Preparing a Budget For a New Home in Collingwood

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Before looking at prospective homes, one must have a clear idea of their financial limitations. This facilitates looking at houses relevant to the potential buyer and avoids wasting the time of both the shopper and their realtor. A seasoned realtor with insider knowledge can then use these factors to inform any guidance and suggestions they give their client, directing them towards homes and investments that make sense for their situation. The following are the crucial elements to consider when preparing a home budget to begin a home search.

Determine the Price Limit

First of all, one must begin their budget creation with a calculation of how much they can spend on a home. The recommended starting point is to multiply one’s income before taxes by 2.5. There are other factors to consider, too, though. One’s personal credit score can seriously impact receiving a home loan, with higher scores usually allowing for lower interest rates and better agreement terms. In fact, mortgage rates play a huge role in determining financial limits.

Prepare for the Down Payment

Someone in the market to buy must also look at saving for the initial down payment. Again, depending heavily on credit score and the type of mortgage chosen, this amount could be anywhere from 3% to 20% of the overall price. Those who have conventional loans and have paid less than 20% must consider that they will also have to pay private mortgage insurance until they have paid off 20% of the value. With this in mind, saving for a larger down payment can be highly beneficial and save a bit of money in the long run.

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Consider Closing Costs

Besides the down payment, buying a home also incurs upfront closing costs. This includes expenditures like the appraisal fee, tax service fee, credit reporting fee, and the mortgage lender’s origination fee. This usually adds up to 2% to 5% of the home price, which can add up quickly when combined with all the other costs of purchasing a property.

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Consider All Potential Expenses

When moving to a new property in Collingwood, there are also extra expenses that can be forgotten. Moving can be costly, as well as buying appropriate furniture and appliances one lacks. A home may also call for personalized renovation factors, like painting. The mortgage is an ongoing payment, including property taxes, interest,  homeowner’s insurance, and possibly other recurring expenditures. Maintenance is another crucial factor, which is essential in protecting and enjoying one’s property investment. This includes ensuring appliances are in the best shape possible, cleaning and checking gutters, and taking care of the exterior landscape. Additional funds and savings may also be needed for initial or future processes like roof upkeep or replacement or HVAC system replacement.


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Countering a Disappointing Offer


In the process of selling one’s Collingwood home, there is always the possibility of receiving offers from potential buyers that do not live up to initial expectations. When this occurs, it is essential to consult with one’s real estate agent and put a lot of thought into how to approach countering the offer. In an effort to move closer to one’s desired closing price with a level of professionalism, it is important, as the seller, to remain calm while also acting with a sense of determination. There are a few critical methods of countering an offer that can be highly effective. Choosing which one is right for a given situation can make a difference in securing a beneficial deal for both buyer and seller.


Countering at Original Asking Price


While some sellers, for fear of losing a sale, may feel compelled to settle for a drastically lower price than originally desired, there is a way to maintain reasonable expectations and still procure a smooth sale. Insisting on the original listing price, or something only slightly lower, is not a turnoff to serious buyers and can prevent a homeowner from settling too early on an unfair price. Unless a homeowner has unique circumstances and must sell as fast as possible, even if it means a severe loss of compensation for the value, waiting out for a buyer willing to pay, at least somewhere near the asking price, is usually the best plan.


Offer Rejection


A more daring strategy, homeowners selling their properties can choose to simply reject an offer without offering an alternative price at all. This puts the next move in the hands of the offerer, requesting another, better offer. As mentioned above, serious buyers are highly motivated and may be prompted to turn in a more beneficial proposition. 


Creation of a Bidding War


Another way of responding to a home offer is a psychological tactic to increase pressure to agree to a higher closing price. When multiple offers are submitted, the seller can initiate a bidding competition between the interested parties. The seller uses other received offers as their countering response to those who bid lower to get genuinely interested individuals to reach a higher price.


