the extra mile and leave a six pack in the fridge as a welcome gift. 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.

Hamilton Heritage

by Darrin DeRoches November 28 - December 4, 2013

I had the pleasure of attending a panel discussion of the Economics of Heritage Preservation at the Hamilton Club. Every time you hear about “heritage” in a city, you think of stuffy people trying to save old buildings and slow up the progress of new properties. I figured I would enjoy the beauty of the Hamilton Club, some food, and a few drinks and that would make it worthwhile.     The room was filled with a diverse group including the who’s who of Hamilton builders, politicians and city employees. The mayor started off with a warm welcome and positive outlook on the evening’s speakers. The speakers came from Toronto, London, Buffalo, Ottawa, Waterloo, and New Hamburg. They all had a different perspective on saving “heritage properties” and the costs of doing so. Each speaker could have held their own night and gave a lot of information about the pursuit of transforming a heritage property into a successful, profitable property. I was impressed by each speaker and their candor and willingness to share their experiences. They freely showed the cost per foot and the “premium” people will spend to be in an updated heritage property.     You can replace the windows with replicas for a lower cost than removing, restoring and re–installing the existing ones. The costs, preservation and even landfill ethics when it came to windows was discussed. This all just proved a point as to where does heritage take over function and costs. I was most impressed with Clayton Smith from Commercial Realty Group who is, in my opinion, doing restoration the right way. He is taking underserved properties in downtown Toronto and restoring them to their glory. I spoke with him over a beer in the meet and greet and his openness to share the real costs and the higher returns he gets from his properties really drove home the message of the night.     Take an old building, update it to today’s standards but keep all the history in place. I always thought that a “heritage designation” would hurt the process but listening to the discussions throughout the night, everyone is happy to have a building saved and repurposed properly. I walked away with a new perspective and a kind of excitement to see what Hamilton has to offer with our old buildings and our builders restoring them. Stinson School, Dundas School and the Royal Connaught are all going to be proof that restoration and heritage will bring great profit and a greater pride in our city. I applaud everyone who was involved in the night and look forward to the future of our heritage! 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.

Avoid The Media Hype

by Darrin DeRoches November 21 - 27, 2013

As the year is coming to an end the experts are starting to make their predictions for the Canadian Real Estate Market. We are being warned to raise our interest rates from a European council based in Paris who believes our market will no sustain its present strong increases. They then go on to predict our market will increase from 2 to 3 per cent in the coming years?  Are they really looking to help themselves by asking us to raise our rates?  Then you read about this “bubble” coming in the market.  A “bubble” happens when there is too much inventory on the market and not enough buyers and it will finally burst and the market is flood with lower priced inventory to try to right itself. You read about the Toronto and Vancouver markets where they are building condos at a high rate and many are sitting empty. I myself was in Toronto this weekend and everywhere you look a new condo is popping up. All these glass towers may become Toronto’s problem in the future but they are more concerned about the glass pipe right now.      So how do you know what is real and what is just media hype? Stop believing what everyone is writing. But of course you are reading my article right now so what makes me right?  I look past all the media hype and the company slogans. I am involved in real estate in market daily. I speak with real estate agents, brokers, banks, lawyers and credit councilors weekly.  These people are dealing with the market and these are the real indicators.  This time of the year is slow for real estate, so you start to look ahead in to the New Year and figure out what is going to happen.  It has been a strong year for real estate and Hamilton is moving at a good pace. There are investors coming to town.  Companies are relocating. A good amount of “Toronto buyers” are buying in Hamilton. The new GO Station is coming next year and sure it will have some impact but not as strong as “all day” trains. All this “growth” shows a strong movement in the coming years.     Hamilton’s real estate market has been moving upward for the last fifteen plus years. We have kept up with the pace of the market but lately we are now on top of this growth. I would not say that Hamilton’s real estate market is “hot” or the “next best thing” but who wants to be that? Warren Buffet invests in strong, steady and robust companies and that is what Hamilton is right now. Ambitious City is what is being thrown around right now but I believe strong and steady will always win. Throw in a little ambition and you have a great future in the market within a great city!  Lastly, Oskee Wee Wee — Tiger Cats — bring home the cup!  It would be great way to finish the year at being # 1. 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.