Why Invest in Vancouver Real Estate

Tue, 18 Jun 2013 21:38:00 GMT

Part of my presentation from a wine and cheese event my wife and I hosted last week. Let me know if you would like to attend future wine and cheese events.

What can I do to Sell my Home Faster?

Sat, 08 Jun 2013 04:32:00 GMT

I always advise my clients to declutter before putting their home on the market. Believe it or not, this can add thousands to your selling price. As an added benefit, a big purge means that when it’s time to move, it’ll be easier and cost you less.

When faced with rooms full of junk and basements and storage lockers bulging at the seams, it's easy to feel overwhelmed. Even I sometimes don't know where do you start? The next question to pop into your head is "How do I get rid of all of this stuff?" I interviewed a few local professional organizers for advice.

Start the decluttering process at least a month in advance; longer if you have a large home or have been living there for a long time. Give yourself enough time. Most people underestimate how long it will take to declutter a home. Spend at least a couple of hours per day in the month leading up to the open house sorting and getting rid of stuff.

Before digging into the crawl space where you store old memories and photos, start with the present; with the stuff that you see every day and are less attached to like chipped dish sets, old clothing, and children's toys. After the first round you will be surprised at how good it feels to rid your self of these items.

Next it's time to get ruthless. Arm yourself with plenty of heavy-duty black garbage bags, then designate sorting areas: donate, sell or consignment, and toss.

Things like broken and rusty appliances or torn or stained clothing headed for the trash pile are the easiest to determine. Deciding what to keep versus what to donate, sell, or even recycle can be tougher.

Evaluate each item and ask yourself what purpose it serves. Is it irreplaceable? When was the last time you used it?

What are the chances that your next new printer will come without a cable? Recycle the old cables you held on to for years.

Only keep what you need, use, and love. People tend to use only 20% of their things 80% of the time. Most people live in fear of, "What if I need it?" It is important to get over this fear when decluttering and realize that less is more.

Once you’ve determined what to lose, start offloading your cast-offs before you lose momentum. Here are some resources to help you along your clutter-busting journey:

Things like expired medication, batteries, antifreeze, or broken appliances have to be disposed at the appropriate depots. Find out what goes where here:

Metro Vancouver Recycles: Select a material type and enter your postal code for a list of depots, charitable locations, and consignment stores near you. Or download their free mobile app.

Freecycle.org: Join people around the world getting rid of stuff on this grassroots community page.

There’s no shortage of charities to which you can donate clothing, household goods, and small appliances. Some of them, such as Big Brothers and the Canadian Diabetes Association offer free home pickup.

10 Common Mortgage Mistakes

Mon, 13 May 2013 00:05:00 GMT

Applying for a mortgage can be overwhelming. To help you feel more confident, I've put together a list of the top ten most common challenges and how to avoid them.

1. Not knowing your credit rating.

Lenders can use your credit rating to verify your repayment history. As part of your approval process, your lender will obtain and review your credit report. Should you want to review your own report ahead of time, you easily request a copy from either www.equifax.ca or www.tuc.ca.

2. Being unrealistic about how much you can afford to pay.

You may be under or over estimating how much you can afford to pay for a home. Start by checking my online mortgage calculator. You can input different down payment amounts to give you an idea of the maximum mortgage payment you can afford each month.

3. Not considering a firm mortgage pre-approval.

Knowing the mortgage amount you will be approved for gives you the confidence to begin looking at homes within your price range. Make sure that you are unconditionally and firmly approved.

4. Thinking you won't qualify for a mortgage.

Not sure if you qualify for a mortgage due to your credit history being less than perfect? You should still seek to get formally pre-approved, as many banks can help find a solution.

5. Not knowing all the down payment choices.

You will be glad to konw that there are different options available depending on how much down payment you can afford. Low down payment mortgages (below 20% down) require mortgage default insurance and the premium can be added to the amount you borrow. First-time homebuyers are eligible to use up to $25,000 in RRSP savings per person for a down payment

6. Focusing too much on the interest rate, rather than the overall solution.

All too often buyers give more thought to interest rates than the mortgage solution itself. While rates are a valid consideration, the type of mortgage, payment structures, terms and flexibility will have a greater impact on your overall cost of borrowing.

7. Understanding your interest rate risk tolerance.

Choosing a fixed or variable rate term can be difficult. Get expert advice to help you decide which mortgage solution works for you based on your tolerance for interest rate increases. MOst lenders now have a combination mortgage which means you can enjoy the advantages of both variable and fixed rates.

8. Not choosing your own mortgage payment schedule.

Customize your amortization period depending on how much you can afford. If you decide to take a longer amortization, consider a strategy to reduce amortization of your mortgage by making extra payments along the way.

9. Forgetting about closing costs.

It helps to know what closing costs are so you can minimize last minute complications. When calculating costs, assume you will need approximately 1.5 per cent of the purchase price.

10. Not understanding the ongoing costs of owning a home.

A suggestion is to budget a least one per cent of the home's value for yearly maintenance expenses including heating, electricity, water, repairs and taxes. If you live in a condo, keep informed about future strata fee increases or assesssments.

Homebuyer's Guide (Parts 6 and 7)

Tue, 09 Apr 2013 21:36:00 GMT

Welcome back to my 7 part home buyer's guide designed to teach you everything that you need to know about buying a home in Vancouver.

Whether you are purchasing your first home or your third, this series will help you to navigate the complexities and financial implications of your purchase. Part 1, Are You Financially Ready, can be found here. Parts 2 and 3, Consider your Mortgage Options and Mortgage Default Insurance, can be found here. Parts 4 and 5, Government Programs and Finding a Home can be found here. This newsletter contains the final sections, Parts 6 and 7, Making and Offer and Closing and Related Costs.

Part 6: Making an Offer

After seeing many different homes, you have finally found one worthy of an offer! What are the next steps?

What is an offer?

An offer is a formal, legal agreement to purchase a home and is legally binding once accepted by the seller. Offers to purchase a home can be made conditional on factors such as financing or a home inspection. If any of the conditions are not met, you can change or cancel the offer, even if the seller has already accepted it.

