Many Canadians are looking to renovate their homes in the next few years. However, there is a lot of uncertainty about what changes will happen with home prices and how the country’s economy will be doing in 2021. To help you make an educated decision, we put together some Canadian renovation trends that have been happening over the last few
months. We have noticed a considerable shift in the way Canadians are doing renovations. We are seeing more Canadians care more about the standard of living and quality of life versus trying to increase their home value.

During 2020 and 2021, the pandemic has been in full swing, causing millions of people in Canada to stay at home. Being in your home for days at a time has caused many Canadians to take up small projects and renovation improvements to their homes. We see gardens, basements, driveways, backyards, kitchens, and more being torn down and built back up strong. Many have said this is because of the HOT housing market, as everyone should be
looking to sell. But on the contrary, 84% of Canadians are renovating their homes for a need, recreational purposes, aesthetic purposes, maintenance, and overall quality of life.

We see that about 50% of Canadians renovated their home last year for personal reasons, and 30% renovated for non-essential reasons, i.e., recreational/aesthetics purposes. Even though this may be true when speaking with homeowners, 59% said that they also have the R.O.I on their property in mind.

The shift to “Work From Home” has changed Canadians mindsets when it comes to their properties. This affects the selling market as many homeowners are now putting more effort into making their home the best it can be. Even if they are not looking to sell, there will be a gap in housing quality when they do it.

What is the best renovation for the best R.O.I on your property? We see that a fresh coat of paint and landscaping can go a long way. The best thing about this, on average, over 50% of Canadians said they want to keep renovations under $10,000. This is excellent news as a fresh coat of paint and basic landscaping usually can end up being under $10,000. We also spoke with agents, and they noticed those kitchen improvements, such as cabinets,
countertops, and appliances, are also a perfect home improvement with great R.O.I.

As we see these changes, The A-Team wants you to know and understand the real estate market trends to help you get the best price on your home!

The stress test is a new measure introduced to help cool down the overheated housing market at that time. The idea was not to make home loans more expensive but rather ensure anyone getting a mortgage will pay it off if rates go up in five years or so. Fixed-rate mortgages are currently available for an interest rate of around two percent, with variable
loan rates even cheaper– making this option accessible and attractive.
What is the Canadian stress test for mortgages?

The stress test is a mortgage qualification standard that tests the borrower’s ability to withstand an increase in interest rates or unemployment and determines whether they can still afford their home if these changes occur.

Why was the Stress test introduced?

There are new mortgage rules in place to protect borrowers like you. They exist because the government wants people to afford higher interest rates when they inevitably rise again; otherwise, if you can’t handle it, you get forced into an unaffordable situation where you can’t make your monthly mortgage payments.

How does the Stress test work?

The stress test is a measure that banks use to determine your mortgage eligibility. For example, a bank will offer you an interest rate based on your credit score when it’s time for approval. Still, they’ll calculate at a considerably higher interest rate under the stress test, ensuring you can make payments if rates go up.

How do you determine which interest rate your lender will use?

As of June 1, the minimum qualifying rate for uninsured (with at least 20% down payment) and insured mortgages is 5.25%. So, to put this into real terms: If you wanted to borrow $400k from a mortgage company that offered you an initial interest rate of 3%, they would require proof that you can afford monthly payments that total roughly $2190. Instead of the monthly mortgage rate of 4%.

Under the new mortgage regulations, borrowers who got approved after May 31 had higher interest rates than those that applied pre-June 1st because they need proof of income, as well as debt ratios, like the ratio of gross family income compared to total household expenses, and more information about what assets makeup one’s net worth when applying for financing over $500k.

Is it more challenging to get a mortgage?

Two factors have made it harder to qualify for a home loan as of today. The first is that the federal government has raised the minimum financial bar, raising 2%. This means anyone applying for a mortgage must now meet these new requirements to be approved, which makes owning a property more expensive and difficult overall. Second, Ottawa also increased their interest rate “stress test,” setting this at 5.25%, increasing from the original 4%.

This will make homeownership even less affordable than before because they pay higher monthly payments on top of an already high price tag. Not only that, there are tougher standards set out by banks themselves requiring borrowers to meet them or else risk being denied approval altogether!

What the mortgage stress test means for homebuyers in 2021

First-time homebuyers are the most vulnerable to Canada’s mortgage stress test. This is because first-time homebuyers usually have much smaller down payments as they don’t yet build up equity in a previous house. In addition, first-time homebuyers often lack relationships with banks due to inexperience with mortgages.

