The real estate absorption rate affects how long your property will be on the market and in return has a major effect on the sold price of your home ? It is also a way to predict future selling prices.

How to calcuate your absorption rate

Find the number of homes currently available for sale in your neighborhood. Then divide that number by the number of homes sold in your community in the last 30 days.

For example... If there are currently 20 houses for sale in Riverbend and there have been 5 house sales in the last 3- days... It means the absorption rate for Riverbend Houses is 4 months. That means there are enough Riverbend houses on the market for the next 4 months. 

Is it a buyers or sellers market?

An absorption rate of 0-4 months is considered a sellers market which means there is not a lot of inventory and prices will rise.

An absorption rate of 4-6 months is considered a balanced market which means supply and demand is pretty even.

An absorption rate of over 6 months is considered a buyers market which tends to decrease house prices a bit due to an over supply.

Currently in Terwillegar - Riverbend Edmonton (December 15th, 2022), there are 80 single family houses on the market and there have been 29 house sales, so the absorption rate is 2.76. It's still considered a sellers market and is one of our best neighborhood to purchase a home.

Closing Delays and How to avoid them

Whether you are buying or selling a property, it’s important to understand that there can be delays in a real estate closing. A closing delay is something you want to avoid. There are several reasons possession may not be possible on the date you have on your purchase agreement. Sometimes upexpected or negleted items occur and nobody wants to be left homeless on their possession date.

REALTORS® are aware of these delays (because we don't get paid until after possession day), we help our clients avoid closing delays for a smooth transaction and a happy buying and selling experience. Below is a list of possible closing delays.

You choose the wrong lawyer

Not all lawyers are familiar with real estate transactions and this can cause delays in the transfer of title. At EdmontonHousesAndHomes, we encourage our clients using real estate lawyers.

Unreal closing dates

Unlike other provinces in Canada, Alberta's land title transfer process begins prior to you meeting with your lawyer. In the province of Alberta, it takes time to process a the title of a property to another person. This time frame will vary according to the market and land titles processing time. As a rule of thumb - a good closing date is 1-2 months after you write your offer to purchase.

Your bank revokes your mortgage

Yes. This does happen. The bank has the right to secure their mortgage and in the event that something changed, such as a job loss or the buyer also purchased a vechicle, changing their debt-ratio, the bank can pull your mortgage. REALTORS® will remind their clients not to make any big purchases until they recieve their house keys.

Real Estate Appraisal Issues

Sometimes (usually in a busy market), the bank did not send out the appraiser prior to telling you your mortgage has been approved. If the property does not appraise out at your offer price or higher, the bank can refuse to forward funds, the seller will need to reduce the price of the property or the buyer must come up with the diffence between the offer price and the appraised value.

Terms or contingiencies of the contract

If you have a walk through term written into your agreement and you find out the terms after the contract have not been fullfilled, this can be considered a breach of contract. These items could be as simple as the seller removing the dog feces in the back yard to more substantial issues such as a builder not finishing the completion or repairs. It is always best to have a walk through clause written into the offer prior to the buyer removing their conditions.

Problems with the title

Edmonton REALTORS® are obligated to pull title when they are writing an offer to ensure the persons selling the property is correct as well as ensuring there is enough equity in the property to be sold. Sometimes, prior to closing, after conditions have been removed, the seller has taken out a second or third mortgage and there is not enough equity to close. If this happens, there is major liablity issues that your lawyer will discuss.

The RPR does not have compliance

In the REALTORS® purchase agreements, there is a cluse reguarding the real property report and compliance which the seller has signed and agreed to. In the event the seller does not have compliance, there is an issue. A common one is when the seller has change the deck or a non-movable shed had been added to the property.

Homeowner insurance is not secure

The buyers lawyer will ask the buyer to bring in the insurance binder. This is basically a peice of paper saying the buyer has insurance on the property. If there is no insurance, the bank can not forward the mortgage funds.

Closing costs

If either the buyer or the seller does not have enough cash to close, there's a problem. Read more on closing costs.

Unclear terms

When writing an offer to purchase, the terms, conditiond, amendments and addendums must be crystal clear to avoid misunderstandings. The interpatation of the buyers lawyer may not be the same as the sellers lawyer. If the written phrase is not cytal clear, have your REALTORS® re-write it in lamens terms.

The buyer changes their mind

During the last Edmonton real estate crash, we seen this happen often due to the crashing real estate prices and buyers did not want to pay the agreed amount when the value of the property had substantially decreased. In our REALTORS® contracts, there are items put in place with the consequnces of such action. To avoid this in a soft market, be reasonable with your negotitaions. - The buyer can walk away.

The seller is unable to vacate on time

Alberta REALTOR® purchase contracts state that the property must be vacant by noon on the day of possession. However, sometimes the seller is still in the property due to circumstance beyond their controll. If this happens, it is a breach of contract. The best thing do is take your lawyers advice, there is some conpensation.

Not working with a qualified REALTOR®

The majority of Edmonton Remax REALTORS® have closed hundreds and hundreds (some have closed thousands) of real estate transactions. Using an experienced REALTOR® can be the differnce between being homeless and a seemless closing.

We pride ourselves on helping our clients with a smooth real estate transaction and a great buying and selling experience. If you or thinking about buying or selling and need experienced Edmonton Remax REALTORS®, email us. We are here to help.

Alberta REALTOR® Fiduciary Duties

Real Estate Agents in the province of Alberta who are in an agency capacity for buyer or seller clients have duties mandated by the legal system called fiduciary duties. The position of the REALTOR® is a fiduciary capacity, acting in the best interests of the client.

