By Steve Bucci | Bankrate.com

Dear Debt Adviser,

I am a first-time homeowner and just received a $5,000 tax refund. Is there a way to use it to lower my mortgage

payment (not the length of time I pay)?

-- Marci

Dear Marci,

As a first-time homeowner, I'll forgive you for getting a $5,000 tax refund. Many people don't realize the great tax

advantages of owning a home until after they purchase one. A rent payment of $1,500 a month is much more

expensive than a mortgage payment of $1,500 because almost all of the mortgage payment is deductible from

your taxable income, thanks to the mortgage interest deduction. The result for you is a sizable windfall.

 

You do have a few options to lower your mortgage payment: one short-term, one medium-term and one long-term.

Let's start with the short-term solution.

 

You could place your $5,000 tax refund into a savings account, and withdraw a portion of it each month to help with

your mortgage payment. For example, if you wanted to have a slightly lower payment for the next five years, you

could withdraw $83 each month from your savings of $5,000. So if your mortgage payment is currently $1,500, you

would need to use only $1,417 of your income to make the payment. Your savings would make up the rest. (You

could drastically reduce your mortgage payment by $416 per month, but your $5,000 in savings would be gone in

only one year.)

 

The long-term approach to lower your mortgage payment is to research refinancing opportunities. Contact your

current lender and a couple of competing lenders, and find out what terms you would qualify for in a refinance of

your mortgage. Be sure to do all your loan shopping within a 30-day period so the credit inquiries will count as just

one, for credit-scoring purposes. Once you know what terms you can expect, use Bankrate's calculator to

determine if refinancing will meet your goal of lowering your mortgage payment.

 

A medium-term option is to adjust your withholding so your annual tax refund is smaller -- only $500 or so, instead

of $5,000. Ask your human resources department at work to increase your personal allowances so that about

$3,500 less is taken out over the course of the year. You'll then have an additional $300 or so each month after

taxes that you can use to further lower your mortgage payment.

 

If you are trying to lower your payments because they are too high for you to comfortably afford, and you may be in

danger of missing a mortgage payment because you don't have enough income to consistently pay what you owe

each month, seek help now. The nonprofit Homeownership Preservation Foundation operates the Homeowner's

Hope Hotline at (888) 995-HOPE, which can put you in touch with a housing counselor. The counselor will help

you decide how to best solve a mortgage payment problem and avoid home foreclosure.

By Brian Morton, Vancouver Sun

Bob Rennie, who spoke to a full house about the state of the Vancouver property market, said aging baby

boomers with billions of dollars in equity will become a much greater force in the condo market as they

increasingly downsize from expensive single-detached homes, and put money aside for their children.

Bubble? What bubble?

 

That’s Vancouver condo marketing guru Bob Rennie’s take on concerns that the region’s real estate market is

headed for a meltdown because of sky-high prices.

 

“It’s not a bubble,” said Rennie, director of Rennie Marketing Systems, in an interview following his keynote

address to the Urban Development Institute Thursday.

 

“With the 80 per cent of the [condo] market that traded in [Metro] Vancouver last year, you only needed a household

income of $52,800 to purchase. That’s not a bubble story.”

 

Rennie, who spoke to a full house about the state of the Vancouver property market, said aging baby boomers

with billions of dollars in equity will become a much greater force in the condo market as they increasingly

downsize from expensive single-detached homes, and put money aside for their children.

 

He also noted that the number of people between 55 and 64 will increase 38 per cent between 2009 and 2018,

those between 65 and 74 will increase 56 per cent, while those between 35 and 54 will only increase by 4.6 per

cent.

 

Because of that, he said, developers should shift their thinking into providing more larger one-bedroom condos to

accommodate the downsizing boomers.

 

“I believe the leaner, meaner baby boomer is the game changer,” said Rennie. “Baby boomers are sitting on $88

billion in equity in Greater Vancouver and they’re looking at their retirement years. That equity will be freed up over

the next 15 years [and] when they sell their home, they’ll buy down and help their kids.”

 

Rennie said there were about 19,000 condo sales in Metro Vancouver in 2011, and that while the average price for

80 per cent of those condos was $315,000, the overall average price was $427,000, which required an income of

$66,000 to finance.

