How Does Home Buyers YEG Work?

I get calls every day asking me to learn a little more about Home Buyers YEG & how we work as a company? Our slogan ‘We Buy Houses YEG’ doesn’t provide much of an explanation but this blog post will!Selling Your Home, HomeBuyers

At HomeBuyersYEG we Renovate houses, Re-develop the property or Hold homes as cash flowing investment properties.

It’s that easy! HomeBuyersYEG searches for mutually beneficial deals in Edmonton where a real estate seller would benefit from a quick worry free sale & we can benefit from adding value to the homes current condition.

Our services are definitely not for everyone but we strive to find the perfect fit & when we do, the seller walks away with what they wanted out of the house & we’re able to get our hands dirty on another project!

Is my house right for this sort of a sale? 

HomeBuyersYEG could be the perfect solution for getting rid of your home in many instances. Are you:

Unmotivated to fix up your home before putting it on the market?

Worried about keeping your house neat for never ending ‘walk throughs’?

Is there not enough equity in your home to interest realtors?

Worried your home’s structural conditions would stop future buyers from getting a mortgage on the place?

HomeBuyersYEG works for many different situations & if you’re not happy with our price at least you gave it a shot! Next time you’re thinking of selling call 780-306-1661 & find out what we’d be willing to pay on the spot! Or contact us online!

 

 

 

 

 

Real Estate Investors Keys To Success

Real Estate investing can make you hate or love owning property and much of that outcome can be entirely decided by luck. Luck is definitely a factor in Real Estate (like many business ventures) but luck only lasts for so long.. Here’s a few tips I’ve learned from some of the true Edmonton Pro’s who make money over & over on every deal the pursue.

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#1 Patience

When I first began investing in Real Estate I was convinced the only thing worse than a bad Real Estate deal was letting your capital rot in a bank account or low risk mutual fund. After some time spent working with a few guys who are truly the best in the business, here in Edmonton, I learned there’s always a better deal.

The key is to find the right balance between a ‘rare’ deal and a ‘unnatural’ deal a rare deal happens every day in Edmonton, someone will find a piece of property for 10-$30,000 under the current market price, which is to be expected with real estate as the market is not entirely efficient. An unnatural deal is the type of deal you hear about from a friend of a friend – someone who found a giant lot in Westmount with an old lady who wouldn’t let him pay more even though he insisted (a true story I actually heard once). Unfortunately, waiting for this deal is like trying to win the lotto and the man power to finally find this perfect lot often goes unrewarded. What I’ve learned – be patient but not hopeful and put the time and energy you would waste on countless walk through’s and negotiations towards making that one ‘rare’ deal into a really fantastic flip or cash flowing asset!

#2 It’s Okay To Spend Money on a House Before You Buy It

If you find a really great opportunity but the house is a little rough around the edges, do not skip the 300-1,000 dollars it takes to get the place fully inspected. The main reason is to prepare yourself for what is to come. It may be hard to spend that sort of money up upfront before the house is yours but knowing what’s behind those basement walls or lurking in your sellers attic is definitely worth it.

An example how this could work towards your benefit: I recently purchased a home in Elmwood, it had been on the market for 106 days (usually this is a bad sign) – I spent about $600 on inspections before buying to find #1 the seemingly poorly build upgrades were to code #2 the electrical & plumbing where fine #3 the house was in good shape structurally. After 106 days on market the sellers were pretty much convinced the house was worth land value. I got the house for 285K & the initial listing price was 370K! That’s not too bad!

So, in the future: Don’t fall into the trap of expecting too much from a real estate deal and Don’t get careless about ensuring the asset you’re about to buy is truly as good as you think it is!

 

3 Steps to Ensure You’re Getting the Best Deal When Buying a Home

If you’re anything like me, the price you’re paying for your new house seems like a blessing one day & an absolute rip off the next. I think this is a fairly natural aspect of being human yet it’s also completely insane. This post will explain a few things you can do to help rest easy at night after going unconditional!

ABC – Always Be COMPARING

MLS is an amazing tool, what’s even better than it’s ability to make real estate shopping quick & simple, is it’s database of comparable sales. Do not just let your realtor tell you if the house is a good price based off comparables, ask for the comparables yourself! Then, ask for the neighborhood sales overall; then, ask for the neighborhood sales over the last 10 years. Once you have this data it’s time to seriously review it. From this you should be able to see the neighborhood specific rate of appreciation, as well as any anomalies in the sales data, such as a short term bump in average selling prices (this would be a sign of gentrification).

