New construction. On a new home that lists for $300 000, there is a 13 percent HST built in to that figure. It used to be that the house was listed a price and HST was added on top of that but due to the change in legislation, now taxes MUST be included. Next, there is a 1.5 percent “tax” of the total cost at closing called the deed transfer. Next, is the real estate agent’s commission – when you are selling your home, you are responsible for paying your listing agent and the buying agent, which is a percentage of the cost of your home, plus 13 percent HST of both totals.  If you are buying a home, you do not have to worry about real estate agents commission. If you get a home inspection, there is that cost plus 13 percent HST. As well your lawyer (whether you are selling/buying, you need one) has a fee to charge and must charge you 13 percent on their fees. Within the first 385 days, your property taxes will be issued and you will add to the tax poll. When you do the math, you can see that the government gets their share. Remember you, the consumer, are paying these taxes.

How can one get more coppers back in their pocket? In new construction, the government will allow you to write various things off in the form of rebates. These rebates go back directly to the builder in most Purchase and Sale Agreements. See if you can get the rebates – some builders will say yes and some will say absolutely no. But try.

There is an energy rebate for new construction that goes to the home owner if your new home passes the test. I believe there is a time frame for this so check into it.

Until lately, the Nova Scotia government was giving back up to $7000 on new home construction. The point here is check out with your MLA, MP, Real Estate Agent, Lawyer and Builders Association to see if there is any incentives out there to help minimize the heavy tax blow in building your dream home. The last thing to remember is look at the new mortgage laws. In the past, you could get a 100% mortgage with nothing down but thanks to the mortgage crisis, these laws are tightening up and the laws are changing to prevent problems from occurring again so check with your Real Estate Agent or Mortgage Specialist to see how much of a down payment you will need if you are buying a home.

Let’s do a room by room cleaning starting with the bathroom. The shower head could use cleaning – a mineral cleaning solution from the hardware store will open any little blocked holes caused by mineral build up. Also, using a cleaning disinfectant will eliminate any unwanted bacteria. One would be very surprised at the millions of little critters living on your shower head that pour down on you every morning while you’re trying to clean yourself. It may also be a good time to change the shower head to a water saving type that is good for the environment as well your wallet.

Next, check to see if any seepage is coming from your tank to your bowl. Use the same mineral solution in your toilet tank to clean any build up on your flatter valve. It is amazing what the extra water bill costs are when there is seepage.

Now, check under the sink to see if any of the pipes are leaking. Take two or three kettles of boiling water and pour them down the drain to clean tooth paste build up. This also goes for the bathtub for hair and soap build up. Check around the tub, walls and ceiling to see if there is any mold. Your local hardware stores have many products to kill the growth. They also sell paint products that have mold restraint agents in them. But you must find the cause first – or else it can come back! Check your ceiling fan to ensure it is working well. It may need cleaning or is not removing the moisture in bath bathroom which means purchasing a new one.

Let’s go to the kitchen. Check under the sink again for leaks as like before in the bathroom. If you have a heat exchanger, clean the outlet from grease and dirt – do the same to all the outlets in the home. The stove vent should be cleaned using a degreaser. If you have a filter in the vent, now is a good time to replace it. The wood cabinet doors could use a cleaning as well an oiling from the dryness. Check your food containers in the pantry to check that no little bugs have made a home over the winter. Also, now is a good time to clean the light shades – might as well do all of them in the home. Pull out the fridge and stove and clean behind them. The dishwasher could use a cleaning – use a couple cups of bleach to clean the inside. Open the fridge and remove all those items that you haven’t used for the past year.

For all the rooms in general – clean the windows both in and out. For the bedrooms, check out your closets – this is a great time to gather up all those clothes you haven’t worn for a long time and give to your local charity. If you have the time and energy, clean the walls, doors, baseboards, blinds and curtains. If your heat source is forced air or heat pump, the heating ducts and returns could use a vacuuming. If you have a fireplace – check it for mortar failure, water leaking in, etc. If you have a propane fireplace – clean the under pull down panel for dust. Turn off the auto pilot and close the valve – no use in burning propane if you don’t need to.

