While it is too soon to tell how cannabis usage will affect your property value, early surveys have shown that the majority of Canadians believe using pot in the comfort of your own home will adversely affect the home’s value. Of the Canadians asked, 64% felt smoking marijuana in your home would lower the total value while only 21% felt that home usage would not affect the realty valuation. The remaining people polled were neutral. The numbers differed slightly among those renting property. Forty-six percent of renters felt that marijuana use in the home would decrease its value while 33% felt that pot usage would not affect the rental property valuation in Canada.
Growing Marijuana Plants
Under the new law, Canadians can grow up to four plants in their home in most provinces and territories. When Canadians were asked whether or not they felt growing cannabis plants would affect the resale value of their property, the results depended greatly on the age of the person surveyed. Millennials were more lenient with their views. Only 38% felt growing plants inside the property would reduce its value. Baby boomers and Gen-X populations had far different views. Fifty-eight percent of the Generation X population and 59% of the boomers felt that home plant growth would lower their property value. Over half of the people surveyed (52%) would not consider buying a home if they knew pot plants had been cultivated in the property. Many potential home buyers are considered about the short and long term issues they will face buying a home that has been used to produce cannabis. Buying a home that has been used as a grow op can be costly to repair.
Since Marijuana became legal in Canada, many insurance companies have added exclusion clauses in their policies to protect themselves from the cost of covering damage caused by using and growing marijuana. The smoke and odour from pot use can linger in homes and furnishings and cause health problems for new owners. Cleaning the interior of the place to eliminate the residue is pricey and not covered by house insurance. Growing plants in homes is also very risky. People who cultivate cannabis in their home are 24% more likely to have a house fire. There is also a greater chance the property will have electrical damage, moisture build-up, and mould issues. Growers are also at a higher risk of being burglarized. Most insurance companies are refusing to cover the costs of these damages if they are caused by pot usage. Before you buy or selling a home or condo, it is important to check with your insurance company and real estate agent first before you finalize the deal to make sure you are covered if damages occur to your home.
Cannabis Stores and Home Values
While it varies from territory to territory, all provinces are allowing pot shops to open in their cities. Despite the provincial and federal governments acceptance of marijuana stores, most Canadians surveyed expressed concerns about having a dispensary in their neighbourhood. Most felt that opening a pot shop in their community would lower their property values. Of the 1300 plus people surveyed, 42% felt that having a cannabis shop in their area would negatively impact their property’s value while 48% said having a dispensary in a neighbourhood would discourage them from purchasing a home. Now that Cannabis is legal in Canada, many political parties, industry leaders, and private sector consumers are left to deal with the impact that this new law will have on their personal and professional development. The real estate market is just one area seeing the adversity from this new law. Although Bill C-45 is still a relatively new law, many Canadians believe that the production, cultivation, and commercial sale of Marijuana will have a negative impacts on buying, selling, and renting residential properties. Home owners and real estate agents have many questions and concerns about the short and long term affects that cannabis legalization will have on the housing market. If you are considering buying or selling your home, it is important to talk to your real estate agent first about the Cannabis Act and how it will affect your property value.
Less CompetitionThere are far less competition right now, increasing your chances of getting the home you really want. Fewer homeowners are selling a house during the cold time of year and equally fewer people are actively looking to buy a home. This is great for both buyers and sellers. Sellers do not have work as hard to make their home stand out among the other listings. Sellers have a better chance of getting their dream home without the worry of being outbid or overspending in a bidding war.
Realtors Work Harder for Their ClientsBecause the market typically slows during the cold time of year, real estate agents have a lot more time to spend with each client. Regardless whether their clients are buying or selling a house In the winter, your agent will work much harder to get you what you want. Realtors want the property sale just as much as the client so they will go the extra mile to see that your home is sold. Agents also put more effort into finding the right home for the eager buyer.
Competitive PricingRight now it is a buyers market. Homes do not sell as quickly during the slow, colder season, so house hunters have a lot more negotiating power. They can offer a lower sold house price that meets their budget. With fewer listings and clients actively looking, sellers must offer a fair and competitive price if they want to sell their home.
Serious Buyers and SellersSummer is usually viewed as the best time to buy or sell a house because there are a lot more people on the market. However, despite the volume, many are window shoppers; they are more curious to see what is available and less interested in actually bidding on a property. Equally, there are plenty of homeowners that like test the waters to see if they can get a good offer on their property. During the winter season, both buyers and sellers are more serious in their intent. Buyers list their property because they genuinely want or have to sell their home. Sellers want to buy home and look at listings with the intent of putting a bid on the property if it meets their needs.
Less Yard WorkDuring the growing season, homeowners must spend a considerable amount of time and money tending to the landscape and exterior of their homes to make them look as attractive as possible for potential buyers. However, at this time of year, the blanket of snow hides all the ground underneath so property owners have far less outdoor work to worry about.
