Wednesday, 27 February 2013

14 Important facts to consider before you try to sell your own home



Occasionally, one can see "For Sale By Owner" signs, and some owners think that selling their

own home will not only save them money, but believe they have an advantage over the sellers

that have their home listed by a reputable Realtor©. Before you decide to take on this very

important and legally complicated process…remember not even most Real Estate Lawyer's

recommend selling your own home yourself in today's market. Here are a few of the reasons


1. You are limiting your exposure to potential buyers (less than 10% of what a good real estate

broker will generate) which theoretically means your home will take ten to fifteen times longer

to sell on the market.

2. The longer a home is on the market the lower the selling price is. Why? Because most buyers

think that if the home has not sold after this long... there must be something wrong with the


3. The selling/buying process begins AFTER the buyer leaves your home. Most sellers think that

all it takes is for someone to see their home, fall in love with the great decor... and the offer

automatically will follow. Remember that the buying process begins after they leave your home.

If a real estate sales representative does not represent the buyer, and they are looking on their

own…they usually le
ave the home and start to talk themselves out of the buying process. If the

buyer is represented by a real estate professional Realtors© are trained on how to overcome

buyers remorse--a very common occurrence.

4. Because of the limited exposure you will very likely end up with a lower selling price.

Remember, in order to generate the highest price possible for your home… selling means

exposure. You need the maximum exposure possible, to generate the highest price possible.

5. Most buyers find it extremely awkward to negotiate or even to talk directly with sellers and

therefore avoid FSBO properties.

6. Lack of negotiating experience and lack of pertinent information often will result in a lower

selling price, or worse yet, a bungled contract and possible lawsuits.

7. The majority of qualified buyers are working with experienced real estate professionals.

8. Many serious buyers will pass by a FSBO home merely because they recognize that it is not in

the real estate mainstream, this can some times make them wary.

9. As most local buyers now retain an experienced real estate sales person to represent them as

their buyer-agency, you will probably be negotiating against an experienced professional.

10. Expected savings in broker's fees will also be greatly reduced if you offer a selling

commission to entice real estate sales representatives to bring potential buyers.

11. If you are planning to use a Lawyer to help you negotiate the offer, then your lawyer's fees

will be considerably higher.

12. Only real estate sales representatives have access to the up-to-date market information. News

reports cannot approach the timeliness or specificity available to real estate sales people. Further,

real estate sales representatives are involved in home sales much more frequently than the

average homeowner is. This familiarity leads to a degree of expertise that provides an edge on

negotiating and successful selling.

13. You only pay the commission to the real estate broker, if they successfully sell your home at

the price you are happy with.

14. Accepting an offer is one thing, ensuring a safe and successful closing is quite another. Real

estate transactions usually always have problems on closing. At times, expecting the Buyers and

Sellers Lawyer's to fight it out or resolve the problems, can sometimes mean the deal is lost. This

is the time that your experienced real estate professional, can be the most important. Your

Realtor© can act as a great mediator. Lawyers MUST act only on their client's instructions and

are not paid to negotiate

Kevin & Faye Kitzman

Sales Representatives

Remax Real Estate Centre

Direct : 519-577-0603



Faye Kitzman

Mortgage Agent

Mortgage Intelligence




Tuesday, 26 February 2013

24 Things you didn't know about credit cards

24 things you didn’t know about credit cards
By: Henry Stancu Staff Reporter, Published on Thu Oct 27 2011