Things to do in general would be to clean the filters in the heat exchanger – best way is to take them and soak them in warm soapy water and then rinse. Change the air filter in the furnace. Check for any oil leaks and fan belts. The switches on the electrical panel – turn them off and on, make sure everything is okay. Check all smoke and any other detectors you may have. Check your attic to see if any moisture got into it over the winter.

To end, go outside the house – hopefully we get a sunny weekend in March! Check the oil tank and lines so that there is no leaking from the oil tank as well it has oil and the power lines are still level. You may decide to paint it with a rust inhibitor. Check the roof shingles to see if any blew off since the fall. Check the rain gutters and down spouts to ensure they are clean. The deck may need some cleaning and a fresh coat of water sealer. Also, look at the deck chairs and ordainments. Clean any garbage that may have accumulated over the winter in flower beds and the yard. If you have a dog, now is a good time to remove the droppings. Pull out the lawn mower and see if it still works.

The barbeque – most important piece of equipment for the summer! Check that the tank is full and no leaks (use soapy water over the fittings – if bubbles appear, you have a leak). Clean the racks and burners of rust. Turn it on to see if everything works.

Enjoy the spring! For more information on real estate issues, please check out www.homesforhalifax.com

Doug: Hello Ally. Thank you for taking time out of your busy schedule to discuss mortgage jargon as well as what you can pass on as a Specialist to Buyers and Sellers. If you could give one piece of advice to a person or couple when purchasing a home what would it be?

Ally: Find a Mortgage Specialist that you are comfortable with. Get pre-approved (not pre-qualified) before house hunting. That way you know exactly what your maximum purchase price is. Being pre-qualified is using only the information given by the client without verifying it. The difference is, when you are pre-approved, we have gone into the credit bureau and checked your credit. This will give us your debt ratio and determine how much you can spend when purchasing a home. Don’t shop around when you have a mortgage person – every time one runs your credit bureau it gives you a “hit” on your credit, which could decrease your credit score, in turn, harming your credit. I have seen situations where couples have gone to five or six mortgage people and each time they had a “hit”, their credit score decreased – bringing a once great situation to a bad credit situation. Also remember that a bank is limited to their own facilities when searching rates and incentives for you as the buyer. A Mortgage Specialist can go anywhere, including your bank. Your Real Estate Agent or Lawyer should be able to give a name. But, before you choose a Mortgage Specialist, interview them. Get references; find out their experience and do they follow up after everything is completed.

Doug: What documentation does Buyer need once they have decided on their Mortgage Specialist?

Ally: Proof of income of each person who will be on the mortgage – this includes a letter from their employer and a recent pay stub. Next, proof of their down payment – a bank statement showing the monies are in an account or a gift letter showing a friend or relative is supplying the money for the down payment. If RRSPS are being used then proof that they exist must be provided. Also most lenders like to see the closing costs in their bank.

Doug: What is one thing you can say could potentially cause an issue in negotiating a purchase when it comes to a Buyer getting a mortgage?

Ally: In almost every transaction where “cash back on closing” is included in the Purchase and Sale Agreement. A mortgage insurer (the lender) will not insure that “cash back” amount of monies and they will take the cash back amount off the purchase price. For example: Purchase Price of the home is $200,000 with $1000.00 cash back at closing. The Lender views the value of the property as $199,000 and will base their loan amount on the second figure not the first ($200,000).

Doug: Good to know. What about when a buyer does the Purchase plus Improvements (they need funds to fix up the home)?

Ally: There is typically no problem with this. The funds are to be used for renovations or to better the home. The funds are not for a trip south, a 52 inch plasmas TV, a new stainless steel fridge or new front loading washer. But rather for windows, flooring, doors, roof etc. The maximum you can get is 10 percent of the purchase price. You will have to get quotes from qualified contractors. Uncle Charlie can’t come and do the roof if he is not qualified roofer and has a legal company. Also some folks think you can buy tools to complete the job but you can’t use the monies from the 10 per cent. You can, however, get the monies and do the job yourself. You must remember you will not get reimbursed for your labour; only for the materials you used for the renovations.

Doug: Is 100% financing still available – even though the Federal Government banned the concept?

