1 in 4 Canadians would enter bidding war for house

According to CBC a new Canadian survey reports that one-quarter of those polled would willingly get into a bidding war when buying a home.

The web-based survey of 1,000 house and condo owners was conducted last month by Leger Marketing for BMO Bank of Montreal.

It found that 75 per cent of respondents said they would walk away from a bidding war on a home they wanted to buy.

But about half of those willing to bid against other buyers said they'd pay as much as 10 per cent above the list price.

P.O.V.

Would you get in a bidding war to buy a home? Take CBC survey.

A small percentage said they'd pay as much as 20 per cent above list price when bidding for a home.

Men were more willing than women to bid as much as 120 per cent of the listing price.

Only one-in-five women (20 per cent) said they'd bid 120 per cent of asking price, compared with about one-in-three men (34 per cent).

Respondents in Ontario, Manitoba and Saskatchewan were the most likely to agree to pay above asking price. Those surveyed in Quebec and Atlantic Canada were the least likely to participate in a home bidding war.

A survey of this type is considered accurate within 3.1 percentage points, 19 times out of 20 — although regional breakdowns are less accurate.

The survey was conducted March 19 to March 22.

Things you think add value to your home, but really don't

Continuing our conversation from last week about improvements to a home we thought it is a good idea to look at an opposite side of the spectrum. What things most of us think bring value, but in fact are just waste of money

Extensive Landscaping:
A beautiful yard may encourage potential buyers to take a closer look at the property, but will probably not add to the selling price. If a buyer is unable or unwilling to put in the effort to maintain a garden, it will quickly become an eyesore, or the new homeowner might need to pay a qualified gardener to take charge. 

Keep out side neat and clean, have some flowers, cut grass regularly, but don't over invest in it


High-End Upgrades:
Putting imported tiles in your entryway may do little to increase the value of your home if the bathrooms are still vinyl-floored and the shag carpeting in the bedrooms is leftover from the '60s. Upgrades should be consistent to maintain a similar style and quality throughout the home. For example hardwood floors in a townhouse are rarely worth installing. Good laminate on another hand is very appropriate. 

High-quality upgrades generally increase the value of high-end homes, but not necessarily mid-range houses where the upgrade may be inconsistent with the rest of the home. In addition, specific high-end features such as media rooms with specialized audio, visual or gaming equipment may be appealing to a few prospective buyers, but many potential homebuyers would not consider paying more for the home simply because of this additional feature. Chances are that the room would be re-tasked to a more generic living space.


Overbuilding for the Neighborhood:
Homeowners may, in an attempt to increase the value of a home, make improvements to the property that unintentionally make the home fall outside of the norm for the neighborhood. While a large, expensive remodel, such as adding a second story with two bedrooms and a full bath, might make the home more appealing, it will not add significantly to the resale value if the house is in the midst of a neighborhood of small, one-storey homes.

Target to be at the bottom of top third of the price range. The most expensive house on the block will always take longer to sell, no matter how great it is. In general, homebuyers do not want to pay $450,000 for a house that sits in a neighborhood with an average sales price of $350,000; the house will seem overpriced even if it is more desirable than the surrounding properties. The buyer will instead look to spend the $450,000 in a $450,000 neighborhood. 

Swimming Pools:
Swimming pools are one of those things that may be nice to enjoy at your friend's or neighbor's house, but that can be a hassle to have at your own home. Many potential homebuyers view swimming pools as dangerous, expensive to maintain and a lawsuit waiting to happen. Families with young children in particular may turn down an otherwise perfect house because of the pool (and the fear of a child going in the pool unsupervised). In fact, a would-be buyer's offer may be contingent on the home seller dismantling an above-ground pool or filling in an in-ground pool. An in-ground pool costs anywhere from $10,000 to more than $100,000, and additional yearly maintenance expenses need to be considered. That's a significant amount of money that might never be recouped if and when the house is sold.

