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CMHC’s latest survey

Mon, 20 Jan by Pauline Relkey

The 2019 findings are in.

Canadians across the country were asked about their thoughts, attitudes and behaviours about and the process of buying a home in the annual Mortgage Consumer Survey and this is what they said.

Affordability continues to be the most important factor when it comes to buying a home.

One of the biggest stories of 2019 was the dramatic decrease in the number of home buyers who spent the maximum amount they could afford. The cost of becoming a homeowner is at the top of Canadians’ “must-haves”:

Price/affordability (80%)
Number of rooms (73%)
Proximity to public transit (67%)

The majority of Canadians are aware of the mortgage qualification rules (“stress test”). In fact, 65% of buyers said they believe the new mortgage qualification “stress test” will keep more Canadians from taking on a mortgage they can’t afford.

Despite debt levels, consumer optimism is on the rise.
Nearly one third of home buyers don’t expect interest rates to rise in the next year – up from just 20% in 2018. More than 8 out of 10 home buyers also feel confident that buying a home is a sound long-term investment.

The majority of home buyers have a positive attitude towards the idea of buying a home. Close to 9 out of 10 buyers were “happy” or “excited” about buying a home. However, more than one third also said that buying a home made them feel “stressed.”

Most home buyers are satisfied with their experience with their lender or mortgage broker.

The top reason for selecting a lender or broker is the interest rate offered. Despite high satisfaction levels, only less than half of home buyers received a follow-up call from their mortgage professional.  Hmmm a lesson to be learned. Always stay in touch with clients!

First Time Home Buyer Incentive Program

Mon, 20 Jan by Pauline Relkey

Have you heard about this program that just started in September 2019?

First time home buyers who have 5% down payment can apply for this program and get another 5 or 10% as a shared equity mortgage. Existing homes = 5% and newly constructed home = 5 or 10%.

This helps first time home buyers to reduce their monthly mortgage payment without increasing the amount that they must save for a down payment. No on-going repayments are required, this incentive is not interest bearing and you can repay the incentive any time without a penalty. This shared equity mortgage means that the federal government shares in both the upside and downside of the property value.

Your total income must be $120,000 per year or less. The property must be located in Canada and suitable and available for full time year round occupancy.

The homeowner repays the incentive amount after 25 years or when the property is sold, whichever is earlier. The property value determines what you get and what you pay back. Example if you are buying a $300,000 resale property and have your 5% down payment of $15,000 and you qualify for this incentive, you can get another $15,000 from the federal government to put towards your purchase. When you go to repay this amount, it will be based on the value of your property at that time, either in 25 years or earlier if you are selling the property. If the property is then worth $350,000 you will pay back 5% of the amount ($17,500). If the value is down and the property is worth $250,000 you will pay back 5% ($12,500).

There are qualifying factors to this program. Give me a call if you or someone you know could take advantage of this program.

Why Put Money into a House You are Leaving?

Mon, 08 Apr by Pauline Relkey

I received some great info from a home stager that I work with, Dianne Thompson with Simply Stunning Designs.

“I am selling! Why would I put money into a house I am leaving?” I would say this is the most common question professional stagers field every day! On the surface, you can certainly understand why the question is being asked. There are many reasons to support the process of staging a property before showing it to the public.

Who Is Buying?
Whether you know it or believe it, it is true; the buyer will determine if, when, and for what price your house will sell. You can have your hopes, wants and dreams but ultimately the power lies with the buyer. A great staging professional is knowledgeable about which demographic is most likely to purchase your property and will make recommendations to improve condition and presentation. The largest property buying demographic today is the millennials. The younger members of this generation may still favour renting; however, once they hit their thirties and begin to settle down, they want their version of a great house.

What they want is move-in ready. Why? Pressing student debt is already a worry, so they scrape together as much as possible for the down payment and simply don’t have extra cash to invest in fixing up the things you couldn’t get to do. The other factor to consider is this group of people do not want to be DIY Weekend Warriors; they want to have fun on the weekends! Also, they don’t have the skills to do the work and they aren’t interested in learning how to do it.

