Monday, February 27, 2023

10 Questions You Should Be Asking Your Real Estate Agent

Choosing the right real estate agent can mean the difference between earning top dollar on your property investment and barely breaking even. Your agent will negotiate the price of your house and charge you a commission.

You deserve to feel confident that you’ve asked all the right questions before selecting the real estate agent who will sell your house.

Here are 10 essential questions you need to ask before choosing a realtor

1. How much experience do you have?

As simple as this sounds, many home sellers don’t ask this question!

Don’t assume an agent has the experience you’re looking for simply because they’re an agent.

2. How does your fee structure work?

An honest realtor will clearly outline the details so there are no surprises.

Beware of realtors offering rates that seem super low, as it may speak to their planned level of effort.

3. How will you advertise my listing?

A diverse marketing plan is key to selling a home.

Ask agents for current ads, not just in print but online as well. A competent realtor should have all the advertising bases covered.

4. Do you have support staff?

There’s a careful balance here.

While you don’t want to be handed off to your realtor’s assistant, you do want your realtor to have support staff in place so they can focus on the task at hand—selling your house.

5. Do you also help buyers find homes?

To avoid a potential conflict of interest, ask if your realtor will solely represent you, or if there’s a possibility he or she may also represent a potential buyer.

Know your real estate agent’s priority (yes, it should be you).

6. On average, how long does it take you to sell a house?

Any realtor worth your time will be only too happy to share their stats. Find out how many homes they’ve sold in the last year, and how long each sale took.

7. Will you help me stage my home?

A great realtor has a keen eye for decor.

Find one who can show you how to set the ideal stage, making your house attractive to potential buyers.

8. Is my neighbourhood growing or slowing?

Asking about your neighbourhood will tell you the agent’s level of experience, plus it gives insight into the current market trends in your area.

9. Can you give me a comparative market analysis (CMA) for my neighbourhood?

Quick on the heels of question #8, ask for a CMA, which lists current homes for sale and recent sales in your area.

This can help you compare your home to others on the market in your area.

10. Do you have references from (preferably three) clients?

Again, any realtor you want to work with will have up-to-date references from recent clients.

Are you looking to buy or sell property? If you’d like, we can have a real estate expert show you the most efficient process that saves you thousands of dollars, a lot of time, with little or no inconvenience to you. Contact us today!

Source: Zoocasa

Should I Get a Home Inspection?

Should I get a home inspection? A careful mind always answers “yes” but under certain market conditions, some homebuyers may be tempted to bypass this critical step in the purchasing process. It could be a competitive seller’s market, or the immediate “feels” you get when you find a home that could be “the one.” From the moment you walked through the front door, you knew it had to be yours. The walk-in closet, open-concept plan and lush backyard are exactly what you’ve been dreaming of, and may be enough to overlook the leaking faucet in the bathroom and the strange smell wafting up from the basement.

Sometimes when viewing a home, it is easy to let staging get the best of us. We get so caught up in the pretty wrapping that we forget to look inside to see what makes the home tick.

It is a classic example of never judging a book by its cover, and can be easily solved with a home inspection. When buyers put in an offer, there is the option to insert a home inspection clause. When you hire a professional home inspector, you can save yourself time, stress, and avoid potential financial risk by proactively identifying any issues within the inner workings of the home. The home inspector will do a visual inspection of the structure and components of the home to ensure everything is performing correctly and is in safe working condition.

The home inspector will pay special attention to the following areas of the home:

Roof
Ventilation
Fireplace
Plumbing
Electrical
Appliances
Exterior
HVAC
Structure

How much does a home inspection cost, and who pays?

The cost of a home inspection will vary depending on factors including the age, size, and location of the home. Always make sure you choose your home inspector carefully by doing your research and taking a close look at their qualifications and credentials. Choosing a reputable inspector could save you from running into unplanned and often costly issues in your new home.

Source: RE/MAX

Thursday, February 23, 2023

‘Move-over’ buyers driving demand in high interest rate, low inventory market

Photo Credit: Richmond News

The Metro Vancouver housing market will continue to see increased interest rates, financial pressure from mortgage stress tests and low inventory this coming year, according to a new report from Re/Max Canada.

Despite these factors, Re/Max Canada said the “move-over” buyer and influx of newcomers to the city is driving some demand within the region.

Transition buyers who are hoping to gain more space and upgrade their real estate are taking advantage of favourable conditions for this kind of move, said Tim Hill, a real estate adviser at Re/Max.

“The gaps between the townhome market and the detached market in many cities are really good. They're better now than they were in the peaks of the market,” he said. “Right now the move is less costly to the consumer, even with the higher interest rate, than it was in the peaks of the market.”

Anticipated changes and tightening of restrictions to mortgage stress tests have encouraged 21 per cent of Canadian home buyers to make a move sooner than originally planned this coming year, according to a Leger survey commissioned by Re/Max Canada as part of the report.

“People are now having to qualify at seven per cent, in some cases eight per cent for a stress test. And that really hurts affordability and brings down buying power too,” said Hill.

