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A Replay: Michele Talks About Tax Tips And First Time Home Buyer Tips!

Posted by Brad Fry on August 31, 2021
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Warning! ;) This is a digitally automated transcript of the show so there will be mistakes throughout - including the spelling of Michele's name!

 

Curtis Pope: 

Here we are another Saturday morning a beautiful Saturday morning perfect time to talk real estate. It's the Cummins Real Estate Group show with the one and only Michele Cummins and myself Curtis Pope. Good morning, Michele. How you doing?

Michele Cummins - PREC: 

Good morning, Chris. I'm doing fantastic. And how is your fine day so far rolling out?

Curtis Pope: 

Well, I got a cup of coffee in hand and I am good to go.

Michele Cummins - PREC: 

Oh, me too. Actually, I'm almost done with my second cup. Oh,

Curtis Pope: 

you're gonna be really good and caffeinated today.

Michele Cummins - PREC: 

Oh, yeah. I'm awake. I'm awake.

Curtis Pope: 

Excellent. Well, that's it. We need both of us to be awake. So we can we can talk coherently here about real estate.

Michele Cummins - PREC: 

You know, I think everyone is out mowing already this morning.

Curtis Pope: 

Yeah, that's one of the things I get to do today. Once I'm done here. I gotta cut the grass

Michele Cummins - PREC: 

before it gets too hot because yeah, it's gonna be one of the hottest days so far this year. That's what

Curtis Pope: 

Environment Canada is telling us.

Michele Cummins - PREC: 

Yeah, so time to go outdoors and do some gardening and Oh, that reminds me I've got I did just to post a couple days ago about outdoor and making your outdoor space, fun with outdoor structures and sits by patio covers pergolas, decks, gazebos, sheds, greenhouses, there's great tomatoes, bridges, got to kind of fix our bridge ponds are so many great ideas that you can transform your outdoor space. And why not use every square footage possible. You're blessed to have every square footage you have. So use it use every inch and make a statement with it and enjoy it because we're all at home more often these days and we our backyards are our playground right now.

Curtis Pope: 

You know, pergola is one of my all time favorite words.

Michele Cummins - PREC: 

Mine too.

Curtis Pope: 

I don't know why it's just a fun word to say. pergola.

Michele Cummins - PREC: 

It is,

Curtis Pope: 

when it's really you know, it live, they look cool, but it's like, they're not really keeping the rain or anything off. Yes. So I don't know why they're so popular, but I love them.

Michele Cummins - PREC: 

Places to grow beautiful vine,

Curtis Pope: 

I guess. Yeah. Okay. Yeah.

Michele Cummins - PREC: 

So, okay, buying this, this show buying a home in this type of market that we're in. later on. In the second segment, we're going to talk about six tips for first time homebuyers. And we're gonna also talk about the four things people are looking for in 2021 and buying tips for that and and what are the amenities people want this year. So we're talking about that but you know, it's really intimidating. Adventure this buying home, especially in today's market. So I wanted to say as well on my actual business Facebook page, which is just Michelle Cummins, REMAX little oak, or it's at Fraser Valley Realty, to equip yourself with the knowledge of the costs associated with homeownership and the cost of living, which a lot of people don't think about that they first think about getting the mortgage, and what does that look like, but what do the overall costs look like on a day to day quarterly, annual basis, right. So on on there, I have the home budget planner, so I posted it, I think Wednesday or Tuesday A few days ago. But it can be an incredibly useful tool. So check it out. Hopefully it helps you wanted to share that. Excellent. Good idea. And also what has been happening in the last I would say two weeks, maybe three, but really, we've been noticing it in the industry the last week or two is that multiple offers have sort of come to a home where we feel like we're going to get six offers we this week, we really haven't had any multiple offers, like none compared to what we had a month ago. Right? And last week, you know where you thought maybe you get six you got maybe two or you maybe we need that you get four you get none. Like it's really it's, it's shifted. So having said that mark hat has set three all time records in real estate for the Fraser Valley. So it's not like our market is our prices and sales aren't happening and listings aren't happening they are but just I wanted to give the knowledge and caution sellers for their expectations. If you're going to list your home you were gonna get the highest price possible because we are at the highest prices still. And it should sell relatively pretty quick but you know, you might not get multiple offers. So a warning or a heads up that you should definitely price your home now in today's market for what you feel it's going to sell for so there's no more You know, pricing it at 850, let's say when you think it's gonna sell for around 900 or more, or, you know, 899 when we think it's gonna sell over 900 you know, just just price it where you think it's gonna sell, whether you feel the market value is, make sure your realtor you know, take their advice on this because we're in the thick of it. 24 seven real estate is it's not a game, it's literally we're working hard every minute of every day, and we hardly sleep or eat. So, especially in a market like this, so we know it, we know exactly what's going on. And so I just wanted to share that because sellers, you know, have expectations maybe still that there's all these multiple offers happening and but you know, no, right now, you really got to price smart and price well, so that you will be get an offer within the first week. So but if you do it right, you will definitely still you're gonna make top dollar, it's still the highest prices ever. It's just not multiple offers anymore.

