If you're a first-time homebuyer, you're hearing a lot of talk in the real estate market these days. Will prices go up? Will the market crash? Will I ever be able to afford a house? How will the new rule changes affect me? How will I ever pay off this debt?

It's easy to get caught up in all the noise but harder to separate the facts from the hype. As I edge closer to celebrating my first half century on this planet, I find myself using the phrase "if I knew then.. " more and more — which got me thinking about the next wave of first-time homebuyers, and what pearls of wisdom I could bestow on them.

I had an interesting conversation with a colleague the other day regarding property values in Vancouver. He relayed me a story of a friend who had bought a house on the west side of Vancouver in the mid 1990s and it is now worth over 4 times the amount they paid. In terms of equity, it was the equivalent of winning the lottery. We pondered the question, what will people be saying 20–25 years from now? Is it quite possible that a young 25 year old couple today might look back in the year 2033 and say "If only we had bought that house back in 2013? Why didn't we? Oh ya, there were new mortgage rules and a lot of global uncertainty..."

Here are a few things that I've learned about real estate:

1. Real estate has peaks and valleys, but there has never been a future peak that is lower than the past one. Just give it time.
2. Time is your ally. Time can turn any bad real estate decision into a good one.
3. Equity is your safety net. It can supplement a pension and give you financial options in later years.
4. Your mortgage is a forced savings program.

So let's assume that 20–25 years from now you'll be looking back and saying to yourself one of two things:

• I'm sure glad I bought that first house, or
• I wish I had bought something back in 2013

A lot of people are in this situation today and paralyzed by all the noise around them. And in the absence of facts or perspective, fear will take over. So what are the factors that are influencing your decisions today? 

New Mortgage Rules

Yes, there are new mortgage rules that have been implemented over the past few years, but in some respects, this could be to your advantage. Many first-time homebuyers are unaware that you can still buy a home with as little as 5 per cent down. The main rule change that impacts your ability to afford a home is that you can no longer access a 30 year amortization. Your payments will now be determined based on you paying off that mortgage over a maximum 25 year period. Although this does make your payments a little higher in the beginning, it increases the amount of equity you build with each payment (remember your forced savings plan). 

In addition, the rule changes imposed by the government have had the exact effect they were looking to accomplish and that is to slow down what was becoming an over-heated housing market. Again, this is to your advantage because it will help to bring house prices back within your range.

Global Uncertainty

There is no doubt that we live in an age of global uncertainty and face the threat of financial chaos in Europe and a pending credit crisis in the US. However, this is not the first time our world has faced these challenges and it won't be the last. The key factor to look at is what you can control in your world. Ask yourself about your own employment options - your own employment future. The key to creating long term wealth in real estate through equity is your ability to afford your monthly mortgage payments and making them consistently over a long period of time — regardless of what is happening on the other side of the world. If you do so, one day you'll wake up and realize two things:

1. Your mortgage is paid off, and
2. Your house is worth more than the day you bought it — regardless of what happened during the years in between.

So if you're a first-time homebuyer in 2013, here's my advice to you. Create a budget that you can afford and be comfortable with. Buy a house or home that does not put a strain on your budget. Focus on taking baby steps and don't get overwhelmed by the big picture. Make the monthly payments into that forced savings program you called a mortgage and then let time be your friend and real estate will do what it has done for many generations before — eventually go up as your mortgage goes down — and that is what we call "creating equity." And then maybe, just maybe, as you're about to celebrate your first half century on this planet, you'll look back and say, "I'm glad I got started in 2013."

Republished from Peter Kinch's The Mortgage Minute.

A house is probably the biggest purchase you’ll make. So finding out all you can about the home-to-be is essential.

It’s all about the history of your home, and several companies have sprung up across North America to enlighten potential buyers as they begin their home search.

These organizations provide inexpensive reports that include a history of the home dating back years.

This means you can find out about additions and repairs through building permits, and about leaky roofs via insurance claims.

Previous selling prices and even some of the more unsavory aspects of the home, such as its history as a drug lab, are available.

Some firms will also provide names of the companies that made previous additions (such as pools), so you can follow up if you like (or dislike) the workmanship.

In Canada, a comprehensive property history is available from a new company, iVerify (www.iverify.com), or via real estate agents. But if you have the time and energy, you could also conduct searches yourself; virtually all the information is contained in official records, which are available to the public at little or no cost.

History reports such as these can help potential buyers avoid unpleasant surprises at closing time or further down the road.

A track record of problems might make a house a lot more expensive to insure, but if a potential buyer knows about the issues before purchasing, they can decide against buying the home or, at the very least, be prepared for the additional costs.