However, while Hill said that some variable rate mortgage holders are considering a move, he hasn’t personally seen buyers change course due to the stress test.

Nearly 60 per cent of Canadians have concerns regarding the home-buying process. The highest-ranking concern, at 34 per cent, is inflation and the rising cost of living.

Lack of affordable housing options and the rising cost of rent are other notable concerns for homebuyers, both at 25 per cent.

“Our severe lack of supply in every town, community and city across the country, seeps into almost every facet of the lives of Canadians. Not only are their housing options being impacted, but a tighter housing market may compromise job prospects, among other things, placing even greater urgency on governments and housing industry experts to address Canada’s affordability crisis,” Elton Ash, executive vice-president at Re/Max Canada, said in a statement.

Though the majority of homebuyers in Canada are anxious about the housing market, 32 per cent remain optimistic that conditions are regaining balance in 2023.

In addition, one in five homebuyers and sellers support the building of Canada’s “missing middle” through the addition of new developments.

“The potential wide-spread impacts of our housing crisis can be mitigated, but challenges need to be tackled in a co-ordinated, strategic effort by all levels of government. I encourage visionary thinking and solutions that may include reforming municipal zoning laws to allow for a greater diversity of housing; expanding capacity for laneway developments; and using available land to drive housing supply in a manner that doesn’t compromise climate adaption and mitigation efforts,” Christopher Alexander, president of Re/Max Canada, said in a statement.

“For that to happen, some tough decisions need to be made.”

Source: Richmond News

Wednesday, February 22, 2023

You’ve probably heard the saying that you shouldn’t buy the best house on the block.

But everyone’s always looking for a deal, and in a fast-moving housing market, buyers especially are looking for a ‘diamond in the rough’: a good home in a not-so-good neighbourhood that they can buy for a steal and then sit back as the area – and value – improves over time.

How do you tell if you’re getting a bargain in a soon-to-be gentrified neighbourhood, or whether you’re just buying the best house on a crappy street?

Schools

Figuring out which schools are ‘good’ and ‘bad’ can be tricky even in well-established areas, let alone areas that are transitional.

School rankings are publicly available, although there is much debate as to what they actually tell you (and what they don’t). The only way to truly know whether a school is improving is to talk to local parents whose children are in the schools, and to even visit the schools yourself. Demographics of the school and of surrounding households will provide you with information about the local population, but also look at how that information has changed over the past few years.

Are household incomes rising? What about home values and prices? Higher property taxes can translate into better funded school districts. School administrators are also a big factor in the success of an individual school, so be sure to ask how long the principal and teachers have been at the facility.

Development

If you want to buy a home in an up-and-coming area, it’s difficult to know exactly how much that area will change over time.

One way to get an idea of the future landscape is to look and see if there are any development proposals that have been approved for the area. Are there any buildings that are set to be demolished or empty lots or spaces that could be developed? What are the zoning restrictions for those spaces? This may give you an idea of what types of buildings are likely to go up in the near future. Something that’s zoned as commercial may have a very different impact on a neighbourhood than something that’s zoned as residential. Are there areas that are protected and can’t be built upon? That might be good for having green spaces nearby, but maybe not so good for amenities.

Get as much information as you can as to what’s coming in the near future, as it will help you anticipate what’s likely to come down the road.

Homes

The house or condominium building that you want to buy may look just fine – but what about other properties on the surrounding streets?

If they seem to be in disrepair or just look unkempt, it could suggest that homeowners or property managers don’t have an incentive to look after their property, or that the owners are absentee landlords. Neither is particularly bad, but those situations may have an impact on our curb appeal and/or property values and may be unlikely to change in the near future.

A good sign would be any renovations or construction that’s taking place on other properties nearby, meaning that either owners are likely to want to improve their property or to get it ready to sell to high-caliber buyers (like you!).

Businesses

Is there a Starbucks in the area? Kidding, although the types of businesses that are in an area say a lot about its clientele and where business owners think the neighbourhood is headed.

If there are any businesses in the area, note the kind of businesses they are. Pawn shops, pay day loan offices, and convenience stores might deter people from investing in the neighborhood, whereas sit-down restaurants, retail stores, and large supermarkets suggest long-term staying power.

Proximity

How close a neighbourhood is to amenities has an impact on home values, sure, but the proximity to opportunities is just as important – namely, how close it is to places of employment.

This doesn’t just mean being close to a factory or a mall, both of which only offer one type of employment, but close to enough of a hub that offers opportunities across different industries. Even when larger municipalities suffer through housing slumps, people still flock to them because of the employment opportunities available, and they need somewhere to live that’s close(ish) to work.

Something else you want to check out is how close your desired area is to other good neighbourhoods. Being next to a neighborhood that has already up and come, so to speak, isn’t a guarantee of your neighbourhood’s gentrification, but it’s more likely that it will attract people who may be priced out of that area or want to be close to that particular neighbourhood.

On the flip side, if you’re in a pocket of depressed neighbourhoods, it’s less likely that yours will be the one to turn around.