Know The Neighborhood

Okay, congratulations! You know everything about every house that has sold in the neighborhood in the last 10 years! But do you know anything about the neighborhoods future? What’s the crime rate? Has it been increasing or decreasing? Is there public transit coming through? What are the chances the road your house is on becomes more or less busy? These are all questions for your realtor & push him to back his answers with facts! You’re paying him around $10,000 do not be afraid to utilize him or her to their fullest!

Patience is Key

Realtors are great for a lot of really positive things, but they’re also good at creating a sense of urgency which may not properly reflect your own situation as a buyer. Understanding the real estate market takes time & if you’re going to get a good deal you may have to shop around for a while. The longer you look for a home the more likely #1 your initial offers will get reconsidered by once complacent – now nervous – sellers. #2 The longer you have time for the perfect house to come on the market. Don’t let yourself settle until you’ve really given it a good run, I would suggest 5 months in the winter & 3 months in the summer! Warning: Just because you should take your time it does not mean you shouldn’t have all your bank, insurance & law information prepared & waiting for when you do find that perfect house. Many times it’s the buyer prepared to go unconditional immediately who gets the best deal!

So basically, to find the best house you need research & patience! Sounds pretty easy until you actually have to apply it!

Please check out my business: www.homebuyersyeg.com

 

 

 

Can We Protect ourselves from Deal Killing Lawyers?

The most dreaded words a residential real estate buyer hears are: ‘let me have my lawyer take a look at this, then I’ll get back to you’. The reason? Lawyers look at real estate deals through a black & white lens. To a lawyer they expect a downloadmoderate conditional period, a deposit, then a moderate closing period and honestly it’s what I dream about as well, but real life often gets in the way, making deals more and more complicated.

A few ways my deals become interesting are through Cash Back terms, Assignment Scenarios and long holding periods. This post will discuss the most common creative deal strategies & how to ease conservative lawyers into these abnormal terms.

A Cash back scenario can be used on each side of the agreement. For instance, if you’re buying a house for $300,000 & would like some cash for renovations, you can change the price to $305,000 with a ‘term’ that the seller owes you $5,000 cash after the mortgage has been paid off. On the other hand, cash back is a great way to motivate sellers to sell for your price. What if the only reason a seller won’t accept your price is because they’re cash poor at the moment & need some money to move out? Getting them some ‘cash back’ in their pocket can be a good way to move a deal forward especially if your price is not completely covering their existing mortgage. The best way to get a Cash back clause into your Purchase Contract is to get your lawyer to write one, then insert it with a space for signatures underneath.

Assignment Scenario’s are simply times when you get ‘under contract’ with an owner & then sell your purchase contract to another buyer. This part is not very complicated and completely legal under Alberta’s current contract laws, we use it all the time at HomeBuyersYEG. This type of situation can happen for many different reason but often times it’s a great strategy when you’ve just got too much on your plate & want to earn a small commission fee by selling the rights to a deal. To protect yourself from potential legal problem with assignments most lawyers will not have a problem with you simply signing your name at the beginning of the purchase contract with ‘Name / Nominee’.

Lastly, the dreaded long holding period. The longer a contract is tied up the more closely a Real Estate lawyer will look at it because a longer period means a longer time they’re liable to their clients. For instance, if they miss a strange clause and the contract closes in 1 week there’s only 1 week for that clause to effect anything, but if it’s 6 months that’s a long time, for a lawyer, to be held liable for their interpretation of the contract. A good way to ensure the owners lawyer reads the contract & approves is to prepare a statement of intentions document with the sellers before they send the Purchase Contract to their lawyer. This document should outline why both parties believe a longer holding period is mutual beneficial & why any ‘non boiler plate’ clauses are added into the contract. Then both you & the property owners should sign this statement. This opens the door to constructive criticism rather than just criticism from the lawyer.

So there’s a few small tips that may or may not get your ‘creative’ contract’s stamp of approval from a conservative lawyer. My last piece of advice: Have your own lawyer call their lawyer to help explain. Not all lawyers are created equal and this piece of advice is provided with the hope that maybe your lawyer could even teach their lawyer a thing or two about real estate law in general. There are many times a lawyer will find themselves representing a contract in a real estate deal even though it is not their area of expertise!

