8 Rookie Mistakes That Keep People From Selling Their Home

If your home is struggling to catch the eye of a buyer, it could be for an entirely valid reason. Maybe you’re stuck in a sluggish market or have the poshest place on the block (always a tough sell). But there’s another possibility, too—your home could be sitting on the market because of a rookie selling mistake. All of us can make ’em, even those of us who actually have a few home sales under our belts.

The good news? These basic slip-ups can be easily corrected or avoided. To help you out, we spoke to real estate agents to identify some of the most common mistakes people make in trying to sell their home. Sidestep these flubs to avoid sabotaging your own sale.

Rookie mistake No. 1: Overpricing your home

All sellers want to get top dollar for their house. Unfortunately, says Michael Cowling, a real estate agent in Richmond BC with RE/MAX, “many people overestimate the value of their home.” For example, she says, “if a neighbor sells their house for $1,200,000, you might automatically assume that your house is worth at least that much money, but that’s not necessarily the case.”

“Price is typically the reason why a house doesn’t sell. And the last thing you want to do is list too high right from the start, because it could cause your house to sit on the market—which might require you to make a serious price reduction in order to sell it.

“If a home is on the market for more than four weeks, prospective buyers are going to assume that there is something wrong with it,” says Michael.

Your best approach: Listen to your agent’s listing price recommendation, and try not to get too emotional if your agent’s suggestion isn’t as high as you’d hoped.

Rookie mistake No. 2: Not budging on price

Even if the price is right, you might need to be flexible—especially if you’re in a buyer’s market. So, if you receive an offer that’s below list price, you should at least consider making a counteroffer. After all, receiving $5,000 or $10,000 less for your house than what you wanted is a small concession in the long term.

Rookie mistake No. 3: Doing a lousy job of cleaning

Let’s make this clear: Your home needs to be spotless. That might mean hiring a professional cleaner to do a deep and thorough cleaning of the entire place. You might want to consider renting a storage locker to make the process of cleaning out the garage, closets, and attic less onerous. But it will likely be worth it, because clutter distract buyers in a big way.

Bonus: A clean house will also enable you to take great photographs for your listing (see our next point).

Rookie mistake No. 4: Using crummy photographs

Unless you’re an artist with the camera, you’ll want to hire a professional photographer to take pictures of the house, because nearly half of home buyers start their search online, a recent survey by the National Association of Realtors® found.

“You can write a beautiful description, but people aren’t initially focusing on the description, they’re looking at the pictures.”

A good photographer is worth the investment by your agent.

Rookie mistake No. 5: Leaving religious or political belongings in plain sight

“You never know what type of buyer is going to look at your house,” says Michael, so put away all personal belongings—specifically, religious or political items, which can be awfully polarizing. “You don’t want anything that’s going to distract buyers.”

Rookie mistake No. 6: Lurking around at your own open house

This is a huge mistake for several reasons.

“If the buyer knows that the seller is there, they might feel uncomfortable asking the listing agent honest questions about the home,” says Michael. Buyers might also feel like they’re intruding if you’re present, which is kind of crazy.

“People like to open closet doors and look closely at the home without someone hovering over their shoulder”.

Rookie mistake No. 7: Making it difficult for agents to show your home

When selling your house, “be prepared for little privacy,” says Michael. Translation: You’ll need to be flexible when buyers ask to see your home on short notice. To make it easy for buyer’s agents to show the property while you’re away (see No. 6), let your agent install a lockbox with keys to the house.

Rookie mistake No. 8: Leaving pets at home during showings

Some people are simply scared of pets, (yes, even your cute little pug), or they might have allergies that will make them want to steer clear. So don’t just crate your dog or cat during showings; instead, take them with you or drop them off with a neighbor while buyers are viewing the house. And because pets, like humans, tend to accumulate lots of stuff—leashes, collars, toys, water bowls, and the like—make sure you stow their paraphernalia in a cupboard or closet. And do a quick vacuum of pet hair before you go!

Federal Interest Rate Decision Announced

Federal Reserve officials forged ahead with an interest-rate increase and additional plans to tighten monetary policy despite growing concerns over weak inflation.

