Vern McClelland

Open House in Lloydminster East on Saturday

2010-03-10T02:50:00Z

Lloydminster East, Lloydminster - We invite everyone to visit our open house at 3318-44a Avenue Lloydminster on March 13 from 1:00 PM to 2:30 PM.

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Open House in Lloydminster West on Saturday

2010-03-10T02:49:00Z

Lloydminster West, Lloydminster - We invite everyone to visit our open house at 3106 - 57B Avenue Lloydminster, AB on March 13 from 3:00 PM to 4:30 PM.

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McClelland Minute - March 07,2010

2010-03-09T16:24:00Z

When is a Contract a Contract?

A contract is a legally binding agreement between two or more capable persons, for consideration or value, to do or not to do, some lawful and genuinely intended act. Certain essential elements must be present to make a contract enforceable. For example, the parties entering into the contract must be legally competent. The arrangement must be lawful. Each party must receive something. There must be an offer and acceptance. Both parties must consent to the terms of the contract and the agreement must be definite and clear.

Some persons are deemed by law as incapable of entering into a contract. I have had occasion to be called to list a home only to find an owner deep into the bottle. Intoxicated persons are incapable of understanding the nature of a contract so the discussion was set aside until they were sober. Sometimes an elderly person experiencing the onset of dementia will ask for our services. In these cases, I strive to actively involve family members, gently encouraging them to seek general power of attorney over their loved one’s affairs before we go any further.

There must be a lawful or legal object to the contract. If it involves criminal activity, stolen goods, or is designed to deliberately evade taxes, the contract would be totally void in a court of law. For the past few years the federal government has had the right to review every real estate trade in Canada in a nationwide effort to eliminate money laundering or the funding of terrorism. Even so, Realtors are sometimes asked to “look the other way”; for example, selling a revenue property without collecting GST, not taking proper identification from all parties, or accepting significant amounts of cash as partial payment against a sale. There are even occurrences of sellers and buyers attempting to perpetrate mortgage fraud by secretly collaborating with each other so that too, must be guarded against.

The substance of a valid, binding contract is that each party receives something from the other. In real estate, this usually is a promise from the seller to sell in return for an agreed upon sum of money from the buyer. If the consideration was so minimal as to make the contract one-sided, the courts may review the adequacy and act to bring it back into balance.

I had a client tell me of a private deal in which the seller had contacted him as the buyer offering to throw in the garden tractor if he would accelerate the purchase of a country home. They agreed between themselves that there was no need to amend the written contract that was already at the lawyers to show this chattel as part of the sale; the good ol’ handshake clause would apply. Imagine his disappointment when the bonus tractor was not forthcoming on the day of possession and the seller had already left for parts unknown. Not written; not done. If in doubt, always seek legal counsel.

Vern McClelland is associate broker with RE/MAX of Lloydminster. If you have questions or comments on this article or other real estate matters, he can be reached at 780.808.2700 or through the McClelland Group website www.mcclelland.ca

McClelland Minute - February 28, 2010

2010-03-02T17:21:00Z

Thankful To Live Here

My wife and I caught a seat sale to Florida in February, hoping to get out of the cold for a while and explore an area of North America we hadn’t seen before. As a winter vacation, it was a good news / bad news scenario. We traveled much of the central and southern part of state, including a run down to Key West, but the temperatures were the coldest experienced there in 33 years, hovering in the 50s’ most of the time making our time on the beach quite limited.

I thought I would share with you some observations on real estate activity in this part of the United States. Florida is one of four states considered to be worst hit with the housing crisis of the past two years; the others being California, Arizona, and Nevada. Obviously all are in the “sun belt” and areas considered to be prime locations for recreation or retirement.

Tourists have been coming to the coastal regions of Florida for well over a hundred years. Prominent American families have had second homes there starting as far back as the 1880s including Edison, Goodyear, and Ford. Today, it is one continuous urban development that sprawls along the Gulf of Mexico shoreline for approximately 120 miles and reaching inland at least 20 miles, from north of Tampa Bay right down to the Naples and the edge of the Everglades. It is a similar situation on the Atlantic side from Cape Canaveral to Homestead.

