Real Estate 101: Your Buyer Checklist

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Crystal Tost is an award winning real estate agent in Calgary – if you are looking for homes in Calgary click here

Real Estate 101: Your Buyer Checklist

Purchasing real estate may be overwhelming at first, considering all the things you need to study and learn to ensure that you make the right investment. But if you are equipped with the right tools and knowledge, it can save you from making seriously costly mistakes. For buyers looking to purchase a home, whether it’s your first, second or third, knowledge will be your best friend. And with some perseverance, buying your ideal property will be easier than you think.

To make it simple for you, we’ve created a buyer’s checklist to guide you on this endeavor.

  1. First, think about what it is you’re looking for in real estate. Separate your wants from your needs. Crucial factors for good real estate include location, size, style, and occupants. If you are still single, you can look at lofts, condominiums, and studios. If you are planning to have a family, you can look at homes and townhouses of different sizes.
  2. As real estate involves money, you will also need to consider is how much you can afford. When assessing your financial capacity to purchase real estate, it’s recommended that you analyze your debt (if any), monthly income, and credit status. You should also inquire about various down payment plans that will allow you to buy property but still be able to live a comfortable life.
  3. Real estate is primarily about location. An ideal location for others may not be an ideal location for you. So when deciding on buying a home, check your lifestyle, personal preferences, and the prospective home’s distance from your work. Meanwhile, location’s security is also a must-think. The internet is a good place to research about local crime rates, safety, commuting options, and traffic in the neighborhood of your choice. Other factors you should consider in a location include the proximity of a hospital or clinic, school, and other local recreational amenities such as parks, movie theaters, restaurants, and shops.
  4. The next step is to choose a type of mortgage and obtain pre-approval. Before you choose a mortgage broker, it’s crucial to do your homework and shop around before deciding. Brokers offer a range of interest rates, and it’s best to go with one that is well-suited to your needs as well as financial capabilities. It is highly recommended you deal with a mortgage broker when deciding on this aspect.
  5. Work with highly recommended realtors, and if you are new to real estate, asking for referrals especially in the neighborhood of your choice will be helpful. Good realtors will take the stress out of buying real estate as they can help you find property that suits your individual preferences and will also help you with payment options.
  6. Finally, avoid the mistake of purchasing right away. Here’s another often overlooked tip: narrow down your options to five, visit them all to get a feel for the whole property. Many buyers experience having “cold feet” when purchasing a home because they have not looked at enough options before deciding. So remember, even if you are decided on a property, you should still try to negotiate with your broker to increase your chances of getting a good deal.

These are some of the most basic points you should consider when buying real estate. Remember that going into the industry without this checklist in mind may be a pricey mistake. Why risk that when finding your dream home can be ease-free?

Crystal Tost

Property Prices in Wales

Property prices in Wales are going to be subdued throughout this year. Market for residential property has largely been struggling this year. Sales have been falling with the most recent statistics showing that sales have fallen by 17.5%, as the prices per unit tumbled down. In the month of April the prices for houses went down on average by 0.3% compared to the month of March. However in the upper tier of the properties’ market some level of resilience is being seen. The upper tier in the market has created some disparity in the annual house prices.

The Welsh housing market is different from other markets in Europe. At the forefront places in Wales with the highest prices including Monmouthshire and the Vale of Glamorgan, have had the largest increases in pricing per unit while areas with the lowest prices had the biggest fall in prices. This is a unique phenomenal only found in Wales. The constriction of the mortgages market for first time home buyers has helped to dampen the housing market. The adverse whether conditions have also impacted negatively on the market. Property buyers were not enthusiastic in viewing new houses as the heavy rainfall experienced in April kept people in their homes.

Competition in the properties market was dampened by the more than normal rainfall in April. The reduced number of first time home buyers participating in the market is bound to have a long term effect on the market. Securing mortgages for first time home buyers is still hard which has deflated the prices in the market. The month on month prices will remain deflated into the foreseeable future due to the hardships being experienced by first timers. Lenders are also suffering as they face more pressure on their lending abilities as a result of the financial crisis in the world.

