Important Information For Homebuyers – The Consequences Of Cancelling An Offer To Purchase A Home.

When a buyer wants to purchase a home, he usually makes an “Offer to Purchase”. The offer contains, amongst other things, items included and not included, the deposit (earnest money) amount, the possession or closing day, and conditions of purchase.

If the seller accepts the offer, then the contract between buyer and seller is legally binding based on the wording of the offer.

But there are occasions when a buyer backs out of the deal. Reasons may be that:

  • the buyer cannot secure the mortgage commitment under the terms of the contract
  • the buyer may have found a better home
  • on inspection, there may be repairs required that neither the buyer no seller are willing to pay for

When the buyer backs out of the deal, the seller gets adversely affected:

  • the seller has lost the opportunity to sell to someone else
  • the seller’s property may have lost value during the contract phase of the sale
  • the seller may incur additional expenses arising from a delayed move
  • the seller may lose deposit on another home intended for purchase

While the buyer’s action affects the seller, there are also dire consequences for the buyer:

  • the buyer may lose the deposit paid to bind the contract
  • the buyer may face extended legal action should the seller incur expenses that are not covered by the deposit
  • the buyer may have to compensate the seller for loss of value during the contract period

The decision to withdraw an offer and its consequences can emotionally drain buyers and sellers alike.

The bottom line is that the seller’s goal is to sell his/her property at an agreed upon price. If the buyer breaches the contract, the seller is entitled to “be made whole”; this includes providing the seller with all costs associated with obtaining a new buyer and the fair market value of the property at the time of the breach.

Remember this – a buyer intending to purchase a home must:

  • Understand his rights before he signs the contract and makes a deposit.
  • Understand that once an agreement is signed and accepted, simply changing his mind can have far reaching consequences.
  • Understand that as a buyer if he defaults on his obligations the seller can sue for the deposit and damages.

If you are looking to buy or sell a home, you need an experienced real estate professional to guide you carefully through all the steps. We have been in business for over 28 years and currently have over 60 listings. Contact us, call us on 604 913 1000/604 695 1000, or visit one of our offices.

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5 Reasons Why Canadian Real Estate Investing Is Much Better Than Stock Market Investing

If you have money to invest, would you invest it as a down payment on a property and earn revenue and appreciation, or invest in the stock market to get positive results?

 

This is the dilemma many potential investors face. The stock market has been hitting new highs (especially in the US) and local property prices are rising. Both seem like win win situations, but in our opinion, investing in real estate is a better bet, and here is why:  

Real estate investing is much less volatile than stock market investing.

It is easier to lose money on stocks than in real estate. The chances that you will lose 30%+ on your real estate investment in Canada is very low. On the other hand, there are laundry lists of stocks that have lost over 30% of their value within months, weeks and even days. 

If you buy a property for investment purposes you will get revenue rental as well as a fair amount of capital appreciation, unless there is a significant flaw in the property which you were unaware of when purchasing. This makes real estate a relatively stress free and profitable form of investment. 

There are plenty of expense write offs in real estate investing

Real estate investing allows you to write off a number of expenses to reduce taxes payable on the income you earn from the investment property. On the other hand, stock market investing has few if any expenses, which can be utilized to boost the bottom line.  

Real estate is a physical asset

Investing in real estate allows you to “touch and feel” a physical, tangible asset.  If you invest in a house or apartment building, you can visit it and see it visually. Whereas while a stock purchase does represent a piece of ownership of an underlying company, it is usually depicted as an entry on your screen grouped with a whole bunch of other stocks – not something you can physically touch – it’s just a number. 

There is no stress about daily price movement in real estate investing

Real estate prices do not fluctuate on a daily basis as stocks do. If anything, there are monthly fluctuations, which may vary by 1-2%. With stock market investing, it is hard to ignore the changing ticker symbols.  We all know that stock values can drastically change within hours, minutes or even seconds.  

As an investor, you can sink hundreds of thousands of dollars into a stock, which may be down one month and recover in the following months and vice-versa. While a few of us may have the appetite to be able to withstand these fluctuations, most of us don’t, and the less volatile behavior of real estate would be the ideal investment. 

