Archives for January 2011

BEN’S FORECLOSURE FRIDAY LISTINGS – JAN 28, 2011

The thaw has finished (for now) and we are moving into February. Don’t forget to also read the blog entry outlining the mortgage rule changes.

Here are the foreclosure listings, asking prices are less than $300,000, in & around the Edmonton area. If you are looking for the opportunity to find a good deal on a house or condo, have a look at these listings.

(Just click on this link  “Foreclosures-Jan28-2011” to access the listings)

If you have any questions or would like to see one or some of these homes, just contact us.

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New mortgage rule changes: What do they mean to you?

In an effort to reign in household debt, the Federal government has yet again decided to tweak existing mortgage rules. If you’re thinking about buying a new home, refinancing an existing property or taking out a home equity line of credit (HELOC), these rules will affect you.

To help you make sense of them, below are the three changes in a little more detail:

  1. The maximum amortization on all mortgages is now 30 years.

There was a time when Canadians could spread their mortgage out across 40 years – rather than the traditional 25 – thus lowering their monthly payments dramatically. That maximum number was changed to 35 years in 2008, and has since been lowered again to 30 years with the recent changes.

This means that the longest you can take to pay off your mortgage in Canada today is 30 years. This will primarily affect individuals who are trying to get a foot in the market, and are having difficulty affording the higher monthly payments, as well as owners of rental properties.

  1. Homeowners can now refinance a maximum of 85% of their home’s value, down from 90%.

If you’re looking to refinance your mortgage – either in favour of a better rate, or to roll higher interest debt into your lower interest mortgage loan – you were previously able to acquire a new loan that was as high as 90% of your home’s value. Under the new changes, that number has been lowered to 85%.

If you are simply switching to a mortgage with a better rate – and you already have more than 15% equity built up in your home – this will not affect you. If you are looking to roll high interest debt into your mortgage, and that debt brings your total mortgage to more than 85% of your home’s value, you’ll now have to find another way of tackling it.

  1. The government will no longer insure Home Equity Lines of Credit (HELOCs).

If you take out a mortgage with less than a 20% down payment, the lender will require you to purchase mortgage default insurance that is designed to protect the lender in case you default on your loan. While there are private default insurers out there, the government – through the Canada Mortgage and Housing Corporation (CMHC) – also offers this product.

Similarly, when you take out a home equity line of credit – a revolving loan that is secured by your home’s equity – the government offers the same insurance to protect the lender in case you default on the loan.

Under the new rules, the government is no longer offering insurance for HELOCs – which means private insurers will also likely follow suit. This means that lenders will have to carry this risk on their own, with no protection. This will make it more difficult – and possibly more expensive – to acquire these products in the future.

As always, if you have any questions about the new rule changes and how they may affect you today or in the future, please feel free to drop me a line.

Article written by Julie Cooper of Axiom mortgages
Phone: (780) 982-1154

Edmonton neighbourhoods – Dunluce

Dunluce is located in the Castledowns district of Edmonton, Alberta, Canada. This neighborhood is named after a castle in Northern Ireland.

Four major roads separate Dunluce from other neighborhoods in the area. They are the 153rd Street to the south, 167th Avenue to the north, 127th Street to the west, and Castle Downs Road to the east. The neighborhood’s close proximity to these road networks gives its residents easy access to other parts of Edmonton.

Development

The current area of Dunluce is part of the Castle Downs area when it was annexed by Edmonton in 1971 to accommodate its expanding population. Construction started immediately after the approval of the Neighborhood Outline Plan in 1974, with the majority completed by the 1980s.

Data from the 2001 federal census shows that construction in the area occurred during the period between the 1970s and early 1980s. Single family dwellings comprise almost half (49%) of all residences while 19% are rented apartments. The remaining portions are row houses with 18%, duplexes with 10%, and mobile homes with 5%. Almost two thirds of these units are occupied by their owners with only a handful available for rent. The mobile homes are concentrated in a mobile home park at 153rd Avenue and 127th Street.