Policy makers agreed to raise their benchmark lending rate for the third time in six months, maintained their outlook for one more hike in 2017 and set out some details for how they intend to shrink their $4.5 trillion balance sheet this year.

Near-term risks to the economic outlook appear roughly balanced, but the committee is monitoring inflation developments closely, the Federal Open Market Committee said in a statement Wednesday following a two-day meeting in Washington. The committee currently expects to begin implementing a balance sheet normalization program this year, provided that the economy evolves broadly as anticipated.

Policy makers also issued forecasts showing another three quarter-point rate increases in 2018, similar to the previous projections in March.

The Feds actions and words struck a careful balance between showing resolve to continue tightening in response to falling unemployment while acknowledging the persistence of unexpectedly low inflation this year.

Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the committees 2 percent objective over the medium term, the statement said.

The committee had previously described inflation as close to their goal.

Economic Data
Data released earlier Wednesday showed that, on a year-over-year basis, the core version of consumer price inflation, which strips out food and energy components, slowed for the fourth straight month, to 1.7 percent in May. Following that news, the probability that the June hike would be followed by another increase this year dropped to about 28 percent from 48 percent, according to pricing in fed funds futures contracts.

In a separate statement on Wednesday, the Fed spelled out the details of its plan to allow the balance sheet to shrink by gradually rolling off a fixed amount of assets on a monthly basis. The initial cap will be set at $10 billion a month: $6 billion from Treasuries and $4 billion from mortgage-backed securities.

The caps will increase every three months by $6 billion for Treasuries and $4 billion for MBS until they reach $30 billion and $20 billion, respectively.

Officials didn’t reveal the exact timing of when the process will begin this year, as well as specifically how large the portfolio might be when finished.

The FOMC retained language that it expects to keep raising interest rates at a gradual pace if economic data play out in line with forecasts.

Yellen Remarks
Yellen is scheduled to hold a press conference at 2:30 p.m. where reporters are likely to ask, among other topics, about her outlook for rates and the balance sheet.

Wednesday’s decision brings the Feds target for the federal funds rate, which covers overnight loans between banks, to a range of 1 percent to 1.25 percent.

The vote was 8-1, with Minneapolis Fed President Neel Kashkari dissenting from a rate increase for the second time this year, preferring no change.

Quarterly projections for 2018 and 2019 showed Fed policy makers largely maintained their expected path for borrowing costs. The median forecast still has the central bank making three quarter-point increases in 2018; the end-2019 rate is seen at 2.9 percent, a slight change from 3 percent in the March projections.

The new forecasts may in part reflect changes in the FOMC since the last meeting, including the departures of Governor Daniel Tarullo and Richmond Fed President Jeffrey Lacker, and the arrival of new Atlanta Fed President Raphael Bostic.

In any event, interest-rate projections for 2018 and 2019 are becoming less reliable guides to future policy amid the likelihood that the Feds Board of Governors will see a major makeover in the next year.

The Fed has in recent weeks wrestled with contradictory signals from unemployment and inflation. Joblessness in the U.S. dropped to a 16-year low at 4.3 percent in May. Despite that, the Feds favorite measure of price pressures, excluding food and energy components, rose just 1.5 percent in the 12 months through April, down from 1.8 percent in February. The Feds target for inflation is 2 percent.

Inflation Projections
The recent economic developments prompted FOMC members to drop their median projection for inflation to 1.6 percent in 2017, from 1.9 percent forecast in March. The median forecasts for 2018 and 2019, however, were unchanged at 2 percent.

They also reduced slightly their estimate for the lowest sustainable level of long-run unemployment to 4.6 percent from 4.7 percent. That change, and the reduction in the 2017 inflation forecast, could reduce the urgency policy makers feel to hike rates again in coming months, especially if inflation remains soft.

Job gains have moderated but have been solid, on average, since the beginning of the year, and the unemployment rate has declined, the FOMC statement said.

Economic-growth projections were little changed, with the median forecast for 2017 moving to 2.2 percent from 2.1 percent.

The FOMC next meets in six weeks, on July 25-26. A Bloomberg survey of 43 economists conducted June 5-8 showed a median expectation for rate hikes in June and September, followed by the start of balance-sheet unwinding in the fourth quarter.

