Canada’s history is of immigrants with one in four Canadians that have come to Canada as an immigrant – the highest among G7 nations. Canada’s reputation as a diverse, economically stable country is one of the main reasons why people are interested in moving to Canada.

To celebrate family day week , the team and RankMyAgent (RMA) is showcasing some of our favorite neighborhoods in Toronto, Brampton and Edmonton for families with children.

We’ve also reached out to real estate professionals from our community to provide their unique insights on what makes these neighborhoods so desirable!

The post Our top family friendly neighbourhoods in Toronto, Brampton and Edmonton first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

After more than two years living in a pandemic world, we all got used to spending more time at home, many times surrounded by our family, so how can we make this day special? Especially when sharing tight living quarters.

There are, of course, financial and ecological perks to shrinking the square footage of your home, but what do you do when you can’t shrink the number of occupants?

Juggling multiple schedules, maintaining well-treaded, multi-use spaces, and organizing become top-tier tasks for families. Having well-delimited areas became essential during the pandemic. A home office to work quietly and an entertainment room where you can have fun with your family can make spending so much time together easier. So that is why we prepared a few tips to complete this daunting task quickly and without additional stress.

Everything has a home. This tried-and-true tip has been mentioned time and time again, but it is especially important in a smaller space. Make sure that every item in your home serves its purpose and has a place to live where it can be tucked away when it’s not in use. Channel your inner HGTV guru and hit up Home Depot, Home Sense, Ikea or Home Outfitters and find some cute — and practical — storage units that will work in your space, and don’t be afraid to make labels!

The hardest part about this tip — and I think we all know it well — is to actually follow through and put things away when we’re done using them. When living in a small space, especially with other people, things hanging out on surfaces will instantly make your home look more cramped and more cluttered. Tucking them away into their respective drawers or cupboards after use will have the place looking more put-together and reduce some of those stress levels, making clean ups more efficient.

When eyeing up your space, it’s important to ask yourself if all of the items in your home serve a purpose and if not, ditch the clutter and consider downsizing. Listen to Marie Kondo and her art of Tidying Up. If the item does not bring you joy or serve any real purpose in your space, it may be time to part ways with it. 

Use space wisely. Families living in smaller spaces may have to break away from the intended design of the space and get a bit creative. What I mean is who says that the master suite has to be for the adults? Why not put the kids in there? They can share the space, plus it can double as a playroom and keep their toys from spilling out into the rest of the living space.

You can also think of how you can use curtains and bookshelves as room dividers to better create designated spaces to serve specific purposes. Don’t have a closet, for instance? Use a cube shelf from Ikea as a divider and use a few free-standing rolling racks behind to create a makeshift wardrobe. Those cube shelves work wonderfully because you can store items on both sides.

One way to create the illusion of more space is to paint your walls white. Not only is this currently in fashion but it allows the light to add extra square footage to your space, well at least make it look like that. Colour has a tendency to overwhelm a space, so when creating your decor palette, stick to about four colours that can be used throughout the home with one contrasting “pop” colour. The nice thing about colouring your home with decor is that it can easily be replaced when you want to redesign or create a new atmosphere.

Do your kids love to make crafts? Real Simple offers this tip and I couldn’t help myself but include it in this list: throw out the glitter. Glitter is notorious for being the most impossible crafting supply to be cleaned up. Now, imagine what happens when you let this abomination loose in a small space? You’ve seen those glitter bombs? But picture it in your home, where your clothes live and your food! Glitter NEVER really goes away. It hides — lurks in the shadows, in the corners of your cupboard, only resurfacing its sparkly face in the most inopportune moments.

This tip ties in with Real Simple’s point of ditching the sentimental mentality. When living in a small space, you will really have to make some decisions on which meaningful items you keep and which you part with.

For instance, not every single piece of your child’s art collection can earn its spot on the fridge simultaneously. But, what you could do is bring in the tech. Take a digital photograph of your children’s masterpieces and put them on a rotating digital picture frame. That way you don’t have to keep all of the hard copies, but rather select a few of their favourites to store for when they’re older. Plus, they’ll have a digital copy of everything they’ve done on a USB fob when they turn 18 and move out!

Getting outside is one of the best ways to “add more space” to a small home. And now seems to be a good time to get out there as COVID-19 restrictions are being eased up in many provinces. Take advantage of the neighbourhood around you and enjoy quality time with your family as you take a nightly stroll, plan a tobogganing day with hot chocolate or a quick play at the park. Don’t forget to keep yourself and your loved ones safe!

Living in a small space with lots of people and children can be loud, busy and crowded, but by escaping into the wilderness, or even into our own communities, we can take more of that personal time and space while still enjoying the company of our loved ones.

Parents raising their children in smaller residences are becoming a more common occurrence as the housing market is still hard to break into in Canada’s big cities like Toronto, Vancouver and Montreal and Calgary. But with some creativity, planning, organization and absolutely no glitter, you and yours can make it work.

From everyone at RMA, we hope you have a fantastic and fun Family Day with your loved ones.

The post How to live small with a big family in 2023 first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Why is that?

