INSIDER WAYNE COCHRANE’S REAL ESTATE

September 2012

Your Neighbourhood Real Estate Professional

Wayne Cochrane...www.mooving.ca

Inside this Issue:

Outdoor Design Reigns Supreme

Home Improvements That Sell

What Do You Buy When Nothing is Perfect?

Tips for First-Time Buyers

The Easiest and Cheapest Way to Stage Your Home To Sell

Fight Back Against Worry

During his 25 years in the field, landscaping expert Dean Bjorkstrand has learned to identify both enduring outdoor characteristics as well as trends that will pass with the season.

In recent years, Bjorkstrand has noticed an increased focus on eco-friendly design. Permeable pavers, which reduce storm water runoff, are s e e i n g i n c r e a s e d u s e f o r landscaping. Minneapolis residents, where Bjorkstrand calls home, are also favoring outdoor rooms, using patios to increase living space. These areas are f requent ly em bel l i shed w i th f i re p i ts , landscaping, and other elements that give them an organic feel and visual interest.

"Having a design that looks beautiful from the road is always important," explains Bjorkstrand. "I always design for curb appeal and functionality. The result is a useful space that also increases property values."

Design giant HGTV also gives homeowners some insight and tips into the latest direction of landscape design.

First, sustainable landscaping is about embracing your area’s climate. This is where drought-resistant

plants enter. Many areas of the Southwest and West have high temperatures and low yearly rain fall, leading to a need to plants that can brave the heat. Instead of soaking a struggling lawn with wasted water, consider planting succulent plants and landscaping with stone.

Urban farming has also become a growing trend that is sure to stay. Edibles can even take a proud place front and center in garden beds. A properly maintained vegetable garden can be delightfully beautiful. The best part? You can eat it!

Urban farming goes one step further with the addition of chickens! Many HOAs and cities allow you to keep a few of these fun pets. They can be a great way to add life to your own backyard.

HGTV reports another trend in outdoor living is quality versus show. What does this mean? This could be symptomatic of a society that is now choosing to stay put and upgrade existing homes instead of taking on a new homes. Homeowners want outdoor spaces that will last and be enjoyed for years to come. They are choosing smaller, more quality projects as

Outdoor Design Reigns Supreme Written by Carla Hill

Page 2

Condominiums and Townhouses

on the Halifax Common

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opposed to large showy displays of wealth.

Lastly, homeowners are incorpo-rating water features. These fountains, koi ponds, and pools can help balance the flow of en-ergy through your outdoor space as well as add a refreshing and relaxing element to evenings on the patio.

The lines between indoor and outdoor have become blurred in recent years. Outdoor fireplaces, kitchens, and weather-resistant fabrics have made outdoor spaces an extension of your home. You can style these "rooms" in pillows and throws, candles and lanterns, and even add in kitchen spaces that will make living in the open air a true joy.. or selling point!

In a mash-up survey of 450 real e s t a t e a g e n t s a n d 1 , 6 6 0 homeowners, homeowners get it - most of the time - when it comes to home improvements that help induce sales and higher prices.

Realtor.com's home improvement survey, conducted online from June 6 to June 13, 2012, tapped agents and Rea l to r .com users who a re homeowners planning to improve their home before putting it on the market.

Given today's home buyers are aware of soft market conditions that can put a drag on values, they want a home that's ready to appreciate and that's a home in the best shape possible.

Nearly 90 percent of real estate agents believe home improvements can help a home sell faster, and nearly 73 percent say home work can boost the price, provided the home improvements are the right home improvements.

Nearly three in four (71.4 percent) real estate agents say sellers too often underestimate the power of simple home improvements - repairs, painting and cosmetic upgrades.

Not so, say more than one in four (75.21 percent) of homeowners polled. They most certainly plan to repair broken household items before listing their home for sale.

Also, 65.9 percent of real estate agents said another common mistake among homeowners is not making "the right" home improvements for the local market. Like upgrades from home to home help pull up values overall.