When a hermit crab decides it’s time for a new home, it scopes out a new shell before vacating its current accommodation.

But for homeowners, the process is not so easy.

Whether you buy a new home before selling your current one – or the other way around – the choice of what to do first comes down to which option makes you the most comfortable.

Both have pros and cons, and here are some to consider:

Sell first

• When you know what your current home has sold for you can zero in on exactly what you can afford in your next one. 
• Because you already know the conditions of your own home’s sale, such as the closing date, you can make informed offers.
• The downside: If you can’t get possession of your new house before leaving your current one, or even worse, can’t find what you’re looking for, you’ll need temporary housing. Can you afford a short-term rental, and what will you do with your furniture while you’re waiting?

Buy first

• If you’ve found a home with unbelievable features in a great neighbourhood at an awesome price, the pressure is on. You really want this dream home, so in this case, you may have to buy before selling. 
• If the local real estate market is hot, you might feel safer buying first.
  

  It’s probably a safe bet your home will sell fast, unless it’s out of step with its neighbours; if it’s a fixer, or if it’s the best home in the neighbourhood, it may languish or sell below asking.

• The downside: If you buy first and your home does languish, the worst case scenario is you’re stuck with double mortgage payments.

And double stress.

Some families handle risk better than others. What kind and how much depends on your circumstances.

Everyone knows that a home's features can make or break a home sale, and that's truer now than ever. But when it comes time to sell your home, not all home-improvement projects are created equal.

While some home improvements are worth the time and money that you put into them, just as many are not, and it's important to know the difference so that you can show your home in the best light while maximizing your return on investment.

If you're thinking about selling your house anytime soon, think twice before making any of these home improvements:

1. Extreme Additions: Strategic additions that make better use of home space and lot lines can help at selling time, but home improvements that are too personalized or elaborate may have the opposite effect.

"A lot of times we advise our sellers not to do any major additions to a property, because you could price yourself out of the market, as well as increase property taxes for the future buyer," says Renee Mayhall, RealEstate.com. "You want to sell the home and move on to a property that's going to better suit your needs, and let the buyer put their own personal touch on it instead, because you literally won't get that money back."

2. Enclose Porches and Sun Rooms: While these spaces hold interest for some, most buyers will see a lost opportunity for valuable outdoor space or a drain on home energy efficiency, thanks to often-leaky glassed-in walls. I've also seen sun rooms on dangerously poor footings, constructed on a thin patio slab. Instead, keep porches well-maintained and out in the open. An authentic outdoor room is more flexible and appealing to buyers.

3. Way-Out Wall Coverings: Experiments with bold paint colors and personalized patterns will translate either as far out or out-of-date. Remember, this isn't personal, it's real estate. Keep home interiors neutral so that potential buyers have an appealing canvas on which to draft their own stylistic vision and lifestyle.

4. Bad Basement Finishes: Basement finishes can lead to a host of problems for you, as well as for the future owner of your home. Address basement dampness issues before converting this valuable bonus space, and avoid the temptation to carpet your basement unless you want to start a mold farm.

5. Intricate Landscaping: An overabundance of landscape planting may initially appeal to a buyer's eye, but then they'll start thinking about the time and costs of maintaining a backyard paradise. So simplify your landscape plan with easy-care planting that deliver color and impact, and highlight water-wise irrigation systems in your home's listing and open-house tours.

6. Pools and Spas: "Some people love Jacuzzis and other spa-like improvements," notes RealEstate.com Atlanta agent Katrina Walker. "But if it's not a custom home, those may be things you put money into and don't get money back out of when you try to sell the house." Swimming pools also take up valuable backyard living space and add major maintenance and liability issues to a home's real estate profile. Only add one if you plan to be in your home for a very, very long time.

7. Home Office Remodels: Though many buyers tend to work from home at least part of the time, a full-blown office remodel can be an obstacle to other uses of valuable square footage. Avoid custom bookcase installations and bulky built-ins that are difficult and expensive to remove or change.

8. Unnecessary Improvements: Replacing a roof when it only needs a few repairs and upgrading plumbing systems are just a few examples of improvements that mean big money that you'll never get back. Instead, stay on top of routine home-maintenance tasks, and let the next owner decide what major improvements to make. Be careful not to let contractors supersize small repair projects by talking you into full-blown replacements.

9. Anything You Can't Finish: Projects-in-progress shouldn't be among the features of open houses and walk-throughs. If you have a few final improvements in mind, you'll either need to go with a pro or just say no when time and a home sale are of the essence.

"You want to get everything ready before you start to sell, instead of working it out in-between," advises Harrison Tulloss, a ZipRealty agent based in Releigh, N.C. "If you can do small changes and work with what you've got, it usually ends up working out better than totally re-creating or rearranging, and not getting any value out of the investment."

