First and foremost, it is important to know that property taxes are quite unlike most bills you pay. For example, rent is always paid in advance. You pay in full on the first of the month for the upcoming month. Most other bills are paid in arrears. When you make your mortgage payment, you are paying interest for the previous month. When you pay utility bills, you are paying for the utilities you consumed in the previous billing period. When you pay property taxes, you pay somewhere in the middle of the year. In Edmonton and most other municipalities in Alberta, property taxes are due and payable on June 30 every year. In rare cases, the property tax due date is some other date such as August 31 or September 30. Whether it is June 30, August 31, or some other date, when you pay the property taxes you are paying for the calendar year. So, a property tax payment on June 30 covers the previous six months and the upcoming six months.

With this in mind, let’s take a brief look at the property tax adjustment on a standard real estate closing in Edmonton where taxes are due on June 30.

For a closing prior to June 30 where the seller has not paid the taxes, they will still owe their share. If the taxes for the year are $2,400.00, then, using a sale closing date of April 1, the seller’s share is $591.78 for the months of January through March. This will be deducted from the amount the buyer must pay to close the deal. The buyer will then be responsible for paying the entire tax bill for the year on June 30.

For a closing after June 30, say November 1, when the taxes have now been paid in full, the buyer will have to pay money to the seller on top of the sale price. For an annual tax bill of $2,400.00, the buyer will have to pay $401.10 to the seller. This will pay all the property taxes up to December 31.

When there is a mortgage involved, the property tax adjustment between the buyer and the seller stays the same. As a buyer, if you are paying property taxes as part of your monthly payment, these will typically be payments towards next year’s property taxes. You will still have to account and pay your share of this year’s taxes.

If you are a seller, there will still be a deduction from the cash-to-close for property taxes when the deal closes prior to June 30. At the same time, your mortgage payout will be reduced as the mortgage company will give you credit for all the money they hold in your property tax payment account in anticipation of paying taxes on June 30.

For further details and a more in-depth discussion of property tax adjustments, please visit the property tax page on our website at the following link: www.galbraith.ab.ca/real-estate/property-taxes/

Galbraith Law does extensive work in the areas of real estate, small business, and wills & estates.

Magnetic primer - who knew? You can now paint your walls magnetic, and this great tip sticks magnetic spice jars from Bed Bath & Beyond onto just about any surface that you paint with magnetic primer. You can even paint with chalkboard paint over the primer and have a magnetic chalkboard! Organize your spices alphabetically so you can find them quickly when you need them. 

Shoe Rack in Pantry

Use a shoe organizer on the back of your pantry door to hold snacks and other small items. This will clear clutter from your pantry shelves. You can put snacks in the lower sections that the kids are allowed to eat to keep them from climbing through your pantry. 

Cupboard Drawers

Turn cupboards into drawers with sliding organizers. You can get so much more space out of your cupboards with this simple solution - no more kitchen gadgets stuck in the back of your cabinets out of site, and no more unloading your entire cupboard to get at the serving dish you haven't used in 6 months because you couldn't find it.

Use inexpensive shelf organizers in your fridge to reduce clutter and maximize storage space. I love the idea of a lazy suzan with all your condiments - just pull out the whole thing and place it on the table for your next bbq.

Fridge Organization

Curtain rods as vertical dividers - this great idea can help keep lids, pans, trays and other skinny items neatly contained and organized in your cupboards. The bonus is you don't damage your cabinetry in anyway, so you can easily adjust the space as your needs change. Another great use for tension curtain rodes - hang spray bottles from a rod installed in the cabinet under your sink to keep cleaners organized and easy to find.

 
Clever uses for tension curtain rods

The usual advice applies - spend money on kitchens, bathrooms and flooring, and painting has the best ROI. They also include advice about planning ahead and choosing contractors. If you're thinking of renovating this guide is definitely worth a read. 

They point out a number of mistakes that home owners make when renovating, such as poor planning and budgeting, and not hiring professionals for jobs that require expertise. They also note that "nothing is more costly than having to do it twice or replace it early. The importance of using the highest quality materials and reputable contractors cannot be stressed enough. Remember cheaper isn’t always better."

