Happy Hallowe'en!!!!

Boo! Geez, I can be scary. Well, I have a bunch of boxes and such now in the house, so I am going to have to make sure that Scotty gets settled in. He brought a newer couch, so I guess there isn't as pressure on my part to get the new furniture right away. This is good news for me cause I am pushing to get my real estate licence and that costs money. The sooner I get my real estate licence, the sooner I can try to recoup some of these expenses and re-invest in other things for the home, like furniture.

I'm just finding that although I am saving a lot of money by renting out the rooms, I am spending a lot of money on things like tuition and curling tournaments. It's all part of investments, so hopefully I will start to see some larger returns on my money in the near future. For the time being, the money will continue to come into my pocket and leave it by the end of the month. I can't wait to be able to start selling homes.

Test #1 of 3 is tomorrow. I haven't covered all of the material yet, but hope to do so tonight. I haven't found the material to be terribly difficult yet, but I could be surprised tomorrow on the exam. I guess we'll just have to wait and see. Let's hope I can continue my torrid pace through these courses and I don't have any bumps in the road.

Full House.. and some tidbits...

Although not quite the Danny, Joey, Jesse, Becky, DJ, Steph and Michelle, the rooms are now full in my house. Scotty moves in today and I had spent last night trying to get a new coat of paint on his walls before he moved in. I've been so busy lately that I have been postponing some of the household repairs, but this weekend should see an improvement in that regard.

On a side note, there are no more houses listed in the Fringewood area of Stittsville. Since I own a house in that area, it will be interesting to see how the market develops over the winter. It's not an overly active area, but the surrounding area is seeing a lot of new development. I'm thinking of disposing of the property in the spring or summer next year, but I think it will be more market dependent.

Good news on the international front today. In the roller coaster that is the economy, the US has reported a better than expected performance in the 3rd quarter. Since it had been doom and gloom in the US, any news of this sort is expected to help the world's markets, and hopefully will make this economic slowdown a very brief and mild one.

Time is short.

I don't have much time today, so this is more just an update. I am writing my real estate exam this Saturday, so that means that I will be inside studying on Hallowe'en night. I'm a little behind in the material at this point, but the material is pretty easy so far, so I do not anticipate many problems on Saturday.

This is exam one of three before I can go and get my license.

Budgeting

When you are going to go and buy your home, there are a few extra costs that you might not consider. For example, I've mentioned lawyer fees and home inspections in previous posts. All of these costs can add up quickly. They can eat into your downpayment, and although you may be approved for a larger amount, you likely want to keep your mortgage to a minimum.

I would say that you should plan to spend between 4-5 thousand in cash, outside of your downpayment. Why is this important? Well, if you are planning to take advantage of the Home Buyer's plan, you will need cash to pay for your deposit (usually about $2000), plus things like home inspections and lawyer fees. These items add up quickly and you may not be able to get the cash out of your RRSP's quickly enough to close a deal. The last thing you would want is a house of your dreams slipping through your fingers because you have your money "tied-up".

This is also important when it comes to mortgage insurance. Canada's mortgage system requires that you purchase insurance on a mortgage where you do not have a minimum of 25% deposit. 25% deposit is a very large sum and if you are near that amount, you'll want to ensure that you will have enough cash to pay for any extra costs that might incur. You don't want to buy the insurance because it gets expensive in the long-run.

Now, I'm being conservative by estimating $4-5K. You will likely not need this much cash for everything, but it will be good that you have an extra buffer of cash. Not only can things come up during the buying process, there is a good likelihood that things will occur after you purchase a house. I'm not saying that these items will be house related, but you need to ensure that you can pay for that car repair, plane ticket, or anything else that comes at you unexpectedly.

Buying a home will likely be your largest commitment in your life. With marriage's getting shorter, a 25-year mortgage is a hefty burden and it becomes a larger burden than most marriages, financially and in terms of length.

Lawyer fees

The other day someone had asked me about lawyer fees on a real estate purchase. This is a bit of a tricky area. It's sort of like the Southwest Airlines commercials. You know, the ones where the guys are scuba diving when one of the men realize that is no oxygen tank, and finds out after he's under water that there was an extra charge. There are always extra costs to consider.

First, I was charged $400 by my lawyer, but that did not include many of his disbursements. Some lawyer's may include their disbursements in their quotes, so the quotes can differ quite a bit. When I went for a mortgage, the mortgage broker had estimated costs of about $1400 for a lawyer. I am assuming that this amount included many of the disbursements. All in all, I paid about $1000 for all of my legal work. This includes title registration and other various things lawyer's do. I recommend that you budget for the worse (say $1400) just in case, but realistically it should be less if you have a decent lawyer.

