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If you are renting a property, taking out a tenant insurance policy is an important safety net protecting you and your belongings if certain traumatic events occur. Check out this information on the basics of what is covered, what is not and the average cost per 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

Total residential unit sales in the Greater Edmonton Area (GEA) real estate market for October 2023 came to 1,812, decreasing from September 2023 by 12.0%, but showing an increase of 21.0% over October 2022.

New residential listings amounted to 2,753, which is 8.8% lower than September 2023, and 5.8% higher than October 2022. Overall inventory in the GEA showed decreases of 12.7% from October of last year and 4.9% from September 2023.

Detached unit sales totalled 1,055, a decrease of 12.7% from September 2023, but up 12.6% from the previous year. Semi-detached unit sales were down 9.2% month-over-month but showed an increase of 20.7% from October 2022. Row/Townhouse unit sales were down 2.2% from September 2023 and up 26.4% year-over-year. Apartment Condominium unit sales saw numbers increase 57.3% from last year and dip 19.2% lower than September 2023.

Total residential average prices came in at $396,550, a 0.6% increase from September 2023, and a 0.7% decrease from October 2022. Detached homes averaged $486,751, amounting to a 1.8% year-over-year increase, but a 1.4% decrease from September 2023. Semi-detached sold for an average of $385,895, resulting in a 4.2% increase year-over-year, and a 9.0% increase from the previous month. Row/townhouse prices were down 3.1% from September 2023 and down 0.6% when compared to October 2022, selling at an average of $258,779. Apartment Condominium average prices hit $203,663 showing increases of 11.8% from last month and 8.9% from last year.

The MLS® Home Price Index (HPI) composite benchmark price* in the GEA came in at $377,000, resulting in a decrease of 0.8% from September 2023, and a year-over-year increase of 0.6% from October 2022.

Detached homes averaged 43 days on the market, increasing one day from September 2023. Semidetached homes averaged 47 days on the market, an increase of 10 days from the previous month, and row/townhouses showed now change, averaging 42 days on the market. Apartment condominiums averaged 61 days on the market, showing a seven-day decrease from September 2023.

Overall, all residential listings averaged 46 days on the market, increasing by two days monthover-month and dropping by four days in comparison to October 2022.

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

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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
craig@craigfinnman.ca

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

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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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