This can make this process more challenging because resale buyers can qualify based on how long they’ve been clients at the bank whose lending them money (known as portfolio lenders). Although, first-time borrowers may not meet those requirements since these days you need about 20% or 30% down – which is an immense barrier for most Millennials looking into buying property.

Conclusion

The Canadian Stress Test is a measure to protect homebuyers in the future when interest rates eventually rise. However, this may negatively impact new home buyers since they will not pass the stress test due to their low income and equity. Therefore, it’s important for Canadians who are thinking about buying a property or refinancing with an existing mortgage to educate themselves on what it means if they’re unable to qualify under these criteria. This way, they can make informed decisions about how best to move forward with their purchase plans without any surprises waiting for them around the corner, which could derail those plans altogether.

The new stress test will affect every homeowner differently. The A-Team is here to help and support you. Contact us today to see how the stress test can affect you. We are here to help.

There are many reasons to downsize your home. It can be a real opportunity to save money and release equity that is otherwise locked up in the house. The majority of people downsize for one main reason, primarily to save money. People buy larger homes for various reasons, and modern society has conditioned us to think “the bigger, the better,” but there are many potential advantages to downsizing your home.

Less is More

For some people, downsizing to a smaller home can be a much more effective use of your time, money, and effort. Larger homes require much more maintenance, with responsibilities like cleaning, gardening, mowing the lawn, shoveling snow, and general upkeep being larger tasks. A smaller home also equals less debt and less risk. Mortgage loans and payments will reduce proportionally. It will also reduce the utility bill since a smaller space generally requires less energy. Downsizing your house intrinsically opens your home to a wider market if/when you decide to sell in the future; a smaller home will expand the market to more potential buyers due to the simple reason that more people can afford this home.

Financial Flexibility

In our world of capitalism, money is everything, and not being able to afford your home can be a complex reality. The government standard to avoid people being “cost-burdened” and likely to default on their mortgage is that the housing costs should not exceed 30% of your gross income, be it mortgage payments, insurance, taxes, etc., or rent and utilities. Downsizing can be a solution to provide the financial flexibility that some people will need to be able to afford their home and save money for their future. A smaller home’s monthly expenses may not need nearly the same commitment of 30% of your gross income and will free up some equity that can be invested elsewhere.

Interested in Downsizing? We Can Help

If you are interested in downsizing your current home, we can help you prepare your home to receive multiple offers and find the perfect home to fit your needs! If you have any questions, we are more than happy to help!

Most people start their journey hoping to obtain their dream home. A quaint and affordable place with just enough space to be a perfect fit; However, life happens. Things change; everyone’s situation is different, and there are many reasons why homeowners may consider upgrading their house.

Lifestyle Changes

Homeowners consider moving into a larger home due to life transitions; getting married, raising babies, aging parents moving in, more people usually require more space. As your family starts to grow, space becomes a factor. Upsizing allows us to have larger backyards, more rooms, and an overall comfortable, spacious area, making it extremely beneficial for you and your family. Life transitions can also mean career changes. People relocate all the time for a new job or to reduce the commute to work. In the age of COVID, work-from-home opportunities have become prevalent, and having enough space for a home office might become essential for your family’s success. With the lockdowns happening and COVID seemingly staying for a while, families stuck at home have begun to feel cramped and may opt for a bigger house to have more breathing room.

Investment Opportunities

The housing market can be a great place to invest your extra capital. The real estate market has been on the incline for the better part of the past decade and would be hard-pressed to find the same percentage of returns on investments like stocks and GIC’s. Having a bigger house also enables you to rent out part of the space, helping you subsidize your mortgage. There’s no better feeling than knowing someone else is helping you pay off a certain amount of your mortgage, assisting you in progressing towards positive equity on your home, where the market price greatly outweighs the remaining mortgage balance.

Interested in Upgrading? We Can Help

If you are interested in upgrading your current home, we can help you prepare your home to receive multiple offers and find the perfect home to fit your needs! If you have any questions, we are more than happy to help!

Every home seller dreams of having multiple offers on their house, after all it’s one of the largest assets that most people can attain in their lifetime and getting a good return on investment will be one of their top priorities. There are many factors that affect whether or not your home will receive multiple offers, however arguably the most important factor would be the current state of the market in terms of supply and demand.

Understanding the Real Estate Market Conditions

In a balanced market , where demand and supply are equal, the aforementioned “other” factors will become much more significant. Due to the coronavirus pandemic and other conditions, we are currently in an unbalanced sellers market , where demand outweighs the supply; the perfect conditions for sellers to receive multiple offers on their homes. The government has also announced their plan for permanent resident admissions, namely immigrants, to reach the levels of nearly half a million people . The influx of immigrants will significantly increase the demand for houses as the new permanent residents will all need some sort of housing.