ORIEO

Unfortunately, I was unable to attend last night's meeting of OREIO (OttawaReal Estate Investors Organization). I had curling to attend. It was our first night at Carp's Tubman league. For the record, we won 8-1 after 6 ends. It was a slow start for our team, but we managed the game well and made shots when we really needed to.

So, I diverted a little bit from what I wanted to talk about. At this point, I do not know much about OREIO, but it looks like the perfect type of organization that meets my needs as a potential real estate agent/owner. I would like to go to the meetings, which are held about once a month, but they fall on my curling night. I think I am going to have to wait until there is a meeting that appeals to me directly, and I'll miss a night or two of curling.

From what I understand, there are a ton of real estate people at these meetings. It allows for some really good networking to occur. From mortgages to investment opportunities, there is a lot of information and contacts to gather. I think it will be quite worth it for myself and any of my potential real estate clients.

I know most people that read this aren't going to be real estate investors, but I wanted to let you know that I am continuing to gather information about real estate and how that may help you in the future if you happen to use me as your real estate agent. I'll have good contacts for mortgages, home inspections, repairs, etc.

New poll... reward program!

Ok. If you're reading this on facebook, I'd like you to take a moment to visit featherslam.blogspot.com. On this website, I have included a new poll asking visitors their preferred compensation in a referral reward program. I'd like for you to go and vote. It will give me an indication to what might motivate people to use word-of-mouth to help me out in my little real estate venture.

Why a referral program? Well, real estate is all about relationships and my network is only so big. In order for me to be a successful real estate agent, I believe that I need to do two things. First, get the word out. Second, work hard to gain the knowledge and trust that is needed to deliver to my clients.

What kind of people am I looking for? Pretty much anyone that is looking to get involved in real estate, either buying or selling. If you're a buyer, I'm free. I do not charge any fees to help you look for a property. I earn a commission only when I help you purchase a home. The money that I am paid comes from the seller's proceeds, so I can help you choose the right home at no cost to the buyer. Nothing! Therefore, if you're referring a buyer to me, I will compensate you if I am able to make a sale. It's a pretty good deal. You get a reward and it does not cost your friends a dime.

Planting the real estate seed...

I'm not going to say that real estate is easy, but getting the word out that I'm going to be a real estate agent is pretty easy. It's a good introduction for people. It allows me to let them know that if they ever need someone to buy or sell a home that I would be available to them. The person may not be ready to buy or sell right away, but at least they know that I will soon be able to help them out.

So, when do I get my licence? Well, that isn't for certain yet. There are three courses that I need to pass first to be eligible. Typically, as I understand, it should take about 6 months to complete. Unfortunately, I don't think I want to spend that much time waiting for the exams to occur. I'm going to push myself to write right away, so that I can begin selling in 2009. I'm not sure if it's even possible with the way the exams are scheduled, but I will push for that.

So, if you're sitting there thinking, I think I would like to help Chad out with getting started in real estate, well, here's something I can do for you now. I'm going to give you a little bit of planning advice. If you're seriously thinking about buying a house in the near future, begin by putting money into an RRSP. You're going to need a downpayment for the house, so you might as well do this. Under a program called the Home Buyer's Plan (HBP), you can withdraw up to $20,000 from your RRSP for your first home. The only catch is that the money has to have been in your RRSP for 90 days. Therefore, before you go and start looking for your home, you should be putting your downpayment into an RRSP, so that you will be able to save on your taxes next year, and have a decent downpayment for your home.

So, how does this help me? Well, first, it gets me 90 days closer to my real estate licence. :P Next, it will also give you a natural buffer for giving yourself enough time to make the right decision on likely your biggest investment decision of your life. That way, I can ensure that you will be a very satisfied customer and that you will refer me to anyone else you know that may be looking at purchasing a home.

Chad the Real Estate Agent

Ok. Maybe I'm nuts. Two careers? I always liked the idea of things like new home sales, residential resales, commercial properties, and property management, but it seems as if I have jumped into the real estate game a little faster than I really had originally expected.

I've ordered the course materials and now I am studying to get my real estate licence. I write the first of 3 exams November 1st. It's a little bit rushed, but I want to complete it before I get too busy with my other job. Once the new year rolls around, I'm not going to have much time to study with all of the curling that I will be doing as well.

Someone told me that it takes about 6 months to complete the set of exams, but I'm going to push myself to try to be done most of my work by the new year. That only gives me about 3 months, but I really don't mind reading the materials because it is of great interest to me.