Agents, 62 percent of them, also said too many homeowners make specialty improvements based on their own tastes rather than what might appeal to a buyer.

R e c o m m e n d e d h o m e

improvements

T h e m o s t c o m m o n h o m e improvements recommended by real estate agents included:

• The vast majority, 96.5 percent, of real es ta te p ro fess iona ls su rveyed recommend sellers repair household items that are broken before putting a home on the market.

• More than half, 63.8 percent, of real estate agents recommend sellers make kitchen improvements.

• Most, 59.3 percent, of real estate professionals recommend sellers make bathroom improvements.

What sellers improve

Are sellers complying with real estate a g e n t s ' r e c o m m e n d e d h o m e improvements? Again, for the most part, yes.

The most common improvements made by home sellers:

• A majority, 75.21 percent, of sellers planning renovations will repair broken household items before selling their home.

• Most, 53.43 percent, of owners plan to add new flooring before selling their home.

• Also most, 53.37 percent, of sellers plan bathroom improvements before selling their home.

Homeowners appear to have dropped the ball on kitchen work, but they aren't pinching pennies when it comes to home improvements that sell.

Home improvement budgets were $2,001 to $5,000 for 24.1 percent of home sellers planning improvements; $5,001 to $10,000 for 22.23 percent and $10,001 to $20,000 for 16.63 percent.

Home Improvements That Sell Written by Broderick Perkins

Page 3

Give me a call...

Wayne Cochrane EXIT Realty Metro

wayne@mooving.ca (902) 830-4761

WAYNE COCHRANE’S REAL ESTATE INSIDER

Mortgage Rates

Fixed rates:

1 yr: 2.65%

2 yr: 2.79%

3 yr: 3.10%

4 yr: 3.15%

5 yr: 3.04%

Rates provided by Invis Mortgage

as of September 24, 2012

Subject to change without notice

How do you decide what to buy - whether to buy - when nothing's perfect?

Today's "dream home" emphasis on buying real estate makes it tough for buyers whose wish list and budget do not match. If you have designer tastes and a fixer-upper budget, should you buy now, or wait until you can afford more?

That question is simple to ask. Buyers should always ask and answer this question before they start the dream home search. The problem is that this simple question has a very complex answer which is all about you. I've been answering it by raising relevant issues and topics in the 600 plus articles written for this column, "Decisions & Communities," and I can always see more considerationsKand more articles to write.

The real answer: Only you know what

to buy and if you should buy.

To prepare yourself and your partner to answer this question with foresight - not wish you had in hind sight - there are strategies to consider:

When prices are going up,

strategize.

The urgency to jump into the market before real estate is financially out of reach, must be weighed against the reality that prices often reverse themselves at some stage. Decisions regarding this financial concern should include considerations like the following:

• The "what goes up, must come

down" pattern is no longer true for all neighbourhoods, particularly choice urban and recreational locations.

• Factor in the cost of where you'll live

while you wait, and how you'll stay ahead of inflation. Calculate how to realistically save more money toward the purchase.

Create a Plan B in case prices do not come down when you want them to.

Set a budget that expands real estate choices.

Making sure you "tick off" all the items on your wish list, but don't end up "house rich, cash poor" can be a challenge. Get tough, to get ahead: Before you view any houses or condominiums, put your financial ducks in a row, so nothing will get in the way of negotiating a deal when you find "it":

• Get your credit in order. You can

check your credit rating with the main credit companies for free. Correct errors, and there will be errors, since no one cares about the accuracy of this record but you. You know about paying off credit cards and any debt you can to achieve top borrowing power, so do it.

• Search out a mortgage broker

experienced at maximizing borrowing power while minimizing borrowing costs. Time spent here will save you thousands over the years ahead.

