February, 2012 (Advice for Home Owners)
If you own a home or you are thinking of owning a home, you are on the property ladder. As you move up or down the ladder you will need advice and that’s where I come in. As your REALTOR® you have my real estate experience, loyalty, honesty and my commitment to helping you make the right real estate decisions.
The Property Ladder News delivers information through three columns. I keep you up to date with the industry through “Market Temperature”, offer knowledge to buyers and sellers through the “Home Advisor” column and provide advice about keeping up with your house as an investment through “Home Maintenance”.
I write my own articles and the information contained within is my own opinion. If you have questions or wish to comment on anything I have written, feel free to use the comment section on my website blog at www.jimperks.ca call or email me.

In This Edition
Market Temperature: February in Calgary
Home Adviser: The First Time Home Buyer Tax Credit
Home Maintenance: Sourcing the Internet for Maintenance Tips

Market Temperature
The January market saw some stabilization and as we move into February, we see the start of the most productive real estate season of the year.
On Feb 1st the House Price Index was introduced to Calgary. This is a tool for Realtors that creates a more accurate picture of pricing both by neighbourhood and by property type. This will complement the Comparative Market Analysis to help Realtors narrow the range of pricing for homes. If you are buying or selling a home over the next while, ask your Realtor to show you how the House Price Index works and what it looks like for properties in your neighbourhood.
There are two big Real Estate events coming up this month for Calgarians. The first is the REDEX or Real Estate Developers Expo. If you are interested in real estate investing , you should not miss this event. It runs sat. The 11th and Sunday the 12th at the Ramada down town on 8th ave. Tickets are $20 at the door but you can enter free by preregistering on line.
The Calgary Home and Garden Show runs from the 23rd to 26th at the BMO Centre and Corral. Tickets are $14.00 at the door. I have purchased a limited number tickets that I make available free to my clients. If you would like to attend give me a call. I can arrange for you to get tickets before the event. Proceeds for the Home and Garden Show go to the CREB Charitable foundation to support some very worthy causes here in Calgary
We’re heading into the peak real estate season as we approach spring. This is the time of year were we see the most number of buyers and seller in the marketplace. If you are looking to buy or sell, give me a call. I’ll show you how the new House Price Index works for your neighbourhood.

Home Adviser
If you bought your first home in 2011 you may qualify for the First Time Home Buyers Tax Credit. The home must be in Canada, must be the first home you have purchased or you have not owned a home since 2006. If you are disabled and are purchasing a home to improve your living conditions, you may also qualify. Watch this video for more information
http://www.cra-arc.gc.ca/nwsrm/vdcsts/2012/menu-eng.html?clp=ndvdls/hmbyrs-eng

Home Maintenance
The Internet is full of great information on just about any topic you can think of. When it comes to home maintenance, there are a number of great sources you can use to find out the “How Tos” of the work you want done. Last week I needed to do a repair on my single lever kitchen faucet. It was the cartridge type, so when it started leaking I assumed it meant replacing the cartridge. After a little research though, I found that the leak is often caused by one of three possible problems. The cartridge is worn out, the O rings need replacing or the cartridge is coming lose inside the housing of the tap because of repeated use. I shut off the water, removed the housing and tightened the screws that hold the cartridge in place. No more leak!
Before you go out and spend money on parts or a tradesperson, try doing a little online research about your problem. You may be looking at a simple fix. The website I found my information on was www.familyhandyman.com
I hope you enjoyed this edition of The Property Ladder News. As always, your comments and feedback are welcome. If you have any questions about real estate or there is a topic you would like me to cover here in The Property Ladder News, let me know.
Jim Perks
The Property Ladder Guy
403 660 6239

January, 2012 (Advice for Home Owners)