Article By Tom Kraeutler 

One thing that most buyers are looking for is space. They want to know they're going to have room for everything (and everyone) and they're not going to grow out of their house too quickly. So here are some ways to make your house seem bigger than it really is.

Get rid of clutter

This is probably the most important secret to increasing the illusion of space. Remove items you don't need from surfaces, particularly in the kitchen. Keep shelves tidy and not stuffed with books and ornaments.

Paint the walls

Use white or neutral colors to make rooms appear light and spacious. Use tones of a neutral color such as brown or gray to avoid visual clutter and make your décor feel more harmonious.

Consider off-site storage

If you're running out of room for your possessions, move some of them into a storage unit while your house is on the market. Alternatively, have a yard sale to get rid of unwanted items — or donate them to charity. Otherwise, your house might look as if it's not spacious enough for a family.

Remove some furniture

Potential buyers need to be able to walk around your house without bumping into chairs and tables. Put some furniture into storage until you move. Leave a path through your rooms that buyers can walk through.

Organize closets

Make sure you've tidied your closets. Invest in an organizing system, if necessary. Remove clothing that you're not likely to wear from your closets.

Clean up the garage

People want to know they can fit a car (or two) in the garage and still have room for storing their possessions. So clear out your garage and neatly organize everything that must stay in there.

Mirrors and drapes

Place mirrors in strategic places and remove fussy window treatments to enhance the illusion of space.

Creating an inviting landscape not only ensures a positive first impression with buyers but may also increase your home’s value and lead to a quicker sale.

You don’t have to spend a lot to make big improvements in your home’s curb appeal. Keeping your lawn manicured – mowed and edged – and trimming bushes and trees is an inexpensive way to make a positive impression on buyers. You’ll also want to remove any dead or diseased plants and ensure beds are weeded and freshly mulched.

Before beginning any landscape project, make a plan. And if you live in a neighborhood with restrictive covenants requiring approval by a landscape committee, be sure to follow proper procedures to avoid spending money on projects that you may be forced to undo later. A project plan will also help ensure that you make wise choices and stay within your budget.

Use color and depth to create visual interest, and select a variety of plants that bloom or change color throughout the year so your yard will be attractive regardless of the season. If your yard is open to neighbors’ yards, a street or public areas, consider screening to create a more private space. This can be accomplished with evergreen trees and bushes or with an attractive fence.

Sometimes what you remove from a yard can be as important as what you put in. If the front of your home is obscured by overgrown trees or bushes, remove them or trim them back to help buyers get a clear view of your home. Remember that the goal is to create a welcoming first impression that says, “Come in!”

Trends in landscaping

• Low maintenance vegetation: less lawn to mow, helps keep weeds in check.
• More trees: enhance beauty and provide shade.
• Decks, patios and terraces: offer outdoor living space for dining, entertaining and relaxation.
• Outdoor lighting: provides enticing views of your home and landscaping at night.
• Irrigation system: costs more but simplifies lawn care and is attractive to buyers.

Spring is home-buying season, and if you have friends moving into their first home, you know a housewarming gift is in order.

While flowers and candles are lovely, why not pick up something practical, particularly for those first-time homeowners? Read on for ideas that are sure to be appreciated.

Books
Pay a visit to your local bookstore and check out the home improvement shelves. Books on do-it-yourself home projects or a first-time owner’s guide are great options. Alternatively, pick up a beautiful coffee table book on a subject your friends are interested in.

Gift baskets
Don’t pay big bucks for someone else to put one together; get creative and personalize a gift basket yourself. Try items a homeowner would find handy, such as dish towels, hand soap, linen spray, funky paper napkins and monogrammed coffee mugs. Or go with a theme, such as movies: Pick up a few classics on DVD and add some gourmet snacks.

Gift cards
Buy them a gift card for home improvement, décor, gardening or grocery stores. Or give them a break with a restaurant gift certificate or a one-time visit by a cleaning service.

Tools
A collection of essential tools is something that every homeowner will need at some point. Buy a basic toolbox and fill it with items such as a hammer, various screwdrivers, pliers, a wrench and a tape measure. Or choose one tool – a drill or a hammer – and buy the best quality item you can afford. Include drill bits or nails.

All-season rooms – whether they’re heated, fully insulated sunrooms or enclosed patios with an independent heating source – provide the perfect bridge between indoor and outdoor living spaces. But many homeowners aren’t quite sure what to do with this sunny space.

If you’ve got an all-season room, take advantage of its potential. Determine your best use for the room and then think outside the glass box – perhaps you need a home office or a transition area from outside to inside to leave muddy clogs and jackets.

