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If you’re thinking of  buying a home, this 12-step plan will help to guide you in the right direction.  But before we jump right in, you have to make sure three things are ready: you,  your bank account, and the real estate market.

Are you ready? Be sure.    Owning the roof over your  head will bring you great pride, but with that pride comes accountability and  sacrifice. There’s the obvious financial responsibility, but your home will  also require constant care and upkeep. That’s what real pride of ownership is  all about.

Is your bank account  ready? Check it twice.    Your first home will be  the biggest financial obligation you’ve ever faced. You should already be an  experienced saver, and good at managing debt like student loans or credit  cards. Ideally, you’ve also saved up some money for a nice down payment. Talk  to your financial institution about the Home Buyers Plan too. Our next step  will give you a crystal clear picture about how much you can afford.

Is now a good time to buy?  Here’s the hottest market tip you’ll ever get.    Markets go up, markets go  down and even the smartest experts can’t accurately predict when a market will  peak or bottom out. The good news is, if you’re buying a home as a long-term  investment (and for long-term enjoyment), you’re protected from short-term  changes in the market. Over time, real estate has almost always increased in value.

All you have to do is pick  a home that meets the needs of you and your family. Then you’ll enjoy living in  your investment as it grows in value. A home is one of the best financial  decisions you can make, so make sure you think things through.

Step 2: Figure Out How Much  You Can Afford.

Before you start looking  for your dream home, let’s find out how big you can dream. Knowing your true  budget is the first and most important step in buying a home. Why?

A home is a big purchase.    It’s probably the most  expensive thing you’ll ever buy, and there are lots of expenses you might not  even know about. Everybody’s total costs are different, but it’s almost  guaranteed you won’t have that much money saved up. Hopefully you have enough  for a nice down payment. Here’s the reality in detail:

Cost of buying a home =    One time costs (down payment, legal fees,  inspection fees, taxes)  

Monthly  costs (mortgage, utilities, maintenance, insurance, property taxes)

Yes, you need a mortgage. Step 9 is practically  bursting with tips on how to arrange your mortgage but for now, we just need to  figure out how much a bank will lend you.

How much will a bank lend  you?    Well that depends on how  much you can afford each month. This is determined using two lending  principals.

The first lending  principle is that your monthly housing cost should not exceed 32% of your gross  monthly family income. This principle is known as the Gross Debt Service (GDS)  ratio calculation.

The second lending  principle used, the Total Debt Service (TDS ) ratio calculation, is that your  monthly housing cost and payments on all of your other debts (including loans,  credit card and lease payments) should not exceed 40% of your gross monthly  income.

Step 3:  Decide What You Want to Buy.

First, decide where you  want to live.

Urban - The big city. Sure the  prices are generally higher, but you can walk to a restaurant, maybe even to  work. You’ll also have the widest range of housing options.

Suburban -Newer schools, newer  shopping centers, bigger yards, bigger homes, no wonder so many people love the  suburbs. But if you work in the city, be prepared for lots of rush hour  traffic. It’s a packaged deal.

Smaller Cities and Towns - There are many wonderful  self-contained communities, and compared to the big city, you can save a  bundle.

Rural -If you like the idea of  owning land, how about a few acres all to yourself? Seclusion is not for  everybody, but for some, it’s heaven.

Next, decide what type  of home you want.    By now, you probably have  a good idea of what type of home is right for you. To familiarize you with the  terminology, here’s a quick overview:

Single-family detached    As the name implies, the  home is not attached to the home next door. Styles range from a single-story  suburban bungalow, to a three-story Victorian.

Semi-detached or linked    Two houses that share a  common wall. Typically less money than a fully detached home.

Duplex or Triplex    A two-storey or three-storey  home, with each floor belonging to a separate family. Separate entrances are  most common.

Town house    Also known as terrace or  row housing. Several homes with a common style joined in a row. They usually  share walls on both sides. May come with a monthly maintenance fee.

Condo    An  upscale version of an apartment. Usually located in high-rise buildings with  access to common elements. Maintenance fees usually apply. Condos also make a great  first home purchase because they’re often thousands of dollars less than a  detached home.

How  Condos are owned    You’ll  own 100% of your unit, and a share of the common areas. Common areas include  the necessary plumbing, electrical systems, hallways and elevators. They may  also include lots of fun stuff like a private gym or party room.

Condo fees    Membership  has its privileges, and it costs. On top of your mortgage and property taxes,  condo owners also pay a monthly fee to operate and maintain the common areas.  Be sure to look into condo fees, and how well they’re managed, before signing  anything.

New or Resale?

Resale. Previously loved.    Nothing can match the  charm and character of an older home. As a bonus, the previous owner may have  made improvements and upgrades and you get them with the house, usually for  less than the cost of putting them in yourself. However, some may have a little  too much ‘character’ like a leaky roof – know what you’re getting yourself into.  You should always work with a knowledgeable REALTOR©, and as we cover in Step  10 never buy a resale home without a Home Inspection.