Adding in an Expiration Date


In addition to the chosen method of countering, it can be helpful for sellers to express a clear expiration date for their counter price or terms. This is a preventative measure to move the process along and keep the negotiations from taking up too much time. The potential buyer can either accept or decline, allowing the seller to move on either way. It is useful for sellers to keep in mind that the state of being in negotiations essentially puts a hold on receiving outside offers, reinforcing that time is of the essence.


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How to Offer Competitively on a Collingwood Home

Collaborating with a trusted realtor is essential for potential buyers in the Collingwood area ready to draft an offer on a home. This ensures the following key factors are considered, making the complete proposal comprehensive, informed, and as competitive as possible. 

Calculating a Reasonable Price

To get a good grasp of what constitutes a fair price for a property, interested buyers must consider factors like how much similar properties in the area have sold for and how the state of the local market sways room for negotiation. Giving serious thought to one’s budget and financial planning is also crucial, as the loan amount one is approved for is not necessarily cohesive with actual affordability. Furthermore, it is helpful to remember that homes on the market for longer typically have owners more open to accepting negotiated deals, which newer listings often mean sellers are stricter with their offer expectations.

Determining the Earnest Money Deposit

Potential buyers must pay an up-front cash amount, ensuring that, if they back out of a deal for reasons unrelated to their written contingencies, sellers get to keep the sum for the inconvenience. Shrewd individuals interested in landing the property need to consider the importance of this initial financial aspect, as generous deposits of 1-2% or more can help an offer attract more attention.

Contingency Consideration

Contingencies are essentially stipulations officially set forth by potential buyers. One type of stipulation allows interested individuals to withdraw their offer if the home is appraised at a lower value than originally thought. Another common contingency is used to ensure the potential buyers’ rights to back out if their applied mortgage loans are denied. Still, others give buyers the right to lay claim to property but only buy once their former owned home has sold. Whatever a prospective buyer finds appropriate to include in their formal offer, contingencies protect them from legal issues or losing their deposit if they back out of a deal because of listed reasons.

Composing the Offer

With the support of their realtor, interested parties must include comprehensive and accurate details in their written offer in order for it to be effective and truly competitive. Apart from complying with any pertinent local regulations, offers must include essential elements like the names of every individual on the future title, the offered price and downpayment (including the earnest deposit), and any concessioned closing costs requested of the seller. Of course, negotiations usually follow the turning in of an offer, something further facilitated by the expert advice of a seasoned realtor.

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The Importance of a Home Inspection

For anyone looking to buy a new property, investing in a home inspection is one of the most important things. We know what you’re thinking: the money aspect of things. Buying a property is overwhelmingly expensive on its own, but when you add a home inspection on top of it, you pay even more. But, when you look at things in the long run, a home inspection can end up saving you thousands of dollars. Want to find out how? Read on! 

As a buyer, you need to figure out if there are any significant issues with the property you intend on buying. And, this needs to happen before you close on it! How does a home inspection help you, though? What you can do is use it as a contingency in your purchasing agreement so that if and when the home inspection is conducted and reveals that there are significant defects involved, you can back out on your offer. That being said, all of this needs to happen within a set timeframe. A reliable realtor will go out of their way to put this clause in your contract. 

Coverage of a Home Inspection

It is important to note that you should visit the property in person to check out the defects yourself even after the inspection has taken place rather than rely on photos. Think you have a good home inspector? Here are a few things they should be doing for you:

They will figure out if a particular problem is a safety issue, is a significant defect, or a minor one. 

  • They will find which items must be replaced, repaired, or serviced. 
  • They will analyze factors that seem okay for now but may need monitoring down the line. 

What a Home Inspection Doesn’t Cover

Effective as they are, home inspections cannot figure out everything wrong with a particular property. An inspector searches for visual clues that might indicate a much bigger problem. It is also important to note the things that a home inspection does not cover. Here are some of them:

  • The space behind electrical panels
  • The insides of pipes or sewer lines
  • Inside chimneys
  • Inside walls

Are Home Inspections Worth It?

