A first time Vancouver home buyer called to ask if it was normal for Vancouver real estate salespeople to be unfair. Curious I asked them to expand on that statement.

Almost Excited

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They were excited! A new listing had come to market which had been sent to them via my HomeSearch notifier. The home, a great looking bungalow on a well positioned lot, was in their budget. Could this be their new home? They were very interested but they noticed that on day one, Friday, there was an ‘agents open’. Then on Saturday and Sunday there would be open houses for public viewing. The kicker – offers would be presented after Sunday’s open house!

How and Why?

Why they asked would the salesperson follow this marketing process? How were they going to be able to make a reasoned, intelligent decision about their life’s biggest purchase in so little time. At issue, the time allotted was, from a practical viewpoint, insufficient to arrange suitable inspection, reflect on the implications of that inspection and last, since this was taking place over the weekend, being able to re-confirm their financing options. The pressure to act quickly and decisively on such a large purchase seemed to them to be unfair! Why the rush they asked?

Due Diligence

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For a number of Vancouver home buyers this scenario is revisited time and again. These home buyers often feel the marketing process employed by some Vancouver real estate agents place them in dangerous waters. The methodology used creates within these buyers undue pressure to act on a major financial decision. By its nature the time lines are limiting and as such preclude adequate reasoned due diligence. In effect they are making an immense financial commitment with their eyes closed.

Viable Alternative

An alternate approach that has in my experience proven to provide benefits as great or greater to both the Vancouver home seller and accordingly the buyer, can be straight forward, transparent, and fair. All it takes is a few days and a schedule in which all interested parties get a chance to do their investigative homework, reflect on the results and make a decision to either go forward or walk away from the purchase. Ultimately, the result is happy customers on both sides of the transaction that have been treated fairly.

Legs

To my way of thinking, the house has not got legs. It isn’t going anywhere. Simply, I don’t get the need for a hell bent rush to have a home sell in 96 hours or less. Really, what is so wrong with an salesperson spending a few more hours or days that allow all interested parties to be able to do the following:

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• have complete thorough property/building inspection by a competent licensed inspector,
• have the time to digest the results of that inspection,
• have time to consult with contractors, plumbers, electricians to discuss the cost of any repairs that need be made,
• revisit their bank to assure that financing is in order
• have the time to see the home in the light of day and visit it at night to see how many ‘daylight dogs’ come out at night when the owners are home from work
• talk to the neighbours about the neighbourhood
• check traffic patterns on a weekday
• physically checkout schools, parks, shopping to see if they are suitable for their needs
• visit city hall for a cursory check for outstanding issues with the property

Lament

This may all sound like a lament for some lost deal but in truth it is more a pleading for sanity to prevail. Buying or Selling a Vancouver home is a very expensive proposition. It would be nice, something that is seen less in this business, to know that both parties make an effort to extend good faith with an understanding that taking a few extra days to sell a Vancouver home never hurt anyone.

Lower mainland sellers have rebounded as active listings have regained the momentum lost throughout the last quarter of 2010 as the listing count headed for its low in the early part of January 2011.

“V”

Recapping: October 1, 2010 recorded 24,457 active listings. This inventory dropped by almost half to January 5, 2010′s 13,965.

Since that low, the last 50 days has witnessed sellers coming out in full force as the active listing count has climbed steadily to reach today’s total of 19,023. At this velocity, April’s count may exceed October’s.

If the market repeats itself, we may re-experience the market pattern of last fall with a few new twists.

The Reversal

Added to the growing inventory, reflect on these additional economic twists that may coalesce to construct a reversal of local market fortunes.

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Consider:

1. the end of the 35 year amortization – eliminates many first time buyers
2. increased living costs – hydro (soon to be up 50%), heating, gas, food
3. political turmoil in the middle east and it’s economic effect via trickle down on our slow to recover economy
4. depending on your perspective – impending or assured interest rate increases
5. no substantial wage increases in all sectors to offset these base increased living costs

Squeezed

Expected is that we will see higher average sale prices recorded in February. Selling now may prove to be a wise decision for if the influences noted prove true, the Vancouver real estate market could be in for a long slower sales summer as buyers begin to realize that their home buying budgets are being squeezed.

However, you will need to stay alert! At these bargain prices, they come with strings attached to issues you might not like.

