When you think of what’s involved in a real estate transaction, you likely think of everything before the sale. For the seller, there’s the home preparation, photographs and marketing to find the most qualified buyers. For the house hunter, going to showings and choosing your home are what stands out. Few people think about what happens after the fact, once the paperwork is signed but before the closing date. 

However, the closing process is critical to ensure a seamless transfer of ownership. When something is off legally, the transaction can fall through. Even worse, there can be lawsuits. Real estate contracts are legally binding, with potentially severe consequences when breached. Unfortunately, legal jargon is nearly impossible for a layperson to understand, never mind follow to the letter. But what exactly does a real estate lawyer do, and do you really need one?

A Real Estate Lawyer is Always Required–to Some Degree

While not recommended, you could negotiate the terms of the purchase agreement if the contract is simple enough. However, The Land Registration Reform Act of Ontario requires a lawyer to examine the title before any ownership transfer can occur. The lawyer steps in to make sure all the i’s are dotted and t’s are crossed to eliminate any issues before they arise. 

Your lawyer will pour over the purchase agreement to see that every clause is valid and can advise you whether any conditions will impact the house closing. They also inspect the property title to find out if there are any liens or outstanding taxes.

If the property is a condo, the lawyer will thoroughly review the status certificate, ensuring that the management company has the required reserves to maintain the building. This gives you peace of mind that you won’t get dinged with a hefty and unexpected assessment fee after your purchase.

Whenever complications or disputes arise, you’ll always want a good lawyer in your corner.

Looking for more facts that can help you succeed in real estate? These resources may be helpful:

• How to Negotiate a Real Estate Contract
• Pre-Qualification Vs Pre-Approval: What’s Better?
• How to Stand Out in a Changing Market

Buying a Home? Add in a Clause for Your Lawyer to Review

Making an offer to purchase can get complicated on large transactions like real estate. You have to put a lot of thought into the market to know how much to offer and what, if any, conditions you should place to protect yourself. 

Your real estate agent is there to help you get the best possible price and terms. But did you know that a real estate lawyer can help create a bulletproof offer? For example, you’re probably already familiar with certain conditions buyers often place when bidding on a home. Conditions of home inspection and condition of financing are two of the most common clauses you’ll see.

However, many people don’t realize that you can even include a condition of legal review. This allows you to have your lawyer inspect the offer before it becomes binding and can save you a lot of headaches during the close.

Woolcott Real Estate is one of the top teams in Burlington and Hamilton for a reason. Find out more about our selling process here.

Selling? How a Lawyer Protects Your Financial Interests

When selling a home, your real estate lawyer works to ensure the buyer follows through with all of their commitments, including submitting the deposit and down payment on time. Your lawyer will also uncover any problems with the property title and resolve them before they affect your closing.

Working with a highly qualified real estate lawyer brings peace of mind to what might otherwise be a stressful transition!

Can the Buyer and Seller Use the Same Lawyer?

Ontario law generally prohibits the buyer and seller from using the same lawyer. As you can imagine, this could become a significant conflict of interest and detrimental to both parties. However, there are some exceptions to this rule:

• When the buyer and seller are considered related under the Income Tax Act
• When the transferor and transferee are the same person, and the transfer takes place to sever land
• A transfer between an estate trustee and the beneficiary
• In a remote area where finding separate lawyers represents an undue inconvenience

Most Common Legal Pitfalls in Real Estate

Now that you know the importance of working with an experienced real estate lawyer, let’s look at some of the most common legal pitfalls and how to avoid them.

• Errors in drafting the purchase agreement. Big or small, errors in the contract can cause the property not to close or result in a lawsuit after the fact.
• One party wants to back out after the market changes. Legally, it’s not allowed, but breaches do happen, especially when a property dramatically changes in value after the papers are signed. Having a lawyer review the contract reduces the chances of last-minute problems.
• Misunderstanding zoning laws. A buyer might purchase a property with the intention of performing significant renovations. Checking the zoning laws before agreeing to purchase is critical.
• Disputes over chattels and fixtures. What is included in the offer and what is not? Both parties must be on the same page.
• Seller representations and warranties. The seller is obligated to disclose certain facts about the property, and must honour all stated warranties.