Rising Interest RatesThe Bank of Canada(BoC) announced last year that they would be steadily raising interest rates to bring them to a more neutral range over the next couple of years. During the last 15 months, the rates have increased five consecutive times and the BoC has stated that they will continue to climb in the foreseeable future. It is expected that the rates will increase anywhere between 2.50% to 3.50%. While these numbers might not sound high, when it comes to buying real estate, the higher rates can easily add hundreds, even thousands of dollars more to your home’s price. For already indebted homeowners, these rate hikes will affect make it more difficult to buy a home and pay a mortgage. The rising interest rates will also have an effect on sold house prices. Some sellers could lose money on their investment well they sell their house. Knowing that the rates are only going to increase, now is the best time to buy a house. Securing a mortgage will only get harder as we head into the busier real estate season.
Regulations are TighteningTo protect debt riddled Canadians from overspending on their real estate, provincial and federal government bodies have developed legislation to protect candidates when buying or selling property. These polices have made it more difficult for some home shoppers to buy their first home. Buyers must now have more of a down payment saved before they can apply for a mortgage. Cautious banking institutes are also taking more precautions and establishing stricter guidelines for approving home loans. It is becoming more difficult for new home buyers to save enough money and get a mortgage. As the year progresses, it will become even more difficult to purchase property, especially for first time buyers. Listing prices are often higher during the peak season and, with more people looking, there is less room to negotiate. Many house shoppers will not have the savings to put down on their dream home when the market is at its busiest. Buying or selling a house is never an easy, or quick process. Because it is one the biggest investments you will ever make, lot of planning, preparation, time, and saving must go into your venture. In the next few months, there will be a lot of for sale signs popping up as the industry gets ready for their busy spring and summer seasons. But for serious real estate investors, winter is one of the best buy times that is often overlooked. This slower, colder season offers greater opportunities to get the house you want at a price you can afford.
Meet Potential Clients in Public PlacesYour first meeting with any new client should always be in a public place. Invite them to your office for the initial consultation. If you have a home office, schedule your meeting at a popular coffee shop in a central area. For your own personal safety as well as the wellbeing of your family, never invite someone to your home.
Keep Files On Every ClientAs part of your ongoing safety measures, it is important to create a hard file on every client. If something happens, the information you collect will make it easier to identify the person. Your records should include a personal information sheet that each client fills out during their initial consultation. There are many forms you can download online or you can create your own. It should also include copies of their government issued photo ID. Once you no longer need the clientele’s personal data, it is important to destroy the documents to keep their privacy safe.
Book Daytime ShowingsAlthough it is not always feasible, try to book most of your showings during the day. It is easier to see when the sun is out. If you must book after sunset, take extra safety precautions to make sure the entire home and area is well lit and all curtains are open before showing the home.
Follow the Ten Second RuleAs soon as you arrive for a scheduled appointment, use the ten second rule to assess the area for any safety issues. Spend ten seconds while sitting in your car to look at the home, the yard, fencing, garage, street, and neighbourhood. Once you step out of your car, take another ten seconds to look around to see who is in the area and take pictures if you feel you need to. As you are approaching the property, use the same time span to look for issues in and around the property such as animals, people, and household hazards. When you first enter the building, spend your time looking for anything that could be a safety concern.
Follow Your Instincts ALWAYSIn many reported situations of violence against a realtor, the agent stated that they instinctively felt uncomfortable around their client before their meeting. These silent signals should never be ignored. If your gut feeling is telling you that the situation is not safe, follow your instincts ALWAYS. You have the right to cancel a scheduled appointment.
Vehicle SafetyAs a regular practice, never share a vehicle with a client. Arrive at the destination in separate vehicles, even if you will be showing the clientele multiple listings. Park your vehicle in well lit areas on the street or somewhere where you cannot be blocked from leaving. While in the car, your doors should be locked at all times so no one can get into your vehicle. Keep your keys on you and easily accessible so you can quickly get to them if you need to.
Let Others Know Where You AreWhen showing listings, as a safety precaution, someone should always know your whereabouts. Before going to any appointment make sure you let someone know where you are, who you are with, and what time your meeting is scheduled to begin and end. You can give your schedule to a friend, family member, or colleague.
Use a Safe WordHaving a safe word is also important. Safe words are code that that are designed to alert your contacts that you danger without directly saying so in front of your client. For example, saying phrases like “I need the blue file”, I forgot my red jacket”, or “can you get my silver travel mug” are examples of safety phrases.
