Reaching Out To Renters

Written by Cindy Freiman

Now is the perfect time to reach out to first-time homebuyers by pointing out the benefits of buying now as opposed to waiting another year or two.

With interest rates still sitting at “emergency” levels with nowhere to go but up, now is an ideal time for you to market to renters/potential first-time homebuyers with solid examples of how much they could save in interest if they bought in the current low interest rate environment versus predicted rates over the next couple of years.

But if historically-low interest rates still don’t tip the scales with potential first-time buyers who are sitting on the fence, it’s important to have prepared answers to their most common objections to help convince them why now is an optimal time to buy.

Down payment
The main reason many renters feel they can’t afford to purchase a home has to do with saving for a down payment. The key is to explain to first-time buyers that there are many solutions available today that can help them with their down payments.

Talk about how many lenders will allow for a gifted or borrowed down payment. And of those lenders that will not provide this alternative, explain how many offer cash-back options that can be used as a down payment.

Better yet, introduce potential first-time buyers to available programs from some financial institutions where they will offer a “free down payment” or a “flex down”. Of course, the client will end up paying about 1% more in their interest rate, but the program will help them get in the homeownership door and start accumulating equity earlier. The client must, however, stay with the original lender for the full initial five-year term or else they’ll have to pay the down payment back.

First-time homebuyer incentive
As you’re probably well aware, last year a $5,000 increase was made to the RRSP Home Buyers’ Plan, meaning first-time homebuyers can now withdraw up to $25,000 from their RRSPs for a down payment – tax- and interest-free. The problem is that many potential homebuyers still don’t know this fact.

And if there’s a couple making a home purchase together, they can each withdraw up to $25,000 from their RRSPs.

Educating and coaching
There’s an endless amount of information available to prospective homeowners – through the Internet, friends, family members and anyone willing to voice their opinion on a given subject. What they need, therefore, is education and coaching as opposed to being bombarded with more information.

You may even want to suggest that they speak to a trusted real estate agent contact of yours once you’ve gotten them pre-approved and before they head out home shopping. This will help set their minds at ease, because many first-time buyers are overwhelmed by the financing and buying processes, and often don’t know what it truly costs to purchase a home. Providing real examples can go a long way in showing them what it costs to buy a home in their area versus what they’re currently paying in rent.

If a renter is currently paying $800 per month, for example, with that same payment (including taxes) they could afford to buy a $120,000 home. And assuming real estate values increase 2% per year over the next five years, the new homeowner would have accumulated $27,000 in equity in their home. If they continue renting, however, this $27,000 has generated equity in someone else’s home.

It may even be worth your while to set up a joint meeting with your undecided client and a trusted real estate agent to further clarify the situation. Your client will have two professionals in one place available to answer all of their questions about the home financing and purchasing processes.

And if you don’t think it would be worth your while to take a team approach with a real estate agent for just one client, consider holding a free first-time homebuyers seminar where you and other professionals can dispel the myths and educate any clients you have that are undecided about homeownership. This is an excellent way to pool your resources to not only help your clients make a decision, but also tap into the clients of the other professionals holding the seminar with you.

My Top 10 Christmas Specials

1. Rudolph the Red Nose Reindeer

2. A Charlie Brown Christmas

3. Dr. Seuss's How the Grinch Stole Christmas

4. Mickey's Christmas Carol

5. A Muppet Family Christmas

6. A Garfield Christmas Special

7. Frosty the Snowman

8. Santa Claus is Coming to Town

9. The Year Without Santa Claus

10. The Little Drummer Boy

My Top 10 Christmas Movies

1. A Christmas Story

2. It's a Wonderful Life

3. Elf

4. Love Actually

5. National Lampoon's Christmas Vacation

6. Home Alone

7. White Christmas

8. Meet Me In St. Louis

9. The Muppet Christmas Carol

10. The Grinch

These are my top 10 Christmas movies what are yours?

Buyer agents matter even more

By Mark Weisleder

When you use an agent to sell your home, you may agree on a commission as high as 5 per cent with the proceeds split two ways. One half goes to the agent who works for you and the other half is paid to the agent who finds the buyer and helps negotiate the deal.

Now that the federal government has brought more competition to buying and selling a home, there are more ways for you to sell a home by yourself. That means the role of the real estate agent acting for the buyer will become even more important to you and the buyer.

Most people understand that when you sign a listing agreement to sell your home if you sell during the term of the agreement, you owe commission to that agent.

It’s a little different for when you’re buying a home. Here, you agree to work exclusively with one agent to find the property you want. The agent protects your interests and negotiates the best price for you. This becomes important if you are involved in a bidding war because you’ll need an objective third party to guide you, to make sure that you do not get too emotional and end up overpaying for the property.