A successful sale begins with knowing how much your house is worth in today’s market. Book your free home evaluation here.

Finding a Good Lawyer

It’s not every day that you’re buying or selling a home. As a result, you may not have a lawyer in mind or a plan to find one. You can try searching through Google reviews to see a lawyer’s track record from previous clients. 

However, the best way to find the right professional for you is often through your network. Your real estate agent will have connections with trusted experts in every field you can imagine. Finding a qualified real estate lawyer is often as simple as asking for a recommendation.

Do you have questions about what it’s like to buy or sell in the current market? Our local experts are standing by and ready to answer your questions, big or small. Reach out to us today.

If you’ve followed real estate news at all in the last six months, you know the market has undergone a massive change recently. 2022 started out with one of the busiest housing booms in recent history. The average price of a home spiked to record highs, but buyers were not dissuaded. Nearly everything that hit the market got scooped up, often to the tune of multiple-offer scenarios and fierce bidding wars. However, it all came to a fast halt when the Bank of Canada began raising the interest rate. Sales slowed down, and prices began to fall.

At the beginning of the year, high prices put the dream of ownership out of reach for millions of Canadians. Now that prices are coming down, first-time buyers are facing a new challenge… Interest rates.

Higher interest rates increase the cost of borrowing while reducing the amount you can qualify for. As a first-time buyer, it can sometimes feel like you can’t win. However, help is available. Here are some tips to help you get into your first house sooner rather than later.

A Quick Glance at Government Programs

Your first purchase is always the most difficult. And yet, homeownership helps to provide financial stability for the country. That’s why the government has an interest in helping first-time buyers. There are programs available as long as you:

• Are a Canadian citizen
• Are over the age of majority
• Are making a qualified purchase on a primary residence. (Government programs do not apply to investment properties.)

The First-Time Home Buyer Incentive

This Federal program provides up to 5% for your down payment on a resale home. For a newly constructed home, the government will put up as much as 10%. This shared equity loan must be repaid when you sell the property or within 25 years. Find out more about the First-Time Home Buyer’s Incentive here.

Home Buyer’s Plan

You can pull a maximum of $35,000 from any registered investment plan to put towards your down payment. You don’t have to pay tax on this amount as long as you repay it within 15 years. Find out more about the Home Buyer’s Plan here. Bonus: If there are two first time buyers on title, both buyers can use the HBP, allowing for a total of $70,000.

Land Transfer Rebate

The Land Transfer Rebate is a massive financial boost for first-time home buyers and can save you up to $4,000 on your closing costs. Find out more here.

First-Time Home Buyer Tax Credit

Currently, you can claim up to $5,000 on your tax return when you buy your first house, which will result in a savings of $750. The budget for 2022 proposes to double this amount to $10,000. If this passes, the tax credit will save you $1,500. Find out more about the First-Time Home Buyer Tax Credit here.

There is no shortage of things you have to know about when buying a house. Here are some other articles that can help you:

• Interest Rates are on the Rise: Should You Get a Fixed Rate or Variable?
• Conditions & Clauses on a Real Estate Purchase
• 7 Amazing Benefits of Working with a Real Estate Agent

Get Pre-Approved

Now that you know what programs you might qualify for, it’s time to get the ball rolling. If you want a quick idea of how much you might be able to borrow, you can get a pre-qualification. It’s easy, takes only a few minutes and you can get your results back right away. However, these results are a very rough estimate and not entirely accurate.

Serious home buyers should always start with a pre-approval. This process is much more in-depth. You’ll need to fill out a mortgage application and enter your income, debts, assets, and other personal information. Once completed, you’ll know how much you can borrow and can begin your home search!

Want to know more about the differences between a pre-qualification and a pre-approval? Read our complete breakdown right here.

Save as Much as Possible for your Down Payment 

The down payment is often the biggest obstacle between you and a new house. The good news is you may be further ahead than you realize. You’ve likely heard that you need 20% before you can even think about buying your first home. However, in Ontario, this is only true for homes over $1,000,000. 