Copyright Bloomberg 2017

Market Activity Picks Up in May

Home buyer activity returned to near record levels across the Metro Vancouver* housing market in May.
Residential property sales in the region totalled 4,364 in May 2017, a decrease of 8.5 per cent from the 4,769 sales in May 2016, an all-time record, and an increase of 22.8 per cent compared to April 2017 when 3,553 homes sold.
Last month’s sales were 23.7 per cent above the 10-year May sales average and is the third highest selling May on record.
“Demand for condominiums and townhomes is driving today’s activity,” Jill Oudil, Real Estate Board of Greater Vancouver (REBGV) president said. “First-time buyers and people looking to downsize from their single-family homes are both competing for these two types of housing.”
New listings for detached, attached and apartment properties in Metro Vancouver totalled 6,044 in May 2017. This represents a 3.9 per cent decrease compared to the 6,289 units listed in May 2016 and a 23.2 per cent increase compared to April 2017 when 4,907 homes were listed.
The month-over-month increase in new listings was led by detached homes at 27.1 per cent, followed by apartments at 22.7 per cent and townhomes at 14.1 per cent.
The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 8,168, a 5.7 per cent increase compared to May 2016 (7,726) and a 4.5 per cent increase compared to April 2017 (7,813).
“Home buyers are beginning to have more selection to choose from in the detached market, but the number of condominiums for sale continues to decline,” Oudil said.
The sales-to-active listings ratio across all residential categories is 53.4 per cent. By property type, the ratio is 31 per cent for detached homes, 76.1 per cent for townhomes, and 94.6 per cent for condominiums.
Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
“While sales are inching closer to the record-breaking pace of 2016, the market itself looks different. Sales last year were driven by demand for single-family homes. This year, it’s clear that townhomes and condominiums are leading the way,” said Oudil. Contact me to understand the different factors affecting the market today.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $967,500. This represents an 8.8 per cent increase over May 2016 and a 2.8 per cent increase compared to April 2017.
Sales of detached properties in May 2017 reached 1,548, a decrease of 17 per cent from the 1,865 detached sales recorded in May 2016. The benchmark price for a detached property is $1,561,000. This represents a 3.1 per cent increase over May 2016 and a 2.9 per cent increase compared to April 2017.
Sales of apartment properties reached 2,025 in May 2017, a decrease of 5.8 per cent compared to the 2,150 sales in May 2016.The benchmark price for an apartment property is $571,300. This represents a 17.8 per cent increase over May 2016 and a 3.1 per cent increase compared to April 2017.
Attached property sales in May 2017 totalled 791, an increase of 4.9 per cent compared to the 754 sales in May 2016. The benchmark price for an attached property is $715,400. This represents a 13.1 per cent increase over May 2016 and a 1.9 per cent increase compared to April 2017.

Housing Market Insight May 2017

Originally published: Housing Market Insight – Vancouver CMA – Date Released – May 2017

When home prices in the City of Vancouver fluctuate, there is a measurable effect on home prices of other municipalities; this is known as a spill-over effect. „ The spill-over effect from Vancouver takes several years to fully set in for other municipalities. „ Within commuting distance of Vancouver City, the length of the commute and the size of the spill-over effect are related. „ House prices in municipalities that are outside of the commuting range are still affected by price changes in Vancouver.

In the fourth quarter of 2016, in CMHC’s Housing Market Assessment, moderate evidence of house price acceleration was detected in the Vancouver census metropolitan area (CMA), and in the following quarter acceleration was also measured in the Victoria CMA. Market commentators have also suggested that strong house price growth in Vancouver in 2016 was spilling over from Vancouver to other centres in British Columbia. The purpose of this report is to measure the link between house prices in the City of Vancouver and other major centres in British Columbia, and to discuss possible causes.

Spill-over effects from Vancouver City are strongest in Richmond and the North Shore. CMHC estimated how price movements in the City of Vancouver affect municipalities that are both nearby and farther away. Our results show: „ There is a detectable spill-over effect. „ The spill-over effect is strongest in municipalities adjacent to the City of Vancouver. „ As the distance increases, the spill-over effect generally becomes smaller, but only up until a point. Beyond commuting distance, the effect is similar regardless of distance. “Our estimates show that on average a 1.0% increase in house prices in the City of Vancouver was immediately transmitted to places like Burnaby, Richmond, and the North Shore resulting in price increase of 0.45% in Burnaby and Richmond and 0.73% in the North Shore.”