Do you have your money ready?

You will need to present a deposit within one week of having an accepted offer (after subject conditions are removed) or right away if you are writing a non-subject offer. The amount varies based on the home's purchase price and the market. It is usually around 5%.

Do you have up-to-date identification?

The federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act(PCMLTFA) requires REALTORS® to identify clients involved in the buying and selling of real estate. REALTORS® need to record your name, address, date of birth and occupation for their files which are kept for at least five years. They need to see valid government-issued ID. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) provides more information about the Act on its website: www.fintrac-canafe.gc.ca.

Part 7: Closing and Related Costs

Closing costs are the legal, administrative and disbursement fees associated with buying a home. Understanding these fees will help you budget more accurately. Remember these are additional costs over and above the price of the home.

How much land transfer tax will you have to pay?

The land transfer tax is a one-time tax levied by your province when you purchase a property. The tax is based on a percentage of the purchase price of the property, and varies from province to province. Some municipalities also charge a land transfer tax (for example, Toronto).

Have you budgeted for the associated legal costs?

Legal costs cover your lawyer’s fees or notary’s fees. These may include:

• Reviewing the terms of the offer

• Conducting a title search on the property

• Registering a new title

• Obtaining relevant documents, such as surveys and evidence of liens on the property

• Checking the statement of adjustments for taxes, utility and fuel bills, and other costs that have been pre-paid by the seller at the date of closing

Do you need a home inspection?

A home inspector assesses a property’s condition and can tell you if something is not working properly, needs to be changed, or is unsafe. They may be able to identify where there have been problems in the past, such as a leaking basement or termite damage.

What other costs can you expect?

• Interest adjustments between date of closing and first mortgage payment

• GST/HST on a new home or a home that’s been extensively renovated

• Service charges from utility companies for hook-ups on electricity, gas, internet and telephone services

• Appraisal fees

• Moving costs

• Storage costs if you must leave your current residence before you are able to move into your new home

• Furniture and appliances

• Real estate commissions

The Value of a REALTOR in Vancouver

Wed, 20 Mar 2013 23:32:00 GMT

VALUE POINT 1

REALTORS protect the interests of their clients

VALUE POINT 2

REALTORS are licensed

VALUE POINT 3

REALTORS are members of a professional association

VALUE POINT 4

REALTORS follow a Code of Ethics

VALUE POINT 5

REALTORS put their duties and obligations in writing

VALUE POINT 6

REALTORS listen and explain

VALUE POINT 7

REALTORS communicate

VALUE POINT 8

REALTORS meet mandatory education requirements

VALUE POINT 9

REALTORS use the MLS to help clients buy and sell properties

VALUE POINT 10

REALTORS explain the costs involved

50 Ways to Green Your Home and Save Money in Vancouver

Wed, 20 Mar 2013 23:02:00 GMT

LOCATION: Choosing Where You Live

1 Green neighbourhoods: Buy a home in a neighbourhood close to work, transit, shopping, community centres and other services.

2 Transit-oriented density (TOD): New, compact, complete green neighbourhoods are being built with transit as their focus. Instead of owning a car, join a car share cooperative, take transit, cycle or walk.

3 Lower Cost Luxury: If it’s features such as a gym or pool you want, buy a strata unit with these amenities and share costs.

4 Score your location: Walkable neighbourhoods offer health, environmental, financial and community benefits. Enter your address or the address of a home you want to buy at www.walkscore.com. This tool calculates a walkability score based on the home’s proximity to transit, grocery stores, schools and other amenities.

HOME IMPROVEMENT: Heating and Cooling

5 Get an energy audit LiveSmart BC will cover $150 of the cost.

6 Install a high-efficiency heating system Make sure it’s ENERGY STAR rated.

7 Weatherize your home From windows (BC Hydro provides grants of $60-$120) to doors to insulation and weather stripping. Don’t forget to seal your ducts.

8 Insulate your pipes It will prevent costly heat loss. Here’s how.

9 Insulate your hot water heater Buy a pre-cut jacket or blanket for $10–$20. You’ll save up to 10% on heating costs.

10 Install a programmable thermostat Set it lower at night and during the day when you’re away. Lower the temperature. Each degree below 20C saves you 3-5% on heating costs.

11 Clean your furnace filter This optimizes performance.

12 Get the most from your fireplace Here’s how to make it efficient.

13 Use curtains In the daytime during summer, close to help cool your home.

14 Install ceiling fans The energy it takes to run a fan is less than an air conditioner. In summer, make sure the fan’s blades are rotating anti-clockwise for a cooling effect. In winter, the fan should be running clockwise, pushing the warm air down.

15 Use an electic fan Skip the air conditioning. On hot summer days, place a bowl of ice in front of a fan to cool down.

WATER

16 Fix leaks. Fix leaking taps One drop per second equals 7,000 litres of water wasted per year.

17 Install a filter Stop buying costly bottled water which adds to the landfill.

LIGHTING

18 Change your light bulbs Lighting accounts for 15% of your energy bill. Replace old bulbs with ENERGY STAR rated bulbs. Check for rebates.

19 Sensor lights Turn lights off outside when not in use.

20 Keep it dark: Light pollution is an increasing problem. Turn off outdoor lights to save energy and encourage night life such as bats and frogs. A single bat can eat tens of thousands of mosquitoes nightly. If you have safety concerns, use motion detector lights – which come on, only as needed.

21 Holiday lights Use LED lights.

KITCHEN

22 Replace your fridge An old energy guzzling fridge costs you about $85 a year to operate. Replace it with an ENERGY STAR fridge. BC Hydro will rebate you $50. BC Hydro will also not only come and pick up your old fridge free-of charge, they’ll rebate you $30.

23 Replace your dishwasher Buy an ENERGY STAR appliance. BC Hydro will rebate you $25.

24 Replace your freezer Buy an ENERGY STAR appliance and BC Hydro will rebate you $25.

BATHROOM

25 Low flow shower Hot water accounts for 25% of your energy costs. For a $15 investment you can save half the water of a standard shower say experts.