Many first time home buyers in Wales are finding it hard to acquire home ownership. However the Bank of England seems like is going to offer some relief. The new funding for lending if successful would enable first timers to get affordable rates on their mortgages from mortgage lenders. Wealthier buyers and rich retirees have been instrumental in keeping the properties market going. The prices are higher compared to the same time last year.

The housing market will remain subdued this year due to the economic slow down and the difficulties of securing a mortgage. The Queen’s Jubilee celebrations and the Olympics will also impact negatively on the market. Activity in the market will be similar to those seen in 2006 and 2007.

Safeguarding Rent Deposits in Scotland

Estimates provided by the Scottish government suggest that between 8,000 and 11,000 tenants in the country have their deposits held wrongly each year by their landlords. A new scheme aimed at safeguarding rent deposits for residential properties has come into force in Scotland. The new scheme came into force on Monday 02 July 2012. According to the Scottish Housing Minister, Keith Brown deposits amount to over £75 million. This amount is obtained from the majority of 273,000 households which form the bulk of private rented homes in the country.   The new scheme although compulsory will allow landlords and letting agents to participate freely.

Landlords and letting agents will opt into the scheme free of charge. Several safeguards have been implemented to ensure landlords can get legitimate access to deposits. The landlords under this scheme will only access the deposits under justified circumstances. Tenants will be protected from dishonest landlords. The tenants won’t need to seek for legal redress to get their deposits back. In essence tenants will get to enjoy a free, independent dispute resolution system if the tenants are not able to agree with the landlords about deposit refunds.

The institutions set up to provide this service are Letting Protection Service Scotland, Mydeposits Scotland and SafeDeposits Scotland. These institutions will accept the deposits for house leases from landlords or letting agents for safekeeping. These institutions will also communicate about this to the tenants.  All the details about the tenancy will be conveyed to the tenants by these institutions. As from the 2nd July landlords are at liberty to submit the deposits held by them to the scheme voluntarily.

However depending on when the tenancy agreement commenced, the law has set out a limit within which the landlords are to deposit the deposits with an approved scheme. The deadlines are between November 2012 and May 2013. The majority of landlords in Scotland are responsible and honest in their dealings. The new scheme is only meant to tame the few errant landlords who are tarnishing the image of private rented houses sector.

The tenancy deposit scheme is expected to yield a transparent and fair system for all tenants and their landlords. According to Marieke Dwarshuis, a director at Consumer Focus Scotland what remains for the success of the scheme is to have the landlords and the tenants informed about it. Understand their rights and responsibilities will help to ensure the success of the scheme.

In the video below, watch Eddie Hooker, CEO of my|deposits Scotland explain what the TDP legislation is, who it will affect, and what tenants, landlords and letting agents are required to do and by when.

Falling Prices for Country Houses in The UK

The price of country houses in the United Kingdom has gone down yet again. In the year 2012 during the second quarter the prices went down by 1.5%. Data obtained from the latest release by Knight Frank on country house index shows that the annual price decline has increased to 4.8% from the previous figure of 3.9% in the first quarter. Similarly the decline from the first quarter on country house prices was at a paltry 0.2% compared to the 1.5% in the 2nd quarter. This is a big decline expected to affect the market in the long term.

However, contrary to the trend witnessed, prices for country houses worth about £5 million and more had an increase in their prices. During the first quarter of the year these properties saw an increase of 0.8% on their prices. The increase on price for property worth £5 million and above continues to increase and on the year increase was by a whopping 3.5%. Property owners in London are also benefiting from the increase in prime property prices. A simple example could help to drive the point home, a family owning a home in central London in early 2009 valued at £2.4 million can today sell their home for £3.52 million.

Property prices in London are higher than the previous highs seen in 2009. The price on property in prime central London has risen by 48%.  This increase on prices in London is creating demand for country commuter spots. Prices for prime property in places like Guildford have gone up by 0.2% as a result, while in other areas such as Oxford and Henley they have gone up by 2.5% and 0.5% respectively. According to Grainne Gilmore, the head of research in UK’s residential market at Knight Frank, the current currency movements have affected prime country property market.

The prime country property market today is more attractive for overseas investors. Russian buyers are particularly active in this market segment. The currency movements are making the market attractive to virtually all buyers from foreign countries. Buyers from Singapore buying a home in the UK can enjoy a 40% discount compared to prices in March 2008. This is as a result of the house prices and currency movements. Buyers using the American Dollar have a chance of getting a 34% discount on the price while those using the Euro can get a discount of more than 20%.