The idea for what would later become credit cards was published in 1887 in a utopian novel called Looking Backward.
1. The idea of using a card for purchases was first published in 1887 by Edward Bellamy in his utopian novel Looking Backward.
2. Diners Club issued the first credit (charge) card in 1950, and it was honored at about two dozen New York City restaurants.
3. The first widely accepted plastic charge card was issued in 1958 by American Express.
4. American Express rolled out its Platinum Card with an annual fee of $250 in 1984 and today its extremely exclusive black titanium Centurion card carries a $2,500 annual fee and requires the holder to spend $250,000 a year.
5. The first credit card allowing payment over time was the BankAmericard in 1959, renamed Visa in 1977.
6. Formed by a group of U.S. bankers in 1966, the Interbank Card Association began using the name Master Charge in 1969 and renamed it MasterCard in 1979.
7. MasterCard was the first to place a hologram on its cards to deter fraud in 1984 and others soon followed.
8. The Discover Card was introduced by Sears in 1985. Unlike others at the time, it charged no annual fee.
9. Credit cards have a uniform shape and size as their dimensions are governed by the ISO 7810 standard, an international guide for identification cards.
10. The average U.S. citizen has four credit cards, in Canada, the average is two.
11. The credit card delinquency rate in Canada is half what it is in the U.S.
12. There are 72 million credit cards issued in Canada according to
13. A 2010 U.S. survey found close to 610 million credit cards were issued south of the border.
14. Credit cards account for 5 per cent of the average Canadian’s total household debt.
15. With roughly 65 per cent of Canadians paying their credit card balance in full each month, the interest rate for two-thirds of credit card users is zero.
16. A 2011 survey by The Strategic Counsel, a market research group, found 64 per cent of Canadians pay their balance off in full every month, while just half of American households do.
17. The Canadian Bankers Association reports there are about 71 million Visa and MasterCard cards in circulation in Canada.
18. Next to mortgages, credit cards account for the second highest proportion of consumer debt in Canada.
19. Most Canadians use their credit card as a method of payment, not a means of borrowing.
20. Advertising “No pre-set spending limit” is a bit of a stretch as limits are based on income, spending patterns and credit card history.
21. About 60 per cent of consumers have a rewards credit card.
22. People are likely to spend more money paying with a credit card than with cash.
23. Studies have shown credit cards can increase the consumption of less healthy food.
24. Counting out and handing over cash is more stressful than using a credit card, research suggests.
Source: Canadian and U.S. banking, marketing and debt-counseling surveys and studies

Source: Toronto Star
Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603
Faye Kitzman
Mortgage Agent
Mortgage Intelligence

Friday, 22 February 2013

Is it bloom or bust for real estate this spring?

Is it bloom or bust for real estate this spring?

Spring market being watched as best barometer of where Toronto housing market is headed.

Economist David Madani sent shock waves through the real estate industry when he

predicted that Toronto’s overheated housing market was due for a 25 per cent correction.

That was two years ago.

He’s still waiting — and watching closely — as the GTA heads into one of the most pivotal

spring markets of the last two decades.

Madani remains convinced that the most prolonged housing boom in history, fuelled largely

by low interest rates, is headed for a hard landing, particularly in Toronto’s “overbuilt” condo


“What’s critical is what happens in the spring,” says Madani. “If we continue to see increases

in active listings as sales continue to decline, then we’ll start to see more obvious signs of

prices dropping.”

That March-to-May period — traditionally peak buying and selling season and a barometer of

consumer confidence — remains the great “if” in a market that has so deftly defied logic,

many veteran watchers can’t agree where it’s headed.

Complicating matters is that a seismic crack has inched its way across the GTA landscape and

left in its wake two very different and diverging markets — high-rise condos and low-rise


In January, the market took a turn that, while hopeful, is unlikely to see housing bears like

Madani head into hibernation:

sales picked up steam in Canada’s two most watched markets,

Toronto and Vancouver, after six months of declines, according to the Canadian Real Estate


Don’t be shocked to see GTA sales pick up and prices climb about three per cent this year —

for houses, not so much for condos — with the jobless rate at its lowest point in four years,

interest rates unlikely to rise until April, 2014 and the added bonus of surging equity

markets, says BMO senior economist Robert Kavcic.

The average sales price of a GTA home was up 4.1 per cent in January over a year earlier to

$482,648, though the benchmark price — considered a better indicator of real value — has

dropped almost 1.5 per cent just in the last six months, according CREA figures.

After months of double-digit sales decline,

bidding wars have re-emerged as a blood sport in

some Toronto neighbourhoods just since early January.

“Byers and sellers remain in a standoff,” notes Queen’s University business professor and

real estate expert John Andrew. “Sellers are holding out for their prices and buyers are

waiting for deals. I think it’s too early yet, but there will be a correction.”