From our perspective the biggest mistake you can make is not considering resale when renovating. The report explains: "When it comes time to put it on the market, you don’t want your house to be the “white elephant” of the neighbourhood. Permanently changing the function of the rooms, not keeping with the average/appropriate style of the neighborhood or going overboard and creating a house well above the  average listing price of other homes in the area will make it difficult to sell."

Trendy Backsplash

I would add that renovations that are too trendy are also a big mistake for resale, unless you're specifically renovating to sell now. It's not a big deal to paint a super trendy colour, or replace a backsplash with the latest trend in tile - as these are quick and inexpensive to change when the time to sell inevitably arrives. On the bigger ticket items, like floors and cabinetry, classic looks don't get old as quickly as trendy looks. 

Keeping in mind that this guide does not consider the personal benefits you'll get out of renovations (including maintenance and utility savings), here are some of the best renovations you can do, from an ROI perspective on an average home:

• Replacing vinyl siding
• New soffits and fascia
• New roof
• New doors and windows
• Painting
• New flooring of almost any kind (cork and slate get the lowest return)
• Kitchens and bathrooms
• Basement development
• Tankless hot water heater
• High efficiency furnace
• Upgrade electrical from 60 to 100 amp
• Adding a double garage
• Decking and fencing

Some of the renovations with the lowest ROI include:

• Re-insulating the attic
• Skylights
• Wet bar
• Alarm systems
• Ponds & fountains
• Stamped concrete or exposed aggregate driveways, sidewalks & patios
• Retaining walls
• Hot tubs & swimming pools

The price range of the home is an important consideration - where replacing vinyl siding might have good ROI on an average priced home, in most cases it would hurt the value of a luxury home. Whatever materials you choose, they have to be in line with the overall value of the home and neighbourhood. 

Our clients frequently call us to go over their renovation plans, and we're happy to provide advice so their renovations help the value of their home, even if they're not planning on selling for years down the road. 

A sincere request

They are distributed all over the city by a few repeat offenders, and many home owners believe them. The letter is so generic it could apply to almost any potential buyer looking in a condo complex or neighbourhood. 

We've listed many properties where the owners have shown us this letter, and asked us to let the agent know about their listing. Of course, we always call the agent, and amazingly they never even show the listing let alone bring an offer. If they really had a client that wanted to live in the area badly enough to distribute letters about their predicament, shouldn't they be the first agent calling us to show the property?

Here is what the Real Estate Council of Alberta (RECA) has to say in their advertising guidelines:

"RECA is aware of some marketing schemes that rely on the concept of communicating a misleading offer to get a foot in the door with a client, but the offer is then substantially qualified during the meeting with the prospective client. This is a form of misleading advertising called “bait and switch" and it is illegal in Alberta and most jurisdictions across Canada."

It's just one more example of advertising that makes consumers skeptical - it certainly makes me wary about dealing with these specific agents. Perhaps if the letter said my clients would like to live in a 1000-1300 square foot bungalow on this street because their parents live on ### street, and their daughter has special needs and must live in the area by August to attend such and such special school, I would take notice.

On occasion we've had clients that really did want to buy in a particular building or on a particular street, and they've asked us to do something similar. The problem with this tactic is that if we do find a home owner interested in selling in this scenario, we've seriously given away our client's motivation. Our hands are really tied behind our backs when the time comes to negotiate for our clients in this type of situation.

Informal/Natural landscaping – after centuries of taming the wild landscape with straight lines and edges, designers are embracing nature and creating gardens with a more natural feel. As we become more urbanized and removed from nature, we are starting to make whatever small outdoor space we have remind us of the great outdoors we get to enjoy on our holidays.

Natural Landscaping from House Beautiful

Pale or dark – one trend is to pair neutral shades of grey and white with pastel pink, apricot and lavender. Bleached floors and cabinetry and are also on the radar. If pale isn’t your thing, dark is in as well. Dark floors (and I mean really dark), cabinetry and walls are showing up in design magazines, all in the same room.  Apparently mixing the two trends together is not a good idea, unless you go totally black and white. Personally, I can’t see myself living with either of these trends, but I’m sure there are people who will love it.

Pale or Dark from HGTV.ca

Go bold – if most of your home is neutral, go bold with colourful, textured backsplahes, light fixtures and area rugs. You can completely change the look of a room with a relatively simple lighting change, and your kitchen can be completely renewed with a fairly inexpensive and quick backsplash update. Geometric patterns are also very popular this year in design and fashion. 