26 High efficiency or dual flush (you choose the amount of water used) toilets These are now required in new homes because of water savings.

OFFICE

27 Use smart strips Also known as power bars, this lets you power off all equipment at the same time.

28 Buy energy smart electronics There are rebates available.

29 Recycle your old electronics Here’s how.

YARD IMPROVEMENT

30 Conserve water Fresh water comprises just 3% the world’s total water supply, so conserve. Get a rain barrel and harvest water you can use in your garden. Local governments such as Vancouver and Richmond will subsidize the cost.

31 Drip irrigation It saves water compared to sprinklers.

32 Elbow grease Don’t power wash your driveway. Sweep it or use a scrub brush and pail.

33 Less lawn Lawns waste water. Instead conserve and beautify using indigenous plants such as ferns, tiger lilies and hostas.

34 Grow your own How much more will you spend on food this year? Even a few miniature fruit trees and a small vegetable garden in a raised bed or in containers will help keep you healthy and save you dollars. Lettuce, spinach, tomatoes, cucumbers, strawberries and blueberries thrive in our climate. Here’s how.

35 Preserve your produce Invest in home canning jars and equipment and a small freezer and enjoy your produce year round – at considerable savings. Here’s how.

36 Bee friendly We need bees to pollinate, so get a few plant beefriendly annuals such as asters, marigolds, sunflowers, zinnias; or perennials such as clematis, foxgloves, hollyhocks, roses or shrubs such as Buddleia.

37 Go chemical-free “Get rid of weeds without using chemicals that harm us and our pets,” advises REALTOR® and Richmond City counselor, Derek Dang, who led the way to a bylaw banning cosmetic pesticides. His suggestion, “Use dish detergent or weed by hand.”

38 Plant fruit trees They’ll give you shade and fruit. Plum, apple, pear and more.

39 Compost It will make your garden grow and divert waste from the landfill.

GREEN AND CLEAN

40 Clean green Vinegar, baking soda and lemons clean as well as expensive, chemical-filled cleaning supplies for a fraction of the cost.

41 Green Laundry detergent Use phosphate-free, biodegradable detergent.

42 Upgrade your washing machine Replace your old washing machine with an ENERGY STAR washer that gets clothes clean using cold water and BC Hydro will rebate you $75. Wait until you have a full load instead of washing clothes as you need them. Clean your lint trap after every use.

43 Install a clothesline Dryers use a huge amount of energy.

44 Get a rack If your neighbourhood or strata prohibits clotheslines, buy a small drying rack.

LIVING GREEN

45 Recycle Replace your old washing machine with an ENERGY STAR washer that gets clothes clean using cold water and BC Hydro will rebate you $75. Wait until you have a full load instead of washing clothes as you need them. Clean your lint trap after every use.

46 Buy local Your food doesn’t travel long distances, you support local farmers and the local economy and you consume less pesticides.

47 Don’t use paper or plastic Use cloth bags when you shop or reuse your plastic bags.

FINANCING

48 Borrow green Most financial institutions offer “green” mortgages, including:

• BMO Eco Smart Mortgage offers home buyers a 3.89% rate on qualifying green properties.

• RBC Energy Saver™ Mortgage gives home buyers a $300 rebate for a home energy audit and a five-year 4.34% rate.

• TD Canada Trust offers a Green Mortgage and Green Home Equity line of credit. For each green mortgage TD donates $100 to the TD Friends of the Environment Foundation.

• Vancity offers a Bright Ideas home renovation loan at prime +1% to home buyers and owners making green renovations.

• The City of Vancouver with Vancity offers a home energy loan program for home buyers and owners making energy efficient upgrades at 4.5% fixed rate over 10 years. The loan program is a 12 month pilot project with a goal of 500 homes participating. It will wrap up October 21, 2012. For more information attend a loan info workshop or call 604-374-0507.

• CMHC offers a 10% Mortgage Loan Premium refund and possible extended amortization for buyers purchasing an energy-efficient mortgage or making energy saving renovations.

RESOURCES

49 Green Tool Kit BC Real Estate Association’s Green Tool Kit provides information, references and links. It also provides comprehensive information on rebates and incentives.

COMING SOON

50 Loan programs Pay-as-you-Save (PAYS) loan program will help home owners and businesses finance energy efficiency improvements through a loan from BC Hydro or FortisBC. Expected to launch in 2012.

Homebuyer's Guide (Parts 4 and 5)

Thu, 07 Mar 2013 21:21:00 GMT

Welcome back to my 7 part home buyer's guide designed to teach you everything that you need to know about buying a home in Vancouver.

Whether you are purchasing your first home or your third, this series will help you to navigate the complexities and financial implications of your purchase.Part 1, Are You Financially Ready, can be found here. Parts 2 and 3, Consider your Mortgage Options and Mortgage Default Insurance, can be found here. This newsletter contains Part 4, Research Government Programs and Part 5, Finding a Home.

Part 4: Research Government Programs

The federal government has assistance programs to help homebuyers. Research government program requirements to see if you are eligible.

Government programs can change over time. For the most up-to-date information, refer to Service Canada’s website:www.servicecanada.gc.ca.

First-Time Home Buyers’ Tax Credit

First-Time Home Buyers’ Tax Credit — a $5,000 non-refundable income tax credit on a qualifying home. The credit provides up to $750 in tax relief to assist first-time buyers with purchase costs. For more information, check the Canada Revenue Agency’s (CRA) website: www.cra-arc.gc.ca.

Home Buyers’ Plan

Home Buyers’ Plan — a one-time withdrawal up to $25,000 from a Registered Retirement Savings Plan (RRSP) by first-time buyers to help purchase or build a home. Generally, you have to repay all withdrawals from your RRSP within 15 years. For more details, visit CRA’s website at: www.cra-arc.gc.ca.