Five Of Nine

Five of the homes are located on the Musqueum reserve. These homes are situated on leasehold land. Many of the annual lease payments approach $10,000 per year.

Thin

Be sure to leave your packages at the door when you enter this Vancouver home. Situated on Point Grey’s fifteenth Ave where with under a million dollars in your pocket, you can buy this thin, one bedroom house, on a 16 foot wide lot. The bonus is that you get a whopping 960 square feet of living space.

Noise

If the sound of never ending speeding traffic lulls you to sleep this beauty at Oak and 60th offers up some Feng Shui at $988,000. Suggested inclusions in your offer would be several cases of sleep aid and ear plugs. You might quietly also include breathing masks to reduce the ingestion of exhaust particulate.

The total number of Active Listings in the British Columbia’s lower mainland real estate continues to drop. Compiled from the IDX data of the three major real estate boards – Real Estate Board of Greater Vancouver, Fraser Valley Board and the Chilliwack Real Estate board, shows a reduction of 6,465 since October 1, 2010.

Looking Forward

A quick chat with a few of the Realtors® who work through the Holiday Season tells me that the lack of ‘quality’ inventory in some sectors is causing a degree of frustration for many buyers. We have seen this theme throughout the year and even while overall inventory continues its drop, there remains a large number of homes considered by buyers to be unsuitable in respect of their price point or condition. Attached to this frustration is the inevitability that those homes that are in good condition will often attract multiple offers as buyers compete for the ‘good’ homes.

Nothing new in the outlook where we can anticipate that sellers of clean, well maintained homes, properly staged and marketed by a skilled Vancouver Realtor® will in the new year, continue to benefit from buyer frustration.

It’s a question that in some circles is considered heretic. Is it a dream? Is it realistic?

On the ‘Agenda’ with Steve Paiken, this question is discussed with Dr. Robert Shiller, Yale University, who owns two houses, Phil Soper of Royal Lepage who owns his home, Richard Florida, Director of Martin Prosperity Institute, University of Toronto, who owns in Canada but insists on renting in the US and Jane Saber, Professor of Marketing, Ryerson University who is a happy renter.

Is Owning a Vancouver Home Right for You?

Maybe the trade off is that it is better to rent as Jane Saber does, ‘have some money in the bank and buy the shoes you like.’

Hat Tip – Rob Carrick, Globe and Mail

Have you lost something or, did someone enter your property uninvited and take it?

The Vancouver Police Department has released their latest crime map. Want to know what nefarious things are going on in your neighbourhood?

Vancouver City Police

On a regular basis the Vancouver Police Department publishes crime maps for your consideration.

Vancouver Home Buyers Want to Know

As a Vancouver Realtor® I’m often asked what the crime rate is like and what types of crimes are perpetrated in different neighbourhoods. When buying a Vancouver home this resource is a very quick way to find out. If you are in the process of finding a Vancouver home and consider this information important you may want to book mark the site on your browser.

The maps reveal crime rates for Break and Enter in both Vancouver residential and Vancouver commercial properties. There are separate maps for automobiles to show which Vancouver neighbourhoods have theft from autos or have had the entire car stolen.

Hat Tip to Valerie Maclean, Executive Director, Vancouver Police Foundation

Many buyers of Vancouver homes roll in with an offer to purchase that they hope will have traction. Often, the buyers wish does not reflect the seller’s desire.

Junk Store Reflections

The physical methaphor for such hope can be found tucked in the corner of street side window in one of Vancouver’s Main street junk stores.

From the desk of our trusted friend Cameron Muir, BCREA’s Chief Economist we have This or That news that perhaps more truly reflects the state of Vancouver’s real estate market.

BCREA

Muir said…

This

- “BC home sales increased for the second consecutive month in September.”

Drawing from the same breath he also says:

That

- “consumer demand is still noticeably lower than last fall’s frenetic pace.”

Then

Refreshed by his balancing skill he goes on to say the “market conditions have improved, with the months of supply declining from 11.1 in June to 8.9 in September – A balanced market typically exhibits five to seven months of supply.”

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As He Sees It

“The current downward pressure on mortgage rates is expected to bolster housing demand this fall as consumers take advantage of a second opportunity to secure near record low interest rates.”

Quotes from BCREA’s Oct 13, 2010 missive.