Simply put, selling a home takes a lot of time and effort. Although FSBO is not an impossible path by any means, there are a number of key points to keep in mind before choosing to oversee the sale of your home.

Not only are you responsible for all aspects of putting your home on the market, including, but not limited to, setting the listing price, advertising the property and setting up as well as being in attendance for showings for potential buyers, you’ll also have to negotiate in terms of the sale, including price, closing date and more. In other words, instead of having multiple specialists to help you with the sale of your home, you will be the all-rounded expert in all fields.

For many home sellers, these tasks are worth their time and effort in lieu of paying out commission to a REALTOR®.

But to backtrack just for a moment, let’s look at setting the listing price a little more closely:

One of the biggest risks associated with selling your home on your own is not hitting the “sweet spot” of home prices. Market changes can cause housing prices to fluctuate. If your house is overpriced, you might find it sitting on the market for longer than what you might have expected. Additionally, prospective buyers may shy away from a home that has been sitting on the market for an extended period of time because they might think negatively about the house or the neighbourhood.

On the other side of the coin, selling the house for too little benefits no one except the buyer. If trying to avoid paying commission is the primary motivation behind selling your home on your own, but you undervalue the price of the property, the cost-savings benefit of FSBO might not be fully realized.

This is one of many areas that working with a REALTOR® can come in handy. Real Estate professionals have access to data on actual selling prices  – not listing prices – and would be familiar with relevant market demands and changes in your neighbourhood helping to provide analysis of current trends.

Some Risks when you decide to sell on your own:

• Leaving money on the table as FSBO don’t get as much exposure without the help of a REALTOR who is well connected to buyer agents
• Will have to pay for legal, marketing costs yourself
• Risk that home defects have not been documented, running into legal issues down the line
• Time spent trying to list, market and negotiate your own transaction
• Safety concerns when showing your own home
• Wasting time and efforts by staging and showing your home to potentially unqualified buyers
• First time home buyers may be apprehensive to seal a deal without the help of a professional

Statistics show that selling your home with the assistance of a professional REALTOR® will garner you a bigger profit. According to the National Association of REALTOR®’s 2022 Profile of Home Buyers and Sellers, the average FSBO home price was $225,000, while the average home price sold by an agent was $330,000.

That report also showed that only 10% of home sales in the U.S. were FSBO. It also stated that 86% of buyers purchased their home through a real estate agent or broker, a share that has steadily increased from 69% in 2001.

Only 28% of FSBO home sellers decided to market their homes on websites including social networking websites and FSBO websites. However, it is evidently a useful platform to use because 51% of buyers found their home on the Internet. Other FSBO sellers marketed their homes through friends, relatives, or neighbours (28%) or yard signs (20%).

The most difficult tasks for FSBO sellers cited in the report include getting the right price (16%), understanding and performing paperwork (13%), selling within the planned length of time (10%), preparing home for sale (6%) and having enough time to dedicate to all aspects of the sale (1%).

Although you may think there is no one better qualified to show off your house than yourself, a REALTOR® can ensure the presentation of your home goes as smoothly as possible.

Not only can a REALTOR® offer expert tips on staging your home to look its best, they are also able to highlight certain features or aspects of the home that the homeowner may unintentionally overlook during the presentation process. REALTOR®s also know the current trends as to which designs or furniture arrangement can attract buyers. For those pressed for time and find themselves juggling a career and family, working with a REALTOR® can be a wise investment.

The ultimate goal in any home sale process is to get as many eyes on, and as many people passing through, the property as possible. A REALTOR® can not only have your property listed on the Multiple Listing Service (MLS), they can help promote the property via flyers, pamphlets and postcards with eye-catching photos and major selling points to help drum up interest.

These are costs that FSBO sellers would otherwise be responsible for absorbing.

Another benefit of using a REALTOR® is the exposure they can provide to other agents who might have the perfect buyer for the property already in mind. An agent tour of the home early in the sales process allows other agents to ask questions and gather information about the property that cannot be discovered through pictures and MLS information alone.

Most importantly, a REALTOR® is there to represent your best interests as a seller.

Your REALTOR® can help you objectively evaluate each offer without compromising your marketing position. With a REALTOR® in your corner, they serve as a bit of a buffer between you and the seller. REALTOR®s can solicit honest and open feedback from prospective buyers, who may not be as candid when dealing with a homeowner on a one-on-one basis.

And when you’re lucky enough to reach the offer stage, they will not only help you devise a win-win agreement that will appease both parties, they can also help walk you through the process of appraisals, inspections and financing – tasks that you may not be as familiar with as a FSBO.

Keep in mind that several different variables can arise between the sales agreement and the final closing of the property, as both buyers and sellers have various legal responsibilities that need to be fulfilled.

REALTOR®s carry Errors & Omissions insurance, which serves to protect parties from potentially financially-crippling liability should they be brought to court for negligence, errors, failure to disclose, or other possible reasons.

Your home is among the most valuable assets you’ll ever own. When it comes to selling your home, trust a professional REALTOR® to ensure you get the job done right without undervaluing your home.