Ally: Some Lenders will still provide a free cash back down payment option. The rate is higher but still reasonable. That is how the lender makes the monies back. This type of mortgage is not open to everyone – you must qualify for it. If you are able to qualify for this your style of mortgage it is based on a 5 year term. If you choose to break the mortgage prior to the 5 years you must pay down payment back. You still need closing costs.

Doug: Any final comments or words of advice?

Ally: Yes, if you do not qualify for a mortgage. Don’t give up! Get your Mortgage Specialist to show you what you must do to get that mortgage. Let them get you moving in the right direction.

Thank you Ally!

Ally Higgins can be reached at allylh@ns.sympatico.ca or www.premieremortgage.ca/allyhiggins or at 902-830-1817.

The Christmas tree will be going up soon. Make sure if you are purchasing a “real” tree that the tree is fresh and not dried out. You should saw off the base of the tree six inches so the trunk can draw up liquid. Pick up some ginger ale; trees love the sweet taste of it. Pick an appropriate spot for the tree, do not put it next to the electric baseboard or forced air register where it will dry out. A dried out tree is a big fire hazard! When putting up Christmas lights, plug them in a surge bar so the wall outlet doesn’t resemble an octopus and start a fire. Also, it will be easier to just unplug the surge bar. Be sure you use pet friendly ornaments – or keep them away at all times. For example, hold off on the tinsel, the family dog cannot digest it.

It is a good time to start putting up your outside lights when there is no snow or ice to tend with. Check the ladder before you start – make sure it isn’t in need of a repair. If it is, don’t use it. Also, don’t do the job alone, get a helper so it is easier and safer.

While you’re out in the shed or garage, be sure you have some salt and sand for that unexpected snow storm. Also, check that the shovels are easy to get at and still useable. They seem to go quickly at the stores after the first snow storm or it could happen during those Christmas holiday hours when stores are closed. If you got a snow plow, start it and run it for a few minutes. Lubricate the parts that need oiling. As for the shear pin, make sure you have a spare, just in case. If your snow plow is you and your shovel, remember don’t overdo it. If we haven’t worked out all year, we can’t expect our bodies to perform 100 percent. Take on the snow drifts a little at a time. Go back in the house and have a glass of water, relax then return to the clearing the driveway. Or better yet, pay one of the neighborhood children to clean it!

We seem to use more electricity during this holiday season. You can cut down by turning off lights you are not using. The computers can be turned off. You would be surprised the amount of power they draw just by keeping them on overnight. Simple habits that could be good for the whole year but at this time of year, saving that extra money can help!

Now is a good time to change all the batteries in the house. Alarms, wall thermostats, etc. whatever takes the Duracells.

This time of year, the Christmas parties will be starting soon. The Police will be out in full force. So make sure you have a designated driver, or take a cab, or call a friend. Just don’t drink and drive. If you are hosting a party, remember that you are responsible for anyone that leaves your house impaired. So if you are serving alcohol, make sure you collect everyone’s car keys and don’t let them drive if they have had too much. They can sue you as well as their family if they get in an accident and are paralyzed for life. A best friend could become your worst nightmare. Another reminder is at those parties, there are a lot of calories being served. Remember they are easy to put on but a lot tougher to take off.

When you do open up the presents, resist the temptation to burn that colored wrapping paper in the fireplace. Creosol builds up and can cause chimney fires. Another bad habit is lighting candles and leaving the room. Talk with any Fire inspector and they tell you most fires at Christmas are caused by unattended candles. So keep your candles lit only in the rooms you are in!

As we get closer to Christmas our routines will go off track and we will be doing extra activities. Between office parties, children concerts, shopping, decorating and cooking, we will be challenged to stretch our limits. For some of us, the slightest little thing can trigger our emotional clock. Don’t let the stress of the long line ups, the constant tug of people wanting our money and time turn us into Mr. Scrooge or Ms. Scrooge. Stress is the number cause of many illnesses. We must remember the true message of Christmas is love and giving.