Brass and copper – oh no, brass is back. It’s not like the brass we saw around fireplaces and bathroom fixtures in the ‘80s, thank goodness. Brass and copper are warmer than chrome and nickel, and can be seen in lighting and plumbing fixtures, hardware and decorative objects. They mix well with other metals and their patina gets even better with age.

Once upon a time, when I started in real estate, I was showing a property to my first set of buyers, and my father (who happened to be my broker) was observing. As we walked through the home I proudly announced: “this is the kitchen, this is the living room, this is the…” you get the point. The whole time I got the distinct feeling they wanted to run, while I (being so green) wanted to prolong this twisted agony so I could win them over. I remember wishing I had more rooms to show them, but alas we ran out of rooms, and true to my instincts they bolted out of the home. To make matters worse, my father who was hanging back almost like he wasn’t there, was chortling with a smug grin.

Ralphie

At this point he gave me some very sage advice, which I protested that I did not need but found it extremely valuable over the years. He said to me: “if they cant figure out it’s the kitchen then they shouldn’t be buying a house.” No words were truer but like the kid from “A Christmas Story” I still internalized that I was right. “No,” I thought to myself, “I am there to show the home.” Sensing my quandary he added that my job was to help them find what they are looking for, to or help educate them on what was available.Instead of showing them the kitchen, I should have been asking if the kitchen would work for them, or if they had something else in mind. In the end I knew he was right, and it was an epiphany of sorts into the psychology of selling.

I often show homes to clients when the sellers are home, and they frequently crowd my clients like merchants in a Mexican bizzare shouting “look at my store,” “come in amigo I have the best stuff.” Or sometimes they hover, like a helicopter mom making sure we don’t break anything, or get anything dirty. If I can run interference and distract the seller I will, but it doesn’t always work. Very often the seller will proudly display the hand installed tile or some other “masterpiece” they are so proud of.  What they don’t notice is the look of horror, queasiness, embarrassment on my clients’ faces – similar to the one on the young couple I helped chase out of a home many years ago.  

It all boils down to this… If you want to sell your home the details are important, and one of the most important is to make buyers feel comfortable when viewing your home.

A client of mine recently asked the question of whether or not they should renovate their 40 year old bungalow. More specifically they were on different sides of the fence on one particular renovation. Their bungalow has only 1.5 bathrooms upstairs and they were considering removing their bathtub and putting in a very nice slate shower in the main bathroom, which would mean there would be no tub upstairs.

Their main concern was resale. How would this go over with buyers when the time came to sell? My answer was “not great.” Their home is best suited to families, and parents like to bath their children in a tub. It’s really that simple. Their response was one of understanding and this was something they had considered already. In fact their impetus for contacting me was to see what percentage of the market would accept taking a property like theirs without the tub, and what would it cost them in terms of lost value?

How Much is it worth to Liv the way you want?

So the real question is (if resale is important) when will you be selling? When I asked this question their answer was 10 years maybe more. I’m the first one to point out that life has a way of changing our plans but for the most part you have to start somewhere and that somewhere is what are your plans?

So if you plan to be somewhere for a long time, what is worth for you to Liv with less than the full enjoyment of your home. You have to factor that in to any lost value consideration.

Lastly you have to consider demographics.

Things work in cycles. So in 10 years it is likely the demographics will be different, and maybe it will be more elderly people that will be buying. Maybe having a large slate shower that you can easily get into sit down instead of cumbersome tub that must be ripped out could be a selling feature. In the meantime, enjoy your shower for many years to come!

Photo from Habitat for Humanity ReStore web site

Here is a list of some of the items they can accept:

• Appliances: washers, dryers, stoves, fridges (*seven years old or under)
• Antiques
• Bathtubs: claw foot, jacuzzi (whirlpool). * no rust please.
• Cabinets
• Carpet: only new please.
• Doors
• Windows
• Lighting fixtures
• Kitchen sinks
• Lumber: clean, no nails.
• Moldings
• Plumbing fixtures
• Furniture: dressers, tables, kitchen chairs, etc.
• Tools
• Books

Of course, if you’re looking for a bargain on building materials, shop at the ReStore!

Under this new rule, if you’re working with a REALTOR® to buy or sell a home, you won’t have access to information about recent sales when you need it the most. You will be able to see that the home is sold, but you won’t know the sale price until title transfers (typically 30-60 days later). The rule is set to come into affect on Dec. 1/12.