• Make sure you know why you "must

have" the "must haves." Often fads and trends influence this list. Concentrate on buying what's going to be in and what can be inexpensively up-dated to follow new trends, rather than paying for renovations that are already fading from fashion. Pare the "must have" list down to "absolutely must haves" - a very short list which will probably include a specific location. With fewer limiting criteria, you'll have more possibilities to choose from. Then, create a "value" list of features and benefits that will add value through expanded use, income potential, cost reduction, or other factors of relevance to you. Keep track of these details when viewing, so comparisons can be accurate.

Create a budget to cover all the costs of buying and expenses of ownership in the first year. A real estate professional will know how to crunch these numbers so you're clear on how much cash you'll need on closing to cover legal fees, adjusted costs like property taxes, and expenses heating, and utilities for the upcoming year. Provide your buying agent with a list of ownership costs you want to know for each property, so you can determine value and, eventually, use these figures to decide on an offer price.

Adapt to buy

If you walk into a house or condominium unit and feel you're home, put in an offer. If you don't have this immediate "dream home" reaction, you may still discover this is an ideal property for your needs, and a great investment.

• By totaling up "value" features and

benefits, you will find real estate to love, and transform into a dream. Make enough profit on this real estate, and you can afford a true dream home on your next buy.

What Do You Buy When Nothing is Perfect? Written by PJ Wade

Page 4

SEPTEMBER ISSUE

• Buy the best location you can afford.

Ideally, the least house on the best street within your budget for the greatest appreciation in value over the shortest time. The same is true for condos, a lesser unit in the best condo, in the best location you can afford.

• Place the greatest weight on features

and benefits that cannot be changed like location, including sun orientation, and things that are expensive to change like square footage. Look for bad decor and sloppy housekeeping since these can reduce the number of interested buyers and keep the price down. Be aware of superficial "staging" and its stripped down approach that makes rooms look larger and everything look newer.

• Buy the neighbourhood first. Decide on

who you're going to live with and where you'll spend your time shopping. School and workplace issues are important. Find out what redevelopment is planned for the area. Many lovely neighbourhood shopping areas are threatened by "big box" development.

Discovering your dream home can be expensive. If you get emotionally attached to the real estate before you own it, you can lose your negotiating toughness and spend more than necessary. This can also lead to drastic overspending reactions if there are multiple offers.

Pay as little as possible, but remember that there are other cost factors to build into the offer including closing date, what is included in the price, and what the owner will pay for (survey, repairs, taxes, etc.). Make sure you have a thorough home inspection to reveal even deliberately-hidden problems with wiring, plumbing, and other expensive to repair elements.

Concentrate on the dream of home ownership, rather than the cosmetic "staged" appeal of a particular house or condominium, and you won't have your dream turn into an expensive nightmare.

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Brain Teasers

Word Scramble:

smiontpusa

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Tips for First-Time Buyers Written by Jim Adair

Page 5

Since 2008, the Canadian Finance Ministry has tightened the rules for government-backed mortgages four times. The most recent changes, in July 2012, hurt first-time homebuyers the most, because it made it tougher for them to qualify for a mortgage.

The maximum amortization period for insured mortgages is now 25 years, down from 30 years. In 2011, 40 per cent of new mortgages were amortized over periods longer than 25 years, says the Canadian Association of Accredited Mortgage Professionals. One-quarter of all mortgages had amortization periods longer than 25 years.

An RBC report says that based on a typical mortgage size of $288,000 for a bungalow, with a posted mortgage rate of 5.24 per cent, the reduction in the amortization period from 30 years to 25 years raises a homeowner's monthly mortgage bill by $136. The Ministry of Finance says that raises the monthly mortgage payments from nine per cent to 12.5 per cent, depending on interest rate assumptions.

The government, concerned about high levels of consumer debt, instituted the changes to slow down the real estate market and it seems to have worked. But the improving financial health of the country won't be much comfort for would-be first-time buyers who thought they were close to being able to afford a home of their own, but now have to wait.