If you own a home or you are thinking of owning a home, you are on the property ladder. As you move up or down the ladder you will need advice and that’s where I come in. As your REALTOR® you have my real estate experience, loyalty, honesty and my commitment to helping you make the right real estate decisions.
The Property Ladder News delivers information through three columns. I keep you up to date with the industry through “Market Temperature”, offer knowledge to buyers and sellers through the “Home Advisor” column and provide advice about keeping up with your house as an investment through “Home Maintenance”.
I write my own articles and the information contained within is my own opinion. If you have questions or wish to comment on anything I have written, feel free to use the comment section on my website blog at www.jimperks.ca cal or email me.
In This Edition
Market Temperatue: Your 2012 Property Tax Assessment
Home Advisor: The Jewel Box Phenomenon
Home Maintenance: 13 todos with 10 minutes or less

Market Temperature
*Please Note, The City Assessed value is not the current market value of your property.

Your 2012 Calgary Property Tax Assessments
On January 3rd The City of Calgary mailed out the Property and Business 2012 Assessment Notices and the Assessment 2012 Customer Review Period is from January 3rd to March 05, 2012. The 2012 Property Assessment values are based on a July 01, 2011 market valuation and December 31, 2011 physical condition.
Here are some of the key findings in this assessment:
2012 median single family residential assessment is $400,000 compared to $410,000 in 2011.
2012 median residential condominium assessment is $240,000 compared to $250,000 in 2011.
Total number of accounts on the 2012 Property Assessment Roll is 456,000.
Total value of the 2012 Property Assessment Roll is 232 billion A 1 Billion increase over last year. The previous year saw a 13 billion increase
The typical market value residential property assessment change is down3% between 2011 and 2012.
93% of the residential properties’ revenue neutral taxes will be within ± 10% of last year’s taxes.
62% of residential properties will see a revenue neutral tax decrease due to the 2012 assessment.
38% of residential properties will see a revenue neutral tax increase due to the 2012 assessment.

Home Advisor
The Jewel Box Phenomenon
There is an interesting phenomenon taking place in the real estate market place. Although I would not say it is a trend, there is a definite indication that buyers attitudes are starting to change. The jewel box is a smaller home, usually about 1600 sq ft or less that is full of amenities and light on space. The home appeals across a wide demographic from young urban professionals looking for quality of life to empty nesters looking to downsize but not wanting to compromise on their amenities.
Typically, buying a smaller home means buying builder quality finishing in a cookie cutter neighbourhood full of first time buyers. In fact, most of the new home product in these smaller sized homes still fits this description, but there seem to be a growing number of buyers who are happy with less space. They are not looking for builder grade finishes. They want gourmet kitchens with stone countertops and top of the line appliances, high end fixtures throughout the home and quality flooring materials like hardwood and stone. They want theatre sound and built in technology to make their home run more efficiently. They want the uncompromised finishes that come in a large luxury home, but they want it in less space and a more affordable package.
There is a growing movement for the Jewel Box Home. On the internet, websites and blogs are dedicated to this movement:
http://thejewelboxhome.blogspot.com/
http://www.thejewelboxhome.com/
Here you can find home plans dedicated to The Jewl Box Home:
http://www.familyhomeplans.com/small-jewel-box-house-plans
There are many more places where you can find information on living large in a smaller space. Whether this phenomenon becomes a trend remains to be seen, but given the changes that have taken place in our economy over the past few years and the age of baby boomers, it all make sense, doesn’t it?