Ahh, that new house smell.    You will be the very first  person to live in your new home. In fact, your new home may be so new, that it’s  not even built yet. You have the luxury of customizing your home to your tastes. But when you move in, be prepared for constant touch-ups by your  builder; dust, mud and unpaved roads if your area is still developing; and  shifting and settling of your home (cracks and popping nails) within the first  year.

Before you commit to  anything, carefully examine the property, the blueprints and visit other homes  built by the same building company. Check to see you like the finishes they  offer and the craftsmanship and quality of their work. Have your REALTOR© and  lawyer review everything before you sign. While your home is being built, stay  on top of the process and remember, you have a legal right to make a full  inspection of the house before you accept it as complete.

You know what you want,  but remember to focus on needs.    Are you getting out of a  two-bedroom apartment because it’s too small? Then your new home should have at  least three bedrooms, and probably a second bathroom. REALTORS© call these  must-have features needs. Features you’d like to have are called ‘wants’.

Your strategy should be to  find a home within your price range that fulfills all or most of your needs,  and as many of your ‘wants’ as possible. Use the Dream Home Checklist to help you decide what you’re looking  for in a home.

Step 4: Find a REALTOR© that is Right for You.

You know how much money  you have, and you have a good idea of what you want. Now you need the help of a  real pro, to make your search a success.

REALTORS©. Highly trained,  and continually training. REALTOR© Membership of a Real Estate board, ensures the highest  level of service and that you are always treated with honesty and integrity.  This is backed by the REALTOR© Code of Ethics. Take a look at The REALTOR©Commitment®  to learn more.

The Three REALTOR© Relationships    The relationship between a real estate brokerage and an client is called Agency and there are three major  kinds:

1.  Seller (Vendor) Agency   The real estate brokerage  and all its REALTORS© represent the seller exclusively and it’s their job to  get the best offer on the home. They are legally obliged to tell the seller anything  known about a buyer. For instance, if a seller’s REALTOR© knows a buyer will pay more for a property, they must tell the seller.

2.  Buyer (Purchaser) Agency    The real estate brokerage  and all its REALTORS© represent the buyer exclusively. They seek out homes that  meet the buyer’s needs and help assess the merits and defects of potential  homes. They keep the buyer’s information confidential and never disclose  information like the maximum amount their buyer is willing to pay. You may be  asked by your REALTOR© to sign a buyer agency agreement. In fact, in some  provinces, REALTORS© are required to  ask you for your own protection. This agreement ensures that the REALTOR© and  the brokerage can look after your best interests.

3.  Dual Agency    Sometimes, a brokerage may  have an agency relationship with the buyer and the seller. Both the seller and  the buyer must give their informed consent, and the REALTOR© must always  provide full and timely disclosure of all pertinent information to both  parties.

SELL AND BUY WITH THE SAME  REALTOR©? Absolutely! Especially if  you’re remaining in the same community. Your REALTOR© is already an expert on your  needs, so it can save you a lot of time and energy.

Selecting a REALTOR©

There are lots of ways to  find a REALTOR©. As you drive through prospective neighbourhoods, jot down the  names and numbers of REALTORS© on the ‘For Sale’ signs. Open Houses are a great  way to meet face-to-face. Maybe friends or family members have worked with a  REALTOR© they love. Interview two or three and pick the one you like best.

How REALTORS© help buyers  like you.    A REALTOR© will review your  list of wants and needs to help you determine your price range.

• Answer  questions about the markets you’re interested in and help you compare homes  and neighbourhoods.
• Use  the local Multiple Listing Service (MLS).
• The  MLS is the single most powerful tool for buying and selling a home. Your  REALTOR© will give you access to exclusive features of the MLS system that the  public is not privy to.
• Preview  properties to ensure you’re only shown homes that meet your needs and budget.
• Make  appointments and walk you through potential homes, answering all your  questions.
• Give  up-to-the-minute information on financing and explain your mortgage options.
• Negotiate  with the seller, smooth out any potential conflicts and draw up a legally  binding contract.

Stick with your REALTOR© One dream, one team. The  REALTOR© you select will become an expert on your specific needs and tastes.  Scattering your time and  energy amongst multiple REALTORS© will work against your goal of finding your  best home. And because most REALTORS© have equal access to the same property  listings, there’s no real advantage to having multiple REALTORS©.

Step 5: See What’s Out There.

The hunt is on! Time for  you and your REALTOR© to find that perfect home.

Read all about it.    Start reading real estate  ads in local papers, or visit the MLS . Let  your REALTOR© know what you like. Visit areas you are considering and get a  feel for them. Make note of the surrounding schools, shopping and recreational  areas. Keep an eye out for not-so-great things like large industrial areas,  railway tracks, high-voltage power lines and airports. Visit during the day and  at night.

Open House, come on in.    ‘Open houses’ are a great  way to see inside the homes of your potential neighborhood. The hosting  REALTOR© probably knows the local market inside and out, and will be happy to  answer the questions that are bubbling up inside you don’t be afraid to ask!