Curtis Pope: 

strategy of figuring out which technique to use, as we've discussed so many times about going low and looking for multiple offers or going high because you want to get that certain dollar figure Well, now, you're pretty much going for just what you're looking for, for your price.

Michele Cummins - PREC: 

Exactly, exactly. I know some, some realtors have expressed. You know, I just saw this actually, you know, was yesterday. And he he said that his seller of his said, I want to price it at this. But I won't sell for anything less than this. And then I set this and then but it was it was like, Oh, that's not the strategy we need to use today because things have changed. And that's the real estate market it you know, it can change overnight. So that's where we're at now. Now, Chris, I have not been keeping an eye on the time and I wanted to talk about it's tax time and April 30 is coming up and I have some real estate tax, write off advice to give Do we have time to talk about that? We

Curtis Pope: 

got about four minutes still. So let's go for it.

Michele Cummins - PREC: 

Okay, let's do it. Okay. So people may not know that you actually there's some real estate right off so you can you can have some people can. Now before I talk about that, so there's a great website I found it's called tax tips.ca. So it's Canadian, and it actually has some, it's chock full of like tax calculators, rate brackets, and a lot more. So it's always wise to gain the knowledge for yourself and know at the end of the day, where you're really making, you know, after taxes, what do you put in your pocket after taxes after the deductions? You know, what type of write offs can you use, and myself, for? I looked for years and years, obviously, I use an accountant. For years and years ago, I was looking for a good one. You know, I've been in real estate selling for 18 years. And I've had to go through a few accountants and it's so hard to find, you know, a good one. And I found an amazing one. About four years ago. It's been four years and Andrew is the name and God virtual and he's out of our heels with I've replanning group, and they're an amazing group. We've had him on the show, actually, I think that two years ago, maybe 2018 or 19. So we have their show on our podcast. But he is amazing. So anyways, shout out to him. If you need an accountant, definitely call Andrew he will take care of you at Ivor planning group. But okay, so this is about each year. I mean, so many of us Canadians move from our primary residence, so some might be able to deduct those certain moving expenses on their year end personal tax return. Not everyone can claim the deduction though, too bad, as there's criteria for eligibility, and certain types of expenses that can be deducted. So who can claim moving expenses, it's individuals who have moved and established a new home to be employed or to run a business at a new location. they're entitled to disaster illegible moving expenses, you must be deemed or factual resident of Canada and the move must go from the place where you are, ordinarily reside your main primary residence to another place where you will ordinarily reside, you may be eligible for the deduction. If the new home is at least 40 kilometers closer to your new place at work than the prior locations. It covers individuals who have moved within Canada from outside Canada to a new work location in Canada, or from Canada to a new work location outside of Canada, and certain individuals who moved between two locations outside of Canada. So lots of information, but if you're Canadian, this is great. full time students may also qualify to be dusty, illegible moving expenses from part of their scholarships, fellowships, you know, whatever, they have the grants. So what type of expenses? Can you claim? Well, you can deduct illegible moving expenses, and there's a lot of them. There's transportation and storage costs. That's very common, includes movers, movers in transit storage packing your insurance, your travel expenses to a new location, including your vehicle expenses, your meals and accommodations for you and your family members for a certain amount of time. So to claim the vehicle or middle expenses, you must either have the details or like you just have to, there's a lot of details again, talk to your accountant, make sure you don't miss any of these write offs. Temporary living expenses, I think it's up to 15 days is what I had read. And there's so much more I mean, the cost of your legal documents and simple things like replacing your driver's license and your vehicle permits, and there's just so much you're moving your address that cost money at the post office. So all these expenses, the cost of selling, so just want to make sure that everyone knew that so you're not missing out. You