Andrew Norman, 32, and his wife Lisa sold their downtown condo more than a year ago and

started renting, anticipating a downturn. The couple have been looking for a home for

themselves and their 2-½year-old son since January, but lost one to a bidding war and

another to a bully bid.

“We’re feeling a little locked out right now,” says Norman, a financial advisor. “I think

eventually there will be a few more houses out there and a little more anxiety (among sellers).

We’re really trying to stay unemotional about all this, which is hard to do.”

Norman, like many buyers, is trying to understand the new reality of the GTA market, where

condos now seem to sit at one end of the supply-and-demand chain and houses at the other.

“People who are looking for condos now have more reservations, they are taking longer and

they are usually looking for deals,” says realtor John Pasalis of Leslieville’s Realosophy.

“Places are definitely selling for less than they did a year ago.

“But there’s been no slowdown in the house market this year. We’re seeing the same problem

we’ve had for a lot of the last 10 years — not enough houses for all the people who want to


Houses as Holy Grails

The demand for low-rise housing, especially in the 416 region, has been exacerbated over the

last few years by the lowest interest rates in history, crippling commute times and provincial

policies that have succeeded in curbing sprawl.

But that’s also contributed to a

52 per cent drop in new low-rise homes being built across the

GTA and a 44 per cent increase in prices, according to market research firm RealNet.

That’s made detached homes, in particular, the coveted Holy Grail of housing.

Demand for a place with grass rather than glass is bound to increase over the next decade as

the huge cohort of echo kids now living in downtown condos start looking for houses in the

suburbs or along subway lines where they can raise their kids, says economist and

demographer David Foote, author of

Boom, Bust & Echo.

Many have predicted a housing crash, claiming that the decade-long boom has left house

prices wildly out of whack with incomes. But Kavcic notes that people overlook the fact prices

collapsed to bargain-basement levels in the 1990s.

While GTA house prices are now 6.5 times average incomes (far less than the 10 times

average in Vancouver), the lowest interest rates in history had make housing more affordable

than a decade or so ago, says Kavcic.

But all bets are off for strong sales and price growth, even in the coveted house sector,

economists agree, as interest rates eventually start to climb.

The condo conundrum

Not surprisingly, debate is most divided around the exploding number of ever-shrinking

boxes in the skies, with some 57,000 under construction at the same time sales are down and

resale prices are softening.

The condo boom has been driven largely by two things unlikely to last — low interest rates

and investors — says housing analyst Ben Rabidoux. Demographer David Foot notes that, in

a decade, the stream of echo kids will be largely in houses and boomers are unlikely to live in

700-square-foot condos.

Rabidoux expects to see condo prices drop three to five per cent this year, especially if

investors start dumping units because prices are slumping or they can’t cover their costs in

what’s been, so far at least, a very tight rental market downtown.

“Many investors chose to hold and rent their units in 2012 rather than sell them into

uncertain market conditions,” notes market research firm Urbanation, which believe prices

and sales will hold. “The unwillingness of condominium sellers to accept low-ball offers will

keep prices from falling to any significant extent in 2013.”

But Rabidoux warns there are other worrisome warning signs: Canadian housing starts

plummeted to 160,577 in January from a seasonally adjusted 197,118 in December, largely

because of a pullback in condo construction.

Even a “painless soft landing” for the housing sector — years of sluggish sales and flatlining

prices — would hit the Canadian economy hard, given that the housing boom has propelled

construction and housing-related industries to more than 27 per cent of GDP, he notes.


Kevin & Faye Kitzman

Sales Representatives

Remax Real Estate Centre

Direct : 519-577-0603



Faye Kitzman

Mortgage Agent

Mortgage Intelligence



Wednesday, 20 February 2013

1329 King St. N. St. Jacobs, ON.

St.Jacob's House, $275,000

50 Fireside Dr. Breslau, ON.


210-170 Water st. N. Cambridge, ON.

Water st

Your bank mortgage: Is it fair and does it suit your needs?

Decoding the mortgage market

Your bank mortgage: Is it fair and does it

suit your needs?

