Vancouver Real Estate Marketing Company Says Young Vancouverites Can Afford to Buy Real Estate

Online Marketing Key Can Be Blogs Websites Social Media And EmaiThis just in: a recent article in The Huffington Post suggests that many Gen Y would-be home buyers are in a position to buy property now. And by property they mean very small condos – some even with balconies! According to a recent poll done by a prominent real estate marketing company (which the article author happens to head), the savings rate of this 20-35 year old demographic is quite respectable.

It’s quite likely this data is skewed since it was collected from potential home buyers attending one of Key Marketing’s projects being offered for sale – InGastown. Yes, these were people already interested in buying a condo in the very short term. Seems to me this would not be a reliable sampling of this entire demographic – just the ones who hope to buy now in a particular project. The InGastown project does have an interesting gimmick where you can trade your car in towards your down payment.

Finally, within this “article”, the author links to two projects his company is handling the marketing for.  In these projects, Gen Y buyers can purchase a home for under $300,000. So, is this an actual news item on Huff Post or a paid marketing piece?

BC government increases tax threshold for first time home buyers

cp-bc-budget-balanceA select group of first time home buyers in BC received a gift from the province in the recent budget announcement. If you purchase your first home in BC and it is under $475,000 (full exemption) or $500,000 (partial exemption) you may be able to avoid paying all or part of the BC Property Transfer Tax (PTT). This tax is calculated at 1% of the first $200,000 and then 2% of the remaining purcahse price above $200,000.  This change is expected to only impact about 1700 buyers in BC in 2014.

To receive the full exemption you must:

  • be a Canadian citizen or permanent resident
  • have lived in B.C. for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a B.C. resident in the last 6 years
  • have never owned an interest in a principal residence anywhere in the world at any time
  • have never received a first time home buyers’ exemption or refund

and the property must:

You may be eligible for a partial exemption from the tax if the property:

For all the details go to the province’s site here:

The old threshold was set at $425,000 so this is a moderate increase and will help some buyers out that would have missed out on the exemption. The real estate sector has been lobbying with only moderate success for the BC government to increase this threshold for several years. The government seems to have made the smallest change possible while still being able to make this part of their budget highlights announcement.

Five reasons to get a mortgage financing pre-approval

So you think you’re ready to start shopping for a property? Whoa Nelly! While it may seem like you’re ready because you’ve done lots of online property window shopping and begun to feel confident about comparing market values, you’ve missed a crucial step in the process. Here are five reasons to get a mortgage financing pre-approval early:

checklist

Time savings

Does it make sense to look at a smorgasbord of properties that you have absolutely no chance of purchasing? Don’t you have better things to do with your free time than view half the condos in the city?

Secure a mortgage rate-hold

Once pre-approved, you will likely be guaranteed a particular mortgage rate for up to 120 days. This is can be very helpful in times when rates just happen to be on the up-swing. In the event of rates dropping, your mortgage broker will ensure you get the lowest rate possible.

Be ready to act quickly on the right property

You never know when the right property will present itself and you’ll need to act quickly. Pre-approval will put you in a position to act swiftly and from a position of strength when writing an offer.

Gain the upper hand in negotiations

If you are interested in a hot property and you find yourself pitted against a other buyers in a multiple offer situation, being pre-approved can make the difference. Imagine yourself as the seller: if you are courting several interested buyers and only one is pre-approved, which party would you sell to?

One final benefit – you may save your Realtor some aggravation (and time) if you are pre-approved before you begin viewing homes. And who wouldn’t want this?

I welcome any questions about selling or buying.
Feel free to comment here or contact me directly.

Real Estate Closing Costs

Once you have an unconditional accepted offer on a home you are selling or buying it will be time to start thinking about which lawyer or notary you will use for completing the transaction. Closing costs will vary depending on how complicated the transaction is and somewhat upon which firm you choose. The closing costs will vary depending on whether you are buying or selling. Buyers can expect the following costs at closing:

  • Property Transfer Tax (PTT) on most properties and possibly Goods and Services Tax (GST) on newly-built properties
  • Legal fees – These include lawyer/notary professional fees, land title search, land title registration and other nominal fees
  • Closing adjustments (property taxes already paid by the seller, etc.)

Sellers can expect the following costs at closing:

  • Fees to discharge/payout a mortgage
  • Lawyer/Notary Fees
  • Real estate commission fees and possibly withholding tax (applies to non-residents of Canada)
  • Closing adjustments

The statement of adjustments is the document which lays out the amounts owed and the credits due to both the buyer and seller. During the appointment with the lawyer/notary, buyers and sellers will be presented with this summary of charges/credits with either a final amount due (buyers) or to be received (sellers).

It’s a good idea to speak to a potential lawyer/notary about there workflow and their schedule before choosing one so that the closing process will go smoothly with plenty of time to sign documents before completion date.  I have several good lawyers and/or notaries I can refer should you require one.

Intentionally under-pricing your property

The practice of pricing a property below market value has become popular recently in the Vancouver real estate market. The seller’s goal is to entice the maximum number of buyers, and therefore multiple offers, in the shortest time and to pressure them to battle each other in a bidding war until a clear “winner” is identified. A feeding frenzy may be the best analogy.

Bait ball 1

This strategy works best in hot neighborhoods where there are many more buyers than sellers. This is the worst situation for a buyer since it adds pressure to the purchase and often results in the need to eliminate subject clauses in order to have the best chance of “winning” the property in a bidding war. Sellers (and sellers’ Realtors) love this approach when it goes as planned.