All-season rooms make great party spaces, family hangouts … even mud rooms.

Greenhouse. A glass-enclosed sunroom provides lots of natural light for plants all year long. Use tile flooring for easy cleanup. A sink or easy access to a hose will make watering a breeze, and don’t forget a small storage unit to hold fertilizer, pots and other plant paraphernalia. Add a comfy wicker chair and table so you can sit and enjoy the greenery.

Home office. With the addition of bookshelves and a desk, an insulated sunroom can be perfect for working at home. While the idea of a home office filled with light appeals, blinds or curtains are essential for making it work for work. Choose light furniture and sunny paint colours. 

Mud room. An enclosed patio is perfect for storing shoes, jackets and seasonal items. Pick easy-to-clean, scratch-resistant flooring. Add mats for muddy boots, stand-up coat storage or pegs and a bench for removing your shoes.

Party room. A sunroom can be party central. Wicker furniture and light-coloured cushions keep the look airy and light, and bright flowers in small glass vases add punches of colour. Use a bar cart to store tableware and glassware. Portable speakers or an iPod dock add music without taking up too much space, and they can be tucked away when not in use.

H.S.T. will be eliminated April 1, 2013 (yes, April Fool’s Day). To help purchasers of new homes, the provincial government has announced transitional rules.

Effective April 1, 2012, buyers may be eligible for a provincial enhanced New Housing Rebate if they buy, as their primary residence, a home (as currently defined) priced up to $850,000. The current threshold is $525,000.

In addition, buyers may also be eligible for a provincial New Housing Rebate if they buy a secondary vacation or recreational home outside the Greater Vancouver and Capital Regional Districts priced up to $850,000.

Buyers of new homes will be eligible for a rebate of 71.43% of the provincial portion of the HST paid on the new home up to a maximum rebate of $42,500. Homes priced at more than $850,000 will be eligible for a flat rebate of $42,500. 

Below are the typical scenarios.

If a buyer enters into an agreement dated on or before April 1, 2012 and they take ownership or possession on or before April 1, 2012, nothing changes. The buyer will pay the 12% HST and be eligible for a rebate of up to $26,250 on homes priced to a maximum of $525,000. Homes priced at more than $525,000 are eligible for a flat rebate of $26,250.

If buyers have entered into an agreement dated on or before April 1, 2012 and they take ownership or possession on or before April 1, 2013, they will pay the 12% HST and be eligible for a rebate of up to $42,500 on homes priced to a maximum of $850,000. Homes priced at more than $850,000 are eligible for a flat rebate of $42,500. 

If a buyer purchases a presale residential property and they have an agreement dated on or before April 1, 2012 and they take ownership or possession on or after April 1, 2013, they will not pay the 7% provincial portion of the HST. Instead, buyers will pay a temporary transitional provincial tax of 2% on the full house price. This 2% reflects an embedded PST builders pay on materials. 

If a buyer purchases a residential property and they have an agreement dated on or after April 1, 2012 but the construction of the home commenced before April 1, 2013, and they take ownership and possession after April 1, 2013, they will pay the 12% HST and be eligible for a rebate of up to $42,500 on homes priced to a maximum of $850,000. Homes priced more than $850,000 are eligible for a flat rebate of $42,500.

If a buyer purchases a residential property and they have an agreement dated on or after April 1, 2012 but the construction of the home commenced before April 1, 2013, and they take ownership and possession after April 1, 2013,they will not pay the 7% provincial portion of the HST. Instead, buyers will pay a temporary transitional provincial tax of 2% on the full house price. This 2% reflects an embedded PST builders pay on materials.

If the Contract of Purchase and Sale is signed on or after April 1, 2013, with possession after April 1, 2013,only GST is applicable. The HST will generally cease to apply to sales of real property (including residential real property) if ownership and possession of the property transfer on or after April 1, 2013. This will be the case for sales of new housing, irrespective of whether the agreement of purchase and sale was entered into before April 1, 2013 or whether construction of the new housing began before April 1, 2013.

If a Contract of Purchase and Sale is signed on or before November 18, 2009, or construction began before July 1, 2010, with possession on or after April 1, 2013 special transitional rules apply. In this situation a Buyer will pay a 2% transition tax.

If a Contract of Purchase and Sale is signed after November 18, 2009, or construction began before July 1, 2010, with possession on or after April 1, 2013 the buyer will pay a 2% transition tax. However the 2% tax will not apply where construction has been substantially completed before July 1, 2010 and the PST Transitional New Housing Rebate has not been claimed as of February 17, 2012.

All the same rules apply to recreational property that apply to other residential property.