My name is Rayna Elabed and I don’t like to think about real estate as just selling homes. I do more than that, for example I have actually been able to help a beautiful expanding family get out of a terrible neighbourhood and into a great neighbourhood with awesome schools. Sometimes, I’ve had a client with some financial issues and because I trusted her too, I covered their staging rental fee. Another client I helped out, the Buyer wanted drywall to be patched up throughout the home if my Seller got her price. Lol yes this was an old one, when it was a Buyer’s market in London – ha ha so cute. Those were the golden days. Meant we got to buy low and sell low, but listen to that – so many people complaining right now that we are selling high so therefore need to buy high. Ya well guess what, it’s the same damn thing. When are people going to realize that real estate is cyclical like all business cycles are in any basic economic theory, yes there are ups and downs, real estate however is the least volatile because there are multiple variables that affect its value. So it makes you question, why do so many people want the market to crash or the “bubble to burst”! NO! Enough, I am going to teach you something I learned from my economics professor at the University of Western Ontario. (Honestly, that man is made of genuine brilliance). Ever wonder what markets are impacted by? What influences markets? Why do they change to certain environmental efforts? Political, social, religious etc, you name it – it all leads to one general theme, and that is speculation. People created markets for exchange and money, a means of exchange. So if we believe money is valuable, then we can also believe there’s value in certain commodities. We demonstrate our acknowledgment of something’s value by our willingness to consume it. So supply and demand, if there’s limited supply and a lot of people demand it, then the price will go up. But we all agree that the commodity has value, but how much is determined by how much the demand is relative to the supply. In other words, People determine prices of goods by their willingness to consume it. This is calculated by our dollar and actions, so if we are telling the market we don’t want something to succeed, we are actually making it happen. So let’s think about that for a second, why would you want a bad thing to happen to you? You wouldn’t, so why keep insisting on it to happen? When people change their behaviors, markets realize that and begin to readjust to accommodate you because their existence is based on your needs and wants. So the moment you begin to want something more, and everyone wants it but there’s a limited supply. Well guess what, the price goes up. You got the law of scarcity to thank for that. Exactly as it sounds, the world is full of a limited quantity of something and everything so the less we want it, the chance of abundance there is. The better flexibility in the price. Losing interest in your local market is a bit of a scary thing to do because you are prematurely shortening its growth cycle and allowing it to begin its descend. Don’t get me wrong, it’s a natural occurrence because people’s interests and preferences are always changing so one commodity can be hot and another not so much. Now to relate this to real estate, it shares these themes but now you need to add layers, government regulation is one. In a real free and open market, governments aren’t to interfere with the balance of the markets because they were designed by the natural balancer, equilibrium. An equilibrium is the happy middle when markets are their most efficient, there is an equal amount to satisfy the equal amount of demand. So what? Just wait, there’s a point here but I just need you to understand some economics first because if you did, you wouldn’t be so Buy smart, real estate isn’t just real estate, its your road to the lifestyle you want, its your retirement, its where you can gain wealth. Most importantly, its not being produced anymore and actually due to rising sea levels, could become a large contributor to higher land prices in areas we probably didn’t think we would see increases in as well. Anyways, what are some smart ways to buy real estate?
Zoning, this is a big one because bylaws can make or break a deal, if you have an R3 or greater in the City of London and haven’t taken advantage of it, you are missing out hard. Especially right now when vacancy rates are the lowest ever in London, we are also tied with Ottawa to being the fastest growing city in Canada. Rental price growths in London were the fastest in Canada. London is on fire. Can’t afford a home? Can’t afford to sell and move? Well get creative and capitalize on this market. Ask me how, let’s break down your options. I don’t just do those “FREE COMPARATIVE MARKET ANALYSIS: CMAs” that every realtor and their dog offers, I am talking about real conservations about things that could really give you value and change your perspective. It doesn’t cost anything, but your time.
Lot size, this is another one, the frontage refers to the size of the front of the lawn, usually lots at minimum will be around 33-34 ft, I’ve seen 30s but let’s just use the average, well if you have double that – and especially if you have the depth, there’s a chance you might be able to sever the lot. Of course, you would need to get in touch with the city regarding the road allowance and set back requirements etc. See what I wouldn’t understand is the city not saying yes to a properly funded project because they know at the end, they will have another parcel that they can tax lol. If they don’t, you tell them Rayna said that. The other thing you could do is if you have a bigger lot and zoning for a multi-family, you find a way to build yourself a money making mini-Hotel California.
Okay so those were freebies, what about this market? It’s killing dreams and snuffing out the profit margins. Well it is and it isn’t, if making good money fast was easy, we would all be rich but what is rich relative to rich, it’s just average, so couldn’t we all just be poor then, we wouldn’t know the difference. Perspective! That’s the goldmine, realize your positioning in the market, realize your point of view and now get a new perspective. London Ontario offers a secondary dwelling unit in your home, you just have to meet building code, fire code and something else.