Up here, when we talk planned communities, we usually are referring to a subdivision with one or two schools, a park, and a modest mixture of housing from single family to apartments. Down there, planned communities are the size of Lloydminster and larger, with post-secondary campuses, business zones, and wide spread residential areas; all rising out of the limestone base of what is a relatively flat state. Today most of the newer subdivisions have an extensive amount of unoccupied housing, and it is a rare community that doesn’t have at least a quarter of the homes in a distress situation.

In the Tampa Bay area, home prices have plummeted more than 40 percent from the peak in 2006. A two bedroom, two bath, 1254 sq ft town home that sold new three years ago for $191,800, is now listed at $70,000. Similarly, a three bedroom, two bath, 1301 sq ft single family ranch style home with double attached garage originally sold for $222,800 in 2005 is now available for $97,000. I was talking to the manager of a Tractor Supply House, a store similar to our Peavey Mart. He said his acreage had devalued from $650,000 to just over $300,000 in just 30 months!

Inland central Florida is where you find Disneyworld, citrus trees, and the large reservoirs that supply fresh water to meet the incessant demands of the cities of Orlando, Miami, and Tampa-St. Petersburg-Clearwater. The government appears to be quite concerned that the demand for water is outstripping supply. All I noticed is that if you climb the 30’ high levee on the south shore of Lake Okeechobee the actual shoreline is at least a quarter mile away. Not a good sign one would think.

There also appeared to be lot of farmland actively being marketed for potential development. I guess if your oranges are freezing, and there is intense competition from cheaper South American imports, it would be tempting to cash out and be done with the struggle.

All in all, I still like our humble home in the Midwest. Yes, our weather can be cold in winter, and hot in summer, but we still have lots of open country to enjoy, a relatively stable economy, no alligators in the creek, and our communities don’t have to rebuild every 40 or 50 years following a hurricane.

Price Reduced on 208 - 6th Avenue Paradise Hill, SK in Paradise Hill

2010-02-24T20:12:00Z

Paradise Hill, Lloydminster (Part) - Announcing a price reduction on 208 - 6th Avenue Paradise Hill, SK, a 1,404 sq. ft., 2 bath, 4 bdrm 1 1/2 story. Now MLS® $144,900 - .

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Bungalow For Sale in Maidstone

2010-02-22T17:36:00Z

• 1,352 sq. ft., 2 bath, 3 bdrm bungalow - MLS® $182,500

Maidstone, Rural NW Saskatchewan - Excellent value on this newly renovated 1352 sq ft 3 level split with single attached garage on a 78'x198' lot in a great location in Maidstone, SK. Large entry off the front door leading to an open island kitchen/dining area that overlooks a well maintained back yard and patio. Good size living room, 3 bedrooms upstairs with 4 pce. bathroom. Basement has large family room plus a 2 pce. bathroom with laundry. Newer countertops and tile backsplash. Annualized power of $62.00, gas $162.00. No survey, compliance or PCDS available, tenants rights apply.

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McClelland Minute - February 21, 2010

2010-02-22T16:35:00Z

Conditional Offers

Most offers on real estate contain conditions that provide support to the buyer’s decision making process and due diligence on the property.

Subject to achieving financing by a certain date. Fairly straightforward with two aspects – the buyer’s ability to service the debt, and the value of the property as determined by independent appraisal needs to be equal to or greater than the sale price.

Subject to a current Real Property Report and Letter of Municipal Compliance. The RPR is a survey showing the boundaries of the parcel and the location of improvements within it. The compliance letter is a statement from the municipal government saying that the current use of the property and how it is been developed is appropriate to the zoning bylaw. For example, if the bylaw requires a house to be set back 25’ from the street to allow room for a boulevard, sidewalk, and vehicle parking, the RPR will provide the actual distance.

The property sells without liens and encumbrances other than those easements, covenants, or agreements that are acceptable to the buyer. Utility company corridors as an example. If you want electricity, you need a power line, and so on. Possibly the neighbour’s driveway cuts across the corner of your lot, as it has for past 40 years, so you see no harm. However, you are buying an acreage and the sewer discharges on someone else’s land. Changing that could be expensive; is it worth the risk without a proper encroachment agreement?