If it is an unbalanced buyer’s market , where there is more supply than there is demand, it’ll become much more difficult to receive multiple offers on a house, let alone sell a house. A balanced market, where demand and supply are equal, won’t be nearly as difficult as a buyer’s market. When it isn’t a seller’s market, you’d have to perform certain actions to help your house perform favorably on the market.

A Price Tag they Can’t Refuse

One of the best ways to get multiple offers on your home is to create an auction atmosphere. Auctions are an incredible selling tool. There is an incredible psychological experiment where they got people to bid on a $20 bill, the unique twist being that the second highest bidder would also have to pay their bid. Of course, the allure of buying a $20 bill for anything less than that was too sweet to resist.

However, the irrational part begins when the bidding reaches $20, most people will have stopped bidding at this point but the remaining two bidders will usually get stuck in a deadlock, bidding against each other to suffer the least amount of loss. Their competitive spirit takes over, all reason goes out the window, and there are anecdotes of bids reaching $2000! Obviously, housing bids won’t be as irrational since more capital is involved and there isn’t a penalty like the experiment. A low starting price, a price that’s too good to pass up, is the perfect incentive that will ignite a bidding war.

Open House and Home Showings

Varying experts have different opinions on this topic, give ample access so buyers can come and go when they please, or limit the viewing times so that many potential buyers are viewing the location at the same time? It’s difficult to say which is right, both ways seem to hold some merit, then the best method is whichever is more convenient for you. In the current state of coronavirus pandemic, things are different since large gatherings are prohibited but online listings can bring in many viewers so hire a professional to take the listing photos.

Home Improvement

A commonly asked question is what steps should be taken to prepare a home to be sold. Huge, costly renovations aren’t something most people want to spend money on, fortunately the famous saying of keep it simple applies here as well. Low-cost home improvements prior to listing can go a long way.

● Fresh paint
● Replacing outdated light fixtures
● Refinishing floors/replacing carpets
● De-cluttering
● Sprucing up landscaping/curb appeal

The most important factor of the list above would be the colour of the fresh paint. A quick google search will tell you there are many different colours that can enhance a room, what they all have in common is the shade. A softer and lighter shade of colour has generally performed better than darker colours.

Final Thoughts

Homeowners that can generate multiple offers on their homes will have done their research.
Luck is generally not a factor. As a seller, getting multiple offers on their home is the best
case scenario, and the above tips can help homeowners achieve that.

Selling your home is rarely a market-driven decision, it’s usually an outcome of a change in lifestyles. A house is generally the most valuable asset most people can attain, and determining when is the right time to liquidate this important asset to maximize the return on investment is a difficult thing to do. Unlike trading stocks, homes carry meaningful emotional baggage, it’s not as clear cut and simple as buy low, sell high. Here are some signs that it might be time to sell your home!

Positive Equity

Being financially prepared to relocate is an important factor for you and your family’s security. During a housing market meltdown, millions of homeowners can find themselves with a negative equity on their house, meaning they owe more on their mortgage than they can sell their house for. Clearly, selling a home on negative equity is not a good idea and shouldn’t be exercised unless it is to avoid bankruptcy or foreclosure.

In the last several years home prices have been gradually increasing, meaning homeowners are building equity and they are also paying off their mortgages at the same time further increasing their equity. It is actually quite simple to calculate your home equity, it is just the difference between the remaining mortgage balance and the market value. A good idea would be to have enough home equity to pay off the rest of the mortgage and a surplus capable of providing at least a 20% down payment on your next home.

Lifestyle and Family Changes

Condos and apartments were perfect when you were young, living with roommates or by yourself. It offered just enough space, had the right amenities, and was convenient for you to get to your workplace. However, when you get into a new relationship or are trying to start a family, a change may be in order. The most common reason people sell their homes is when their family has outgrown the space and they are shopping for the right school district.

A home with a big yard may become excessive when the kids have gone off to college or moved out to be on their own. Amidst the coronavirus pandemic, work from home opportunities have become prevalent and larger homes will become more attractive for buyers as space for a home office is now almost a necessity.

Market Conditions and Solid Plan for What’s Next

If you do decide to list your home for sale, understanding what the local real estate market conditions are can be quite beneficial. Essentially, it comes down to supply and demand, and whether they are balanced or unbalanced. The only situation where it is not a good time to sell your home is when it is a buyer’s market, meaning there is more supply than there is demand. When it is balanced, or when it is a seller’s market, that is the ideal time to list your home on the market. Selling your home is a significant change to your family’s lifestyle, and obviously you should have a solid plan to secure your next home because you will always need a place to live.

