Whenever the Canadian real estate market topic comes up in conversation, it typically surrounds how first-time homebuyers are struggling to get their feet in the door. Whether the challenges of putting together a down payment or qualifying for a mortgage, aspiring homeowners have many hurdles to overcome.

But while these labours of Hercules are undoubtedly real, move-up buyers also have an uphill battle to overcome as they are contending with comparable issues, from higher borrowing costs to more expensive residential properties in their communities or a faraway distance.

Wait a minute. What is a move-up buyer anyway? This person currently owns a home and intends to sell this property to acquire a new one that is typically larger. The reasons for this decision will vary, but some common factors of moving up include needing more space for a growing family, upgrading to a better neighbourhood, taking advantage of favourable market conditions, and searching for a differently designed home.

At a time of tightening lending standards and above-trend mortgage costs, move-up buyers will need to determine how to finance this transition, which could happen at a snail’s pace or the speed of light. Let’s dig a bit deeper to consider your financing or borrowing options.

What Every Move-Up Home Buyer Should Know About Financing Options

Here are four financing options that every move-up homebuyer should know:

Using Your Home Equity Wisely

Did you buy your home before the coronavirus pandemic? Did you acquire one in the early days of COVID when rock-bottom interest rates fueled a buying frenzy? Whatever the case may be, you might have accumulated a tremendous amount of tax-free equity over the years. It might be enough to fund your next home purchase or the down payment on your next single-family house in Victoria, townhome in Halifax, or two-bedroom plus den condo in downtown Toronto.

Of course, the question becomes: Should you touch your home equity? The reality of the situation is that you can employ the gains from the sale of your home, but you should do so wisely or conservatively. Rather than use up 100 percent of your home equity, perhaps you can dedicate a certain percentage of the proceeds to your move-up acquisition.

Like buying a home will be the most significant financial decision of your lifetime, so is the decision to sell your home, since you might access hundreds of thousands of dollars in equity.

Line of Credit or Bridge Loan

Because you own your home, tapping into credit is a little easier. It will vary on a case-by-case basis, but generally, homeowners will be given favourable terms for a larger amount of capital.

As a result, you could be tempted to fund your move-up purchase with a line of credit. Or, if you need time between selling your current property and buying your next one, you may consider using a bridge loan. While it is imperative to speak with a mortgage broker about your financing options, making the necessary calculations, from interest rates to extra charges, is vital.

Both credit instruments can be useful and affordable mechanisms at your disposal. A line of credit can be an easier way to fund your purchase if it is only a small mortgage or purchase. A bridge loan can be a helpful tool in this transition period of listing your property and buying a new one without enduring immense financial pressure.

Are Second Mortgages Reasonable Options?

Typically, homeowners will use second mortgages to help consolidate debt when they have lost a job, suffer from a health ailment, or endure credit challenges. Private lenders usually offer them, and they come with higher interest rates (in this climate, it can be in the double digits!).

That said, conventional mortgage lenders might be willing to offer second mortgages with customizable terms and conditions. Many families use these financial products to help their kids buy a house or pay for their children’s post-secondary tuition.

At the same time, financial institutions will often push through a home equity line of credit (HELOC), as borrowers can receive up to 65 percent of the value of their home.

Ultimately, it is about weighing your financing options and determining what is best for you, your family, and your wallet. Communicating with both your real estate agent and the bank is crucial.

Cash-Out Refinance

A cash-out refinancing option consists of obtaining a new mortgage for your home, whether from a current lender or a new source. You will then pay the first loan in its entirety by using the second one, which will help you lock in a new interest rate and loan term.

This might seem enticing, but there are a few things you need to know:

• Users will pay fees and penalties to ensure the long-term savings exceed the upfront costs.
• Borrowers must meet requirements (length of homeownership, credit score, home equity, etc.).
• Clients must have a lower debt-to-income ratio.
• The minimum equity requirement is usually as much as 20 percent in equity.

Other Money-Related Tidbits of Information

In addition to your financing options, it is essential to think about other factors related to your move-up homebuying experience:

• Refrain from going overboard and over budget on your next purchase.
• Sit down and calculate your finances, from what you earn to your liabilities to your retirement savings.
• Determine whether to buy or sell first (there is no right or wrong answer to this quandary).
• Take your time and do your research on what is available in the real estate market.
• Work with the right people to make the best decision possible.

Takin’ Your Time

The last few years have been a chaotic time in Canada’s housing market. The roller coaster ride of mortgage rates, the buying frenzy, the dramatic rise in home valuations, the modest correction, and everything else that occurred in the Canadian economy. As we learned, being impatient can often burn buyers and sellers. Therefore, you do not need to put the pedal to the metal. Instead, be patient and precise so you can be confident you made the right choices throughout the move-up homebuying process.

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Looking to Refresh Your Space in 2024? Here are the Hottest Renovation Trends! Whether it's for family milestones, house functionality, or the need for extra space, renovations are on the rise! Need expert advice or looking to make a move? Let's chat!

Craig Finnman
RE/MAX Elite
(780) 982-1589⁠
craig@craigfinnman.ca⁠

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Exciting News for Canada's Job Market! Despite the unemployment rate ticking up, job gains have surpassed expectations, with 41,000 new jobs added in February.

As a Realtor, this signals positive momentum for the housing market! More jobs mean more potential homebuyers entering the market.

While employment growth may be trailing population growth, the surge in full-time work indicates stability and confidence in the workforce.

With job gains spread across various sectors, including accommodation and food services and professional services, the economy shows resilience and diversity.

As we navigate these economic shifts, rest assured that the real estate market remains a solid investment option.

Let's continue to monitor these trends and seize opportunities together!

Have questions? Thinking of buying or selling? I’m here to help you make the best financial decisions. Reach out today!

Craig Finnman
RE/MAX Elite
(780) 982-1589⁠
craig@craigfinnman.ca⁠

There were a total of 1,966 residential unit sales in the Greater Edmonton Area (GEA) real estate market for February 2024, showing increases of 36.9% over January 2024, and 52.6% over February 2023. New residential listings amounted to 2,762, a number 27.7% higher than in January 2024, and 9.3% higher than February 2023. Overall inventory in the GEA increased 5.8% from January 2024, but is still 14.3% lower than February 2023.

Total residential average prices came in at $407,458, a 2.3% increase from January 2024, and a 10.4% increase from February 2023. The MLS® Home Price Index (HPI) composite benchmark price* in the GEA came in at $382,200, increasing 1.5% from January 2024, and 3.7% from February 2023.

Overall, all residential listings averaged 50 days on the market, a month-over-month decrease of nine days and a seven-day decrease when compared to February 2023.

Detached unit sales totalled 1,159, a number 32.5% higher than the previous month, and 60.5% higher than the previous year. They averaged $508,411, increasing 5.2% from January 2024 and up from the previous year by 10.7%. Detached homes averaged 48 days on the market, decreasing 12 days from January 2024. 

Semi-detached unit sales increased 36.2% month-over-month and showed an increase of 28.0% year-over-year. They sold for an average of $385,163, a 7.7% increase year-over-year, and a 1.8% increase from the previous month. Semi-detached homes averaged 42 days on the market, a decrease of 11 days from the previous month.

