Edmonton Real Estate Blog

The cold, wet stuff has a way of ar­riving without regard for our busy schedules. It’s not a problem if the only items on your to-do list are making snow angels and taking a nap, but if you need to clear the path to the car quickly-and drive off safely-it pays to prepare. Start with the right equipment and deicers, then stick to these time-tested removal methods. You’ll be on your way-or back inside making cocoa-in no time.

Before the ground freezes… drive tall stakes around plant beds near paths and driveways so that you know where to stop shoveling.

Pro Tip: “If your shrubs get loaded down with snow, leave them alone-you’ll do more damage trying to shake it off.” –Rick Kier, president, Pro Scapes Landscape and Lawn Care, Jamesville, N.Y.

Look for a shovel… with a lightweight plastic or aluminum blade coated with a nonstick finish to make loading and unloading a breeze. Avoid a blade so big you’ll be tempted to overload it; an ergonomic, S-shaped shaft will save your back by requiring less bending. Avoid using metal blades on softer materials, such as wooden decking. A pusher-basically a shovel with a C-shaped blade-is handy for clearing lightweight, fluffy snow.

Pros recommend… shoveling several times, even while it’s still storming, so that snow doesn’t get a chance to bond to surfaces. (It’s also a lot easier to shovel 2 inches of snow than 5.) Get down to the pavement beneath so that sunlight can warm it up and prevent ice from forming.

Don’t heap snow… on foundation walls, where melting water can refreeze and cause cracks to widen, or against anything made of wood, which is also susceptible to water damage.

Rock salt is cheap… and works at temperatures above 12 degrees F, but it’s tough on shrubs and grass and can eat away at concrete. Two other salts, magnesium chloride and calcium chloride, cost more but are less harsh (though still not great for plants) and work at much lower temps than rock salt (from 20 to 25 degrees below zero F). Still pricier is a nonsalt option called urea. It’s usually used as a fertilizer, and it can be a little tough to find. Wear gloves when spreading any deicer by hand. For large areas, use a handheld spreader or a push spreader, but not a grass spreader (the deicing granules will gunk up its gears). Store deicers off the floor or in a sealed bucket to keep them dry.

Use sand or kitty litter… to add traction to slippery surfaces. Choose sandbox sand over mason’s sand, which is too fine. Or try alfalfa meal, a slow-acting fertilizer that also helps melt snow-your yard will thank you.

A snowblower is quickest… to clear large flat areas. Use one when there’s at least 11/2 inches of white stuff on the ground. Before each use, spray the exit chute with silicone to keep snow from sticking (furniture polish also works). When you’re done, let the machine run for a few minutes to dry out, which will help prevent vital parts from being damaged by freezing. Then drive carefully-or stay home and build a snowman with the kids.

Source: Sal Vaglica, This Old House Magazine

Time is running out to qualify for Ottawa’s $1,350 home renovation tax credit, and you have even less time to make use of year-end tax strategies. So here a few timely reminders.

You have until Feb. 1 to spend $10,000 on qualifying items or work to earn the maximum renovation credit, and more than $1,000 to get any of the 15 per cent tax credit. Qualifying expenditures include repairs, alterations and preventative maintenance for a home or apartment suite you own, including the cost of labour, materials and equipment rentals.

Remember that labour costs for home repairs, as well as the cost of heating your home, will be going up next July 1 when Ontario adopts the harmonized sales tax.

But going into debt to renovate, insulate or replace a furnace – particularly credit card debt – will negate some of the value of the tax credit.

Anyone who bought his or her first home after Jan. 27, 2009, will be eligible for a $5,000 federal tax credit, which would put $750 back in your pocket, but only temporarily because you now own a house.

Anyone who turns 71 this year should remember to transfer money from their registered retirement savings plans to a registered retirement income fund or annuity before the end of the year. If you don’t, the RRSP will be taxed as though it was all withdrawn as income in a single year.

If you turned 55 or older this year you will now be eligible to convert locked-in money from a former employer’s pension plan to a life income fund (LIF), and start withdrawing a prescribed minimum or maximum as regular income.

It would be better to wait as long as possible before age 71 to start spending retirement savings, particularly in the wake of the investment losses of 2008 and the low rate of interest paid on investments.