How much you’ll spend on a home inspection will vary depending on who you hire, the size of the property you are choosing, and the region it is in. While home inspections are not the only solution to steering clear of red flag homes, it pretty much gives the potential buyer an idea of what they will have to spend on when they buy the property, should that be their decision. That being said, they are worth the money that you spend on them. Without them, you would never know what structural damages are in a property. When you are in the league of a reliable realtor with an excellent track record to prove themselves, all of this will become much easier for you.

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Ask The Right Questions Before Refinancing Your Mortage

Refinancing your property may sound like an excellent idea, but the deeper you look into it, you will find that it isn’t the most reliable option for every homeowner out there. You may fall into the category that is better suited for refinancing, but you can’t know that for sure until you ask yourself these key questions to figure out of you are making the soundest financial decision of your life. 

Have I Accumulated Enough Home Equity For This?

To figure out what your home equity is, you must determine the current market value of your home and what you owe on your mortgage. The difference between the two is your home equity. Most homeowners out there need at least 20 percent home equity in order to qualify for refinancing without having to go through private mortgage insurance. When you add PMI to your new loan, you essentially lose the benefits of refinancing altogether. 

Is My Credit Score Good For It?

Mortgage lenders will lend to individuals with credit scores as low as 500, but it is getting tougher and tougher out there, especially in the economic conditions we live in today. The fallout from the pandemic on the credit market was hard, and as such, lenders now have stringent requirements that borrowers must adhere to diligently obtain any kind of financing. As such, you must find out what your credit score is with the help of several paid online services.

What Are My Financial Goals Long-Term?

Figure out why you want to refinance in the first place. Each homeowner requires refinancing for different reasons. Many of these wish to obtain refinancing to reduce their monthly payments and increase their cash flow. If this is what you want long-term, you must use a mortgage calculator to figure out what your monthly payments will look like once you successfully obtain refinancing from a lender.

How Long Will I Stay In This Property?

If you are going to refinance, you should know that it generally costs around 3 to 4 percent of the overall loan amount. Before you make plans with the money you obtain from refinancing; you should ask yourself just how long you are willing to live in this property. To do this, count just how many months it will take you to come up with the closing costs.

Do I Know the Terms of My Current Mortgage?

If you are a borrower with an adjustable-rate mortgage, you should switch to a fixed-rate mortgage loan as part of the refinancing agreement. With this, you will have some peace of mind knowing that the interest you pay along with your monthly payments will not change until your mortgage lasts. Get in touch with a realtor immediately so that they can advise you of your options when you are either looking to refinance or purchase a new property altogether.


Staging vs. Not Staging: Before Your Condo is Listed

When you are gearing up to sell your home, you go through a range of emotions such as stress and excitement. It is a huge decision to make, after all! You have to stage your home before you list your condo up for sale, and it should be one of your priorities. You won’t only get a fast sale by stating your condo properly but will receive a good value for it on the market. Home staging statistics prove that potential buyers are willing to pay top dollar for it when your condo is properly staged.

There are several staging techniques that you can incorporate in your staging strategy in order to enhance the appearance of your condo and transform it into a more welcoming environment for any potential buyer out there. In order to stage your condo, you can add proper lighting, have plants in every room, incorporate beautiful artwork on the walls, invest in some mirrors, and add just enough accessories to the condo to make it look high-end and polished. The gist of it all is that potential buyers need to envision themselves living in the condo you were trying to sell.

Staging Allows Buyers to Envision Your Condo as Their Condo

When you’re trying to sell your condo, it should be your goal to make sure that anybody who enters there can see themselves living in the property. To do this properly, you must de-personalize your property. Remove any picture frames containing family photos, your children’s toys, or your pets’ toys from the condo. For individuals or families trying to sell properties rather than condos, it also helps to increase your curb appeal by removing anything outside in the garden that might make the property a little personal.

You might think that it adds an emotional value to your property, and while for some, it may work, for most buyers out there, it will not be effective.