Curtis Pope: 

know, it's all true. Because I moved back to the lower mainland from Prince George, we were able to write off so much. And it was funny because the government actually, you know, they said, Oh, we need to see proof of all these receipts. So I sent it to them. And then because they sent me my return, it was like a huge return. It was like the biggest tax for November God, because we had so many write offs. So when I sent them all my receipts, they learned the lesson, because the government then owed me another 400 bucks. I'd missed a couple things.

Michele Cummins - PREC: 

Oh, that's great.

Curtis Pope: 

So it's funny, the government's never asked me to reverse seat sense for some reason. But you know, you're right. You can write off just about everything on the movie, like yeah, you know, I was able to write off the hotel room on the way down, and I was able to write off the meals on the way home and stuff like that. And it was just like, yeah, just about everything you could imagine you could write off

Michele Cummins - PREC: 

that you knew about that.

Curtis Pope: 

Well, I made a big move and the kids were young and every penny counted then so yeah. Absolutely. All right. Well, we got it. We better take a break here. And if people want to get in touch with you and ask you questions, things like that, where can they go?

Michele Cummins - PREC: 

That's all cummins.ca

Curtis Pope: 

We're back with more right after this. All right, we're back with Segment Number Two of the Cummins Real Estate Group show with local realtor superstar Michelle Cummins, and myself Curtis Pope. Now, Michelle, what do we want to talk we're the second thing that I believe is something to do with first time homebuyers

Michele Cummins - PREC: 

