Benefits of Pricing Right
- Your property sells faster, because it is exposed to more qualified buyers.
- Your home doesn't lose its "marketability."
- The closer to market value, the higher the offers.
- A well-priced property can generate competing offers.
- Real Estate Professionals will be enthusiastic about presenting your property to buyers.
Renovating For Resale
When it comes to home renovations, one plus one does not necessarily equal two. The money invested in improving your home will not always translate into an equivalent return in the selling price of your home. However, with planning it is possible to both increase the salability of your home and even profit from your home renovations.
Renovations do not have to be extensive or expensive to earn a high rate of return. In fact, one of the cheapest and simplest improvements yields one of the highest paybacks. According to a study (1999 Renovations and Home Value Survey) by the Appraisal Institute of Canada (AIC), a fresh coat of paint on interior walls returns an average 73 percent payback. So, a $1,500 paintjob could be expected to increase a home's selling price by $2,625 (a $1,125 profit).
To maximize salability ensure that your new décor is modern and tasteful. Choose shades of white and tame versions of popular colours. Steer away from too many personal touches and custom work if you plan to re-sell. It is unlikely that your investment will be recouped and it may prevent the quick sale of your home. Also, try to keep renovations in harmony with the fashion of your neighbourhood.
The kitchen and bathroom are key areas to focus your renovation attentions. With average paybacks of 72 and 68 percent respectively, new fixtures, cabinets and tiles could be well worth the money and/or time and effort. The AIC's study highlighted the top ten renovations and the average rate of return:
- Interior painting and décor - 73%
- Kitchen renovation - 72%
- Bathroom renovation - 68%
- Exterior paint - 65%
- Flooring upgrades - 62%
- Window/door replacement - 57%
- Main floor family room addition - 51%
- Fireplace addition - 50%
- Basement renovation - 49%
- Furnace/heating system replacement - 48%
According to another study (Prepare to Sell by HomeGain.com in California) smaller changes to a home can also reap hefty rewards. Any addition that brightens your home (such as new light fixtures) should be returned in the selling price by an average 84% of the cost of the renovation.
As an expert on home sales trends in your neighbourhood, your Royal LePage Sales Professional can suggest which areas of your home could benefit from renovation and increase its value and salability.
Energy Saving at Home
You know your father was right. You shouldn't just stand there with the refrigerator door open. It is a waste of energy. And if you had paid attention to "turn out the lights", you would have developed good energy conservation habits.
It's funny how you think more about conserving energy when YOU pay the hydro bill. If you are like most people, you probably shake your head every time you get the bill and wonder how you might reduce it. Well, you'd be surprised at how much you can do to save energy - and not all of it involves weekend-long projects.
Before you can improve your home's energy efficiency you need to do an energy audit - this involves a walk about your house (exterior and interior) noting where energy is being consumed and where it is being lost.
The Exterior
There are a number of things to look for on the exterior. Check for holes (e.g., where wiring, ductwork, tubes and hoses enter the building) and cracks through which heat may be escaping. Particular attention should be paid to areas where different kinds of building materials meet to see if there are gaps, e.g., where windows fit into walls, where concrete foundations join wood, etc. And don't forget to consider the landscaping and how your house is situated. Is one side of your home particularly wind-beaten?
The most common problems discovered on the exterior inspection involve places where air comes into the house. Caulking will do the trick on holes, cracks and small gaps. Weather-stripping around doors and windows will create a tighter seal between jams and casings. Fireplace chimneys should have snug-fitting dampers that can be closed when the fireplace isn't in use.
Windows are a significant source of heat loss on most homes. Windows should be double pane. If yours aren't, and you can't afford to replace them just yet, consider installing storm windows. Shutters will also provide insulation. Obviously, the better the shutters fit, the better the insulation. And awnings on south-facing windows can be used to minimize the summer sun, helping reduce the inside temperature without using energy to do so.
Closely planted shrubs or a sturdy fence can protect the house from the wind and can help reduce your winter heating load. Shade trees planted on the south side of the house block the summer sun. Also, vines help keep a house cool in summer and warm in winter.
The Interior
When auditing the interior consider the following: appliances, lighting, the heating, ventilation and cooling (HVAC) system and energy consumption patterns. List all the appliances, noting whether they are fairly new or rather old. Older appliances will tend to be less energy-efficient. If you can, replace older appliances with energy-efficient models (or at least consider the energy efficiency level when it's time to replace them).
Regardless of the age of an appliance, there are ways of optimizing its energy efficiency. For example, by keeping the condenser coils of your refrigerator clean and by turning the thermostat setting from 37°F to 40°F, you will save energy. Also, cooling hot foods before you refrigerate them saves energy. Don't preheat the oven too early and resist the temptation to peek while food is baking - each peek drops the temperature by 25°F to 50°F. Only run the dishwasher with full loads and (of course) use energy saving features if available. Heating water consumes the second largest amount of energy in most houses. Reduce the hot-water tank's thermostat to about 120ÕF - this is plenty warm enough for most household uses. Keeping waterbeds covered retains heat and saves energy.