The post FSBO: Everything You need to Know first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

In 2022, the real estate market continued to have hiking home prices with a decrease in home sales, especially towards the end of the year as interest increased. According to The Canadian Real Estate Association, starting in November 2022, there was a 3.3% month-over-month decline in national home sales. Compared to 2022’s peak in February with an average of $816,720, the national average home price in November 2022 was $632,802 which is a 22.5% decrease. The amount of newly listed properties have also declined by an average of 1.3% month-over-month in November, with larger declines in the B.C. Lower Mainland and Okanagan regions. November 2022 marked the lowest number of new listings in a month in 17 years.

With the current inflation rates in Canada, it has forced interest rates to increase as well. The Bank of Canada kept raising rates aggressively in 2022, with a 100-basis point hike in July. This month’s hike marks the 8th time the Bank raised rates since March 2022. As of Jan 25, 2023, the overnight rate stands at 4.5%.

Will home prices drop in 2023 and bottom out?

While Canadians will still likely continue to struggle with inflation in 2023, RE/MAX anticipates that 60% of housing markets will see more balanced conditions, meaning the supply and demand for housing will be more even compared to 2022. This is expected to be more apparent during the third and fourth quarters of 2023, especially in the Greater Toronto Area (GTA), Mississauga, Greater Vancouver Area (GVA), Calgary, Regina, and Winnipeg. The largest price declines are forecasted to be in Ontario and Western Canada where several cities can see a 10-15% decline. However, Atlantic regions such as Halifax and St. John’s are expected to see an 8% and 4% increase in home prices respectively.  TD bank predicts that Canadian home sales will bottom in early 2023.

Despite the 2023 housing market predictions, Vancouver is still anticipated to be the most expensive region, averaging a home price of $1.2 million. On the other hand, Regina will have the most affordable prices with an average of $361,495 by the end of 2023. Royal Lepage notes home prices have declined from the highs earlier last year, but are still higher than pre-pandemic. The projected average home price in Canada for Q4 2023 is estimated to be 15% higher than Q4 2020 and 18.4% higher than Q4 2019.

Although house prices will fall, rents are projected to rise as there was a lack of rental listings. In 2022, the average price of a single bedroom apartment in Toronto is now $2481 a month which has increased 20% year-over-year. The hike in rental prices is mainly because listings have gone down 25.6%, causing there to be a lack of supply. However, due to such high prices, most Canadians cannot afford to buy a house and hence, there are more renters than homeowners. This is prominent in cities such as Montreal, Quebec City, and Halifax as more than 50% of the buildings built since 2016 are rented. From a survey conducted by RE/MAX, 15% of Canadians are debating about moving to a different province for better housing availability and livability.

Will there be New Regulations in 2023?

The Government of Canada can see how inflation has caused houses to be less affordable for Canadians so they have taken new measures to counteract the problem.

To make homes more affordable to Canadians, the Government of Canada has passed the Prohibition on the Purchase of Residential Property by Non-Canadians Act which came into effect on January 1, 2023. This Act prevents non-Canadians or corporations that are not incorporated in Canada, from buying residential property for 2 years beginning on January 1, 2023. According to the Government of Canada, residential property is defined as a building with 3 homes or less and parts of buildings such as a semi-detached house or a condominium unit. If this law is violated, the non-Canadian or anyone who intentionally assists a non-Canadian, will receive a $10,000 fine and the court may request the sale of the house. This new regulation can help make sure that homes are being used by Canadians to live in and not as assets for foreign investors.

For foreigners who already own a house in Canada, they will need to pay a 1% vacant home tax annually if the home is underused. This measure is to ensure that non-Canadians pay their fair share of Canadian tax and in hopes that this will free up more homes for Canadians.

The last measure is to add Goods and Services Tax/Harmonized Sales Tax (GST/HST) on all houses that are resold before it has been built or lived in. This was effective as of May 7, 2022 and can help reduce homes being sold for high prices.

All three regulations are made for the same purpose – to make homes more affordable and increase the number of Canadian homeowners.

Housing Market 2023 Predictions

As 2022 was still a year of hiking home prices, the Government of Canada is taking measures to help Canadians become homeowners at more affordable prices. Although interest rates are expected to remain the same, house prices are forecasted to decrease in many regions. Based on the trends, 2023 is predicted to be a year with a more balanced market.

The post What to Expect from the Real Estate Market in 2023 first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

An economic downturn could stress you out if you’re selling your home. A contracting and uncertain economy doesn’t usually yield top dollar for home sales.

At RankMyAgent, we aim to make the home selling process more manageable. So this article explains what a recession entails and tips to sell your home for the best price during a recessionary environment.

What is a Recession?

The traditional definition of a recession refers to two consecutive quarters (three-month periods — so two consecutive quarters equal six consecutive months) of declining Gross Domestic Product (GDP). But this definition comes with numerous asterisks.

Even if Canada faces two declining quarters, we may not be in a recession. We continue to face record-low unemployment rates, and in a recession, unemployment peaks.

A recession depends on numerous factors like employment, consumer spending, and GDP. An “official” recession usually occurs once a group of leading economists looks at these factors and determines we’re in a recession.

What Can We Expect During a Recession?