You have decided you want to sell your home, but now you are faced with a common seller dilemma: should you repair your home before selling it? Well our home experts are here to tell you that there are so many benefits to doing those touch ups to keep your investment strong and give you the best money in your pocket!

When selling a house, you want to get the best profit, and as a smart seller, repairing the most important things in your home will ensure you get the most money. Leaving any repairs for the buyer is not the smartest move, especially since some buyers will make purchases contingent on certain repairs. The last thing you would want is for your sale to fall through because of a minor repair issue. Not everyone has an unlimited budget, so first tackle those broken components in the home and anything that would stop a sale from happening.

The key to being a smart seller when it comes to repairing your home before selling, it is to focus on those important repairs without overspending. You wont be around your home to enjoy those new cabinets or new floors once you sell, so be smart when making choices for what to fix up. Factoring in the return on investment is important, since some repairs are very expensive, but ultimately useless, because they will add little the sale price of the home.

Knowing your competition puts you on top! Before deciding to make that dream skylight in the master suite or lifting your roof, think about what sells in your neighborhood. Homes in your area are your main competition, so if an upgraded kitchen sells, then this should be your focus for repair. This doesn’t necessarily mean buying the most expensive cabinets and appliances. A simple paint job or updated hardware might be enough to give your kitchen a new look and bring you a higher return. Compare the homes in the neighborhood and make sure that every dollar you spend will support you a higher asking price. 

Before jumping into breaking walls and tearing floors, weigh the costs of your planned improvements against your home market value once everything will be completed. Every house condition is different, so the repairs you make will be specific to your home. Be smart with your investment repairs, and talk to your real estate agent about the market you are entering for the best return on your property.

Renovating our home can not only make us feel happier, but it can actually increase the value of the property, so that when you decide to one day sell it will bring you the highest return on investment. But when thinking to upgrade the home, it’s important to invest in the right renovations, especially in a down market, to ensure it doesn’t detract the house price. We have gathered some tips below to make your home the most attractive to future buyers, and give you the post profit.

1. Bathroom

Bathrooms are one of the most popular home renovations, as they really increase the value of your investment if done wisely. Upgrading your bathroom can be costly, so budget yourself when choosing the right vanity, lighting fixtures, baths or even flooring. If you want to do some minor repairs without full scale renovations, swap out old drawer knobs, faucets and pulls for a more modern and cohesive look. If you only have one bathroom in your house, take a look at any extra spaces not being used and consider adding a half or even full bath if you have the space.

2. Kitchen Remodel

For most homes, kitchens are the heart of the home. If done right, remodelling an outdated kitchen can add a lot of value and give you a higher profit on your home. Upgrading your cabinets, appliances and lighting fixtures can improve both the look and functionality of an older style kitchen. When invest in a new kitchen, the best advice we can give is: don’t go overboard! A little sometimes goes a long way, so don’t invest in a deluxe kitchen, but try to budget your choices.

3. Upgrade those Windows

Replacing old windows can give your home a fresh new look and can bring up the value of the home by bringing down energy costs. Switching to energy efficient windows can save significant heating and cooling costs. Check out vinyl window replacements the next time you’re thinking of swapping your windows.

4. Outdoor

There are many outdoor structures that can bring up the value of your home. Simple fixes like adding a new fence will give your home better privacy and curb appeal. If you have the space, investing in a fire pit can give your home a cozier and warmer feel during the cooler months. Add a deck to your backyard and enter a world of possibilities. The addition of a wooden deck gives you space for barbequing, gardening and if large enough a spot for patio table and chairs. Decks will increase the value of the home, but you want to be aware of the costs with adding a deck to your property, because everything depends on size, materials and how many extras you want added to the deck. When renovating your outdoor space, avoid adding in-ground swimming pools, because while it seems like a fun idea, it will make your house much more difficult to sell in the future.

Selling your property is just as important as buying it. As a homeowner your number one priority should be getting the maximum value for your home. Unfortunately this isn’t the easiest task to accomplish. That’s why we provided the most common home seller questions and answers!

1. How much is my home worth?

This is a number that heavily depends on the home’s individual factors. A common tactic is to look at figures of properties in your area, using an online valuation tool (RBC Home Value Estimator), searching “how much is my house worth?” or getting a comparative market analysis by asking your local real estate agent. You can also opt to hire a professional home appraiser because lenders usually require a home appraisal before they approve a mortgage. Among other things, appraisers evaluate:

  • Market: The region, city, and neighbourhood in which your home is located.
  • Property: Characteristics of the house, including renovation improvements and the land it is located on.
  • Comparable properties: Sales, listings, vacancies, costs, depreciation and other factors to similar units in your area.