CMHC Green Home program

CMHC Green Home program — when you use CMHC-insured financing to buy or build an energy-efficient home or make energy-saving renovations, you may qualify for a premium refund of 10% on your mortgage default insurance and a premium refund for a longer amortization period (if applicable). Check outCMHC’s website for more information: www.cmhc.ca.

Part 5: Finding a Home

Finding your perfect home can be a long process. I will help identify the right type of home for you and continually research new listings in neighbourhoods that meet your needs.

Check out this webpage to see how I make the home buying process easier for you!

Where do you want to live?

• Urban, suburban or country?

• Will you need to commute? Do you need access to public transit? How much will commuting cost?

• Are there schools nearby? How will your children get there?

What type of home do you prefer?

• Single-family detached homes stand alone on their own lot.

• Single-family semi-detached homes are joined on one side to another home.

• Duplexes contain two single-family homes, one above the other.

• Row houses (townhouses) are several single-family units, located next to one another and joined by common walls.

• Other types of homes include stacked townhouses, link or carriage homes, condominiums and co-op apartments.

What are the types of ownership?

Freehold

You own the land and house and are responsible for everything inside and outside of the home.

Condominium ownership

You own your unit and share ownership of common spaces. The condominium association is responsible for upkeep of the building and common interior elements, such as halls, elevators, parking garages and the grounds. You pay a monthly fee to the condominium association to cover maintenance costs. The fee varies but can often include utilities, TV services and taxes. You may also have to buy or rent your parking space.

Condos often have strict rules regarding noise, use of common areas and renovations to units. Be aware of your condo’s rules before putting in an offer.

Co-operatives

Similar to condos but instead of owning your unit, you own shares in the entire building or complex with the other residents. Co-op residents pay for maintenance and repairs through monthly fees and are subject to the rules and regulations of the co-op board.

Be aware that if you decide to sell or rent your shares, the co-op board has the right to reject your prospective buyer or tenant. Read the co-op’s rules before making an offer.

For parts 6 and 7 of the series click here...

Homebuyer's Guide (Parts 2 and 3)

Tue, 05 Feb 2013 21:19:00 GMT

Welcome back to my 7 part home buyer's guide designed to teach you everything that you need to know about buying a home in Vancouver.

Whether you are purchasing your first home or your third, this series will help you to navigate the complexities and financial implications of your purchase. Part 1, Are Financially Ready, can be found here. In order to get this information to you more quickly, I have included Parts 2, Consider Mortgage Options and Part 3, Mortgage Default Insurance in this newsletter.

Part 2: Consider Mortgage Options

Most people know that a mortgage is a loan used to buy a property. Your monthly payments depend on how much you borrow (or the principal), the interest rate, and how long it takes you to pay it back (or the amortization period).

It is important to negotiate interest rate and mortgage terms with various lenders. Talking to more than one lender helps you make an informed decision and get the best interest rate. The mortgage business is almost more competitive than the real estate business :)

What type of mortgage is best for you?

• Fixed rate mortgages: Your interest rate is locked in for a specified period called a term. Your payments stay the same for the mortgage’s term so you will not pay more if interest rates increase over time.

• Variable rate mortgages: Rate of interest you pay may change if rates go up or down.

• Conventional mortgages: Require a down payment of more than 20% of the property’s value. You are not required to get mortgage default insurance with a conventional mortgage.

• Closed mortgages: The mortgage cannot be paid off early without paying a prepayment charge.

• Open mortgages: A mortgage that can be paid off at any time during the term, without having to pay a charge. The interest rate for an open mortgage may be higher than for a closed mortgage with the same term.

What mortgage features are best for you?

• Portable mortgages: If you sell your existing home, you can transfer your mortgage to your new home while keeping your existing interest rate. You may be able to avoid prepayment charges by porting your mortgage.

• Prepayment privileges: You can make lump-sum prepayments or increase your monthly payments without having to pay a charge. This can help you pay off your mortgage quicker and save on interest charges.

How often can you make your payments?

• By switching from monthly payments to accelerated weekly or biweekly payments, you can pay off your mortgage faster. Explore your options for mortgage payments and see how much interest you could save by using my mortgage calculator.

What types of mortgage charges might you have to pay?

• You may have to pay charges if you prepay large portions of your mortgage early or if you break your mortgage due to unforeseen life changes, such as marital breakdown, death of a spouse or relocating for a job.

• It is your right to know how lenders calculate prepayment charges. Read your mortgage contract carefully and make sure you understand how charges will be calculated before you sign.

How much do you need for your down payment?

A down payment is the portion of the property’s price not financed by the mortgage. You will need a down payment of at least 5% of the purchase price of the home. For example, to buy a home for $800,000, you will need at least $40,000 as your down payment. If your down payment is less than 20%, you will need mortgage default insurance.

Part 3: Mortgage Default Insurance

When you buy a home with less than a 20% down payment, the mortgage needs to be insured against default. This type of insurance protects the mortgage lender in case you are not able to make your mortgage payments. It does not protect you. If you require mortgage default insurance expect to add 0.5% to 3% to the cost of the mortgage depending on the total amount borrowed.

Mortgage default insurance enables you to purchase a home with a minimum down payment of 5% (10% for multi-unit dwellings) with interest rates comparable to those of a conventional mortgage.

Major providers of mortgage default insurance include Canada Mortgage and Housing Corporation (CMHC), Genworth Financial Canada, and Canada Guaranty Mortgage Insurance Company.

For parts 4 and 5 of the series click here....

Homebuyer's Guide (Part 1)

Mon, 07 Jan 2013 21:29:00 GMT

Welcome to a 7 part series on everything you need to know about buying a home.

Whether you are purchasing your first home or your third, this series will help you to navigate the complexities and financial implications of your purchase. It will cover topics from assessing how financially ready your are, to closing costs and other fees related to your purchase.

Part 1: Are you Financially Ready

The first step in the home buying process is to determine if you are in fact financially ready to purchase a new home. My wife and I looked a purchasing a home last year, and although we were approved for close to a $1M mortgage, we decided that the timing was just not right.