was I wanted to start off with that because I had a deficiency walkthrough of a brand new beautiful townhouses last week a deficiency walkthrough for those who might not know for new home construction you before you move in you walkthrough with the builder or their representative, usually and your realtor. And you know, you got some green tape and you walk around with a very eagle eye and microscope I send you for you take a look at everything. And you mark anything that's a deficiency so that they can fix it hopefully before you move in. But there's also the one year builder's warranty that that you have. So when you nail pops up to your home settles and everything, you get to give that list to the builder and they will come back their service guys and fix everything by the end of the year. So you have a whole year. But people you know, when you buy a new home, you want everything to be perfect because it's new, it should be. So that's called the deficiency walkthrough. So anyways, we did that. It was in series beautiful, how complex right on the park, lots of trails, this wonderful first time homebuyer a couple of miles off, I love them, they're there. They're fantastic. But I wanted it made me so joyful. It always makes me joyful. Especially first time homebuyers, right. It's just such a big thing. It's a big purchase and so proud of them to get there and do it and make that decision and and it's just so good for them. So anyway, so happy. So the walk they were very well. It went very well. And I wanted to get some helpful advice. So six smart strategies for first time homebuyers. If you're thinking about buying a home and you're wondering what you know, when is the right time? Well, here's some six. It's six pieces of practical advice. One is of course, get a pre approval. We always talk about this on the show, everyone should get a pre approval. cursory pre approvals from an online calculator only provided top level estimate but a true pre approval account for factors such as your income, credit score, and downpayment. Now we have the partnership with a few mortgage providers and mortgage brokers. thrive mortgage group is one of our mortgage providers that we use and they have some great great efficient ways of getting your documents uploaded and making it efficient of making it clear and understandable, it's very safe because it doesn't just save on her computer. You know, they're a great source for efficiency. And if you like, Pat, and you like things done quickly and swiftly, and you'd like to keep communication, so you know, you haven't missed anything, they're fantastic. with that. I do have on my homepage, on my website, there is a pink tab, and you click it and yes, most online, almost all online calculators don't give you an actual pre approval where you're, you know, you're solid for that interest rate for the next 120 days. But but that pink tab on my site is from haystacks mortgages. And they actually do give you a true pre approval, there is an actual mortgage provider on the other end of that, and, and that's a six minute pre approval, it's very fast, and then they follow up and get you all your documents. But there, if you're just out and you need something quick, go on my home page and click that link. And within six minutes, you can get approved. So second thing know your numbers, you should have the resources required to handle the inevitable extra costs. We talked about costs earlier. And these are the costs of actually purchasing a property. If you only have enough to cover the 5% down payment, then you won't you can't afford a house you have to think of other things if you go if you purchase over a certain price point you've got property transfer tax. But if you're in the average price point, you know, pretty much first time homebuyers that is waived. But you there's other expenses, the legal conveyancing costs, there may be some property taxes that you owe back to the seller who may have already paid for the full year. You know, there's moving costs, we talked about that. So there's other costs, so you got to have more than justify percent down but as far as the downpayment, that's a minimum of 5%. Okay, three, don't let FOMO be your main motivation. When you get into a deal with thin margins. If anything goes wrong financially, you know, you're in trouble. Hence, buying decisions can't only be based on the FOMO fear of missing out. Make sure you have all your ducks in a row your T's crossed your I's dotted you've got professional advice. you're leaning on that professional advice you're asking questions. There's never too many questions you can ask. Even if you're not a first time homebuyer but especially if you're a first time homebuyer and again, to help out those who are buying, I have a buyer's guide on my website as well under the blog or just search for it or email me I'm happy to email it to you. It's a full Buyer's Guide to prepare you for buying. Okay, so number four, future proof your buying decisions. think seriously about what your plans for the future are assess where you're going to be comfortable today, of course, but also in the next five years. What kind of hobbies do you have? Where do you see yourself in the next three years and five years? Seriously, you got to think of those things because life changes pretty quick. And number five, don't be too proud to ask for help just like asking questions. Don't be too proud to ask for help. You know, Family Health won't always be available. It can be a way to get into the market, though, at today's high prices. But you just if you need it, just ask. There's a lot of people out there who family friends who might help you. Don't worry about hitting a 20% downpayment. So many people think they need 20%. Well, while the cost of mortgage default insurance will add up to 5% to your mortgage, it often comes with better interest rates. Yes, having lower down payments below 20% actually gives you a better interest rate. Some people think, Oh, I'm gonna put 20 50% down, it's all good. But guess what, there, there are higher interest rates, the more you put down. I know that sounds funny, but there's reasons for it. So so you're saving on the monthly payments. So yeah, there you go. that those are the six tips for home first time homebuyers. And then I want to talk about four reasons people are buying homes in 2021. This year, why are they buying? Well, the record low mortgage interest rates is number one, the average rate for a 30 year fixed mortgage and a record low 16 times continuing to fall. Oh my goodness, many wonder how long these rates will last creating urgency to buy this year. And because the term rates have currently gone up late recently, this variable rate has not because as we talked about, the Bank of Canada hat is holding the base rate. So the variable rates aren't changing just some of the term rates have and a lot of people do the 5% down on sorry, five year term, because then they hear about it all the time. You know, they're just like, Well, isn't that what everyone does? I'll do what everyone does, but sometimes that variable rate is A lot better for you, you can get out of the mortgage without a penalty. Who knows in two years if you change your mind, or if you're having a job transfer, and you don't want that prepayment penalty that $30,000, or whatever it is, it can be really high in, especially in your first three years into your mortgage into your term mortgage. So there's things to think about to working from home, that's a reason people are buying this year. remote work is a new normal, and maybe here to stay. And I'm telling you, my assistants, they're working from home they have since last March, I have a wonderful new lady coming on board, and she's going to be working from home and guess what they're working from home even after COVID is over, because why not? So I still have my office office. But you know, let them work from home. That's kind of I think the new norm for a lot of people after all this is over. For some working remotely in their current home is challenging, though. I mean, they were used to it. I've got so many people who are moving this year because of that challenge. So they may be looking at better options this year. Three more outdoor space. So we talked about earlier in the first segment of the show about creating some great outdoor space and entertaining area because we're all you know, we got to entertain ourselves at home. Being at home is driving those in some areas to seek less densely populated neighborhoods and more usable outdoor space so they have more room to stretch their legs. And I've got to find Keith Abbotsford homes right now. Oh, my goodness, their outdoor spaces are private and fun and relaxing. And just wonderful. So have a look at my website for those listings. And actually, one we're going to talk about, because we just listed yesterday, and the other one just as a week ago or so.