For anything less, you’ll need 5% on the first $500,000 and 10% on the remaining amount.

Here’s how that breaks down on a $700,000 purchase:

If you wanted to put down 20%, you would need $140,000. If you can make it happen, you have the added benefit of not having to sign up for mortgage insurance.

However, you don’t need that much to make your purchase.

• 5% of $500,000 equals $25,000
• 10% of the remaining $200,000 equals $20,000.
• In total, you would need $45,000 as your down payment 

These funds should be readily available. If the seller accepts your offer, you’ll have to put down around 5% immediately as your deposit. The rest of your down payment is paid once the house closes.

Have you decided where you want to buy your first house? Here are some ideas to consider:

• The Hidden Gems of Burlington You Need to Know About
• Hamilton Vs Toronto: Which City Should You Choose?
• What to Expect When Buying a Home in Waterdown

Be Prepared For Your Closing Costs

Your closing costs include lawyer fees, land transfer taxes, utility hookups, and appraisal fees. You can expect your closing costs to amount to 3 to 5 percent of the total sale price. You’ll have to pay some of these costs upfront, and you can roll the rest into your mortgage payments. 

Work With A Real Estate Agent

Buying your first home can seem overwhelming in any market. This year has been particularly challenging, and many people have been caught off guard by the rapidly changing conditions. 

However, at the moment, things are looking up for buyers as prices are down and there is less competition. A real estate agent can help you through the entire process, from finding the right home in the right area to helping you negotiate the best possible price and terms.

Buying your first home is an exciting milestone, and our local experts are standing by to guide you all the way. Call 905-332-9223 or email today, and we will be happy to answer any questions – with no obligations.

“Negotiation” is a word that can put many people on edge. It implies that there is a lot at stake. Say and do all the right things, and you come out ahead. However, make one little mistake, and you stand to lose a lot. Nowhere is this connotation more true than in real estate. Buying or selling a home involves significant amounts of money, and it’s enough to make anyone feel tense. But, a successful negotiation isn’t at all like what you see in movies or on T.V. 

They don’t necessarily involve talking smoothly or driving a hard bargain. Instead, the key to winning is education and research. Below, you’ll find a review of how a real estate contract works and what you can and can’t negotiate.

Components of a Real Estate Contract

Simply put, a real estate contract is legally binding. You should never sign it unless you understand every clause and condition. Your best bet is to talk to an experienced real estate professional who will help protect your interests. There are three types of real estate contracts you might come across: 

• Purchase agreement
• Assignment contract
• Lease agreement

The contract you’re most likely to see is a purchase agreement containing the offer to purchase a property and the terms. The elements of this contract include:

• Mutual agreement – all parties are willingly entering into the contract
• Consideration – the object of value being traded, in this case, the house
• Capacity – each party must be of legal age and sound mind
• Lawful purpose – the contract cannot contain any illegal clauses

Real estate contracts are often subject to intense negotiation. The buyer, of course, wants to purchase the property at the lowest possible price. In contrast, the seller wants to earn the highest amount possible. Once the paperwork is signed, the deal is done. There’s no backing out without consequence after all conditions have been met. 

Want to see what other clauses and contingencies you might see on your contract? Read our article right here.

Elements of Negotiation

What aspects of a real estate sale can be negotiated? The price is the most obvious. However, you can also negotiate certain conditions into the agreement that must be met before it becomes legally binding. While you can include any contingency you want to purchase a home, these are the ones you’ll see most often:

• Condition of home inspection
• Condition of sale of current property
• Condition of financing

Before signing off on your offer, you want to ensure that it includes everything you want. For example, buyers often believe that the house comes with the drapes and appliances. However, if you want to be sure, get it in writing.

That old saying “hope for the best, prepare for the worst” was never more true than when it comes to negotiating real estate. But here are some informative articles to help you get the best results:

• The Deal Fell Through. What Happens Now?
• Interest Rates Are On The Rise. Should You Get A Fixed Rate or Variable?
• How To Stand Out In A Changing Market

How the Current Market Affects Your Negotiating Power

In fierce sellers’ markets, the buyer cannot always get the price or conditions they want. Sometimes, you have to place a firm offer to stand out against other potential buyers who love the property. Whenever the market allows it, we recommend at least adding the condition of a home inspection. This protects you from ending up with something beautiful on the outside but riddled with non-stop problems after you take possession. 