Robert McLister Special to The Globe and Mail Published Monday, Feb. 11 2013,

Banks operate under the scrutiny of government watchdogs. But when it comes to

mortgages, those watchdogs don’t watch everything they could.

“Individual (bank) mortgage reps operate outside of regulatory boundaries which

commonly govern licensed professionals,” says Samantha Gale, a former mortgage

regulator with B.C.’s
Financial Institutions Commission and chief executive officer of the

Mortgage Brokers Association of British Columbia

. Rules pertaining to mortgage rep

competency, the suitability of mortgage recommendations and compensation disclosure

are largely left to the banks themselves.

That raises certain questions, like the procedure banks use when sending a mortgage

applicant to another lender.

At Royal Bank of Canada (RBC), for example, mortgage reps route applicants that don’t

meet normal guidelines to their Alternate Mortgage Solutions (AMS) team. RBC’s AMS

employees then farm those customers out to other lenders and the bank’s mortgage rep

gets paid when the mortgages close.

Some might easily mistake this practice for “dealing in mortgages,” an activity that

normally requires a brokering license. But, because bank employees are the ones

recommending the alternative lenders, and because banks are federally regulated, they

aren’t bound by tough provincial rules that make it an offence to broker without a licence.

Consumer protections differ in bank and broker circles. In Ontario, for example,

provincial penalties apply whenever a broker:

Suggests an unsuitable lender or mortgage – Ontario requires brokers to “take

reasonable steps” to ensure that any mortgage presented to a borrower is

Not only must the borrower be properly qualified, but recommendations should

attempt to minimize the borrower’s current and future borrowing costs and

provide the right mortgage flexibility given the customer’s needs. By contrast,

while bank regulations encourage banks to “Know Your Client,” they don’t

contain specific guidelines on ensuring suitability – apart from confirming the

borrower is properly qualified.

Sells a higher mortgage rate to get paid more – Brokers must disclose this

conflict of interest. Federal
disclosure rules don’t hold banks to the same standard,

even though many bank reps – like many brokers – get paid sales incentives and

earn more for selling a higher interest rate.

Policing these things falls in the lap of provincial regulators. Provinces draft specific

broker conduct rules, pro-actively monitor and audit brokers and sanction individual

brokers publicly when they’re caught violating regulations.

With bank mortgage reps, there is no independent government watchdog that directly sets

specific suitability and compensation disclosure rules, audits and monitors individual

reps, and publicizes it when a bank rep breaks the rules. The banks themselves are

responsible for “developing the policies and procedures to be followed” by their

mortgage reps, says Rachel Swiednicki of the
Canadian Bankers Association (CBA).

Many assume the
Office of the Superintendent of Financial Institutions (OSFI), the

primary bank regulator, supervises bank rep conduct. In fact, OSFI’s main role is to

“monitor and examine institutions for solvency, liquidity, safety and soundness,” says a

spokesperson. “OSFI does not have the authority to intervene in the day-to-day

operations of the institutions it regulates for individual consumer-protection purposes.”

That’s actually the job of the
Financial Consumer Agency of Canada (FCAC). It is tasked

with ensuring that bankers comply with federal consumer protection rules.

FCAC is a fantastic
mortgage educator and regulator when it comes to high-profile

problems like mortgage penalty disclosure or failure to provide cost of credit disclosure.

But “FCAC appears to regulate systemic institutional compliance problems only,” says

Ms. Gale.

Julie Hauser, FCAC’s spokesperson, explains that “FCAC supervises federally regulated

financial institutions, not individual employees.” Unlike provincial broker regulators,

FCAC generally does not:

· Have its own set of rules, prohibitions and competency requirements to promote

suitable mortgage recommendations (e.g., federal rules don’t deal with specifics about

what constitutes a suitable alternative lender for a declined borrower, or when a secured

line of credit, 1-year term or fully-closed mortgage are appropriate for a borrower)

· Impose specific educational standards and licensing for bank reps

· Pro-actively audit or monitor individual bank mortgage rep conduct

· Post online when a bank rep wrongs a mortgage customer (
like this.)