Row/Townhouse unit sales also increased 44.6% compared to January 2024 and 49.2% compared to the previous year. Prices were up 2.4% from January 2024 and 9.7% when compared to February 2023, selling at an average of $275,735. Row/townhouses’ days on the market decreased eight days to 45. 

Apartment Condominium unit sales also increased 46.7% over February 2024, and 48.0% from the previous month. They averaged $181,347, decreasing 5.7% over last month and coming in 3.2% lower than the previous year. Apartment condominiums averaged 65 days on the market, showing no change from January 2024.

Considering buying or selling? I love to help!

Craig Finnman
RE/MAX Elite
(780) 982-1589⁠
craig@craigfinnman.ca⁠

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At a time when mortgage rates are hovering between five and six per cent and home prices remain above their pre-pandemic levels, discussions surrounding the mortgage stress test have been prevalent across the Canadian real estate market.

The mortgage stress test is a federal government mandate requiring that borrowers prove they can afford higher payments if mortgage rates rise in the future. Typically, the stress test is the current mortgage rate plus two per cent. At the height of the current tightening efforts by the Bank of Canada (BoC), the stress test was north of eight per cent.

The purpose behind the rule is to prevent borrowers from taking on more than they can afford and to stop lenders from lending money to financially stressed or would-be fiscally challenged clients.

But now that the post-crisis real estate market is an environment where interest rates are at their highest levels since before the Global Financial Crisis, critics have wondered if the stress test is excessive, with some urging Ottawa to ease or suspend the measure.

For now, it appears that everything will remain the same, according to the country’s chief banking regulator.

What’s Going on With the Mortgage Stress Test?

According to the Office of the Superintendent of Financial Institutions (OSFI), the qualifying rate for uninsured residential mortgages will continue to be higher than 5.25 per cent, or the mortgage contract rate plus two per cent. Peter Routledge, the OSFI chief, stated in a December 2023 report that the stress test has resulted in a more robust and resilient mortgage financing system as it helps both borrowers and lenders better manage risk.

The federal government reiterated the OSFI’s stance shortly after its confirmation.

Others agreed, including Fitch Ratings.

The credit ratings agency supported the OSFI’s decision, calling it a positive for the Canadian real estate market, the nation’s banking system, and the broader economic landscape.

Underlying Risks in a Stable Mortgage Market

Despite everything that has transpired since the start of the coronavirus pandemic, both the Canadian real estate market and the mortgage industry have remained solid and cushioned the blows from the crisis-era fallout. In other words, delinquencies and forced sales have been largely absent in Canada.

However, the Canada Mortgage and Housing Corporation (CMHC) recently warned that approximately 2.2 million mortgages will have to be renewed in 2024 and 2025. This would represent nearly half (45 per cent) of all outstanding mortgages, totalling roughly $675 billion.

Even if the central bank engages in lowering its benchmark policy rate and the bond market responds, it might not be swift enough to prevent borrowers from paying higher rates.

In fact, the CMHC projected that as households renew in the coming years, the higher mortgage rates will equal about $15 billion in additional payments for households each year.

Ultimately, this could result in consequences for the economy since the funds will be reallocated from other sectors, the CMHC says.

Mortgage Rates in 2024

Financial markets are bracing for rate cuts this year. Investors think they could happen as early as March, while economists believe the likelihood is sometime in the middle of the year. This will lead to lower bond yields and, as a result, lower mortgage rates, with experts saying the conventional five-year fixed mortgage could slide to around 4 per cent. But whether this will help or hinder the Canadian real estate market and the national economy remains to be seen.

Whether you're a homeowner, prospective buyer, or industry enthusiast, connect with me to discuss more about the latest developments shaping the Canadian real estate landscape.

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Home Buyer’s Glossary: Real Estate Terms You Should Know

Amortization
The length of time allotted to paying off a loan – in home-buying terms, the mortgage. Most maximum amortization periods in Canada are 25 years.

Assessed Value
The dollar value assigned to a property by a public tax assessor for taxation. This valuation forms the basis for determining property taxes owed by the owner.

Balanced Market
In a balanced market, there is an equal balance of buyers and sellers, which means sellers often accept reasonable offers, homes sell within a good amount of time, and prices remain stable.

Bridge Financing
A short-term loan designed to “bridge” the gap for homebuyers who have purchased their new home before selling their existing home. This type of financing is common in a seller’s market, allowing homebuyers to purchase without having to sell first.

Buyer’s Agent
The buyer’s agent represents the homebuyers and their interests in the transaction. On the other side of the transaction, the listing agent represents the seller and their interests.

Buyer’s Market
In a buyer’s market, there are more homes on the market than there are buyers, giving the limited number of buyers more choice and greater negotiating power. Homes may stay on the market longer, and prices can be stable or dropping.

Closing
This is the last step of the real estate transaction, once all the offer conditions outlined in the Agreement of Purchase and Sale have been met and ownership of the property is transferred to the buyer. Once the closing period has passed, the keys are exchanged on the closing date outlined in the offer.

Closing Costs
The costs associated with “closing” the purchase deal. These costs can include legal and administrative fees related to the home purchase. Closing costs are additional to the purchase price of the home.

Condominium Ownership
A form of ownership whereby you own your unit and are interested in common elements such as the lobby, elevators, halls, parking garage and building exterior. The condominium association is responsible for building and common elements maintenance and collects a monthly condo fee from each owner based on their proportionate share of the building. Condos often have guidelines regarding noise, use of common areas and allowable renovations within the units.

Contingency
A condition or clause in a real estate contract that specifies certain events must occur or certain conditions must be met before the contract is legally binding.

Curb Appeal
The visual attractiveness of a property when viewed from the street or sidewalk. It’s often the first impression potential buyers have of a home and can significantly impact their perception of its value.

Debt-to-Income Ratio (DTI)
A financial metric used by lenders to evaluate a borrower’s ability to manage monthly payments and repay borrowed money. It is calculated by dividing an individual’s total monthly debt payments by their gross monthly income, often expressed as a percentage. A lower DTI suggests that the borrower has a good balance between debt and income, making them a less risky loan candidate.

Deposit
An up-front payment is made by the buyer to the seller at the time the offer is accepted. The deposit shows the seller that the buyer is serious about the purchase. This amount will be held in trust by the agent or lawyer until the deal closes, at which point it is applied to the purchase price.

Down Payment
The down payment is the amount of money paid upfront for a home to secure a mortgage. The minimum down payment in Canada is five percent of the home’s total purchase price. Down payments of less than 20 percent of a home’s purchase price require mortgage loan insurance. The mortgage loan amount is the selling price minus the deposit and down payment.

Dual Agency
Dual agency is when one real estate agent (or real estate brokerage) represents both the homebuyer and the seller in a real estate transaction. There are limitations and requirements around dual agency, which differ by province.

Equity
The difference between a home’s market value and the amount owing on the mortgage. This is the portion of the house that has been paid for and is officially “owned.”