House hunting with your  REALTOR© – hunting smarter    If you’ve been very good,  you’ve armed your REALTOR©with your Dream Home Checklist. Even if you’ve just talked  about it, your REALTOR© knows what you’re looking for.

Welcome to the wonders of  mls.ca    REALTORS© run an  incredible research tool called the Multiple Listing Service (MLS). You can  view information about properties listed in MLS systems across the country in the public advertising portal. Your REALTOR© will start sending  you listings of potential homes right away. You’ll be amazed how fast and easy  it is to zero in on your favourite few homes.

Work from a short list    If you and your REALTOR©  have done your homework, and used MLS listings to scout ahead, you only need to  visit a handful of homes to make an informed and wise selection.

Stay objective when  visiting potential homes    Walking through a  potential home is a thrill, but try not to lose your head. Don’t let a giant  kitchen island or swanky hot tub distract you from your real goal, finding a  home that meets all your needs and fits your budget. That’s why we’re arming  you with this comprehensiveHouse-Hunting  Checklist. Print it out and be sure to take it with you to homes you’re  serious about buying. Good luck and happy hunting!

Step 6: Sell Your Current Home.

Not many people can hold  on to two homes, so you’ll probably need to sell the home you have now. Be sure  to check our incredibly helpful 10 Steps to Selling Your Home. In the meantime,  here’s a quick overview.

When should you sell?

Buyer’s and seller’s  markets explained.    When there are lots of  people looking for homes but not many for sale, this is called a “seller’s  market” because the seller has something everybody wants. When there are lots  of homes for sale and not many people buying them, this is called a “buyer’s  market” because buyers have more power of choice.

Wait for the market to  improve?    If you’re selling one home  and buying another, you don’t really have to worry about playing the market. If  you sell your existing home for a ‘low’ price, you’re probably also buying at a  low price. If you are upgrading to a larger home, this actually works to your  advantage. Imagine when your bigger home is on the upswing.

Seasonality. Do home sales  get frostbite?    It’s true. Winter sales  tend to be slower, and Spring sales are more brisk. Regardless, there are  always people looking to buy and sell, and seasonality is only one of many  factors to consider.

If you need to sell fast.    Talk with your REALTOR©!  They are experts, and know the price that will make your home look attractive,  without making you look desperate.

Buy first or sell first?  The eternal question.    Many people are able to  time their sale and purchase so they happen on the same ‘closing date’. Buyers  can make their offer ‘conditional’ on the sale of their existing home, to make  sure they’re not left paying for the upkeep of two homes. When selling, you can  try to extend the ‘closing period’ to give yourself more time to find your next  home. REALTORS© are very skilled at this sort of negotiation, and can make your  transition a lot easier.

Sell with a REALTOR©, or  go it alone?    In the same way that many  people decide not to fix their own cars or do their own dentistry, it’s wise to  enlist a professional when selling your most valuable asset. Real estate transactions  are complex, time consuming and involve a lot of legal documentation. Finding  your new home and changing your life is hard enough! Your REALTOR© is expertly  trained and highly motivated to get you the most for your home.

Step 7: Add  a Lawyer to Your Team.

Buying a home involves  piles of legal documents. You need someone to translate the ‘legalities’ and  ensure your best interests are protected.

Finding a good lawyer.    There are lots of good  lawyers out there. Ask your friends or people at work. REALTORS© will happily  give you the names of several good lawyers. They can’t legally recommend just  one, but they’ll only refer lawyers experienced in real estate. Be sure you ask  how they structure their fees, and get an estimate of the other legal costs you  can expect.

How your lawyer will help.

There are many, many legal  steps to transferring ownership of land from one person to another. Even if  pitfalls like fraud, government legislation, zoning issues or unpaid taxes  don’t come up, your lawyer will more than earn their pay by making the legal  transfer of the home a smooth one.

Don’t be scared of your  lawyer.    They are there to help  you. Ask questions if you don’t understand anything. Explaining legal jargon in  plain language is a big part of their job.

Step 8: Make  an Offer.

You’ve found a home?  Congratulations! Now, if you actually want to make it yours, you have to make a  successful offer, one that the seller will accept.

Preparing the offer.    REALTORS© are expertly  trained and will prepare the offer for you. Here are some terms you’ll see in  the offer:

• Buyer  or Purchaser That’s you.
• Seller  or Vendor – The present owner(s).
• Purchase  Price – The most important number.
• Deposit  – A cheque you write to the seller’s broker, who deposits it in a trust account.  This is your way of saying “my offer is serious”. The size of the deposit is up  to you.
• Clauses  particular to this agreement – Every transaction is unique, and your REALTOR©  may add conditions important to you. Making your offer conditional upon a proper  Home Inspection is a good idea.
• Chattels  included and fixtures excluded – Be sure you know what is included with the  house! The washer and dryer, the microwave, draperies, light fixtures. Don’t  leave anything to ‘chance’ because chances are, it won’t be there when you move  in.
• Irrevocability  of the offer – The length of time you give the seller to consider your offer.  Usually less than 48 hours.
• Completion  date – The glorious day you take possession! Often 30 or 60 days after signing.