Just in time for the Christmas season, Doug Williams is offering $1 100 cash back upon closing towards Christmas bills! Check out the conditions at www.twitter.com/dougwilliamsrty

If you are building a home and using a Real Estate Agent, I would strongly suggest you hire a Real Estate Agent who is experienced in the building process. Filling out paperwork is one thing but understanding what can go wrong is very important. The same would apply to the Lawyer that you use, make sure that they have lots of experience in dealing with new home construction. Believe me, these two together will save you tremendous grief down the road.

One of the biggest problems I have seen over the years is communication. What you want and what the contractor thinks you want can be two different things. Be very explicit and simple, even to the type and color of door knobs. Oh yes, I almost forgot – EVERYTHING is to be written down, signed, initialed, dated and everyone given a copy. For people who are just doing renovations, be sure to have a lawyer look at it. If you have problems down the road, he/she will be representing you so why not let them be part of the process from the beginning.

A good builder/contactor will not require you to sign anything until you are both on the same page. For example: what you want for flooring, what you want in the ensuite, the various paint colors of the rooms or how your kitchen will look like. Most contractors today will give you an allowance for lighting, flooring and the kitchen. Go to the place where they will buy these items from and see what you are getting. It is very important to not sign anything until you do. Make sure the amounts will satisfy what you were expecting – both in quality and quantity. Remember that show homes are nice to visit but most cases, it is full of upgrades and not what you will get in the home that you just purchased.

Whatever your project is, be sure to get quotes from other contactors. But make sure that you are comparing apples to apples. Often I hear that was not included or I thought you meant this. Do your homework. I tell people go to open houses and take pictures of the kitchen you want or that living room – it is also better to show your contractor a visual and include in the contract.

I tell people to talk with people who the builder/contractor has done work for. Calling references is not always the best way to do this. If you left a job because you had a dispute, are you going to ask that person for a reference? Get your lawyer to inquire from other colleagues. Check with your local New Home Warranty or whoever the builder uses and see if they have many complaints. But the best is snooping around and finding people they did work for. Don’t be genetic with your questions either. Don’t just ask if they a good builder. Ask if they finish on time (and if they were compensated if it was not finished on time), when they wanted changes if the contractor was cooperative, did they come back to fix items, were the allowances (monies) enough to get flooring and kitchen cabinets, did they clean up after they were finished and would they use them again?

Be sure that whoever you hire has insurance on their workers as well if insurance for home damage if they cause it, WCB coverage and that all the sub-contractors have insurance and also have WCB coverage. Be sure you ask to see these policies and be sure you check to see whether they are up to date.

I believe in the underground economy but when you try doing this with new home construction or renovations, remember there is no paper trail meaning it is very difficult to take the company or people to court. Also, if you want to claim the home renovation tax credit, you need to keep your receipts incase you get assessed by Canada Revenue Agency.

After you choose your builder/contractor the most next important item is the contract. Be sure it is very detailed. What they are going to do, the time frame, whether they compensate you if the work is not completed on time, what work you are getting done and the exact items to be installed – have a schedule of all the materials being used and allowances granted, a guarantee and what that guarantee entails and length of time you have to collect the guarantee. When you are building, the law provides that there is a builder’s holdback lien (talk with your lawyer about this). As well as if all the work is not completed, be sure you hold enough monies back not only for the item(s) but also to have it installed.

A Real Estate Agent and Lawyer with lots of experience in New Home Construction can go a long way in making your project or new home a pleasant time.

Doug: Good afternoon Lola! To begin, if you could give one piece of advice to Buyers, what would that be?

Lola: I would say: to touch base with their lawyer in the beginning. In many cases, the Buyer is excited and does not fully understand what they just signed. The individuals should speak with their lawyer to ensure what they have purchased fits in with what they believed they wanted. The best case scenario is to take a few minutes before you go house hunting and discuss your goal with your lawyer.

Doug: What would be the next piece of advice be?