Fixed-Rate Mortgage
A fixed-rate mortgage guarantees your interest rate for a pre-determined amount of time, typically five years. When the term expires, you can stay with the same lender or switch to a different one.

Freehold Ownership
A form of ownership whereby you own the property and assume responsibility for everything inside and outside the home.

Foreclosure
The legal process through which a lender takes control of a property due to the owner’s failure to make mortgage payments. Initiated after a series of missed payments, foreclosure ultimately results in the sale of the property, usually at a public auction, to recoup the lender’s losses.

Gross Debt Service
The percentage of your total monthly income that goes toward housing costs. Canada Mortgage and Housing Corp. recommends your GDS remains at or below 39%. Check out CMHC’s Gross Debt Service calculator.

High-Ratio Mortgage
A high-ratio mortgage is a mortgage where the borrower has less than 20% of the home’s purchase price to make as the down payment. A high-ratio mortgage with a down payment between 5% and 19% of the purchase price requires mortgage loan insurance. In Canada, 5 percent is the minimum amount required for the down payment.

Home Appraisal
A qualified professional provides a market value assessment of a home based on several factors such as property size, location, age of the house, etc. This is used to satisfy mortgage requirements, giving mortgage financing companies confirmation of the mortgaged property’s value.

Home Buyers’ Amount
This is a $5,000 non-refundable federal income tax credit on a qualifying home, providing up to $750 in tax relief to assist first-time buyers with purchase-related costs.

Home Buyers’ Plan
A federal program that allows first-time homebuyers to withdraw up to $35,000 interest-free from their Registered Retirement Savings Plan (RRSP) to help purchase or build a qualifying home. The borrowed amount must be repaid within 15 years to avoid paying a penalty.

Home Inspection
The home inspection is performed to identify any existing or potential underlying problems in a home. This protects the buyer from risk and gives the buyer leverage when negotiating a reduced selling price.

Home Warranty
A warranty that protects the homeowners against future problems with the home for a determined period of time. New home builders are required to offer warranty protection to homebuyers, such as Tarion in Ontario. Home warranty requirements and providers differ by province. Home warranty programs also exist for resale homes.

Land Survey
A land survey will identify the property lines. This is not required to purchase a home, but it is recommended and may be required by the mortgage lender to clarify where the owner has jurisdiction over the property. This is important if issues arise between neighbours or the municipality, should the owner wish to make changes in the future, such as installing a pool, fence or other renovations involving property lines.

Land Transfer Tax

This is the tax payable by the buyer to the province in which the transaction occurred upon transferring land. The amount varies depending on the municipality, land size, and other factors. Most provinces have Land Transfer Tax, though it may have a slightly different name (such as property purchases tax). If you are a first-time homebuyer, you may be eligible to receive a rebate, typically processed at the same time as the land registration, to offset the costs.

Low-Ball Offer
An offer on a home that is significantly below its market value or the asking price set by the seller. In a buyer’s market where supply exceeds demand, you might have more leeway to make a lower offer. When demand exceeds supply in a seller’s market, making a low-ball offer is generally not advisable as sellers have the upper hand.

Multiple Listing Service (MLS)
A database where real estate agents list properties available for sale or rent. It is a centralized platform allowing agents to share comprehensive information about listings, including photos, features, and prices. The MLS is often considered the most accurate and up-to-date source for real estate listings, and it provides the data for many consumer-facing real estate websites.

Mortgage Loan Insurance
If your down payment is less than 20 percent of the home’s purchase price, mortgage loan insurance is required. It protects the lender in case of payment default. Premiums are calculated as a percentage of the down payment, changing at the 5%, 10% and 15% thresholds.

Mortgage Pre-approval
A mortgage pre-approval helps buyers understand how much they can borrow before going through the mortgage application process. It allows you to make an immediate offer when you find a home since you know how much you’ll be approved for that lender and locks in the current interest rate for a period of time, insulating you against near-term rate increases.

Offer
An offer is a legal agreement to purchase a home. An offer can be conditional on several factors, the most common being financing and a home inspection. If the conditions are not met, the buyer can cancel their offer.

Porting
Transferring your mortgage (and the existing interest rate and terms) from one property to another.

Refinancing
Replacing an existing loan with a new one, typically to secure more favourable terms such as a lower interest rate. Homeowners often refinance their mortgage to reduce monthly payments, shorten the loan term, or access equity for home improvements or debt consolidation.

Seller’s Market
In a seller’s market, there are more buyers than there are homes for sale. With fewer homes on the market and more buyers, homes sell quickly in a seller’s market. Prices of homes are likely to increase, and there are more likely to be multiple offers on a home. Multiple offers give the seller negotiating power; conditional offers may be rejected.

Title Insurance
Title insurance is not mandatory in Canada, but it is highly recommended to protect both the buyer and the mortgage lender against losses related to the property title or ownership, such as unknown title defects, existing liens against the property’s title, encroachment issues, title fraud, errors in surveys and public records, and title-related issues that could prevent you from selling, leasing or obtaining a mortgage. Your lawyer can advise you on this.

Underwriting
The process by which financial institutions like banks and insurers assess the risk associated with a loan, insurance policy, or investment. Underwriters evaluate a borrower’s creditworthiness, the property’s value, and other factors to determine loan eligibility and terms. This risk determines whether the loan should be approved, and if so, at what interest rate and down payment requirements.

Variable Rate Mortgage
A variable rate mortgage fluctuates with the prime rate. Your monthly payments remain the same, but the proportion of your payment going toward principal versus interest can change.

Virtual Deals
The home-buying process completed using technology in place of face-to-face contact. Some common technology tools include 360 home tours and video showings, video conference calls, e-documents, e-signatures, and e-transfers.

Mastering real estate terminology and understanding the nuances of real estate terminology in Canada are critical steps for anyone buying, selling, or investing in property. Whether you’re navigating mortgage rates set by the Bank of Canada or simply trying to interpret the language of a property listing, a solid grasp of the terms used can empower you to make smarter decisions and provide you with the tools you need to navigate the Canadian real estate landscape with confidence.

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The Canadian real estate market is facing new realities. The Bank of Canada’s (BoC) rising interest rates have made purchasing a residential property more expensive. Higher immigration levels will likely exacerbate the supply-demand imbalance. Rising inflation, higher borrowing costs, and growing labour shortages have made housing construction activity a bit more subdued. As a result of these new market realities, many households today are searching for different types of housing, particularly value-added properties and communities.

“Today’s purchasers are focusing on value-added properties and communities, given new market realities,” said Elton Ash, the executive vice president of RE/MAX Canada.

“Listings that offer a short or long-term benefit – be it a basement apartment that allows homeowners to offset their mortgage costs now or homes that hold long-term potential in a future renovation or sale to a builder—are most sought-after. Location, while still an important aspect, has been replaced by value and necessity. A growing number of buyers are willing to travel further afield to get the best bang for their buck.”

Considering how high rents have become in the last couple of years, even a modest discount on a basement apartment’s rent can support homeowners’ mortgage payments.