Wall-to-Wall Carpeting:
While real estate listings may still boast "new carpeting throughout" as a selling point, potential homebuyers today may cringe at the idea of having wall-to-wall carpeting. Carpeting is expensive to purchase and install. In addition, there is growing concern over the healthfulness of carpeting due to the amount of chemicals used in its processing and the potential for allergens (a serious concern for families with children). Add to that the probability that the carpet style and colour that you thought was absolutely perfect might not be what someone else had in mind. Because of these hurdles, wall-to-wall carpet is something on which it's difficult to recoup the costs. Removing carpeting and restoring wood floors is usually a more profitable investment.

Finishing unfinished space
Finishing your basement or attic might seams like a good idea because you  increase square footage without having to build, but payback will only be 50-90%. Which means you will never recover the cost. Taking into account high cost of such project, you probably have a better chance spending money in other areas.

Energy efficiency upgrages Retrofits, like insulation and high-efficiency furnaces, pay for themselves over time. Some, like solar panels, and tank-less water heaters, may take years to pay for themselves. You realize benefits of such upgrades only if you continue living in the house, but not if you are selling. Many people would like to be friendly to environment and pay less for utilities in the long run, but only few will be ready to pay premium upfront at house purchase.

Invisible Improvements:
Invisible improvements are those costly projects that you know make your house a better place to live in, but that nobody else would notice - or likely care about. A new plumbing system or HVAC unit (heating, venting and air conditioning) might be necessary, but don't expect it to recover these costs when it comes time to sell. Many homebuyers simply expect these systems to be in good working order and will not pay extra just because you recently installed a new heater. It may be better to think of these improvements in terms of regular maintenance, and not an investment in your home's value. 

Bubble Trouble: the latest (and heartening) analyses of Toronto’s housing market

In seams that for the last 10 years all people were talking about in Toronto is when the bubble will burst. But year after year prices continued to go up and are now over half a million! So when will it end? Will it ever? Below are some opinions that we are far from the end.

• A report by Central 1 Credit Union posits that Toronto home values will keep climbing for the next three years and could hit an average of $523,000 by the beginning of 2014 (the current average home price in Toronto is about $500,000). The report also suggests the hysteria over an oversupply of condos is unwarranted. Thanks to the city’s burgeoning population and low-ish interest rates, Helmut Pastrick, Central 1’s chief economist, believes the market will hold steady for a really, really long time: “My 25-year projection for prices would be upward.”

• The Globe and Mail took a look at demographics (with charts!) and concluded that a steady increase in young folks will keep things afloat. Unlike in many developed nations, the number of 20-to-44-year-olds in Canada has been growing steadily since 2007. And since that’s the main home-buying demographic, the logic goes, property values won’t tank.

• In a breathless article, the New York Times focuses on the demand for downtown condos, making the condo boom sound not only sensible but pretty too. The story contains nary a peep about a possible bubble burst or even a market cool-down, but it describes Toronto’s gleaming towers and a “skyline shimmering like a diamond necklace.”

That’s all very reassuring, but would-be buyers would be wrong to think Toronto real estate is a risk-free investment. Always keep in mind that experts were wrong before. Always plan for day when it all will change.

Market Watch: Toronto April 2012

Greater Toronto REALTORS® reported 10,350 transactions through the TorontoMLS system in April 2012. This level of sales was 18 per cent higher than the 8,778 firm deals reported in April 2011. The strongest sales growth was reported in the single-detached market segment, with transactions of this home type up by 22 per cent compared to a year ago.

“Interest in single-detached homes has been very high, both in the City of Toronto and surrounding regions. Growth in single-detached listings has not kept up with demand, which means competition between buyers in this market segment increased. With this in mind, it was no surprise that the strongest annual price increase was also experienced in the single-detached segment,” said Toronto Real Estate Board President, Richard Silver.