There are plenty of factors to consider when trying to judge whether your desired neighbourhood is on its way up. Your real estate agent will help you decode the area and look for the signs that you’re one step ahead of the gentrification game. Are you looking to buy or sell property? If you’d like, we can have a real estate expert show you the most efficient process that saves you thousands of dollars, a lot of time, with little or no inconvenience to you. Contact us today!

Source: Zoocasa

Tuesday, February 21, 2023

Getting a Mortgage with Student Loan Debt

On average, Canadian students pursuing full-time undergraduate programs paid an average of $6,693 in tuition for the 2021/2022 academic year. Similarly, Canadian students pursuing full-time graduate programs paid an average of $7,742 for the academic year. After graduation, those loans come due, and four years of education can amount to a significant amount that is paid off over a decade or more.

So, what happens if you want to buy a home either during your post-secondary education or later down the road? The good news is that getting a mortgage with student loan debt is possible. However, your debt-to-income ratio and mortgage affordability will be impacted by it. Let’s learn how.

Understanding Debt-to-Income Ratio

Debt-to-income ratio is the percentage of your gross monthly income that goes into making monthly debt payments and is used by lenders to determine your borrowing risk. A low ratio indicates sufficient income and a good balance between income and debt, while a high ratio indicates insufficient income or too much debt. Mortgage lenders want to see low debt-to-income ratios before issuing a mortgage to a potential borrower to ensure they are low risk.

When applying for a mortgage, your lender will look at two key debt ratios. One is your Gross Debt Service Ratio (GDS), which represents the ratio of your income to the cost of your housing and is not typically affected by student loans. The other is your Total Debt Service Ratio (TDS), which represents the ratio of your income to all your debt service requirements, such as housing, credit card debt, and any loans. This is where your student loan debt comes into play.

Most lenders will not let you get a mortgage with a TDS greater than 44 percent. If your loan payments are too high or your income is too low, then you will not be able to qualify.

How Student Loans Affect Your Mortgage Affordability

While getting a mortgage with student loan debt is quite possible, it will affect your mortgage affordability, which is how much you can borrow based on your current income, debt, and living expenses. The higher your mortgage affordability, the more expensive a home you can afford to purchase. With student loans, your debt increases and affects your TDS, so you will likely be approved for a lower amount than you would without any student loan debt.

The other way that student loan debt affects your ability to get a mortgage is due to how it impacts your credit score. In Canada, student loans are a type of debt reportable to the major credit bureaus in Canada – Equifax and Transunion. Therefore, your credit score will be positively impacted if you have been diligent about making payments toward your student loan debt on time. If you have not made regular payments or been late, your student loans will negatively impact your credit score and may hurt your chances of getting approved for a mortgage.

How to Get a Mortgage with Student Loan Debt

Getting a mortgage when you have student loan debt is very doable if you take the proper steps. Here are a few things you can do when applying for a mortgage with student debt:

Pay off other debt – If you have other types of debt beyond your student loans, it is wise to pay them off as much as possible. Even small amounts of credit card debt will affect your debt-to-income ratio and your ability to get a mortgage while taking care of them immediately will improve your mortgage affordability.
Restructure your student loan. Debt ratios are based on monthly payments. By restructuring your student loan to extend payments over a longer period of time, you’ll reduce your monthly obligations and positively impact your debt ratios. However, you’ll pay more student loan interest over time, so try to pay it off as soon as possible once you’ve been through the home-buying process.
Make regular student loan payments – The best thing you can do when applying for a mortgage is to ensure that you make your payments regularly and on time. This will improve your credit score and help your chances of getting approved for a mortgage.
Get pre-approved – If you aren’t sure about whether you will be able to get a mortgage with student loan debt, apply for pre-approval. This will give you a set mortgage amount and interest rate so that you know what you can afford.

There are always various factors that go into determining the eligibility of a potential mortgage borrower, one of them being student loans. With a good credit score, employment history, and minimal other debt, student loans will not impact your debt-to-income ratio too much nor hinder your mortgage approval process.

Source: RE/MAX

Sunday, February 19, 2023

10 Expert Tips for Staging Your Home to Sell

You’re about to move up into a home that better suits your lifestyle. Congratulations, it’s an exciting time! But before you can do that, you need to sell your current home. The goal of any seller is to get the highest sale price in the shortest amount of time. If that’s your objective, too, consider staging your home.

The numbers speak for themselves: according to a study from the Real Estate Staging Association, staged homes spend 73 per cent less time on the market, and staging your property could net you 25 per cent over the asking price.

the reason staged homes can sell faster and for a higher price is because they showcase the home’s best features, impress buyers, and downplay the home’s weaknesses.

What is Home Staging?

Staging is not about decorating. Decorating reflects your personal style and taste. Staging does the exact opposite of decorating, making your home appeal to as many people as possible.

When you stage a home, you help homebuyers picture themselves in the space. When they move through the kitchen, you want them to feel like they can effortlessly cook a meal here, for example. They need to see it as their dream home. This

Staging Your Home to Sell Faster

Homebuyers want who are looking for a turn-key home usually do not want a project. Here’s what you can do to appeal to this type of buyer, and stage your home to sell.