You many have finished with this property, but to them it is their new home. They want it to look and feel fresh and new. In fact, research shows they want the feel of new so much; most of them are willing to pay more money to get it. What that means to you is this: If you choose to bring your property onto the market “as-is,” you risk:
a) being on the market longer than you want or
b) having offers for less than you expect.

Why Stage?
Staging is a service for selling property that has measurable value. Whether the market is a buyers market, sellers market or a balanced market, staging is a powerful marketing tool that should never be discounted because of the outlay of money. If you were selling your vehicle, wouldn’t you clean, fix and polish it to make it feel new? Why would your house be any different? Especially when the return of investment comes at a much greater margin.

The largest investment most people ever make is in real estate. Sellers want the most money possible in the shortest time for no effort and no money. But, that’s a pipe dream. 97% of prospective buyers look on the internet first, which means you need lots of great photos to capture interest and get on the must-see list. Don’t play with your investment! When you are competing with new houses, your house must look and feel new too. Failure to meet this expectation will just have millenials favouring other properties.

   

The Difference Between a Banker and a Broker

Tue, 26 Feb by Pauline Relkey
A mortgage banker works for a bank or similar lending institution which actually provides you the money for the mortgage. A mortgage broker works with many lending institutions to shop for a loan for a specific individual. The broker is a middleman between you and the lender.

The difference between a banker and a broker comes down to the products each can offer and where their allegiances lie.

While using a mortgage broker seems like it would save you money because they have access to many lenders and programs, brokers are paid commissions by the mortgage company and some lenders pay more than others or offer perks. When working with a Bank, that loan officer only has access to their own mortgage  programs and mortgage rates. A banker is paid by the bank, to make the bank money, by selling you services, while a mortgage broker is paid by the lender they choose for your mortgage provider.

Either way has its pros and cons.

Both have access to various mortgages. The broker might have more companies to work with, but banks and credit unions are becoming more flexible with their products in order to compete.  You still need to shop around. Word of mouth from a trusted friend or family or from your realtor is a good way to start. Friends and family do mean well, but as a Realtor I can tell you that I have come into contact with many bankers and mortgage brokers over the last 28 years and always try to find you the best match.

You will likely have to meet with either a mortgage banker or mortgage broker, as they need some basic info about you and your income and expenses.  You typically don’t pay either for their research or time. When you choose your mortgage and get it in place, either will then be paid.

You will still negotiate on terms and rates with either.

Renewal Time?

If you have a mortgage up for renewal, or you would like to refinance, it is always in your best interest to check around with a mortgage broker and/or with the lender who currently holds your mortgage. Just because they were the best option previously, that doesn’t mean they will be the best option in the future.

If you or someone you know is considering a new mortgage or renewal, let’s connect to get you the best mortgage options available!

Seniors and Reverse Mortgages

Wed, 08 Aug by Pauline Relkey

A reverse mortgage is a loan that allows you to get money from your home equity without having to sell your home. You may be able to borrow up to 55% of the current value of your home tax-free.

Eligibility for a reverse mortgage
To be eligible for a reverse mortgage, you must be:
a homeowner
at least 55 years old. If you have a spouse, both of you must be at least 55 years old to be eligible.

Qualifying for a reverse mortgage
Your lender will consider:
your home equity
where you live
your age
your home’s appraised value
current interest rates

In general, the older you are and the more home equity you have when you apply for a reverse mortgage, the bigger your loan will be.

Accessing money with a reverse mortgage
You may choose to get the money from your loan through:
lump-sum payment
planned advances, giving you a regular income
a combination of both of these options
You must first pay off any outstanding loans that are secured by the equity in your home with the funds you get from your reverse mortgage.
You can use the remainder of the loan for anything you wish, such as:
pay for home improvements
add to your retirement income
cover healthcare expenses

Repaying the money you borrow with a reverse mortgage
You don’t need to make any regular payments on a reverse mortgage. You have the option to repay the principal and interest in full at any time.
Interest will be charged until the loan is paid off in full. The interest will be added to the original loan amount, which increases the loan amount over time.
If you sell your house or if you move out, you’ll have to make payments. When you die, your estate will have to repay the loan.

