First Time Buyers

by Darrin DeRoches May 2 - 8, 2013

I have written about first time buyers before but every time I work with a new client that has never bought before, I learn something new. First time buyers may be just as informed about real estate as other buyers but unique questions always come up and the interesting part is that the questions usually come from friends and family. The first time buyer has to stop listening to everyone else and trust their own instincts. The dumbest questions are always from the people giving them advice and never from the buyer themselves.     This is why I usually put a first time buyer with a Mortgage Broker so that they can ask all the questions and get the banks working for them. I have seen too many banks take advantage of their naivete and sign high rate mortgages with bad terms because the buyer has “blind faith” with their bank. They usually say “I have been banking with them since I was a kid” So what! This is the exact reason why they will hit you with a high rate and finally make money on you since they have given you a free account for years. Think about it! Another problem that happens with a first time buyer is moving too slowly. They listen to their friends who say you should look at “twenty to thirty homes” before making a decision. Wrong! The right home, location and price are the deciding factor not the number of homes you look at. You can miss out the best deal waiting to find the “perfect home”. Most are afraid if they move fast they will be ridiculed by their family. If your family’s last name is Trump, then maybe they can give you advice, otherwise listen to your broker.     That brings me to the most important decision – picking the right broker. First things first – you are probably buying the most expensive thing in your life and picking the right broker can make or break your financial future. Just because your cousin Johnny just got his real estate license does not mean he is the right person for the job. How do you pick the right broker? Ask yourself these questions: Has the broker been successful in buying real estate for themselves? Are they full-time  real estate brokers? Are they approachable and take time to answer questions? Lastly, have they been successful in winning against multiple offers? Anyone can write up an offer but it takes the right broker to write up the “winning offer”. Even if you are not in competition, the way you write an offer can make a deal a steal! Time after time I have clients excited about buying their home and getting it for a price they cannot believe.     Listen to your gut, move quickly when it is the right home and most importantly pick the right broker. Business is business and family is there to support you, but when buying your first home – go with an experienced professional! 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.

How To Approach Downsizing

by Darrin DeRoches April 18 - 24, 2013

Downsizing can be a hard thing to do but if you approach it the right way it can be the right answer. People have to purchase smaller homes for a variety of reason but the main two are divorce and retirement. Divorce usually means a split in income and the ability to maintain the matrimonial home can be difficult. The two parties need to buy new homes that they can afford and keep their children in the same school and also fit all their belongings etc. The reality that the house will be smaller and lack all the bells and whistles is usually hard to come to terms with. A recent client of mine is going from a $500,000 home into a $250,000 home but wants a $300,000 dollar home. The problem is the size and location of the new property and the reality is that their income will only support a smaller home. The process can be very emotional and sometimes it is hard to come to the reality of their future. They need to be honest with themselves so they do not become house poor. My advice to them is to be brutally honest and buy an affordable property and if in time their financial standing improves, their children grow older and move out then they can reconsider a larger property in two or three years. The most important thing is to own a home and be able to afford it.     The retirement home is becoming more and more needed in today’s market. The population is aging and they require different things from their home today than they did 10 years ago. Most people require a bungalow where everything is on one floor. Laundry, bathrooms, bedrooms all need to be on the same level and their family home usually becomes too large and hard to handle. They have options and can even consider “retirement communities” but the majority of clients wants to maintain their independence and do not want to pay condo fees. I have found the best answer is one floor freehold townhouses that are mixed in communities with all different age groups. These properties are not as easy to find but they are the best option since they still have the feel of your own home but with the comforts of a community.  The grass cutting, snow removal and the ability to live independent and safely on one level is what you want and to be able to sit on your porch and watch the world go by is what you may need. This way you are able to still be involved without be separated from your community.     When downsizing, one must really look at what they need today and in the near future and figure out what works best for them emotionally and financially. Get rid of all the clutter, simplify and enjoy the next chapter of your life while staying in your community. It may be hard to find the right property but by using the right broker you can certainly improve your chances. 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 mail@uniquerealty.ca.