Subject to a Property Condition Disclosure Statement. This forms part of the contract and can be used in a court of law. Many times it prompts sellers to tell the buyer about aspects of the house they may not been able to have observed for themselves, like there is seepage every spring on to the basement floor or the water softener does not work.

Subject to a professional home inspection, with results acceptable to buyer. I bet you didn’t climb on the roof before making the offer did you? If you don’t have the skill to do this yourself, spend the money and accompany the inspector while he takes a close look at the property. Don’t sweat the small stuff; look for big ticket items that would prove costly to repair or may be a hazard.

With acreages, subject to a water quality and quantity report acceptable to buyer. Wells can change quickly. Have an independent professional test for flow and check the pumping equipment. Send a water sample to the lab. Coliforms can make you and your family sick; don’t take this area for granted.

Designate which appliances, window treatments, and other unattached goods are to stay. They are to be in working order at date of possession. Want to know what gives Realtors the most grief in a house sale? Used appliances, swapped out light fixtures, and dirty homes.

Vern McClelland is associate broker with RE/MAX of Lloydminster. If you have questions or comments on this article or other real estate matters, he can be reached at 780.808.2700 or through the McClelland Group website www.mcclelland.ca

Price Reduced on 5222 - 49th Avenue Lloydminster, SK in Lloydminster East

2010-02-19T22:11:00Z

Lloydminster East, Lloydminster - Announcing a price reduction on 5222 - 49th Avenue Lloydminster, SK, a 676 sq. ft., 2 bath, 2 bdrm single story. Now MLS® $137,500 - New Price!.

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McClelland Minute - February 14, 2010

2010-02-16T16:27:00Z

When You Don’t Need a Realtor

Most people outside the profession of Realtor think we earn our living selling real estate. I believe successful Realtors are facilitators and problem solvers; we assist sellers and buyers, landlords and tenants, to connect in a business like way with each other.

As a buyer or seller, you don’t need a Realtor if you have a logical way of determining current market value of property. With houses, this usually means an accurate description of the subject property – condition (effective age as opposed to real age), size, construction, features, location, etc. You then compare this list to similar properties that have sold within the past 180 days, adding and subtracting attributes to develop a fair analysis. You will also have to factor in for market incline or decline.

As a seller, you don’t need a Realtor if you enjoy showing strangers through at a time convenient to them and are prepared to answer questions about your property. It helps to have a bit of thick skin because buyers are often quick to criticize anything that doesn’t meet their personal standards. For example, you may be very proud of the paint colour in the living room, but they say that will be the first thing they will change upon assuming ownership. And that paving stone patio you spent several weekends building last summer? Well they want to take it out and replace it with a wood deck and hot tub.

As a buyer, you don’t need a Realtor if you have sharp observational skills. It may help to carry a check list. What is the approximate age of the shingles, were the windows wood casement or PVC, was the tub surround in good condition, how old was the furnace and hot water tank, and so on. Are you sure that the square footage or age of the home is accurate? Did the owner offer you a written disclosure statement on the condition of the property? Are there any easements on the title that may effect your ability to enjoy the property?

As a buyer or seller, you don’t need a Realtor if you enjoy the push and pull of negotiation. Some buyers start to bargain with you from the time they first enter the door. After all bullies and bluffers need houses too. Maybe you feel compelled to tell the buyer that you really need to sell or that the asking price is negotiable or try the tried and true approach “make me an offer and I will let you know if you are anywhere close” – all sure tactics to get a quick sale at your price right?

As a buyer you don’t need a Realtor because you believe that sellers always tell you the truth. Theirs was the only house on the block not to flood in last year’s 5 inch rain storm or the wiring leading to that 70 amp panel is up to date or the 20 something year old furnace has never given them a lick of trouble or it is okay to have the garage built over a gas line, no harm done.

As a seller you don’t need a Realtor because buyers always can afford your property, just ask them. Of course it helps if you drop your expectations to what they can afford; after all, they really need the property. And by the way if there is a delay in financing, it is always the bank’s fault. There should be more sellers willing to rent to own anyway or prices are way too high here compared to where they are coming from.

Yep, you don’t need a Realtor, anybody can do this job.