Curtis Pope: 

Talking about outdoor spaces in your husband sends me a text the other day of himself sitting by the campfire with the mountains in the background. Yeah. Must be rough,

Michele Cummins - PREC: 

isn't it? I know. So you can choose your wonderful outdoor space. You're enjoying your outdoor space more now that you've moved in before, right? Absolutely. And

Curtis Pope: 

the magnolia tree now is opened up and it's just beautiful.

Michele Cummins - PREC: 

Oh, send me a photo. I will do that. posted online.

Curtis Pope: 

Good call do that.

Michele Cummins - PREC: 

Yeah. Okay, number four, avoiding renovations. So many homeowners now would rather buy a new home or a home that's renovated and go through the process of fixing up the one they have? Yes. And yeah, that you can get it. Why not get the mortgage at the low low interest rates that there are and have something already done for you rather than buying something that you need to renovate or buying, you know, something that you know, you're going to have to take the time and out of your own pocket or whatever anyways, so maybe we learned easy, you know, our lives are stressful, our lives are busy. Most of us in a lot of us don't have the time, or the energy or the where with all to do renovations. And I've been finding this trend lately is buyers just want a gun. They want it pretty. They want it nice. They want to see what they want. They don't want to have to wait for it. So that's a big one.

Curtis Pope: 

Absolutely.

Michele Cummins - PREC: 

So now that brings me to what amenities or buyers are on buyers wish lists this year. So we talked about first time homebuyers. We talked about what buyers are looking for right now like why they're buying I say, but now what amenities are they looking for. So it kind of goes hand in hand. But you know, while public health precautions continue to keep us at home these features will become more popular to create safer spaces for us while providing an oasis of comfort. So this is an interesting one because this isn't just what I've come up with numerous listings with the term, home office or Zoom Room. Okay, this is from Zillow, this up, they're up 48.5% year to year in just at the end of last year. So now it's probably even more so that's evidence that homeowners are preparing for long term remote working environments. So there you go home office or Zoom Room when when it used to be Oh do you have seven bedrooms or you are there's an office and you know you might have wanted to go oh let's let's just say it's a bedroom because there's room here you just have to put up a wall or doors and you have a closet. Well call that instead of a bedroom call it a Zoom Room or home office because that's what people need. I prefer home office but there you go. And vacation worthy amenities. We talked about the entertainers outdoor space and use that square footage you have and make it beautiful because buyers are focusing on functionality functionality right, especially the backyards and fire pits and outdoor kitchens, and then safer and healthier homes. homebuyers are looking for home gym. Now more than ever Alongside home sway areas where they can have private time to meditate. So that can go from inside to outside when the weather gets better. So yeah, those are those are the top things people are looking for. Oh and more room for for the humans and the pets. So more people are living in multi generational households. And this year, the share of young people moving back home reached an all time high as schools and universities and things have gone online. So many of the students have gone back home. Also pets, pet friendly rentals are actually up 73.1% according to Zillow. And you were you had sent me earlier, the the notice or the the media press about how rental rates in the overall Canadian overall area has gone down. And we were talking about how Vancouver though rentals have gone up?

Curtis Pope: 

Yes, yes. It's just they hold their value here because we just don't have the inventory. Right.

Michele Cummins - PREC: 

Exactly. Oh, and the last thing is small towns and new builds. So as we talked about earlier about how buyers want something new or already renovated, something that you just move in and enjoy love, the bling bling. So that's what they're looking for the pandemic has sparked a migration from densely packed cities to smaller towns and homebuyers are prioritizing new builds for customization options up 25% and that there that's cleaner and and unused. And that probably has to do with health concerns and you know, bacteria and dirty other people's you know, and I think that's why new homes are also up as well. Oh and the quarter of the week before we go. Okay, I believe you can and you're halfway there.

Curtis Pope: 

theater was about. Very, very true. Very good. All right. Well, people want to get more information about your listings and about the services you provide. As a top notch realtor, where can they go?

Michele Cummins - PREC: 

Michelle, come and stop ca

Curtis Pope: 

and make plans to join us again next week. But once again, we will talk real estate in order to unlock your real estate potential on a show where real estate is maximized. Thanks for listening

 

If you missed last weeks episode where Michele talks Rental Rates and More, please go back and take a listen - it's well worth it!

 

Click Here to listen to the full Episode & Previous Episodes!