About the offer.

When it comes to the type of  offer you make, it really depends on your individual situation. Discuss your  options with your REALTOR©to see which of these offers is right for you.

• Firm Offer to  Purchase

Usually  preferable to the seller as it means you, the buyer, are prepared to purchase  the home without any conditions.

• Conditional  Offer to Purchase

Usually  means there are one or more conditions on the purchase, such as “subject to  home inspection”, “subject to financing”, etc. The home is not sold unless all  the conditions have been met.

• Acceptance of  Offer

An  Offer to Purchase is presented to a seller who may choose to accept the offer,  reject it, or submit a counter-offer. The counter-offer may be in regards to  the price, closing date, or any number of other variables. Offers can go back  and forth until both parties have arrived at an agreement or either side ends  the negotiations.

Submitting the offer    You’ve signed on the  dotted line and your REALTOR© has whisked your offer to the seller’s REALTOR©.  This process works best when you don’t meet the seller in person.

The seller can accept your  offer – Fantastic, when do you move in?

The seller can reject your offer – It’s not common for an  offer to be completely rejected. Your REALTOR© will likely investigate, to see  if there was some sort of misunderstanding.

The seller can sign back or counter your offer- The seller wants to alter – some part – of your offer. It’s almost always the price. The seller will cross  out the price on your offer and write a higher number. Now it’s your turn to  sign back, and see if you can bring that number down. It can feel a bit like a  ping-pong match. Emotions can run high, so both sides will be reminded that a  little flexibility goes a long way. Good luck!

Step 9: Arrange  a Mortgage.

Money makes the world go  round, and a mortgage gives you the power to buy a home. This isn’t the most  fun step in buying a home, but it’s vital.

Who do you talk to?    There are hundreds of  banks, credit unions and other lenders out there who would love your monthly  mortgage payments. So talk to everybody. Now is not the time to be money-shy!  Talk to your banker and call around to other banks. Ask people you know.  REALTORS© are very knowledgeable about Mortgages and have lots of good advice.

Call a Mortgage Broker.    Mortgage brokers are  another great resource. They find low rates for a living, and they usually  don’t get paid unless you sign a mortgage through them, so they’re highly  motivated to get you the best deal.

Your best mortgage might  be the seller’s mortgage.    You can sometimes take  over or ‘assume’ the seller’s mortgage. This is a great idea if the seller is  locked into a lower interest rate than you can get right now. Your REALTOR© can  help you.

Mortgage Terminology

Mortgage term - Typically from six  months to five years, the ‘term’ refers to how long the bank has agreed to lend  you the money. At the end of the term, you usually renegotiate a new term.

Amortization - The length of time it  will take you to pay off the whole mortgage. Often as long as 40 years, if you  don’t accelerate your payments. The longer your amortization, the lower your  monthly payments, but the more you pay in interest over time.

Interest rates - Interest is the cost of  borrowing money, and the interest rate tells you exactly how much. Using the  mortgage calculator, check the difference between borrowing $100,000 at 6% and  at 9% at the same amortization. Surprising, no?

That interest rate not  only affects how much you pay, it also affects how much you can borrow. So  remember to keep searching for the best rate!

How big a down payment?    You want as small a  mortgage as possible, which means making the biggest down payment possible. Just  remember to set money aside for all the fees associated with buying a home. Not  to mention moving, repairs, renovations, new furniture…think ahead.

Lock into an interest rate  – for how long?    It’s a tough question.  What if you lock in for five years and rates go into a period of decline?  That could mean you’re stuck paying more than you had to for a long time. But  if rates were to steadily climb over the next five years, locking in for five  years now would be a great move. For many, a long-term mortgage offers peace of  mind in knowing that their mortgage payments will stay the same for several  years. Your REALTOR© will have a lot of good advice.

What you need to apply for  a mortgage.

• Letter  of employment confirmation – Ask your employer for a letter that confirms your  position, your pay and how many years you’ve been with the company.
• List  your assets – Your car, stocks, bonds, GICs. Show which assets will be used for  your down payment.
• List  your liabilities – Car payments, student loans, credit card debt. List all the  money you owe, and note how you’re paying it off.
• Social Security Number – And your chequing account number, and your lawyer’s contact  information
• Information  about the house you want to buy-The home is your security on the mortgage, so  the lender wants to know all about it.

Don’t forget these extra  costs.    Face your new financial  responsibilities head-on, and you may even dodge some of them. And then won’t  you look smart!

Application fee - Some mortgage lenders  charge a fee to process your application. Many lenders will agree to waive this  fee, so make sure you ask!

Appraisal fee - Your mortgage lender may  need to have your new home appraised by a professional, and they often pass the  bill on to you. Sometimes your lender will also waive this fee. Again, it  doesn’t hurt to ask.

Mortgage broker’s fee - Your mortgage broker may  charge a fee that’s payable on your closing date. Ask your broker, to avoid  surprises.