McClelland Minute - February 7, 2010

2010-02-08T16:22:00Z

Demographic Trends That Will Influence Real Estate

A college professor once said at a conference I attended that if you want to predict the future, seek to acknowledge the past and understand the present. This particularly applies to changes in population within our region and the country as a whole.

Immigrants will continue to shape Canada as it has been the practice for the past three hundred years. Our country needs more labour than it can presently raise on its own, so we invite hardworking peoples from offshore. Many will stay to raise their families and further create multi-cultural societies in our communities. Personally, as a grandson of immigrants, I believe this will only make us all stronger. Many of these families live together in multi-generation households and prefer to cluster with others of similar nationality. I am always impressed by their willingness to sacrifice in order to get that first home, even if sometimes they don’t have the means to furnish properly at the outset.

Baby boomers, age 55 +, are still making an impact by downsizing from their large suburban homes into one or even two smaller condos. They don’t seem afraid to pick up and move either, sometimes to be closer to family, or warmer climates. Friends of mine retired from their jobs in Saskatoon, bought a new ranch style home on a golf course in Phoenix, and kept their modest cabin at the lake. They think they have the best of both worlds and maybe they do.

Some in this age bracket however feel trapped by the market downturn, the need to continue working, or health issues. Too many look at their spouse, see nothing in common, and decide to call it quits. This often creates deep divisions within families and lifelong friends, making for an unhappy entry into the “golden age”. As single income individuals the attainment of suitable housing becomes quite difficult adding further stress into their life.

The age 35 + group is probably the most difficult to pin down in my mind. They are either aggressively using real estate to build wealth or have settled into a comfortable setting with no plans for changing their home in the future. The traders see each house simply as a step to the next bigger / newer one with the goal of increased equity each time. Their counterparts are more likely to steadily pay down the mortgage on the family home, like their parents did before them, and become committed to a neighbourhood or community.

This, of course leaves the twenty somethings. What a dynamic crew. They have a pretty clear idea about how to get what they want. They have been raised to be self-sufficient; after all if you need information, just google it or ask your network of friends. When they are searching for that first home, technology and people behind it must respond quickly or they will move on. This age group is setting the pace in real estate in a very real way, the others are watching and learning.

As Realtors we serve them all. Each demographic brings something to the table – enthusiasm, wisdom, experience, values. I wouldn’t have it any other way.

McClelland Minute - January 31, 2010

2010-02-01T20:44:00Z

Don’t Try This at Home!

I thought we would lighten up the column a bit this week, and share a few anecdotes from our day to day lives as Realtors. The following are true stories, and remember we are professionals, so please don’t do this in your home!

Members of the Group often work with families that have their house listed for sale, or have just sold it, in seeking a home to trade up to. One time, Mike was with a couple as they were walking into the main bathroom, and as he pulled back the shower curtain to have a better look at the tub, the wife said to him, “Oh no, you mean you actually look in bathtubs?” You see, whenever a request came in to look at her house, she would just toss the dirty laundry and misplaced toys into the bathtub in hopes that no one would ever know!

As a seller, your job in presenting your home to sell is to make it look the best it possibly can so a future buyer will feel comfortable when they come to view it. One of the rules a listing Realtor always recommends is to put away anything that may distract the prospect from viewing the structure. The owner of a house Robyn was showing must not have heard of that guideline, because upon entering the master bedroom, the buyer and she were greeted with an adult novelty toy in full display on the bookcase headboard!

Speaking of presenting well, on one occasion this fall in a country residence I couldn’t find the light switch at the bottom of the basement stairs, so I stepped onto the floor to see if there was a drawstring for a ceiling fixture. I knew I was in trouble when I felt something “squish” under the soles of my shoes. When the lights were finally located I was greeted with a combination of raw sewage, dog ***, and mouldy pizza boxes on the floor!

Lots of times, while buyers are taking off their shoes and observing the entryway, the Realtor will go ahead to turn on the kitchen and hallway lights. On a recent tour of vacant rural property, I was glad I was the first one to enter the living room as it gave me just enough time to throw a mouse that had been laying dead on the carpet out the front door. Numerous times, we have had to kick dirty underwear under a bed in advance of our clients. At one acreage, I got a funny feeling upon entering the kitchen, like someone was watching me, and looked up to see a huge black cat ready to pounce from his perch atop the fridge cabinet.

