Low interest rates.

When interest rates are low, borrowing money becomes more affordable. Lower monthly mortgage payments allow more people to qualify for home loans, which increases buyer demand. As more buyers get into the market, competition for homes can intensify. This surge in demand often drives home prices up because more people are able and willing to offer on available properties.

In summary, low interest rates = higher demand = potentially higher home prices

High interest rates

On the flip side, when interest rates rise borrowing becomes more expensive. Higher monthly payments can stretch buyers budgets or even make home ownership unaffordable for some. This leads to a decrease in homebuyer demand because fewer people can afford to purchase homes. With fewer buyers in the market sellers may need to lower their asking prices to attract offers, which can lead to a decline in home prices. In this way, higher interest rates tend to slow down the housing market.

In summary, high interest rates = lower demand = potentially lower home prices.

The bottom line

Interest rates affect both the supply and demand sides of the housing market. When rates are low, more buyers can afford homes, competition increases, and prices often rise. When rates are high, fewer buyers can afford homes, competition decreases, and prices may fall. If you’re planning to buy, sell, or invest it’s important to keep an eye on interest rate trends as they can significantly impact not only how much you pay for a home but also how much your home may be worth in the future.

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Know exactly what you’re looking for in your new house, have your real estate agent screen all the new listings and send you ones that fit your criteria right away so you can hopefully view it before the listing goes public, this way you’ll be ahead of the game if you want to submit an offer.

Real Estate is a great investment but you need to do your research and be smart about it, you don’t want to get caught up in a bidding war and gamble away the return on your investment. It’s your real estate agents job to search for comparable properties within the neighbourhood of the home you want to make the offer on and to advise you on the market value, but you control your money.

Money isn’t everything, writing a short letter to the seller(s) explaining a little bit about yourself and why you want their home so much can set you apart from other buyers, selling a home can be an emotional time, especially if the seller raised their family in the home, some sellers would prefer to see another family enjoy their home over a few thousand dollars.

Including a significant deposit in your offer will show sellers that you’re serious about purchasing, and the deposit will go towards your downpayment if you get the property.

In a multiple offer situation don’t add unusual requests, terms or conditions, the closer you can agree with what the seller(s) want, like the closing date, the better.

A “clean” or firm offer, which is an offer without conditions such as, financing, insurance and home inspection will be more appealing to a seller, however you want to be aware that these conditions are included for your benefit and waiving them may not be in your best interest. A home inspection for example could potentially reveal minor to major issues with the property. If you choose to waive your home inspection condition and max out your budget in a bidding war then after moving in significant problems arise this could end up costing you big money to repair and you may end up regretting your decision.

Bidding wars can get ugly and you don’t want to get caught up in it so be prepared, know your limit and stick to making your best offer you can afford that you’re comfortable with.

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So how do Real Estate Professionals determine what that amount is? Well, there are different methods of estimating value but let’s focus on the Direct Comparison Approach method since this is the most popular in residential markets.

The Direct Comparison Approach involves comparing your home to similar homes which have recently sold and making adjustments for any differences. This takes, time, skill, knowledge, and careful judgement. The information is typically gathered from Brokerage files and The Multiple Listing Service.

The most important factor to consider when gathering information is selecting truly comparable properties, you don’t want to compare a ranch style home to a two-storey, or a new home to an old home, or a 1 acre lot to a 100ft lot, or a home on the south end of town to yours which is in a completely different neighbourhood, or…… well you get my point.

Adjustments are made based on value, not on cost. The cost of the renovation and the value that it adds are two different things. An example would be a renovated kitchen that may have cost $25,000 but may only be valued at $20,000 or the opposite could occur, a garage that was cost $10,000 to construct could potentially add $12,000 worth of value. So you can see how cost and value differ, if you are planning any renovations, perhaps you are updating your home to get it ready to sell, my advice would be to check with a Real Estate Professional to determine how much value your planned renovations will incur.

Time is another important factor that needs to be considered, you need to know what the economic conditions and market trends were at the time of sale of the comparable property, since market conditions have a significant impact on market value. Furthermore the necessary adjustments will need to be made.
An estimate of value is just that, an estimate, therefore if you have more than one Real Estate Professional estimate the value of your home it’s unlikely that they will come up with the exact same figure but it would likely fall in a relatively close range.

The post Estimating The Value Of Your Home appeared first on The Eden Team.

The first way is to compare the home to the neighbourhood sales. If the homes are basically the same size and style generally neighbourhood values will be close and consistent. So if 2 homes just sold in the same area and both were roughly 1500 sq ft bungalows with 3 bedrooms and 2 bathrooms and one sold for $550,000, the other sold for $547,000 and the same type of home has been listed for $590,000 there’s a good chance it’s overpriced for the market.

The second way to tell if a home is overpriced is to see how long it has been listed for.  If it’s been on the market for over 90 days and other homes in the same area have all been selling in under 60 days it’s pretty safe to assume that the price tag is too high.

The third way to identify an overpriced home is to see how much action it’s getting. If it’s being well marketed on every platform available and there’s been lots of showings and activity on the property but no one is bringing an offer, you guessed it, it’s overpriced!

The post How to Spot an Overpriced Home appeared first on The Eden Team.

“The speed of your success is limited only by your dedication and what you’re willing to sacrifice.”

Nathan W. Morris

Now that we can all agree that nothing comes easy and sacrifices must be made we’ll jump right into our first money saving tip!

1. Prioritize! Pick the most important things to spend your money on and find cheaper ways to do them. Limit yourself to a determined amount of spending money a month and don’t go over it!
2. A big money pit is your vehicle, I’m sorry to say it but as convenient as a vehicle is it’s costing you! Gas alone is a huge expense and on top of that you have car payments, insurance and maintenance. Invest in a bus pass or bike – you’ll be doing the environment and your health a favour on top of your wallet!
3. Move in with family or find a room mate to share the cost of living with. Let’s face it rent isn’t cheap and it’s hard to save up while you’re paying to live. Let’s say average rent is $1300/month, for 12 months that’s $15,600 splitting the cost with a roommate equals a savings of $7,800 a year!
4. Stop eating out – not even coffee! Take a little time to meal plan and invest in a nice thermos, trust me it will get easier as you develop the habit of making a lunch and buying the right groceries. Focus on the added health benefit to get you through!
5. Cut the cable! This one might sound difficult especially for the TV lover, but with the inexpensive cost of Netflix these days it’s an easy money saver! Cable will cost you around $60/month versus Netflix at $10/month, this is a savings of $50 a month and $600 a year!

It’s all about finding cheaper smarter ways to do things while keeping the ultimate goal of home buying in mind!

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