Land survey fee - Lenders may require a  survey of your property. It can typically cost between $600-$900. Lenders will  often accept an existing survey. Get your lawyer on the case.

Home inspection fee - A home inspection is so  important, we devoted an entire Step to it. Avoid surprises and protect  yourself…this is money well spent.

Home Insurance - Mortgage lenders require  you carry fire and extended-coverage insurance because your home is the  security deposit on the mortgage. Often you can have these payments added to  your monthly mortgage payments. Shop around.

Fire Insurance- Mortgage lenders  require a certificate of fire insurance to be in place from the time you take  possession of the home.  The amount required is generally the amount of  the mortgage or the replacement cost of the home. This cost can vary on the  property size, amount of coverage, the insurance company and the municipality.  The cost can vary anywhere from $250-$600 annually for most properties.

Title insurance - Not mandatory, but it  protects you from all sorts of fraud and potential errors surrounding the title  to your land. It’s normally a few hundred dollars. Ask your lawyer for details.

Legal fees - Your lawyer is vital to  the home-buying process. You’ll pay legal fees for their time and  ‘disbursements’ which are the costs involved in title searches, drawing up the  title deed, and preparing your mortgage.

Maintenance and utility  costs -  Just a reminder, you now have more regular monthly payments in the form of  property tax, utilities, repairs etc.

Closing Adjustments- The previous owner may  have paid property tax or utilities in advance, and they want to be credited  for those payments. Any bills after the closing date are the responsibility of the purchaser. A lawyer will let you know what they are once the various  searches have been completed.

Step 10:  Find a Home Inspector.

When walking through a  home you’d love to buy, it’s hard to put aside your emotions and really see  what kind of shape it’s in. Now that you are buying, it’s time to see  everything. Home inspections rarely cost more than a few hundred dollars, and  their service can save you from unpleasant surprises when you move in.

Your offer to buy may be  conditional upon a satisfactory home inspection.    This is an increasingly  standard condition on any resale home. If the seller doesn’t want you closely  examining the home before you take possession, you have to wonder why.

Go with a qualified  professional.    Make sure your inspector  is a member of a provincial association of home inspectors. It’s your guarantee  they have the training and experience for the job. Your REALTOR© can recommend  several home inspection companies to choose from.

What will they check  during the inspection?    Lots of stuff. Plumbing  and electrical systems, the roof, visible insulation, walls, ceilings, floors,  windows and the integrity of the foundation. They check for nasty stuff like  lead paint, asbestos, mould, outdated and dangerous wiring, and they’ll look  for evidence of pests like mice or termites. A good inspector should make you  feel like you’re watching a CSI detective.

Join the inspection.    There’s no better way to  get familiar with your new home than being part of this checkup. If any problems are detected, you’ll see them firsthand, and you’ll also learn some maintenance tips from a genuine pro.

You’ll get it in writing.    Their report will  summarize the condition of your home. If there’s anything that needs work, the  home inspector will provide an estimated cost for the repairs.

Home inspection for a new  home?    New does not equal  perfect, and construction quality can vary greatly from builder to builder.    Repairs and corrections  will probably be covered by a provincial new home warranty program like Tarion,  so bad news doesn’t necessarily mean it will cost you.

Step 11:  Close the Deal.

Your offer has been  accepted and you can’t wait to move in. These are exciting times, but don’t  break out the bubbly just yet. You have to close the deal. Your REALTOR© and  lawyer will do most of the closing work, but here’s your checklist.

Closing checklist

• Immediately  begin satisfying any conditions of the agreement that require action on your  part. Your REALTOR© will fill out the documents stating that the conditions  have been satisfied.
• Have  your lawyer begin searching title to the property. This can take a while, so  make sure you give ample time.
• We  recommend a home inspection to avoid any unpleasant surprises on move-in day.
• Well  before closing, get your homeowner’s insurance. Your insurance broker will give  you a ‘binder’ letter certifying that you’re covered. You can’t get a mortgage  without this letter!
• Contact  your lender and have them finalize your mortgage documents. Have your lawyer  review them before you sign.
• Your  lawyer will transfer essential utilities like hydro and water, but you’ll have  to make sure telephone and cable companies switch their services to your name.
• If  you rent, you must give notice to your landlord, or sublease your apartment.
• Begin  planning your big move! Where are those cardboard boxes? Book your moving  service early to avoid scheduling problems.
• Send  out your change of address information and fill out a card at the post office.
• Contact  the Ministry of Transportation about changing your driver’s licenses.
• A  day or two before closing, you’ll meet with your lawyer to sign the closing  documents.
• Your  lawyer will tell you in advance what certified cheques you’ll need to seal the  deal.

The big day arrives

Deliriously happy and  emotionally exhausted, here you are on closing day. You made it! If your lawyer  has arranged everything well, closing day can be surprisingly low on drama.  Before you know it, you’ll be handed the keys you new home.

Congratulations!

Step 12:  Move In.

Moving day will come  sooner than you think, so get planning now.