Real estate investing is relatively much easier than stock market investing

If you want to be a successful stock investor, you need to understand technical analysis, how to gauge the fundamentals of the company, how the sector you are investing in compares with other sectors, etc. etc.  The management of the company and worldwide events can also influence the stock. In other words, there are a lot of moving parts, so the specialized education, market awareness and knowledge is required.  

With real estate investing, the task is easier. An adequate amount of research combined with local knowledge, and an experienced real estate advisor, can give you a head start in pretty much any real estate market.  

Most real estate investors begin by putting a down payment on a property and rent it out. With time and confidence, another property is purchased using the equity appreciation from the first property, and this process is rinsed and repeated. Within a few years, the investor owns a portfolio of properties and has considerably increased his/her net wealth.

 If you are thinking of real estate for investment purposes, talk to us. Over the years we have worked with many clients, who have successfully invested in properties throughout the Lower Mainland of Vancouver. We know the market well.  Call us on 604 913 1000/ 604 695 1000 or contact us by email.


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Sweeping Changes Proposed As Vancouver Fights To Get Units Back Into Rental Housing.

Sweeping Changes Proposed As Vancouver Fights To Get Units Back Into Rental Housing. 

According to Vancouver Mayor Greg Robertson, Airbnb is effectively “Vancouver’s largest hotel”. Currently there are thousands of short-term rentals that are believed to be eating into Vancouver’s rental supply. In view of this, the City of Vancouver is proposing sweeping changes in the short-term rental market that will bring at least 1,000 rental units back into the market. 

Presently, Vancouver has around 6,000 active listings on various platforms such as Airbnb, Hometogo, VRBO etc. These are not registered and are effectively “illegal” according to the City. The City estimates that at least 70% of the current short-term rentals will be able to continue doing so once its proposed regulations are adopted. 

Below are some of the proposed new regulations for short-term rentals in the City of Vancouver: 

  • Owners or renters would need to obtain a business license to be able to participate in the short-term rental market. This would have to be posted on the relevant platform the property is listed on.
  • There would be a one-time activation fee of $54 and an annual fee of $49. These fees are in line with long-term rental units and bed and breakfast businesses currently operating in the Vancouver. By keeping the fees low, the City is encouraging compliance.
  • All short-term rental unit operators would have to comply with Federal and Provincial tax requirements, based on the income they generate from the unit.
  • Each property would have to ensure that it fits with building safety guidelines and the surrounding neighbourhood.
  • A transaction fee of up to 3% that would apply to the guest. This would be comparable to the Provincial Government tax on hotel guests that is currently being levied.
  • Only principal residences would qualify. The intent is that long-term investment homes and secondary homes would be returned to the rental market.  

The Mayor calls his proposed regulations a “balanced approach”. “Our focus is to protect long-term housing and also that we ensure that people can make supplemental income from short-term rentals”, he said during his press conference. 

Did you know that we have a property management and rentals division? Contact us or call 604 695 1000 and we will be pleased to discuss your rental needs.

 

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No Air-conditioning at Home? Don’t Worry We Have You Cooled Using These 7 Hacks

It’s summer and for a change instead of finding ways to keep our homes warm, we are looking for ways to keep them cool. While installing air conditioning is a good option, it may not be necessary, especially as we don’t have the searing hot heat and humidity our friends in the East and down South have. 

So here are a few hints to keep your home cool even if you have air-conditioning installed: 

Close your blinds or curtains.

Closing your blinds from late morning to early evening can lower your indoor temperature by as much as 20 degrees. This is especially important for south and west facing windows.  

Unplug unnecessary appliances and devices

Everything you plug into a socket produces some heat.  Even devices that produce a glowing red light when not in use, drain energy and produce heat – they need to be unplugged and not just turned off. 

Use ceiling fans the right way

During the summer months your ceiling fan should blow forward in a counter-clockwise direction. During winter, the direction should be changed whereby the air gets circulated throughout the room. The base of the ceiling fan normally has a small switch that changes the direction of the airflow. 

 

Enjoy more outdoor barbeques and salads

Generally speaking, in any household, the kitchen generates a lot of heat with the oven being the main culprit. By frequent use of the outdoor barbeque, you are reducing the use of the oven and heat generated within the home. Eating lots of salads and “cold” meals reduces reliance on the oven as well.  