But these are hard times and Ontario does permit a one-time withdrawal of 25 per cent of a new LIF for whatever reason. After Jan. 1, Ontario will also permit a second withdrawal of 25 per cent or an initial withdrawal of 50 per cent.

In addition, you may apply for withdrawals from locked-in accounts that have small amounts of money or if you are in financial hardship. See www.fsco.gov.on.ca for details or call the Financial Services Commission of Ontario.

Executors and heirs should be aware that losses on registered savings that occurred after the death of a person in 2009 or later, and before distribution of the estate, may be carried back and counted as a reduction in the taxable income that would have been declared on behalf of a deceased person who had no surviving spouse or dependant.

Things that must be done before Dec. 31 to qualify for a tax refund next spring include making charitable and political donations, paying post-secondary tuition, buying monthly or annual transit passes, spending up to $500 per child for eligible sports and fitness programs and paying charges for a safety deposit box.

If you operate a business, the end of the year is a good time to purchase computers, cars and other equipment for which you may claim a capital cost allowance. The entire cost of a computer purchased after Jan. 27, 2009, and before February 2011 may be written off in the first year.

Parents and other relatives who want to see children in their family obtain a post-secondary education have until the end of the year to contribute to a registered education savings plan. You will not get a tax refund, but the child will qualify for a federal grant equal to 20 per cent of the contribution, or substantially more if the parent contributing has a low income.

To make the most of that government assistance, be careful to consider the sales and management fees that will be deducted from investments. Bonds and other safe investments are not earning much of a return these days.

Anyone investing outside of an RRSP should be careful about buying mutual funds that may pay a taxable year-end distribution of recent investment gains.

If you have sold investments at a profit this year, and have no losses to carry forward from previous years, consider selling investments before late December that would produce an off-setting capital loss.

Be sure to wait more than 30 days before repurchasing the investment sold at a loss or it will be considered a superficial loss. There may be situations where a superficial loss might be advantageous to a couple, but seek professional tax advice first.

One thing you may be asked to consider at this time of year is any pitch for tax shelters built around some charitable activity.

You may get a tax refund before Canada Revenue gets around to checking out the scheme, but tax authorities have made clear they will eventually hunt down and disallow every one of them.

 Source: James Daw from Yourhome.ca

Well another week has gone by and things are not improving.  As of this morning there are 1,794 active single family homes in Edmonton proper which is almost the same as the inventory level we had last week.

The real concern comes from the number of sales in the previous 30 days of single family homes in Edmonton proper at 546.  That is a 5% drop in the number of sales in just one week.  It also brings the listings to sale ratio up from 3.11:1 that we had last week to 3.29:1 this week.  Both of these are indicators that the market is softening.

Sellers will have to be more aggressive in their list price in comparison to their competition, but the ratio is still not high enough to put downward pressure on valuations.  So I would expected the valuations to remain fairly stable over the short term.

Also keep in mind that historically we do get a slow down in the market at this time of year until approximately February when things start to heat up again.

OTTAWA – Canadian home resales improved 41.5 per cent year over year to 42,288 units in October, a record for the month, according to the Canadian Real Estate Association.

The national average price for homes listed on the Multiple Listing Service also reached a new high in October at $341,079. This was 20.7 per cent higher than the same month last year.

* Related: Canada’s hottest housing markets | Coolest markets

New sales records for the month were reported in one-fifth of local markets, including Toronto, Montreal and Ottawa.

On a seasonally adjusted basis, MLS home sales totalled 45,818 units in October, two per cent higher than the previous record set in May 2007 and 74 per cent above the recent low in January.

“Low interest rates and upbeat consumer confidence continue to release the pent-up demand that built late last year and earlier this year,” stated CREA president Dale Ripplinger.

“The release of that pent-up demand has boosted national sales activity to new heights and is drawing down inventories.”

* Tell us: Is Canada experiencing a housing bubble?

The sharp rise in demand for homes has shrunk inventories to 194,994 or a seasonally adjusted 4.1 months worth, the lowest level in more than two years and 20.8 per cent below the peak reached a year ago. This is the sixth month in a row in which inventories are down from year-ago levels.