1. Focus on the key rooms

There are several areas that homebuyers are zeroing in on when they look at your home, with the living room, kitchen, primary bedroom, and dining room topping the list.

If you can’t get to every room, make sure that you spend your time, energy, and money on these rooms.

2. Clean, clean, clean

If you have spent any time looking at homes for sale online, you have undoubtedly encountered some sellers who skimped on the cleaning. We’ve all seen the kitchen photo where that morning’s breakfast is still on the counter. Avoid that. Please.

If you can’t stage every room in your home, you can still clean every room. It’s essential. It signals pride of ownership and that you have cared for the house over the years.

Ensure that appliances are spotless and the bathrooms sparkle. You will not regret cleaning.

3. Declutter your home

Decluttering is something that you can do without having to hire a stager. It gives your home an open, airy feel, making it feel more spacious.

On the flip side, an overcrowded home is distracting. There is no room for buyers to imagine. Instead of potential, they see restrictions and a shortage of storage space.

Go room by room. Organize your items in piles: the things you want out of your life and the ones that can go into storage, until you’re ready to move.

4. Depersonalize the space

While you are decluttering, be sure to remove any personal items from display. Buyers want to picture themselves in the space, and your family portraits can make it hard for them to imagine.

Photos, your kids’ artwork on the fridge, knick-knacks from that trip to Italy – sure, they have sentimental value to you, but not to potential buyers. Remove these items are replace them with more generic artwork that will appeal to potential buyers.

5. Add Plants

Freshen up your space with live, thriving plants. They can do wonders to make your home feel more inviting. Do not crowd any area with plants, have them dispersed throughout the space.

6. Give Rooms a Purpose

Just because you use that spare room as a gym, home office and the guest room does not mean that a potential buyer will see the practicality of it. They want each room to have a single, defined purpose. A bedroom is a bedroom. An office is an office.

Defining the purpose of each room will maximize the appeal and contribute to that open, clutter-free feel that buyers want. Giving each room a purpose allows buyers to envision how they too can make use of the space.

If you can add office space, do it. With so many people shifting to remote or hybrid work, it allows them to see themselves working in that space.

7. Fresh Paint

According to the RE/MAX Canada Renovation Investment Report, 36 per cent of RE/MAX brokers surveyed said buyers want a fresh coat of paint. This simple and cost-efficient update can go a long way. When you head to the paint store, opt for light, neutral colors. People’s color preferences vary widely, and bold choices may scare some buyers off.

8. Let There be Light

You want your home to feel bright and inviting. Lighting plays an essential role. Open your curtains and blinds to let the natural light pour in. Turn on all the lights. Bring in a lamp to let your home shine if you need new lighting!

9. Furniture

When it comes to furniture, less is more. Don’t clutter a room with too much furniture. The starting point for most professional stagers is getting rid of furniture. Often, they will remove about half of the furniture in the home. The goal is to make your house look bigger. Furniture takes up space and can make the home feel cluttered.

If you need to upscale your furniture, you can rent the right pieces to make your space more inviting.

10. Boost the Curb Appeal

The exterior of your home is a great place to start your staging efforts. Some sweat equity over a weekend can turn into real equity in your bank account.

Make your home sparkle with a power washer. If you don’t have one, rent one. Remove dirt and grime from your siding, roof, fascia and gutters. Give your deck a scrub too.

If your shutters or front door needs some paint, be sure to freshen them up. Pay attention to the little things like the house numbers, mailbox and welcome mat.

Source: RE/MAX

Friday, February 17, 2023

Canadian Housing Starts (January 2023) - February 15, 2023

Canadian housing starts declined 13.3 per cent to 215,365 units in January at a seasonally-adjusted annual rate (SAAR). Starts were down 6.9 per cent from January of 2022. Single-detached housing starts rose 9.5 per cent to 62.9k, while multi-family and others fell 20.1 per cent to 152.5k (SAAR).

In British Columbia, starts fell by 13.6 per cent in January to 50.1k units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts fell 11.3 per cent m/m to 5.9k units while multi-family starts fell 14.2 per cent to 40.6k units. Starts in the province were 29.1 per cent above the levels from January 2022. Starts were up by 2.4k in Victoria and 0.1k in Kelowna, while falling 5.4k in Vancouver and 1.5k in Abbotsford. The 6-month moving average trend rose 0.6 per cent to 50.7k in BC in November.

Photo Credit BCREA

Source: BCREA

Tuesday, February 14, 2023

The RE/MAX 2023 Quest for Excellence Scholarship Program | Deadline Approaching

The RE/MAX Quest for Excellence scholarship program is a cash scholarship that recognizes students for their ongoing community contributions and pursuit of leadership. RE/MAX Canada will award 40 scholarships of $1,000 each to students across Canada (except for Quebec).

The RE/MAX Quest for Excellence scholarship program is a great opportunity to reach out to your clients and local high schools to help spread the word.