Costs to get a reverse mortgage
Costs associated with a reverse mortgage may include:
higher interest rate than for a traditional mortgage
a home appraisal fee
a closing fee
a prepayment penalty if you sell your house or move out within 3 years of getting a reverse mortgage
fees for independent legal advice
Shop around and explore your options before getting a reverse mortgage.

Compare the costs and impact of the following:
getting another type of loan, such as a line of credit or credit card, etc
selling your home
buying a smaller home
renting another home or apartment
moving into assisted living, or other alternative housing

Where to get a reverse mortgage
Two financial institutions offer reverse mortgages in Canada:
HomEquity Bank offers the Canadian Home Income Plan (CHIP). It is available across Canada directly from HomEquity Bank or through mortgage brokers
Equitable Bank offers the PATH Home Plan. It is available through mortgage brokers in Alberta, British Columbia and Ontario
Your financial institution may offer other products that might meet your needs.

Pros and cons of a reverse mortgage
Before you decide to get a reverse mortgage, make sure you consider the pros and cons carefully.
Pros
You don’t have to make any regular loan payments
You may turn some of the value of your home into cash, without having to sell it
The money you borrow is a tax-free source of income
This income does not affect the Old-Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits you may be getting
You still own your home
You can decide how to get the funds

Cons
Interest rates are higher than most other types of mortgages
The equity you hold in your home may go down as the interest on your loan adds up throughout the years
Your estate will have to repay the loan and interest in full within a set period of time when you die
The time needed to settle an estate can often be longer than the time allowed to repay a reverse mortgage
There may be less money in your estate to leave to your children or other beneficiaries
Costs associated with a reverse mortgage are usually quite high compared to a regular mortgage

Questions to ask a lender about reverse mortgages
Before getting a reverse mortgage, ask your lender about:
the fees
any penalties if you sell your home within a certain period of time
how much time will you or your estate have to pay off the loan’s balance if you move or die
what happens if it takes your estate longer than the stated time period to fully repay the loan when you die
what happens if the amount of the loan ends up being higher than your home’s value when it’s time to pay the loan back

Myth: The bank owns the home.
Fact: The homeowner always maintains title ownership and control of their home and they have the freedom to decide when and if they’d like to move or sell.

Myth: The bank can force the homeowner to sell or foreclose at any time.
Fact: A reverse mortgage is a lifetime product and as long as property taxes and insurance are in good standing, the property remains in good condition, and the homeowner is living in the home, the loan won’t be called even if the house decreases in value. Reverse mortgages provide peace-of-mind that the homeowner can stay in their home as long as they’d like.

Myth: Surviving spouses are stuck paying the loan after the homeowner passes away.
Fact: Surviving spouses can choose to remain in the home without having to make a payment unless they choose to sell the home.

Myth: The homeowner cannot get a reverse mortgage if they have an existing mortgage.
Fact: Many people use a reverse mortgage to pay off their existing mortgage and debts, freeing up cash flow for other things.

Myth: A reverse mortgage is a solution of last resort.
Fact: Many financial professionals recommend a reverse mortgage because it’s a great way to provide financial flexibility. Since it’s tax-free money, it allows retirement savings to last longer.

Home is where the heart is, but it’s getting more difficult for seniors to stay in their homes.
93% of Canadian Seniors live at home and prefer to age in place.
60% of retired Canadians say staying in their home is critical to their quality of life.
700,000 Canadian senior-led households face a housing affordability challenge.
Canadian seniors who live alone at home experience poverty at nearly twice the rate of other seniors.
1 in 4 Canadian senior-led households are spending more than 30% of their income on housing.
Only 1/3 of the Canadian workforce is covered by a registered pension plan down from 37% in 1992.
Almost 30% of Canadians who are nearing retirement have $50,000 or less in savings.
35% of those nearing retirement plan to use the value of their home to generate retirement income.
Nearly 70% of Canadians nearing retirement are still carrying debt.

THE TAKEAWAY
Most seniors prefer to live their retirement years at home but live on modest incomes and may face challenges to their financial security. Canadian seniors do benefit from access to CPP, OAS and housing assets but are feeling the pinch.