‘Closing date’ often means  moving date.    Unless you have major  repairs or renovations planned, you probably want to move in the day you take  possession. If you intend to move at the end of the month, contact a moving  company or truck rental company now. Most people move during this time and  there aren’t trucks and movers for everybody. If you can move mid-week or  mid-month, a moving company might cut you a deal. Keep in mind, the closing  process might not have the keys in your hands until early-to-mid afternoon.  Verify with your lawyer and schedule your moving times accordingly.

Go with a reputable moving  company.    We’ve all heard moving  horror stories. Go with an established, insured mover, so your items are  protected. If any damage does occur by the movers, call the moving company  immediately to notify them.

Pack it yourself, and pack  early.    Nobody will take the same  care you will. Start early and spread it out over many days. Label all your  boxes by room so the movers know where to put them, and label anything that’s  fragile. Smaller breakables should be driven to your new home by you to ensure  they are safe from breakage.

Do you really need to take  that with you?    A new home is a new lease  on life, and a chance to liberate yourself from stuff you simply don’t need. If  you haven’t used it or worn it in the last year, you don’t need it. Have a  garage sale to make some extra cash for your move, or give your items to  Goodwill or United Way. You won’t have to pack  and unpack it, and it will become someone else’s treasure.

Once you move in.    The boxes are mostly  unpacked and you’re settling in nicely. You will now feel a strange urge to  begin making changes and improvements right away. That old carpet has to go; a  bigger deck would be great for entertaining…slow down! Take time to get a  feel for your new home, and more importantly, your new budget. Take a deep  breath and enjoy what you have, your new home.

Asked at a news conference in New York what it would take for Canada to act again to cool the market, he said: “It will take clear evidence of a bubble in the housing market in Canada, which we have not seen.”

Given low interest rates, the level of housing demand in Canada is not surprising, Mr. Flaherty said. But he added: “We have seen in the past year some softening in the Canadian housing market, in part due to the tightening of the insured mortgage market rules that we did earlier this year… That’s an appropriate result from that tightening.”

Home resale prices for Canada as a whole have risen between 5.7% and 7.8% over the past year, the report said.

Asked what would constitute evidence of a bubble, Mr. Flaherty said: “If we saw dramatic surges in prices in some part of the country. There’s some demand in Vancouver in particular, particularly from the Asian people coming to Canada who are investing in real estate. So there’s some demand there that is unusual in terms of the entire country, but overall across the country there’s been some moderation, which is good.”

The government has tightened mortgage rules three times since 2008, most recently in January.

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Before we get into specifics, here are three tips that every divorcing spouse should read. First, make sure you keep paying your bills throughout your settlement period. While I appreciate the raw emotions involved in working through a divorce, refusing to pay joint bills is literally cutting off your nose to spite your face. Recent slow or missed payments will damage your credit and make it either prohibitively expensive or downright impossible to qualify for mortgage financing in the foreseeable future. The best advice I can give you is to make sure that all of the bills are paid (you can seek reimbursement for the expenses your spouse should have covered during the settlement phase, so keep your receipts!)

Second, separate your joint accounts as soon as possible and check your credit report to ensure that you did not miss anything. Regardless of what you and your ex-spouse have agreed about who is responsible for paying what bill, a missed payment on a joint account will hurt both your credit ratings equally. Also, if all or most of your credit has been in your spouse’s name, set up your own accounts as quickly as possible because it is much easier to get approved for a mortgage with an established credit history. 

  
Third, since no lender will provide you with a mortgage until all of your future financial obligations can be clearly understood, complete your separation/divorce agreement as a matter of priority. Also, because your soon-to-be ex-spouse can make a claim against any of your assets, lenders will not risk such a claim on your new home while divorce proceedings are still underway.  

More specifically, if you are looking to buy out your former husband/wife’s share of the matrimonial home, the first step is to agree on the property’s current market value. This can be done by hiring an appraiser, or by giving us a call for a free market evaluation. If an agreement on price can be reached, the net equity in the home can then be calculated by subtracting any debts secured against the property along with the estimated costs of disposition (selling costs are included because they must be incurred in order to liquidate the property). If a price cannot be mutually agreed upon, the house could be listed for sale and the proceeds divided at closing.

While getting through a divorce is often unpleasant and expensive, getting good advice can at least help save you money and unnecessary hassle. To ensure that you are left in the best possible position, try to involve your chosen legal, mortgage and real estate advisors as early in the process as possible, because you’ll be surprised at the difference we can make, especially when given a little time.  

 (Please note: You should not make any final decisions related to your separation/divorce without the advice of a lawyer. Although I can explain the concepts, point you in the right direction and provide the appropriate real estate or mortgage advice, I am not a legal expert.)

And lastly, if you haven’t already retained a lawyer, you should consider contacting Fairway Divorce at http://www.fairwaydivorce.com. They offer a flat fee service that can save you a lot of money.

A tough topic, but one that unfortunately is a fact of life for 37% of Canadian families. Hope this helps.     