There's Mold & There's Mold

by Darrin DeRoches April 4 - 10, 2013

This week I showed a four bedroom house with all the must haves to my client and she loved it and wanted to make an offer. Sounds good but there was one problem – there was already another offer on the property. Most agents would just give the old “oh well, we will find you something else” but my client wanted this house and I have been showing her homes over the last three months and this was the first one she loved. I called back the agent and asked about the other offer. He explained to me it was only good until Monday and I was surprised about the quick time period and it was a holiday so banks are closed – so what was the issue?     I asked a couple of poignant questions and let the agent talk and talk until he finally revealed a possible mold issue. I asked to be kept in the loop. Monday morning at 9am I got the call that the deal had fallen apart. I got an offer written up and by the end of the day my client had her dream home. We checked the report and saw the mold and also found the cause which was that the vents were covered up once the new siding was installed. A simple fix under $100 and the mold will be no more. We secured the property for less than the other offer and we can now close on a great home for my client. The mold is being removed and the venting problem will be fixed before we take possession of the property – simple fix and moving fast got us a deal and more importantly a great home for her family.     Once a client hears about mold, they usually run from the property but 90 per cent of mold issues are minor and easily fixed. The sellers were totally freaked out over the mold since their children are living there but then they saw the results of the inspection stating that it was minor and no health problems existed. Inspectors always love to scare clients with mold but once the shock wears off and you realize how simple the fix is you can use the issue to your advantage. I had buyer ask for $2,000 off the price to fix the mold which the seller fixed with a dollar fix of bleach and a couple hundred dollars for the re–inspection to prove the mold was removed and the problem fixed.     Obviously if there is a “big mold issue” it can be a large cost and people in space suits will take over the home to correct the issue. These issues come from years of neglect, leaking roofs, pipes, windows etc. These mold issues have to be dealt with properly and with the right professionals. When you ask these same professionals about the mold they will tell you every home has some type of mold but less than 10% have a “real issue”. 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 mail@uniquerealty.ca.

Condo Investor

by Darrin DeRoches March 28 - April 3, 2013

The big move to Hamilton is constantly being talked about and is it really true? There is a property in a sketchy area of Hamilton that is promoting an entire block available to build a new apartment tower since Hamilton is a having an influx of people moving here. All the papers and magazines are writing about this huge movement and there are examples of people moving here but how many and why? Condos are going up and more are in the pipeline so a new tower geared towards rentals makes sense or does it?     There is around a 3.5 per cent rental gap in Hamilton and if you believe statistics it is considered low in comparison to other markets. We are the best place in the country to invest in real estate right now so all the indicators show we will be in need of more rentals. My only question is when exactly are the droves of new Hamiltonians supposed to show up? I personally have written about all the inquires and excitement about our city and even made fun of real estate agents who mock the new condos as “who the hell are going to live in them?” but you still must wonder – when?     I believe the new influx of condos will not only bring more people to our city it will bring in the “condo investor”. These people have bought and sold condos in Toronto, Vancouver and Montreal where they buy multiple units with the sole intentions of selling them for a profit when the project completes. It is a pretty simple way to make money over a short period of time. They buy at the lowest point before the project begins and in a couple of years when the project is actually built they make the increase in value. This increase can be a good 20 to 40 thousand dollars an a average unit. Hamilton had a 7 per cent increase in value in the last two years, with this and buying first and then selling high, money is to be made.     People always ask why there are units for sale once a project completes – it is the investor. The only problem with this is sometimes the units will not sell and the investor then puts them up for rent. A new project in the west end did just this and you can rent a condo for around $1,300 a month since they are unable to sell – right away. This influx of condos and potential rental units into our downtown market is most likely more than we will need when it comes to quality rentals. Let’s be honest there are not a lot of people who can afford to rent a $1,300 dollar condo and save enough money to eventually buy their own home. If you can afford that rent you can also afford to buy the condo itself or a great home in our city. We are still priced affordable compared to everywhere else so the investor may be careful jumping into our 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 mail@uniquerealty.ca.

The Phones Are Ringing

by Darrin DeRoches March 21 - 27, 2013

Spring is here and the phones are ringing. It may still be cold outside and the flowers are not blooming but the spring market is starting strong. I received four different calls about income properties this week and I do not have any listed. I also had two calls on a commercial property that is for lease but two different buyers want to purchase a property that is not listed. The real estate investor is looking to Hamilton in a big way.     The inquiries are for duplexes, students, triplex and commercial spaces. The questions are all the same – positive cash flow and good tenants. Hamilton is one of the only cities left where you can put down 20 per cent investment and have a property pay itself off and still have a positive cash flow monthly. The first time investor is always a challenge since they believe they will make a ton of money with very little work. A good property will make you money but the right tenants will make your life easy. Every type of investment has its challenges and a little bit of wisdom can go a long way.     Most people think the more rooms in a student house the better the return. Eight rooms at $400 each is $3,600 a month income so buy a property in the mid $400,000 and it all makes sense. I would suggest you get a student house with six rooms in the mid $300,000 and make more money.  Why would I suggest to a buyer to purchase a cheaper home and make less commission? A proper set up home with two baths and 6 rooms is easier to rent or split between groups so you can charge a little more for more space and a better set up. That six bedroom property will bring in $2,400 to $2,600 per month and be fully rented, compared to an eight bedroom house you cannot charge the same price for the attic or basements and it is next to impossible to find a group of eight who want to live together. An eight bedroom house will likely bring in $2,800 to $3,200 per month on average and the difference may pay the mortgage difference but it is more likely to be a challenge. The larger homes tend to turn into “animal houses” and bring a lot of challenges.     Duplex and triplexes are great investments but when you are buying those you have to really consider the locations and what type of tenant and rent it will bring. A rule of thumb is if they do not have long term tenants in them, there is an issue. If the seller is selling this great investment but cannot bother to have put an ad on Kijiji and fill his house it is a big red flag. Pay more for a property in a good rental area with higher rents and you will tend to have better clientele. Investing is not just about the numbers it is also about the location, people and history of the 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 mail@uniquerealty.ca.