Participants must be a Grade 12 student attending high school in the 2022/2023 academic year, who have not previously participated in graduation commencement ceremonies in the past.

Eligible students are invited to write and submit an online essay* up to 1,250 words in length, answering one of the following questions:

What does a “bright future” look like for you?
How have you demonstrated leadership or charity within your community to make it a better place?
How can we ensure fair and affordable housing for all Canadians?

To apply, students are to submit their essay online: https://rem.ax/2023_QE_Entry_Form

DEADLINE TO APPLY: MARCH 13, 2023

For more information, please visit: https://rem.ax/Quest_for_Excellence_Program

If you have any questions regarding the scholarship program, please contact: questforexcellence@remax.ca

Source: RE/MAX Canada

Monday, February 13, 2023

Housing Market Faces a Challenging 2023 Before Posting a Strong Recovery in 2024

Photo Credit: BCREA

BCREA 2023 First Quarter Housing Forecast Update

Multiple Listing Service® (MLS®) residential sales in BC are forecast to decline 7.1 per cent to 75,150 units this year. In 2024, MLS® residential sales are forecast to post a strong rebound, rising 23.8 per cent to 93,025 units.

“A slowing economy and still elevated mortgage rates are expected to keep housing activity lower than normal through much of 2023,” said BCREA Chief Economist Brendon Ogmundson. “However, we expect a strong recovery, boosted by an expected decline in mortgage rates and record high immigration that will carry significant momentum into 2024.”

Inventories have increased from the depleted level at the beginning of 2022, but they remain low compared to historical levels, despite a sharp decrease in sales. However, the abrupt shift in market conditions has meant that prices have come down despite low inventory, falling from peak levels through the spring before stabilizing toward the end of last year. While we expect MLS® average prices to trend relatively flat this year, they will be lower than the peak values of 2022. Consequently, year-over-year comparisons will register negative for much of 2023, likely resulting in negative annual price growth even if monthly prices begin to recover as expected later this year.

Source: BCREA

Thursday, February 9, 2023

Better protection for strata property owners coming in November

Strata property owners in stratas which have been neglecting maintenance and risking higher insurance costs, will have new protections starting November 1, 2023.

Amendments to the Strata Property Act will raise the minimum amount developers and strata corporations must contribute to the contingency reserve fund (CRF), ensuring there are adequate finances for maintenance.

Increasing the CRF

Strata corporations in BC are required to have a CRF to pay for infrequent common expenses, such as maintenance work and emergencies.

These new rules will increase the minimum amount that developers and strata corporations are required to contribute to a CRF, to at least 10 per cent of the annual operating expenses from the previous five per cent.

Developers are required to include a CRF contribution in a new building’s interim budget to be equal to at least 10 per cent of the operating expenses.

Under the BC Financial Services Authority’s Policy Statement 1 (section 3.8), developers must:

“Disclose who is responsible for paying the cost of utilities and other services. Attach a copy of the estimated operating budget of the strata corporation as an Exhibit, including a schedule showing how the budget will be allocated amongst the individual strata lot owners. If the strata corporation has approved a budget at an annual general meeting, attach a copy of its most recent budget as an Exhibit, including a schedule showing how the budget is allocated amongst the individual strata lot owners.

The goal is to prevent developers from advertising unrealistically low strata fees to prospective buyers and avoid unexpected increases in strata fees in the building’s first years.

The new minimums were set with the advice of strata managers and homeowner representatives.

The majority of the approximately 34,000 strata corporations in the province exceed this minimum amount and won’t be affected by this change, according to strata industry experts.

Mitigating risk

BC Financial Services Authority advised in a Report on the State of Strata Property Insurance in British Columbia, that improved maintenance and risk-mitigation practices are needed to reduce more pressure on premiums and deductibles.

For the small number of strata corporations that need to contribute more funds to their CRF to meet the new minimums, this will reduce their risk of strata insurance claims and premium increases, and significant special levies on short notice.

Form B changes

The province is also enacting changes to the Form B Information Certificate.

A summary of the strata corporation’s insurance coverage must be included in the form, effective April 1, 2023. This will make it easier for prospective buyers and strata owners to know whether the property is adequately insured, and the amount of insurance individual owners need to purchase.

Source: REBGV

The Difference Between Being Pre-Qualified and Pre-Approved

Purchasing a home can be confusing with all the different terms and requirements. Two steps involved in the mortgage process are pre-qualification and pre-approval. But what’s the difference between being pre-qualified and pre-approved?

Prospective homebuyers should consider getting pre-qualification at the onset of their home-buying process. It allows them to consider their budget and gain insight into their mortgage options.

Then, homebuyers should consider getting pre-approval when they are more involved in the home-buying process, ideally within three months of the expected purchase date of their new home. It allows them to understand their financial position better and narrow their options.

Being Pre-Qualified

Getting pre-qualified for a mortgage is the first step in the process and is a more casual version of being pre-approved. In the pre-qualification process, an aspiring homeowner would provide a general overview of their finances to the lender, including income, assets, and debt. It does not require a credit check. The lender would then review and assess the financial information and give an estimate of the mortgage amount the borrower could be eligible to receive. Still, this amount is subject to change upon pre-approval.