If you have any questions, or are having any trouble with Real Estate contracts please reach out! 780 306 1661

Will a change in Interest Rates Change The Value of My House?

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The current interest rates for home buyers in Alberta is around 2.23 – 2.4% for a 25 year mortgage. The variance in basis points is mainly determined by whether or not you have a variable rate or a fixed rate & the length of the term. A variable rate mortgage is the lowest interest rate percentage at 2.23% but it fluctuates with the market. A 25 year mortgage locked in at 10 years would be the highest at around 2.4% it’s higher because you’re paying a premium for the security 10 years of  the same payments has to offer.

There are many strategies when buying a home to decide which one of these structures is best for you, but what does the borrowing rate mean for you once you’ve already got a house? 

The ‘cost’ of capital will affect your sale price. Like I’ve said in blog posts before, when selling, the price you’re negotiating on is cash in your pocket. To the buyer, the sale price is broken down into a mortgage payment which they not only have to afford but also must qualify for. So, to you, it does not matter what the mortgage rate is when selling but let’s see what it means for the buyer:

If your house is 550K & their mortgage rate is 2.33 APR the monthly mortgage is $1,900

What about a 3.5 APR Mortgage rate? The payment is now $2,200

That may not seem like a huge bump but it has lowered your pool of potential buyers. Higher mortgage rates will slow the real estate market and eventually lower the price of your property.

Following with our example above, to have the same amount of buyers at 3.5% who could afford your house at 2.33% you would have to re-price it at $480,000.

The moral of this story: you’ll get more for your house if you sell when mortgage rates are lower than when they are higher!

How To Pick The Right Realtor

realtor-home-value-397x223Realtors are the life blood of the Real Estate market and I work with them everyday. A good realtors knowledge about the market and homes in general makes them an invaluable resource. On the other hand, I’ve talked with many homeowners who feel cheated by realtors they’re currently using or have used in the past. The choice in realtor can mean the difference in so many important factors when selling your house I thought it was necessary to mention some important signs that will tell you if the realtor giving you his/her sales pitch in your living room is a good or bad choice!

Personal Brand

Does your realtor have their own website? Many do but if you find one that doesn’t this is a red flag. Just because a Realtor is middle aged it does not mean they have been working in the market for long. Always ask your Realtor how long they’ve been working for. A realtor who has been working for a while will have the name brand and personal connections to get your home sold fast, they will also understand & price your home the most responsibly. If they are on a team rather than working as a singular realtor this is just as good but ask them what their team specializes in. I cannot stress this enough, realtors will take listings no matter what, but if you’re a Condo owner in Millwoods listing with a realty team that sells bungalows in the west end you’re unlikely to get the quick sale you desire.

Sales Pitch

Realtors work off a 7% commission for the first 100K and a 3% of the rest in Edmonton Alberta. This is normally split between 2 realtors; your realtor and the buyers realtor. If you’ve got a realtor coming to you saying they will sell your home for a flat rate commission of 2% or 3% this usually means a few things (all of which are not good). 1) this realtor is hoping to sell your house without another realtor involved on the buy side, this means they’ll just market it through the web which is a slow & ineffective way to sell real estate. A greedy realtor on the buyers side may even ignore the listings with a low commission. 2) The realtor is new to real estate & does not want you going with a better prepared realtor who would expect the normal fee’s. Be wary of cheap realtors!

Side Hustle

As surprising as it may sound, you want a realtor who has another ‘job’ in the real estate industry. Some of the best realtors I know are also developers, investors or renovators. So please ask your realtor what they do besides sell houses! This is an important questions because many realtors will say “your house is a perfect for _______  and I could sell it instantly to eager investors!” but unless they’re actually connected to the market from the other perspective this statement could be completely false or a misunderstanding of the current market or important aspects of your property like zoning!

These are a few key signs to help understand whether you’re getting paired up with a quality realtor or someone who’s making a lot of promises they cannot follow through on. Lastly, never sign more than a 60 day contract many realtors will have you believe they need 90 days, but if it is not sold in 60 then it’s your realtor who’s at fault! (Edmonton average days on market is currently 48).