A Look at the Numbers

The latest shift in consumer demand helps explain why detached home sales climbed up to nearly 45 per cent in the first half of 2023 in the Greater Toronto Area (GTA) housing market and close to 30 per cent in the Greater Vancouver Area (GVA) real estate market, according to new data compiled by RE/MAX.

Whether they bought at the beginning of the coronavirus pandemic when the central bank slashed rates to nearly zero, or families who took advantage of the modest correction during the BoC’s tightening cycle at the start of spring 2022, homebuyers will enjoy the long-term benefit of higher home prices because of the additional value found inside these residential properties.

To further support this supposition, the York Region housing market enjoyed a significant boost in detached home sales in the second quarter, skyrocketing 104 per cent from the previous quarter. As demand continues to increase and supplies fail to keep up, home valuations will likely maintain their general upward trajectory.

But the state of communities is essential, too. Whether it is amenities or the neighbourhood’s fabric, everything outside of a residential property can support prices. For homebuyers, it is a balancing act: the arts and culture of a major urban centre or the large shopping malls and large chain restaurants in these smaller communities.

And then there is the issue of taxes, especially the municipal land transfer tax.

While detached homes situated in areas outside Toronto enjoy slightly lower prices, they are not subjected to the municipal land transfer tax, something that provides enormous savings for homebuyers.

Remember, a recent Leger survey found that more than one-quarter of Canadians (28 per cent) say that the land transfer tax has affected their decision to dip or not to dip their toes in the Canadian real estate market.

Meanwhile, shifting back to the major urban centre, a handful of neighbourhoods in Toronto that possess long-term potential are bucking the national trend of sliding detached home sales.

Bathurst Manor-Clanton Park is considered the most affordable and undervalued area of North America’s fourth-largest city. Detached housing values are a little more than $1.7 million, representing the lowest average price point in the downtown core, which explains the robust homebuying activity in the first six months of 2023 compared to the same time a year ago.

H2 Investors Versus First-Time Homebuyers

There is little doubt that value-added properties are exceptional investments. The challenge, however, is that there is fierce competition between investors and first-time homebuyers.

According to Statistics Canada, housing markets that possess the largest percentage of investor-owned housing are Toronto (22 per cent), Georgina (18 per cent), East Gwillimbury (15 per cent), Richmond Hill (15 per cent), and Mississauga (14 per cent).

So, this creates a barrier to entry for households acquiring a detached home in either Toronto Central or municipalities outside Canada’s largest city.

“In Ontario, businesses owned 74,485 condominium apartments for investment purposes,” Statistics Canada stated in its report. “Most condominium apartments used as an investment in both Ontario and Manitoba were owned by in-province investors.

Whatever the case may be, it is clear that shrinking inventories and robust demand will add to Canadian real estate market prices, be it in British Columbia or Ontario. Don’t believe it? Not even the Bank of Canada raising interest rates put a major dent into home prices this past year.

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During the pandemic-era housing boom, many homebuyers purchased residential properties at rock-bottom mortgage rates. In response to the national economy’s pressures, the Bank of Canada (BoC) slashed interest rates to near zero, allowing prospective homeowners to obtain greater purchasing power and acquire a detached house, townhome, or condominium suite that might have exceeded their initial budgetary limits.

Now that rates are at their highest levels in 16 years and the average five-year fixed mortgage rate is close to six percent when these homeowners renew their mortgages, they will need to be prepared for higher monthly payments. It might be a couple of hundred dollars, or it might be a couple of thousand dollars. It all depends on the size of the mortgage and the rate.

Before diving into the steps of renewing the mortgage, it is essential to become acquainted with the basics of mortgage renewals.

Mortgage Renewal: A Primer

So, what do you need to know about a mortgage renewal?

The term of their mortgage expires between one and five years, and you need to renew your mortgage to continue borrowing from the lender. When a mortgage term ends, you can modify the terms of the original mortgage, including changing the length of the term, from a three-year term to a six-year term, for example. Or you may adjust the amortization period or payment frequency.

What You Need to Know About Requalifying

Now, what about requalifying for a mortgage?

Borrowers need to requalify if they switch mortgage lenders. At the same time, considering how high interest rates are today, this would be pretty challenging to requalify for some. The process can be a lot easier if borrowers renew with the current mortgage lender and refrain from negotiating better terms and conditions. However, once mortgage holders attempt to shop around for a different lender, they must requalify. This could leave them in a difficult situation: it would be tougher to renew, and subsequently, homeowners might be left without a lender, forcing them to sell their home. Of course, the other option is to meet with a private lender and pay significantly higher interest rates.

H2 Steps to Mortgage Renewal

Mortgage renewal is a crucial decision that should be carefully considered. You must view current market conditions, evaluate your financial goals, and consult with mortgage professionals to ensure the renewed mortgage aligns with your goals. In addition, the process will involve renegotiating the terms and conditions of an existing mortgage loan, which affirms that a decision must be well-planned.

Here are six steps to follow when renewing a mortgage:

#1 Start the Process Before the Current Mortgage Expires

Beginning the renewal process a few months before your current mortgage term expires is vital. This will give you time to study the market, compare offers from different lenders, and negotiate the best terms. The renewal process can be initiated through your lender or mortgage broker.

#2 Clearly Understand the Terms of Your Current Mortgage

Mortgage agreements can be complex, and you should read the fine print before you start the renewal process. Therefore, you must carefully assess the current mortgage agreement, including the interest rate, remaining balance, repayment terms, and, most importantly, any applicable fees or penalties you may have to pay if you terminate the mortgage early.

This step lets you identify the changes or improvements you want in the renewed mortgage.

#3 Check the Market and Get Competitive Rates

Renewing your mortgage allows you to explore other lending options. Your goal should be to secure the most favourable terms. For this, you will need a clear idea about current interest rates, different mortgage products, and terms offered by other lenders. Many borrowers are not well-versed in these things, so consulting with a mortgage broker can simplify this process.

#4 Always Negotiate the Terms

When you have collected sufficient information about competitive rates and the different types of mortgages, you should first negotiate with your existing lender unless your goal is to find a new one altogether.

If your existing lender is not offering you the best terms, you can turn to potential new lenders and consider two other components:

• Evaluate each offer according to the improvements you seek in the new mortgage agreement.
• Ensure you receive better terms in the renewed deal regarding the interest rate, repayment schedule, amortization period, and prepayment options.
  
  

#5 Ensure All Documentation is Complete

The process of getting a mortgage (or renewing one) is intricate. One area that requires a bit more due diligence is documentation, as lenders will request a lot of paperwork:

• Proof of income
• Employment verification
• Bank statements
• Other documents that can help lenders determine your financial stability.
  
  

Indeed, this is a critical step, so ensuring all documents are accurate and provided to the lenders without delay is imperative.

#6 Review the New Agreement Carefully

Lastly, the final step during your renewal process is to review the terms and conditions of the new mortgage agreement. As a result, be sure to check the interest rate and payment schedule and ensure they align with your goals. If you need help understanding something, seek clarification from an industry professional. Ultimately, you should only sign the mortgage renewal agreement if you are delighted with the terms or have no better option.