I love to ask my clients about everything that motivates them, why are they who they are usually because of certain motivators, their tastes and preferences will help me direct you in the right direction. Sometimes when we are in tough positions, you need someone to remind you why you even began and what you were searching for! What motivates you? Do you want a certain lifestyle? Okay let’s talk about that. You want fancy cars? Okay let’s talk about that. You want to start a family? Let’s talk about how we can plan for that. Nothing is easy and it will take time and steps, no one got rich over night unless they robbed a bank or won the lottery, your chances of succeeding is shitter than actually being struck by lightening, remember that cliché? It’s a classic reminder that you’re still winning, you haven’t died yet. Congratulations! Now let’s get your bum to work and show the world what you’re made of! Let’s invest in you, in what motivates you.
HOW? Invest in real estate and watch your wealth accumulate over time. The pace the market is going now, we might be able to see stronger growths in shorter periods of time. See my other posts discussing people mentioning the “Housing Bubble Bursting”. Ya, maybe, but like I said, consumer speculation is a very strong concept that doesn’t get as much attention as interest rates changing. Interest rates force markets to change, but why? SPECULATION! If we know ahead of time that the rates will increase, we know to spend now and save later. Buy low, sell high. The vise is also true, in anticipation of the rates increasing you will see an increase in sales because people are speculating that this event will happen even though it was just an announcement. Why do governments only release part of the information? Usually something else hidden, a curve ball. I believe it’s because that’s the real shock to the market when it does happen – doing exactly what it was designed to do. Interest rates traditionally take around 6 months to really show up in market trends. A lot of variables are being adjusted and they slowly begin to infect the other until its all been absorbed.
Common Mistakes Made When Purchasing A Home
- LEASING OR FINANCING A CAR. If you want a house, just wait before leasing or financing a car, this will affect your debt ratios and may actually prevent you from qualifying entirely or will require you to put more money down since you will not qualify for as much of a mortgage amount. PLEASE wait until after you have purchased and CLOSED on your home, then you can do whatever you want.
- ASSUMING NEW DEBT right before closing. Yes, this is similar to number 1, but very important to make sure you do not assume any new debts right before you are about to close on your new home, otherwise you won’t be able to close and may face penalties from the Sellers.
- NOT USING A MORTGAGE BROKER. Honestly, I think this one is important because this sets the foundation for how well prepared you will be and how much you can qualify for. So mortgage brokers vs. a mortgage specialist at your bank, neither you will have to pay for, if they are charging you a fee, please seek additional advice because you shouldn’t be paying any additional fee, they are paid by the Lender. However, a Broker can shop around at various lenders vs. a bank specialist will only be able to “sell” you their in house services/products. This means, it may not always be the best deal in terms of interest rate.
- Thing you can go direct, buyer agent doesn’t cost you anything and can actually save you thousands of dollars. Give an example.
- Not thinking about resale, don’t buy with emotion, whats your goal? Location and function you cant change
- NOT USING RAYNA ELABED. Lol okay won’t be end of the world, but you should use a licensed realtor for your real estate transactions because of liability reasons. To a buyer, I am completely free of charge since most of the time the cost is covered by the Seller.
THINGS THEY DON’T TELL YOU
- If you buy a home near a fire hydrant, did you know that you can call your insurance company and get a better rate? Some insurance companies will adjust your rate based on this fact, but you have to make it known, otherwise – no one cares, they’re getting paid and you have no idea. Sometimes it’s just nice to work with insurance brokers on this as well to make sure they can shop around to find you the best deal. But also call your own insurance company and ask for a quote, compare them. It’s cooler to be a savvy consumer and ask questions, than pay more for something that you don’t have to.
- If a home can’t be insured, most likely won’t be able to get a mortgage. Mortgage lenders will not release funds to the lawyers on closing date if your insurance will not insure the property. So please make sure you call ahead and get a quote, they will ask for specifics of the property – ask me, Rayna Elabed, and I can assist you with that.
- Why would a home not be able to get insurance?
- Homes without proper or adequate living situations can propose this question. For example, No furnace or heating units fixed to the home, in need of major repairs where an appraisal may not support the value.
- The market is hot, so not many people are going in with no home inspections, I always recommend to do a pre-inspection with a Home Inspector or trusted professional who can seek out any issues prior to submitting an offer. This way you can protect yourself since in some situations, Sellers can sell the home “as is”, waiving warranties and liabilities in the process. This could be an issue if something serious comes up and you didn’t do your due-diligence, you may not be able to pursue the Sellers for any damages. So please be mindful, ask questions and stay protected.
- TAX SAVINGS. Did you know if
- Another note to make is, if a Seller has never lived in the property, it’s tough to even take this individual to small claims court, you will need proof that they actually knew and tried to cover up the problem.