Get help from your garden

Shade providing plants, trees and shrubs in front of windows can absorb much of the afternoon sun to cool down your home, and add beautiful landscaping to the outside.  Did you know that a tree in full bloom can block over 70 per cent of solar radiation from entering your home? 

Change your bedding

During the winter months fleece blankets and flannel sheets are great for keeping you warm, however in the summer, using cotton instead is a great way of keeping cool, as cotton breathes easier and stays cooler. 

Use ice with your fan

If you fill a bowl with ice and place it at an angle in front of a large fan, the air that blows off the ice is extra chilled and can really keep a room cool. Even a bowl of icy water will do the trick. Try it – it really works! 

Summer is usually the busiest time for homebuyers and sellers. For a full list of our luxury homes available for sale, please visit our website. We have over 60 amazing homes offered for sale.

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Why The Biggest Mistake A First Time Home Buyer Makes Is Not Using An Experienced Realtor.

A fundamental mistake we often see first time home buyers make, is not hiring their own real estate professional to represent them with their purchase. 

This usually happens in 3 ways: 

  1. They rely on the resources available on the Internet to help them with their purchase, as there are a number of on-line self-help resources.
  2. They go to a real estate developer’s office and buy direct.
  3. They go to an open house and buy directly from the seller’s agent. 

The problem here is that there is no professional representation for the buyer, which could be helpful in negotiation and problem solving. 

A homebuyer who wants to avoid paying an agent’s commission will end up paying one way or another. Granted that the commission comes out of the seller’s sale proceeds, but the home is invariably priced to account for this.  

So what can go wrong with the transaction that can cost a first time homebuyer dearly without professional representation?

  1. Delay in closing due to missing documents, errors on documents etc. These can be preventable as a real estate professional has the knowledge and training to ensure that all the necessary paperwork has been filled out correctly.
  2. Lot of valuable time can be spent on the transaction. The internet can educate, to a large extent, on how to buy a property. But why would one want to spend all that time learning when there are experienced professionals who can do this?
  3. Hidden flaws and expenses may linger. Walking through a home, one may not notice flaws or discrepancies that would be apparent to the trained eye of an experienced realtor. This also applies to various closing costs that a buyer may not be aware of, and have not factored into his/her budget.
  4. The buyer may be overpaying for the home. Chances are slim that the buyer is familiar with the current and historical price of properties in the area. A professional realtor has a number of resources at his/her disposal, and has training in negotiation, which can work in the buyer’s favor.  

Buying a home is one of the largest financial transactions you will ever make in your life. So why wouldn’t you trust a professional to do it for you? After all , the seller pays the commission. 

 

When you decide to do so, contact us and one of our experienced real estate professionals will help you find your dream home.

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REBGV Market Update June 2017 – Condominium Listings At Near All Time Lows, While Detached Market Has More Selection.

REBGV Market Update June 2017 – Condominium Listings At Near All Time Lows, While Detached Market Has More Selection. 

The June 2017 stats released by the Real Estate Board of Greater Vancouver (REBGV) shows that the trend continues from the previous month, where demand for condos continues to outstrip supply and demand for detached homes has fallen to more typical levels. 

The following indicators give a better understanding of the results: 

Home Sales

The number of registered home sales in June totaled 3,893. This is down around 12% from the record setting 4,400 sales in June 2016 and down 10.8% from May. However, June sales were 14.5% above the 10 year June average. 

Home Listings

The number of newly listed homes for sale on the Multiple Listing Service (MLS) was 5,721. At the same period last year, the number of new listings was 5,875 while in May 2017 the number of new listings was higher by 323, totaling 6,044.  

Whereas the number of new listings may have decreased when compared to the previous month and the same time last year, the total number of properties listed for sale on the MLS has actually increased. 

In June the total number of properties listed was 8,515. The June 2016 total was 7,812 and the May 2017 total was 8,168. 

Sales – To – Active Listings Ratio

This ratio gives a good understanding of supply and demand in the market. For all property types, the ratio was 46% for June 2017. It is down by 7% when compared to the previous month. 