Figure 1 shows the spill-over effect from Vancouver to other municipalities in British Columbia. These results measure price changes due to a random and unexpected increase to the house prices of Vancouver after accounting for other sources of variation. The reported results are an historical analysis of the house price data in British Columbia and they can be thought of as the average spill-over effects of the past. That means that this is not a forecast of how spill-over effects will happen in the future, as the exact causes of spill-over effects are complex and differ over time. In addition, these values do not imply that every price movement in Vancouver has resulted in a visible price movement in other markets. There are other factors that may have cancelled out these effects or amplified them, depending on the particular example. These effects are related to changes in the Vancouver housing prices in isolation of other factors that would jointly affect house prices in B.C. centres like province-specific or national economic developments and regulatory changes targeted to housing markets.

Short-run Spill-Over Effects Mainly Affect Direct Neighbours of Vancouver City. Our estimates show that on average a 1.0% increase in house prices in the City of Vancouver was immediately transmitted to places like Burnaby, Richmond, and the North Shore resulting in price increase of 0.45% in Burnaby and Richmond and 0.73% in the North Shore. The immediate response of other centres was also detected.

Spill-over Effects Take a Long Time To Be Fully Realized. The spill-over effect only becomes fully realized over a long period of time, such as 5 years or more, for most municipalities in British Columbia. As with the short-run effects, the further away from Vancouver, the lesser the extent of the spill-over effect up until a point. Beyond commuting distance, the effect is similar regardless of distance. After five-years, in places as far away as Kelowna, for example, prices were 0.5% higher than they would have been otherwise. In Richmond and the North Shore, the long-run spill-over effect from Vancouver was as strong as the long-term effect on Vancouver itself. When prices increase unexpectedly in Vancouver, they eventually had the same effect on Richmond and the North Shore. For Burnaby, the link between prices was somewhat weaker. This is possibly due to the historically higher share of apartment sales in the Burnaby market as compared with Richmond and the North Shore.

Spill-over effects are consistent with a trade-off between commuting distance and lower house prices. House price levels vary from one municipality to another for many reasons including but not limited to: proximity to employment or economic activity, available services, land availability and use, property tax rates, natural and geographical features. When the difference in house prices between two neighbouring areas exceed what is warranted by such factors, home buyers have an incentive to buy in the lower priced area. A very common example is when a buyer chooses to locate in a municipality Vancouver increased faster than in Surrey or Langley. In all likelihood, some buyers chose to locate in areas with longer commutes because of the additional cost required for living closer to Vancouver. To be clear, this data is not conclusive evidence of this effect because we do not explicitly know buyer motivations. Vancouver has notably different type and quantity of supply than Surrey, for example, but the incentive structures are clear; there is a trade-off between house price and commute. With that in mind, this data also highlights the fact that the incentive structure changes over time, meaning future spill-over effects will likely differ from what occurred in the past.

Migration out of Vancouver provides another route for spill-over effects. The steady migration out of Vancouver means that there has long been a flow of potential buyers from the Vancouver CMA housing market into other parts of British Columbia (Figure 5). This out migration provides a clue as to another potential channel for spill-over effects. To the extent that the migration data approximates the flow of homeowners in Vancouver leaving for other parts of the province, price fluctuations in Vancouver house prices affect the home purchasing budgets that migrants take with them to other markets. Intraprovincial migrants leaving Vancouver were typically over the age of 30, with the highest concentration between the ages of 45 and 50. In other words, the people leaving Vancouver were very likely to have some home equity built up, especially considering the 65% homeownership rate in the Vancouver CMA combined with the fact that homeownership rates are higher, on average, for older demographics. Because there are other ways for Vancouver to influence other municipalities, spillover effects from Vancouver decrease with distance, but only up until a certain distance. For markets like Kelowna, the spill-over effects are likely linked to people leaving Vancouver and settling elsewhere.