Teenagers are always good for a different perspective on life, and there are a lot of parents out there that let their kids express their views how they wish. Sometimes this means bright orange or hot pink paint in the girl’s room, or jet black paint in the boy’s. Other rooms will have so many posters on the wall that it looks like wallpaper from Hollywood. This kind of stuff is pretty distracting to a buyer, and honestly, some have a hard time looking past it.

Realtors learn to look under area rugs to make sure they are not hiding anything suspicious like damaged hardwood flooring, or sun bleached linoleum, but I wasn’t prepared for what I saw at one old house. It was an opening to the cellar; likely originally created for a heating grate for the gravity furnace. If someone had stepped onto the rug, it would have meant a quick ride down into the lower level!

McClelland Minute - January 24, 2010

2010-01-26T16:26:00Z

Real Estate and Divorce

If you and your partner are happy with each other, you have my permission to ignore this week’s column. However, if you are currently in, or contemplating, a separation, and own real estate together with that person, then please read on. I hope the advice offered today will help in some small way to prepare for what lies ahead, at least real estate wise.

The first recommended step is the development of a collaborative agreement on the terms of the separation including child custody, division of property, and financial arrangements among other essential elements. If one party wishes to stay in the home, appoint two accredited appraisers to each conduct an independent valuation. This will establish a range of current fair market value to use as a planning tool in your settlement discussions. Allow a reasonable period of time for the party who wishes to stay to obtain financing if that is what is required; appreciate the fact that it may be difficult on only one income.

If neither party wishes nor can afford to stay, it would be appropriate, in addition to an independent appraisal to choose an experienced Realtor to prepare a comparative market analysis. Again, this gives you benchmarks for estimated fair market value. Provide him / her with the appraisal, then meet together, during a collaborative meeting if appropriate, and discuss strategy – asking price, projected length of time the property is expected to be on market, how long it may take to create transition plans for people, pets, and furnishings, how offers will be deliberated, etc. Fair rules make for fair play.

Do not use the Realtor as a “ping pong” ball, to be bounced back and forth between two camps in an attempt to “get even” or assert one’s will over the other. By this time, both parties need to have moved on to the next stage of their life, and they have to be serious about selling. If a buyer suspects there is a crack to be opened between the sellers, I guarantee it will cost the owners’ money by weakening their power in negotiation. If one or both of the parties want the entire separation agreement finalized before disbursement, simply place the proceeds from the house sale in trust with a neutral lawyer.

In today’s world, there is also the “elephant in the room” that needs to be addressed up front – debt against the property. You may have bought at or near the peak of the market using 5% or even 0% down triggering a 3.5% mortgage insurance premium. Possibly your partner and you re-financed the property to purchase a big ticket item like a boat or to consolidate consumer debt. In any case, the total owing needs to be verified complete with mortgage penalty, real estate brokerage costs, and legal fees. If the sum exceeds the current value of the home, then this property is “under water”. This creates a whole new set of problems to be dealt with or foreclosure will inevitably result with both parties seeing their credit rating plummet.

From my perspective, there is no winner when a relationship breaks down. What can be achieved is a fresh start for each party, but only if emotion doesn’t overrule common sense. Realtors are experts in the trading of real property, acting as advisors and facilitators, not psychologists. We just want to do the best we can to help our clients in what often proves to be one of most difficult aspects of our business.

McClelland Minute - January 17, 2010

2010-01-19T16:02:00Z

What to Expect from Your Realtor

I have to admit that on entering the business a number of years ago I was quite surprised at the range of skills a Realtor needs in order to be successful. This career is not just sales; it is a wide range of interdependent professional competencies. Since 98% of all property in Canada is sold with the support of a real estate brokerage, there is a good chance that if you haven’t used a Realtor yet, the time will come when you will.

Members of the general public often don’t realize that the Multiple Listing Service and the national web site www.realtor.ca are completely maintained and funded by individual members of the Canadian Real Estate Association as a service to both buyers and sellers. We are fortunate in this country that it spans all provinces; it usually only exists in a regional format in the United States, if at all. (Unfortunately, it appears our federal government thinks that this successful program should also be made available to people who want to sell privately with no oversight from provincial regulatory commissions. It is becoming a scenario similar to the old story of the Little Red Hen being penalized for her industrious nature – but I digress.)