 

Rennie noted that proximity to transit is paramount for today’s homebuyer.

 

“In the ’70s and ’80s it was location, location, location. In the ’90s through mid-’2000s, it was timing, timing,

timing. And from here forward, it’s transit, transit, transit.”

 

He also said that planning should be conducted more on a regional basis in order to make homes more

affordable.

 

Meanwhile, Tsur Somerville, director, centre for urban economics and real estate, Sauder School of Business at

the University of B.C., said he also doesn’t believe there’s a real estate bubble in Metro Vancouver, largely

because there’s not an explosion in housing starts – typical for real estate bubbles.

 

Somerville said that while the affordability numbers have been skewed by the higher end parts of the market –

“there were double-digit increases in Richmond, Vancouver, Burnaby and West Vancouver, with single-digit

increases everywhere else” — the region is still very expensive compared to other cities in Canada.

 

“Compared to other cities, that income [$52,800] gets you a house. Here, it gets you a condo. That means we’re

expensive, but that’s the reality of what we are.

 

“It’s still an expensive place to live, but it’s not unaffordable. You’ll end up smaller and further away from the core.”

 

bmorton@vancouversun.com

 

© Copyright (c) The Vancouver Sun

The Bank of Montreal says the drop should continue for a couple of years

VANCOUVER (NEWS1130) - Home prices will fall over the next couple of years in Vancouver according a report from

the Bank of Montreal.

Year-over-year home re-sales are down by more than 13 per cent in April and sales in the first four months of this

year compared to last year are down 20 per cent.

"I can best describe it as a softening of a market," says BMO Mortgage Expert Carolyn Heaney.  "In the last couple of

quarters we've seen prices in Vancouver escalate to almost 163 per cent of what they originally were, so I would say

we had a bit of an inflated market.  What we're seeing now is those prices are softening and it's a healthier market."

BMO Senior Economist Sal Guatieri says the price of homes in Vancouver and uncertainty over long-term mortgage

rates are creating a buyer's market.

He also says rich foreign investors who have driven up real-estate prices in Vancouver are now looking at cities that

are less expensive.

"The sizzle is coming off the Vancouver housing market," Guateri says.

"I think it's a good opportunity for buyers to take their time and look at the market," Heaney says.  "It's also a great

opportunity for purchasers to get in to their banks, see what they can afford and maybe look into longer term rates."

The report also says condos are being overbuilt in Vancouver and that is curbing demand.

Professional, single women are a growing force in the local real-estate market, and they know what they want

By Gail Johnson - The Georgia Straight

Inexpensive home pick-me-ups to give your place a whole new feel

 

By Tiffany Mealia - She’s So Savvy.

 

Feeling like it’s time to freshen up that fabulous place of yours, but don’t know where to start? Have you looked

through the design magazines, cleaned up your drool, and thought - I will never be able to afford any of that!

 

That may be true, but design doesn’t need to mean decadently priced. Might we suggest a few small and

inexpensive pick-me-ups which can be done for next to nothing and will give your place a whole new feel?

Consider the options…

 

1. Throw pillows: These can be found at any department store or discount home store. Often found on sale, 

   throw pillows are a great way to put some colour into a space without committing too much to any one 

   design.

    

2. Bringing outside items…inside: Think pinecones and fallen branches in the winter; sturdy greens and 

   pussy willows in the summer. Grab a pile of any one of these items and toss them in a glass jar or vase 

   (go for that scattered, vintage look). If you feel like getting crafty, head to a craft store and pick up some 

   iridescent glitter. Sprinkle that over your items and voila - something that looks like it came straight from 

   the gift section of your local boutique.

    

3. Paint: If you do it yourself, this can be one of the cheapest ways to create a drastic change in your home. 

   For big impact, grab a gallon of paint and go at your walls! Or try painting just an accent wall; a gallon of 

   paint is likely all you need.

    

4. Candles: We associate most memories with scents, so if your place smells warm and cozy, it will likely be 

   reflective of wonderfully warm memories. Find a scent you like, light the candle and relax

    

5. Create a scene: Group books of similar colours, seashells, rocks . Put them in a decorative bowl, stand a 

   framed photo as the backdrop, and drape a throw over a nearby chair or bench. It’s about creating a 

   tableau (think, artful clutter).