A recession’s outcomes and contributing factors are a “Catch-22” — i.e., the presence of the factors indicates a recession, but the same circumstances also result from an economic downturn.

We usually see the following during a decline:

• Layoffs: Businesses fear the unknown and want to reduce spending when the economy begins to tumble. You can expect layoffs in business departments that aren’t critical or where companies previously overhired.
• Less consumer spending: People are also fearful when we hit a recession. We’re scared of losing our jobs or taking a loss in the stock market. As a result, we might spend less and save more of our income for a rainy day.
• Depressed stock market: Investors may sell their stocks and choose safer investments. So, you can expect stock prices to decline. Some corporations also don’t fare well during a recession, and their stock price reflects that.
• Higher interest rates: This isn’t true for all recessions. But in our case, a recession may be caused due to the Bank of Canada increasing borrowing rates to tamp down inflation. This would make buying a home and making mortgage payments more expensive.

These factors can turn the residential home market in favour of the buyer. We’re more cautious about making significant financial decisions in a recession. We’re also unsure whether we can hold our job or afford increasing interest rates.

As a result, there are fewer buyers on the market. We might wait until economic conditions are more positive and confident before applying for a mortgage and making the largest purchase of our life.

But the number of sellers remains the same or even increases during this time. Some Canadians may need to sell their second home to cover costs or downsize to afford their mortgage in a poor economic environment.

Tips for Selling Your Home During a Recession in Canada

1. Rethink if You Need to Sell

Housing prices tend to peak before an economic decline and slide once a recession becomes a reality.

Selling in the middle of the downturn might not bring you the best price. Downturns tend to be buyer markets, where homebuyers have more leverage. You won’t likely have the same bidding wars or unconditional offers we saw a year ago.

Sometimes, you might not need to sell an investment property or move into a larger home right now. It’s best to consider whether entering the real estate market is required.

2. Sell Sooner Rather than Later

Past recessions show a history of dipping home prices. If you plan to sell in the near future, it’s better to do it as soon as possible. You’re only going to face tougher selling conditions.

Otherwise, you should wait until the economy is more positive before you sell. Home prices tend to fare better when there’s financial prosperity among Canadians.

3. Don’t Overprice Your Home

You might be used to seeing bidding wars and homes selling for hundreds of thousands of dollars over asking. But the market right now might not have the same prospects. You should temper your expectations to something reasonable.

Working with a real estate agent can help you set a reasonable selling price. Additionally, a realtor can guide you towards getting the best dollar for your property. They might suggest minor renovations or staging to bedazzle the prospects.

4. Give Your Home Some Minor Renovation

Minor renovations, deep cleanings, and restoring curb appeal can help move your home on the market. These changes make your home shine in photos and showings.

You don’t need to overhaul your entire kitchen. It may not be worth it in the current environment since labour is in short supply — contractors aren’t as open to negotiations or discounts. At the same time, home prices are going down.

Contributing your own labour by refreshing walls with a coat of paint or deep cleaning your carpets may be what you need to increase your chances of selling. A clean and refreshed home can help potential homebuyers envision themselves living there.

5. Consider Renting your Property Out Instead

Cities like Toronto and Vancouver are seeing record-high rent prices because surging interest rates have left prospective buyers unable to purchase a home — therefore, many Canadians continue to rent.

Some sellers who aren’t getting the offers they hoped for have turned to the rental market because the sky-high rent prices make being a landlord much more appealing.

If you aren’t in a rush to sell, renting out your property until better economic conditions might be an option to get the best return on investment from your property.

Recessions don’t have to be scary. Yes, there’s a fear of layoffs and depressed stock prices, but things rebound eventually. If you’re planning to sell your home during a recession, it’s vital to temper expectations. You can’t expect your home to sell for the same amount that homes sold for during a growing economy.

The post How to Navigate a Recession as a Canadian Home Seller first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

The metaverse isn’t just another Bitcoin. It’s not even a recent concept! The metaverse simply describes integrated 3D virtual worlds — imagine games like Roblox or World of Warcraft. These games have been around for decades!

But as technology advances, companies are finding new ways to put the metaverse to use. McKinsey believes that the metaverse could drive physical product sales, reduce the need for physical stores, and enhance in-store experiences. The consulting firm further found that 64% of consumers surveyed were excited about shopping in the metaverse.

This article discusses the metaverse and how it may affect the real estate industry.

What is the metaverse?

The metaverse is any online 3D world where you can interact with others via an avatar. We’re used to metaverses through video games. But companies now want to apply the technology to industries beyond gaming.

For example, instead of using a video conference to meet with someone halfway across the world, you could meet in a metaverse and engage in new ways. Integrate this experience with virtual and/or augmented reality and create a much more immersive experience than just a ZOOM call.

You could also create better digital shopping experiences. Instead of flipping from webpage to webpage, consumers may someday visit virtual malls from the comfort of their homes. Here, people could purchase real-world items in a more mesmerizing shopping experience, and this better user experience could translate to more sales.

The possibilities for the metaverse are endless. And the industry is only beginning. That’s why everyone has high hopes.

Many people are already investing in the metaverse by purchasing land in specific digital universes, hoping that the value of these digital properties will appreciate.