Top 3 Ways to Get Started with Commercial Real Estate

It can prove to be a bit of a challenge to get into commercial real estate for first-time investors. It doesn’t matter if you have invested in residential real estate before because commercial real estate is a whole new ball game that overwhelms even seasoned residential investors. Sure, it is an intimidating world to enter, but it is worth it. So, how do you get started? Take a look at these top 3 ways to get started with commercial real estate. 

Figure Out How Much Money You Can Invest

Before you go too deep into it, you need to assess your current finance and see just how much money you can invest in a property. Decide whether you’d like to invest in a commercial property on cash or will you be seeking a loan down the line to boost your initial investment money set aside. 

If you wish to purchase commercial properties with the help of a loan, it helps to get in touch with your local bank to find out what your options are. You may have to let the bank know how much you have put aside to determine how much loan you would qualify for an investment property. 

Do Market Research: Its More Important Than You May Think 

So, by now, you’ll have figured out your finances, how much you can invest, and just how much you can borrow from a bank for an investment property. The next step is to gain an insight into the real estate world around you or in other locations. Perhaps there is a commercial sector you already have your eyes on, such as apartments, offices, or retail stores. You can do one of two things or both; you can do it yourself or hire a professional to investigate on your behalf. DIY is good, but professional help is even better. 

Experts Are Better Than Beginners: But Together, They are Unstoppable 

At this point, it would be advisable to get in touch with a reliable realtor near you that has an in-depth knowledge of commercial real estate and can steer you away from potential red-flag investment properties. It is okay to do some research on your own, but having a realtor by your side can boost your chances of finding an investment property that will earn you a lot of money down the line. 


When hiring this professional, look for their track record. How many properties have they sold? Do they have a long list of clients? Are they well-known in the area? A good realtor will earn your confidence fast and be very clear with you regarding your options, so keep an eye out for them! 


Everything You Need to Know About Residential REITs

Real estate investment trusts are crucial if you work diligently to build an equity or fixed-income portfolio. They offer incredible diversity great returns, all at very low risk. They help individuals generate a dividend income while they appreciate, making them a great alternative to investing in stocks or bonds. Don’t even think about putting your money away in the form of cash because cash, when it sits idle, depreciates, and that is not something you want. 

With the help of a reliable real estate agent and an online broker, you will be able to invest your hard-earned money into real estate investment trusts. 

REIT is a specialized kind of company that deals with real estate assets. These companies that also invest in commercial properties are known as equity REITs. REITs that invest in mortgages and mortgage-backed securities are known as mortgage REITs. 

Residential REIT

A residential real estate investment trust owns and operates rental properties, including urban high-rise and low-rise apartment buildings. Their focus is mainly on owning properties that appeal to single families and students.


Residential REITs focus primarily on developing new properties from the ground up; then, some grow through acquiring new properties. Both forms of residential REITs increase the value of properties by buying in. Some REITs also do a combination of both. 

Investing in Residential REITs the Right Way

If you’re looking for a short-term investment, residential REITs are not ideal for you. However, if the long-term investment is more your thing, you must invest in residential REITs the right way. In the short term, REITs are impacted by the housing market, but the impact is not as severe over long periods. If you’re investing in REITs, plan for a minimum of 5-years ahead as an investment. 

Residential REITs Offer Diversification

You can easily diversify your portfolio with residential real estate investment trusts. Try to invest in multiple ventures and not tie all your money in stocks because when they slump, as they often do, so will your spirits. When you invest in residential REITs over a long period, a portion of your investment portfolio will continue to appreciate and be secure. 

Residential REITs resist Recession

If you’re looking for an investment protected from the recession, then residential REITs are the way to go. Even if the economy is in the gutter, people will always need places to live in, and as such, will want to either buy or rent. This has less to do with unemployment and more to do with basic needs. 


So, have you made up your mind and would like to learn about whether or not the residential REITs are your next investment option? It might help to get in touch with a realtor to discuss your options. It is better to do this sooner rather than later so your realtor can lay out all of your options in front of you and help you make an informed decision. 