 

Housing Market Insight – Vancouver CMA – Date Released – May 2017

Know the rules when it comes to insuring secondary suites

Secondary suites continue to be an affordable housing option for Metro Vancouver area residents, benefitting home owners as mortgage helpers and tenants as a less expensive roof over their heads. Secondary suites are so prevalent that Canada Mortgage and Housing Corporation estimates there are now about 101,808 accessory suites in the Metro Vancouver region.

With so many suites in our area, it’s important to remind home owners to let their insurer know about a suite and to buy insurance to cover the suite. “Whether the suite is legal or illegal, having insurance coverage is vital. There is a misconception among home owners that their existing policy will cover a suite.
A home owner who doesn’t tell their insurer about a suite and that there are two households living in the home, opens themselves up to significant risk.

An unreported and uninsured suite could potentially void the existing insurance contract on the primary residence if there is a flood or a fire. Some home owners may not properly insure their property because of fear that their insurer will report the suite to the local municipality. This isn’t true, however its always good advice to comply with local bylaws and report and register the suite with the local municipality. How much will insurance cost? “About 10% of the cost of your total home insurance. So if you’re paying $1,200, it will cost you an additional $120.
Home owners who rent their secondary suite can also buy separate comprehensive rental insurance. Depending on the insurer and on the policy, this can cover vandalism and damage by tenants, typically up to a payout maximum limit of $5,000. This insurance doesn’t cover the tenant’s belongings. The tenant has to buy their own insurance for their possessions.

Home owners with laneway homes, coach homes above garages and other authorized or unauthorized accommodation on their property should also let their insurer know and should buy appropriate coverage. When buying a property with a suite it’s a good idea to find out beforehand whether the property is insurable.
Based on the official community plans for Metro Vancouver municipalities, there is room for an additional 215,000 suites in the region.

Source: Greater Vancouver Real Estate Board

When it comes to analyzing market trends, look beyond average price

As originally published on www.crea.ca 

 Because all real estate is local, home prices can vary widely across Canada. REALTORS® often use average prices because they’re easy to calculate: simply divide the value of homes sold by the number of sales. The result is an “average” price that can be compared from one time period to another and across housing markets.While this sounds simple enough, it actually isn’t. The problem with using averages to gauge price levels or changes is that extremely high value home sales distort calculations.

Imagine 10 people are at a bar, each of whom earn an annual income of $50,000. There’s no variation in their incomes and the average annual income for the group is $50,000.

Now suppose Mark Zuckerberg, CEO of Facebook, sits down at the bar and his annual income is, say, $1 billion. The average annual income for the group of 11 is now $90,954,545 – yet no one’s individual salary has changed. The average is still statistically correct, but misleading and/or misrepresentative.

Similarly, when the number and/or proportion of home sales rises in three of Greater Vancouver’s most expensive neighbourhoods (namely, West Vancouver, Richmond and Vancouver West), the national average price climbs (all other things being equal). However, that doesn’t mean selling prices have climbed in other neighbourhoods.

As the chart above highlights, from May 2008 to January 2009, home sales in these three neighbourhoods dropped by 72%, contributing to a drop of over $43,000 in the national average price. As home sales there rebounded from March to October 2009, the national average price jumped back up by $52,000.

Between April and August 2010, sales again dropped in these neighbourhoods, after CMHC introduced tighter mortgage regulations. This contributed to a decline in the national average price. Fast-forward to early 2011 (January to May), when home buyers in these neighbourhoods advanced their purchasing decisions to beat further mortgage regulations, and the national average price rose. It then subsequently declined between May and December 2011 as sales in these three neighbourhoods dropped once the regulations took effect.

More recently, due to a surge of activity in the Greater Vancouver market between August 2015 and February 2016, the national average price climbed by more than $70,000. However, between February and October 2016, the national average price slipped by just $21,000 as home sales in these neighbourhoods decreased by over 71%. The smaller decline in the national average price reflected rising sales activity in the Greater Toronto Area, where the proportion of national sales activity is greater than any other major urban centre and ranks among Canada’s more expensive markets.

It’s difficult to know whether average price changes reflect an actual appreciation or decline in home prices versus changes in the mix of sales. That’s why the MLS® Home Price Index is a far better way of gauging price trends and levels: unlike average and median prices, it isn’t prone to being distorted by changes in the sales mix from one month to the next.

