Ajax Pickering Real Estate Blog

…so when it comes time to sell, be prepared to play it up

Mairi MacLean, CanWest News Service

We seldom, if ever, think of our homes as stage personas. Yet when they’re on sale, they’re in the spotlight.

Home stagers, also known as house stagers, are acutely aware of this. Like stage directors, they strive to get the best out of their actor/houses, to create the most positive impressions in hopes of wowing the crowd of would-be buyers. They can also be of use when someone is moving into a new home, hoping to sell an empty one, or any time a home could benefit from a fresh, unbiased eye.

We asked four home stagers to describe their work and explain what to expect from a home stager. Gabriele Campbell, an interior decorator, and Shelley Sadownyk, a professional organizer, started their home staging business three years ago; Connie Williamson, a 13-year interior decorator, created her house staging company Serenity Redesign about five years ago; professional organizer Angela Clissold founded her staging company Sort and Style after moving to Canada following a 10-year career as a British Airways executive.

WHAT IS HOME STAGING?

CAMPBELL: “It focuses on presenting the house in the best possible way. It takes each room, room by room, and develops a focal point, a primary purpose for each space. The biggest mistake most homeowners make is, they think because they’re happy and comfortable in their house, everyone else will be too. Nothing could be farther from the truth! When buyers go in, they want to be able to visualize themselves and look past your stuff and think, ‘This space would be great for my stuff.’”

CLISSOLD: “We’re using the buyer’s eyes. We’re also playing down the faults in the home while bringing forward the good features — often when you live in a home you can’t see them, you forget you see that fantastic view every single day. You may even stick the DVD player in front of it. Staging is also a key marketing tool. If you’re serious about getting top dollar and working to a time frame, that’s what staging does — it showcases the space. People also want to be move-in ready. They are cash-rich and time-poor. So staging is a service.”

SADOWNYK: “When we come in, we’re not there to criticize how (homeowners) live or how they have their furniture. We want to make it as simple as possible for a buyer to come in and see the space.”

WHAT ARE THE ELEMENTS IN STAGING?

CAMPBELL: “We focus on three Cs: clean, clutter- free and colour. When we say clean we mean clean like never before, especially kitchens and bathrooms. Nothing eats up valuable real estate like clutter. In that category comes table tops, night stands, shelving counters.

SADOWNYK: “It’s also cupboards and closet spaces. If your pantry is so full and you can get that much stuff in, great. But someone else might see it as so full they don’t think it has enough space. If the cupboards are packed full of dishes you only need once a year, let’s clear it out and concentrate on cleaning it up so people can really see how much storage there is.”

WHY DO HOME STAGERS LIKE TO REMOVE PERSONAL ITEMS FROM THE HOME, TOO?

SADOWNYK: “We talk about depersonalizing the space, taking down personal photos and collections, because other people want to picture themselves in the home. They can also get intrigued and start looking at your stuff, and you want to eliminate that. For safety reasons, no one needs to know who’s living in the home — we worked with one client, a single mom with three daughters, and nobody needs to know that. You also need to start detaching (from your home), so depersonalizing helps.”

WILLIAMSON: “The basics also include fixing the minor repairs, things like broken mouldings, leaky faucets, updating small things like your light fixtures and plug-ins. It really makes an impact — (potential buyers) see the updates, not necessarily the largerticket items. Another word we use is neutralize. It’s picking out neutral paints. Now is not the time to play around with colour.”

CAMPBELL: “On the exterior, there should be no more than three colours. On the interior, it should be neutral. Beiges, tans, taupes are very popular. You should choose colours pleasing to the broadest public and avoid saturated colours, dark reds and deep blues.”

WILLIAMSON: “One of the best things is to paint. It can yield back 110 per cent! It smells fresh, looks clean and does an amazing transformation.

Sometimes home staging involves the smallest of details.

Rearranging some furniture.

Making sure buyers don’t miss that you have a fireplace, and that it works by having it lit. It’s creating that lived-in feel.

Some may have dated furniture, so it’s a matter of covering it with slipcovers.”

CAMPBELL: “It can be as much or as little as clients need. Sometimes it’s just going in and doing a couple of rooms that are problem areas.

Then they’ve learned so much they can implement (changes) through the rest of the house.”

CLISSOLD: “Can you swap things out? People might be open to renting accessories and furniture.

We have connections on short-term rentals, right down to a week, and we use storage companies. A lot of my business is taken up by accessory rentals.

It might be a lamp in a corner, a mirror over the bed, something strong to detract from something else.”

SADOWNYK: “People can look to hire in or beg, borrow or steal from friends. If people buy something for use in their next house, can they use it before they sell? We also have a referral base of people we work with who know it’s short notice.

Maybe it’s painting a couple of rooms so they can squeeze us in, or quickly change the faucets.”

WHAT ABOUT THE EXTERIOR OF THE HOME?