That means it’s up to a bank to set and enforce its own specific competency, suitability

and market conduct policies within general federal guidelines. In many ways, this makes

banks their own overseer.

So, why aren’t the feds watching mortgage rep activity more closely? Apparently it’s a

low priority issue for Ottawa. “We need the political will of regulators to get together and

sort this problem out,” Ms. Gale adds. “There is real risk here for consumers.”

Ms. Gale says that mortgage brokers have a fiduciary-like relationship with customers –

to recommend a suitable lender with suitable terms. But with banks, a similar fiduciary

relationship doesn’t exist because they primarily push their own brand.

“Banks are kind of like a mortgage shop,” she says. “And when they pass you off to

another lender, and you don’t know who you’re dealing with and why, that’s a consumer

risk.” (Banks always get a customer’s consent to work with another lender, but a bank’s

true reasons for choosing another lender are not always disclosed.)

Some banks refer customers that they can’t service to lenders or brokerages that the bank

has a monetary interest with. “They’re not necessarily working for you to get you the best

deal,” Ms. Gale says.

Rodney Mendes, a broker and former TD Canada Trust mortgage specialist of 15 years,

says banks’ internal guidelines are “just as stringent” as provincial broker regulators.’

RBC, for example, states it has a “strict code of conduct,” “comprehensive training” and

“pro-active monitoring and auditing practices for its entire mortgage business.”

That’s all good, but bank mortgage reps “don’t report to any governmental authority

unless there is a complaint,” Mr. Mendes says. “Bank mortgage specialists report to their

own internal compliance department” so it’s often up to management to discipline a

mortgage rep. And, in a small number of cases, it’s possible that management “may not

want to lose volume on their books” by coming down too hard on a big producer.

Banks have a “strong culture of compliance,” counters the CBA’s Maura Drew-Lytle.

Banks make mortgage specialists attest to their compliance obligations and subject them

to annual training and testing. Mortgage reps can also be fired, which is less of a threat

for mortgage brokers. Ms. Drew-Lytle also notes that banks address most consumer

complaints internally, using well-established complaint processes with a third-party

ombudsman as an arbiter.

All of that is true. But when it comes specifically to suitability and compensation

conflicts, the goal should be to fully disclose and avoid them, not address them when

there’s a complaint.

As a side note, not all mortgage brokers have clean hands just because they’re monitored

more directly by provincial regulators. Like the large majority of bankers, most brokers

are honourable professionals who care about their clients. Yet, as a broker, I regularly

witness biases, conflicts and competency issues in our industry. I’ll reveal examples in

my next column.

That said, the takeaway here is that Canadians are forced to rely heavily on banks to

police their own mortgage sales forces. There is no impartial government watchdog proactively

targeting bank reps who make unsuitable mortgage recommendations or fail to

disclose compensation-related conflicts. With more direction and better funding, the

FCAC could assume that role.


Kevin & Faye Kitzman

Sales Representatives

Remax Real Estate Centre

Direct : 519-577-0603



Faye Kitzman

Mortgage Agent

Mortgage Intelligence



Financial Strain can take heavy toll on relationships:poll

Financial strain can take heavy toll on

relationships: poll

TORONTO — It may not be romantic, but couples who avoid talking about money problems may eventually

see the financial strain affect their relationship, according to a survey released Wednesday.

The study, conducted by Ipsos Reid for Calgary-based accounting firm MNP Ltd., found that 20 per cent of

Canadians polled who were married or common-law say their relationship problems are due to their current

debt situations. And 27 per cent say financial stress has left a negative impact on their relationships.

“The critical thing is what is actually causing the riff in their relationship, and they say it is actually financial

(problems),” said Grant Bazian, president and chief executive officer of MNP.

The study also found that younger married couples and those in common-law partnerships were most likely

to say money was affecting their relationships (41 per cent) compared with those who were middle-aged (28

per cent) and seniors (16 per cent).

Those with children were also more likely (35 per cent) than those without (23 per cent) to say their

relationships were strained by finances.