    

6. Rearrange your furniture: This one doesn’t cost a dime! Designers are known for switching up their 

   furniture - from room to room, or just rearranging the same pieces in a different configuration - to keep 

   their home and their inspiration fresh. See if it can work for you too.

By Bill Bischoff | MarketWatch

 

Prices in many real-estate markets may be close to bottoming out. We hope. So the old adage about buying low

may be something to consider if you have a kid who will soon be heading off to college. The idea is to buy a condo

for the kid to live in while attending school. That way, you’ll avoid paying through the nose for a dorm room or

apartment with no hope of any profit. And if you buy a condo that has some extra space, you can rent it out to your

kid’s friends and offset some of the ownership cost.

 

Lots of parents have made good money by following this strategy for the four or five or, God forbid, six years their

kids spent in college and then selling the condo after graduation. Of course, the longer you can hold onto the

property, the better the odds of cashing out for a profit. The other key factor to consider is the tax benefits. Here’s

what you need to know.

 

Deducting college condo ownership expenses

The tax rules generally prevent you from deducting losses incurred from owning and renting out a residence that’s

used more than a little bit by you or a member of your immediate family. However, a favorable exception applies

when you rent at market rates to a family member who uses the property as his or her principal home. In this

case, you can deduct tax losses from the rental activity (subject to the passive loss rules, which I’ll explain later).

This beneficial loophole is open for you if you buy a condo and rent it out to your college-going child (and roomies,

if any) at market rates.

 

You can deduct the mortgage interest and real-estate taxes. If you pay mortgage points, you can amortize them

over the term of the loan. You can also write off all the other operating expenses—like utilities, insurance,

association fees, repairs and maintenance, and so forth. As a bonus, you can depreciate the cost of the building

(not the land) over 27.5 years, even while it is (we hope) increasing in value.

 

So where will your poverty-stricken son or daughter get the money to pay you market rent for the condo? The same

place he or she would get the cash to pay for a dorm room or an apartment rented from some third party. In other

words, from you! You can give your kid up to $13,000 annually without any adverse federal tax consequences. If

you’re married, you and your spouse can together give up to $26,000. Your child can use that money to write you

monthly rent checks. Just make sure he or she actually sends the checks and make sure they say they are for

rent. Also, it’s best if you open up a separate checking account to handle the rental income and expenses. Taking

these simple steps will help keep the IRS off your back if you ever get audited.

 

Passive loss rules may postpone tax losses

If the condo throws off annual tax losses (which it probably will after counting depreciation deductions), the

passive activity loss (PAL) rules generally apply. The fundamental PAL concept goes like this: you can only deduct

passive losses to the extent you have passive income from other sources -like positive taxable income from other

rental properties you own or gains from selling them. Fortunately, a special exception says you can deduct up to

$25,000 of annual passive losses from rental real estate provided: (1) your annual adjusted gross income (before

the real estate loss) is under $100,000 and (2) you “actively participate” in the rental activity. Active participation

means being energetic enough to at least make management decisions like approving tenants, signing leases,

and authorizing repairs. You don’t have to mop the floor or snake out the drains.

 

If you qualify for this exception, you won’t need any passive income from other sources to claim a deductible rental

loss of up to $25,000 annually (your loss probably won’t be that big). Unfortunately, however, if your adjusted gross

income (AGI) is between $100,000 and $150,000, the special exception gets proportionately phased out. So at AGI

of $125,000, you can deduct no more than $12,500 of passive rental real estate losses each year (half the normal

$25,000 maximum). If your AGI exceeds $150,000 and you have no passive income, you can’t currently deduct any

rental real estate losses. However, any disallowed losses are carried forward to future tax years, and you’ll be

able deduct them when you sell the college condo. All in all, this is not a bad tax outcome--as long as your losses

are mostly of the “paper” variety from noncash depreciation write-offs.

 

Favorable tax rules when you sell

When you sell rental real estate that you’ve owned for over a year, the profit—the difference between sales

proceeds and the tax basis of the property after subtracting depreciation—is long-term capital gain. However, part

of the gain—the amount equal to your cumulative depreciation write-offs—can be taxed at a maximum federal rate

of 25%. The rest of the gain will be taxed at a maximum federal rate of no more than 15% under the current rules

(which I hope will be extended to post-2012 years).