Source
CMHC

As your Edmonton Re/Max Elite Realtor, I'm thrilled to offer a helping hand on your homeownership journey. If you're exploring mortgage options, I've got fantastic news – I can connect you with a like-minded professional who specializes in seamless pre-approvals!

Let's turn your dream home into a reality. Ready to take the next step? Message me today!

(780) 982-1589
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Living in an “information age,” the answers to nearly every question are just a click away. Problems find solutions, mysteries are solved, and the world seems to spin faster, but how do we verify that the information is correct?

With 90% of consumers beginning their home search online, virtually anyone can make a reasonably educated guess on what the value of their home is. Sellers can explore similar houses with similar features and cross-reference those with listings in their neighbourhood to see what buyers are looking for and how much they are willing to pay. As a buyer, this leaves you wondering whether you are paying a fair price for your dream home. Fortunately, some professionals conduct Home Appraisals, giving everyone involved in the transaction peace of mind.

Home Appraisal

A home appraisal is an objective assessment of a property’s value conducted by a licensed or certified appraiser. The home appraisal provides buyers with a market value of the home based on several factors, including the property’s location, age, and current condition. A home appraisal generally costs between $300-$400, and along with providing security to all parties involved, it is also used to satisfy mortgage requirements.

During the appraisal process, the appraiser visits the property and conducts a thorough inspection, taking note of its physical characteristics, features, and any improvements or renovations. The appraiser also considers factors such as the neighbourhood, proximity to amenities, and recent sales of comparable properties in the area.

After gathering all the necessary information, the appraiser uses a combination of valuation methods, including the sales comparison approach, income approach (for rental properties), and cost approach, to arrive at an estimated value for the property. The final appraisal report provides a detailed analysis and justification for the determined value.

Mortgage financing companies want to know the value of the property they are providing a loan for, should the buyer not be able to pay their mortgage. By getting a home appraisal, all parties can feel secure in the sale, knowing they are making a good investment and receiving a fair arrangement.

Current Market Assessment

A current market assessment (CMA), also known as a market analysis or market evaluation, is an evaluation of a specific market’s current state and conditions. It involves gathering and analyzing data to understand the dynamics, trends, and factors influencing supply, demand, and pricing within a particular market segment or industry. There are several elements considered:

Market Size and Growth – The market is assessed regarding sales volume, revenue, or other relevant metrics. Additionally, historical data and trends are analyzed to determine the market’s growth rate over a specific period.

Market Segmentation – A CMA identifies and categorizes the market into segments based on various factors such as demographics, customer preferences, product types, or geographic locations.

Competitive Landscape – A CMA evaluates the competitive environment within the market, including the number and strength of competitors, their market share, key players, and their strategies.

Supply and Demand Analysis – The market’s balance between supply and demand is examined. This includes analyzing inventory levels, production capacity, consumer preferences, and pricing dynamics.

Market Trends and Influencing Factors – Key trends, drivers, and external factors that impact the market are identified and analyzed. This includes technological advancements, regulatory changes, economic conditions, consumer behaviour, and social trends.

A home appraisal is not to be confused with a current market assessment. Typically, a CMA is provided by your local real estate agent during the listing process and is complimentary. This report assists with determining the home’s asking price, using current housing market information such as supply and demand, seasonality and home information like location, age, square footage and more.

Although both reports are similar and use relatively the same set of criteria, a CMA is ultimately determined by what current buyers are willing to pay for the home in a range acceptable to the seller. A Home Appraisal is based strictly on the physical attributes of the house.

Ensure you are prepared and ready for anything in your home-buying journey. Are you interested in getting a Current Market Assessment on your home? Connect with me today!

Craig Finnman ⁠
Re/Max Elite ⁠
craig@craigfinnman.ca ⁠
780-982-1589⁠

Start Home Search
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The Canadian housing market has seen record prices over the last two years. With record-low inventories and increasing demand, prices soared from coast-to-coast. It is the perfect recipe to create a seller’s market, meaning that competition for homes is fierce. RE/MAX brokers reported multiple-offer scenarios in key Canadian housing markets such as Toronto, Ottawa, and Vancouver. This leads many to question what prompts multiple offers and how to win a bidding war.

How a Bidding War Works

In a seller’s market, there are more buyers than homes available for sale. The combination of limited inventory and high demand often puts upward pressure on prices, creating the ideal conditions for a bidding war. Homes typically sell quickly in a seller’s market, and multiple offers on a listing are more likely, giving the seller the upper hand.

When market conditions favour sellers, demand is usually up, and inventory is down, which has been the case throughout the pandemic. With few listings on the market, the seller and listing agent may choose to set an offer deadline by which interested buyers must submit their offers. In a bidding war, there are multiple offers and pressure for potential buyers to compete to raise their bids, pushing the sale price well above asking.

A bidding war typically follows these steps:

• Buyers interested in the property submit their offers to the seller or real estate agent. The offer typically includes the proposed purchase price, conditions or contingencies, and the desired closing timeline.
• The seller reviews all received offers and assesses their attractiveness based on the purchase price, closing timeline, contingencies, financing details, and buyer qualifications.
• The seller may negotiate and respond to one or more buyers by issuing counteroffers. Counteroffers typically involve adjustments to the original offer’s purchase price, terms, or conditions.
• A bidding war can emerge if multiple buyers are still interested and engaged. Buyers may be notified that they are in a competitive situation and can revise and improve their offers.
• Buyers raise their initial offers, often exceeding the original asking price, to outbid other potential buyers and demonstrate their commitment to securing the property.
• The seller evaluates the revised offers and determines which is most favourable based on the purchase price, conditions, financing, and the buyer’s ability to close the deal.
• The seller accepts the winning offer, and the buyer proceeds to fulfill any remaining conditions or contingencies specified in the offer. Once all requirements are met, the sale is finalized, and the closing process begins.

In Canada, policymakers have introduced various measures to address these issues. For instance, cooling measures have been implemented to curb excessive speculation and prevent housing bubbles. These measures include foreign buyer taxes, restrictions on foreign investments, and stricter mortgage qualification rules. The objective is to ensure that the housing market remains accessible to Canadian residents and that affordability is not compromised.

The Importance of a Real Estate Agent in a Seller’s Market

Sellers can only hope to receive multiple offers on their listings. However, from the buyer’s perspective, it can be a frustrating and emotional experience. When you look at the bigger picture of a home purchase, “winning” is relative to the buyer’s goals. If the only objective is to buy a specific home, then offering the highest possible purchase price with no offer conditions is the way to go. It is the way to get the house you want.

However, most homebuyers have other goals, such as buying within a specific price point and a defined timeline for closing the deal and moving in. Then there’s the home itself. Does the buyer intend to fix and flip it? Demolish and build? Or are they seeking a move-in-ready home? Whatever that goal is, buyers should communicate it to their realtor, who can help strategize how to reach it. While you might need to make some concessions, your realtor will do what is necessary to realize as many of your goals as possible.