Two schools take care of the educational needs of the children of Dunluce: St. Lucy Catholic Elementary School ran by Edmonton Catholic School System and the Dunluce Elementary School ran by the Edmonton Public School System.

The huge area and facilities of Castle Downs Recreation Centre located in the southeast corner of the neighborhood provides for the recreation needs of the residents.A dry pond found between 121 Street and Dunluce Road adds another natural feature to the environment.

Following the tradition of naming the neighborhoods within the Castle Downs district after famous castle, Dunluce is named after an historical castle in the north coast of Ireland.

Wiki: http://en.wikipedia.org/wiki/Dunluce,_Edmonton

Edmonton.ca: http://www.edmonton.ca/for_residents/2006_DEMOGRAPHIC_Dunluce.pdf

If you’re interested in real estate in either Dunluce or Castledowns, fill int he form below. We’ll send you sales activity as it relates specifically to this neighbourhood.

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Who foots bill for bedbug removal?

Q: I moved into my current apartment a couple of months ago, after moving out of a building that I later learned had a bedbug problem. The owner of the first building knew that a few apartments were infested, but took ineffective steps and didn’t tell anyone (nor did the affected tenants).

Shortly after I moved to my new place, I noticed bedbugs … and told the landlord. He’s treating the problem, but wants me to pay for it, saying I brought them in. It’s possible I did — but I got them from my former building. Isn’t the landlord at my old building the one who’s really responsible for the second infestation? –Matty R.

A: Your tale of woe is, unfortunately, becoming more and more familiar. Tenants who have a bedbug problem may hesitate to tell the landlord, let alone other tenants, for fear they’ll be labeled a Typhoid Mary (and told to pay for the cost of eradication).

They may try to handle the problem themselves; even if they get the landlord involved, the landlord too may try to keep the problem under wraps while attempting to rid the individual units of the problem, so as not to lose tenants.

But bedbugs are resistant to halfway remedies, and are notoriously mobile. Any response short of a comprehensive treatment is likely to fail, with the result that the critters not only continue to plague the originally afflicted tenants, but also have the time to breed, multiply and travel to other apartments.

It’s quite possible, if the timing is right, for a neighboring tenant to unwittingly carry a bug or two with him in furniture, clothing or books when he leaves the building for unrelated reasons. If those traveling bugs have not yet taken a bite, the departing tenant will not know that he’s introducing the bugs to his next living situation.

Your landlord may have pretty good grounds for expecting you to pay for the exterminator. His case will be stronger if he can show that no one else in the building has the bugs, and that the former tenant in your apartment made no complaints, either. But he won’t be able to conclusively prove that you’re the culprit.

It’s possible that the former tenant introduced a bug or two just before he left, and you were the unlucky recipient of what he left behind. If the apartment was cleaned before you moved in, conceivably the cleaning company used vacuum cleaners that were used in other units or buildings, with unsealed bags that can also transmit the bugs.

If you refuse to pay for the extermination, your landlord may take the cost from your deposit, then demand that you replenish it. Standing your ground will result in a “pay or quit” notice, followed by an eviction lawsuit. In court, you’d have to show that the deduction was improper because there isn’t sufficient proof that you are responsible.

Whether a judge would side with you is impossible to know. And, of course, you’d want to point to the former landlord as the real culprit.

But here is where you’d probably run into a procedural difficulty: In a normal lawsuit, you’d countersue the former landlord, arguing that if anyone’s responsible, it’s him. But chances are that the unlawful detainer process in your state is not set up to allow for this type of expansion of the lawsuit.

These cases are designed to be fast and simple, and the judge may not let you bring in another party. In this event, you’ll be in a very bad position.

If you can’t bring the former landlord into the lawsuit, and you lose, you’ll lose the apartment and have an eviction case on your record. Your next step could be to go to small claims court and sue the former landlord for the monetary consequences to you of his failure to effectively deal with the infestation, but that won’t get you back into your apartment, or get the eviction off your record.