The Metropolitan Outlook covers 27 census metropolitan areas. Of these 27, there is expectation for only a handful -  Windsor, Calgary, Oshawa, Regina, Saskatoon, London, Sherbrooke, Winnipeg, and Thunder Bay -  to see higher real gross domestic product (GDP) growth this year.

“Most Canadian cities rebounded well from the recession. This year, however, a weaker domestic economy, winding down of federal and provincial government stimulus measures and uncertain economic conditions in the United States will result in stable or lower growth in a majority of cities,” said Mario Lefebvre, Director, Centre for Municipal Studies.

In terms of overall economic growth, in the top spot as the fastest growing Metropolitan economy for 2011, is Windsor. On the heels of growth of 3.5 % last year, there is an expectation that the GDP will rise by 3.9% in 2011- thanks in part to an expected cash injection in the construction industry, via the $1.6-billion Windsor-Essex Parkway project which will begin in 2011.

Similarly, Calgary will continue to grow promisingly- buoyed in part by the robust energy sector. There is forecasted growth of by 3.7 % in 2011, and expectations that it will exceed 4.0% in 2012.

In terms of housing, Robin Wiebe, Senior Economist with the Conference Board of Canada says that most of the markets are currently balanced; “Of 28 markets surveyed, 23 of them are balanced. Of the remaining five, two are in buyers market positions (Saskatoon and Trois Rivieries) and the other three are in sellers’ position (Thunder Bay, Sudbury and Oshawa).”

Wiebe holds hope that balance will be maintained in the Canadian housing market through the next year. “The real issue here is, we have not half bad employment numbers and reasonably low interest rates, which are good for the market.  There is also the introduction of mortgage rule changes- which have yet to take effect.  There may be a bit of a rush to market to buy for people who won’t qualify under those changes- before they take effect. This might bring sales forward.”

“There are enough good things present in our economy to avoid tipping too far into buyers’ market territory. There is an expectation, as well, that interest rates will remain low, and so affordability is still present. There is also expectation that employment numbers will continue to stay in a good range.”

First you see that the lawn has not been cut and the weeds are taking over. Then you notice that the newspapers and mail are piling up on the front porch. The windows look dirty, and the house looks forlorn and neglected.

These are possible signs that a house may have come under power of sale – but don’t be fooled. Even properties that look majestic and pristine, including homes in high-end neighbourhoods, can be subject to a power of sale.

A power of sale is a forced sale of a property by a mortgagee (a bank, financial institution or other lender) due to a default of one or more obligations by the mortgagor (owner or borrower) under the mortgage.

The obligations include: paying principal and interest, paying municipal realty taxes, providing adequate insurance on the buildings, and keeping the property in good repair. When a mortgage goes into default, lenders have several options, and power of sale is just one of the legal remedies.

 “There’s a story behind every power of sale, and in many cases it’s a sad one,” says Simon Giannini, Senior Broker with Royal LePage Signature in Toronto.

“For investors or lawyers, real estate is a piece of paper or a business proposition, and in a number of instances, if it doesn’t work out, the investors walk away,” says Giannini. “But most owners have an entirely different relationship with the property. Power of sale is very personal to them.”

In some cases, people have put only five or ten per cent down, and they become ill or lose their job, or both. As they fall behind on their payments, the lender will take over and sell the property to minimize their losses.

Giannini sees hundreds of power of sale situations each year, he estimates. But .  .”they are not necessarily a great deal for buyers or investors.” 

Buyers who seek a power of sale situation may think they’ll get a great deal, but Giannini warns that power of sale is not always an attractive proposition. “Many people have misconceptions about the value of a power of sale home,” he says. “It’s not always a good deal. Some people see it as an opportunity to take advantage of someone else’s misfortune, but fortunately, the courts hold the lenders to a higher standard, requiring them to get a fair price, and in fact the best price, for the property.”

As with any purchase, a prospective buyer should understand the local market values, and make sure to do a thorough physical inspection before finalizing a purchase.

The Real Estate Centre Team publishes a weekly report with a list of Power of Sale properties in the GTA. For a free copy, email me at simeon@RecCanada.com  or call 416.366.9090.

House prices in Canada increased by almost 7 per cent a year since 2000, according to ReMax, as tight inventories helped drive prices higher across the country.

The real estate brokerage examined sales data from 18 major Canadian markets and found that the annually compounded rate of return was 6.82 per cent. ReMax said the market has been skewed toward sellers for most of the last decade, except during 2008 and early 2009 when prices sagged through the recession.

Strong seller’s/balanced conditions prevailed for much of the time frame, prompting significant gains in housing values,” the report stated. “The lone exception was when the market dipped into buyer’s territory during the latter half of 2008 and early 2009. However, fewer listings served to offset diminished demand and provided greater stability.”

It reached that conclusion by examining monthly sales-to-new listings ratios – which indicate how much supply is on the market. More supply tends to mean lower prices, as sellers need to compete against each other to close deals.