Stay Safe With Your PhoneYour cell phone is a great tool to help you stay safe. Most personal handheld devices have an emergency contact setup on the lock screen that you can access quickly if needed. There are also different apps available to help realtors stay safe in isolated situations. PROtect is one app that is designed for real estate agents. This user-friendly application protects you by letting your designed circle of contacts know when you are in situations where your safety might be jeopardized. Once you have uploaded your contacts, you can set a timer for each appointment or preschedule your calendar meetings in the program. Once the timer goes off, you can notify your contacts that you are safe. If they do not hear from you, they will know something is wrong. The app also has a special help button feature where you can bypass the timer to alert your circle that you need immediate assistance. There are other apps available to help protect you from dangerous situations including Autumn Alert, Musketeer Safe, Gethomesafe, iWitness, Roar, and Feelsafe. Most are free and available on all apple and smart phone devices. Finding the right system for you will help ensure your safety during potential hazardous appointments.
Let The Client LeadStay safe when a client shows up to view a place by letting them lead the way. Walk behind them when touring a place and guide them to different areas using hand gestures. Never go into an area where you will be blocked in or cannot see properly. Clients can look at attics, lofts, and basements on their own.
Staying Safe During Open HousesOpen houses are popular events when selling a home. However, real estate agents have less control of who walks into the premises during the scheduled event. During the open house ask another realtor, your assistant, a friend, or family member to stay at the property with you. Having a buddy system will protect you from potentially dangerous moments. Prior to the showing, make sure the owner removes all potential hazards including sharp objects, personals photos and documents, pharmaceuticals, money, jewelry, technology, and other personal valuables. This will not only protect your client but the realtors from danger as well. After the open house or showing, always check all rooms and areas of the place first to make sure no one is still on the premises.
Take A Self Defense CourseSometimes, despite all the precautions you take, there might be times when your safety and wellbeing are still at risk. Taking a self defense course can help you defend yourself until you can escape the situation. Many martial arts organizations, community centers and local schools hold self defense training programs.
Protect Yourself OnlineCriminals use the internet frequently to find their victims. As real estate agents, you are at risk for identity theft, online scams, and letting would be predators know your whereabouts. Always use care when posting your own personal data and scheduled showings online. Some agents do not use their image on their promotional materials or website. Protect all your passwords, PINs, login information and personal accounts privately secured so they are not easily accessible to would be hackers. Because online scams are becoming more prevalent, it is important to stay on top of the latest online assaults. Equifax and other secure financial tracking companies offer services to protect your financial data and identity from fraud and theft.
Use Other Personal Safety DevicesThere are different safety devices you can use to help protect yourself from harm. Whistles are simple and effective tools that can alert people in your immediate area that something is wrong. Body and dash cameras are becoming more common tools used by real estate professionals to ensure their wellbeing. A NIMB ring is another great accessory for realtors. This attractive piece of technologically designed jewelry has a panic button that can quickly alert first responders that you need immediate help and where you are. Having this or other stay safe tools will help protect you while you are on the job. As real estate agents, you face many unique hazards in your profession. To protect yourself from the increasing criminal activity, it is important to incorporate practices and tools into your daily duties so you can stay safe at all times and in every situation.
When it comes to mortgages, interest rates are often the first concern. Although the rate is an important piece of the mortgage package, more people should be concerned about the options and penalties that are associated with the mortgage they choose. Not all lenders offer the same thing. With the increasing number of lenders, it is important to understand what differentiates them and their offerings. Some lenders will offer you great rates and put limitations on your mortgage, while others will offer you great options but limit your discounts on the rate. It is up to your mortgage professional to educate you on what they offer, and it is up to you to educate yourself on how it may affect you and your financial future.
collateral chargeA mortgage product you need to familiarize yourself with is a ‘collateral charge’. A collateral charge is a program where the bank can help you access equity as it builds in your property. This can be used as a great tool, but it can also put a stranglehold on your ability to switch out of the mortgage at renewal, or before renewal if a better or different option comes along. It is a wonderful product for the bank, but may not be the best for you moving forward. This is a great example of why you need an experienced professional to help navigate you through your mortgage options.
low rate deals‘Low rate deals’ are something you need to be aware of. More often than not, you get what you pay for. A lot of low rate deals will get you amazing rates, but you may have to sacrifice payment frequency, ability to make extra payments, or incur a large penalty if you choose to move or payout your current mortgage before the term is up. A mortgage is not just a mortgage and all lenders are not the same. There are a lot of different ways to structure a mortgage to maximize principal payments, reduce interest cost and develop a program to grow your real estate portfolio.
Some helpful questions to ask your mortgage professional…
- Can I make extra payments? If so, how often and how much?
- What is my penalty going to be if I pay my mortgage off before my term has ended?
- (Ensure that they know the difference between the standard options – three months interest penalty or interest rate differential – and which one applies to your mortgage)
- Is my mortgage portable? Can I move it to a new property if I move?
The answers may save you thousands of dollars!
If you have any questions, please feel free to contact Andrew Young