The real estate agent’s job is to approach the transaction objectively. This includes the process of real estate bidding and negotiating. They can bring logic to this emotional process and potentially help you avoid a massive financial risk. A professional, experienced real estate agent who knows the local market can help you keep your eyes on the prize – a home that suits you, your budget, and your long-term goals.

How to Win a Bidding War

Here are some strategies to help you make an intelligent bid and a wise purchase if all goes in your favour:

Know Your Budget – Knowing how much you can spend on a home is critical for a homebuyer. Getting a mortgage pre-approval can provide valuable insight and guarantees your mortgage interest rate for up to 120 days, which is essential as rates climb upward. When you’re ready to make an offer, despite your eagerness to win the war, so to speak, do your due diligence and consult with your lender before making a firm offer.

Consider the Worth of the House – This is especially important as housing prices soar, even in smaller communities. Your real estate agent will pull recent sales stats, giving you valuable insight into the selling price of comparable homes in the same neighbourhood and under the same market conditions. This can help you determine an offer you’re comfortable with and whether competing against other bids makes sense.

Reduce Your Offer Conditions – In a seller’s market, having fewer conditions on your offer can work in your favour. Flexibility on your desired closing date or inclusions could tip the scales in your favour. A clean offer is more likely to win in a seller’s market, especially in a bidding war. With that said, we highly recommend making the offer conditional on a satisfactory home inspection. Remember that even if you discover issues with the home in a seller’s market, you may still not have much negotiating power. However, having this information will help you decide if the house is worth what you’re expected to pay.

Consider the Location – Beyond the home itself, remember that location is a huge factor in determining a home’s value. Premium neighbourhoods come at higher prices, thanks to proximity to amenities, green space, transit routes, shopping, services, and other factors. Whatever draws people into the area is likely a factor driving up the selling price.

How to Avoid a Bidding War

Short-Term Strategy – One trick to winning a bidding war is to avoid it altogether. Make an offer before the home hits the MLS system or gains buyer attention through an open house. Your agent will best advise you on how to proceed, so prepare to drop everything to tour a new listing and make your offer before someone else does! (Note: Mortgage pre-approval in this scenario is critical.)

Long-Term Planning – The spring and summer real estate markets see the most activity under normal conditions, with buyers out in droves and bidding wars bubbling at the surface. If you’re not in a hurry to buy, minimize your competition and possibly even price by shopping in the “off” season. Winter sees a drop in inventory and demand, reducing your chance of being outbid.

Do Your Homework – You’ve determined how much you can afford, right? And you know what the home is worth based on the comparables your real estate agent pulled for you. You also know what the home is worth based on your lifestyle, budget, and future employment prospects. Make a bid that’s reflective of all these considerations. Before jumping on the bidding bandwagon, be confident you’re getting a good deal.

When asking how you win a bidding war, remember that the spoils don’t always go to the highest bidder. Know when to walk away. Even in a seller’s market, the perfect home is out there, waiting for you to find it.

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If you are interested in purchasing a residential property in 2023, the competition will be fierce as housing supply remains tight and demand begins to be renewed. Mortgage rates have likely peaked, the consumer remains in decent shape, the Canadian government’s immigration program anticipates seeing hundreds of thousands of newcomers in the next couple of years, and the national economy is holding steady.

While housing affordability is not at the forefront of the federal government as it was in the last election campaign, many local governments are taking action to ensure that more Canadians can achieve the dream of homeownership. But will this be enough to increase housing opportunities and ownership rates? Many industry observers argue that federal policy proposals, such as home renovation tax credits and co-housing CMHC-backed mortgages, might not be enough to curb sky-high prices. Instead, policymakers need to facilitate more supply initiatives, like streamlining new developments and speeding up the application process.

Indeed, despite the housing correction over the last 18 months, prices are still above their pre-pandemic levels, be it a detached residential property in Atlantic Canada or a condominium in downtown Toronto. This has left many Canadian households to continue renting, which has also become an exorbitant expense in plenty of markets.

So, are these trends weighing on homeownership rates across the country?

Home Ownership Rates Drop Across Canadian Real Estate Market

Since the beginning of the century, the homeownership rate in the Canadian real estate market has steadily risen, climbing from 63.9 per cent in 2000 to an all-time high of 68.55 per cent in 2019. However, according to Statistics Canada, the national homeownership rate slipped to a four-year low of 66.5 per cent in 2022. In all provinces, homeownership rates have been on the decline.

Here is a breakdown of provincial homeownership levels:

• British Columbia: -3.2 per cent to 66.8 per cent
• Alberta: -2.7 per cent to 70.9 per cent
• Saskatchewan: -1.9 per cent to 70.7 per cent
• Manitoba: -2.6 per cent to 67.4 per cent
• Ontario: -3.1 per cent to 68.4 per cent
• New Brunswick: -2.7 per cent to 73 per cent
• Nova Scotia: -4 per cent to 66.8 per cent
• Prince Edward Island: -4.6 per cent to 68.8 per cent
• Newfoundland and Labrador: -1.8 per cent to 75.7 per cent

Put simply, the homeownership rate is higher at the provincial level than nationally. However, the two most populous and expensive Canadian real estate markets – Ontario and British Columbia – are closer to what it is nationwide.

In addition, Canada ranked 23rd among Organisation for Economic Co-operation and Development (OECD) countries. This was also below the OECD’s average of 71.5 per cent.

Overall, everything that has transpired over the past year, from higher interest rates to slowing economic conditions, has discouraged young Canadians about owning a residential property.

Survey: Young Canadians Discouraged About Homeownership

According to the Bank of Montreal’s recent Real Financial Progress Index, 68 per cent of Canadians feel purchasing a home is out of reach. Seventy-one per cent of Generation Z Canadians (18 to 24) are most likely to share this view. This is followed by 69 per cent of younger millennials (25 to 34) and 65 per cent of older millennials (35 to 44).

The June 2023 survey from the financial institution revealed that 67 per cent of Generation Z Canadians plan to defer their home-buying efforts, while 73 per cent of younger millennials postpone their home-buying plans.

“While the challenging market and economic conditions may pose hurdles and uncertainty, we encourage Canadians to work with a professional advisor or planner to explore the many paths to homeownership,” said Gayle Ramsay, the head of everyday Banking, segment and Customer Growth at BMO, in a statement.

Finally, 71 per cent of Canadians consider housing costs the third largest source of financial anxiety, following unknown expenses and concerns about their personal finances.

Another Stark Revelation: Falling Housing Investment

Housing investment is falling across the country.

Statistics Canada recently reported that investment in building construction slumped 1.3 per cent in March to $20.3 billion. Within this category, residential sector investment construction tumbled 2.1 per cent to $14.6 billion, while non-residential sector spending rose 0.9 per cent to $5.7 billion.

The statistics agency discovered that investment in single-family homes dropped 1.8 per cent to $7.9 billion, with seven provinces recording declines. Moreover, multi-unit construction slipped 2.4 per cent to $6.7 billion, led by Ontario (-4.7 per cent).

This trend is seen in new housing construction activity data Canada Mortgage and Housing Corporation (CMHC) data show that housing starts declined 23 per cent month-over-month in May, totalling 202,494 units. Despite an immense jump in April, it was down considerably in March at 213,800 units.