Tips for the First-Time Home Buyer

Wed, 25 Apr by Pauline Relkey

When venturing into the world of home ownership, first-time buyers often find themselves having to make important, fast decisions in what feels like a surreal situation — after all, it might have only been a few weeks since owning a home seemed more like a far-off daydream than an immediate reality. A few common sense tips will help you navigate these unfamiliar landscapes as you move towards one of the biggest financial decisions of your life.

1. Get pre-approved
Though a pre-approval isn’t a guarantee that you’ll get a mortgage when you’re find a property, having one can give you a firm grasp on what you can afford before you start looking. A pre-approval from your bank or lender will save you time by narrowing your search to a more precise selection of homes, and this, in turn, can protect you from the all-too-common disappointment that follows setting your heart on a house you can’t afford.

2. Don’t expect your standards of living to change
It’s bound to happen: you see a house that maxes out your budget, but you imagine you can make it work by cutting out things like morning coffees, cellular data and cable TV. Remember, ‘roughing it’ for the sake of your house quickly loses its charm, and you’ll soon regret the lack of wiggle room for things like new furniture, redecorating, or unexpected repairs. Don’t regret your first home — avoid becoming ‘house poor’ by staying below the upper limit of what your bank is willing to lend you.

3. Make a list and check it as many times as it takes
Each property you consider will have its own unique combination of pros and cons, and going through them can feel a little like comparing apples to oranges. Don’t expect to stay clear-headed when the house with the poor walking score has the kitchen of your dreams; instead, stay on track by building a list of “must haves” and “nice to haves.” Though your list might evolve over time (especially if the “must haves” are rare for your price range), having a set of self-imposed guidelines can keep your search on course when you’re feeling overwhelmed by options.

4. Don’t confuse “first home” with “forever home”
Most first-time buyers start out a little starry-eyed, imagining that new home will be stylish, spacious, efficient … basically, everything they’ve been dreaming of. In reality, being able to afford a house that has everything you want is pretty rare in the first go-round, which can make you feel so discouraged you start closing yourself off to the available options. Remember, your ‘starter home’ doesn’t have to meet all the criteria of your ‘dream home,’ and the equity you’ll build for the next few years will get you closer to your goal.

With so much new information to absorb, steps to take, and decisions to make, buying a first home can feel like a rollercoaster ride. It’s important not to lose your head throughout all of it. Taking a few steps to keep your expectations rooted firmly in reality can help you glide through the process and feel confident in your final decision.

8 Things to Consider Before Selling Your Home

Mon, 26 Feb by Pauline Relkey

As winter moves closer to the finish line, the annual spring real estate market heats up. There are many things to consider before you put your home on the market – here are 8 of the more critical ones.

1. Budget

Know what you can afford so that you don’t stretch yourself thin. Talk to your mortgage person.

2. Know the costs.

There are plenty of expenses when selling your home. Some are straightforward such as renovations and paying for movers. Others may not be as obvious – nor who pays for them – such as land transfer taxes (buyer pays), real estate agent commissions (seller), mortgage insurance (buyer), legal fees, bank fees and possibly capital gains taxes.

3. Find out your home’s worth.

Knowing how much you’re likely to get for your home can dictate how much you may be able to afford when buying another house. Do your research by checking what similar homes have sold for in your neighbourhood. The best way to do this is to meet with your Realtor who will be listing your house for sale.

4. Choose a real estate agent.

You can choose to sell your home yourself to save the commission fees – but you also incur all the responsibility for writing legal contracts. Of course, I suggest that you choose a trusted real estate agent who knows your area and by asking for referrals. If your Realtor helped you find your present property and has stayed in touch with you, give her/him a call.

5. Decide when to sell.

Do you sell during the traditional peak markets of spring and summer or or off-season? Selling during the peak means more buyers and possible bidding wars, while selling off season means fewer homes competing with yours. As the saying goes, 6 of one and half a dozen of the other.