To save energy on lighting, replace traditional bulbs with fluorescent bulbs. Use lampshades with white liners because they provide better reflection. And arrange lamps so that light reflects off two walls rather than just one.
Regarding your HVAC system, keep filters, grills, and coils on furnaces and air conditioning units clean to help them run efficiently and save energy. Also, be sure the heating/air conditioning ducts are clean. Do not block hot or cold registers with furniture. Close drapes and blinds to keep the sun out of rooms. Also, glass doors surrounding a fireplace reduce the radiant heat from the fire but they allow you to enjoy the fire while saving heat your furnace is producing.
Analyze your home's energy consumption looking for patterns - not just by month or season, but also consider daily patterns. In winter, conserve energy during the day by reducing the thermostat while you're away. Also, find out if your electric company offers billing options with reduced rates during non-peak hours (e.g., 8 p.m. to 8 a.m.). Under such a program you can save money simply by running appliances (e.g., washers, dryers, dishwashers), only during off-peak hours.
If you're interested in more information on energy saving, your electric company is a good starting point - most have brochures and literature on the subject. Also, for a small fee some hydro companies will send out an "energy advisor" who will do an on-site energy audit, pointing out specific ways you can save energy.
Title Insurance Explained
Title insurance is growing in popularity in Canada. But what is it exactly? Should you get it? Do you need it? Whether title insurance is right for you is something you should discuss with your lawyer, as it depends on the circumstances of your transaction. This article will provide you with some background information about title insurance to help you make an informed decision.
Title to property
Title is the legal term for ownership of property. Buyers want "good and marketable" title to a property - good title means title appropriate for the buyer's purposes; marketable title means title the buyer can convey to someone else. Prior to closing, public records are "searched" to determine the previous ownership of the property, as well as prior dealings related to it. The search might reveal, for example, existing mortgages, liens for outstanding taxes, utility charges, etc., registered against the property. At closing the buyer expects property that is free of such claims, so normally they must be cleared up before closing. For example, the seller's mortgage will be discharged and outstanding monetary expenses (such as taxes and utility charges) will be paid for (or adjusted for) at closing.
Sometimes problems (or defects) regarding title are not discovered before closing, or are not remedied before closing. Such defects can make the property less marketable when the buyer subsequently sells and, depending on the nature of the problem, can also cost money to remedy. For example, the survey might have failed to show that a dock and boathouse built on a river adjoining a vacation property was built without permission. The buyer of the property could be out-of-pocket if he is later forced to remove the dock and boathouse. Or, the property might have been conveyed to a previous owner fraudulently, in which case there is the risk that the real owner may come forward at some point and demand their rights with respect to the property.
Who is protected with title insurance?
Title insurance policies can be issued in favour of a purchaser (on new/resale homes, condos and vacation properties), a lender, or both the purchaser and lender. Lenders will sometimes require title insurance as a condition of making the loan. Title insurance protects purchasers and/or lenders against loss or damage sustained if a claim that is covered under the terms of the policy is made.
Types of risks that are usually covered under a title insurance policy include: survey irregularities; forced removal of existing structures; claims due to fraud, forgery or duress; unregistered easements and rights of-way; lack of pedestrian or vehicular access to the property; work orders; zoning and set back non-compliance or deficiencies; etc. For a risk to be covered, generally it has to have existed as of the date of the policy. As with any type of insurance policy, certain types of risks might not be covered, for example, native land claims and environmental hazards are normally excluded. Be sure to discuss with your lawyer what risks are covered and what are excluded.
The insured purchaser is indemnified for actual loss of damage sustained up to the amount of the policy, which is based on the purchase price. As well, some policies have inflation coverage, which means that if the fair market value of the property increases, the policy amount will also increase (up to a set maximum).
How long is the insurance coverage?
In the case of title insurance covering the purchaser, title insurance remains in effect as long as the insured purchaser has title to the land. Some policies also protect those who received title as a result of the purchaser's death, or certain family members (e.g., a spouse or children) to whom the property may have been transferred for a nominal consideration.
In the case of title insurance covering a lender, the policy remains in effect as long as the mortgage remains on title. A lender covered under a title insurance policy is insured in the event the lender realizes on its security and suffers actual loss or damage with respect to a risk covered under the policy. Lenders are usually covered up to the principal amount of the mortgage.
The premium for title insurance is paid once (at the time of purchase). Generally speaking, in Canada the purchaser of the property pays for the title insurance, though there can be situations where the seller pays for it. Some policies automatically cover both the purchaser and lender; others will cover both for a small additional fee.
Protection and peace of mind
Title insurance can help ensure that a closing is not delayed due to defects in title. And, if an issue relating to title arises with respect to a risk covered under the policy, the title insurance covers the legal fees and expenses associated with defending the insured's title and pays in the event of loss.