A recent survey by TD Canada Trust says that recent first-time buyers were able to save up for a down payment fairly quickly. A down payment of five per cent (the minimum required) took less than two years for 71 per cent of those polled. A down payment of 10 per cent to 20 per cent was achieved in one to four years by 66 per cent of those surveyed, and 61 per cent were able to save up for a down payment of 25 per cent in three years or less.

However, the poll found that 29 per cent of first-timers failed to budget for some of the additional costs of homeownership, such as maintenance fees and utilities. Thirteen per cent didn't plan for closing costs (typically about 1.5 per cent of the purchase price of the home), and six per cent didn't budget for anything except for the down payment and

mortgage payments.

f you are thinking of buying a home, first you have to "prove to yourself that you are ready to take on the responsibility of a mortgage," says Farhaneh Haque, director of mortgage advice for TD Canada Trust. "Start by comparing what it costs you to rent monthly to what it would cost if you owned your home. Remember, as a homeowner there are housing expenses such as property tax, insurance, repairs and utilities that should be factored in, in addition to your monthly mortgage payments."

The Financial Consumer Agency of Canada (FCAC) website includes online worksheets to help first-time homeowners save up for a house. Most people know how much money they make, says FCAC, but do you know where your money is going? The exercise of filling out the worksheet can help you figure out where your money is going and suggest ways to cut expenses.

"Learning to stick to a budget can seem difficult at first, but the more you use your budget, the easier it becomes," says FCAC. "If you find your actual spending varies a lot from your budget, you will have to re-adjust the figures in your budget to make it more realistic. If your spending varies only a little from your budget, you are on the right track."

Once you think you have a large enough down payment to think about buying a home, most major Canadian banks have worksheets on their websites to help calculate what your can afford.

RBC says a common first-time buyer mistake when looking for a mortgage is focusing too much on the interest rate, rather than the type of mortgage they are buying. Over the last several years, variable-rate mortgages have proven to be money savers, but if you are worried that rates may go up, a fixed rate provides peace of mind. Most banks also offer a combined fixed and variable-rate mortgage option. As demonstrated by the difference between the monthly payments in 25 and 30-year amortization periods, you can save a lot of money by having a shorter amortization - but that requires a larger down payment.

Another way to reduce total interest costs is to increase the frequency of payments when you can afford it. Make sure your mortgage allows you to do this and to use prepayment privileges without penalty. It's a competitive mortgage market, with banks, credit unions and mortgage brokers all interested in securing your business, so shop around for the best rates and terms.

Getting preapproved for a mortgage is a great idea because then you will know exactly how much you can afford, and in a hot real estate market you can make an offer immediately if you find the house of your dreams.

First-time buyers can also take advantage of the Home Buyers' Plan, which allows you to withdraw up to $25,000 from your registered retirement savings plan to buy or build a home.

How many “squirts” of milk does it

take to make a gallon of milk?

Word Scramble: Eivtitepmoc tekram sisylana

Go to www.mooving.ca - ‘About Wayne’ and click on ‘Monthly Newsletter Trivia’ for the answers.

Brain TeasersBrain TeasersBrain TeasersBrain Teasers

Home staging typically removes personal mementos, religious objects, and cultural items, helping prospective home buyers to feel at ease and to visualize their own belongings in the space.

If you are a home seller, the good news is that there is one sure-fire, simple, inexpensive way to supercharge your home staging efforts - organize!

However, organizing and de-cluttering aimlessly isn’t enough. It’s essential to organize with one goal in mind, and that is to create a sanctuary where potential home buyers can easily imagine themselves living, working, and playing for years to come.

Here are the top five residential "trouble spots" for clutter, and what you can do to organize them.

1. The home office

The problem: Big libraries with books, magazines, and files as well as big electronics like computers, printers, and shredders mean little extra, useable space.

The solution: Toss magazines and newspapers first, as they are normally the easiest to part with and will give you a motivating "win" to start. Give away unwanted books to charity. Switch out a desktop computer for a laptop, opening up more room. Dust, label, and arrange the computer cables in an attractive manner.