What do lenders look for?

You should look at your annual income to determine if you are eligible for a mortgage and how much you can comfortably afford.

A mortgage lender uses to factors to determine if you are able to borrow money.

1) Gross Debt Service (GDS) ratio

This is the percentage of your gross monthly income used for mortgage payments, taxes and heating costs. It should not be more than 32% of your gross monthly income.

2) Total Debt Service (TDS) ratio

TDS ratio is the percentage of gross monthly income required to pay for monthly housing costs plus any other debt payments that you are already making. It should not be more than 40% of your gross monthly income.

Have you been pre-approved for a loan?

This is an important first step in your home search. Imagine finding the perfect home, only to find out that you are not able to afford it. By getting pre-approved for a mortgage before you start your home search you will have a realistic expectation of what you can afford. Although it does not guarantee that you will be able to borrow the approved amount, it is a good starting point.

What is your Credit Rating?

The final step to determine whether you are financially prepared to purchase a home is to order a copy of your credit report to make sure that it does not contain any errors. Lenders will check this report before approving you for a mortgage. A credit report is a summary of your financial history and shows whether you have had any problems paying back debt in the past.

Visit the website for the Financial Consumer Agency of Canada (FCAC), to order your credit report and find out more about how to improve your credit Rating.

For parts 2 and 3 of this series click here

Tips for Selling During the Holiday Season

Sat, 08 Dec 2012 03:52:00 GMT

Here are 9 tips from Real Estate Weekly on how to sell your home during the holidays. I think these tips are great for sellers to pay attention to any time of year.

It’s a tough real estate market out there right now. Prices are dropping slightly, sales are slower and there’s less interest in the $2 million-plus homes that were so hot last year. But Realtors report that desirable, well-staged, well-priced homes are still selling.

Here are some seasonal strategies to make your home stand out in the December/January market.

Tip 1. Be prepared to negotiate

Many people who want to buy in December and January are serious buyers who are aware that there are bargains out there. And this year in particular, buyers know that prices are dropping. Consult with your Realtor to determine the ideal price for your home and make a plan for negotiating to reach it. Don’t reject initial lowball offers. They may be just a starting point.

Tip 2. Add curb appeal

How do the front and back yard look? It’s winter and the garden is sleeping, but can you make it look better with pots of attractive winter-hardy plants? If you’re planning on selling, it’s probably worth the investment to hire people who can add curb appeal to your home.

Tip 3. Stage it and pare it down

This goes for any time you’re selling your home. Eliminate all clutter, remove personal touches — make your home as neutral as possible so buyers can imagine their own lives in your space. If you can’t bear to part with your personal decorations or clutter, hire a stager. Getting rid of stuff adds huge value to your home.

Tip 4. Decorate with discretion

Much as we love to lay it on thick during the holidays, decorations equal clutter, and clutter is a bad thing at an open house (see Tip 3). Instead of decking the halls to the hilt, just put up a few dramatic but simple decorations.

Tip 5. Go with nature

Avoid overtly religious seasonal decorations during the holidays. The Lower Mainland is home to so many cultures. In our multicultural region, you’re best to decorate with a nature theme: evergreens, rosemary branches, candles, berries, pinecones, lights. A few dramatic sprays or a small tree are festive without being overbearing.

Tip 6. Don’t hide flaws

House hunters want to see everything, so don’t use holiday decorations to hide some flaw. Cracks, mould, water stains, whatever.. it’s better to fix them than hide them. Otherwise, like the Ghost of Christmas Past, they’ll come back to haunt you.

Tip 7. Make it fragrant

This is the season when you can really appeal to the most primal sense: smell. For open houses, simmer a big pot of some kind of punch with apple and spices on the stove to make the space smell like everyone’s best memories. Or bake some special cookies just before you leave. Use real scents, not fake ones.

Tip 8. Keep it minimal

You’re busy, your Realtor is busy, everybody’s busy — you can get away with just a couple of open houses during the holiday season. There are interested buyers out there. They’ll come because they’re serious.

Tip 9. Gift wrap your home with a great online listing

Buyers will be doing much of their house hunting online, so work with your Realtor to make your listing really sell your home. Remove all clutter from areas being photographed, and use throw pillows or other small decorative accents to add drama. Include lots of photos — even a virtual tour — so viewers can get a real sense of your home. Include a couple of summer photos so people can see what the garden looks like at its best. In the listing itself, include key words that people will use in their online search, including the neighbourhood, the schools nearby, and the style of home. Use these more than once so the search engines will give your listing a better position in the search results. Finally, check the copy for spelling and grammar so it looks professional.

How is the Vancouver Real Estate Market Doing?

Thu, 08 Nov 2012 16:41:00 GMT

The most frequent question that I am asked as a REALTOR is: "How is the real estate market doing?" I am pleased to report that I can now answer this question with a lot more certainty, and tailored to my clients' needs.

Historically, this question has been difficult to answer because it depends on where you live, the type of home you live in (single family, condo or townhome) and the price point of your existing property.

For example, at the same time that the market is booming for one bedroom condos downtown, it may be dragging for $2M condos in Coal Harbour. Hard to believe? I now have access to "micro-statistics" to back up my assertions.

A new tool called SnapStats takes data from the Real Estate Board of Greater Vancouver and assembles it into an easily understandable set of figures and graphs. The sales information in the report is for Vancouver West, Vancouver East, North Vancouver, West Vancouver, Richmond, and Downtown Vancouver. Under the agreement that I have with SnapStats, I am not allowed to post these statistics on my website, but I can send them to my sphere of influence as a PDF document.

These statistics are fairly easy to interpret, but I wanted to take the time to walk you through the report in detail. The most important number to look at on the report is the Sales Ratio Percentage. This percentage is the number of sales for the month divided by the active listings. For example if 1 in 10 homes were selling, you would have a sales ratio of 10%. Why is the sales ratio so important? The sales ratio tells us whether we are in a balanced market, a seller's market or a buyer's market, and therefore which side has the upper hand in negotiating. Following is the sales ratios for each type of market condition.