Lola: To find a GOOD Real Estate Agent – an agent who is experienced in the area of Real Estate that you are purchasing, whether it be new construction, condos, investment, etc. We always interview people for employment so why wouldn’t you with your Real Estate Agent? This is a big investment so be sure you get the best Real Estate Agent for the job. As well as insure that they have clauses in their Purchase and Sales Agreement that protect you as a Buyer and that they are very clear to all the parties involved. Also, don’t forget to get your Real Estate Agent to call your lawyer so both are on the same page when it comes to protecting your best interests. Many times, the Real Estate Agent will forget and has moved on to their next deal. One other item, there is HST on the Agent’s commission. Many people come in my office and I have to tell them this. Sometimes, the Seller forgot to calculate this in their final figures at closing.

Doug: What are some of the little things you see that can be avoided?

Lola: There are a few items that immediately come to mind:

1. Using no fee banks (the ones that don’t have tellers). Clients must remember that when using these institutions, it takes 10 business days to get a draft cleared which can hold everything up.
2. Bring your ID to the closing. The law states that people must produce photo identification at the time of closing. Many people forget it or are not aware of this rule.
3. Using the Home Buyer’s Plan to withdraw funds from your RRSP’s. Today, more and more people are using them in the purchase of their home. It can take up to 21 business days to get the actual monies from your bank or institution where you have them. A lot of folks are under the impression they can get their cash in a couple of days.
4. Buying a home with leased items. Real Estate Agents and Clients don’t seem to understand this part of the Purchases and Sales Agreement which creates a lot of stress at the closing. We scramble at closing to ensure that the lease that the Buyer already accepted is dealt with. Also, Real Estate Agents are not explaining the difference between rented and leased equipment. When you lease, you will one day own it and sometimes with furnaces or hot water tanks, you have to buy the companies fuel at their prices.
5. Property Tax. These are payable twice a year. Sometimes the lending bank or institution will require people to have the monies upfront for the next tax session and this is not explained by the agent or lender at the time of purchase. The end result of this is that clients are short funds at closing or spends their money on new drapes or a dishwasher and now has this tax to be paid.
6. Electricity hook up, etc. Sellers and buyers seem to forget to unhook their service providers or get them hooked up prior to closing. Clients should make a To-Do List prior to closing. If this is your first time buying, get your agent to assist you in making the list, they have a lot of experience in clients moving.
7. New Construction. This has a few items that are easy to fix. Some builders want the deposit cheques to go directly to them – this isn’t a good choice as giving $50 000 to someone you don’t know is not a good idea. This is a choice you need to make however! Some builders will charge extra if the Buyer does not qualify for rebates which changes the price of the home – this is not right. Also, there a few things to look out for when you are purchasing a new condo. The condo fees that are quoted at the time of purchase never seem to stay the same in a year’s time – they can double or triple which can affect your financial budget. Also, the closing dates very rarely coincide with the original dates given at the time when the Purchase and Sales Agreement signed – this can affect the Buyer if they have sold their home and need a place to live. Sometimes, the condo buyer will let you move in early until they get condo status  but they can charge large rental fees – so you can pay $2 500 to $3 500 a month to rent their OWN Condo because the builder is behind.
8. Closing condition of home. People expect the house they are buying to be clean which is an interpretive word. What is clean to you may not be to the next person. I spend a lot of time fighting over $100 to have it cleaned. Get your agent to put it in the offer that they want the house “to be cleaned professionally and the receipt sent to the lawyer.”
9. Closing Costs. Finally closing costs, clients always want to know up front what they will be but we do not actually know until the bank or lending institution sends the statements to us.

Thank you Lola for your time and valuable information. Lola Doucet is a Nova Scotia Real Estate Lawyer located in Bedford, HRM. Her website is www.loladoucet.com. For more information for selling and buying real estate, please visit my website at www.homesforhalifax.com

So as an accounting student, everything is about taxes – saving it, avoiding it or getting it back! So here is the 2009 information on the Home Renovation Tax Credit. It is a non-refundable tax credit based on eligible expenses for house, condo or cottage improvements – it is claimed on your 2009 income tax return. So, it can only reduce your tax payable, it cannot create a tax refund if you have no taxes payable (not usually the case unless you’re a student, unemployed or make below the personal tax credit limit). An important point however, is it only applies to work performed or goods acquired after January 27, 2009 and before February 1, 2010 under an agreement entered into after January 27, 2009. You need to remember that any renovations made by a contractor and paid “under the table”, and do not receive a receipt for, are not eligible expenses! You do need to have your receipts.  Eligible expenses are goods that were acquired during the 2009-2010 allowable period even if they are installed after January 2010, however; for worked performed by a contractor, only the work completed is eligible even if it’s prepaid.