Conditions may cost you the house if another buyer comes along with a firm offer. However, sometimes it’s worth it to keep looking because you may avoid a costly and stressful mistake.

During buyer’s or balanced markets, a buyer has more negotiating power. You may be able to get a break on the price or add in additional conditions to protect yourself and ensure you’re getting the right house.

As a seller, the ability to negotiate depends primarily on market conditions and the value of similar homes in your neighbourhood. It may be tempting to overprice your home in the hopes someone will pay, but this strategy often backfires, and you may not find a buyer at all. 

The Offer Process

When a buyer finds a home they like that’s in their price range, they’ll work with their Realtor to craft an offer. The offer to purchase includes the price they’re willing to pay, any conditions they may have, and expiry date when the offer becomes null and void.

The seller can now contemplate the offer and decide whether to accept or reject it. If the conditions are almost, but not quite, agreeable, they can also come back with a counteroffer.

Sometimes, they’ll ask the buyer to increase the dollar amount. Other times, they’ll ask for the removal of conditions or more flexible closing date. 

The process of offering and countering can go back and forth several times. At some point, an agreement will be made, or one party will decide to end the negotiations and move on. That’s why it’s so important to understand the market and the strength of your position. Otherwise, you may lose a contract for the sake of a few thousand dollars or over a fridge or stove.

Should you work with a real estate agent, and how do you pick the right one? Here are some ideas to help you make the best choice:

• 7 Benefits Of Working With A Real Estate Agent
• Can A Local Agent Sell Your House For More Money?

The Importance of Working With A Realtor

Real estate contracts can be complex, but they are legally binding. A professional, local real estate can protect you from overpaying or selling your house for less than it’s worth. But how do you choose the right agent? For the best results, you should look for someone who is:

• Knowledgable about the area
• Has experience with different types of markets (not just the boom that we came out of)
• Is part of a team of experts that can handle every detail for you
• Has experience in negotiating with both sellers and buyers
• Will be available to support you and answer all of your questions

Do you have questions about negotiating the best possible terms for your real estate transaction? Reach out to us here, and we’ll get back to you with the answers you need and more.

Have you noticed that the news headlines seem to be very doom and gloom about the economy lately? It’s true that interest rates and inflation are on the rise, but conditions are not nearly as bad as you might think. Right now, we are enjoying a strong economy that is recovering well from the pandemic restrictions of the last two years. To top it all off, unemployment rates are at a record low of 4.9% as of July.

Nevertheless, the uncertainty has hit the real estate market. Yes, housing sales are down from the boom we experienced in the winter. Relatively speaking, however, the market is still strong.

Whenever there’s a change, some people begin to wonder if they should use the services of a real estate agent when buying or selling a house. The temptation to forgo a Realtor is clear. The average home in Burlington now rivals that of Toronto at nearly $1.3 million. 

At that price, even the lower commission at a discount brokerage seems expensive. It’s times like these where professional expertise is even more critical.

The best part is that working with the right agent doesn’t necessarily cost you money. They can, in fact, help you earn or save far more than you would ever pay out in commissions. 

Let’s examine some of the facts versus fiction about working with a real estate agent.

Fiction: I’ll earn more when selling my house if I do it alone or by using a low-commission agent.

Fact: The old adage is true. You get what you pay for. 

When selling on your own, the slightest mistake can cost you thousands of dollars or even lose you the deal altogether. In the worst case scenario, you could land yourself in some legal hot water. 

In this market, buyers are hesitating. Some are even trying to back out of their deals as prices drop. 

Effective negotiation and comprehensive marketing are essential to your success. An experienced and savvy homeowner might be able to pull it off. However, you’ll still have to pay the buyer agent commissions, and the lawyer fees are often higher for For Sale By Owner (FSBO) transactions. 