If you are determined to go after the former landlord, consider paying for the extermination and then suing the former landlord in small claims court, asking for the cost of the extermination and perhaps some actual damages if you’ve been bitten. That way, your tenancy won’t be at risk.

Q: I’m just starting out as a property manager. My first client is a homeowner who plans to rent out his home while he sails around the world. He gave me a contract published by an online forms provider. What are some of the issues I need to watch out for? –Tim A.

A: The most important step is to take control of the business relationship, by writing the contract yourself (as the lawyers say, he who writes the contract controls the deal). It may be more convenient for you to just go through the homeowner’s agreement and make a few suggestions.

But that would be a mistake, because almost every contract is written to the advantage of one side. Chances are, your homeowner chose a version that favors him.

But because a contract is already on the table, you may not be able to counteroffer this time around with your own. So if you decide to start with the homeowner’s contract, here are a few issues to watch out for.

First, make sure that the owner agrees to carry a comprehensive general liability policy on the property, and to include you as an additional insured. Although you should by all means have your own liability insurance, being added to the homeowner’s policy may save you from having to call on your own policy in the event of a claim.

Along with insurance, make sure the agreement specifies that the owner will “indemnify, defend and hold (you) harmless” in the event your actions result in a monetary loss to you or the owner (such as a settlement or a verdict). This promise covers you in case you make a mistake in the normal exercise of the duties you have undertaken as the manager.

Note that you’ll not only get reimbursed for any monetary damages you suffer, but the owner will have to defend you as well (lawyers and lawsuits are expensive), and not attempt to hold you responsible for any monetary losses suffered by the owner.

Before we move on to the next issue, let’s make sure no one gets caught up in thinking, “Why shouldn’t the manager be responsible for his own mistakes?” That question is a moral one — and indeed, in many situations, we definitely should be responsible for our behavior. But allocating coverage for mistakes, which happens when parties to a contract negotiate over who’s going to carry the insurance, is not about morality.

Instead, it’s about which side has agreed to assume the risk, that is, carry the insurance, and that comes down to bargaining power and practicality. Most of the time, the most efficient path is the way to go.

Here, the landlord has liability insurance already, and it’s designed to cover accidents that happen on site. Adding the manager, who is an agent of the landlord, adds very little risk compared to the risk factors that are already contemplated.

The language of the indemnity clause can get tricky. I’ve seen one that made all of these promises, but ended with “except when the damage is due to the negligence of the manager.”

Wait a minute — didn’t the owner also promise to add you to his insurance policy, which will cover you precisely when you negligently do something that results in damage? What one clause gives, the other takes away. See what I mean about one-sided contracts?

Make sure your duties are clearly spelled out, and pay particular attention to the issue of capital improvements. It’s one thing to supervise or perform routine maintenance; that’s what you’re getting paid for, among other tasks. But supervising a capital improvement is a bigger job.

You’ll want to negotiate that separately, and have the right to either be paid separately or decline the job. You and the owner can decide ahead of time how you’ll characterize any large project. Don’t wait until the work has started to raise the subject of extra compensation.

Finally, because your owner is likely to be unreachable while at sea, consider asking for a larger-than-usual discretionary fund, so that you can respond to an urgent repair without having to wait for approval. For example, suppose the roof is torn off by a windstorm, and you need to hire a roofer pronto.

If your owner is out of touch, you could lose valuable time (and the damage could worsen) while you wait for the OK to spend the thousands of dollars needed for repair. If you have preapproval for repairs costing that much, you can take action right away.

For your next client, you’ll want to come armed with your own contract. Having a lawyer draft one that’s fair and legal — but with your interests in mind — is well worth the investment. You may need to vary its terms a bit when dealing with savvy homeowners, but that’s OK (though you should clear major revisions with your lawyer before signing on the dotted line).