How does buying metaverse land work?

Some metaverses let you purchase unique digital land and other properties. Big names like Snoop Dogg and Steve Aoki already own properties in a metaverse called Sandbox. Decentraland is another popular network where people can purchase unique parcels of land.

Metaverses usually have their own cryptocurrency used as a medium of exchange. Decentraland’s currency is called MANA, for example. To purchase real estate on Decentraland, you ultimately need MANA.

After obtaining the necessary currency, the land purchase process depends on the specific metaverse. Each has its own procedures.

Many assign you an ownership ID to the digital land parcel, similar to an actual deed. Buyers may need to show proof of their real-life ID and address too. Your virtual deed could also come as an NFT.

Like the real world, these properties can be anything from houses to apartments to commercial storefronts. It can also be a plot that you develop into a customized residential or commercial space.

Unlike reality, land in metaverses is infinite. There’s also usually no travel time between two points in a metaverse. In the real world, land scarcity and a property’s location determine a building or land parcel’s value and cause it to appreciate.

A particular area of a metaverse might appreciate for other reasons, however. If you own the digital parcel beside Snoop Dogg, you could expect that that land could fetch a nice premium. High-traffic areas are generally the ones that sell for big dollars.

For example, one parcel of Decentraland land sold for $2.4 million worth of MANA in late 2021. This piece of land was located in the “Fashion Street” area of Decetraland, making it highly valuable. The purchaser, tokens.com, hopes to one day build a virtual shopping centre to sell virtual clothing for digital avatars.

In addition to infinite land, there’s also the potential for infinite metaverses. If Google, Meta, and other large tech companies all started a consumer-targeted metaverse, this could reduce the popularity of Decentraland or Sandbox and then reduce the value of all land there as investors rush to invest in a new metaverse.

Just think of the rise and fall of other websites and networks! You don’t know if your metaverse will be the next MySpace or Tumblr.

How Could the Metaverse Affect Tangible Real Estate?

While the potential for a new way to “invest” in real estate might become viable someday, how can the metaverse affect the real estate we know? One way is through more immersive showings and the ability to meet online in the metaverse.

Realtors currently use many ways to display a property. Photos are the most common. But videos, 3D renderings, and 360-degree cameras are increasing in popularity too.

But imagine a metaverse where potential buyers can walk through online replicas of houses on the market. Suddenly, buyers in foreign locations can view a listing as if they’re there. This could help increase the draw and attraction of a house and encourage more buyers.

Simultaneously, a realtor can take buyers through the property and interact with them in the metaverse as if it was a real-world showing.

The metaverse could also change home buying by giving buyers, sellers, and brokers a place to meet. As a buyer or seller, you may someday have an initial consultation with a realtor in the metaverse when an in-person meeting isn’t viable. Or, suppose you meet your mortgage broker in the metaverse. The ability to show and view facial expressions and body language could help you explain your needs and allow realtors or brokers to reveal how they can help.

The metaverse is not a new technology. But many companies are now trying to apply it to new industries. Buying and selling real estate in the metaverse has significant actual dollar values, though it comes with numerous risks.

For real-world homebuyers and sellers, the metaverse has numerous applications in how we’ll someday view a home or meet with the people who help us in the home purchase or sale process.

The post Real Estate and The Metaverse: Unique Potential for the Industry first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

The legislation, which “governs real estate brokerages, brokers and salespersons” in Ontario, seeks to modernize how our real estate sector is regulated. TRESA has updated our laws in different phases. For phase one, instituted on October 1^st, 2020, the act contained updates, such as changing the rules in which advertisements can “refer to brokers and salespersons.” We are currently in phase two of implementing TRESA’s new regulations, with the latest phase set to create more ambitious changes. These changes will update the Real Estate Council of Ontario’s (“RECO”) Code of Ethics, enhance RECO’s powers, increase disclosure obligations for RECO registrants, and perhaps what has been the most newsworthy change, instituting Open-Bidding in Ontario.

Does TRESA bring Open-Bidding to Ontario? The Federal and Provincial approach to Blind-Bidding

Open-Bidding has been a hot topic for the past few years, as real estate prices have skyrocketed since the pandemic. The current Federal Government, led by Prime Minister Trudeau’s Liberal Party, ran on instituting Blind-Bidding for real estate sales. While there is currently no timetable on when the full Blind-Bidding ban will be implemented, the Canadian Real Estate Association is working on an Open-Bidding pilot. As of now, though, there is no currently detailed set of legislation proposed that would allow analysis on how the ban on Blind-Bidding would work, be implemented, or the effects on the real estate market.

Comparatively, we have more to work with regarding the new TRESA Blind-Bidding regulations. The Ontario Blind-Bidding approach is noticeably looser than the Federal Government’s approach to Blind-Bidding. The current Bidding system for real estate is blind; you are looking to buy a house from Jane, but Tom is looking to buy that house as well, and June also just decided to put in a last-minute bid. Real estate brokerages must tell June, Tom and you that there are three written Bids for Jane’s property. However, there is no obligation for Jane’s brokerage to tell each of you the dollar value of said written Bids. Under Ontario’s current regime for bidding, you can know the number of bids competing against yours, but not the dollar value.