From the report:

* “Western Canada experienced some of the highest rates of return for real estate over the 11-year period. While values in Regina posted the greatest percentage increase (9.56 per cent), Edmonton, (9.25 per cent), Saskatoon (9.2 per cent), Winnipeg (9.01 per cent), Kelowna (8.42 per cent), Greater Vancouver (7.8 per cent), Calgary (7.7 per cent) and Victoria (7.59 per cent) all outperformed the national average.

* Equally strong gains were posted in Quebec. While solid balanced market conditions prevailed for much of the decade, housing values in Quebec City and Montreal rose 9.2 and 8.48 per cent respectively on an annually compounded basis.

* Increases were more moderate in Ontario and Atlantic Canada – with the exception of Newfoundland & Labrador, where values escalated 8.14 per cent on average. Ottawa led in terms of price appreciation in Ontario at 6.78 per cent, followed by Hamilton-Burlington at six per cent, Kitchener-Waterloo at 5.69 per cent, the Greater Toronto Area at 5.35 per cent, and London-St. Thomas at 4.82 per cent.”

We’ll be on the air every Saturday from 6 PM to 7 PM talking about all things real estate.

You can listen to the show on radio at AM 1010 in the Toronto area, or go online to www.Newstalk1010.com and we’ll be streaming live.

Don’t forget to go to www.LIFERICH.ca to ask questions, or to register for one of our weekly courses at the Schulich Executive Centre, at York University.

We’d love to hear your feedback about the show, comments, suggestions, even complaints!

Our aim is simple: to be the best resource possible for anyone that wants to learn about real estate. Whether you are buying your first home, or you’re a homeowner, and just want to understand, or you want to learn more about creating wealth through real estate investment, this show will be for you.

Now, I’m off to prepare for the show!

Spring is just around the corner, and with the uncertainty about the stock market, more and more people are focusing on home sweet home. Values have come up an average of 7% per year over the last 30 years, so people are not afraid to spend money on what has proven to be one of the best investments they have. The key is to know where to spend your money, and there are several areas to consider, which include both cosmetic and functional aspects.

Functional renovations like a new roof or new windows are a must, but won’t necessarily add value to your home because buyers expect a functional roof. The same can be said for plumbing, electrical, and heating/cooling. The key to adding value is focus on the things that are important to buyers, and not to over-improve. When deciding whether to proceed with functional renovations though, it’s also important to consider that significant government rebates are available for many energy efficiency improvements.

Most people know that kitchens, bathrooms and a fresh coat of paint inside and out, offer the best return on investment. According to the Appraisal Institute of Canada, you can expect to get back 75 to 100% of what you put into kitchens and bathrooms. Painting, because it costs so little, can get returns of 100% – 1,000% of your investment.

There are some improvements that we undertake simply for our own enjoyment, like a swimming pool, which in some markets can actually lower your market value, since most people do not want a pool. And although landscaping is important, it will likely offer a lower return in the area of 30% to 40%.

Consider as well that not all of your renovations need to be sizable. Even minor improvements like new light fixtures, cabinet hardware or faucets can give your home a contemporary look.

Here are the TOP 5 WAYS to add value to your home, even in a strong real estate market.

5) More space and light:  dark and cramped is never good, so a little light goes a long way. Consider knocking down some walls to open up your floor plan a little. Open rooms create an inviting atmosphere for entertaining, and is also great for young families who want to keep an eye on the little ones.

4) Home office: many people are now tele-commuting at least some of the time, and that number is growing. Creating a dedicated work space adds value, and may make a portion of your living expenses tax-deductible. Converting a small bedroom, or sunroom is a great way to take care of business in your pajamas. If you live in an older home, make sure that the electrical outlets have been updated with grounded outlets. Phone lines and data ports are also a big plus.

3) Curb appeal. A good first impression can add five to ten percent to the value of your home. If the exterior colour is dated, or needs repair, painting is a good place to start. It’s important, however, to choose colours and details that match the period and style of your home. If the driveway or walkway looks a little tired, paving is a good investment. As for landscaping, a manicured yard, front and rear, doesn’t hurt, but don’t go overboard. If you don’t have a green thumb, stick to common perennials and drought-tolerant plants.

2) Bathrooms. Updating or even adding bathrooms can add considerable value to any home, especially master baths. Although we’re seeing hardwood in some modern renovations, ceramic flooring is the best option as it handles water better, and not terribly expensive. If you’re trying to go modern, make sure that you retain a classic look that is in keeping with your area and style of home. Expect 75 – 150% return in this department, not to mention a faster sale.

1) You’ll probably notice that at most parties, people end up in the kitchen. By far this is the most important area of any home, and it’s known as the heart of your home for a good reason. When planning your reno, make sure to include plenty of counter and cabinet space. Granite or quartz counter-tops are very popular. Stainless steel appliances are still a hot ticket right now, but above all make sure that your appliances all match.

One of my personal preferences is the Bosch line of appliances, which are environment-friendly, and offer both quality and style. Expect 100% return on high quality appliances, not to mention that you get to enjoy them in your kitchen. For a free copy of my e-book, “Everything You Ever Wanted To Know About Real Estate But Were Afraid To Ask”, email me at info@RecCanada.com