Tips on Buying Your First Rental Property

The real estate market in 2021 has been hot, and right when real estate buyers thought that the market would slow down, the exact opposite happened. The demand for new housing has continued to stay at an all-time high and has been filled by a solid economic base that draws in more workers and their families towards city life.

If you seek to buy a rental property, you might be wondering the best way to go about it. Before you leap investing in this kind of property, you must know everything there is to know before you jump in. Generally, the real estate market tends to be unpredictable. But when you add a global pandemic to the mix, many companies offer their employees working from home opportunities; there is no way to predict the next step for the real estate market.

There are, however, a few things you need to consider before you invest in your very first rental property.

Do You See Yourself as a Landlord?

Suppose you have purchased a rental property as an investment and have rented it out, which automatically makes you a landlord. You need to ask yourself if you have spoken with a property management company. Yes, being a landlord can indeed earn you a lot of extra income, but don’t let it fool you into thinking that there’s not a lot of work that goes into it–in your spare time to be specific.

Tenants may call you in the middle of the night for minor property repairs that you will have to do out of your pocket. If you’re not ready for this kind of commitment and are not the handy type, then you might not be cut out for this kind of role.

Increased Down Payment

The average down payment for a property in Canada is 20% if the property that is listed is for more than $500,000. However, if you would like to make money on your investment, suppose you want to rent it out; the more money you put on as your down payment, the better it is for you. If you can afford it, try putting a 25% down payment to make back more money through equity in the first year.

Up and Coming Neighborhoods

If you would like to maximize your profits from your rental property, one way to do so is to check out up-and-coming neighbourhoods in the city. Suppose you invest in a property in an area that is not as desirable as others, but the prices in that area are lower than in other areas. In that case, it is possible that you can maximize your profits as the neighbourhood will continue to develop and gain gentrification.

Should You Paint Your House Before Selling It?

The answer to this question is yes. A fresh coat of paint is the most affordable way of making sure your property looks cleaner, newer, and like it has been maintained for some time. When you have scuffed or dirty paint on the walls, it may reduce your home’s overall resale value. However, it isn’t just the paint of your house that affects its overall value; it is also what color you choose that matters.

Colors to Avoid and Colors to Use

To get the highest possible price for your property, try to avoid colours that are too extreme or bright. While courage and creativity are excellent traits, they’re not rewarded well in the real estate market. Potential buyers must imagine their furniture and decor inside of your property. If your property is painted in colours like burnt sienna or sunset orange, it will make it infinitely harder for the potential buyers to imagine it as their own.

Mint Green for Kitchens

You may not know this, but buyers tend to offer $1,800 less for a home that has a kitchen painted in a trendy colour such as mint green. You must also avoid the color red as it can potentially reduce $1,500 from the overall price paid off your house, on average. Yellow is another colour you must avoid as it doesn’t settle well with potential home buyers. A colour that does well for kitchens is white.

Bright Green for Bathrooms

If you have your bathrooms painted in a bright green color, you might repel a lot of sellers. On average, typical home buyers tend to steer clear from vibrant colours used in a bathroom and prefer going for more neutral and calming hues in a room they will bathe and brush in the morning. Avoid other colors such as pink, bright yellow, and fire engine red. These are also colors that are less likely to help sell a house. Try going for light blues for bathrooms instead as they can on average, causing buyers to pay 1.6% more for a property.

Blue for Living Rooms

Did you know that when blue is used for property living rooms, it can lower its overall value by $189? Yes, there have been instances of homebuyers loving it, but most prefer to steer clear of it. Homebuyers also prefer colors used in a house that complement colors are used in every room. In general, there should be one theme followed throughout the house in terms of color palettes. Other colors that you should avoid for living rooms are bright yellow, bright green, and pink. Try going for gray when it comes to living rooms. It offers a calming ambiance that homebuyers love, and it gives them a chance to use statement colors for wall art and furniture with a neutral background.

Want some interior design ideas for 2022 before you sell your property? Take a look here.