New Property Investment Opportunities in Brazil

Brazil is the world’s 6th largest economy. The country is regarded as one of the best performing real estate market. Statistics from Knight Frank’s Global House Price Index, show Brazil as having the second highest annual house price growth. Its growth was at 23.5% in the first quarter of 2012. The growth in the housing markets in Sao Paulo has seen the prices for houses increase by 18.7% year on year during the first 3 months of the year, 2012.

A new direct flight connecting Sao Paulo in Brazil with the United Arab Emirates expected to start in June 2013 is expected to open new investment opportunities. The investment opportunities to be borne out of this connection are expected to be in real estate. Real estate developers in Sao Paulo are excited by the prospects offered by Abu Dhabi’s Airliner the Etihad. According to the Brazilian ambassador to the UAE, the flights by Etihad Airways to Sao Paulo will create opportunities for the government, trade, tourism and cultural exchanges.

Dean Thomas, who is the director of DLT International in Brazil, a condominium Development Company, he believes that an increase in business is eminent. Commercial relations between North America and the Middle East are expected to improve drastically. Certainly interest in business opportunities in Brazil has been growing in the Middle East. According to Dean Thomas who has been in business in Brazil for more than six years the growth in interest has been growing steadily. About three years ago now, DP World a company registered in the UAE bought a majority stake in Embraport, Brazil. Embraport, a new port terminal next to Porto de Santos, the country’s largest container terminal.

Mubadala Development an Abu Dhabi Government owned strategic company went into a deal with EBX Group. The deal was worthy $2 billion and it was struck earlier this year. EBX Group has interests in oil, gas and the gold industry. More developments are expected to take place soon. Emirates Airline started flying into Rio de Janeiro earlier this year. The Dubai Department of Tourism and Commerce Marketing is expected to open an office in Sao Paulo.

Thomas believes that Emirati’s are competent investors. Emirati’s are able to spot new opportunities and take advantage of the opportunities. The robust economy in Brazil coupled with its wealth from natural resources and a growing number of middle class families makes the country an ideal place for foreign investors.

U.K Housing Market Showing Signs of Stability

Chesterton Humberts/CEBR House Price Poll of Polls found that the U.K. housing market is showing a greater stability. The report found this is largely due to the increased number of mortgage approvals as well as the greater amount of credit availability.

In all, the recent report found that house prices have remained fairly flat while London has been helping to increase the national average. In fact, approximately thirteen percent of the national average in sales is due to sales in the capital city. As such, even a slight increase in house prices in London is likely to have a significant impact on the national average, which may create an misleading figures when looking at national statistics. Nonetheless, the recent fall in world stock markets has helped make Eurozone house prices in London a relatively safe bet for investors. Some additional highlights from the report include:

•    House prices in the UK increased by 0.2 percent between August and September of this year, which further increased the amount of stabilization in prices throughout the country
•    House prices in the UK reached £176,553 in September, which is -1.6 percent lower when compared to September of last year
•    The national picture does not accurately represent the diverging trend between the North and South portions of England, as house prices in London have increased by 2.5 percent over the past year while failing -5.2 percent in the North West
•    While house prices grew in London at about the same pace as the rest of the UK in September, they have outpaced the national trend over the year
•    August saw 52,410 new mortgage approvals compared to just 49,644 in July, which represents the highest level seen since May 2010

“In recent months the gulf between asking prices and selling prices has widened as sellers, on average, have been in denial about the true market value of their homes based on the economic realities. This is most keenly observable in the difference between the Rightmove Asking price surveys and the Land Registry data,” said Robert Bartlett, who is Chesterton Humberts’ CEO, in a recent article.  “In addition, buyers appear willing to wait longer at present, without much urgency to make offers or conclude a purchase.”
Bartlett expects to see asking prices fall during the winter, which is traditionally a less active time for home buyers. When the stamp duty relief ends in March, however, he expects to see a major increase in activity. Nonetheless, experts caution that additional steps may be necessary to ensure the housing market continues to stabilize.