The Ontario regulations create an “Open-Bidding option.” Blind-Bidding will still be available, but the seller can decide whether they want to engage in an Open-Bidding, or Blind-Bidding process. The new Open-Bidding Option will come into force in April 2023, along with the other recent changes from phase two of TRESA.

What is the effect of Open-Bidding on the real estate market?

That’s the billion-dollar question. In terms of a total blind-bidding ban, critics feel that such a policy is overhyped in terms of its effect on real estate prices. They propose that to truly reduce the average cost of a home, efforts to increase supply and change zoning laws would be more effective. Some proponents of Blind-Bidding bans agree that Open-Bidding isn’t sufficient to bring down housing prices but a necessary step that must be complemented by increasing supply and reforming zoning laws.

Those critiques of Blind-Bidding are better suited toward the Federal Government proposition. As the Ontario Open-Bidding Option is different, the comments vary from those of the Federal Government’s complete ban. Proponents, such as Tim Hudak, the CEO of the Ontario Real Estate Association, welcome the Open-Bidding Option, as the new regulation strikes “the right balance between adding more transparency to the offer process and protecting a homeowner’s right to sell their home how they want, instead of blanket bans on the traditional offer process.”

On the other hand, critics disagree with the new rule because of the discretion it gives to the seller. They believe that the goal is increasing transparency. Open-Bidding must be the only option to achieve that goal. Such transparency is more valuable to a functioning real estate market and society than the right to Closed-Bidding for sellers. Some critics are not necessarily proponents of Open-Bidding, but again critique the choice given to sellers, saying that either you go all-in on Open-Bidding, or maintain the current Closed-Bidding-only regime.

Perhaps Ontario’s Open-Bidding Option will impact the average price of real estate in the province. Still, if it does, it will likely not be as significant as how changing zoning laws and increasing supply can impact price. Whether you disagree or agree with the new rule, it probably depends on whether you believe sellers should have the option to engage in Open-Bidding, or whether Open-Bidding should be mandated for transparency.

The post What do the new TRESA Regulations mean for Closed-Bidding? first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

In this article, we digest what house hacking is and its advantages and drawbacks. If done right, you could be on the road to living in your home for free.

What is house hacking?

The goal of house hacking is to cut your living expenses while you build home equity. The premise is to purchase a larger home than what you need so you can rent out the remaining space and act as a landlord. Your tenants’ rent should cover the full or a substantial amount of your mortgage payments. All the while, it’s you who builds equity in the property.

What goes into house hacking?

Some house hackers opt to purchase a duplex or triplex or a home with a basement apartment. But you can simplify it further. For example, you can rent out an extra room in your house to start your house hacking journey. But keep in mind during the home purchase process that you’ll be house hacking so you can plan.

When buying a home, you’re not only looking for your primary residence but an investment property. Therefore, you want to consider things like your neighbourhood and how you can renovate the property. Areas with post-secondary institutions can potentially reward you with student renters who are often ideal tenants. You’ll also want renovations that aren’t specific to your taste and appeal to the general population.

Unlike BRRRR, house hacking doesn’t require that you find a gem of an undervalued property. Generally, your goal isn’t to be profitable but to reduce your monthly expenses. But, it’s still important not to overpay for a home and to find the best deal available.

Build equity in your property with fewer costs

Whenever you make a mortgage payment, part of the payment goes towards the principal of the loan. By renting out part of your home, you can make this payment with less of your own money, in that you’re using someone else’s money—the rent from your tenant. Thus, you’re effectively building equity in your home for free!

Begin your real estate investment journey

While capital is also an issue, individuals commonly fear real estate investing because of their lack of knowledge. To be a real estate investor and landlord, you need to understand the role’s financial, legal, general contracting, and other aspects.

However, house hacking ignites your learning because you begin to act as a landlord and real estate investor on a small scale. If you continue to invest in real estate, you’ll already know how to find and manage tenants and attend to many legal and financial situations.

Property management is much easier when you live there

Property management can be challenging when you’re far away. Often landlords may live in a city but have investments across the province. If a toilet’s clogged at 2 AM, a landlord often can’t just get out of bed and drive over. Calling a plumber or other professional to remedy the situation may also be expensive or challenging. This issue doesn’t exist when you house hack because you live with your tenant. If there’s an issue at 2 AM, it’s a matter of going downstairs or to the other unit.

Your quality of life may be reduced

If this is your first home, you want to make the house really feel your own. But when you house hack, this may not always be possible. For example, House hacking may mean you have a tenant in the bedroom beside you or that you can’t use your basement because it’s currently a rental apartment.

There are tons of upfront costs and work

Purchasing a home is hard. It’s even harder when you’re trying to buy a larger home so you can house hack. There will be many upfront costs for a down payment, lawyer fees, realtor commissions, and more. Additionally, you’ll likely need to renovate the property to make it desirable to tenants. Renovations will further take time, and it can be a stressful process for some. If you don’t have the necessary time or capital to manage it, house hacking may not be for you.