Home Maintenance
13 Todos with 10 minutes or lass
You’ll love these ideas. They only take 10 minutes, but they are things you need to cross off your list. If you don’t have a list, make one! I kept it to 13, a lucky number.
1. Vacuum the condenser coils at the back of your fridge.
2. Replace your furnace filters.
3. Polish your natural wood front door. If painted, surface wash it.
4. Clean the air conditioner grill and register.
5. Dust and test your smoke and carbon monoxide detectors.
6. Replace the batteries in your smoke and carbon monoxide detectors.
7. Self-clean the oven (Yes, this takes hours, but it only takes a the push of a few buttons to set it up).
8. Check your water heater for signs of leakage or rust.
9. Look for worn extension cords. Replace them.
10. Inspect your furnace. Any signs of rust or scale? Any weird noises? If so, book a professional inspection.
11. Pick a ground fault circuit interrupter outlet (GFCI) and test it. Push the Test button, check that this has popped out the Reset button and that anything hooked up to the outlet will no longer power on. Push Reset and you’re good to go. Test a different GFCI outlet next time.
12. Conduct a garage door safety check. Put it into manual mode and lift it: it should glide smoothly and stay open on its own three feet from the ground. Put a pet- or child-size object under the door and close it. It should pop up as soon as it meets the obstacle. If not, call a pro. Do not use real children for this experiment!
13. Check your emergency flashlight. Do the batteries work? If not, replace them, or consider upgrading to a non-battery powered, manual wind-up model.
I hope you enjoyed this edition of The Property Ladder News. As always, your comments and feedback are welcome. If you have any questions about real estate or there is a topic you would like me to cover here in The Property Ladder News, let me know.
Jim Perks
The Property Ladder Guy
403 660 6239

“A house that is marketed properly will be in the best possible condition, priced right and highly visible to the right buyers..”There are 3 factors that will determine if a home sells quickly: Condition, Price and Marketing.

Condition
When a house is up for sale the home owner should want it to be in the best possible condition to get the best possible price. The house will attract more buyers and get top dollar if it is “move in ready” for the new owner. A home in good condition will definitely attract more when it is marketed “move in ready”. This can mean putting out a little extra cash before putting it on the market to do some of the fix ups needed to improve the condition. Giving it a fresh coat of paint and following the directions of a good staging professional can make thousands of dollars difference in the selling price. A home that is in good condition and staged properly sells faster and for more money. That is a fact.

Price
If a house is overpriced the wrong buyers are seeing it and it does not matter how much exposure it gets. Potential buyers will be expecting more home than the overpriced home can deliver. If a home has a market value of $400,000 and is listed at $450,000, only buyers who are looking for a $450,000 home will see it and will be comparing it to other homes in they have seen in the $450,000 price range. The $400,000 home will make the entire group of currently listed $450,000 homes look better. An overpriced home serves only one purpose in the market. It helps to sell properly priced homes. An overpriced home makes a well priced home look even more attractive. It will sit on the market while other houses all around it are being sold. No marketing in the world can help to sell an overpriced home.

Marketing
Marketing encompasses more than just advertising a house for sale. Condition and pricing are an important part of the whole marketing campaign. When marketing is done well, the most likely result is a quick sale for the maximum price possible under current market conditions. From preparing the house using a professional stager and pricing it correctly, to a using a variety of advertising mediums, good marketing brings qualified buyers to the table.
When you are selling your house you want the highest sale price possible and you want it sold in the shortest amount of time. That’s where good marketing comes in. A house that is marketed properly will be in the best possible condition, priced right and highly visible to the right buyers.
You need your home sold for the best price in the shortest time. Ask me about my “12 Point Marketing Plan” to ensure you get the best price in the shortest amount of time. When its time to sell your house, set yourself up for success. Call me today!

Jim Perks
The Property ladder Guy
jim@jimperks.ca

This is the second in my renovating for profit series. My focus in this post is on understanding market value and pricing. A key component to the profitability in the renovation for profit business is understanding price and value. There is a very distinct difference between the two.

Open up the weekly Real Estate News or go to Realtor.ca and you will see a selection of properties with the owners asking price clearly displayed. The numbers you are seeing on that page are not the market value, but rather the starting price in a negotiation for the purchase of the house. When you are in the business of renovation for profit, the listing price should have very little meaning for you when buying.

When buying you must consider what the market is willing to pay for the house you are purchasing once the renovation is complete, or its post renovation market value. Work backward from that value to arrive at the optimum purchase price. To know what a renovated home is most likely to sell for you need to know the actual purchase prices of houses in your area and you need to follow the market to keep track of where the market is trending. My website at www.calgarypropertyprice.ca can help you keep track of the market in your neighbourhood.