“Three years after the collapse of Lehman Brothers, credit conditions remain a significant obstacle to improvements in the housing market,” said Douglas McWilliams, who is the Chief Executive of CEBR. “Small improvement in mortgage lending activity will not let the Bank of England off the hook. Another round of quantitative easing is now not only expected, but it is becoming increasingly necessary.”

Homburg REIT Purchases 29 Canadian Shopping Centers for $114.9 Million

After paying $114.9 million for 29 neighborhood shopping centers, Montreal-based Homburg Canada Real Estate Investment Trust will be adding 728,000-square feet of retail space to its portfolio. The property, which is being sold by international property investor Delek Global Real Estate Group, is largely anchored by the Jean Coutu Group Inc. pharmacies.

While the purchase includes 29 neighborhood shopping centers, three of which are located in Ontario, the 24 Jean Coutu leasings represent half of the portfolio’s net income. Other tenants included in the portfolio are Shoppers Drug Mart, IGA, a bank and Dollarama. The leasings have an average remaining lease term of 7.2 years. According to Homburg REIT officials, the company hopes to attract new tenants to the shopping centers, most of which are found in the Greater Montreal area.

“With this deal we continue to grow our footprint in Montreal and Quebec and get access to more high-quality tenants,” Jim Beckerleg, who is the CEO of Homburg Canada Real Estate Investment Trust, is reported as saying in a recent article.

In order to purchase the shopping centers, Homburg REIT will assume $74.6 million of existing mortgages as well as $40.3 million of equity. The company is also planning to sell its multi-residential Atlantic region portfolio for $65 million as part of its move away from investing in the residential sector.

“The residential sector is no longer part of our strategy,” said Beckerleg. “We’ll continue to focus on the retail and office sectors of the commercial market.”

After repaying the mortgages on the Atlantic region portfolio, which features 1,261 residential units within 29 properties and 42 buildings, the company will see net proceeds of $37 million. After completing its transactions, REIT’s total Canadian portfolio will include 8 million square feet of commercial leasable space in Ontario, Quebec, Atlantic Canada and the West. Some of the company’s best-known assets include Alexis Nihon Plaza, CN Central Station, Calgary’s Scotia Centre and Centre Lav.

International Living Lists Top 5 Places for Expats to Retire

For retirees looking for a luxurious place to retire, International Living suggests taking a closer look at Ecuador. According to the publication, Ecuador has grabbed the top position in this year’s Global Retirement Index for the third year in a row.

“No matter where you choose to live in Ecuador, there is no better place on earth to discover the simple abundance of health, tranquility, adventure, and beauty,” says expat Patricia Farmer. “We chose Bahía de Caraquez on the coast to begin our Ecuador adventure. There are plenty of amenities, including a hospital, restaurants, and frequent expat get-togethers.”

In determining its rankings, International Living analyzed 37 data points within 8 different categories. These categories included:

•    Real Estate – considers how easy it was to purchase real estate at a low price. Weight: 15%
•    Special Benefits – considers government provisions such as public transport, health care, entertainment, airfares, utilities, property rights for foreign residents, duty-free imports and property tax rates. Weight: 20%
•    Cost of Living – based on statistics provided by the Indexes of Living Costs Abroad, Quarter Allowances, and Hardship Differentials as well as first-hand experiences of the editors of International Living. Weight: 20%
•    Culture – focuses on things such as education as a percentage of GDP, literacy rates and the number of UNESCO sites per square kilometer. Subjective ratings on cultural and recreational offerings were also taken into consideration. Weight: 10%
•    Health Care – considers the cost of a typical visit to a doctor as well as the type of coverage provided by health insurance. Other factors include the number of people per doctor, the percentage of the population that can access safe water, the number of hospital beds per 1,000 people, life expectancy rates, infant mortality rates and public health expenditure as a percentage of the country’s GDP. Weight: 20%
•    Infrastructure – focuses on things such as the length of railways, navigable waterways and paved highways in comparison to the country’s population and size. Other factors, such as the number of motor vehicles, airports, Internet service providers, telephones and cell phones per capita are also taken into consideration. Weight: 5%
•    Safety and Stability – considers the amount of unrest within the country, which is mostly measured by Interpol data and U.S. State Department statistics. Other factors such as political rights and civil rights granted by the government coupled with reports from expatriates living in the country are also considered. Weight: 5%
•    Climate – favors those countries with moderate rain fall, temperate weather throughout the year and little risk of natural disaster.