Ben’s Foreclosure Friday listings – Jan 21, 2011

Thanks to Jerry for his kind mention of these Foreclosure blog posts. The cold weather has eased and the market is moving a bit more, as we move away from the holiday season.

Here are  foreclosure listings, up to $300,000, in & around the Edmonton area. If you are looking for the opportunity to find a good deal on a house or condo, have a look at these listings.

(Just click on this link  “ForeclosuresJan212011” to access the listings)

If you have any questions or would like to see one or some of these homes, just contact us.

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Mortgage Changes Sensible

Some prospective first-time buyers saw their window of opportunity to own a home close this week with the federal government’s announcement of changes to government-backed mortgages. Finance Minister Jim Flaherty reduced the term of government-backed mortgages to 30 years from 35 years, effective March 18. He also lowered the maximum amount of equity that can later be refinanced from 90 per cent to 85 per cent.

While these changes are ultimately bad news for some, they are sensible steps to protect Canadians from getting in over their heads with a mortgage they may not be able to afford when interest rates rise a few years down the road. And make no mistake, they will rise when the underlying prime rate of one per cent begins to recover.

But Flaherty is not protecting just homebuyers with these moves. He is protecting himself and his government, which in 2006 allowed the Canada Mortgage and Housing Corp. to lift its 25-year limit on mortgages and insure them all the way up to 40 years. Flaherty ratcheted that 40-year term back to 35 years in 2008 and this week’s move was just another step back from a reckless initial decision.

The government hopes these moves will reign in skyrocketing household debt. While consumer spending and purchases of homes have helped drive the economy out of the recession, household debt has soared to 148 per cent of disposable income. It doesn’t take a computer to figure out where that trend leads. As the robot in the old TV series Lost in Space would say: “Danger, Will Robinson, Danger.”

Flaherty also announced that effective April 18, the federal government will cease to insure newly issued home equity lines of credit or HELOCs, although lines of credit issued before then will continue to be insured. This move also makes sense. Home equity lines of credit have grown dramatically in recent years and are now believed to account for 12 per cent of consumer debt. The Bank of Canada says half of these variable-rate loans are spent on consumer goods like cars and boats, renovation of homes and purchases of vacation properties while only a third goes toward reducing other debts. It makes little sense for the CMHC to continue to insure these lines of credit. This insurance plan was created to foster home ownership.

Flaherty’s tweaking of mortgage terms and down payments also helps his government distance itself from the future rise in interest rates, and that’s useful when there’s a possible election looming on the horizon. But it will have some negative effects on the economy, too. Economists suggest as many as 20,000 home sales could be affected by the changes that will add about $100 on to monthly mortgage payments. About 30 per cent of the mortgages issued in the past year were for 35-year terms.

One mortgage broker says the change could translate into about an $18,000 hit for a person earning $50,000 a year who would previously have qualified for a $257,451 loan. That’s eight per cent less house that a person can afford to buy, and in some communities, it could be the difference between getting a house or not. Some analysts say the average price of resale homes could drop between two per cent and seven per cent over the next year, which would be good news for the prospective homebuyer, but bad news for those hoping to sell. Others are predicting a slowdown in home sales.

But should prospective home buyers who can’t afford to buy a house over a 30-year term be purchasing a home right now anyway? Everyone who has bought their first house knows there are many other costs associated with owning a home that are over and above the capital outlay and property taxes.

These changes protect the taxpayers’ money that backs home buyers. Sure, overall, spending could drop — a consequence with potential negatives of its own — but these moves should strengthen household finances across the land. And that’s a good thing in these ­uncertain times.

Source : Edmonton Journal
Read more: http://www.edmontonjournal.com/business/Mortgage+changes+sensible/4130487/story.html#ixzz1BggssuB7

“Steady as she goes” in 2011 predicts REALTORS® President

Edmonton, January 12, 2011:

Chris Mooney, President of the REALTORS® Association of Edmonton predicted that the housing market in 2011 would be “steady as she goes.” He was addressing 800 REALTORS® and their guests at the 23rd Annual REALTORS® Housing Forecast Seminar at the Shaw Conference Centre today.