It is also advisable to get a Comparative Market Analysis done on the property before you buy it. I can provide that service free of charge to clients who use me as their buying agent.

Moving backward from the probable market value of the renovated home, you want to subtract your costs and expenses to arrive at the best purchase price for the house. These will include the cost to carry the mortgage for the amount of time you expect to be working right up to the time it takes to sell the property, your cost of materials, cost of labour, trades, real estate fees and, most importantly, a margin for profit. If you are doing this for the first time it is a very good idea to talk to someone who has experience. I would be more than happy to help clients who want to take on this challenge.

What happens when the seller won’t move on their price? Walk away. You are going to put too much time, effort and money into a project. It must be profitable. There are plenty of opportunities. Never fall in love with a house.

When you purchase a house to renovate for profit there are four major considerations. What is the current market value, what is the cost to complete the renovation, what will the property sell for once the work is complete and where the market is trending. Needless to say, you want to get in and out of a project as quickly as possible. The faster you work, the lower your cost to carry and the less you are influenced by trending in the market. If you base your purchase price on the future market value and there is downward pressure on value, you could end up with little or no profit. The quicker you complete the project, the less likely it is that any possible downward trending will affect your yield. The housing market will trend. Prices go up over time, but there are points in time where house prices fall back and there are times where they flat line.

If you are buying and selling houses, you want to know what the market is doing. If you are following the market, any time can be best time to buy if the right property comes along. You have to find the right property and you have to be aware of your margin and what a project will yield. It is difficult to make profit selling a house in a falling market, but with the right property the worst case will renting it out until the market improves.

Searching for a property to renovate for profit? I am never too busy to help in a property search.

Jim Perks

This is the first in a series of blog posts where I want to focus on flipping properties. I define flipping as buying homes, renovating and then selling for a profit. There are good profits in this activity, but there are also a number of pitfalls and I hope that these posts will help some would-be flippers avoid problems, prevent loss and increase profits. Since I began working in the real estate industry, my life has taken a number of turns; I have experiences, both good and bad, and have learned many lessons along the way. Through research and an understanding of the business, I have built on my knowledge and I feel that I can help people by sharing what I have learned.

At the start of my quest in real estate I visited with a very successful businessman who made his living flipping and renting homes he had renovated. Unfortunately, I walked away from that opportunity for an education thinking I would be OK just finding a property and fixing it up. Had I paid closer attention to what he was doing, I would have been more successful on my first attempt.

My expert has about 20 homes in his possession at any one time and lives at the edge of his line of credit. From the outside looking in, it looks risky, but he is able to mitigate his risk by sticking closely to the basic principle I am going to share with you in this post. If you pay attention to this lesson, you will make more money flipping houses!

Before you begin down the road to fun and profit, you need to define what it is you are going to do. Today’s blog is all about the word “SPECIALIZE”. There are many different avenues you can follow when you flip properties and by focusing on a specialty you will learn exactly what you need to do to make money, then profit many times over from that knowledge.

Going back to my expert, he specializes in single family homes in a specific price range that are in a certain group of neighbourhoods. He knows how and when to buy and how much profit can be realized from each home before he buys it. He understands the buyers’ needs and wants in his neighbourhoods, the best price range for maximum profits and which streets are better choices. He has become so familiar with his product that he has all but eliminated his risk of loss.

When you have specific knowledge of a niche market and understand the needs of the buyers in that market, you will significantly reduce the risk of errors and increase your profits. If you are flipping in a neighbourhood that does not have hardwood floors as a standard in most homes, you will not profit from putting hardwood in your renovations. In fact, those hard wood floors will end up costing you money and eating into your profits. Likewise, if top of the line appliances are not an expectation in your neighbourhood, you would be wasting money putting top appliances in your renovation package. The list goes on and on. You could be spending money unnecessarily in your renovations and losing out at the time of sale. On the other side of the coin, your neighbourhood may demand hardwood, completely modernized kitchens and baths as well as open concept living. If you don’t provide these in your renovations, you homes will take longer to sell and sell for less money. Knowing and understanding your buyers helps you achieve the maximum profit from each project.