Seller's Market: sales ratio of 21% or greater.

Balanced Market: sales ratio of 15% to 20%

Buyer's Market: sales ration of 14% and less

The SnapStats report breaks down the sales ratios not only by price range, but also by community. For example last month detached homes in Dunbar had a sales ratio of 21.57% and homes priced between $2.00M and $2.25M had a sales ratio of 22.41%. Given these sales ratios, it would be a good time to sell a home in Dunbar.

You will also find a 13 month trend on the SnapStats report. From the graph for Vancouver Westside Detached Homes we have seen an increase in the number of sales, an increase in the average sale price and a decrease in inventory. This makes me think that heading into next year detached homes in Vancouver West may be back to the values we were seeing at the end of 2011.

Call me to get access to the October, 2012 market report from SnapStats to see how the market is doing in your neighbourhood.

Should I Invest in Real Estate or Insurance?

Mon, 15 Oct 2012 22:45:00 GMT

With my being a Realtor and my wife being a financial planner, we frequently have investment discussions about the best place to invest our after-tax dollars. My wife recently put forward a pretty compelling argument about why a Universal Life policy could be a better long term investment than a downtown condo bringing in $1,500 per month in rent. So, we decided to each make our case and ‘square off’ on the topic.

Here were the rules of the game:

A 30 year time horizon
Similar net amount invested
Ignore inflation in order to compare the relative merits of each investment more easily

The case for Investing in Real Estate

For my side of the comparison, I chose a condo in the popular and well-priced Spectrum Development, located right on top of the downtown Costco. Optimistically, a one bedroom unit there will rent for $1,500 per month, and there are units on the market under $450,000 with strata fees of nearly $300 and property taxes at 1,600 annually.

I assumed:

Sales price of $438,000
A 20% down payment ($87,600) to avoid CMHC mortgage insurance costs
A mortgage amortized over 25 years at a constant 5% for the life of the mortgage
NO increase in strata fees, property taxes or homeowner’s insurance
NO special assessments • Occupied with a rent paying tenant 100% of the time
A small annual investment in maintenance (new carpets, paint, etc) of $1,000 per year.

In Vancouver, we generally accept that making money in real estate means relying on market appreciation, as opposed to cash flowing on the rent. The silver lining to this is that you may write off the loss as an investment loss on your taxes, as opposed to increasing your income (who wants that anyway?).

So, the first big question is: What is a reasonable capital appreciation value to assume over the 30 year time horizon? I looked at Real Estate Board of Greater Vancouver statistics for the 20 years between 1992 and 2012, as I couldn’t go back any farther. During that time, the median price of a condo in the same price bracket more than tripled in value. If I extrapolate that over another 10 years, it would be a five-fold increase in value. However, I recognize that the transformation from post-Expo 86 to 2012 has been remarkable, and that next 20 or 30 years are not going to see as dramatic a change because the downtown core is that much more “built out”. So, I assumed a 400% increase in value. With that assumption, my condo would sell for $1,752,000 in 30 years’ time. Not bad, right?

However, the costs of owning a condo are also significant. First, there are property taxes, homeowners insurance, strata fees and regular maintenance that add up to $540/month on top of the mortgage costs of $2,038 (equating to a lifetime interest cost of $260,984). Then upon selling the unit, I would incur a capital gains tax of $328,000 and transaction costs of about $50,000, not to mention my initial cash investment of $87,600. After all is said and done, I calculated a net profit of $712,709.

The case for Insurance

Many people view life insurance as a black hole in which money goes, only to come out when they die. This is no longer the case! Savvy investors, and indeed wealthy individuals and families, have been using life insurance as an investment for generations and recognize it as a powerful means of doubling net worth with each generation.

For those not interested in improving their children’s’ standard of living, Universal Life Insurance is a means of building a nest egg that may be accessed for retirement income, vacations or their children’s’ or grandchildren’s education. Better yet, it is a tax preferred investment vehicle with no minimum withdrawal amount.

Let’s say I was 39 and I took out a $800,000 policy on my own life combined with a $750,000 on the life of my child, aged 4. Insurance on children is cheaper, because they are younger, and it will allow me to build wealth in a portfolio that I can either keep for myself or transfer to my child when she is an adult.

The beauty and unique feature of Universal Life, as opposed to Whole Life insurance is that it is totally flexible. I can increase or decrease premiums as my cash flow allows, within parameters established when the policy is set up, and depending on how and when I want to use the cash value of the account.

I looked at what I could do with a policy using a similar cash outlay to the condo above. David paid $87,600 at the start, followed by 25 years of $12,995 per year. His total net cash investment was about $354,000. I spread the condo down payment over the first 5 years of my policy, and added in the $12,995 for a total of $30,515 for five years, followed by 21 years of premium payments of $12,995 and a final payment of $6,500, equating to the same $354,000.

At a 5% long term investment growth (I am allowed to pick from a variety of funds within the insurance company’s portfolio) I will have $1,411,898 cash surrender value in my account. I can withdraw this as a lump sum, incurring taxes at a preferred rate to net me $831,350. I’m ahead by about $120,000. Alternatively, I can borrow against this and retain the account value, and pay the tab from the death benefit which is over $3.6 million by the time I am 80 years old. Not to mention, if the market does better than the very conservative 5% growth I assumed, then so do I!

Summary

People love, and will continue to love, property as an investment. It is perceived as a safe long term bet. It is tangible, which is a huge psychological plus. We live in a city where property values seem to continualy rise over a five to ten year time horrizon. A property in the downtown core may be a great growth opportunity, with no ‘sweat equity.’ There are other ways of leveraging an investment in property that could work to your advantage. For example, renting out a basement suite until you are ready to grow into it.

However, with a Universal Life policy, everything is simple. You do not need to take ads on Craigslist to rent out your unit, you do not need to respond to emergencies, ensure access for maintenance, renovate, or worry about the housing market when it is time to cash in on your investment. Moreover, you leave a legacy for your family.

