Bank Foreclosures Up Across Alberta

alberta foreclosures

alberta foreclosures

(Photo credit CBC)

What happens when you own a home and suddenly get laid off, downsized or flat out fired? Or maybe you still have a job but are getting less hours and/or a lower amount on each paycheque. Just because you no longer earn any money (or find yourself earning less) doesn’t mean that the bills will go away and one of the biggest bills a homeowner will have to pay each month is the mortgage. Sadly for a lot of Albertans and of course Canadians throughout the country, that may mean the bank will foreclose on that housing loan.

In the last two years alone, foreclosures have gone up about 25% each year in Alberta which translates to 5,746 properties across the province, 2,277 of which were in Calgary alone. While these numbers may seem alarming (whenever anything goes up that fast that quickly it tends to be alarming), the numbers are not as high as they were after the 2009 financial crisis when many people found that their subprime loans weren’t all they were cracked up to be.

The number of people missing mortgage payments is also on the rise across the province. A three year high was reached this past February when 2,736 mortgages were in arrears by three months or more. In some cases, people are six to nine months behind.

This time around the foreclosure rate is largely blamed on the loss of jobs– people either finding themselves unemployed or underemployed– coupled with a high debt load. When things are good, we tend to treat ourselves to things; when things go badly, we still have to find a way to pay off those credit cards and minimize our debt. While things may be looking up in the city of Calgary job wise now, the city still has the largest unemployment rate among Canadian major cities; today it sits at 9.3%.

Banks and other financial institutions are, by law, allowed to start the foreclosure proceedings if you miss just one payment. Thankfully most don’t act that quickly and will be eager to work with the homeowner to get them back on track so that they can try to avoid the whole process from occurring at all. That is, if the homeowner faces the issue and doesn’t pretend it’s not happening or it doesn’t matter if they fall behind on the payments.

For homeowners who have fallen behind, the experts say the best thing to do is to be open about it with your lender. If you show up to meetings and work with the institution to come up with a repayment plan, or if you have a plan of your own worked out, lenders will be more willing to allow it to pan out before starting foreclosure proceedings. In some instances, you as a homeowner will be allowed six months to figure it out and start the repayments.

If the foreclosure proceedings advance and it does end up in a court of law, it will likely also be the homeowner who is on the hook for the bank’s legal fees and that can run anywhere from $6,000 to $8,000.

As if losing your home and paying extra legal fees weren’t enough, the experts also agree that foreclosure should be the last resort as it can damage your credit and prevent you from buying another property for a number of years.

Sometimes, however, foreclosure is the only option and those properties are then put back onto the market so that the lenders can get some of their money back. In Calgary, some realtors will list foreclosed properties separately from others for sale. The reason is simple: foreclosed properties are sold ‘as is’. That is, they have no warranties and no representations. While they may sell for less they are usually listed close to their true market value, so buyers may get a deal, but it won’t be a major fire sale like we see coming out of the United States at times where their laws differ. If you are thinking of scooping up a foreclosure for dirt cheap you may not find yourself in much luck, as the bank will want as much out of the property as they can get.

In Calgary, a shrewd buyer can find anything from $150,000 condos to multimillion dollar mansions on the foreclosure list. Just make sure that you know what you’re getting into as you have nothing to fall back on should you purchase one and something goes wrong. If the former owner trashed the home, it will be up to you to fix it, not the bank. They just want to sell it and move on.

If you find yourself in dire financial straits and are falling behind on your mortgage payments, don’t bury your head in the sand and hope it will go away. It won’t. Instead be upfront and honest with your lender, you may be surprised at the clauses that are built into your loan that you may not have known about that will allow you to come up with a solution to the problem. Help may be just a simple phone call away.

Could A Foreign Buyer’s Tax Boost Calgary’s Real Estate Market?

Vancouver implemented one last August and recently Toronto did the same: A foreign buyer’s tax of 15% on homes purchased by non-residents. Both cities did it to try to curb their out of control real estate markets and try to get more control over their pricing. It may have other benefits however, as the experts say that this just may pique the curiosity of those out of town buyers and re-route them to Calgary.

We all know that Calgary’s real estate market is slowly coming back to a more balanced state after the economic downturn of a few years ago, and if there is a big tax to come on a purchase in the other two major cities in the country, the thought is that those foreign buyers will see the potential and value for their money in Calgary. If they flock to the city and buy their properties here instead of Toronto or Vancouver, it can only be good for the markets, right?