I know of a home in an estate area that has been sitting on the market now for several months. It is on an incredible view lot with a stunning mountain view. Based on its size and location, it is priced right for the neighbourhood. I believe it is not selling because the owner decided to cut costs on the renovation. Laminate floors, some obvious DIY finishing and low end appliances all contribute to the problem. Buyers are looking for hardwood floors, top craftsmanship and high end appliances in this estate area and are immediately disappointed when they walk in the door. No matter how great the view is, they can’t get past the poor quality of the floor they are standing on. In the buyer’s mind all of these deficiencies bring into question the quality of the home in general.

So many people decide they are going to flip a house and do not realize this most basic principle. They buy a home and go to work renovating without any understanding of the market they are working in. They cut corners in their spending or put too much time and money into their projects. I did my first home this way and paid the price. In order to realize the maximum profit in a flip you have to know and understand your buyer. You have to know when it is necessary to spend on the upgrades and when certain features are not an expectation of the buyer. When you reach this level of understanding, you will truly profit from your efforts…. learn before you earn.

For the typical owner in today’s real estate market, the next step up on the property ladder is about a 50% increase in value. This number holds true for most couples in North America. For example, a move from a $200,000 home to a $300,000 home is a typical value increase. The step up is a change of $100,000, or 50% of the value of the first home. From there, the next step up may be to a $450,000 home and then maybe to a $650,000 to $700,000 home or more.

There are three main influences that facilitate stepping up to the next rung on the property ladder and three motivations that can put pressure on families to increase the size of their home. Facilitators are those factors that provide the financial capability for the move up and motivators are factors that encourage the move.

The first facilitator is increases in salary due to an advancing career. Having more disposable income gives the owners an opportunity to buy a larger home or a home in a higher valued location. The second facilitator is the increase in home equity with the relative change in market value due to inflation. Although this factor has been significant in the past few years in Canada, we will probably see home equity increase at a slower, more normalized pace in the foreseeable future. The third facilitator is the increase in equity due to mortgage reduction over time. As the owner pays down the mortgage amount, the relative equity in the home increases.

It is logical to assume that these three facilitators will converge to create a positive buying situation at a point of about 25% of the value in the move up home, as this would be the required amount for a down payment to step up the property ladder. Unless there is this convergence, the move up is not likely. Of course there are unknowns, such as inheritance and windfalls that can facilitate a move as well.

Motivators are the factors that trigger the desire to make the move up the property ladder. The first motivator acting on the majority of families is the need to increase living space due to a growing family. In most cases, the first move up the property ladder is motivated by the growing size of a family. The second move is motivated by the aging of family members and their need for more personal space.Teenagers need more room and they need privacy…so do the parents!

The third motivator is less obvious and it involves the desire to simplify living arrangements because the children have moved into their own homes. This move is often into what is called the “Jewel Box” home. It is fewer square feet than the previous home, but it is finished to a very high standard. Hardwood, granite, high end cabinetry and finishing throughout the home are typical of the jewel box. Although this move may not be an increase in value and equity may be recouped from this move, it is considered the last rung at the top of the property ladder.

From personal relationships to job transfers, there are many other reasons to move and many different motivators. The property ladder is just one reason owners look to change their living situation. It is a normal process that most Canadian families go through. Moving up the property ladder should be a positive experience and bring the buyer satisfaction in knowing they have made the right decision about their new home. For many Canadians, their home is their biggest investment.

Contact me if you are thinking about making a move up. I can provide you with the real estate services you need to make a successful transition from you existing home to your next home on your way up the property ladder.

Jim Perks