6. Add visual appeal.

Creating curb appeal is an obvious benefit, but don’t forget to freshen up the interior as well. Make any minor renovations, declutter and consider staging, because professionally staged homes typically sell faster and for more.

7. Get a home inspection done.

While buyers will probably get their own inspections done, having one ready says that you’re confident in your home and have nothing to hide because you have taken care of what work is needed – it provides peace of mind for everyone.

8. Coordinate closing dates.

Being able to move from one home to another on the same day can be hectic and cause you stress. Hopefully you can take possession of your new place before you have to be out of your present one. If not, you may have to either rent another home short-term, put belongings in storage and generally cause unnecessary upheaval in your life. Talk to your bank about bridge financing.

Do you know your Credit Score?

Wed, 14 Feb by Pauline Relkey

GET YOUR CREDIT REPORT
Your credit history is an important part of your future – it can open doors for you or keep them locked. Decisions including approvals for loans and mortgage or rental applications may be affected by your credit history.

Make payments on time and always pay at least the minimum amount required
Notify creditors as soon as you move to ensure bills will arrive at your new location on time
Notify creditors right away if you experience problems making a payment
Review the accuracy of your credit report by checking with one of the two largest credit reporting agencies – Equifax or TransUnion
To receive a copy of your personal credit report, please send a written request to one of the following credit reporting agencies:

EQUIFAX CANADA INC.
Consumer Relations Department
Box 190 Jean Talon Station
Montreal, QC
H1S 2Z2
Phone: 1-800-465-7166
Fax: 1-514-355-8502
www.equifax.ca to complete and mail Equifax’s Credit Report Request form.

Requirements:
Equifax requires a written credit report request including your name, address, date of birth and Social Insurance Number (optional). Please also include photocopies of two forms of identification (both sides) and remember to sign your request.

TRANSUNION OF CANADA
(For all provinces except for Quebec)
Consumer Relations Centre
P.O. Box 338, LCD 1
Hamilton, ON
L8L 7W2
Phone: 1-800-663-9980
7 a.m. until 8 p.m. ET, Monday to Friday
Visit www.tuc.ca for TransUnion’s Consumer Relations Information form

TRANSUNION (ECHO GROUP)
(For Quebec residents)
1 Place Laval
Suite 370
Laval, QC
H7N 1A1
Phone: 1-877-713-3393 or 1-514-335-0374
8:30 a.m. until 5 p.m. ET, Monday to Friday
Visit www.tuc.ca for TransUnion’s Consumer Relations Information form

Requirements:
TransUnion requires a written credit report request including your name, address, previous address (if present address is less than five years), phone number (optional), date of birth, place of employment (optional), and Social Insurance Number (optional).

Please also include photocopies of two forms of identification (both sides) from the following list:

Driver’s Licence
Passport
Certificate of Indian Status
Age of Majority/Provincial ID
Citizenship Card
Department of National Defense Card
Firearms Possession and Acquisition Licence (with photo only)
Social Insurance Number (optional)
Credit Card (primary account holder)
Or, you can include one or more of the above along with one of the following:

Credit Card (secondary account holder)
Birth Certificate
Legion Card
Hunting/Fishing Licence
T4 Slip
Student Card (only with photo, signature and currently enrolled)
Employee ID/Union Card (only with photo, signature and current employer)
If more than one member of your household is requesting their credit report, each separate request must contain all of the above information.

What Home Inspectors Want Buyers and Sellers to Know

Fri, 08 Dec by Pauline Relkey

The home inspection process can be terrifying to go through, whether you are the seller or buyer.

For sellers, it’s like having your annual physical and you are being reprimanded by your doctor for not eating right and not exercising, etc.

For the buyers, it can be like finding your soulmate then discovering they are already married.

Don’t let the inspection stress you out. That’s not what your inspector wants either. All he wants is to do his job and provide you with an inspection report so that you are a happy customer.

Work with your home inspector to make the process easier and more effective. Knowledge is key! Here are 7 essential things you should keep in mind.