WILLIAMSON: “I read an article not too long ago and one professional home stager described curb appeal as ‘your 24-hour billboard,’ because people drive by your home all the time. And in many cases it’s the drive-by that initiates the viewing.” Sadowynk: “We’ve had places where you pull up, there are some weeds, the grass is a little long, there are some dead plants and you walk in and it’s beautiful! But for a lot of people, they might drive by and not even want to look in. So you need a clean lawn, a painted house, a door in working order, lights that work. So when they open the door they want to see more and they like everything so far.”

CAMPBELL: “They’re looking for defined space. If there is patio furniture, depending on the season, we say put it out and put in a portable fire pit. If there’s a place for a play structure, put in a play structure.

If there’s a shed, it needs to be clean and operating properly.”

DO HOME STAGERS WORK EXCLUSIVELY WITH HOME-SELLERS?

CLISSOLD: “We work with homeowners and with realtors. We’re a second opinion from another professional.

“Often a realtor doesn’t want to offend, if the homeowner is reluctant to make changes that should be made. We support the homeowner by being the go-between.”

WILLIAMSON: “When I began five years ago, homeowners were 90 per cent of my clients. Now, it’s 50-50 (realtors, sellers). Realtors are on board, they’re introducing staging to their clients; they see the benefits and homeowners are seeing it as an additional tool.”

HOW IS HOME STAGING AFFECTED BY THE HOT REAL ESTATE MARKET?

CLISSOLD: “Homeowners are now getting a bit bolder, using things like Comfree (no real estate commission), and they’re thinking ‘If I’m not using a realtor I need to cast (another) professional eye over what we’re doing.’”

SADOWNYK: “Having a home on the market is a lot of stress, leaving your house every day, hoping everything is perfect. If it’s on the market for three days as opposed to three weeks, that alone is worth it in stress and time. The advantage to sellers to getting the best price, the advantage to buyers is they get a house that’s ready to be lived in immediately, and for realtors, they can show that house with absolute confidence.”

WHAT REACTIONS HAVE YOU RECEIVED?

SADOWNYK: “It makes them feel wonderful.

‘Ooh, now I don’t want to sell!’ — you’ll get that every once in a while. One client said, ‘Why didn’t I do this before?’ Every homeowner, once we’ve staged their house, they’ve learned something they can take to their new house. They say ‘I’m going to put my furniture the way you had it, I never thought of it this way.’ ”

WILLIAMSON: “After you’ve staged the home, most people are so excited. They’ve never felt like this in their home. The second question is, do I really want to sell? A client phoned me a couple of days ago and said, ‘I don’t care if it sells or not.’ She’s sleeping better in her bed since her home was staged.”

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Contact the Jeffrey Team for more information - 416-388-1960

Canadians are taking advantage of boom to buy second properties

Garry Marr, Financial Post

To understand why Boomers are investing in real estate simply look at how much prices have gone up. A decade of capital appreciation in the residential market has convinced many middle-aged consumers to make real estate investing not just about the home they are living in, but about a second property.

“In the early to mid-1990s, people had a sense that real estate wasn’t a good investment. It wasn’t going to keep pace with economic growth. People would purchase homes for lifestyle reasons only,” says Peter Norman, a senior economist with Altus Clayton, a real estate research firm. “The tide turned as values started to increase. We’ve had a housing cycle in the last 10 years where house prices have increased at a steady to fast pace. When you see values steadily climb, that appeals to most people. And then you have stock markets go through two undulations: the tech crash and the [subprime] financial crisis.”

The average price of a sold home across the country through the first nine months of this year reached $324,312, according to the Canadian Real Estate Association. A decade ago, the average price of a home sold across the country was $154,606.

What Is A Boomer? The demographic cohort, by the numbers. Born between 1947 and 1964. Boomers are less likely (52%) than either young adults (63%) or seniors (62%) to reject the idea that there is no use worrying because tomorrow usually takes care of itself. Boomers are more likely (11%) than Generation Y (2%) to report not having any savings plan at all. While the tendency to live beyond your means decreases with age, Boomers (20%) land closer to young adults (33%) than to their parent’s generation (8%) in doing so. Boomers are saving for home renovations (30%), followed by a dream vacation (23%). SOURCE: HSBC DIRECT SAVINGS SURVEY FOR HSBC BANK CANADA BY INNOVATIVE RESEARCH GROUP

A Statistics Canada survey shows real estate investing has been on the upswing over the past six years. The federal agency’s Survey of Financial Security found the dollar value of real estate holdings, not including principal residences, rose 80.5% from 1999 to 2005.

The median net worth of the nation’s 13.3 million families was $148,400 in 2005, up 23% from a 1999. The median net value of a principal residence was $87,000. The median value of other real estate was $85,000, but the corresponding figure for debt was $90,000 –an indication many Canadians are financing second properties and hoping for some capital appreciation.

“A significant change in the composition of assets during the six-year period was growth investments in real estate such as cottages, timeshares, rental properties and other commercial properties,” says StatsCan.