If you would like to play with the assumptions on the property investment, or see more details about the insurance illustration, you may download our spreadsheet by clicking here or give one of us a call.

Come Horse Around with me at the Southlands Country Fair This Weekend

Tue, 11 Sep 2012 23:46:00 GMT

Enjoy a day in the country without leaving the city.

Join me at my booth at the fair this Weekend, Sunday, September 16, 2012 from 10AM to 4PM. Enjoy pony rides, a petting farm, kids amusements, food vendors and horse entertainment.

I will be serving 500 cookies and handing out 1,000 balloons. Enter to win a kids wooden dolls house valued at $250.

Should I Buy a New or Used Home?

Tue, 11 Sep 2012 23:16:00 GMT

Ultimately, choosing a home is a matter of location, cost and your fist impression (gut instinct). When you first walk in the door of the home do you feel an emotional attachment to the home? Is it located in a neighbourhood that is inviting and safe? Can you afford it without losing sleep over making the mortgage payments?

Because the housing market is still soft in Vancouver, it is important to weigh these more important questions before jumping into any buying decision. Remember that you could be living in this home for a minimum of five to ten years before moving. This is a long term commitment – especially with the uncertainty surrounding the current market conditions.

So back to the original question. Which is better, a new or an old home? This is a tough question to answer. It comes down to taste, how much you can afford, lifestyle and the possibility of some compromise.

I remember when I moved back to Vancouver from Phoenix and I had the choice between buying a new town home on a busier street or a smaller one bedroom by the water. I chose the one bedroom because it offered me a quite location and I didn’t have a family at the time. Now that I am married with a child, my priorities have obviously changed. Recently my wife and I are considered purchasing a 3 bedroom, 2,500 square foot town home. Nowadays we value space and we are less concerned about the exact location (I am now willing to walk / run 10 minutes to the ocean).

A new home, or one built over the last couple of years is going to offer some advantages over a used home. It should obviously be in great condition and require little in terms of maintenance. You should be able to rest easy knowing that you will not be hit up with any serious expenses for some time.

A new home should be in fashion and not need to be renovated to meet current trends. The flooring, countertops and fixtures should all be up to date and not need to be changed.

Older homes may have smaller more intimate spaces where a new home will feel more open. This is due to a change in what home buyers’ value. Often times a buyer will purchase an older home and open the kitchen to the living space during the renovation. A newer home will have more bathrooms than an older home with the same number of bedrooms.

New homes today offer a 2-5-10 warranty. 2 years on materials and labour, 5 years on the building envelope and 10 years on the structure. This is a concern when purchasing a used condominium. A new building envelope can mean over $100,000 in the form of a special levy to a strata condominium owner. For this reason, older homes must be inspected by a professional. Not only should the home itself be inspected, but the property should also be inspected for the possibility of an underground oil tank (if purchasing a single family home).

New homes should meet or exceed the existing construction bylaws. Old knob and tube wiring is sometimes an issue when it comes time to insure a home. Old wiring and plumbing may also pose a problem when you want to renovate a home. The local building code may require you to change more of the electrical system and plumbing system when making an addition or renovating portions of an old home.

It is important to look at the operating costs associated with owning a home. A new home should be more energy efficient. If you decide to purchase and renovate an old home, sometimes BC Hydro will offer a rebate if you purchase new windows or more energy efficient appliances.

Over the past decade Vancouver home prices have steadily increased regardless of whether you purchased a new or used home. Although this may be changing, I still believe that owning a home is a great long term investment.

Win / Win Conflict Resolution

Tue, 10 Jul 2012 17:20:00 GMT

Recently I attended a course through the Real Estate Board that educated Realtors on the importance of resolving conflicts and arriving at a Win/Win outcome. Now, this is something I feel that I do well, and have been practicing this art since I was a boy observing my Father in action as a Developer. Still, I found the course very useful because it articulated what many of us know intuitively, and by doing so, allows me to practice negotiation more purposefully. Here is what I took away from the course.

First of all – What is conflict? Conflict may be described as:

The actual or perceived opposition of needs, values, wishes, or perceptions resulting in stress or tension.

Of course, conflict can be either personal or interpersonal. This article will focus only on interpersonal conflict. For personal conflict, you may prefer seeing a Psychologist over a Realtor!

1) Most conflict is ego based. Ego based conflict results from individual values, personal prejudices and cultural influences. These types of conflict also happen when we misinterpret each other’s behaviour or vocabulary.

2) Some conflict is situational. This stems from differing needs and expectations. For example, when a seller is willing to accept $1,000,000 for a home and a buyer can only afford $900,000. Here we have a situational conflict of $100,000.

A Realtor’s job is to minimize ego-based conflict and overcome situational conflict through awareness.

Next, the course articulated the five general ways in which people approach conflict:

1) Treat the conflict like a competition. Some people need to “win” at all costs and may display pushy or threatening behaviour. Usually, personal relationships are damaged along the way.

2) Avoid the conflict all together. Some folks shy away from conflict altogether. This leaves issues unresolved, and will not lead to a negotiated solution!

3) Accommodate and put the relationship before the issue. People who take this approach are usually seen as weak-kneed and lacking confidence.

4) Compromise. On the surface, this may seem like the ideal way to resolve conflict, but it almost always leaves both parties feeling like they have given in to the other.

5) Collaboration. This is the best way to resolve a conflict. This style of conflict resolution is hard on the problem and soft on the people.

Recognizing these situations will help you identify better solutions. Here are some of my techniques learned from years of working as a developer and Realtor:

1) Understand your own triggers and know that you have a choice of how to respond to a situation. Never simply react.

2) Practice active listening by questioning, paraphrasing and clarifying an existing point of contention. You can also be more empathetic and encourage the other party to give you more information.

3) Practice non-defensive communication by using “I” statements instead of “you”. In other words, instead of stating, “You insulted me,” say, “I feel hurt by that comment.”

4) Whenever possible communicate in person. Context is lost through e-mail, text and even phone conversations. Remember that most communication is “non-verbal” and expressed through body language.