The answer is yes, at least for the short term, since more foreign investment would only be good for the markets, but the experts are also warning that any changes to the markets in Toronto may be short lived. They saw it happen in Vancouver and are figuring that it will go the same way in Ontario’s largest city too.

When Vancouver implemented their tax, people assumed that all the foreign buyers would just flock to Calgary and gobble up property after property. While it was true that Vancouver’s home prices did go down and price growth stalled for months, the market is now coming back and the experts are predicting this will also happen in Toronto. They say the new tax will only work for around six months, and then once the ‘fear of the unknown’ has passed, the demand that has been pent up for months will all come spilling out at once and the market will be back to where it is now. The thought there is that buyers will wait and watch the fall out before actually signing on the dotted line, which in turn may cool the prices and give everyone breathing room before the markets get ‘back to normal’ once again.

Right now though, Calgary does look like an attractive option for those foreign buyers. They already account for a substantial portion of the demand for luxury homes in Toronto and Vancouver, something that Calgary also has a lot of and if they aren’t hit with an expensive tax and they are getting more value for their money why would they not look here?

While there are no stats on foreign buyers in Calgary’s market, there are in other parts of the country. The Chinese buyers for instance are buying properties in our cities so that their children have a place to call home when they are attending school here. What they do with these properties after their children have graduated, or whether they simply buy them for rental properties in the first place isn’t something that is tracked.

So will those foreign buyers try to avoid the high tax imposed on them in Vancouver and Toronto and look to Calgary to buy their next property? If the experts are giving it six months before everything goes back to normal, we should have our answer in the fall.

Easter 2017 Events

(Photo credit Calgary Farmer’s Market)

Easter not only celebrates the resurrection of Jesus but is it also a sign of Spring and new beginnings. Aside from the holiday being a religious one it is also a time of Easter egg hunts, family brunches and of course the Easter Bunny. Churches have a full slate of events, restaurants are busying themselves for the Easter brunch crowd and of course, there are plenty of family friendly activities to take in this month.

In the religious vein there is Saviour-An Oratorio which is a unique and interesting option this Easter. It blends classic, pop, inspirational and traditional styles of music together and is a joint effort by the New West Symphony & Chorus and the First Alliance Church Choir & Orchestra. There will be two performances of this oratorio, the first Sunday April 9th at 7pm at the Bow Valley Christian Church and the second on Wednesday, April 12 at 7pm at First Alliance Church. This is a family friendly event with no admission charge.

The Calgary Farmer’s Market is having Easter photo and fun days on April 14 and 15th from 10am-2pm. You can get your picture taken with the Easter bunny, decorate cookies and take in the other activities. It is a free event, but they are accepting donations of food and/or cash for the Calgary Food Bank so no one goes hungry this Easter.

In Airdrie on April 16 is the Family Easter Egg Hunt that goes from 9:30-noon. It takes place at East Lake Park and it is a free family event. There will be half a ton of chocolate eggs to hunt for, face painting, crafts and other activities to enjoy and new this year, there will also be the Butterfield Acres petting corral to check out. They too are taking donations of food and/or cash for the local food bank.

Speaking of Butterfield Acres, they are having their annual Legendary Easter Hunt over two weekends this year, April 8 and 9th from 10am-1:40pm and again April 14 and 15th from 10am-1:40pm. Kids will learn the legend of the Easter bunny and then go out and hunt for eggs. They then will visit the farmyard to see all of the new baby animals before checking in to see if the bunny himself left them a little take home treat. Fun for the whole family, this event is $12.99 for kids and $14.99 for adults.

If you like animals you won’t want to miss the Calgary Zoo’s Easter Eggstravaganza being held this year on April 14 and 15 from 9am-2pm. It is included with your general admission to the zoo and includes treats, face painting, bunny races, crafts, live entertainment and cooking demonstrations. It doesn’t matter the weather, as all activities have indoor venues at the ready if needed.

Easter bunnies and Easter brunch. While there are special brunch menus at restaurants all over Calgary and surrounding areas, there isn’t enough room to list them all here, but two are a bit more special because of where they are being held.

The first is the Heritage Park Easter Brunch at the Wainwright Hotel. It is on Easter Sunday April 16 with seating available from 9am-2pm at the Hotel which is a historical landmark at the park and a place where you can step back in time while enjoying some delicious menu items. If you can’t make it there for Easter don’t worry, they have a Mother’s Day brunch and many other events planned throughout the year.