 

Remember those carryover passive losses that we talked about earlier? You get to use them to offset any gain

from selling the condo.

By Liam Lahey | Yahoo! Finance Canada

 

There's good debt and bad. For first-time homebuyers, knowing the difference between the two and how to

manage debt wisely is a critical step towards owning a home.

 

Repeated warnings from the Bank of Canada and elsewhere that Canadians are overextended on debt might be

keeping some potential buyers at bay. But Rob Macdonald, a mortgage broker with Invis in Vancouver, says the

key to understanding whether or not it's time to buy comes down to planning and how you manage your debt.

 

"One of the biggest mistakes first-time homebuyers make is they get absolutely fixated on what interest rates are.

The interest rate in a mortgage is just a piece of the puzzle," he explains. "Managing the debt through the length of

the term is one of the more important features. Managing your mortgage to avoid payment shock can save you

thousands of dollars versus the best rate you would've got originally."

 

An average mortgage in Macdonald's market (the Fraser Valley neighbourhood in Vancouver) presently falls

between $300,000 to $400,000. Interest rates are terrific today he acknowledges -- a five-year mortgage is at 3.3

per cent currently versus 5.5 per cent just a few years ago.

 

"If you get a low rate today at 3.3 per cent you're enjoying a mortgage payment of around $2,000 a month," he

explains. "Five years from now it goes to 5.5 per cent and your payment jumps by $350 to $400 a month."

 

Chris Kiskunas, regional mortgage sales manager, Royal Bank of Canada (RBC) in Toronto, says to be wary of

the proliferation of personal debt.

 

"Sometimes a few hundred dollars on a credit card doesn't seem like a lot (of debt). But when you also have the

same or a little more on other cards and you total it all up, it can actually prohibit your ability to qualify for as much

as you might on a home," she says. "For someone preparing for first-time home ownership, evaluate your

financial situation and determine what you owe, to whom, and what are the interest rates? Position yourself to

qualify for the most home you can buy."

 

Kiskunas recommends potential buyers take in the big picture when thinking of home ownership, which will help

first-time buyers to get a sense of how much it costs to actually own and maintain a home.

 

"Any financial institution or lender that is going to consider approving you for a mortgage is going to look at the

mortgage principle and interest payments, the taxes on the property and the estimated cost of heating the

property," she explains. "The industry rule of thumb is all of those costs should not exceed 32 per cent of your

gross combined income."

 

Any other debt (credit cards, line of credit, car loans, etc.) should not exceed 40 per cent of your total gross income.

"The mistake that people make is they don't calculate the cost of carrying that home. Beyond taxes and heat

there's gas, hydro, TV and Internet, insurance, and then any other payments you're responsible for," she adds.

"When you want to determine the affordability factor on a home you want to know you have money at the end of the

month to be able to eat."

 

What to do when rates rise?

With current interest rates being as attractive as they are, is it worthwhile to strike while the iron is hot and buy

now? Or is it wiser to remain a renter for the time being? It depends on personal circumstances, Macdonald says,

but if interest rates are going to climb you'll likely face the same hike in the rental market. In short, it's a catch-22.

 

"If you don't buy today for example and interest rates start to go up, what happens is it's less likely more people will

be buying in the coming years. That'll put pressure on the rental market," he says. "That means less vacancy and

then landlords have the ability to raise rates. And if mortgages get more costly for landlords, landlords will typically

download that expense on the tenant."

 

Never too early to starting your research

Perhaps sorting that out comes down to having a discussion with a mortgage broker. But should you wait until you

believe you have everything lined up? Or is it recommended to embark upon the effort much sooner? RBC's

Kiskunas believes the latter is best.

 

"Studies have shown that regardless of the fact that people might feel better educated (about mortgages and real

estate) they still want to talk somebody," she says. "It's never too early to get educated about what you're planning

to do. You can get really good advice from a mortgage specialist whether or not you choose to buy within the next

six months or the next two years. The relationship should start now."