Pre-qualification can often be done with the lender online or over the phone at no cost. It only takes about one to three days to get a pre-qualification letter. Pre-qualification is a prime opportunity to talk with your lender about your specific mortgage needs and gain insights into the most suitable options available from your lender. Most importantly, it gives you a general idea of the size of the mortgage that you will be eligible for and be able to afford.

Being Pre-Approved

Getting pre-approved for a mortgage is the next step in the process and is much more involved than being pre-qualified. While pre-qualification indicates a potential borrower’s ability to obtain a mortgage, pre-approval gives a more definitive picture. In the pre-approval process, the aspiring homeowner completes an official mortgage application and supplies the lender with all the necessary documentation to perform an extensive credit and financial background check. This could include:

Assets
Debt
Income
Identification
Proof of employment
Proof of capital to pay closing costs
Expenses and financial obligations, including:

*Child or spousal support

*Student loans

*Lines of credit

*Car loans

*Credit card balances

Note that the credit check is a soft credit check and will not affect your credit score.

The lender may require additional documents to verify your employment, such as recent pay stubs, a Record of Employment (ROE), or a Notice of Assessment from the CRA if you are self-employed. Once they have reviewed and assessed the documentation, the lender will offer mortgage pre-approval for up to a specified amount. It is possible to get more than one pre-approval by exploring various lenders.

Pre-approval also offers a better idea of the interest rate you can expect to be charged on your mortgage. Lenders will provide a conditional commitment in writing for an exact mortgage amount, allowing borrowers to look for homes at or below that price level. Some lenders also allow borrowers to lock in a fixed interest rate, valid for 60, 90, or 120 days. However, a rate hold does not guarantee mortgage approval, and you can still be refused if there are changes in your financial situation.

A Breakdown of the Differences Between Pre-Qualified and Pre-Approved

While pre-qualification and pre-approval both provide mortgage amounts that a borrower can reasonably expect to receive, there are several differences between them:

Pre-approval requires filling out a mortgage application and a credit check. It may also require paying an application fee. Pre-qualification does not have these requirements.

Pre-qualification takes about one to three days, while pre-approval can take up to two weeks.

Pre-approval requires much more extensive documentation on finances, credit, debt, and employment. Pre-qualification only requires general answers without documentation.

Pre-qualification provides a rough estimate of the mortgage amount you can expect to be approved. Pre-approval provides a calculated estimate of your mortgage amount, complete with a written commitment from the lender.

Pre-approval includes interest information with the potential option to lock in your interest rate for up to 120 days. Pre-qualification does provide information on interest rates.

While pre-qualification and pre-approval are sometimes used interchangeably, they are different from each other, and both should be completed in the mortgage application process. By getting pre-qualified and then pre-approved, you will be provided with reliable information on the size of the mortgage you can receive and the interest rate.

Source: BCREA

Tuesday, February 7, 2023

Federal Foreign Buyer Ban effective January 2023

The federal government’s ban on new foreign ownership of residential property became law on January 1, 2023, disallowing anyone who isn’t a Canadian citizen or permanent resident from buying residential real estate for two years.

During this period, the federal government plans to work with provinces and municipalities to develop a framework to better regulate the role of foreign buyers in the housing market to ensure housing is available for and used by Canadians.

The Liberal Party promised the ownership ban in the 2021 election and rolled it out in the federal Budget 2022: a plan to grow our economy and make life more affordable. The budget was clear on the government’s goals:

“We will do everything we can to make the market fairer for Canadians. We will prevent foreign buyers from parking their money in Canada by buying up homes. We will make sure that houses are being used as homes, rather than as commodities to be traded,” – Budget 2022.

To this end, the government tabled Bill C-19, Budget Implementation Act, 2022, No. 1. It received Royal Assent on June 23, 2022. Section 235 of the bill is the Prohibition on the Purchase of Residential Property by Non-Canadians Act.

Who can’t buy residential property?

The act defines a non-Canadian as:
an individual who is neither a Canadian citizen nor a person registered as an Indian under the Indian Act nor a permanent resident;
a corporation that is incorporated otherwise than under the laws of Canada or a province;
a corporation incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada for which a designation under section 262 of the Income Tax Act is in effect and that is controlled by a person referred to in paragraph (a) or (b); and
a prescribed person or entity.

Exceptions

Include:

A temporary resident within the meaning of the Immigration and Refugee Protection Act; or
A non-Canadian who buys residential property with a Canadian spouse or common-law partner if the spouse or common-law partner is a Canadian citizen or permanent resident, or person registered as an Indian under the Indian Act.

Residential property

Includes any real property or immovable that is:

a detached house or similar building, containing not more than three dwelling units;
a semi-detached house, rowhouse unit, residential condominium unit or other similar premises, vacant land, where the land has been zoned for residential use or mixed use and is within a Census Metropolitan Area (having a population of at least 100,000) or Census Agglomeration (having a population of at least 10,000); or
any prescribed real property or immovable.