Rishi Sondhi, an economist at TD Bank, says this has been expected due to declines in home sales feeding “into falling construction activity.”

“This is also consistent with permit issuance, which has dropped to 2019 levels, before the pandemic-induced runup in demand and construction,” Sondhi wrote in a research note.

“That said, starts are volatile and not every data point will move in a straight line downwards. Even with today’s decline, starts are tracking 4% higher than their first-quarter average, thanks to an April pop. This, alongside what will likely be a super-sized gain in home sales should generate a positive second-quarter growth print for residential investment, supporting the overall economy.”

Heading Into 2024 – and Beyond!

The Canadian real estate market has many storylines to follow, from high borrowing costs to tight inventories. The coming year should be an exciting time in Canada, with many components that could weigh on or support the direction of the overall housing activity, be it interest rates or local reforms. Whether prices will rebound in the second half of 2023 and heading into 2024 remains to be seen.

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Cashback mortgages are a type of mortgage that has gained popularity in Canada over the past few years. With a cashback mortgage, borrowers receive a lump sum cash payment from the lender at closing. This cash payment can be used for various purposes, such as covering closing costs or making home improvements.

How a Cashback Mortgage Works

Cashback mortgages are a type of mortgage that has become increasingly popular in Canada in recent years. With a cashback mortgage, the lender provides borrowers with a lump sum cash payment at closing. This payment can be used for various purposes, such as covering closing costs, making home improvements, or paying off high-interest debt.

The amount of cashback a borrower can receive typically ranges from 1% to 7% of the mortgage amount. However, the exact amount can vary depending on the lender and the borrower’s credit score and financial situation. The cashback payment is typically added to the mortgage balance, which means that borrowers will pay interest on the cashback amount over the life of the mortgage.

Advantages of a Cashback Mortgage

Cashback mortgages can provide several benefits for borrowers in Canada:

A cashback mortgage can help with the upfront costs of buying a home or refinancing an existing mortgage. This can be especially beneficial for first-time homebuyers or borrowers who need more cash.

Cashback mortgages can be a way for borrowers to make home improvements or pay off high-interest debt. By using the cashback payment for these purposes, borrowers can save money in the long run and increase the value of their homes.

A cashback mortgage can provide flexibility and financial security. The lump sum can be used for any purpose, meaning borrowers can choose how to use it based on their financial needs and goals.

Drawbacks of a Cashback Mortgage

While cashback mortgages can provide several benefits, they also have several drawbacks that borrowers should consider:

A cashback mortgage often has a higher interest rate than a traditional one. This means that borrowers will pay more interest over the life of the mortgage, which can result in higher overall costs.

They also often come with restrictions on refinancing or prepayment penalties. These restrictions can make it more difficult or expensive for borrowers to change their mortgage in the future.

In a cashback mortgage, the cashback payment is added to the mortgage balance, which means that borrowers will pay interest on the cashback amount over the life of the mortgage. This can result in higher overall costs and a longer mortgage term.

Finally, cashback mortgages may not be a good fit for borrowers focused on paying off their mortgage quickly. By using the cashback payment for other purposes, borrowers may delay paying off their mortgage and incur more interest charges over the long term.

How to Apply for a Cashback Mortgage

Applying for a cashback mortgage in Canada is similar to applying for a traditional mortgage. Here are the steps involved in applying for a cashback mortgage: 

• Determine whether you meet the eligibility requirements. These requirements can vary depending on the lender but may include credit score, income level, and debt-to-income ratio.
• Gather documentation to support your application. This may include income verification, bank statements, and employment history.
• Shop around for lenders to find the best cashback mortgage option for your needs. This may involve researching different lenders online or working with a mortgage broker.
• Apply for the mortgage. This will involve filling out an application and providing the necessary documentation. If you are approved for a cashback mortgage, you will receive pre-approval, which will outline the terms and conditions of the mortgage.
• Close the mortgage by signing the necessary paperwork and paying any fees or charges associated with the mortgage. Then you can begin moving into your new home!

Cashback mortgages are a popular option in Canada that can provide borrowers with a lump sum cash payment at closing. With careful consideration and informed decision-making, cashback mortgages can be valuable for borrowers looking to purchase or refinance a home in Canada. Talk to your financial advisor to see if a cashback mortgage might be a good option for you.

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Congratulations! You've taken the first step towards homeownership by applying for a mortgage. However, the journey doesn't end there. After submitting your mortgage application, it's essential to tread cautiously and avoid certain financial moves that could jeopardize your chances of securing the loan and your dream home. In this blog post, we'll delve into five key things to avoid after applying for a mortgage.

1. Making Large Purchases:
While it might be tempting to splurge on new furniture or appliances for your soon-to-be home, hold off on making significant purchases using credit. Large credit card transactions or new loans can negatively impact your debt-to-income ratio, which is a critical factor lenders consider during the mortgage approval process.

2. Co-signing Other Loans:
Being a co-signer on someone else's loan means taking on responsibility for their debt. Doing so increases your overall debt burden and can raise concerns for lenders, potentially affecting your mortgage application's outcome.

3. Applying for New Credit:
Each time you apply for a new line of credit (credit card, auto loan, etc.), a hard inquiry is made on your credit report. Multiple hard inquiries within a short period can lower your credit score, signaling to lenders that you might be a risky borrower.

4. Changing Bank Accounts:
Lenders like to see stability and consistency in your financial behavior. Frequent changes in bank accounts or financial institutions may raise red flags and cause delays in the mortgage approval process.

5. Creating Unstable Credit:
Late payments or defaulting on existing credit obligations can severely damage your credit score, making it harder to secure a mortgage. It's crucial to maintain a strong credit history during this time to reassure lenders of your creditworthiness.

Securing a mortgage is an exciting milestone, but it's vital to exercise caution with your financial decisions afterward. By avoiding these five common mistakes, you'll increase your chances of obtaining a favorable mortgage offer and realize your dream of homeownership.

Connect with me if you have further questions or if you need a referral to an amazing mortgage broker.

As technology evolves and improves over time, online home listings get more sophisticated. With features such as 3D home tours now available, it is now possible to view a home and go through the entire home purchase online. While many online listings are packed full of great photos and lots of information, going through the home buying process virtually and being unable to view a property in person may leave some things overlooked, as they are not as obvious through a screen. Here are four things to take into consideration when viewing a house virtually.

3D & Virtual Tours

If doing a physical walk-through of a property isn’t an option, 3D and 360 tours can be a great alternative to give you a feeling of what it would be like to walk through a home. Many realtors now offer 3D tours or virtual walk-throughs for their listings, so now is a great time to take advantage of those! 3D tours are great for allowing you to view a property from the comfort of your own home, while also giving you the freedom to virtually navigate your way through the property. This will give you a chance to get a feel for the floorplan and layout of a home without having to actually set foot on the property. With the current situation, many realtors are also offering virtual video walk-throughs of their properties that are currently on the market. Many realtors have asked the seller to film a walk-through of their home that they are then able to share with prospective buyers. Utilizing these virtual tours are a great way to get a feel for the property you are looking at and can be useful for helping potential buyers narrow down the different properties they may be interested in.