Seasonally adjusted new listings on MLS were slightly higher in October compared to September at 65,148 units. New listings peaked in May 2008, then declined until March 2009, and have remained relatively steady since then.

“New listings are still expected to rise in the coming months in response to headline average price increases,” stated CREA chief economist Gregory Klump.

“New supply dropped dramatically in December last year and earlier this year in response to a difficult pricing environment. Sellers who moved to the sidelines should be drawn back to the market as prices rise further over the rest of the year and in early 2010.”

Source: The Canadian Press, cp.org, November 16, 2009

Watch for costly money mistakes. Every dollar you avoid throwing away brings you a step closer to your financial goals.

When it comes to money, most of us like to think we’re pretty sharp. We know enough to comparison shop, stay out of debt and set up some sort of savings plan. Sometimes though, we just get things wrong.Last year, Consumer Reports highlighted how making poor choices can cost you. Some of the blunders identified were more applicable to U.S. investors but here are a few that apply equally in Canada.

Investing too conservatively during retirement
Conventional wisdom suggests that as you age, you should shift money out of stocks and into more stable investments, such as bonds. For instance, a popular rule of thumb is to subtract your age from 100, the difference being the percentage of stocks you should keep in your portfolio. Being too cautious once you retire can hurt you though, Consumer Reports suggests. Annual returns on bonds may barely keep pace with inflation, while stocks typically provide returns that do.

* Even in retirement, be sure to keep as much of your money in stocks as your comfort level allows.

Retiring too early
Attractive as it may seem, early retirement may mean leaving too much money on the table. First, you give up income you would have earned during what might be the best-paid years of your career. Retiring early can also result in sharply reduced pensions, including CPP, as well as lost benefits. Since OHIP and other provincial plans don’t cover many health costs, you’ll have to search out individual health insurance at an age when costs are much higher.

* If you’re in good health and have a choice about when to retire, consider waiting until you’re a bit closer to full retirement age.

Getting divorced
If divorce is unavoidable, make sure you take steps to reduce the financial impact. Hiring lawyers can ensure everyone’s interests are represented, but the more issues spouses want to contest, the more billable hours they face. Consumer Reports found that a low-conflict divorce can generally be mediated for about 75 per cent less than going to trial. Since the intensity of the conflict is the major driver of legal costs, work more toward diplomacy than war. Lower-cost mediation works best when both parties are on a fairly equal financial footing and are able to work together without acrimony.

* Property settlements generally mean a 50-50 split in most provinces. Find a way to get along on custody, the most contentious and therefore expensive issue.

Adopting a healthy lifestyle
Unhealthy habits mean higher life-insurance premiums. Consumer Reports compared the costs of a $1 million term insurance policy for a 40-year-old, healthy male with one who had one of several risk factors often associated with poor health habits, including smoking. The additional costs in premiums for higher-risk men worked out to roughly $42,000 over the subsequent 20 year period.* Before applying for life insurance, consult a doctor about the best ways to bring your vital stats in line with the “preferred plus” underwriting requirements.

Underfunding your retirement
The only way to make RRSPs really work is to start contributing early. A longer time horizon creates more tax-deferred income through the power of compound interest. Look at it this way: At age 20, George makes his first RRSP contribution – depositing $1,000 into his plan and contributing the same amount each year until age 65. Assuming an average rate of return of 5 per cent, the value of George’s RRSP at 65 is $167,685. His older brother Raymond doesn’t get started in an RRSP until he’s 30 years old, depositing the same $1,000 and making the annual contributions until age 65. At the same return but with less time to compound, Raymond will end up with just $94,836 – $72,849 less than his little brother.

* Contribute as much as you can afford to your RRSP and don’t miss out on the catch-up provisions if you fall behind.

Underinsuring a home
If you’ve lived in the same house for at least 10 years, it’s likely worth much more than you paid for it. But if you haven’t updated your homeowners insurance and disaster strikes, you could lose those gains. Some insurers automatically increase your policy limit each year to reflect inflation changes but others don’t. Be sure to review specific items as well. For example, if you purchased extra insurance coverage a few years ago for a high-end bike, you may want to reconsider now that the bike has depreciated in value.