The average price for April 2012 transactions was $517,556 – up 8.5 per cent compared to April 2011. While price growth was strongest for single-detached homes, the better-supplied condominium apartment segment experienced a more moderate annual rate of price growth, at four per cent.

“Monthly mortgage payments remain affordable for home buyers in the Greater Toronto Area. While interest rates are generally expected to increase over the next two years, the extent and timing of rate hikes has been thrown into question by slower than expected economic growth in the first quarter of this year. On net, borrowing costs are expected to remain a positive factor influencing home sales through 2012,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Things that will increase value of your property

Here are some renovations worth doing in your house before going on the market


Curb appeal
A large percentage of home buyers decide whether or not to look inside a house or take it seriously based on its curb appeal. That first picture they see in the listing has to encourage interest. Stow away unnecessary garden implements and tools. Pressure wash dirty siding and dingy decks. Mow the lawn. Get rid of weeds. Plant some flowers. Paint storm windows. All this can be done for a few hunder bucks (including pressure washer rental). If you can budget it install a more attractive front door, maybe something with leaded glass inserts.


Lightning Most of the buyers will come to see your house in the evening. Make sure all lights are on when you leave before showing. Install pot lights in family room, hall, living room and kitchen (budget $80-$100 per light, including installation). Install lights under your kitchen cabinets (up to $200). It’s very inexpensive and easily gives your house contemporary look. To take care of day visitors, wash all windows, trim trees outside to allow as much light in as possible. And still leave lights on for day showings.

Painting 
Fresh paint gives your home clean look. It helps buyers forget that someone else is leaving here and imaging themselves here. Choose tasteful, current, neutral colours. Prefer light colors as it adds light to the room and makes it look bigger. On another had avoid white, it erases any personality of a home. Beige-like colours are your best choice. Unless you’ve done this before, hire a professional. Last thing buyers want to see is smashed paint.

Kitchen remodeling
Typically one of the most expensive improvement projects and for that reason avoided by most buyers. At the same time kitchen is one of the most important parts of a house when it comes to a decision to buy. If you plan carefully this reno can be done on a budget.


Before deciding to replace entire kitchen look and the option of re-facing cabinets. Solid wood doors can be sent for refinish (about 30% of cost of new door). Doors of lower quality can be replaced all together (save money by keeping cabinets).


Countertop can be replaced or refinished as well. Before showings clean all kitchen surfaces and remove everything possible (including microwave). Put a nice plate with fruit and may be some flowers. In the dining area set a table for a romantic dinner with table runner and candles.

 Nowadays you can easily replace all kitchen appliances for under $2000 (ask me where if you think it’s impossible). On average this increases property value by $5000. Not bad, eh! Keep in mind that most of potential buyers will not notice if appliances are the same brand, so mix and match to save a buck

Add a bathroom
This is another expensive project but if most homes in your neighborhood have two, three or more bathrooms, and yours has just one or one-and-a-half, you will definitely increase your property value by adding a bath. It helps if a house has a bathroom on every level. Payback: 80-130%


Bathroom remodeling
When building new bathroom or remodeling old one play it safe and choose white porcelain. Tiles vs vinyl are way more appealing. Because bathrooms are not that big you can find leftover tiles in building stores at a very significant discount. If you are on a budget tile only floor and bath tab area (no walls). You can replace shower head for about $30. Adding other shiny surfaces (like towel hangers and mirrors) also helps create this sparkling clean look. If you have some mold, treat it with bleach (make sure to wear gloves) and ventilate well after that. Final touch – bright coloured crispy clean towels (preferably red) and new soap bar. 

Flooring

Carpets are now thing of the past, more and more people prefer clean look of hardwood.  However you don’t have to spend big backs on real wood. You can find very good quality laminate flooring, which will look just as hardwood and is more durable and less expensive. Some 15mm laminate can be purchased at $2 or even less and installation is much easier than hardwood.

Keep in mind that in condos you need to install soundproof underlayment which is usually more expensive.

Hope these tips help you. Let us know if you have yours!