Being a landlord is a part- or full-time job

The idea of having your mortgage payments primarily covered by a tenant seems nice. However, you want to remember that you’re a landlord now. Despite what some believe, being a landlord is a job and requires attending to particular duties. You need to prepare for finding tenants, drafting leases, and managing ongoing tenant issues and maintenance requests.

Because you’re living with your tenant, the renter selection process is more critical than usual. Remember, this person isn’t only a monthly cheque but someone you’re living with or living beside.

Tax considerations have both pros and cons

There are both tax benefits and disadvantages to house hacking. On the pros side, house hacking lets you deduct the costs of being a landlord, such as property taxes, house maintenance, utilities, and interest payments.

However, the Canadian tax systems won’t allow you to claim the whole property for your principal residence exemption—only for the areas of the home you live in. This is easily calculated if you’re in a duplex, triplex, or renting a basement apartment. But situations such as a tenant that shares a kitchen and bathroom with you make it more complex. It’s best to speak to an accountant or tax professional to understand where your tax liabilities lie.

Final thoughts

House hacking is a great way to build equity in your home while reducing your monthly costs. However, there are many advantages and disadvantages to it, and it’ll depend on your circumstance whether it’s a right fit for you.

The post How House Hacking Can Reduce Your Housing Costs to Zero first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

The residential real estate industry is not different from the rest of the corporate world. Homebuyers and sellers must communicate with agents through new means as opposed to face-to-face interactions. Further, home tours have turned virtual. These may become permanent fixtures even once the Coronavirus is no longer everyone’s first thought.

But it’s not only technology leaving a lasting impact on the real estate sector. Everyone has realized the importance of having living space — especially true as many of us must work and self-isolate at home. Homebuyers and sellers now have a more substantial interest in moving to the suburbs, where a larger home is still within their budget.

COVID-19 will have lasting impacts on the real estate market and the buying and sell process. This post discusses COVID-19’s potentially lasting effects on the operations of the real estate industry. This includes:

1. Buyers and sellers using social media to communicate with agents;
2. The increasing use of virtual home tours and remote home buying; and,
3. A greater demand for larger homes in the suburbs.

Meeting and Communicating with Agents via Social Media

How we find an agent to buy or sell our home has changed with technology. Speaking with friends and getting a referral to an agent is still common. But instead of a call, many opt to message an agent on social media.

A 2018 survey on realtors in the digital age found social media was the best source of generating high-quality leads among agents, even more so than Multiple Listing Service (MLS) websites. Now that it’s harder to meet with an agent face-to-face or through cocktail parties and other social gatherings, social media is even more critical for realtors.

The pandemic is likely pushing more real estate agents onto social media to replace the social gatherings where realtors once met new business leads. As more agents adopt this lead generation tactic, it’s likely to stay in their arsenal for the long term. And social media will become more prominent in how buyers/sellers communicate and meet realtors.

Virtual Home Tours and Remote Buying

We’ve used the internet to browse online home listings for the past two decades. There’s nothing new about it. But the ability to do so during COVID-19 has made it more important, and so, agents are putting more effort into their online listings.

Photography

We already understand that pre-COVID, homes that had high-quality photography sold faster. We can only imagine how much faster photos sell a home now that open houses and showings aren’t as frequent. Before we call an agent to book an in-person showing, we’re likely looking through the photos first to narrow down what properties we want to learn more about.

Videography

A real estate video can help a potential buyer feel like they’re walking through the home. Before COVID, 73% of homeowners said they’re more likely to list with an agent who uses video. Again, this number is likely even greater with COVID-19. As agents adopt more real estate videos into their marketing strategy, it may become a new norm for realtors after the pandemic.

Further, drone footage can provide potential buyers and sellers with an idea of how the surrounding community looks. People don’t only buy a home for the interior but also the neighbourhood.

3D Home Renderings

3D home renderings with technologies like Matterport are becoming more important. 3D digital home tours provide potential buyers with a better online experience that may stay in demand even when they can view an open house again.

Remote home buying

COVID-19 has shut borders, which means foreign home buyers likely can’t fly to Canada to view a property before purchase. Even purchasing a property in another province as a Canadian can be difficult.

As a result, remote home purchases have become more popular. 42% of Ontarians said they were “open” or “somewhat open” to purchasing a home they could only view digitally. Some brokerages combine digital 3D home tours with real-time calls with agents to provide an experience that replicates an in-person showing. Ultimately, COVID has made homebuyers more comfortable with remote home purchases, and this effect likely will last post-COVID-19.

A Push Towards Larger Homes in the Suburbs

Condo apartments [AZ1] in downtown city cores have become scary places for those avoiding COVID-19. Thousands of people living in the same building is not a good way to avoid the pandemic. When you combine this with the small spaces that condo owners must self-isolate in, many look to the suburbs as their next big move[AZ2] .

This desire to move to the suburbs isn’t temporary. Remote work has created a longing for home offices that aren’t possible in a condo. In a survey of Ontarian homebuyers, 28% mentioned that pandemic isolation had increased their desire for a bigger home, more space, and more amenities. 25% wanted more outdoor space, which is usually only possible in the suburbs (unless you can afford a high-end property in the city).

