Sasha Dear

As we enter 2012, we are seeing alot more homes being sold by the bank.

Homes that have been repossessed by the lender because the owners failed to pay the mortgage are foreclosures, or power of sales. Thousands of homes end up in foreclosure every year. Many people lose their homes due to job loss, credit problems or unexpected expenses.

It is wise to be cautious when considering a foreclosure. It is important to have the house thoroughly inspected and to be sure that any liens, undisclosed mortgages or court judgments are cleared or at least disclosed.

When you are ready to make an investment into a foreclosure property, I can put my expert knowledge to work for you.

Muskoka has seen an increase in Power of Sale homes over the last few years. These Muskoka real estate listings are generally sought after by investors who wish to fix up and flip (resell) quickly, or first time home buyers who are prepared to buy a Muskoka property that needs a little tlc.

There are various elements to consider when looking for a Power of Sale home in Muskoka, so it is wise to have a detailed conversation with your Muskoka Real Estate Agent.

I recently received an email from a frustrated home seller. He found my ‘Ask-An-Expert’ section on my Muskoka Real Estatewebsite when searching for advice on selling his Muskoka home.

He told me that he has his beautiful home listed with another Agent, and is wondering why it is taking so long to sell. He has had numerous viewings and open houses, and made a few price adjustments, but after nearly 2 yrs on the market, still no offer.

Here is his email to me, with supporting pictures. Please take a look at this and give your opinion...

“Dear Sasha,

I have been trying to sell my home for the past 2 years now! To say I am frustrated with the whole situation is an understatement. My Agent gave me some pointers and suggestions just before we listed, and I did what was asked of me. He suggested that we make the house more ‘child friendly’, as it was likely that the potential buyers would have young kids. He also told me that in order to promote the listing well on the internet, that we should draw focus on ‘features’ of the home in pictures.

My Agent also pointed out that we should try to promote the age of the house on the outside by giving it more character, while modernizing and upgrading the inside. Apparently, this is what potential buyers now look for when buying a home. I have included some pictures for you, with details of the work that I have put into the home....

To appeal to families with small kids, I thought they would appreciate knowing that their kids would not be able to lock themselves in the bathroom.

Also, as an added bonus, I installed a kid-size handrail at the main entrance.

For 'features' I tried to work with what I have.

In the home-office I simply just had to place the computer in the middle of the room in order to 'draw focus'.

I even came up with an idea of my own! To impress the guys who 'want-it-all' I installed a plug in the shower so that they can shave too!

To make the house look a little more up-to-date, I installed those wood and glass doors that everyone seems to be raving about......

And to add more 'character' to the outside, I made some improvements to the windows .....

I can honestly say, without prejudice, that I do not know where the problem is! Oh...I forgot to mention....

During the course of the listing being on the market, my wife and I had a terrible break-up. No matter what I did to help try to make our home more 'sellable', she just kept nagging me and telling me that I had no idea what I was doing! I'm sure you understand that there is only so much of that kind of talk that a man can take, so I made changes to the front door so that she was no longer able to live with me.

This has caused a few minor issues when buyers have wanted to come view the house inside, but I told my Agent that I would leave the window open for them.

I am BEGGING you to tell me what else I can possibly do to help sell my home!!! Thanks in advance for your time."

Disclaimer: the contents of this post is purely fictional, apart from the pictures that are very real!

I hope you enjoyed taking the current frustration with market conditions to a momentarily humorous level.

Last year January 1st 2010 to July 1st 2010 there were 20 waterfront cottage sales in Bracebridge.

This year January 1st 2011 to July 1st 2011 there have been 13 waterfront cottage sales in Bracebridge.

Thats a 35% drop in waterfront cottage sales for the Bracebridge area.

As of July 5th 2011 there are currently 45 waterfront cottages for sale in the Bracebridge area. Based on the fact that there were a total of 43 waterfront cottage sales for 2010, and the 35% drop in sales so far for 2011, this indicates that out of the 45 waterfront cottages that are currently for sale…only 15 of them will be sold in the remainder of 2011.

This is what we call a Buyers Market, when there are far more properties available than there are Buyers. This also means that as a Seller, you must become competitive with the how you present your cottage and be careful to set a realistic asking price.

Mortgage rules changed this year, causing some confusion for homebuyers and homeowners.

For homebuyers, the biggest change is a reduction in the amortization period - the amount of time after which, if all monthly payments are made on time and in full, the mortgage loan will be repaid.

Under the changes, the maximum amortization period was decreased to 30 years from 35 years for all new government-backed insured mortgages. A shorter period for repayment will mean that your mortgage payments will be greater. However, this shorter period means your mortgage will be paid off faster and you will save on interest.

Generally, if you are just setting up your mortgage, it's a good rule to go for a short amortization and not be tempted by the longest amortization possible. A longer-term obligation may seem appealing, as it will leave you with more cash in hand each month. However, if you seek out the shortest amortization schedule you can afford, you will pay down your mortgage faster and incur less in interest charges. Ask your Mortgage Broker for advice on what strategy would be best for you.

For existing homeowners, the recent regulations do not cause any change in your existing mortgage. However, the biggest change is in the amount you can borrow against your home for refinancing. The maximum amount Canadians can borrow in refinancing their mortgages has been reduced to 85 per cent of the value of their homes, down from 90 per cent.

This is the second time in two years that the refinance limit has been tightened. In April 2010, it was reduced from 95 per cent of the value of your home to 90 per cent, and, with the latest reduction, this means a ten-percentage-point reduction in the amount you can borrow against your home.

This will mean you can borrow less against your home for things such as investing for retirement or for renovations. It may also mean that you will have to revisit your long-term financial plan - or explore other financing routes. A qualified financial adviser may be able to help.

While the recent rules will make home financing more difficult in some circumstances, in theory these changes should make for lower debt levels over time and could provide consumers with an incentive for more prudent financial management.

Article provided in part by ScotiaBank

If you are asking if an open house will help sell your home, then my answer is "unlikely".

Before the Internet boom (before the majority of people turned to the Internet to find their next home), people relied on printed MLS books, newspaper listings, Real Estate magazines, and driving around their desired neighbourhoods to find open houses. Back in those days (before 1995), open houses were an effective way to help sell a home. The people who entered the open house were actually ‘likely buyers' who were in the market to actively search for a home to purchase.

What we see nowadays though, is a trail of nosey neighbours and week-end tire-kickers who want to get decorating ideas or just want to compare your home with theirs so that they can imagine up a value for their own.

So why are open houses still held?

1. There is still a VERY slim chance that the person who enters the open house will in-fact buy it (based on the opinion of at least 50 Real Estate Agents questioned in the Toronto, Barrie and Muskoka areas, the response is about a 2% chance)
2. The Seller may not believe, or has not been educated about the way in which buyers now purchase a home, and the Agent holds it to satisfy the Sellers demands.
3. The Agent wants to draw in potential Buyer and Seller Clients, and this is a great way to meet new Clients.

The majority of Buyers, about 96%, now look at the Internet when searching for a home. Real Estate Agents look on the Internet within their own system, and email or call their Clients when suitable homes become available. The Real Estate Agents own system is the one that feeds the public realtor.ca website. Most real estate boards have now stopped issuing the printed MLS books.

In short, if your home or cottage looks like it may be suitable for someone, then they will make AN APPOINTMENT to come view your listing. Those are the type of people who you really want looking around your home!