Information is power when it comes to a successful real estate transaction. Here are some other resources that can help you achieve your goals:

• Conditions and Clauses on a Real Estate Contract
• How To Stand Out In A Changing Market
• What Happens When a Buyer Breaches their Contract?

Fiction: I can sell a house by myself in my spare time.

Fact: Maybe it isn’t all about the money in your case. But how much is your time worth? 

Listing a home for sale is more complicated than it looks at first sight. There is research, home preparations, showings, marketing, photography, and staging. Trying to do everything is a full-time commitment. If you have a career, doing it all is simply exhausting. And at the end of the day, you’re likely to have even less money in your pocket than you would have if you had somebody to do it all for you.

Working with a local real estate expert doesn’t just make your life easier and protect you legally. Statistics show that an agent-assisted sale typically earns as much as 20% more than an FSBO property. 

Think of it this way: Your buyer probably has an agent representing them. Don’t you want somebody to advocate for your best interest?

Fiction: You should use your friend as an agent.

Fact: It’s understandable that you want to be supportive of your friend who may be just decided to get their real estate license. However, your home is your biggest investment. 

Buying or selling is an emotional experience and even if your friend is a true professional, the stress can ruin a personal relationship. Some people would say that you shouldn’t use your friend to sell your house any more than you should let them perform surgery on on you.

Fiction: All real estate agents are the same.

Fact: The boom of the last two years has attracted many new and inexperienced real estate agents to the industry. 

As a result, there’s been an influx of agents who only have experience working in prime conditions. 

They’ve never had to work in a cooling market, and they certainly never had to deal with a recession. 

Currently, there is a lot of buyer hesitation in the market. Selling a home successfully requires extensive negotiation experience and comprehensive marketing skills. Many new agents do not have these skills and they are struggling.

If you want to achieve the best results, use an experienced professional who has the tools and expertise to succeed in all conditions, not just when times are good.

Fiction: Real estate is a people business, so it doesn’t matter if my agent doesn’t have a web presence.

Fact: This myth is a pervasive one, because it contains a hint of truth. 

Real estate is, in fact, a people-driven business. A large social media following or flashy website isn’t everything. However, it’s important to remember that the world has changed dramatically over the last few decades. Nearly everyone begins their search online before deciding what to look at and whether they will schedule an in-person visit. Technology is here to stay, and your real estate agent should be well-versed in all of the tools to help you succeed. 

Are you ready to buy a new home? Here are some resources to guide you:

• Interest Rates are on the Rise. Should You Get a Fixed Rate or Variable?
• How To Win In A Multiple Offer Scenario
• The Hidden Gems of Burlington You Need to Know About

Fiction: Using a buyer agent will add to my purchasing cost.

Fact: You should always use an experienced agent when buying a house because it usually doesn’t cost you anything at all. 

The buyer agent gets paid by the seller after the house closes. You get all of the guidance and protection of a licensed agent at no cost. And an agent with rock-solid negotiation experience can help you save thousands on your purchase. 

There are many myths about working with a real estate agent, but we are happy to clear them all up for you. Feel free to reach out today with any questions you may have. 

Did you know that Burlington took the top honours for the best community in Canada in 2019 by Maclean’s Magazine? It was also voted number one as the best place to raise a family, and for a good reason. It’s safe and scenic, with all the amenities you could ever need and has access to top-notch schools and parks. 

Of course, downtown Burlington tends to get all the glory because of the cute shops, transit and waterfront access. The attention is well deserved, but there are other beautiful, lesser-known neighbourhoods in the city that you may just want to know more about. Here are a few of our favourites:

Elizabeth Gardens

You could argue that Elizabeth Gardens has just as much to offer as downtown Burlington. You’ve got easy access to the waterfront, with endless independent shops, restaurants and ice cream shops along Lakeshore. The boardwalk is fantastic for walking, jogging or cycling any time of the year.

And move over Spencer Smith Park! It has nothing on the Burloak Waterfront Park, where kids will spend hours on the giant playground featuring a soft, rubberized floor and even has a zipline! 

You may notice one thing missing as you take in the scenery along the boardwalk – there are no crowds! Can you believe this beautiful neighbourhood is one of the most affordable areas in the city?