Mr. Norman says second-home ownership goes up as people age. On a national basis, only 2% of households headed up by someone under the age of 34 have a second home. It is 7% for people 35 to 45 years old and peaks at 12% for people in their 50s, says the economist. By the time people hit 65, they sell their second properties.

“It’s really hard for surveys to quantify this sort of thing because there is so much diversity of product. Sometimes, you have a family owning a cottage and people using it, other times people have a cottage, use it two weeks of the year and then rent. That’s more of an income property. Then you’ve got timeshares where the investment can be very low,” says Mr. Norman.

The numbers he cited for second-home ownership do not even include investment property and, therefore, the condominium market. Some have suggested as much as 25% of the condominiums in Toronto and Vancouver are owned by investors.

Paul Arn, says he knows who is buying and they are older professionals looking for an investment property. He says the rise of the luxury hotel/condominiums like Trump Tower, the Shangri-La Toronto and the Four Seasons Hotel and Residences — trophy buildings — is being driven by these investors. “They’re in their mid-40s, they’re professionals and they usually have a net worth of $5-million to $10-million,” says Mr. Arn.

A survey on the luxury housing market found 25% of homeowners with $1-million principal residences own a second property. Another 6% own three properties and 2% own more than five properties.

Don Lawby, says he’s noticed the trend of older couples refinancing the mortgage on their principal residences for an investment. “It’s usually a second property that they plan to rent,” says Mr. Lawby. “Sometimes it’s so they can buy recreational property.”

He says second properties can be difficult to finance but if you have plenty of equity in your main residence, it is easy to use that cash for other purposes. “There are a lot of people buying second homes now. It’s not even just recreational properties. It’s investment properties. The real estate market has been good, so they are buying.”

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Contact the Jeffrey Team for more information - 416-388-1960

Move risks overheating already hot real estate market

Garry Marr, Financial Post

You have to wonder what David Dodge will be thinking this time. Just over a year ago, the Bank of Canada governor met with Canada Mortgage and Housing Corp. because of his fears exotic mortgages were juicing an already robust Canadian housing market. Now CMHC has decided it is going to let Canadians buy investment properties with no down payment.

The Crown corporation, which controls about 70% of the mortgage insurance market in Canada, has quietly introduced changes that lower the down-payment threshold for an investment property. Instead of needing 15% down, Canadians will be able to buy a second property — not to mention a third and fourth and fifth — with no money down.

“These enhancements will ensure continued supply of affordable rental accommodations across Canada,” said Pierre Serre, vice-president of insurance products with CMHC.

Critics charge CMHC once again has moved into risky territory, the last time being its decision to allow Canadians no money down on a principle residence. “Look at the fee, anytime it’s that high, you know there is a lot of risk,” said one senior mortgage industry observer.

The mortgage insurance fee for the new product is 7.25% of the total amount of the loan.  So a $300,000 mortgage would have a $21,750 mortgage insurance fee.

Instead of paying the fee up front, CMHC will allow that fee to be added to the overall mortgage which can be amortized over as many as 40 years. Based on 5.8% interest,  the current discounted rate for a five-year term, it would cost just over $1,700 a month to carry that $321,750 mortgage.

By law, any consumer with less than a 20% downpayment must buy mortgage insurance if they are borrowing money from a financial institution covered under the Bank Act.

None of CMHC’s competitors are coming close to this new offer. Genworth Financial Canada — the other dominate player with about 30% of the mortgage insurance market — requires investors to have at least 10% down.

Back in July, 2006, Mr. Dodge demanded a meeting with the federal crown corporation. He was concerned about products like interest-only mortgages which give consumers the option of not making a principle payment for the first 10 years of a mortgage.

Mr. Serre said CMHC did consider the issue of whether the changes could overstimulate the market. “We look at those kind of considerations all the time,” he said, adding that to get a loan consumers will have to meet certain criteria in terms of their overall debt load. “We’re not trying to get people into situations they can’t manage.”

Some question whether there was any need for the latest change, given how strong the market in Canada remains.

The Building Industry and Land Development Association said this week condo sales in Toronto - the largest market for new high rises in North America — were up 31% over the first nine months of the year from a year earlier.

“I’m not sure why CMHC is relaxing the rules, the logic escapes me,” said Stephen Dupuis, chief executive of BILD. “The market is strong. I look at what is happening in the United States and wonder if there is a need to be so free with credit.”

The real reason for the new program, suggest some commentators, is CMHC trying to fend off competitors in the marketplace. In a constant battle with Genworth, CMHC is also facing up to four new mortgage insurers who have applied to do business in Canada or are already licenced to do so.

“There are competitors in the marketplace that didn’t exist before. They are reacting to competition that hasn’t even materialized yet,” said Mr. Dupuis. CIBC World Markets senior economist Benjamin Tal said the latest changes by CMHC are probably just the beginning. “The genie is out of the bottle, this mortgage market is starting to move. Over the past 16 months we’ve seen more changes than the past 30 years,” said Mr. Tal.

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Contact the Jeffrey Team for more information - 416-388-1960