The Misleading Math Behind the Rent vs. Buy Calculation

Article originally published on www.realtor.com

| Feb 17, 2017

 

There’s about $13.1 trillion stashed away in the United States, in plain sight. Where? In our homes!

Do we have your attention yet?

That’s the total value of the equity held by over 75 million U.S. homeowners, according to the latest estimates from the Federal Reserve Board. And that works out to almost $175,000 per owning household.

This is unmistakable evidence that homeownership is a critical building block of household wealth. Owning a home is a key reason why the median net worth of a homeowner is almost $200,000 while the median net worth of a renting household is just over $5,000.

Sure, part of that is because owners were able to pony up a chunk of money to put down on a house, and to qualify for a mortgage. But the act of paying for a mortgage actually helps produce more wealth, by freezing payment amounts and building equity through forced savings.

The traditional rent versus buy argument compares the total monthly costs of buying a home with a mortgage with the corresponding rent. So that comparison is relevant when it comes to representing  the housing choice trade-off in clear cost terms.

Two years ago, that head-to-head heavily favored buying, thanks to very low mortgage rates and lower prices. Back then, more than three-quarters of the counties in the country saw lower buying costs than renting costs.

With prices and rates higher now, less than half of the counties in the country see math that favors buying.

But those raw numbers hide the fact that unlike a rent check, a percentage of every monthly mortgage payment—after the lender is paid interest—goes toward the owner’s home equity. That means it’s really a forced savings plan.

Over time, less of the mortgage payments go toward interest and more go toward equity, so the savings power is enhanced further.

Here’s how that works out for a median-price home of $250,000 bought in January with 20% down with a monthly payment of $976.

Before their first payment, the proud new homeowners had $50,000 in equity thanks to their down payment. (Actually, 20% down isn’t always typical or necessary, but, hey, it keeps this illustration simple.)

In the first year, an average of 29% of the monthly payments builds equity. After 12 payments, the homeowners have just over $3,400 in added equity.

By year 14, 50% of the monthly $976 payment goes toward equity. Don’t forget that the monthly payment hasn’t changed, because the interest rate was fixed.

At the end of the 14th year, just shy of $64,000 has been added to the initial $50,000 in equity.

In the final year of the 30-year mortgage, while the monthly payment remains $976, 98% of the monthly payments builds equity until that magic day when the home is owned free and clear.

Think you can beat that with rents? Researchers at Harvard put it this way:

“While studies simulating the financial returns to owning and renting find that renting is often more likely to be beneficial, in practice renters rarely accumulate any wealth. In no small part this seems traceable to the difficulties households face in trying to save absent either a clear goal or an automatic savings mechanism.”

So, you want a better rent versus buy illustration? First, find a place to rent for no more than $976—the same as our mortgage payment example above. If you can rent for less, great. Will you be able to save that difference amounting to at least $3,400 in the first year? That would imply you can really pay only about $700 in rent to get the same savings effect.

If you can’t save $3,400 yourself by paying less in rent, ask the landlord if he’ll take a portion of your rent payments and set it aside for your rainy day fund.

Then ask the landlord if he’ll set your rent payment at today’s rate for the next 30 years. And before you close the deal, ask him to raise the rainy day share each year by 1% to 2% until year 30, when he’ll get only 2% of the rent payment.

Clearly, this would not be easy to do.

Even if the house only keeps pace with inflation over 30 years, which is a very conservative assumption, the forced savings inherent in a mortgage guarantees a homeowner is building wealth. A renter household has to be extremely diligent to amass the same savings that the good ol’ 30-year mortgage does automatically.

Mortgage Qualification Tips for Newcomers to Canada

Have you recently moved to Canada and want to buy a home? Independent mortgage broker Atrina Kouroshnia of Lava Rates explains what you need to know.

If you’re new to Canada and want to buy a home here, there are some rules you will need to follow. First off, the good news is that the Canadian government does not restrict foreign ownership of real estate, so you can buy property here even if you’re a temporary (or permanent) resident, rather than a citizen. Some provinces do limit the amount of agricultural land foreigners can buy, but this won’t apply to most home buyers.