Twenty-two per cent also reported they found it difficult to make the minimum payments on their debts, loans

and credit cards even though the vast majority (96 per cent) say they are aware of how much money they


According to the last calculation from Statistics Canada, the average household owes 165 per cent more

than it earns in annual disposable income — meaning an average family with $100,000 annual disposable

income owes $165,000.

Bazian says sharing with your spouse is key if you don’t want financial stresses to affect your relationship.

“It’s all about communication,” he said. “It’s something you wouldn’t want to hide — especially if the debt is


The poll also found that those who lived in Atlantic Canada were most likely (32 per cent) to say they

struggled to make their minimum monthly debt repayments, followed by Ontarians (25 per cent), Albertans

(22 per cent), B.C. residents (18 per cent), Quebecers (18 per cent) and Saskatchewan and Manitoba

residents (15 per cent).

“Dealing with debt can be overwhelming. And this Valentine’s Day, when you’re getting ready to purchase

that gift for your loved one, you may want to think twice as to whether or not you can afford more purchases

on your credit card,” said Bazian in a release.

“Is the gift worth the high interest rates and will it bring more joy, or just more stress, to your relationship?”

The survey results are from an Ipsos Reid online poll of 1,000 married and common-law living Canadians

conducted between January 23 to 29.

The Canadian Press


Kevin & Faye Kitzman

Sales Representatives

Remax Real Estate Centre

Direct : 519-577-0603



Faye Kitzman

Mortgage Agent

Mortgage Intelligence



Thursday, 14 February 2013

Should you sell your house before you buy a new one?

Should you sell your house before you buy a

new one?

Garry Marr

| Financial Post Feb 2, 2013

It’s the first choice you have to make when you decide to move and one that just might

define the state of the housing market.

Do you start the process by selling or buying? Buy something and the clock starts ticking

on selling your current home because you likely need that money to close the house you

just purchased. In markets where sales are plummeting that could be a scary proposition.

So you sell first. But what do you do if you can’t find something you like in the

neighbourhood you want. Remember, your kids need to go to that local school and be in

the district. Are you prepared to rent for awhile?

People in the industry say the tradition historically has been to sell your home and then

start shopping for the new one. But in this housing market, with multiple offers the norm

and time on the market dropping in many cities, the process reversed and people starting

buying, knowing their home would sell with ease.

Could the tide be turning in another sign of a slowdown for housing?

There are drawbacks to both selling first or buying first but the decision is very much

based on your view of the market.

Contractor Paul Donadio, own of Terracon Inc., is facing that decision and the 37-yearold

married Toronto homeowner has some trepidation about the market in Canada’s

largest city.

“I’m going to sell my house first,” says Mr. Donadio. “What if I don’t hit my numbers? I

could be stuck with two houses and how do you pay for it all?”

One option is to demand a closing date on your purchase a little further out, increasing

your odds of selling. At the end of the day, you might need an escape clause and Mr.

Donadio has one in his income property he’s prepared to move into should he have

trouble buying. Renting is an option, but that market can be tight too.

“You have to live somewhere,” says Mr. Donadio. “You don’t want to end up buying the

wrong house. I want to buy a house that I can fix up. Selling is more stressful than


His real estate agent David Batori says he’s telling his clients to sell first because he

believes more listings will come to market in the spring. But he points out that, for a

young family, selling first comes with the risk of not finding something in the right


“If you are too picky, you’re in trouble,” said Mr. Batori, who adds if you can carry two

properties you should buy the home that is perfect for you with that long closing date.

You are going to need a lot of capital to pull that off because bridge financing at the

banks is difficult to obtain without a buyer commitment for your existing home. The

banks will provide bridge financing about two percentage points above prime if the

closing date for the sale of your home comes after your purchase date, but you have to

have a committed buyer.

Ultimately, if you buy first you can reduce the price of the home you are selling to move


Forget about trying to walk away from your purchase though, you’ve made a

commitment to buy and left a deposit. “You can’t just walk away, you’ll be sued, you are

in breach of contract,” says Mr. Batori, adding he has only seen someone try to walk

away because of a death.