The HRTC applies to eligible expenses of between $1 000 (yes, you need minimum $1 000) and $10 000 so the maximum tax credit would be $1 350, using the 15% basic federal tax rate. Here is a list of Eligible and Non-Eligible Expenses:

Examples of eligible expenses

• Renovating a kitchen, bathroom, or basement
• Windows and doors
• New flooring – carpet, linoleum, hardwood, floating laminate, etc.
• New furnace, woodstove, boiler, fireplace, water softener, water heater, or oil tank
• Permanent home ventilation systems
• Central air conditioner
• Permanent reverse osmosis systems
• Septic systems
• Wells
• Electrical wiring in the home (e.g., changing from 100 amp to 200 amp service)
• Home security system (monthly fees do not qualify)
• Solar panels and solar panel trackers
• Painting the interior or exterior of a house
• Building an addition, garage, deck, garden/storage shed, or fence
• Re-shingling a roof
• A new driveway or resurfacing a driveway
• Exterior shutters and awnings
• Permanent swimming pools (in ground and above ground)
• Permanent hot tub and installation costs
• Pool liners
• Solar heaters and heat pumps for pools (does not include solar blankets)
• Landscaping: new sod, perennial shrubs and flowers, trees, large rocks, permanent garden lighting, permanent water fountain, permanent ponds, large permanent garden ornaments
• Retaining wall
• Associated costs such as installation, building plans, permits, professional services, equipment rentals, and incidental expenses
• Fixtures – blinds, shades, shutters, lights, ceiling fans, etc.

Examples of ineligible expenses

• Furniture, household appliances, and electronic home-entertainment devices
• Purchasing of tools
• Carpet cleaning
• House cleaning
• Maintenance contracts (e.g., furnace cleaning, snow removal, lawn care, and pool cleaning)
• Financing costs
• Amount paid as part of the purchase of your new house, including “upgrades”
• Expenses to acquire goods that have been previously used or leased by you or an eligible family member (e.g., hot water tank)
• Expenses incurred to the rental and/or business part of an eligible dwelling

There are a few disclosures on the eligible/ineligible expenses so be sure to visit http://www.cra-arc.gc.ca/tx/ndvdls/sgmnts/hmwnr/hrtc/lgbl-xpns-eng.html for more information!

By now, you’re probably thinking – well if the government is going to give me a tax credit, it must be pretty complicated to claim! It’s actually not – there will be a new schedule in your 2009 tax package which will allow you to list your expensive and calculate the tax credit which you will input into Schedule 1 which there will be a new HRTC line and make sure to attach the new HRTC schedule to your return. You do not need to send in your receipts HOWEVER; keep them!!! You may be audited by the government. For more information on this program, visit http://www.cra-arc.gc.ca/tx/ndvdls/sgmnts/hmwnr/hrtc/menu-eng.html

Another important point is, the HRTC eligible expenses do not require you to deduct government funding you may have received under the ecoENERGY retrofit so this is an opportunity to double-dip! ecoENERGY Retrofit-Homes is a government program to help more than 200 000 homeowners to cover costs of retrofitting their homes to be more energy-efficient. It provides home and property owners with up to $5 000 in grants to offset costs of making these important. You would first need to have a residential energy efficiency assessment done by a certified energy advisor to be eligible. Your grant is based on the type and number of energy improvements that have been made and how much the efficiency of the home has been improved – not on the cost of the upgrade. The average grant is around $1 000 and has a 25% reduction in energy uses and costs – so you have a future savings in costs as well. For more information, please visit: http://www.ecoaction.gc.ca/ecoenergy-ecoenergie/retrofithomes-renovationmaisons-eng.cfm

The moral of the story for HRTC is: you save the HST on your renovations if you are in the tax situation (working, not many other tax credits) to pay taxes. So it’s not meant to make everyone rush out and renovate – but if you were deciding on doing it anyways, the government just wants to give you a little incentive to do it sooner rather than later.