However, foreign banks cannot register mortgages in Canada, which means you’ll need to get a mortgage from a Canadian bank if you plan to finance the property. The underwriting process for a newcomer can be a bit more complicated than it would be for a citizen, but I’ve seen people qualify for a mortgage only a few months after arriving in Canada.

If you want to buy a home as a transplant to Canada, here’s what you need to know:

Down payments: Depending on the lender, you may need a larger down payment because you could be perceived to be a higher credit risk. Some lenders require newcomers to put down at least 35 per cent, but there are alternative options for newcomers. You may be required to have had a down payment in Canada for at least 30 to 90 days depending on the lender, but some exceptions can be made depending on the country where the down payment is coming from and whether or not those funds can be traced. Lenders may also require that newcomers who are putting down less than 35 per cent purchase mortgage loan insurance because the risk of default is higher among non-citizens.
Employment and credit history: If you’re brand new to Canada, you probably haven’t had much time to establish a long credit or employment history here. Some banks will accept a 35 per cent down payment for those who have been in Canada for less than five years and have yet to establish employment sufficient for the mortgage they are seeking. Under other programs, the lender may require you to wait until you’ve worked with a Canadian employer for at least three months or you may need to provide extra documentation to show that you’re creditworthy. This might include immigration documentation such as a work permit, references from banks or employers, credit reports from your home country, records showing 12 months of on-time rent payments and proof of funds for your down payment. If you’re working for the same company because they’ve relocated you to Canada, that may help demonstrate your stability and creditworthiness to lenders.
Property Transfer Tax: Property transfer taxes may work differently than in your home country, so make sure you do your homework and budget accordingly. The main thing to note is that if you are buying a home in Metro Vancouver, you will have to pay not only the basic provincial Property Transfer Tax that all homes are subject to, but also an additional foreign-buyer Property Transfer Tax of 15 per cent of the purchase price. That applies whether you are resident in Canada or still living overseas, to those who do not have Canadian citizenship or permanent residency. However, if you are a foreign national living in Metro Vancouver with a Canadian work permit, you will be exempt from this extra tax. And the tax only applies to Metro Vancouver, as of late 2016, so if you’re buying outside that region, there is no additional tax for foreign nationals.
If you are exempt from the foreign buyer tax, British Columbia also offers first-time home buyers an exemption from the basic Property Transfer Tax. But again, you must be a Canadian citizen or permanent resident (not on a work permit) to qualify and you cannot have purchased property or been on the title of a property anywhere in the world at any time. The exemption also requires you to have either lived in BC for 12 consecutive months before the date you register the property or have filed income taxes as a BC resident for at least two out of the last six years.

 

-originally published on www.rew.ca

Richard Bell B.A. LL.B. Bell Alliance
Once you’ve found your new home, then comes the seemingly tricky bit of lawyers, notaries, searches and contracts. Richard Bell of Bell Alliance explains that it’s really quite simple.

So, working with your real estate agent, you have found your new home and, with assistance of your mortgage professional, you have arranged for a mortgage. What’s next?

It’s time to hire a lawyer or notary public to help with the legal process to finalize the purchase of the home.

Here are the eight steps you will need to go through.

Step 1: Retain the services of a lawyer or notary. Ask your other professional advisors for a referral or family and friends that have gone through the process. Make sure you are hiring someone with experience in real estate closings. Most closings go smoothly but if something unexpected happens you want to make sure your lawyer or notary public has the necessary expertise. You should contact your lawyer or notary as early as possible in the process.

Step 2: Your lawyer or notary will need to gather information from you, including how you wish to hold title to the property. If you are buying with your spouse or partner, most couples hold title as “joint tenants,” which means that the couple jointly owns 100 per cent. Upon the death of one owner the property automatically passes to the survivor outside of their will. The other way to hold title to property is as “tenants-in-common” which means each owner owns a fixed percentage, which could be 50-50, 70-30 or any combination. Upon the death of one owner, the owner’s interest passes under their will.

Step 3: Your lawyer or notary conducts a title search and obtains tax information and any additional information necessary to prepare the statement of adjustments. This is a balance sheet of the transaction showing the total funds required to complete after accounting for the deposit and mortgage proceeds. And there may be adjustments for taxes, strata fees or rental income.