After Ecuador, Mexico was selected as the second most desirable location for retirees. Panama grabbed the number three position, while Spain took fourth and New Zealand took fifth.

Investors Try to Make Sense Out of Confusing Global Economy

A recent report from LaSalle Investment Management found that the varying speeds of global economic recovery have made it difficult for real estate investors to develop strategies for 2011. In the UK, the United States and France, for example, the economies have only shown a modest rebound. The Asia Pacific, on the other hand, has experienced strong growth.

“Investment performance in the rapidly growing countries will be volatile, due to the waves of liquidity that wash over these less mature markets,” said Jacques Gordon, who is the Global Strategist at LaSalle, in a recent Reuters article. “Growth strategies that take advantage of rapid urbanization and a burgeoning middle class will be most successful.”

Gordon went on to add that selective residential developments in China’s second-tier cities are likely to provide the best opportunities. In those areas that are experiencing low growth, such as the United States, Japan and the United Kingdom, LaSalle predicts that real estate investments could receive a boost from the low interest rates as well as the increased flow of equity capital and debt.

“While investor appetite for risk starts to grow once again, value-add and opportunistic investing will be more attractive in the States, with core investing showing the most signs for improvement,” said William Maher, who is the head of U.S. strategy for LaSalle.

Maher went on to forecast that that the United States transaction volume is likely to reach between $150 billion and $200 billion by the end of next year. The most attractive core opportunities are likely to be in the healthcare, technology and entertainment sectors, which could potentially outpace the national average. In Europe, on the other hand, those who are seeking higher returns should set their sights upon those banks that are taking steps to reduce their exposure to property. Further recommendations include focusing on central London and retail offices while avoiding those regions that are outside of the UK’s South East. Offices in France should also provide good returns, as well as retail and logistics and France and Germany.

Spain Housing Market Experiences Difficulty with Drawing Investors

As Spain attempts to rebound from its own economic problems, the country is facing a new set of hurdles. Namely, analysts are reportedly having a difficult time determining how much the properties are actually worth. As a result of all of the confusions, investors are unwilling to make the purchases that are necessary to help the banks clear out the backlog of homes that are currently sitting empty.

The method used to calculate home price data in Spain is one of the primary causes of the discrepancy. Rather than gathering the data based on actual sale prices, the formula utilizes the appraisals that have been made by private companies. In a slow market, appraisals are heavily dependent upon asking prices, which results in a great deal of variety in estimated home values.

According to the Ministry of Public Works, the price per square meter on the homes currently for sale dropped by 11% since its peak in 2007. On the other hand, Tinsa, which is a large Spanish appraisal firm, has shown an 18% drop during this same time period. Numerous other firms have placed the drop at somewhere between 20% and 30%.

“We don’t have an accurate measure, that’s the bottom line,” said Jose Garcia Montalvo, who is the chairman of economics and business at the Universitat Pompeu Fabra in Barcelona.

The discrepancies between these figures are a matter of concern for investors, particularly after the bailout in Greece and the anticipated rescue of Ireland both failed to produce results. As such, investors are concerned about the possibility of the crisis spreading to other countries throughout Europe. While Portugal is the country that has garnered the most concern, investors are worried about Spain as well.

According to a study conducted by Luis Garicano, who is a professor at the London School of Economics, the housing boom that took place in Spain pushed housing prices up by more than 100%. In fact, two-thirds of the housing units built in Europe between 1999 and 2007 were built in Spain. As housing prices start to decline, it has been difficulty for experts to truly gauge where the value of these homes currently stands. This also means that banks are unable to determine the amount of potential losses they are looking at on their balance sheets.

“It could mean that banks will suffer high loan-loss provisions for many quarters yet,” said Andrew Lim, who is a European banking analyst with Matrix Corporate Capital in London.

About the Author: Brian Kinkade is a broker and team lead with Brokers Guild – Cherry Creek Ltd, one of Denver’s fastest growing full service Denver real estate firm. Brian’s team of Internet savvy agents service the Denver Metro area while specializing in Denver luxury homes, Colorado equestrain property and International real estate.