Penalties

Non-Canadians found guilty of contravening the act are subject to a fine of not more than $10,000. If the federal government orders the sale of the property, the non-Canadian buyer won’t receive more than the amount paid for the property.

Property Purchased by a Non-Canadian Before January 1, 2023

The ban doesn’t apply if the agreement of purchase and sale of the residential property involving a non-Canadian is dated before January 1, 2023.

Regulations

Future regulations will provide details on transactions deemed prohibited purchases, including whether exceptions apply to conditional contracts entered into before January 1, 2023, that become unconditional on or after January 1, 2023.

Source: REBGV

Friday, February 3, 2023

Five things that happened to real estate in 2022

REBGV looks back at the five biggest stories affecting our real estate market in 2022.

Photo Credit: REBGV

The headline story in our market in 2022 was undoubtedly the Bank of Canada’s efforts to bring inflation back to target by rapidly raising the policy interest rate.

The Bank of Canada decided to increase the policy rate at seven of the eight interest rate announcements last year.

This increase has impacted those holding variable-rate mortgages, those looking to renew, and those wishing to enter the market.

MLS® data shows that these increases have translated into downward pressure on home sale activity, and to a lesser extent, home prices in Metro Vancouver.

Photo Credit: REBGV

Interventions by the federal and provincial governments were a major story in 2022.

Many of these were set to begin January 1, like the provincial cooling off period and the federal foreign buyer ban. Others will happen later this year.

The industry spent much of 2022 preparing for these changes. We’ll monitor the market to see what the impacts, intended and unintended, are.

Photo Credit: REBGV

While the province began to lift pandemic restrictions in 2021, 2022 was the first full year of relaxed safety protocols. Previously closed offices began opening their doors again, including REBGV.

The REB welcomed members to visit us in-person and introduced a hybrid workplace model.

The flexibility that work-from-home and hybrid models offer employees while maintaining productivity has meant commercial office space continues to be underused.

Photo Credit: REBGV

The evolution of smart phones and devices has put the tools of the trade closer to our fingertips than ever before.

E-signatures and digital contracts have already changed how we manage documents.

Some real estate platforms – particularly in the US – have already adopted a mobile-first approach. The local real estate sector, however, is still in the early stages of having new mobile technologies that support client interactions.

Later this year, REBGV will introduce a new version of real estate software with an enhanced user interface and more integration with geospatial data such as walk scores, local amenities, and city services.

Photo Credit: REBGV

The past few years have put a long-needed spotlight on diversity, equity, and inclusion (DEI).

The REBGV believes the real estate community needs to stand up for inclusion.

The REBGV, created a DEI statement and an advisory group of members, who are working with staff and experts to develop a DEI program focused on delivering education and fostering conversations.

Source: REBGV (Abridged)

Thursday, February 2, 2023

Home sales decline below long-term averages and inventory remains low to start 2023

Inventory remains low in Metro Vancouver while home sales dipped well below monthly historical averages in January.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,022 in January 2023, a 55.3 per cent decrease from the 2,285 sales recorded in January 2022, and a 21.1 per cent decrease from the 1,295 homes sold in December 2022.

Last month’s sales were 42.9 per cent below the 10-year January sales average.

“Due to seasonality, market activity is quieter in January. With mortgage rates having risen so rapidly over the last year, we anticipated sales this month would be among the lowest in recent history,” said Andrew Lis, REBGV’s director, economics and data analytics. “Looking forward, however, the Bank of Canada has said that it will pause further rate increases as long as the incoming economic data continues to support this policy stance. This should provide more certainty for home buyers and sellers in the market.”

There were 3,297 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in January 2023. This represents a 20.9 per cent decrease compared to the 4,170 homes listed in January 2022 and a 173.4 per cent increase compared to December 2022 when 1,206 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 7,478, a 32.1 per cent increase compared to January 2022 (5,663) and a 1.3 per cent increase compared to December 2022 (7,384).

For all property types, the sales-to-active listings ratio for January 2023 is 13.7 per cent. By property type, the ratio is 10.2 per cent for detached homes, 13.4 per cent for townhomes, and 16.7 per cent for apartments.

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“We know the peak for prices in our market occurred last spring. Over the coming months, year-over-year data comparisons will show larger price declines than we’ve been reporting up to now,” said Lis. “It’s important to understand that year-over-year calculations are backward-looking. These price declines already happened, and what we are seeing today is that prices may have found a footing, even if it’s an awkward one sandwiched between low inventory and higher borrowing costs.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,111,400. This represents a 6.6 per cent decrease over January 2022 and a 0.3 per cent decrease compared to December 2022.

Sales of detached homes in January 2023 reached 295, a 52.6 per cent decrease from the 622 detached sales recorded in January 2022. The benchmark price for a detached home is $1,801,300. This represents a 9.1 per cent decrease from January 2022 and a 1.2 per cent decrease compared to December 2022.