For sellers

1. Move your pets
We know your puppy/cat/snake is adorable and totally considered a family member, but even if your home inspector loves dogs or cats, pets on the loose while the inspection is happening makes the job much more difficult. For example, inspections require opening exterior doors, offering pets far too many opportunities to run out the door. Or the home inspector is afraid of your pet. When you leave the premises for the inspection—and many inspectors and agents ask sellers to do so – please take your pets with you.

2. Don’t forget to clean
Whether you plan on being there for the inspection or not, make sure to clean up beforehand. No, you don’t need to turn your house into an isolation ward by cleaning like a mad person — an inspector won’t ding you because your fridge has fingerprints on the door. But all that clutter? Yeah, that’s all got to go. It makes a huge difference when the inspector walks into a property where everything is put away.

For buyers

1. Any property will have issues/problems
Your home inspector will likely come up with a seemingly endless list of problems after the walk-through. Don’t panic! The inspector has been hired by you to do his job and report on what he discovers.  Put it all in perspective.  If you have never owned property, you might be overwhelmed, but speak to a home owner and they will totally understand. Every property including the realtor’s and the inspector’s, have problems and/or maintenance things. You are not alone. But there are times when you should worry, as in a major, costly fix (foundation, roof, etc). But not every issue is critical. Your inspector will explain which problems you should tackle first and even give you an idea of the approximate cost.

2. Almost anything can be fixed
There are a few scary home inspection terms that seem to be in everyone’s vocabulary: mold, basement walls and asbestos. Yes, they are scary, but no scarier than a roof that needs replacing. Don’t worry so much about mold and radon! Everything is upgradable, fixable, or replaceable. You just need to have a list of what those things are and decide how you want to address them. That’s another of the many reasons you should have a realtor on your side helping you. We will explain all your options at that point.

3. One thing you should worry about is water
Here is one issue that you might want to stress out about (just a little) – water. No, it’s not a deal breaker. Remember that part where I said almost anything can be fixed? But it’s important to address any water-related issues before the deal closes—or at least immediately afterward. Make note of issues such as water marks, mold and leaky ceilings. And give special attention to the basement. Addressing water problems in the basement can be an expensive and difficult proposition.

4. Home inspectors can’t predict the future
You might want to know how many more years the roof will hold up—and while your inspector might be able to give you a rough estimate, he can’t give you a precise timeline. Inspectors don’t have X-ray vision to see through walls or examine the motherboard in that funky new fridge that talks to you. He can’t tell you how long some things will last, but he can comment on the shape it is in, but remember that is relevant to the age of what he is talking about. Yes a furnace might be old but if it’s working fine and doesn’t need major repairs yet, then keep using it until you are ready to buy a new one.

5. Find the balance between your emotions and facts
I see this happen a lot with buying couples. One buyer is emotional at the beginning and the other is practical. Then after the purchase, they  reverse roles and the emotional one becomes practical and the practical buyer becomes emotional. It’s easy to forget your love for the home when you’re counting the dollar signs and hours you might have to spend on repairs. Just remember to take a deep breath, think rationally, and consider whether it’s a smart investment in your future. The justification can sometimes be a horrible process, because our brains are all about money and time and thinking about ‘What kind of mistake am I making?”

Barring any major renovations needed—such as a new roof or mold removal—your inspector’s visit will simply provide a to-do list. But not everything needs fixing immediately, so don’t let a long list dampen your love for the home. Just take things one at a time.

Regina Home Sales Down, Listings at an all time high

Tue, 28 Nov by Pauline Relkey

My summary – even though the above title is true, sellers aren’t budging much when it comes to price.

Listings in Regina reached a record high for October with 1,444 homes for sale.

Sales numbers in and around the city dropped to their lowest level since 2008.

Average time to sell was 61 days which is the longest average listing to sale time in the last decade. The average sale price for October dropped by 1%.

Causes are overbuilding and lack of pressure on both buyers and sellers.

Diversified economy means people still have jobs and thusly sellers don’t feel pressured to sell at lower prices. Sluggish provincial economy causes buyer uncertainty. Buyers feel that prices might soon decrease. Regina has not seen big changes in prices as in other major cities.

Mortgage rules are tighter which reduces buying power.

The complete article is here.

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Association of Regina REALTORS® Inc.. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.