You can try to buy a home with a condition that says the purchase is subject to the sale of

your existing home but you are going up against people with no conditions.

“Sellers will laugh at you, “ says Mr. Batori, adding before anybody agrees to that type of

offer they’ll have an escape clause in case a firm bid comes in. That clause might give

you a right of first refusal but you’ll have to come back with a clean offer with no


Farhaneh Haque, director of mortgage advice and real estate-secured lending at Toronto-

Dominion Bank, cautions against buying without having a firm seller for your existing


“You can have the equity for two properties but you also need to have the income to

carry both properties,” said Ms. Haque, adding the bank probably won’t extend credit to

you for two homes without a high enough income. “It would put you in a situation that is

uncomfortable and maybe not even affordable. Do you want to sell a property because

you are desperate?”

Doug Porter, chief economist at BMO Capital Markets, said any shift in the trend to buy

or sell first will depend on the city because some cities are still sellers’ markets.

“In a sellers’ market you can [buy first],” said Mr. Porter. “In most major cities, we are

shifting. Personally, I would sell first.”

Ultimately, it comes down to your view of the market. You want to buy first, you have to

be pretty confident you can sell. Are you?


Kevin & Faye Kitzman

Sales Representatives

Remax Real Estate Centre

Direct : 519-577-0603



Faye Kitzman

Mortgage Agent

Mortgage Intelligence



Wednesday, 13 February 2013

Bad neighbours can make it hard to sell your home

Bad neighbours can make it hard to sell your


Garry Marr

| Feb 2, 2013

Bad neighbours are not just annoying, they can also cut into your property value by as

much as 10%, says a leading U.S. appraisal group.

The Chicago-based Appraisal Institute, the largest professional association of real estate

appraisers south of the border, says everything from annoying pets, unkempt yards,

unpleasant odors, loud music, dangerous trees or poorly maintained exteriors can cut

into the value of your home.

The group suggests before you buy make multiple visits at different times on various

days of the week to try to get a flavour of what’s going on in the neighbourhood and

whether it could impact the value of your potential home over time.

“I’ve seen many situations where external factors, such as living near a bad neighbour,

can lower home values by more than 5% to 10%,” said Richard Borges, president of the

Appraisal Institute. “Homeowners should be aware of what is going on in their

neighborhood and how others’ bad behaviors could affect their home’s value.”

The group has some suggestions for homeowners dealing with bad neighbours,

including talking to others in your area and approaching the bad neighbour together.

You can also look up any planning or subdivision restrictions to see if the neighbour is

committing an offense. If all else fails, calling a lawyer could be cheaper than the loss in

the value of your home.

Potential homebuyers also should be aware of a property’s proximity to commercial

facilities, such as power plants and funeral homes, as these also can negatively affect a

home’s value,” the group adds.

Elton Ash, the Kelowna-based regional executive vice-president of Re/Max of Western

Canada, said he has seen first hand the value of property sink because of neighbours. It

happened in a rural neighbourhood in British Columbia where a neighbour had virtually

turned his property into a junkyard — with the township finally stepping in to clean it up

because homeowners couldn’t sell their property.

“A motorcycle gang could move next door, that’s an extreme example,” said Mr. Ash.

“But neighbours parking a couple of cars on the lawn is not going to help your home

value. The old saying that fences make good neighbours has more truth than you might


He says an appraiser will lower the value put on a home because they almost have to or

face the wrath of the bank that is loaning out money based on that valuation. The bank

needs to know it can get its money back if the loan goes bad and the home has to be


Keith Lancastle, chief executive of the Appraisal Institute of Canada, said he doesn’t

have data to prove that neighbours could lower the value of your property. He said an

appraiser would make a note on an assessment if he felt there might be a concern in the


“When an appraisal is done on specific property it looks at a number of factors in terms

of assessing the value,” he said, adding it’s doubtful a Canadian appraiser would knock

down a value based on a specific problem with a neighbour. “Some of this is very



Kevin & Faye Kitzman

Sales Representatives

Remax Real Estate Centre

Direct : 519-577-0603



Faye Kitzman

Mortgage Agent

Mortgage Intelligence