Fort Calgary is also having an Easter brunch this year. It too is on Easter Sunday and has available sittings at 9am, 11:30am and 2pm. It is being held in the Officer’s Mess and the ticket price for the brunch also includes access to the museum and grounds for the day.

Just because it’s Spring doesn’t mean you can’t take another trip to the mountains. Sunshine Village is still open for Spring skiing and are having a visit from the Easter bunny and an egg hunt on April 15 and 16th from 10am-1pm. There will also be a non-denominational church service to mark the occasion.

Over at Lake Louise, you can ski and visit with both the Easter bunny and Griff the grizzly as they hand out eggs April 15-17th and at Mt. Norquay on April 16th you won’t want to miss the fun of an Easter brunch, and digging in the snow for Easter eggs. The fun starts on April 16th at 10am.

Whether you are in the mood for hunting for eggs, having a day out with the family, enjoying a delicious meal that you don’t have to prepare (or clean up after) or attending a church service to mark this Easter and all that it stands for there are as always plenty of options available. Happy Spring and have a blessed and happy Easter.

Can You Buy Without Selling?

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In a perfect world, you would sell your house and then instantly find your new home. The offer would be accepted, conditions would be met and both parties would move. Everyone is happy and everything is wrapped up in a big red bow. Sadly, this is not a perfect world and sometimes your house could be sitting on the market for a while before it sells. This doesn’t mean, however that you aren’t out looking for the new property, so what do you do if you find ‘the one’ before you have sold the old? Can you buy before you have sold?

The answer is a resounding yes, you can! And there are a few different ways you can go about this. First, you can just take on two mortgages. Never has it been written that you can’t own more than one property at a time, but for most of us this isn’t a viable option. So, there are a couple of other options out there.

If you want to only hold one mortgage the easiest way is to make your offer contingent on the selling of your property. That is, you will buy property B only after property A has been sold. If property A never does sell, then you never buy property B. This works well in a seller’s market, especially if the seller only has that one offer on their house. It won’t work if there are several interested parties of course, as the ones with the best offer and the least amount of restrictions on that offer are usually the ones who reap the rewards.

Another way to go ahead and buy that new house when you haven’t yet sold yours is to tap into your home’s equity. If you have a high credit score and a lot of equity built up in your current home you can free up that equity with a home equity line of credit. This allows you to buy your new house using the equity of your current house but it’s not something that can be approved overnight. If this is the route you want to take, you have to know in advance to get the appraisal, income verification and credit check completed. Of course there are risks and the largest one with this approach is that if you take too much of the equity from your home it may make it harder for you to secure a mortgage for the new place.

The fourth idea is to add that home equity line of credit to a new mortgage so you are breaking up how you finance the new home. You would get a first mortgage for the amount you need, and use the home equity line of credit to make up the price difference. Once you do sell your house, you pay off the home equity line of credit and you are left with the one mortgage again.

By far the easiest way to do things is to get that house sold before you put an offer in on the new place, if at all possible. If you feel that your current home is taking too long to sell there are things you can do to shake things up a bit. Of course having it priced right goes a long way when it comes to potential buyers, but they also like to see that a house is presented properly and has all of its assets on display.

What can you do to make your next open house a success? Well, for starters, people can’t come to see a place that they don’t know is for sale, so hit social media and get the word out. Flyers, ads and signage are also great ways to get people to the door.

Once they’re at the door you want them to want to come in and look around so make sure the landscaping is neat and tidy, there aren’t any tree limbs or debris blocking the walkway and the exterior paintwork looks nice. Curb appeal goes a long way.

When they enter the house they should be greeted with light, all lights should be on and all window coverings should be open to allow the natural light to flow in. There should be no bad odours to greet buyers and they shouldn’t be tripping over shoes and coats at the front entrance either. Pick all this stuff up before they arrive and store it accordingly.

Keep in mind potential buyers will be looking in closets, so when you are decluttering the living room and kitchen, don’t stick everything in cupboards and closets. Pack non-essentials and personal items away before the open house so you don’t have to move them on the day of. A lot of realtors suggest that you take down personal photos and kids’ artwork so that the space is neutralized. This makes potential buyers see their own things in your space and they can better imagine themselves living there (or not).