By property type, the ratio is 24.5% for detached homes, 93.2% for condos and 62% for townhomes.  

When the ratio is around or below 12% for a sustained period, there is downward pressure on prices. When it is above 20% for a sustained period, there is upward pressure. 

Home Prices

The benchmark price for all residential homes in Metro Vancouver in June 2017 was $998,700. This represents a 7.9% increase over June 2016 and a 1.8% increase over May 2017. 

Condos have seen the largest price increase when compared to June 2016 – 17.6%, followed by townhomes at 10.7% and detached homes at 1.4%. 

Get the full report here. 

In summary, the detached home market has eased back to more typical levels, while the condo market is experiencing fierce competition. 

If you are looking to buy a home, we have over 65 homes available and have been in the real estate business for over 28 years. Contact us via email or call us at 604 913 1000 or 604 695 1000.

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Why The Biggest Mistake A First Time Home Buyer Makes Is Not Using An Experienced Realtor

A fundamental mistake we often see first time home buyers make, is not hiring their own real estate professional to represent them with their purchase.

This usually happens in 3 ways:

1. They rely on the resources available on the Internet to help them with their purchase, as there are a number of on-line self-help resources.

2. They go to a real estate developer’s office and buy direct.

3. They go to an open house and buy directly from the seller’s agent.

The problem here is that there is no professional representation for the buyer, which could be helpful in negotiation and problem solving.

A homebuyer who wants to avoid paying an agent’s commission will end up paying one way or another. Granted that the commission comes out of the seller’s sale proceeds, but the home is invariably priced to account for this.

So what can go wrong with the transaction that can cost a first time homebuyer dearly without professional representation?

1. Delay in closing due to missing documents, errors on documents etc. These can be preventable as a real estate professional has the knowledge and training to ensure that all the necessary paperwork has been filled out correctly.

2. Lot of valuable time can be spent on the transaction. The internet can educate, to a large extent, on how to buy a property. But why would one want to spend all that time learning when there are experienced professionals who can do this?

3. Hidden flaws and expenses may linger. Walking through a home, one may not notice flaws or discrepancies that would be apparent to the trained eye of an experienced realtor. This also applies to various closing costs that a buyer may not be aware of, and have not factored into his/her budget.

4. The buyer may be overpaying for the home. Chances are slim that the buyer is familiar with the current and historical price of properties in the area. A professional realtor has a number of resources at his/her disposal, and has training in negotiation, which can work in the buyer’s favor.

Buying a home is one of the largest financial transactions you will ever make in your life. So why wouldn’t you trust a professional to do it for you? After all, the seller pays the commission.

When you decide to do so, contact us and one of our experienced real estate professionals will help you find your dream home.

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Here Are A Few Quick Feng Shui Fixes To Bring Balance And Energy To Your Home

A number of people nowadays consult the laws of feng shui when designing/decorating their homes. Feng Shui is the system of laws that governs the arrangement and orientation of things in the room/area in relation to how the energy or chi flows. In other words, feng shui is the art of placement – how we position ourselves to harness the positive chi.

People try to adhere to the principles of feng shui in order to bring good luck. However, not all of us have the liberty to drastically change our homes to suit feng shui principles. Here are a few quick feng shui tips and principles that can be easily incorporated into your home:

Clear your space.

The removal of clutter allows the energy to flow freely around the home and achieve a harmonious flow. The accumulation of clutter keeps the energy stagnant by blocking it and not allowing it to flow.

Separate the things you need from the things you don’t need – get rid of things you have not used for a long time, or will not be using.

Keep your home clean

By keeping your space clean and moving things around, you stir up the trapped energy that would have otherwise be left stagnant.

Bring the outdoors indoors

Positive and vibrant chi (energy) is strongest in the great outdoors, so you need to bring some of that energy indoors in the form of flowers and plants. Plants that bring luck and good energy are bamboo stalks, jade plants and green money plants.

Spruce up dull corners

According to Feng shui, dull, lonely corners trap stale energy. In order to remove this, add a nice tall lamp to brighten the corner and move the stale energy around. If you don’t want a lamp in the corner, place a nice tall plant, which brings in natural energy.