* Check out an inflation-protected policy. Make sure it would pay to rebuild according to the current housing standards in your area.

Carrying a credit card balance
Owing money on a credit card is a costly mistake that can take an incredible toll. If you have a card with an interest rate of 15 per cent and you pay only the minimum due each month, it will take you 22 years and 2 months to retire a $5,000 debt, and you’ll have paid $5,729 in interest, CR calculates.

* Use credit cards for their convenience but plan to pay off the balance in full every month.

By Gordon Powers MSN.ca

Weekly rate minder provided by: Souchita Rattanarasy Dominion Lending Centres Optimum 780-932-2225. Explore Mortgage Scenarios with Helpful Calculators on http://www.souchita.com/

“I was delighted on how quickly Serge was able to get our home sold.  He was able to get it sold in less than one week within the price range he indicated that it would sell for. I was also happy that he had the ability to find us the perfect home for us. I will recommend his services to anyone considering selling or buying a home.”                                                                    

  Lillian Yaremichuk

With many homeowners opting to take advantage of the Home Renovation Tax Credit by fixing up or remodelling their homes, it’s always wise to educate yourself on signs of contractor fraud to ensure you don’t end up paying for work that never gets completed.

Following are five red flags that may indicate a contractor is not legitimate:

1. The company does not list a number in the phone book. This may indicate a fly-by-night operation that will be here today and gone tomorrow. They may seem legitimate in the beginning but, as soon as you make your first payment for the job, they may vanish.
2. Asks you to pay for the entire job up front. This contractor will be long gone well before your project gets underway. Or, worse yet, the contractor may have started the project, leaving you with a ripped up home and depleted funds.
3. Only accepts cash. A legitimate business should have the appropriate financial accounts in place to accept a variety of payment options from clients, including personal cheques and credit cards. If a contractor only accepts cash, you probably won’t see them again once they receive a payment.
4. Solicits door-to-door. Most legitimate contractors find enough work through word-of-mouth referrals and advertising. If they need to drum up business by going door to door, they probably are not an established, local operation. Chances are this contractor is running a fly-by-night business.
5. Offers exceptionally long guarantees. The contractor may be making promises that can’t be kept solely to sucker you into hiring them for the job. The contractor could be inexperienced or may be running a fly-by-night business.

The best way to protect yourself from contractor fraud is to seek referrals from people you trust who can vouch for the contractor including friends, family, colleagues or your mortgage or real estate professional.

It’s also important to read and understand every word of a contract before signing it. If you don’t understand something, ask for clarification.

Also keep in mind that you should never sign a contract with a service professional who makes promises that sound too good to be true. Chances are, this contractor needs to create these incentives to attract customers. If that’s the case, the contractor’s record can’t speak for itself.

Be especially wary of contractors who try to scare you into signing for repairs that they say are “urgent”. Before agreeing to any additional costly repairs, seek a second opinion.

If you’re thinking of embarking on some home improvements, feel free to call me to discuss financing options. I may even know of a trusted contractor in your area who could get the job done well.

Article Provided by: Souchita Rattanarasy of Dominion Lending Centres Optimum (780) 932-2225

 There is no doubt that the fall market is here and we are seeing a slow down in real estate activity, but there are still some worrisome trends shifting.

As of this morning in Edmonton proper there are 1,789 single family dwellings for sales and that is down from 1,810 only a slight drop from last week.  However the number of sales were 576 which is down from 604 last week and 652 the week before that.  This gives us a listing to sales ratio of 3.11:1 which is still ok, but rising.  The most discouraging numbers are the sales which are dropping at a faster rate the number of listings.  If this trend continues it will have an impact on valuations.

The even scarier numbers come from the condominium market.  As of this morning there were 1,493 condominiums for sale in Edmonton proper.  In the last 30 days there were 345 sales.  That gives us a listing to sales ratio of 4.33:1 and that is a ratio that is definitely too high for valuations to continue to stay the same.  The pressure will be on condominium valuations to drop in the upcoming weeks.

 Always remember that there is a difference between average selling price that is often published and valuations.  Average selling price is just that the average price that homes are selling for versus valuation is what you are getting for that price.

 Source of listing and sales data provided by the Realtors Assc. of Edmonton

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