2. Should I be present for viewings?

In most cases, it is not recommended for the seller to be present during the viewing, as it can make the buyer feel uncomfortable and unable to ask certain questions. Be sure to allocate time for yourself to be away when you have a viewing planned. Homeowners being around the property can also curb buyer interest. Home inspections are a good sign, as they are more intensive and show a sign of serious interest in your property!

3. Should I stage my home?

The perfect answer for this situation is yes, having a staged home increases your sale value. A staged home sells quicker than an empty one. It has been proven that a staged home can help potential buyers better visualize the space in your home. The major difference between a staged and unstaged home is the overall appearance and ambience provided to buyers when viewing your estate. Staged homes cater to buyers and feature a number of qualities that could make your home deemed “buyable.” Overall, staging your home can make you money, and according to the National Association of Realtors, 71% of agents believe a well-staged home increases the dollar value buyers are willing to offer!

4. Do I really need a real estate agent? Why not sell it myself?

Unless you are a real estate agent yourself, many would recommend going with an agent. Real estate agents have the benefits of time tested experience, a working knowledge of the market, and the ability to accurately price a property to ensure a quick and easy sale.

5. How does the market look right now? Should I list now, or later?

Unless you are a professional agent, it is very hard to determine when really is the right time to list a home. There are simply too many factors to be aware of and too many shifting variables. Therefore market knowledge is the reason to hire a realtor. Your agent should be able to tell you the current days on the market for home sales, market absorption rates, average sale price and more. In the real estate market, knowledge is essential!

Buying a home can be stressful. It is generally one of the biggest investments an individual can make. Although the thought of owning a home is exciting, it can also be extremely overwhelming. That’s why asking the right questions is vital for your understanding before making a decision. Here are the 5 most commonly-asked questions before buying a home!

1. Should I buy instead of renting?

There are numerous benefits to buying a home. The most common argument is when you own a property your money spent on a monthly basis is an investment. When you rent a property, your money spent is an expense. Rent money you will never get back, you are paying for a property you do not own; and therefore you do not build equity. Ultimately your money is building your landlord’s wealth instead of yours.

Owning a home is the way to go for building lifelong wealth. Although the initial startup can be expensive, if you factor in the cost, owning your home will end up cheaper in the long run. So like they say, save, save, save! It is definitely worth it. 

2. How much do I need for a down payment?

Saving for a down payment is the biggest obstacle for first time home buyers. Most first time home buyers aim to put 20% down, and that can be a bit steep. Thankfully, the first time home-buyer incentive allows Canadians to put 5% or 10% of the home purchase price as a down payment. This down payment lowers your mortgage carrying costs, making home ownership more affordable. This program makes it easier for you to buy a home, and is known as a share equity mortgage. This means the government shares in the upside and downside of the property value allowing you to borrow less, and to pay back the same percentage (5% or 10%) of the value of your home when you sell it in a 25-year window. 

3. Does my Credit Score affect my ability to buy?

Not necessarily. If you have a low credit score it is not impossible to get a loan, but it will make things a lot harder. Companies like Equifax and TransUnion keep reports on your credit information. Before applying for a loan get reports from both companies. Fix any errors you may notice to improve your score and pay bills on time to improve your chances of getting a future loan.

4. What do banks mean by “pre-qualified” and “pre-approved”?

Getting pre-qualified for a mortgage tells you how much you may be entitled to borrow. This mortgage amount is not guaranteed, as a letter from the lender may only state you are “likely” to be approved for a mortgage of this amount.

Getting pre-approved for a mortgage is based on your credit score, and is a very good sign! You as the buyer have more to offer when making a deal, especially in a competitive market which is a huge plus.

5. Why should I use a real estate agent?

A real estate agent is always here to help you. They will find the right home, and will offer you advice on what price to offer and conditions you may want to consider. A huge advantage is agents already know the area you are looking to buy in. It is important to have an agent on your side as you spend a lot of time checking out homes.

Real estate agents also know what to look for, and are more familiar with all the paperwork than you are. If you are thinking about saving money: some mistakes or omissions in homeowner documents can cost you far more than hiring a realtor. 

Lastly, having a realtor by your side ensures your privacy, confidentiality, and fiduciary duty. A real estate agent will have your back whether you are a buyer or a seller, and have a fiduciary duty to their clients, legally putting your interests first all while imparting a high standard of confidentiality.