The Mu

On HGTV this morning I saw the following (which I have severely paraphrased):

Potential Tenant: “It’s a great place but the bedroom is no bigger than what we have now, so it will be a tight squeeze.”

Real Estate Agent: “The apartment meets all of their criteria and I have some ideas about how to make the bedroom work for them.”

Potential Tenant: “It’s a little beyond our price range but we’re still considering it.”

Real Estate Agent: “Here’s a plan for the bedroom: simple shapes and lighter paint on the walls will create the illusion of more space.”

Potential Tenant: “With the ideas our agent showed us for creating more space in the bedroom, we’ll take it.”

I was a little confused by the edited show.  I couldn’t understand why they would choose these snippets of conversation that seem to be disconnected.  On the one hand the potential tenants are concerned about the amount of space in bedroom, which they know is not any physically bigger than their current bedroom. The real estate agent, by her own words, is only creating the “illusion” of space and yet the tenants interpret that as having solved their problem.

If you’re selling a home, you want it to show to its best advantage.  Thus, paint and mirrors that open up a room and make it seem bigger or wide-angle photography — these are ways to “market” the home.  But as a buyer, you would still need to take measurements and be sure that your furniture fits or your plans for the room will physically work.

When you see a home full of someone’s stuff (even in a de-cluttered place) the sense of space will be very different from seeing the same home vacant and empty.  You may think the rooms are bigger or smaller depending on how your spatial awareness works.  Once again, nothing beats actual measurements.

Finance Minister Jim Flaherty introduced some new rules last year that affect the way Canadians borrow money going forward.  You may have heard how real estate speculators will be affected by these rules more than the average mortgage holder or home buyer.  For example, starting March 18, if your down payment is less than 20 per cent you will be able to take no more than 30 years to repay the loan, down from the current maximum of 35 years.  That does affect a home buyer’s maximum affordable home price or increases the mortgage payment amount.  But it saves a ton of interest over the long-haul, something that speculators care less about than average homeowners.

Also, something I haven’t seen mentioned in detail are the rules about home equity lines of credit.  Did you know that as part of the new package of legislation, the government is “encouraging banks to lend responsibly”?  Thus, as of April 18th, the government will no longer offer banks the insurance to cover losses from customers with lines of credit.

There are several possible results that we may see after April 18th.  Interest rates on new home equity credit lines could rise.  It could become tougher to qualify for one.  Or both.

The reaction to these rules among real estate and mortgage industry insiders has been mixed.  Clearly some say that this will negatively impact their business.  But many recognize the healthy “caution” that this emphasizes in Canada and steers us even farther away from having a U.S.-style mortgage meltdown sometime in the future.

From the New York Times: “Eighty percent of people across the country who bought a new home last year used the Internet while house hunting, and they rated photographs as the most useful tool in their search, according to a survey of buyers and sellers by the National Association of Realtors. The survey also found that 24 percent of home buyers got their first glimpses of their new homes on the Web, up from a mere 2 percent in 1997.”

My dad was a professional photographer but I have allowed my photography skills (and the equipment I should have to take really great pictures) to wither away.  So when I am listing a home, I hire someone to give the home a fighting chance in the visual world of the Internet.  Merely having photographs is an important first step.  People need to be able to see the home.  But to really make a difference you need: a wide-angle lens, good lighting, intelligent angles, and enhanced contrast.

Often when a window lets in so much sunlight that the details of the room are washed out, you need to be able to compensate.  Sometimes this is done in Photoshop and sometimes it is done on the spot with an experienced photographer. Similar problems arise when the room is not lit well enough and its features cannot be discerned at all.  Again, experience counts.

Timely photos are also important.  The current condition of the home is a good thing to reflect — and it is expected in the instantaneous world of the Internet.  However, many people in the industry make a compelling point that summer photos for a winter listing can provide an “alternative” view of the home.

The latest trend in real estate advertising is to feature “concept” photos: a family enjoying the backyard or a dog lounging on the porch.  The argument is that these kinds of photos give potential buyers a glimpse into what life would be like if they were to buy the home.  I am perhaps old-fashioned in this regard.  I believe the photos should be generic enough that people can inject their own fantasies into them — which follows the same theory as home staging: uncluttered and neutral is better.