Buying a home can be challenging during a changing market but these resources can help:

• Interest Rates On The Rise: Should You Get A Fixed Rate Or Variable Mortgage?
• Conditions And Clauses On A Real Estate Purchase
• The Market Is Changing: Is Real Estate Still A Good Investment?

Tyandaga 

You’ll find the affluent neighbourhood of Tyandaga on the northwest side of Burlington. Though best known for its large, sprawling estate-style homes, the occasional listing for a bungalow or split-level residence does come up. Larger-than-average-sized yards make it easy to enjoy your privacy when you want it. However, Tyandaga is also known for its sense of community, which is there for you when you need it. 

As one of the more mature neighbourhoods in the area, there are plenty of trees, shrubs and green spaces. It’s also close to the Bruce Trail, the oldest and longest footpath in Canada. 

Cityview Park is one of the main attractions, with a playground, sports field, artificial turf and a boardwalk that winds through the naturalized wetlands.

Brant Hills 

If Tyandaga proves to be a little rich for your blood, you might consider its neighbour to the north. Brant Hills is surrounded by the beauty of the Niagara Escarpment, making it a paradise for nature lovers. You’ll still find plenty of luxurious, 2-storey Colonial and Tudor-style homes. However, there is also an abundance of more affordable bungalows, townhouses, and split-level houses.

If you’re looking for some fun family time, head on over to the Brant Hills Community Centre, where you’ll find a library, a gymnasium and a giant outdoor sports field. Drop-in programs are often available, offering fun and educational activities for all ages!

The best part of living in Brant Hills is the scenery. The second best thing may be the ease of commuting. The 407 and QEW are close by and making getting around a breeze.

The Orchard

Looking for the ultimate family-friendly neighbourhood? The Orchard may just be the answer you’re looking for. It’s an extremely friendly area, and nearly everyone has a front porch, where you can sit and enjoy a coffee while waving hello to the neighbours. Your little ones will quickly find new friends to play with as plenty of children are around. The Orchard Community Park is a a great place where the young and young at heart can play sports, explore beautiful nature trails and cool off in the splash pad during hot summer afternoons.

There are several elementary schools within easy walking or biking distance, so getting to and from class will never be a problem. 

The Orchard is located as far north as you can go in Burlington, meaning Bronte Creek Provincial Park is practically in your backyard! 

Are you open to other areas in the GTA? Here are some other comparisons you might be interested in:

• Hamilton Vs. Toronto: Which Should You Choose?
• Our Complete Guide To Central Hamilton

Millcroft

Millcroft is the place to be for golf nuts. This neighbourhood is so crazy about golf that instead of deer crossing signs, you’ll encounter signs telling drivers to watch out for golfers. It consists mainly of executive-style houses on extra-large lots. 

And it isn’t just for golf fanatics. Anyone who enjoys gorgeous scenery and the feeling of being in the country while enjoying city amenities will love living in Millcroft. It’s not the most walkable neighbourhood but is just a 15-minute drive to downtown Burlington. And the Millcroft Shopping Centre is around the corner, with over 40 shops to choose from and plenty of restaurants where you can stop for a bite.

Whenever you feel the need for exercise, Millcroft Park offers baseball diamonds, a soccer field and a tennis court. Plus, there’s a children’s playground and splash pad. It’s a great way to get a taste of the outdoors, with fun activities for everyone.

Are you looking for your forever home in Burlington? We work extensively in the area and can help you find your new perfect neighbourhood! Reach out today for a free, no-obligation consultation.

Last week, the Bank of Canada dropped a bomb on what was already a softening real estate market. People were reeling from a series of interest rate increases beginning in March, which were not unexpected. Inflation is still rising, with out-of-control gas prices driving up the cost of everything from food and clothing to construction supplies. 

Raising the interest rate is one way for the Bank of Canada to try to slow inflation.

However, rising rates can have a significant impact on the real estate market. The last few months have been proof of this. Buyers begin to hesitate because of the higher cost of borrowing. Less competition means fewer offers, and housing prices start to fall.