2. The bedroom closet

The problem: Closets always look too small, especially to the ladies.

The solution: Remove out-of-season clothing and accessories, and place them (neatly!) elsewhere in the home or a storage unit. Relocate or purge any items that don’t belong in a clothes closet, like sports equipment, papers, and junk. Then situate the remaining in-season items as if on display in your favorite store or magazine.

3. The kitchen

The problem: As the heart of the home, the kitchen sees high-traffic volumes – and it normally looks worse for wear.

The solution: Make your kitchen into an orderly command center. Remember: you want to make sure that your kitchen has everything you need to survive a crisis, not that your kitchen has just survived a crisis. Remove any small appliances you don’t use on a daily basis. Chuck the junk mail, and use a tidy basket to hold bills and other essential paperwork. Clear the table and counters of anything "cluttery."

4. The garage

The problem: The garage is a catch-all for... well, everything.

The solution: Pull everything out of the garage, purge the clutter, and then separate the remaining items into categories like auto accessories, camping equipment, yard tools, recycling containers, etc. Find a home for and use tasteful storage to display each category. The key to organizing a garage is to make use of the elevated space, like the walls for storage racks and ceiling for a false attic.

5. The yard

The problem: It’s easy to ignore the dead patch of grass in the backyard because you have more pressing matters, but the outside of a home is reflective of the inside of a home.

The solution: Have a "discovery session," where you walk around your house making a list of necessary outdoor improvements. Then schedule a daily to-do on your calendar, or outsource the tasks, until all items are crossed off.

Bonus: The details

The problem: If the would-be home buyer discovers you’ve skimped on the details, it takes the trust out of the buyer-seller relationship.

The Easiest and Cheapest Way to Stage Your Home To Sell Written by Carmen Coker

Page 6

SEPTEMBER ISSUE

The solution: Create a "house hand-book" that includes information about the features of the home, like a list of paint colors by room, vendors for housecleaning and lawn care, main-tenance records, and manuals for the appliances included with the prop-erty. Taking care of the details dem-onstrates to the home buyer that you have responsibly taken care of the home while it was in your posses-sion.

Prospective home buyers will be quick to judge your house, both in-side and out, for any flaws. Following the above organizing tips could re-duce your listing time on the market and help your house fetch more than one not properly staged.

What's the worst that could happen? As a property owner, what are you afraid of? These are worrying times for many reasons, but that doesn't make worrying the right thing to do.

Worry is an expensive distraction:

• It draws your attention from the things that really

matter, including your family.

• It upsets logical thinking, so you hesitate over

opportunities to buy or sell, or save money.

• It is a drain on energy, so that you let things

slide, compounding a worry into an expensive problem.

• Worry takes the fun out of everything including

home ownership.

If you're worried about downturns in the real estate market, persistent local job loss, or negative economic forecasts, the most important question is, "Why?". Not "Why are these things happening?" but, "Why are you worried?"

Becoming worried because the news you read, hear, and talk about with friends scares you is not surprising. Journalists, bloggers, and broadcasters strive to capture our attention by awakening fears, real or imagined. Advertisers and marketers do this to sell to us. We live in a media barrage of negativity.

Feeling at risk and being at risk are two different things. Do you take time to find out exactly how much of what makes you feel at risk actually represents issues that put you, your family, and your home at risk? The sense of unease that seems common these days should not freeze us in our tracks, but spur us into action. We should be sure that any sense of fear about economic downturns and other news stories is based in fact, not supposition. Use the knowledge of local real estate and financial experts to expose how "big" economic news stories could materialize at street level in your area. Once a problem and its impact on home and ownership are identified, work can begin on reducing or eliminating negative affects, instead of just worrying about the unknown.

To control worrying, take action:

Dig down into what you're upset about, and identify the problem at the heart of your fear. You may discover that unconsciously you were concerned that a forecast 15 per cent drop in property prices would put you out on the street. Irrational, but if you don't check to see what your unconscious is cooking up, you will be haunted by irrational fears.