This article was written by Jennifer Williams, a third-year student at the Desautels Business School at McGill University in Montreal, QC. She is majoring in Accounting and doing a minor in Finance.

When you list with a Brokerage and the For Sale sign goes up, part of your responsibility is to let Potential Buyers into your home for a showing if to see if they want to buy your home. There are obviously some circumstances that prevail – if there are certain situations that pertain to your lifestyle or effect showings such as dogs at home, children go to bed early, running a business out of the home, etc. so tell your agent at the time of you listing the home. That way he/she can put it in the listing cut so other agents are aware of it. If you do tell your agent and they don’t listen to you, fire them! Your Real Estate Agent should be understanding of your situation. Something to remember: most times when a Buyer cannot view a home at the time of the request, they will not come back. So the moral of the story is you may have let a potential Buyer not view your home. Sometimes you will get a call and the buyers are sitting outside your home. They are from out of town and  are probably driving around in your neighbourhood and would like to see the house. You say no because your house is not clean. Ninety nine percent of the time they will not return. These folks are on a short time table and usually don’t have time to return. So again, the moral of the story is you have just let another potential Buyer go. By the way, people who give you five minutes notices are the best Buyers because they understand more so because they just sold their home and realize the effort to keep it tidy. Therefore, they over look any untidiness. A note to remember: every time you refuse a Buyer, it is one less potential offer you will receive.

When you go to a used car lot, do you ever wonder why all the cars look like they are brand new? Even the tires shine! They all look like they should be with the new cars. Why do they do this? Because they want to give you, the consumer, the best impression of the commodity for sale. Remember this: when it comes to your home – your house should shine. If it needs paint to spruce it up, paint it. The cars on the lot have no garbage on the seats or in the trunk to make look cluttered. De-clutter your home as well. Have everything neat and tidy. Your home should be shouting “Welcome! Come and see me.” Have your agent go through your entire home and advise you of everything you should do to get your home ready for the market. There are also professionals you can have come in to advise you as well.

Important note to remember, if you need to replace items such as flooring, roof, windows etc. there are different ways to deal with it. One way is to replace all of the items or just certain ones. But you must watch the costs of these because it can bring the price tag to a level where the selling price is too high for the neighbourhood. Instead, you could give an allowance to cover some of the items. The best solution I believe is to price the house accordingly. In my experience, the main reason a home doesn’t sell is price. Sellers forget that today’s consumers are very knowledgeable when it comes to buying homes. With the invention of the internet, everything is at their fingertips. They know what’s selling, what not selling, how long it’s been on the market and the prices it sold for.

Sometimes, we have a home that is a Cadillac in a Volkswagen. What I mean is that a seller has done so much work to the house that it doesn’t compare to any other home on the street. When we upgrade our homes, we must understand we may not always get back everything we invested. I tell clients that you must view the upgrades as adding to your enjoyment of the home. If this is over looked, the problem it brings is (most times) a Buyer wants a price that is too high for the area. The end result is the house sits on the market.

Pricing is probably the most important advice you can receive when it comes to getting your home ready for viewing. Remember this during the listing of your home.

I have just launched a new program through my website – when your home has a viewing, the buyer’s agent will automatically be sent a feedback form so you can have their honest opinions after they view the house and then it is sent to you! www.dougwilliamsrealty.ca

Hog wash! I see it too many times that half way into it, this peaceful loving feeling is gone. A few examples: one party has put down their RRSP’s for the house and now needs to pay it back and wants more than the 50-50 split. One person has not worked for a year and hasn’t contributed to the mortgage so the other wants more cash at closing. One person bought all the expensive furniture from a prior arrangement but the other person still wants to divide it equally. I have seen a couple fights over a dog and pay legal fees of $1500. Let’s face it, human nature and greed step in and change everything. As well when both parties want to start their life over in a house just as good or better so they want a ridiculous price for their house. Sometimes, one half moves out and the other one doesn’t want to move but cannot afford the house thus the house is hard to get viewings for or the house looks like a tornado hit it.