Step 4: Your lawyer or notary prepares closing documents including title transfer, mortgage, property transfer tax forms and statement of adjustments. Your lawyer or notary will forward the seller’s closing documents to the seller’s lawyer or notary for execution.

Step 5: One to three days before closing is when you usually meet with your lawyer or notary to sign documents and deliver the balance of the down payment or equity.

Step 6: Your lawyer or notary registers the transfer and mortgage documents, arranges for the seller’s lawyer or notary to pick up funds and notifies you that the purchase has completed.

Step 7: You receive the keys for your new home. Normally you receive the house keys directly from your real estate agent on the possession date as set out in the contract of purchase and sale.

Step 8: Move in and enjoy your new home – congratulations!

Originally published on rew.ca

October 9, 2014

Home Sales, Average Sale Prices Down “Significantly” Across BC: BCREA

January home sales across BC fell 23 per cent year-over-year to 4,487 units – a decline of just under five per cent compared with December 2016’s 4,721 transactions.

“Housing demand across the province returned to long-term average levels last month,” said Cameron Muir, BCREA chief economist. “However, regional variations persist, with Victoria posting above-average performance and Vancouver falling below the average.”

The total sales dollar volume across the province in January was $2.79 billion, a drop of 36.5 per cent compared with the same month the previous year, reflecting not only lower sales numbers but also a reduced average sale price.

The average BC MLS® residential price in December was $621,093, a drop of 17.5 per cent since one year ago. It’s also a slide of nearly five per cent month over month, bucking the previous five months’ trend of price increases since August’s dip.

Muir added, “A marked decrease in the average MLS® residential price is largely the result of relatively more home sales occurring outside of the Lower Mainland.”

Looking at the individual real estate boards across BC, Greater Vancouver was once again the area to see the biggest annual decline in sales and average sale prices, followed by the Fraser Valley – despite both areas still seeing board-defined benchmark prices well above year-ago levels.

The best-performing regional markets in January (excluding Powell River and Northern Lights, which are very small markets that see widely varying percentage changes) were the Kootenay, BC Northern, Okanagan Mainline and South Okanagan boards, which all saw year-over-year increases in home sales and average prices.

Although Chilliwack saw a smaller increase in transactions, it posted the province’s biggest rise in average sale price, up 38.3 per cent year over year. Of the large markets, Victoria and Vancouver Island also reported an increase in average sale prices since the previous January, up 12.3 and 5.7 per cent respectively.

National Picture

Home sales and prices across the whole country fared a little better than BC, but the Lower Mainland’s “significant” decline is pulling down the national trend, according to figures released February 15 by the Canadian Real Estate Association (CREA).

The CREA reported 25,282 Canadian homes exchanging hands in January, which is up 1.9 per cent year over year but down 1.3 per cent since December.

The association’s monthly report said, “While sales were up from year-ago levels in about two-thirds of all local housing markets including in the Greater Toronto Area, Calgary, Edmonton, London and St Thomas, and Montreal, they were down significantly in the Lower Mainland of British Columbia.”

CREA added that national sales were only slightly above that of November 2016, when new mortgage rules are introduced, which the association believes could negatively affect buyers this year.

“Canadian homebuyers face some challenges this year, including new mortgage rules that make it harder to qualify for a mortgage and regulatory changes that will push up mortgage financing costs,” said Cliff Iverson, CREA president. “It will take some time to gauge the extent to which these challenges will weigh on home buyers in different housing markets across Canada.”

January’s average sale price in Canada was $470,253, almost flat with one year ago, up just 0.2 per cent. However, the CREA warns against using averages as an indicator of real home values, as they can be easily skewed by high and low outliers. The MLS® benchmark home price in January, aggregated across Canada’s real estate boards, was $551.400 – up 15 per cent year over year.

“The shortage of homes available for sale has become more severe in some cities, particularly in and around Toronto and in parts of BC,” said Gregory Klump, CREA’s Chief Economist. “Unless sales activity drops dramatically, the outlook for home prices remains strong in places that face a continuing supply shortage.”

 

Article originally published on www.rew.ca

Contact Michael Cowling at 604-241-7653 or info@michaelcowling.com for your neighbourhood market update.

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