The Market Is Changing Fast

by Darrin DeRoches March 14 - 20, 2013

The MLS is a great tool to shop for your dream home but remember your agent’s knowledge and expertise is worth more than a website. In today’s market people believe they can shop online and pick out a house they want, take a look and then make an offer with the listing agent. So why use your own agent? You think that you can even save money doing it that way. The problem is you really do not know what the market is doing and the agent selling the property is working for the seller not you.     I have clients who look at the MLS every day and send me the listing asking me to set up appointments. I spend more time trying to explain to them the problems with the property than actually picking the right properties to view. I know what they are looking for because I’ve listened to their requirements but they still want a showing based on a picture. The problem is they are wasting their time and also getting frustrated with the properties not living up to their expectations. They finally got all their paperwork together so I can finally take the lead and show them what they need and not just a good looking pictures.     The MLS can open your mind to the market but a real estate agent can take you to the right properties and open the doors to your dream home. A real estate agent has access to the properties before they hit the mls and if the right property hits the market it will sell even before the average buyer sees it online. The spring market is just around the corner and having an agent working for you can make the difference between buying a home and chasing after the wrong property. You can also beat most of the competition if your agent is on his toes and gets you in before the property hits the MLS.     The best way to get ready for the spring market is by using the MLS to do your window shopping but you have to have your agent ready to move fast or faster than the market. I am getting people calling me about a property that is for lease but was up for sale last year. There are not enough quality properties on the market and there are buyers looking to find something that is not even there. Then they want a great deal on it. I hate to tell them that the market is strong and prices are going up and the inventory is going down. In simple terms, you are going to pay top dollar for real estate in our market. There is a lot of action and buyers with money ready to buy. Then there are people looking to lease and do not want to pay the asking price. The smart landlord is holding out for top dollar because available space is limited. The market is changing fast – pay attention. 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 mail@uniquerealty.ca.

The Right Mortgage Broker

Mortgage Broker

by Darrin DeRoches March 7 - 13, 2013

The right mortgage broker can save you a ton of money. When buying a house most people are so excited that they will sign just about any mortgage to get the money so they can have their dream home. The majority of people just walk into their bank and ask for a mortgage where they are given a percentage that is posted by the bank. They figure it is the best deal and sign away. The problem is it usually is not the best deal for them but rather for the bank. This is why everyone should always consider using a Mortgage Broker for their renewals, new mortgages and re– finances.     The only problem with this is to find the right one. Usually when buying a home your real estate agent works with several brokers. Some are good at customer service and some are good with “getting the job done.” So you have to be careful who you go with since they are handling the biggest purchase that most people make in their lives. Just because they can get the job done does not mean it is worth signing your life away. I had an unusual need for a mortgage for a client of mine so I called the mortgage broker to see if they could get it done.     The client has a home that is fully paid off and is currently up for sale and is worth $280,000. They wanted to buy a new townhome that was worth about $170,000 today before the original home sold. Most people would just say to get a “bridge mortgage” from your bank. Simple enough but the bank said no. The original house is worth over $100,000 more than the house that they wanted to purchase—why would the bank say no? Banks would do the deal but it would require a lot of paperwork and time to get it done and when pressed on this their answer was simply no. So when we asked the mortgage broker to shop it around to lenders, he did.     The problem was the client was in–between jobs and the banks were worried that they would be unable to pay the carrying costs. The mortgage broker kept getting declined from several banks so he looked into private financing. This is where he got a yes! Only one problem—they wanted $16,000 to do the deal and then a monthly payment which was about double the posted rate. It would have cost the client about $20,000 to buy a home before selling theirs. Of course we declined the deal but the mortgage broker found another private lender who did the deal for under $5,000 and a reasonable carrying cost.     Big difference from 20 grand to 5 grand and a yes from a definite no from the banks. This was all completed in less than 48 hours and we closed the deal early. Working with the right people not only saves you a ton of money but gets the job done—the right way! If you need a qualified, honest mortgage broker drop me a line and I will give you his contact information. 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 mail@uniquerealty.ca.