• Obedience: Your real estate agent must obey your instructions as long as it is legal and in accordance with your brokerage agreement.
• Loyalty: Your real estate agent must be loyal and keep your best interests ahead of those of any other party, including themselves.
• Disclosure: In the province of Alberta, the law requires real estate agents, whether in an "agency" capacity or not, to disclose material facts to their client. Material facts are those that, if known by the buyer or seller, might have caused them to change their purchase or sale actions. In a signed agency agreement, your real estate agent must disclose more than the material facts. They must disclose all known or suspected information regarding the purchase of the property.
• Confidentiality: A real estate agents fiduciary duty of confidentiality means that nothing learned about you can be disclosed including your business, financial, personal affairs or motivations. This confidentiality fiduciary duty must be maintained for eternity.
• Accounting: Your real estate agent is accountable for all documents and funds in the transaction. Accurate reporting of the whereabouts of all monies pertaining to the transaction and the ultimate disposition. All documents are to be kept for at least six years.
• Reasonable Care: The words "reasonable care" are only finally fully defined in many cases by a judge or jury when it's too late to change your actions. Most Edmonton Real Estate Agents, as a rule of thumb, go by the ethics code "What we know, you know" when acting in an agency relationship.

Whether you work with a REALTOR® in Edmonton under a "customer status" or a "client status with a buyer brokerage agreement", before signing any paperwork including writing an offer, it is a regulatory requirement to present and discuss our Consumer Relationship Guide with you which includes the real estate agency relationship you have chosen to work under.

Why You Should Always Pull a Land (Property) Title Search

Basic information on a property title will include:

• The current owners' name: In the event of an estate sale, probate may or may not have been completed and your real estate agent will ensure the person selling the property does have power of attorney. In the event, there is only one person on the title in a marriage, a dower consent will also be needed to complete the sale.
• The Legal description: The municipal or mailing address is different from the legal description and includes a block, lot and Plan number.
• The amount of the last mortgage, any second or third mortgages or the original purchase amount at the time of purchase or there may be a nominal fee.

Other things which can be revealed on a property title search may include:

• Outstanding or owing property taxes, special assessments, delinquent condominium fees which have not been paid by the seller.
• Outstanding creditors including other financial institutions and businesses for things like unpaid vehicle loans, furniture stores, construction loans, personal loans, etc
• A lis pendens, which is normally added by a lawyer during divorce procedures and "freezes" the transfer of a property until all parties are satisfied.
• Easements and Liens from a third party, such as the municipality, utility company or Environmental liens, who may have rights to use part of your property.
• Covenants are restrictions on the land that can limit what can be built on it, where it can be built and from what materials it may be built. Breaching a covenant can have serious consequences so it is necessary to be aware of any covenants on your property.

It is important to pull the land title certifictae prior to writing an offer. If you wait until you go in to sign with your lawyer, it can cause closing delays.

What is a CMA & How to Use it

Edmonton real estate agents can provide comparative market analysis, also known as a CMA, for any property including properties subject to divorce, civil enforcement, foreclosures, estate sales, city tax purposes, etc. It takes time for real estate agents to complete accurate home evaluations. Unless you have plenty of experience in buying and selling real estate, online home evaluations may be completely misleading and should never be used as a realistic asking price.

Seller Comparative Market Analysis

When working with sellers, a comparative market analysis is used to determine a realistic and accurate asking price. A Seller CMA is based on comparable properties which are currently active (homes for sale), recently sold homes (usually within the last six months), expired (homes that did not sell for various reasons) and the history of these homes. Other factors will include the current market, supply and demand, condition of the property, location, community absorption rate and many other factors. Experienced, professional agents will take the time to go through all of this data with you, together with determining a true asking price for your Edmonton Home.

Buyer Comparative Market Analysis

When working with buyers, a comparative market analysis is similar to a bank appraisal and is used to write a reasonable offer to purchase. A buyers CMA is based on both current homes for sale and recently sold home price in Edmonton taking into consideration all relevant factors including the condition, size and location. For new builds, this process is a bit different and is based more on the cost to build, economic factors, building quality, and the reputation of the builder.

Free Comparative Market Analysis

If you are thinking about selling your home or if your home did not sell due to other factors, feel free to contact us for a professional no-obligation Edmonton home evaluation. We also service Morinville, Bon Accord, Gibbons, St. Albert, Spruce Grove, Beaumont and Devon. Our Edmonton Houses and Homes Agents will take the time to help, educate and inform you on all real estate aspects of your property to determine the right value for your home, ensuring you receive the highest possible price.

Does Your Bank Require an Appraisal?

Appraisals are an important part of buying and selling homes in Edmonton. Real estate appraisals establish Edmonton sold properties market value prices. Banks and financial institutions require property appraisals when buyers require a mortgage on their new homes as security and provide financial institutions with a cost-effective assurance of the properties value for lending purposes. 

Appraisals are detailed reports compiled by licensed real estate appraisers. Don't confuse a comparative market analysis, or CMA, with a real estate appraisal. A CMA is a sales report based on data entered into the multiple listing service, or MLS. Real estate agents use CMAs to help their clients determine realistic asking and offering prices.

An appraisal is also not the same thing as a property inspection. Home inspectors test appliances and outlets, check the plumbing and electrical, confirm heating and cooling system are in working order, use inspection tools to look for any moisture issues, missing insulation, etc. Such information is helpful for the buyer to know before moving in.

If your real estate appraisal comes in low, the bank may not lend you the money you need to satisfy your finance condition. You may need to come up with the difference in cash or re-negotiate the sale price of the property.