 

As for the all-important down payment, Macdonald says it too is based on individual circumstances. If you're

buying within your means and it's an affordable monthly payment not too far removed from the amount of rent

you're paying, most are comfortable with five per cent down.

 

"As long as you follow a plan and have someone assisting you with managing your mortgage that's taking

advantage of opportunities along the way -- if you were to lock-in for a longer term or an early renewal for instance -

- I don't think five per cent down is a bad thing," he says.

 

However, it's been reported Ottawa is considering raising the minimum down payment for homebuyers from five

to seven per cent in order to stop some consumers from taking on too much debt.

 

"It'd certainly be more challenging for many homebuyers to get into the market (should a hike come to fruition) in

some of the bigger cities," Macdonald adds. "At the end of the day, I don't think it'd be a tremendously bad thing for

Canada. It just means we're a little more cautious as to what our risk might be in the market."

 

If the thought of a higher minimum downpayment is causing anxiety, than it may be best for first-time buyers to

reconsider their purchase plan, Kiskunas  says. "If (Ottawa) shortens the amortization or imposes a higher

qualifying rate from an interest rate perspective, if it's that close to the wire for that individual buyer, then I'd suggest 

that maybe this isn't the right time to buy.

 

"You need to leave yourself some financial wiggle room to help insulate yourself against any changes that might

be brought in like that."

 

In any event, there are online tools that are worthwhile to use in order to gauge the difference between paying a

mortgage and paying rent. CanadaMortgage.com provides an online calculator that draws these comparisons.

So too does the online calculator offered by Industry Canada. Also useful is the Canada Mortgage and Housing

Corp.'s guides to renting a home and buying a home. RBC, too, provides a free, online tool for helping calculate

whether you should rent or buy.

 

Julian Beltrame, The Canadian Press

 

OTTAWA — For most Canadians their home is the biggest investment they’ll ever make — but they might be

surprised to learn you can use if for more than just sleeping.

 

People generally don’t think of their homes as a potential pile of cash in the bank, but experts say it’s something

worth pondering now that home prices in Canada may have hit their peak.

 

In fact, analysts say if finance is the only consideration, conditions now and into next year or so form a seldom

seen sweet spot for using home equity as a type of asset for investment.

 

Why might it be a good time to sell?

 

At about $370,000 average nationally — and just under $800,000 in Vancouver — home prices are already at

record levels. Many observers believe prices are long due for a downward correction of anywhere from 10 per cent

to 25 per cent, perhaps more in some of the hottest markets.

 

“Home prices to income, housing price to rent, all the indicators are setting off warning signals,” said Derek

Burleton, a senior economist with TD Bank.

 

“If you are purely in it for reaping profits, now is not a bad time to sell” before prices drop.

 

The profits from selling a home can be used to build savings, eliminate debt, make traditional investments or,

ironically, buy more real estate — albeit in a different market where home prices are lower.

 

Of course, even if it makes sense financially, selling the family home to rent or move to a less expensive housing

market doesn’t make lifestyle sense for the vast majority of Canadians.

 

Burleton knows how they feel.

“I wouldn’t want to sell my home right now even if I wind up taking a hit on the home price, just because I enjoy

where I’m living and moving is a pain,” he said.

 

While there’s no guarantee of a correction, observers note there are additional signs that the housing market

could cool off in a big way.

 

With ownership levels near a record 70 per cent, demand is expected to wane, making it a buyers market for the

first time in years.

 

And Bank of Canada governor Mark Carney warned last month he was preparing to hike rates, which along with

tighter lending rules being applied by federal authorities could trigger a flight from real estate.

 

In market terms, selling a home at the peak is a way of “locking in” profits accumulated over the past decade of

price appreciation — and tax free if it’s the principal home.

 

Meanwhile, home valuations have been rising far faster than the rent they would fetch since at least 2000.

Canada’s home price-to-rent ratio is well above historic norms and among the highest in the advanced world.

 

That is a hard indicator that homes are over-valued, but also that renting is relatively cheap compared to buying.

 

David Madani of Capital Economics, who anticipates a 25 per cent price crash over the next few years, cautions

that like selling stock shares, timing is always tricky.