There’s always a possibility that an underpricing strategy could backfire and not attract any buyers to an initial offering. This situation can be identified when a property comes on the market and then shortly thereafter the price is jacked up substantially.

If you can’t stand the added pressure as a buyer, bidding against multiple offers on an under-priced property may not be for you.

Underground Storage Oil Tanks (UST)

Did you know owners of properties in Metro Vancouver may have a potentially costly underground storage oil tank (UST) in their backyard? Clean-up and liability issues can come into play if the oil tank leaks and contaminates your property. If the contaminant originates on your property and then seeps onto adjacent properties, you could be liable for the mess and any clean-up on those properties. Ouch! 

Underground oil tanks were commonly installed on properties beginning in the late 1950s. Oil was the primary source of heating fuel for homes until natural gas replaced it due to lower cost and ease of connecting to utility gas pipelines. The oil tanks were usually just capped and decommissioned in place at this point – some with oil remaining in the tanks!

There are many companies in Metro Vancouver that use scanning equipment to check for buried oil tanks for a nominal fee. If there is any possibility that there may be a UST, doing the scan makes sense for buyers and is almost always advisable for sellers. Caveat emptor (buyer beware) is the best policy when it comes to oil tanks and avoiding the associated risks with buying a property where one may be lurking. The cost to remove a decommissioned tank that has not leaked is much less than a major environmental clean-up of a decommissioned leaky tank. Insist on full and proper tank removal documentation in the purchase contract if you are a buyer.

To complicate matters further, different municipalities around Metro Vancouver have different requirements to follow during removal. For further reading I recommend a great article by The Spagnuolo Group of Real Estate Law Firms.

I welcome any questions you may have about selling or buying.
Feel free to comment here or contact me directly.

Will the real estate market and prices remain stable in 2012?

Some interesting predictions from a new poll of Canadian financial strategists and analysts. Get out your crystal ball and get ready to play “Guess where the market is going!” http://cravecanada.com/wp-content/uploads/2008/08/vancouver.jpg As a REALTOR® I get asked almost on a daily basis what the market will do next. Unfortunately this is anyone’s guess. Of  the poll respondents, only 60% of these experts would even attempt a guess at the price forecasting.

The referenced article shares what might be on the horizon. If we do see a small drop in prices I don’t expect much in the way of a major market adjustment. Sure, people who bought with a very minimal down payment and are in a variable rate mortgage could feel the pinch but for the most part Canadian banks are conservative and don’t lend money easily.

Stay tuned here for updates on he market situation and for predictions on where the market is headed. Not from me directly of course, I gave up guessing long ago.

Do your homework and enlist the services of a well-recommended REALTOR® before undertaking a property search to best protect yourself.

I welcome any questions you may have about selling or buying.
Feel free to comment here or contact me directly.

How to Improve Housing Options in Metro Vancouver

First post of 2012 so it seems fitting to start with a list of ideas on how to increase housing options. This article appeared recently in the Vancouver Sun and the writer makes a number of useful, if perhaps optimistic, suggestions on how home ownership might be made more attainable in Metro Vancouver.

The simplest suggestion mentioned to implement would be encouraging and allowing higher density (innovative design and more compact units). This would increase opportunities for people to remain in urban areas without breaking the bank. The main hurdle here seems to be nearby neighbors who fear their property values will fall as a result of additional density being built close by.

Another idea presented relates to having municipalities reduce the charges and fees (development cost charges) they assess for granting building permits as this is a major cost. One would hope that savings here would trickle down to property buyers.

Finally, higher density developments should first be considered near good public transit and the requirements for minimum number of parking spaces per property should be abandoned in some instances.

So that’s the wish list. Do I think any of these are likely to happen any time soon? No, but dreams are healthy.

I welcome any questions you may have about selling or buying.
Feel free to comment here or contact me directly.

The Condo Walk-through – Deficiency Hunting

I recently accompanied a client on their substantially completed new construction condo walk-through. This took place about two weeks before the buyer was to take possession of the new two bedroom condo in the Fraser area of Vancouver. Now I consider attending these inspections a part of my job as a full service REALTOR® but this one was scheduled for 7AM! This is not known as peak performance timing for most REALTORS®.

Nevertheless, I made my way to the building on time to meet my client and we then proceeded to wait for the developer’s representative who ended up being about 10 minutes late. On these outings I use a detailed checklist of potential problems to look for (see image for a sample).

These usually go pretty smoothly and this one was no exception except for some minor surprises. The best part of this inspection was when the developer’s representative opened the door to the laundry area and it was empty. The washer and dryer that were to be included as per the buyer’s contract were nowhere to be found.

Make sure your REALTOR® attends the walk-through inspection with you so they can provide expertise on what to be on the lookout for and to fully protect your interests.

I welcome any questions you may have about selling or buying.
Feel free to comment here or contact me directly.

Surrey rated B.C.’s hottest housing investment market

See the Vancouver Sun article here:

The top towns ranked in Real Estate Investment Network report are:

No. 1: Surrey

No. 2: Maple Ridge and Pitt Meadows

No. 3: Kamloops

No. 4: Abbotsford

No. 5: Fort St. John

No. 6: Dawson Creek

No. 7: Kelowna

No. 8: Comox Valley

No. 9: Penticton

No. 10: Prince George

No. 11: Vancouver