So, if you're thinking about buying a house in the near future, I'd like to hear from you. As an accountant, I can help you plan different ways to help you save for your house and save some money. As a real estate agent, I can help you find the house you want for the price that is reasonable. The earlier we start the process, the better you will be in the long-run. Buying a house is serious business. It will likely be the single-most important investment in your life, so you want to do your homework. I'm helping people because its what I want to do with my career. I can help you ensure that you will be comfortable with your home purchase.

Bedroom painted

I painted the bedroom at the back of the kitchen before Kristyne had moved in. I wanted to get a coat of paint on the walls because the room looked especially dirty due to a lack of care from the previous tenants. I think the room looks 1000 times better than it did, and that I am proud that I was able to install a light fixture without too much hassle.

I'm not a handyman, but I am learning. Electrical work is definetely not my specialty, so I was glad I was able to do it without any help. I'm also glad that I have not burned down the house either. I guess I am more Al "my mother is huge" Borland than Tim "the tool man" Taylor, but there are plenty of other household improvements that I can certainly screw up, but things are coming along decently.

Hopefully, I will have the ground floor all painted by the weekend (except the kitchen).

Realtor.ca

It looks like there is a new website to check out properties. Formerly, mls.ca the site has now changed to realtor.ca. It appears as if they property search function has combined with google maps to provide precise details of property locations. I have mixed feelings about this. First, I probably just don't like adjusting to something that is new. That being said, I do like the feature where properties are imuputed on a map, so that detailed locations can be seen. This is an added feature for those people that may not be familiar with all of the streets in the area.

Now, I encourage you to keep an eye on properties in your area if you are interested in purchasing a house in the next couple of years. It's good to know the market a little bit, so that you know what you can expect to pay when it comes time. It gives you an idea of what it costs, and it also gives you an opportunity to plan your down payment a little bit better. You may consider investing in RRSP's, tax savings account (new in 2009), or other investment choices while trying to build up a down payment. It's important to plan because there are certain rules and regulations that you need to follow in order to be able to take advantage of tax savings.

I'll probably talk about tax implications a bit more in a future post, but I want people to check out realtor.ca today, so that they can plan on where they would like to live and begin the planning process as soon as they can.

US subprime crisis

In a previous post, I mentioned my desire to become a real estate agent. I want to be able to access some key information and networks that will allow me to maximize the potential in a home that I buy or a home that I buy for someone else. I think it will be a key part of being able to get some deals completed. This doesn't come without consequences.

With the housing market in the US taking a huge hit, many Canadians are concerned about the economy north of the border taking a dive as well. Canadians are stretched financially with 40 year mortgages with no money down. There is a real risk that the market does take a hit as banks have been generous with their loaning policies. To me, this indicates that it may not be the best time to enter the market as a real estate agent. The markets are too volatile.

There are two reasons I believe that there will not be a crash in Canada. First, the banks are still loaning money at rates affordable to them in Canada. Even though they are taking on bigger risks, they are protected with rights to the underlying assets. Mumble jumble to you? Simply put, in the US, the banks borrow money at rate A, but loan out at rate B. Due to the intense competition, rate A is higher than rate B thus the banks are poised to lose money. In Canada, rate A is still lower than rate B.

Why would the banks do this in the US? To make it simple, they want to do business with you. Customer loyalty translates into extra revenue in forms of fees and surcharges. However, when the economy started to slow down in the US, people lost their jobs are were forced to try to sell their homes. Subsequently, the price of homes dropped because there are more sellers than buyers.

My second reason for why Canada will be better off than the US is that our economic fundamentals are better. What does this mean? Well, first off, Canadians are continuously paying off their national debt. We are saving billions of dollars in interest charges while the US is poised to sink $700 billion more this week. This is not including the future interest costs.

Next, we are running surpluses in Canada. Albeit, they have been smaller in recent months, but, nonetheless, our revenues exceed our expenses. Given the slowdown in the US economy, we are poised to feel a slight pinch from our biggest trading partner. What does this mean for the housing market? Well, it means that if we needed a bailout package such as the one in the US, we are in a much better position to fight off a recession. Therefore, people will be better suited to keep their jobs and not be forced to sell their homes. I could be wrong, but I think I make sense.

Therefore, given all of the housing market volatility, I am still poised to become a part-time real estate agent. I have an interest in this kind of stuff and I want to be able to help people as much as I can. This is merely a hobby for me, and not a career. My approach as a real estate agent is that I have information available, but I'm not going to force a sale down your throat. I don't need you to buy a house to put food on my table. I'm an accountant, but I like investment decisions.