Make sure they can get into closets, that bathrooms are gleaming and that the kitchen counter is as uncluttered as it can be. It’s also a good idea to go through the house and see if there are clear sight lines throughout. Can things be moved that obscure the view, for instance. You want to make your home look as large and airy as you possibly can.

Pets are sometimes an issue. Dogs aren’t going to take too kindly to strangers walking through their house and some potential buyers may have allergies. It’s best, if you can, to remove your pets while the open house is going on. If you can’t, keep them contained in the laundry room or another room that doesn’t get much traffic for the duration.

Perhaps one of the best things to do at your open house is to listen to feedback. If a lot of people are questioning a bright red wall for instance, perhaps you can paint it before the next open house to be more neutral. Remember that what others have to say is a direct reflection on if they’ll put in an offer. If the comments are positive, you’ve won the battle, if not, you have more work to do.

Unoccupied Homes and Virtual Reality

If you are looking for a new home in the city of Calgary today, you are in luck, as the buyer’s market continues. There are inventories across all sectors of the market, with perhaps the largest amount of properties for sale being in the apartment and condo market.

In the last six months of 2016, the city of Calgary received 27 development permit applications for condo projects. Four of them were approved by January of this year, but will there be anyone to buy these condos once they are finished? There are many condo buildings that are in various stages of development or that have been recently completed across the city, but in December of last year, 1,500 units were sitting unoccupied. Half of these are apartment style units. So why is the city granting more permits when there are so many new units with no owners?

While demand for such places may be lower, the experts say it’s not completely gone and the new developments will just add to the stockpile of units for sale. While the owners try to sell the existing units, some have already turned to trying to rent them instead since this gives them some revenue out of their units albeit not as much as they would have gotten had they sold. The upside to this is that they can then try to sell their apartments and condos a few years down the road when the demand for them goes back up, or they can choose to keep renting them out.

This past February, the biggest increase in sales in the market according to the Calgary Real Estate Board were from townhomes, where the numbers went up 30% from February of 2016. Those in the south part of the city saw the highest increase in sales with 29 deals taking place last month. The experts appear to be right, then; build them and someday they will sell.

One of the things that we can look forward to at the beginning of a new year is the outlook for the year in terms of pricing for homes. The experts at CREB expect that home prices won’t go up significantly this year, and they also predict that condo prices will fall another 2% from current levels. Perhaps this is incentive for those buyers who want a condo to get into one of those vacant homes while prices are going down, then reap the rewards with a resale a few years down the line. The experts say there should be good deals to be had in the condo market but in other sectors expect everything to stabilize somewhat this year.

CREB adds that they are optimistic that over 18,000 properties will be sold in 2017. This would be 3% more than what sold in 2016 but would still be 12% lower than the long term averages. Of course these predictions have a lot to do with the cost of oil, how the unemployment rate goes and several other factors and should only be seen as a forecast, not an actuality.

So let’s say you want to buy an apartment or condo in Calgary this year. You have done your homework and know the area you want to buy in, what you want from your home and you know your price range. So now you just go to each one and look, right? Well, yes, you can, but virtual reality has made it so that you can look at a multitude of homes all in the same afternoon all from the comfort of your real estate agent’s office.

Gone are the hours of driving around, hoping you don’t get lost and get to your appointment on time to view a property, then rushing through so you get to your next appointment. Now you can look at one or many properties all at the same time without setting foot out the door.

Virtual reality is allowing agents to tour a property and take pictures of each room with a special 360 degree camera. These videos can then be uploaded to a phone and with the headset, allow potential buyers to see everything there is to offer in a place. You can discard apartments based on anything just like in real life and then compile a list of those you just have to see in person.

Virtual reality is great for the customer but also a boon for the agent, as they too aren’t wasting time traveling from one property to the next with each client. They simply tour a place once, get the videos and then they can show multiple clients each unit.

Another high tech way of selling homes is with the use of a drone to fly over and take aerial pictures of the property. They can even be used indoors to capture each room giving the buyer a feel like being there themselves. If buyers like what they see they can make an appointment to go in person and tour the home.

These advances in technology allow for people from out of town to virtually tour the properties they like without having to make a trip to the city. Once they have narrowed their choices down, the trip out to see the homes is more streamlined and the buyer already has a good idea of what they like and what they don’t before stepping foot through the front door.

Looking at homes to buy has never been easier, and with the inventory of homes available in the city today, there are many choices available to each buyer. All that’s left to ask is where will your next home be?