REALTORS® expect that sales figures will change direction over the next year and to climb from 18,293 (2010 Edmonton MLS® System total) to 19,500 by the end of 2011. “Consumers appeared wary in 2010 and after an initial surge of sales in the first Quarter, stayed home and waited for the market to bottom out,” said Mooney. “We expect the market to return to normal in 2011 and for sales to increase slightly.”

Prices for single family homes will increase about 3% but an oversupply of condos will keep prices stable for that segment. Average prices for all types of property will vary through the year within a small range. “The average price for single family detached homes over the entire year was up 2.5% in 2010 and we expect that the trend will continue,” explained Mooney. “Prices in July were up over 7% year over year but by year end they were down 2.5% comparing December to December. A single family home priced at $377,000 right now will likely sell for $388,000 next year.”

For the second year in a row condo prices are expected to remain flat with no significant increase in the year-long average price. Buyers can expect to pay $240,000 (on average) for a condominium next year – about what they would have paid in 2010.

Mooney suggested that residential inventory would balloon in the second quarter, topping out at 7,000 properties. The inventory level will fall again to more normal levels by the end of the year. He also suggested that sales of rural and recreational properties would be slowed by low-cost real estate opportunities in the sun states, the higher price of gasoline and the Canadian dollar at par with the US.

Other presenters at the forecast seminar suggested that Alberta’s economy would grow by about 3%. There were no predictions of major outside influences that would skew the normal market operations.

Single Family and Condo Prices Slightly Lower in December

Edmonton, January 5, 2011:

The average price for a single family detached home in December was $355,270, down about $10,000 as compared to the price in November. The average condo price dropped less than $6,000 to $223,454. The marginal price reduction (down 2.7%) continued a SFD slide that started in June when average prices were over $390,000. Condo prices peaked at $252,700 in April and have continued a relentless march downward since then.

The REALTORS® Association of Edmonton released month end and year end results for sales through the local Multiple Listing Service® and includes all residential sales for the City of Edmonton and surrounding communities and counties.

As compared to December 2009, single family prices were down 2.7% and condo prices were off by 7.2%. The average price of all residential property sales in December was down 2.0% as compared to a year ago.

“Homebuyers are watching housing prices slide and may attempt to catch the market at the bottom by delaying their purchase but the low point is only evident about three months after it is reached,” said Larry Westergard, President of the REALTORS® Association of Edmonton. “Home sales are still happening each day and by waiting, the wary buyer may miss the ideal home.”

He urged home sellers to also watch the pricing trends to ensure that their home was appropriately priced relative to the market. “Market activity will pick up again in the spring as usual according to trends,” said Westergard, “Keep your REALTOR® on speed-dial to ensure you have access to the latest market figures.”

Residential sales activity in December was off 34% (784 sales) as compared to November but fewer homes (1,110) were listed and that reduced the available inventory by 18% to 5,721 residential properties on the Edmonton MLS® System. The average days on market rose from 59 to 66 days.

Year-over-year, the all-residential price (includes all single family, condominiums, duplex/rowhouses and mobile homes sold through the year in the Edmonton area) rose 2.6% from 2009. The SFD price rose 3.52% and condos rose 1.89% for the year. REALTORS® sold a total of 18,293 properties of all types in 2010 which was down 14% from 2009. They listed 40,597 properties which is up 7.6% from the previous year. Total Edmonton MLS® System sales were valued at $6.12 billion: a 12% drop from 2009.

The 2011 president of the REALTORS® Association of Edmonton, Chris Mooney, will release his forecast of housing sales and prices on Wednesday, January 12 at the 23rd Annual Housing Forecast Seminar for REALTORS® and their guests.