Strengthen your position against these threats, and build in as much flexibility as possible. This may involve expanding your fight-back network, on social media and face-to-face, beyond immediate friends and family to include your bank manager, mortgage broker, real estate brokers, politicians, and others who monitor the economy of the neighbourhood. Implement improvements to protect your home and preserve your standard of living. Then, when you

feel as prepared as possible against this looming negative, concentrate on enjoying life while you and your network keep vigilant for changing trends and pending crisis. If you don't strengthen your resourcefulness, small problems become big ones, and big ones become overwhelming.

When the next scary economic news hits, decide exactly what you are afraid of before worrying takes over. For instance, if hearing a report about stalling real estate markets pushes your worry button, ask yourself and your network exactly what should be feared? Markets are abstract economic concepts, you and your home are not.

What am going to do about what I'm afraid of?

This is the type of fight-back question that will replace vague worrying with specific take-charge action. Adopt our IDENTIFY-STRATEGIZE-ACT approach to neutralizing the bad news that keeps rolling our way:

IDENTIFY: Make sure that what you

worry about is worth the effort

Slowing real estate markets could worry sellers who must sell now. Excellent real estate marketing advice is essential to minimize concerns and achieve goals. Those who cannot sell for the top dollar they expected have a good chance of making up the financial difference when they buy in this declining market. If you plan to stay where you are for a few years or longer, a slowing market may hold no risk for you. Reduce worrying by acting to maintain and improve your property to preserve and increase home equity. Knowledgeable local real estate professionals can offer insight here.

STRATEGIZE: Face reality and think ahead

Strategies to head-off problems can overcome them before they hit. For example, if local job loss patterns have you concerned, learn as much as possible about how relevant these trends are to you and your income. Instead of waiting until you get the bad news about a lay-off, start learning new skills or transforming a hobby into a business, so you don't have all your income eggs in one employment basket. Professional career advice may help you increase your value to your current employer, or zero in on emerging employment options. Lowering debt, curbing spending, and expanding your contact network will all strengthen your position and replace worrying with strategizing for success. The net will get you started and help you identify the issues, but talking to the experts in your neighbourhood and about your neighbourhood will get you worry-busting results.

ACT: Generalities are only right sometimes, and often not enough to rely on in specific

situations like yours -

Is your real estate fear grounded in generalities or specific reality? Sweeping news stories about economic downturns can be unnerving. Discover exactly what there is to fear by applying the generalities to your specific property or location. If you're worried by a study on how tough retirement

Fight Back Against Worry Written by PJ Wade

Page 7

is going to be for those in debt, consider your definition of "retirement" and your debt reduction potential before you panic. The 21st-Century version of retirement includes income-earning through out the years, so building your abilities in these areas will strengthen financial stability. Nonprofit debt counseling services are available with professional input on debt reduction that should replace worrying with action the antidote to worry.

Believing you can reach a problem-free "once this is over, everything will be perfect" state is what drives too many people into worry overload. Problems and worries won't stop coming. You'll just get better at reducing their impact. Increasing your resourcefulness by anticipating problems and strengthening your fight-back network battles worry and makes problems solvable.

As you overcome a current worry, continually remind yourself that if you don't solve and let go of this problem, you won't be strong and forward-focused for the next one. Adopt a fight-back theme song or mantra to trigger your strength. Hum a few bars of "Don't Worry Be Happy," or yell (silently or otherwise) "Onward & Upward," which is my personal proactive mantra for maintaining forward momentum whatever happens.Source: What's Your Point

WAYNE COCHRANE’S REAL ESTATE INSIDER

WAYNE COCHRANE’S REAL ESTATE INSIDER

Note: This is not intended to solicit clients currently under contract.

The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA.

Page 8

Wayne Cochrane Real Estate Professional

902-830-4761 wayne@mooving.ca

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