Each year our Group informally interviews a random sample of past and present clients to determine how our service and business practice can be improved. Last year over 92% of our buyers researched properties on-line before calling us. What this means is that if you want to sell a property, a good description and lots of photos need to be displayed prominently in a place that prospective buyers can find them. For this reason, in addition to the national site and our own www.mcclelland.ca, we place listings on up to ten other special interest websites; wherever we think it will attract the attention of a prospective buyer of that type of property. Farmland isn’t advertised on recreation sites, and vice versa.

Most Realtors prefer to meet face to face with buyers before the beginning of their search to determine how ready they are to make an offer and to narrow down their specifications. First time home buyers in particular need to be encouraged to obtain pre-approval from their mortgage broker of choice. There is no use showing property that a buyer can’t afford or in a neighbourhood that won’t meet their family’s needs. Our team will conduct an initial search plus place them on an automatic notification program that emails them daily with new listings that occur within their search parameters. Once potential properties are identified, private showings are arranged, and the buyer is supported throughout the balance of home buying process.

There are several important phases in the sales program for a property from the first visit to establish an accurate valuation to the implementation of a sensible marketing strategy followed by strong negotiations and completion activities. This may be the biggest financial transaction an owner will encounter in their life, and it deserves full attention to detail. A Realtor can not invent a buyer, but certain approaches will ensure that the prospects that are available will be exposed to the property in a timely way.

We will continue to see the practice of real estate brokerage evolve. The results of our latest discussions with clients has given us clear direction for the future including expanding the use of technology in the practice and some great suggestions on the type of information that a buyer or seller would like available when making a property trade.

Price Reduced on 301 - 4th Avenue North Marwayne, AB in Marwayne

2010-01-13T22:20:00Z

Marwayne, Lloydminster (Part) - Announcing a price reduction on 301 - 4th Avenue North Marwayne, AB, a 1,114 sq. ft., 3 bath, 4 bdrm bungalow. Now MLS® $239,900 - New Price.

Property information

McClelland Minute - January 10,2010

2010-01-11T16:56:00Z

Highest and Best Use

One of the principles of valuation is a concept called “highest and best use”. It is that use which, at the time of appraisal, is most likely to produce the greatest net return to the subject property over a given period of time. We look at it from two perspectives: as though vacant or as improved.

Let’s say for example, that you are a farmer and own a quarter of land under which a significant deposit of gravel has been recently discovered. In its current use, the parcel is worth what comparable parcels of farm land would be worth within the immediate area. However, the true market value of the property would be determined by the estimated pre-crush volume of the gravel.

Another application of this principle is an old house sitting on commercial property. It appears to be an ideal location for a restaurant or retail outlet. There are a number of factors that will need to be considered including any potential environment concerns, historical property designations, appropriate zoning, municipal servicing, and restrictions on building size. If it clears those hurdles, then it would be valued by the square foot or front foot based on actual sales of comparable properties.

It is not as straightforward as it looks sometimes. A commercial lot along side the highway may seem a suitable site for a motel today, but the buyer would be prudent to look into the city’s long term transportation strategy. Although traffic currently flows both ways in front of the property, the multi-year plan calls for medians that restrict access, which will likely cause potential customers to keep searching further on down the road for an easier site to turn into.

The same applies to raw land on the perimeter of a community. A developer may think it will be easy to tie into municipal services but finds out after purchase that they will not only be responsible for infrastructure costs internal to the project, but also have to pay an offsite levy to assist the town to increase the capacity of the lagoon or water plant.

Not too long ago I was approached by an investment group with land adjoining a lake. They had plans drawn for further subdivision, but wanted to sell the project in the planning stages. Further inquiry determined that all they had was a simple map of how they would carve up the property but nothing more than that. They had done no investigation into the extensive health, municipal, or provincial regulatory framework a project like this would have to satisfy. In fact, they claimed no knowledge of the current moratorium on development around the lake. Even so they wanted 6 times what they had paid for it less then three years before. I suggested they find another Realtor to represent them.