 

“We’re dealing with irrational exuberance. We’ve been treating housing like some magical financial asset that is

going to solve all our problems because prices are always going up,” he said.

 

“Of course, when the turn comes, the over-confidence that drove the market up can turn to fear. You are dealing

with emotion … so I don’t believe in a soft landing.”

 

The market is clearly at or near peak, he said, so soon may indeed be the time to act.

 

But then again he felt that way a year ago, he points out, and if households had acted on his advice they might not

have gotten all the value they could from the premature sale.

By Michele Lerner | Bankrate.com

 

You spend a lot of cash when you buy a home. The down payment for your mortgage is only one expense. There

are other outlays: appraisal, inspection, deposit, cash reserves and more. The costs add up.

 

"How much cash you'll need depends a lot on the size of your home purchase and how much you intend to

finance," says Tim Ross, president and CEO of Ross Mortgage, based in Royal Oak, Mich.

 

Here are other expenses homebuyers incur (and have to save up for).

 

Earnest money deposit. Hopeful buyers need to be prepared with cash for a deposit to attach to their purchase

offer. The amount of the deposit varies, depending on local custom, the amount of your down payment and size of

your home purchase.

 

Ross says deposits can range from a flat fee of $500 to 1 percent or even up to 5 percent of the purchase price. An

experienced Realtor can advise you on how much to offer.

 

Home inspection. "Every buyer should have a home inspection, usually within 10 to 15 days after the contract is

approved," says Dyan Pithers, a sales associate with Coldwell Banker Residential Brokerage in Tampa, Fla.

Costs vary; Pithers says the home inspection can set you back $325 or more. In Bankrate.com's annual closing

costs survey, pest inspections (which are separate from home inspections) averaged $119 in 2011.

 

If you are not on county or city water systems, a well inspection can cost $400, Pithers says.

 

Appraisal. In Bankrate's annual closing costs survey, the average appraisal cost a little more than $400 in 2011.

Buyers sometimes pay for the appraisal when it takes place, and sometimes the fee is included in the closing

costs paid on settlement day.

 

Down payment. "While some low- to moderate-income borrowers can find low down payment programs and zero

down payment programs, in general, most people need at least 3.5 percent of the purchase price as a down

payment on (a Federal Housing Administration) loan," says Michael Jablonski, executive vice president and retail

production manager for BB&T Home Mortgage, based in Wilson, N.C.

 

Veterans Affairs loans, available to veterans and active-duty military families, have no down payment

requirements.

 

"For conventional loans, a minimum down payment of 5 percent is acceptable for borrowers with excellent credit,

but they will also have to pay private mortgage insurance," Ross says.

 

Some conventional loan and jumbo loan borrowers need to pay as much as 20 percent of the purchase price as a

down payment.

 

Mortgage origination fees and title insurance. Loan origination fees vary from lender to lender, and title insurance

varies from location to location, so there's no rule of thumb that applies everywhere.

 

"Sometimes buyers can negotiate to have the sellers cover their closing costs, but it's better to negotiate the home

price first and then negotiate the closing cost assistance to make sure the sellers haven't just inflated their price to

cover closing costs," Jablonski says.

 

Ross says buyers should be careful to review their good faith estimate as soon as they receive it, so they have an

idea of how much their mortgage origination fees and title insurance will cost.

 

Moving costs. "How much moving costs depends a lot on how far you are moving," Pithers says. "If you are moving

nearby and have friends and family to help, it can cost almost nothing. But a long-distance move of a 2,000-

square-foot home, including having the packing done for you, could cost $5,000 to $7,000."

 

Ross says the average moving cost is likely to be less than $1,000, especially if you are moving nearby.

 

Necessary home purchases. If you are moving from an apartment to a single-family home, you may have to buy

items such as a lawn mower, a snow shovel or window treatments.

 

"You need to be careful to really weigh each item against your budget," Jablonski says. "You don't have to start with

a top-of-the-line lawn mower, for example. It's a great idea to do some research, and talk to people in the area

where you are buying. See what they had to purchase right away, so you can budget for it."

 

Pithers says you may need to make deposits for utilities such as the water company or electric company,

especially if you are moving from another locale.