COVID-19 has changed society a lot. One of those changes is how we buy and sell a home, and some of these changes are here to stay. Even after the pandemic ends, we’ll likely see social media and online alternatives to home tours take an even larger role in selling homes and driving leads to agents. The demand for larger, suburban homes will also likely continue as we further embrace remote work.

The post How the COVID-19 Pandemic has Permanently Changed How We Buy and Sell Real Estate first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Although it’s a tough time, it’s important to remain hopeful. The federal and provincial governments have worked with the private sector and with other organizations to help those in financial distress due to COVID-19. Some of these measures may have an impact on your home purchase or sale.

In this article, we look at what measures and policies have been put in place to help fight or recover from COVID-19. Particularly the ones that affect the home purchase and sale process. This includes the restrictions and bans on open houses, the ability for homeowners to defer mortgage payments, and interest rate cuts by the Bank of Canada.

The Ban on Open Houses

Open houses are an easy way for COVID-19 to spread. A dozen people wandering inside a 3,000 square foot or smaller home is the ideal environment for transmission. That’s why real estate boards in Canada have called for the end of open houses ever since measures were put in place to prevent the spread of COVID-19. As a substitute, agents have gotten creative with technology and held open houses through online live streams or pre-made video tours.

Most realtors now will not conduct an open house for the sake of safety and the law. This is not only due to the strong urges from realtor boards, but provinces like Ontario have prevented gatherings of more than 5 people, which can make the idea of an open house more or less impossible. Instead of urging its realtors to not conduct open houses, some boards like the Alberta Real Estate Association (AREA) have outright banned open houses.

If you’re currently looking to purchase a property, you’ll likely have to make do with virtual home showings. If you’re very serious about a property, it may just be a reason for a realtor to provide an in-person showing.

As a seller, you need to understand that realtors are now more limited than before. Without the opportunity to hold open houses, your agent has lost a tool in their belt, but that doesn’t mean that they won’t continue to do the best that they can.

The Ability to Defer Your Mortgage Payments up to Six Months

When a bank provides a mortgage, the debt doesn’t stay with the bank for long. They commonly pool together these mortgages and sell it to someone else, taking a cut on the way. What they sell is called a mortgage pool. If banks want to keep providing mortgages, there needs to be demand for these mortgage pools. To help provide this liquidity, the Government of Canada committed to the Insured Mortgage Purchase Program (IMPP). In this, they’re prepared to purchase $150 billion of insured mortgage pools. This is to ensure lending continues in this dire time.

As a result of the IMPP, the government has also ensured agreement with the leading six Canadian banks that they would allow for up to six months of mortgage payment deferrals. This will ultimately vary on a case-by-case basis. Banks are also set to provide relief on other credit products such as credit cards.

The ability to defer mortgage payments will provide Canadians with some much-needed financial flexibility. If you’ve lost your jobs or lost other sources of income, it can help to defer payments till later on so that you can use your money on necessities like food.

However, this deferral will not be interest-free in most cases. So, if you do decide to defer your payments, you’ll end up having to pay more money back to the bank.

This deferral also helps those who are renting. Landlords who can defer their mortgage payments may be more lenient in deferring or reducing rent.

Estimates believe that these deferrals will leave homeowners with roughly $663 million in their pockets per month. This is based on monthly Canadian mortgage payments averaging to $1,326.  However, everyone is now rushing to their bank to defer their next mortgage payment—whether they need to or not—and therefore, it may take some time to get through.

This opportunity to defer your mortgage can be useful if you’re selling your property due to a loss of income, since this may mean you need extra capital. Delaying your next mortgage payments can hopefully put some money back in your pocket until the economy returns to normal.

Interest Rate Cuts by the Bank of Canada

The Bank of Canada announced three cuts to interest rates in March. This effectively brought the rate to 0.25% and has brought prime interest rates to 2.45%. In a statement, the Bank said that these rate cuts would cushion the economic impacts of COVID-19 by easing the cost of borrowing.

At first, this brought down the cost of borrowing money, meaning lower mortgage rates. That’s why in the first weeks of the rate cuts, there was an unprecedented rise in mortgage refinances. And although day-to-day Canadians will have an opportunity to borrow at lower rates, the rate cut by the Bank of Canada does not equally reduce the cost of borrowing at your local bank. Instead of passing on the complete interest reduction to the consumer, many banks are increasing their margins. This is because lenders are seeing more risk in the borrower’s market. As more individuals lose their jobs, the risk of them defaulting on their loan goes up. These higher margins are to take this into account.

Overall, it may still be cheaper to obtain a mortgage now than before. But with such a high demand for mortgages at current interest rates, banks may further fatten their margins. Although the era of COVID-19 may decrease the number of transactions going on in Canadian markets, we can hope that lower interest rates can improve that situation.

The coronavirus has resulted in new policies and changes such as a ban of open houses, the ability to defer your mortgage payments, and lower interest rates. These changes will likely help or hinder your home buying process. However, it’s important to remain hopeful that we’ll get through this storm.

The post The COVID-19-Related Policies and Measures That a Home Buyer or Seller Needs to Know first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.