Will this spell the end of the hot housing boom sellers have enjoyed for the last two years? Fear and hesitation have made their way into the market, but for the most part, there is no need to worry, not even after the last rate increase. What we can expect is a simple correction to a hectic market that was never sustainable.

The Numbers At A Glance

The year started with a target rate of 0.25%, a historic low put in place to boost the sagging economy brought on by the pandemic. This ultra-low rate worked better than anyone anticipated and triggered one of the most aggressive markets we’ve ever seen. 

As housing prices soared and inflation rose, the Bank of Canada had no choice but to raise interest rates.

The market cooled slightly in April but remained highly competitive compared to recent years. Everyone knew another increase was around the corner. We all held our breath for weeks as we waited for the Bank of Canada to make the announcement. We knew it would be a steep one, and the market braced itself for an increase of 0.75%. 

Instead, they dropped the news of a full percentage point hike in the interest rate. This is the biggest jump since 1998, bringing the target rate up to 2.5%. (Recent update: Since July, there have been several other increases. The latest 0.50 point hike in December brings the rate up to 4.25%.)

With everything going on in the market, it might be an excellent time to review some of the basics. Here are a few more resources to help you become an educated buyer or seller:

• Conditions And Clauses On A Real Estate Contract
• How To Stand Out In A Changing Market
• 7 Amazing Benefits Of Working With A Real Estate Agent

Balance Returns To The Market

At the end of the second quarter, the Canadian Real Estate Association (CREA) reported that there were 2.7 months of inventory available in the housing market. Under normal conditions, these numbers would look like a hot seller’s market. A balanced market takes place when supply reaches about six months’ worth. 

Compared with March, when inventory dropped to 0.9 months, this now seems like a balanced market. Homes take longer to sell, and multiple offer scenarios are no longer a sure thing.

A homeowner who had their property appraised at $2 million in February may feel dismayed that their house is now only valued at $1.8 million. They see a $200,000 loss, but they’re not seeing how much they stand to gain as the market corrects. However, the newly balanced market benefits everyone, especially sellers.

What The New Rates Might Mean For Sellers

News headlines are reporting that interest rates have “taken a hammer” to the real estate market. Prices will likely decrease a little further as the market continues to self-correct. And that’s a good thing. How? The previous scorching hot market was actually a nightmare for sellers who also wanted to buy.

Many homeowners found themselves priced right out of the market a few weeks after their closing date. This new balanced market gives you some breathing room. You have time to look at homes and choose something suitable for your family. And while you may earn less from selling your home, you will also pay less for your new home.

When you look at current conditions calmly, you’ll see that rising interest rates have little effect on existing homeowners. Even if you sell for less than you would have in February, your house is still worth far more than what you paid a few years ago.

What Rising Interest Rates Mean For Buyers

Buyers are panicking more than anyone over the interest rate jump, but they don’t need to. Interest might be higher now, but in March, the average price of a Burlington home reached $1.4 million! Now, housing prices are finally coming down.

Knowing your financing options is one way to shield yourself from higher rates. Read our interview with a top mortgage expert right here.

Buyers who are also selling are at a clear advantage as prices drop. Since interest is based on a percentage, the lower cost of houses helps reduce their monthly payments.

First-time buyers are the ones who will struggle the most with the higher rates. However, there are ways to offset the increased costs and resources available to help you. The best thing you can do is to raise as much as possible for your down payment. The more you pay upfront, the less you need to borrow. Your interest rates and your monthly payments will be lower. 

Under the Home Buyer’s Plan, you can withdraw up to $35,000 without penalty to put towards your purchase. You can also look into the First Time Buyer’s Incentive, a shared equity program where the government provides up to 5% of your down payment on a resale home or 10% on a new build.

You can also help offset higher interest rates by purchasing at the bottom or the middle of your budget. As prices decrease, finding homes within a lower range will be easier.

Whether buying or selling, there is no cause for alarm over temporary market corrections. Remember that housing values rise over the long term, making real estate one of the safest investments you can make. 

Are you ready to make a move or want to talk about what the current interest rates mean to you? We are happy to answer your questions. You can reach out to us right here.