Full Report Here

Undoubtedly, you didn’t hear it first but, just in case you were asleep, cheering the 2010 Olympics, or caught in the frenzy of buying or selling home you should take note that on April 19th, 2010 the mortgage world will change.

Changes

Effective April 19th high ratio mortgages that are insured, have a variable rate or a fixed term that is under five years must qualify using the greater of the chartered bank 5 year posted rate or the contract rate.

Simply, you must qualify for the 5 year posted rate but, it is likely that at least for now, you may be able to secure a ‘contract’ rate that is lower. The new rules have one objective – to that you can afford higher rates.

The posted rate is easy to find. The Bank of Canada publishes it each Monday. The rate to look for has this series number V121764. See Conventional Mortgage – 5 year. Click the little box then go back to the top, enter the date and then click ‘Get Rates’. If you followed these instructions you should get this screen shot showing you that the rate is 5.39%.

What Does this Mean?

The main three changes are –

• 1. Insured refinances limited to 90% of property value
• 2. Qualification for variable rates to be set at the 5 year, rate rather than 3 year rate
• 3. Rental mortgages limited to 80% of property value

There Is More

Further, to these an additional change will take place on April 19th. This rule change will for many, have the greatest effect on home buyers.

In his email update, Rob Reagan-Pollack of Invis explains it this way:

“CMHC – have announced effective April 19th, they will no longer offset rental income against mortgage expense. The proposed new policy will now add 50% of rental income to qualifying income. This will negatively affect anyone who is relying on “suite” income as a mortgage helper, or for anyone who owns or was planning to buy revenue property.”

Rob’s Example

“$1,000/mo of rental income under old rules would add $800/mo of mortgage potential to a file (80% offset) – Approx $153,000 to 184,000 of additional borrowing capacity in today’s rate environment using a 25 or 35 year amortization.

$1,000/mo of rental income under new rules would add $175/mo of mortgage potential to a file (50% of $1000 added to income x 35% of income) – Approx $33,000 to $40,000 of added borrowing capacity in today’s rate environment using a 25 or 35 year amortization.”

“This means anyone who owns rental property or wants a mortgage helper will need a minimum of 20% equity so conventional lending guidelines apply. The unfortunate casualty here are the mortgage banks who rely on CMHC to “bulk insure” their conventional mortgages. Mortgage banks who secure and sell mortgages via the Canada Mortgage Bond or Mortgage Backed Securities will no longer have the ability to offset rental income regardless of loan amount. This means the only lenders who will be able to offer rental offset will now be Chartered Banks and Credit Unions. These institutions do not rely on secondary markets and set their own lending guidelines when lending with more than 20% down.”

Shake Up

Rob, always modest, suggests that “these changes will shake up the market, especially in Vancouver where suites and rental units are popular!”

Cookie Effect

It is anticipated that these rules will leave many buyers on the sidelines. Whether due to personl income levels insufficient to qualify for a mortgage or that they can no longer count on the full benefit of the ‘mortgage’ helper, in either case, many will be left to stand at the station. In addition, suspect is that come July, the idea of baking a dozen cookies may be less appealing. With the addition of the HST to the mix, your home buying decision may equate to baking a much smaller batch or none at all.

YatterMatters delivers and brings you Average Price per square foot. If you are searching for properties in the Homes for Sale section, you will notice a new addition beside each asking price – the Average Price Per Square Foot. The purpose – to give you an instant price comparison between properties.

Deeper

Dig a little deeper – it won’t hurt. Go ahead and click on More Information. There you will find tabs labelled as – Details, Map, Street View, Walk Score and now the Community SnapShot.

Snapshot

Inside you will find even more information about the area in which the property is located. You will find the lowest price, the highest price, Average, Median and of course the average price per square foot in the entire neighbourhood.

Exciting – you betcha! Why? Simple! Now in a blink you can instantly tell whether the home you are looking for is above, below or right on market pricing. No more guessing! It’s all here and it’s a Snap!

Keeping Up with the Jones’

You’ll even be able to tell where your Vancouver Castle ranks relative to your neighbour’s castles. High price, low price big and small it’s here now and it’s for you.

Snap Shot

Selling or buying you will find this a great tool to help figure it all out. Still not sure?

“I can’t help myself” – “make a Snap decision to call me and together, we’ll give it a Shot.”

After all, it’s what I do ‘when life moves you!’