Pay special attention to your front door

The front door is the mouth of your home through which all energy flows in. You want to attract the good energy in and keep out the negative energy. Color the front door with a color that makes you happy and exuberant. Keep a few plants around the entrance to enhance the energy flow around the entrance of the home.

Keep the indoor entryway as free from objects as possible.

Just like the area surrounding your front door on the outside is important for the flow of good energy, the indoor entryway is also as important. In the entryway of your home remove objects that can obstruct the free flow of energy – place shoes and jackets in closed closet, remove unnecessary furniture. Keep the entrance as bright and airy as possible.

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How Much Is Municipal Government Regulation To Blame For The Current Real Estate Housing Affordability Crisis?

The housing affordability crisis in the Lower Mainland has everyone scurrying around looking to blame someone. This problem has a lot of moving parts. A proportion of the vocal blame has been targeted at foreign investors, rightly or wrongly so. But there is another side of the coin – a lack of housing supply. This may be attributed, as some would argue, to the plethora of municipal government regulations and actions.

In July 2016, the Fraser Institute published a 52-page report that suggested municipal regulation of residential development has restricted housing supply, encouraging property prices to increase and distort local economies.

The report looked at five factors that continue to slow down the supply of new housing in Canadian cities (notably Toronto, Vancouver and Calgary): approval timelines, timeline uncertainty, council and community impacts, costs and fees and the prevalence of rezoning.

Developers are aware of the housing shortages, and are fully committed to remedy this. While developers are well stocked with land, realizing the project remains tough. Often, a site with no rezoning or other approvals could require as much as 2-3 years to bring to completion. These municipal approval delays are exactly what is exacerbating the affordability issue, amongst other factors.

The study also found that developers will simply skip over a region if constructing housing becomes too costly or onerous – again, this doesn’t help the Lower Mainland’s housing problem.

Take Maple Ridge for example. Here, slow approval times mean that just one or two projects at a time are selling, creating a virtual monopoly lacking the competition that can yield pricing benefits.

Local municipal councils are known for the extra regulatory hurdles they impose on homebuilders and developers. They may engage in protracted and often arbitrary negotiations with homebuilders before approving new buildings.

In exchange for permission to exceed the zoning limits, municipalities often demand that home builders finance local amenities such as parks, playgrounds etc. The costs of these amenities can outrun the actual expense of the benefits.

The affordability crisis in Vancouver was a major issue during the recent Provincial elections and still remains one of the hottest topics on the Vancouver real estate scene. There are many points of view and we would welcome your comments and point of view.

In these market conditions, you need to work with a real estate company that has the experience and know how on getting you the right home. Contact us and let one of our real estate professionals obtain the best results for you.

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Housing Supply Not Keeping Pace with Demand in Most BC Regions

Vancouver, BC – June 13, 2017. The British Columbia Real Estate Association (BCREA) reports that a total of 12,402 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in May, down 7.9 per cent from the same period last year. Total sales dollar volume was $9.33 billion, down 4.0 per cent from May 2017. The average MLS® residential price in the province was $752,536, a 4.2 per cent increase from the same period last year.

“Market conditions have tightened considerably this spring as an upturn in consumer demand has not been accompanied by a rise in homes listed for sale,” said Cameron Muir, BCREA Chief Economist. “The supply of homes for sale in the province has fallen 50 per cent over the past five years.”

“The entire southern portion of the province is experiencing a shortage of housing supply, which makes continuing upward pressure on home prices inevitable, at least in the near term,” added Muir. Total active listings in the province were down 11.1 per cent to 28,404 units from May 2016. The ratio of home sales to active listings was well over 20 per cent in nine of the province’s 11 real estate boards, and over 50 per cent in Vancouver, the Fraser Valley, Chilliwack and Victoria.

Year-to-date, BC residential sales dollar volume was down 25.2 per cent to $30.6 billion, when compared with the same period in 2016. Residential unit sales declined 20.1 per cent to 43,158 units, while the average MLS® residential price was down 5.7 per cent to $709,541.

For the complete article, please click here.       [LINK]

Credit: British Columbia Real Estate Association (BCREA)

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