No way, no how, can you pin this new rule on REALTORS®. I know that sounds weird, but every REALTOR® I have talked to since this decision was made is against it. You see, our Board of Directors made the decision with no input from the membership. Even though these directors are elected, not one of them ran on a platform of changing the way we report sales data. If they had, they wouldn’t have gotten my vote.

The board says the decision is to protect the association and its members from potential liability – they liken it to buying fire insurance. I liken it to buying bomb insurance. They say that every year a number of deals collapse after conditions are removed, and by reporting the sales information we open ourselves up to liability. It’s worth noting that after at least 100,000 transactions in the last decade in Edmonton, a whopping 0 lawsuits related to publishing sales information in our database have occurred.

The board says it’s no big deal, we should be able to estimate the sale price based on market conditions and the length of time it took to sell. They don’t mention that in doing so, the liability the association sloughed off has now been pushed squarely on to the shoulders of the individual REALTOR®. Our “educated guesses” could be wrong at least half the time.

We make our living interpreting market data for our clients. Our clients rely on this critical, timely information to make informed decisions. I can’t speak for the public, but as someone who buys and sells properties this information is invaluable when key decisions are made. How do you feel about the rule?

A message to our fellow REALTORS®: the board may say the decision is made, there is nothing we can do about it, but I think we can do something. Come to the general meeting on Sept. 27 at the Delta Edmonton South and have your opinion heard (register on the intranet – the form is in the weekly review inserts). Hopefully in a few weeks we can all wake up and think this was just some kind of bad dream.

You can check out the Facebook page on the topic here.

Normally I post the stats for Edmonton only, and then post the Greater Edmonton stats a few days later, because it usually takes a few days for them to be released by the REALTORS® Association of Edmonton. However, this month they were released on the 1st, so I’ve combined all the stats into one post below – Edmonton first, followed by the entire MLS® region.

Real Estate Stats for Edmonton Only

The resale market continues to roll along – sales of single family homes in July were significantly higher than we’ve seen for the past two years. There were 831 sales of single family homes in Edmonton compared to 702 last year, and 592 in 2010.

Edmonton Single Family Home Sales

Condo sales were also better than the past two years – there were 412 condo sales in Edmonton in July compared to 398 last year and 322 in 2010. 

Edmonton condo sales

Prices have definitely begun their annual decline, taking a pretty big nose dive off the peak in June. The average sale price for single family homes in Edmonton was $389,174 – down from $406k last month and just below $390k last year. The median sale price for single family homes was $356k, down from $368k last month and about the same as last year ($356,500). The average price for condos was $234,541 – down from $244k last month and $244k last year. The median sale price for condos was $215k down from $230k last month and $223k last year.

Edmonton real estate prices

The average price per square foot followed a similar trend – for single family homes it was $267, down $1 from last month but up $3 from last year. The average price per square foot for condos was $232, down $3 from last month and last year.

Edmonton price per square foot

Greater Edmonton Real Estate Stats

Sales could not be more normal in the Greater Edmonton area this year. The chart below shows my prediction for sales for the Edmonton area for 2012 that I created at the beginning of the year, with the actual sales plotted on top.

Edmonton real estate sales prediction

Comparing sales to previous years, 2012 is looking pretty good. In July there were 1721* sales in the Greater Edmonton Area through the MLS® system. This is up from 1568 last year, and 1394 in 2010 but down from 1986 last month (as is expected for this time of year). 

Edmonton MLS® Sales

The average residential sale price was $335,534 in July, about the sale ast last year ($334k) and down from $341k last month. The median sale price was $325,000 up from $317k last year about about the same as last month ($325,500). 

Edmonton MLS® Sale Price

The inventory of homes for sale is down slightly from 7,930 last month and currently sits at 7,684 (last July it was 8,421).

Edmonton MLS® Inventory

*We adjust the residential sales total for the current month to account for unreported sales. Every month 6% of sales on average are not reported to the Association in time for the monthly report. The following month the numbers are updated to reflect the total sales during the previous month. That means the current month always looks worse compared to previous month. Our adjusted numbers are far closer to the actual numbers than those reported by the Association each month (so far on average I am under reporting by 23 sales whereas the association is under reporting by 106 sales each month).