Sales of apartment homes reached 571 in January 2023, a 56.6 per cent decrease compared to the 1,315 sales in January 2022. The benchmark price of an apartment home is $720,700. This represents a 1.1 per cent decrease from January 2022 and a one per cent increase compared to December 2022.

Attached home sales in January 2023 totalled 156, a 55.2 per cent decrease compared to the 348 sales in January 2022. The benchmark price of an attached home is $1,020,400. This represents a three per cent decrease from January 2022 and a 0.8 per cent increase compared to December 2022.

Source: REBGV

Wednesday, February 1, 2023

Waterfront student housing and office complex planned near SkyTrain Aberdeen Station in Richmond

Photo credit Daily Hive

A significant mixed-use commercial complex with unique hotel and office uses is proposed just west of SkyTrain Aberdeen Station within Richmond’s city center.

After years of planning, CIBT Education Group and its Global Education City (GEC) division are proceeding with their plans to open a long-term stay student hotel attached to a campus of private post-secondary institutions.

The development site, currently occupied by light industrial and commercial uses, is located at 7780-7840 River Road, just north of the intersection with Cambie Road. But the complex would face a yet-to-be-built segment of River Parkway, along the east side of the property.

Based on the recently submitted rezoning application, GEC Cyber City, the name of the complex under CIBT’s branding, would entail an 11-storey hotel with 183 suites for students. Under City policies for a long-term stay hotel, the guest length of stay will be limited to a maximum of six months per year.

Photo credits Daily Hive

The hotel, retail, and restaurant uses would have a combined floor area of about 83,000 sq ft.

Another 150,000 sq ft within the adjacent eight-storey building would be dedicated to office uses, occupied by educational institutions.

The total floor area of the entire complex would reach about 233,000 sq ft.

The latest design by Urban Solutions Architecture considerably streamlines the form and concept of the buildings. A previous concept design depicted a large single structure with its various interior spaces interconnected by a large central indoor atrium, but the latest design as proposed in the rezoning application shows two separate buildings, with a minor connection established by an enclosed pedestrian bridge on the third level.

Previous design for GEC Cyber City:

Newly revised design for GEC Cyber City:

Photo credit Daily Hive

In exchange for the rezoning, CIBT will offer significant public benefits, including a one block northward extension of River Parkway from the intersection with Cambie Street to a new wrap-around perpendicular road on the north side of the property.

In 2021, the City of Richmond opened its first span of River Parkway road, which is built on the former Canadian Pacific railway corridor acquired by the municipality in 2005. This first span stretched one kilometer south-north from Gilbert Road to Cambie Road.

River Parkway’s current standard is a two-lane road for vehicles, but over time it will be widened to a four-lane arterial road from new property setbacks through redevelopments on both sides of the roadway, and through continuous extensions its northernmost end will meet Capstan Way. The creation of River Parkway provides not only more arterial road capacity for Richmond city center’s densification, but also allows the existing River Road along the Fraser River waterfront to be downgraded as a pedestrian-friendly public space at water’s edge.

2023 artistic rendering of the revised design for GEC Cyber City at 7780-7840 River Road, Richmond. (Urban Solutions Architecture/CIBT Education Group)

Other public benefits created through the GEC Cyber City project entail a five-ft height increase to the adjacent river dike, the funding and construction of a carbon energy plant for municipal government ownership, and other public realm improvements.

Two underground levels will accommodate 217 vehicle parking stalls, with 50% of the stalls set aside for public parking, 25% for assigned spaces, and 25% for employees and carpooling. The vehicle parking supply represents a 20% reduction over City requirements, made possible through transportation demand management measures including bike parking and end-of-trip cycling facilities, a 16-seat shuttle bus service for building users funded by the developer for at least three years, and $100,000 towards an employee transit pass program.

CIBT had previously planned on opening GEC Education Super Centre — student housing and educational institutions within office space — as a component of the major Atmosphere mixed-use development next to SkyTrain Lansdowne Station. But construction, which began in 2019, has stalled due to the financial issues of Alderbridge Way Limited Partnership, the developer of the project. Construction has come to a halt, the building permit has expired, and the project is mired in lawsuits. CIBT is also suing a mortgage lender, Romspen Investment Corporation, for allegations of a breach of contract for the non-advancement of funds for its portion of Atmosphere.

Through a bidding process, there is now an attempt to sell Atmosphere to another developer in order to see the project’s completion. Atmosphere entails an 80,000 sq ft office building, along with retail space and over 800 residential units, primarily condominiums.

CIBT’s largest future project is GEC Education Mega Centre — a 545-ft-tall, 49-storey tower on the former site of Stardust roller rink at 10240 City Parkway, near SkyTrain Surrey Central Station and the SFU Surrey campus

It also has a cluster of locations along Vancouver’s Cambie Corridor, including 200 beds of student housing at GEC King Edward, next to SkyTrain King Edward Station, reaching completion later this year, and a future 18-storey tower with 475 beds at GEC Oakridge, next to SkyTrain Oakridge-41st Avenue Station.