Analyze the Photos

Many realtors work with professional real estate photographers to take photos of their listings. This is a great asset to potential buyers as the photographers know the best ways to show off the different rooms in a home. Make sure you take a look at all of the photos and spend some time noting where windows are and what rooms look like they will get the best natural light. Another good thing to consider when looking through the photos is how your own furniture will look in the space. If the photos of the home are furniture free, allow yourself to mentally place furniture where you think it may look best. If the property is staged, take into consideration where different furniture pieces are placed and how you could change the furniture layout to work for you and your style.

Take Note of Potential Fixes/Renos

While buying a new construction or newly renovated home is great, some people look for fixer upper’s that they can make their own. If you’re looking at a property online that may not be quite your style or that needs some upgrades, take note of those. See what elements of the home work for you and which areas you would consider renovating or giving some TLC in the future. Remember that your realtor is going to be the expert, so don’t be afraid to give your realtor a call to chat about a listing you are interested in and get their thoughts. And remember, paint colour is an easy, relatively inexpensive change that make a huge different in a home!

Consider the Outdoor Space One thing that many people forget to take into consideration when viewing a home online is the outdoor space. Whether this be a small balcony or a large backyard, outdoor space is definitely something to try to get a feel for when viewing a home virtually. Take account of what furniture you may need to fit into the space or invest in, what sort of maintenance will be involved in the upkeep of the outdoor space. Many realtors ask their sellers to try to have two photos of the exterior of the home, one from the summer and one from the winter. This allows potential buyers to get a feel for what the exterior of the home will look like in every season.

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According to a RE/MAX Canada survey of Canadians, 16% said they want to enter the housing market or sell in order to “move up.” The high cost of real estate has made entering the market a challenge for many first-time homebuyers, but thanks to well-timed purchases and considerable equity gains, move-up buyers are in a great position right now, making shopping for a “forever home” feel like less of a stretch.

When you bought your first place, chances are you were young, strapped for cash, and prepared (or at the very least, warned) to make some concessions. “You can’t have it all,” they said. “So where will you take the hit – price, location, home style?” Move-up buyers, on the other hand, typically has some savings and equity to work with, making their next move less of a compromise and more of a thoughtful selection.

But move-up buyers face their own set of challenges that call for a carefully considered strategy. Here are three options for the smart move-up buyer with a plan!

1. Sell First, Buy Later

This strategy is ideal for the move-up buyer who doesn’t want to get stuck paying two mortgages simultaneously. Selling the existing home eliminates the risk of having to carry two mortgages if you don’t sell your existing home in time. It also reduces the chances of having to reduce your asking price if the sale isn’t happening quite quickly enough for your liking. This is a good option for move-up buyers who are banking on the proceeds of their sale to fund their new (and likely more expensive) property. By selling first, you’ll know exactly how much money you have to purchase your next home.

2. Buy First, Then Sell

If homes in your area of choice are selling faster than the “For Sale” signs can hit the front lawn, also known as a seller’s market, the “buy first” strategy might be the way to go. By buying your new home before selling your old one, you won’t feel rushed into settling for a sub-par property or having to seek alternative temporary accommodations while you shop the market. This move-up buyer still lives in their existing home, allowing them the flexibility to shop around and continue looking until they find that perfect place, without any added inconvenience or pressure. This move-up buyer typically requires a bridge mortgage.

3. Time and Align Your Purchase and Sale

When all is said and done, this move-up approach is the most ideal, but getting there is another story. Aligning your purchase and sale closing dates can be tricky. Remember that there are three dancers in this tango – you, the person you’re buying from, and the person you’re selling to. You’ll also have to move out and move in on the same day. In this scenario, time is your best friend and flexibility your savior.

This means you’ve planned ahead – you’ve researched neighborhoods, gotten pre-approved for a mortgage, and you’ve started the organizing and de-cluttering process well in advance.

Your move-up strategy will depend on a number of factors, such as your financial situation, current housing market conditions, and your personal comfort level. Plan ahead and get the right advice to ensure a smooth transaction at both sides of the offer table. Reach out with your questions, it would be a privilege to serve as your Realtor and I love to help!

Craig Finnman ⁠
Re/Max Elite ⁠
craig@craigfinnman.ca
780-982-1589⁠

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Source: 3 Selling Strategies for Move-Up Buyers | Re/Max

Sitting down and planning a home renovation can quickly become overwhelming when costs start adding up. Even with a budget, you’ll likely find yourself going over which is why it’s crucial to add in that 10-20% contingency fund. It’s totally possible to renovate affordably if you invest a bit of time and effort. Here’s how to renovate your home on a budget without sacrificing quality.

Increase Efficiency, Not Size

Storage can be a problem and needing to renovate to gain more can be costly. Recognizing and equipping the room for maximum utility will save you from having to remove walls entirely. If it’s vital to enlarge the size of the room, inquire if it’s at all possible to remove a wall instead of creating an addition. This helps will that brand-new feeling and improves flow without costing a ton. Be sure to check if the wall you want to remove is wall-bearing (if so, it will be more difficult to move and will cost you).

Refinish Instead of Replace

As a homeowner, it’s easy to get caught up on the cosmetics and when something looks worn down and old, instinct is to rip it down and start over. There is, however, ways to refresh a space without completely redoing it. A fresh coat of paint goes a long way; you can add an accent wall with a splash of a fun colour or keep things neutral throughout with lively décor.

Kitchen backsplashes have become increasingly easier for homeowners to install themselves which would help revamp the space. A runner down the hallway or on stairs can hide large marks and give new life to high-traffic areas. Fresh caulking around a tub can go a long way in making your bathroom look new and old furniture can be spruced up by refinishing the wood or reupholstering the material. The possibilities truly are endless.

Reuse and Recycle

What you’re tired of in one space might refresh another. Kitchen cabinets can be used in a basement kitchenette or in the garage and knobs and light switches are easily interchangeable. Simple rearranging can completely change the look and feel of a room without costing a dime.

If you are willing to put in a little time, to reap big savings, search online or thrift stores for items at a fraction the price.

Are there disadvantages of recycling? Several contractors will not work with salvaged items, or homeowner-supplied items in general, because they don’t want to assume the liability if something goes wrong. However, if you are doing most or all of the work yourself, you can find plenty of materials simply by looking around a little bit.

DIY When Possible

It’s always worth doing at least some of the work yourself. There are plenty of jobs that can be done, such as demolition, painting, sanding, or insulating to save yourself some money.

But before you begin, make sure you have a plan. If you are not specific about what you want both with yourself and any contractors, you will end up costing yourself more money by potentially performing renovations that you don’t end up loving.

Reach out with any questions anytime! It would be a privilege to serve as your Realtor.

Craig Finnman ⁠
Re/Max Elite ⁠
craig@craigfinnman.ca ⁠
780-982-1589

Watch Video
Source: How to Renovate Your House on a Budget | Re/Max | February 17^th, 2023