Bottom line divorce can bring out emotional turmoil that can affect financial issues. Emotions can cloud the decisions on what to do with the house. The best method is to step back and see how the divorce will affect your house, mortgage and taxes. If this is too emotional then one should consult with a lawyer or accountant. Be sure they specialize in such matters. Although friends may have good intentions, they can be emotionally involved as well. So get the professionals involved. If children are involved, you may want to consult with your family doctor. You have three options when comes to the house. 1. Sell the house and divide the monies. 2. Buy out your spouse or partner or they buy you out. 3. Retain ownership.

The first option is selling the house and dividing the monies. With this decision, you want the most of the home in terms of price. However, understand that it is only worth a certain price. I see some situations that the house is overpriced and all it does is cause more problems; emotionally and financially. Be sure you talk with an experienced agent who has dealt with such matters. One thing to remember as well is you may not get a 50/50 split -it will depend on the divorce settlement.

The second option is to buy each other out. One party may get a mortgage, have monies or get assistance from family members to take over the mortgage. Remember that in the original mortgage documents, you both have responsibility to the existing mortgage so be sure to read over the paperwork and make the necessary changes.

The third option is to retain Joint Ownership. Because of financial situations or children involved, you may postpone the selling of the house. Sometimes both parties live in the house while other times one spouse lives. One must understand however that it is only temporary. In the US, because of the housing crisis, this is a growing option for a lot of families.

The one question that must be answered is you or your spouse going to continue to live in the house. Maybe you will both continue to do so. Only you can answer this question. One has to be reasonable in this decision because of the financial repercussions. Can you afford to stay and handle the running of the house or take on the responsibility of a new living environment?

Regardless the route or routes you decide to take, remember to get outside professional help. Your Lawyer, Accountant and Real Estate Agent should have experience in these matters. Just as when you bought the house, it was the largest financial decision you make – the same when one goes through divorce or separation.

To end the topic: you might have noticed that I use the noun house and not home. This is because your house is now a commodity. No different than the trading of a hockey or football player. A home is where you will be with your loved ones – but things can happen, and you have to be educated on what can happen.

There have also been changes in ways we calculate return on investment. At one time, the quick and dirty method was to take the monthly rent multiply by twelve (months) times ten (years). The reason for ten years was because it was the usual time for you to pay off the property. The figure that you got was what one should pay for the property. Some people still use this formula but find it difficult to see value in property if the figures don’t fit in with this equation. Some other considerations such as if the tenants were paying for their own heat and the location of the property would be taken into account.

Another calculation is income / sale price. So the total gross income of  $41,000 divided by sale price of $357,000 equals 11.48 percent. The smaller the percentage, the better the investment. Most people had the opinion that if the figure was around 9 to 10 percent, it was a good investment.

Still another system is: market value = net operating income divided by overall capitalization rate OR overall capitalization rate = net operating income divided by sale price. Overall capitalization rate = net operating income divided sale price. A capitalization rate is simply what investors call a rate of return on Real Estate assets.

What I’m seeing in today’s world is a new formula – there isn’t any. The price has nothing to do with the operating expenses or the time it takes to pay off the property. I’m seeing that in using the first equation, it will take 16 -20 years to pay off the investment. When I use the second equation, the average percentage is 15-18 percent.

The new investors are not concerned about the initial rate of return but rather the fact they have investment property and using the theory that Real Estate will go up at a rate of 5 percent a year and that is their return on investment. A second new trend is that people are putting their assets together to purchase properties.

So what is the correct method? I’m not sure of the answer. When I first started in real estate, ones debt ratio could not be over 24 percent. Today it is up to 41 percent. At the same time, the lending rate is at a long time low. As well we have variable rates that are even lower. Thus the cost of money is cheap. The combination of cheap monies and mortgage rates are the reason that solid formulas are not used today – our economy is going through a change and perhaps, in the future, there will be different formulas. Because every time I use one of these formulas and tell an agent it’s overpriced, they tell me they have an offer. As long as rates stay like they are, there will be no problems.

Thanks for reading! Check out www.homesforhalifax.com for more information relating to real estate!