 

Cash reserves. "Lenders typically want you to have at least two house payments, including principal, interest,

taxes and insurance, in the bank after the closing," Ross says.

 

Jablonski says it's better to have six months' mortgage payments in savings after closing.

By Gail Johnson | Yahoo! Finance Canada

Buying a home can be as exciting as it is overwhelming. Two real-estate experts share their insights into all-too-

common house-buying mistakes.

Not being pre-approved for a mortgage
“This is the number-one mistake,” says Kimberley Marr, a Toronto real-estate broker and author of Your First

Home—A Buyer’s Kit for Condos and Houses. “I wouldn’t even go look at a house until you know what you’re

preapproved for. It’s a benefit when you’re putting in an offer, especially in a multiple-bid offer, being able to

provide written proof to sellers that you can complete this transaction. It could provide leverage in getting the

house.”

Marr also suggests shopping around for a mortgage and being clear on the terms and conditions. In other words,

don’t be too excited about a low rate until you read the fine print.

Not being clear about your needs and wants
“A lot of people want to go out and buy a house but they don’t have a plan,” Marr says. “Then they get hooked into

the emotional link to a home. They get caught up in the excitement and overlook necessary features like how many

bedrooms and bathrooms? What about Parking? Closet space? Don’t rush into looking before preparing and

considering what you’re looking for.”

Couples not being on the same page
“One will want to be in Langley and one will want to be in North Vancouver,” says Vancouver real-estate agent and

former developer David Setton. “Or one is just going along but not expressing what they really want. It’s not a good

use of anybody’s time. Sometimes one partner will delegate the other to find the house because they’re too busy

at work. If couples don’t do everything together, you spin your wheels.

Skipping a home inspection
“You need to make an offer conditional to a satisfactory professional inspection by a qualified home inspector,”

Marr says. “This is the opportunity for the inspector to discover and give you a heads-up about any flaws or issues

you may not have been aware of and help you understand the difference between maintenance issues or major

structural issues, faulty systems.

“When people get caught up in multiple offers or bidding wars, which happen often in cities like Calgary, Toronto,

Vancouver, a lot of them to try and look good so they clear the inspection from conditions. That is not something

you want to give up. And attend the inspection; don’t just hire someone to do it without you being there.”

Similarly, people looking at a condo should make the offer conditional on seeing strata certificate, which includes

information such as its budget, rules and regulations, and upcoming assessments or expenditures.

Leaving home insurance until the last minute
“Most people for some reason forget about it and leave it till day before they’re closing,” Marr says. “But you need to

make sure the property is insurable, especially if it’s a rural property. Maybe it’s heated with oil or has old wiring.  If

you can’t get insurance, the bank will not advance funds on closing.

Digging their heels in when negotiating
“Let’s say it’s a $500,000 home; the buyer wants$ 483,000 the seller wants $484,500,” Setton says. “I’ve seen

people say, ‘No, I want to win.’ Negotiating isn’t about winning; it’s about compromise. People might be 20 days

apart on completion date, and one will say ‘I’m not willing to wait.’ It can be a deal-breaker but shouldn’t be. In the

grand scheme of things, it’s nothing.”

Being swayed by bling
Granite countertops and stainless-steel appliances are appealing, but Setton says you need to focus on the floor

plan. “You can change everything else: cabinetry, lighting, wallpaper, carpet, and flooring. But you can’t change the

floor plan. Look for efficiency in your floor plan, especially if you’re buying a condo.”

Being indecisive
Sometimes people will see a home they love but they don’t make an offer because it’s the first one they’ve looked

at. “They hesitate,” Setton says. “Not being decisive can make you lose a house you really like. It’s never going to

be perfect. It’s never going to be 100-percent.”

Trying to time the market
‘That’s a huge mistake,” Setton says. “It’s not possible. If I could do it, I’d be a millionaire. There are too many

factors that affect the market; interest rates, global influence... I can tell you what the market is like right now and

maybe even three months from now, but if a world financial crisis hits or a tsunami hits... Anything can happen.

“A lot of it comes down to being ready in your mind. Are you really committed to buying right now or just curious

about what’s happening? The best realtor in the world can’t convince you to buy anything if you’re not ready. The

right time to buy is when you’re in the financial position to buy.”