In exchange, you agree to pay this agent a fee, typically a percentage of the sale price. For example, if the homer costs $200,000 and you agree to pay your buyer agent a 2 per cent commission, the cost is $4,000. Usually, the agent will get the commission from the seller. If the seller refuses to pay, then the offer will be readjusted to $196,000, and the buyer will pay the fee directly.

When interviewing buyer agents, be sure to ask for references and then follow up and call them. If you are nervous about signing the agency agreement, you might want to consider signing for a short term, let’s say 14 days, to get a feel for the kind of service your buyer agent will provide. You must understand though, that if your agent shows you a home during that 14 day period that you later buy, you will owe commission.

Sellers should make the effort to co-operate with buyer agents as well, even if they are trying to sell their home by themselves. One of the main reasons is that when a potential buyer approaches a seller directly, the seller has no idea whether this buyer is really looking for a home or even has the financial ability to afford the home. They may in the extreme case be a thief who is only looking to see whether they can come back to this property at a later time. When you work with a buyer agent, you know that they have already qualified any potential buyer so that you have the comfort of knowing that this buyer is in fact ready to buy and more importantly, can afford your home.

In addition, because the buyer agent will protect their buyer by conducting the appropriate due diligence on the property itself, there is less chance that the buyer will discover problems after closing. This means that the seller will not likely be sued by the buyer after closing. This means peace of mind for the seller after closing, as well.

There are advantages to both buyers and sellers in working with buyer agents. Understanding this will make your next home purchase or sale decision much easier.

Real estate lawyer Mark Weisleder is the author of Put the Pen Down! What homebuyers and sellers need to know before signing on the dotted line.

Christmas Time= A Time for Giving

The holidays are a great time to reflect and remind our selves about how lucky we truly are. There are a lot of people who are struggling and if you aren't one of those people I encourage you to give back to your community. There are so many ways you can help give this holiday season listed below are just a few ideas.

1. This year the Daily Bread Food Bank is seeing a rise in the number of people using its services. With an increase in unemployment, over 80,000 families are now relying on the Daily Bread Food Bank to put food on their tables. Right now the Daily Bread Food Bank is running its holiday drive so there are 3 ways you can help out.

The first way is to consider organizing your own food drive or fund drive. A few students at Holy Name School banded together a few weeks ago and knocked on doors in our area asking for donations for the Food Bank which I thought was very admirable. Secondly you can drop off nutritious, non-perishable food donations to your local fire hall, Loblaws, Loblaw Great Food, No Frills, valu-mart or Real Canadian Superstore. Lastly you can volunteer at the Daily Bread Food Bank and help package these foods for needy families.

Also on December 10th BT and Home Depot have teamed up to raise money for the Daily Bread Food Bank. Home Depot and BT are handing out Christmas trees to those who donate at least $10 to the Daily Bread Food Bank. This will be at Yonge and Dundas square starting at 6am till 9am, so get their early!

2. Another great way to give this holiday season is to donate a new and unwrapped toy to either Toy Mountain or the Chum Christmas Wish.

Toy Mountain is sponsored by CTV and the Salvation Army. They have teamed up together for their 15th year with a goal to collect 120,000 toys for kids in need. Each day CTV's Tom Brown is at a special location across the city collecting toys for young girls and boys. Please check out their website to see where you can drop of your new and unwrapped toy. http://toronto.ctv.ca/toymountain/

This year also marks the 44th annual Chum Christmas Wish. With the help of RBC the Chum Christmas Wish has become one of the largest distributors of toys to those in need in the Greater Toronto Area, as well as providing financial assistance to hundreds of agencies. With many funding cuts in recent years, the CP24 CHUM Christmas Wish has become the last hope for many to be able to give a child a Christmas. The CP24 CHUM Christmas Wish supplies registered charitable organizations, social service agencies, churches, and community centres with generous financial donations and new unwrapped toys. In turn, these groups distribute the donations to those families, of many faiths and cultures, who require support. To find out locations where you can donate please check out their website: http://shows.ctv.ca/TheWish.aspx

3. For over 118 years the Salvation Army Christmas Kettle Campaign has been a great way for people to give back to their local community. In Canada, Christmas kettles were first used in St. John’s, Newfoundland in 1906. Today, the familiar kettles and bell ringers are seen in more than 2000 locations nationwide. The Salvation Army supports many programs in your local community and to read more about some of their services please check out their website online at http://www.salvationarmy.ca/services/

These are just 3 simple ways to give this holiday season! There are so many charities that need our support so if you aren't interested in any of these please think of donating to another charity close to your heart. Even if you can't afford to give money you can always give back by volunteering, as there are never enough volunteers out there!

If you want to turn up the heat on the holidays come to Dundas Square tonight where you can share a kiss with someone special under one of the largest mistletoe's ever. For every kiss Virgin will donate $5 to WWF Canada. If you don't have a lover to kiss, do not worry, teddy bears, mobile phones, even your new winter boots are welcome. It starts and 6pm so get there soon!