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Highlights of MLS® System activity

December 2010 activity Record for
the month*
% change from
December 2009
Total MLS® System sales this month 869 -11.50%
Value of total MLS® System sales – month $281 million -10.20%
Value of total MLS® System sales – year $6.12 billion -11.70%
Residential¹ sales this month 784 -11.00%
Residential average price $308,496 -2.02%
SFD² average selling price – month $355,270 -2.49%
SFD median³ selling price $336,500 -3.99%
Condo average selling price $223,454 -7.20%

¹. Residential includes SFD, condos and duplex/row houses.
². Single Family Dwelling
³. The middle figure in a list of all sales prices

* Average prices indicate market trends only. They do not reflect actual changes for a particular property, which may vary from house to house and area to area. Prior period figures have been adjusted to include late reported sales and cancellations and therefore reflect a more accurate view of the period than previously reported at month end.

Finance Minister announces changes to the mortgage rules #yegre #yeg


As anticipated, the government today announced three loan financing changes designed to address concerns about increasing levels of household debt. First, the government will reduce the maximum mortgage amortization period from 35 to 30 years. Second, the maximum amount of the value of a home that can be re-financed will drop from 90 per cent to 85 per cent. And finally, government insurance will no longer be available to financial institutions wishing to insure home equity lines of credit.

It is important to note, the government did not increase the minimum downpayment, which was under consideration. And the reduction of five years to the amortization period is understood, given there was a possibility of a larger reduction. Together, these three measures are designed to ensure homebuyers invest responsibly in home ownership and don’t risk their financial security by buying too much home for their income or the country’s economic circumstance.

CREA  recognizes the government is trying to take reasonable and responsible action with respect to household debt, but urges the government to refrain from additional measures until it can fully evaluate and assess the impact of today’s announcement. Local REALTORS® do not expect a major shift in the market as a result of this announcement. Homebuyers will buy a property based on lifestyle decisions and may have to purchase a slightly less expensive home in order to qualify. 

Edmonton Neighbourhoods – Cumberland

Cumberland is a low density residential neighborhood found in the Palisades area of northwest Edmonton, Alberta, Canada.

It is one of the more prosperous neighborhoods in the area as its average household income is higher than the average household income in the City of Edmonton.

Location

The area within Cumberland was used as an agricultural land before it was developed into a residential place. It is located west of 127th Street, east of 142nd Street, south of 153rd Street, and north of the Cumberland Road between the 127th and 136th Streets and a line half a block north of 145the Avenue (between 136th and 142nd Streets).

Cumberland is located within the Palisades Plan Area in the northwest sector of the city. The neighbourhood is bound by 153rd Avenue to the north, 142nd Street to the west, Cumberland Road to the south and 127th Street to the east. Development began in the neighbourhood in the 1990s, but most of the construction of residential units took place in the early 2000s.

Development

Development in the area began in the 1990s and went on until the early 2000s as more residential units were constructed. Data from the 2001 federal census shows that nine out of ten (91%) of the residential units are single family dwellings while 9% are row houses. Also, 89% of the total residential units are occupied by their owners while the remaining 11% are being rented.

The lands around Cumbersome where used for agriculture prior to their development to residential areas. Several recreational facilities are constructed for the use of the residents. A 5.66ha park is located in the northeast part of the place, connected by a series of pathways to linear parks that run through Cumberland; while a storm management facility forms a small lake at the center of the neighborhood.

The name of the place was selected in honor of the first governor of the Hudson’s Bay Company, Prince Rupert, Duke of Cumberland. The Cumberland House served as the first inland trading post of the company in the early years.

Wiki: http://en.wikipedia.org/wiki/Cumberland,_Edmonton

Edmonton.ca http://www.edmonton.ca/for_residents/2006_DEMOGRAPHIC_Cumberland.pdf

If you’re interested in real estate in Cumberland, use the form below. We’ll send you information on the area and the real estate market as it specifically relates to Cumberland.

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