5) Seek to understand. Understand the person as well as the problem in as much detail as possible before trying to come up with a solution.

Thinking of Building a new Home in Vancouver? - Here is the Process

Mon, 25 Jun 2012 17:12:00 GMT

Have you ever thought about building your own single family home in Vancouver? This article will guide you through the four steps involved and hopefully give you a good overview so that the process does not seem as overwhelming.

Step 1 - Finding Land

The first step is obviously finding a nice piece of land to develop. There are many things to consider when searching for land. Here are a few questions to ask yourself:

1) How much do I want to spend? This question is directly correlated to where in Vancouver you would like to live which is the next question. A standard 33' wide x 120' deep lot in Vancouver West is trading at $1.4M to $1.6M depending on the exact location. In Vancouver East lots, can be found for $750,000 to $1M.

2) What part of Vancouver do I want to live in? This obviously ties back to the question, "How much to spend?" Consider your lifestyle, whether you want or need to commute, proximity to ammenities and where your recreational activities take place. Other things to consider when selecting your location is the school district the land is located in.

3) How large of a house do I want to build? The size of the property will dictate the size of the home based on a formula planners refer to as Floor Space Ratio (FSR). Single family homes are limited to a 0.7 FSR. As an example, a 4,000 sq ft lot would allow for a 2,800 sq ft home (4,000 x 0.7).

4) What aspect and do I need a view? Most people prefer a south or west facing backyard so that when they arrive home they can enjoy the evening sun. For some, a view is a must-have, but look into zoning to make sure it won't be blocked if a neighbour redevelops or if trees grow up.

Step 2 - Read the Zoning Bylaw and Visit City Hall

Before removing subject conditions on your offer to purchase the land, I would recommend that you read the zoning bylaw specific to the property and visit to city hall to confirm that you will be able to build a home that suits your needs.

The most important items to consider are the front and side yard set backs and the allowable FSR. The zoning bylaws are available on the City of Vancouver's Website.

Another great website to visit is Van Map. This Geographic Information System Database (GIS) website is a great place to start your research. Here you can turn "layers" on and off to display categories such as property dimensions, electrical and water services.

Zoning bylaws Iin particular) and GIS websites can be difficult to interpret, which leads to the next step of the process - hiring an architect.

Step 3 - Hire an Architect

An architect will be needed to help you get through the city building process and acquire a building permit so that you can start construction. You will want to make sure that you hire an architect that has experience in designing single family homes. An experienced architect will know the zoning bylaw inside and out and allow you to maximize the allowable density for the property (if this is your goal). The architect will also make sure that the elevation of the structure is appealing and not "another stucco box" that we often see in Vancouver. He or she should work from the inside out - in other words, make sure that the floor plan "works" before moving on to the elevation. When it comes to the building elevation, an architect will understand how to mix building materials and colour to make your home shine.

Step 4 - Hire a Contractor

A contractor will be able to interpret the drawings produced by the architect and make sure that the home wiill meet the building code. It will be his (or her) job to make sure that the home is built on budget and on schedule. He will be responsible for hiring the sub-trades (framers, electricians, plumbers etc). A typical single family home in Vancouver can be built in under 12 months at a cost of around $200 per square foot (depending on the quality of the finishes and site conditions). To put this in perspective, a home built on a 33'x120' lot will cost you approximately $600,000 to build. There are many steps involved in building a home which are beyond the scope of this article. For example, you may want to consider building a "green" home and incorporating newer energy saving building materials and technologies, for which there are incentives, especially if you plan to live in the home for more than five years and therefore see the return on investment.

Finally, don't forget to plan and budget for a place to live while you are building - and add a contingency to the mix!

Rescinding a Condo Pre-Sale

Wed, 13 Jun 2012 15:12:00 GMT

Is it possible to legally get out of purchasing a pre-sale condominium? The B.C. courts are now starting to favour developers over purchasers. There is a growing body of case law arising from purchasers of pre-built condominiums attempting to use their rescission rights provided under the Real Estate Development Marketing Act (REDMA) to avoid completing their condominium purchases. REDMA attempts to protect purchasers by requiring developers to use a disclosure statement and setting forth conditions under which a purchaser could get out of a contract.

Originally the courts took a very purchaser friendly stance on interpretation of this legislation, but lately the tides are turning. It all comes down to whether the changes a developer makes to their own disclosure statement during the construction process are “material”. It used to be that purchasers would hang their hats on the estimated construction completion dates and if the developer did not meet the date set out in the disclosure statement they would have a way to get out of their contractual obligations. The courts are now interpreting changes to completion dates as not being a material change. For example, if a development was supposed to be completed in September 2009 and the date slipped to December 2009, the courts are now saying that this is not a material change. The courts are finding that a reasonable purchaser would see the construction date as an estimate and it would not have influenced a reasonable purchaser in their decision to buy.

The same goes for an earlier completion date. The British Columbia Supreme Court recently sided with Bosa Properties in a case where the completion of construction occurred earlier. Associate Chief Justice Cullen concluded that an incorrect estimated completion date does not, without more, provide the purchaser with a right to rescind the purchase agreement. He held that the “key concept…is materiality, which, in the context of REDMA, is a function of the value, price and use of the condominium. Delay manifestly affects those criteria and would be in the mind of a reasonable person as such; acceleration is qualitatively different than delay and would not similarly influence the mind of a reasonable person.” In other words it is the courts job to determine in each case whether the delay has affected the “value, price and use” of the condominium. A purchaser cannot just point to a missed completion date and say it is “material” without first providing evidence that the “value, price and use” were affected.

Even with the current cases, developers should still make sure to follow the guidelines that REDMA sets out. It is ultimately the developers’ responsibility to provide purchasers with a disclosure statement and to have the buyers sign to acknowledge receipt of the document. When completion dates change, developers must also have purchasers sign an amendment to the disclosure statement.

Purchasers must also be aware that “walking away” from a pre-sale does not merely mean losing a deposit; in fact, developers have the right to sue for damages, for example, if the market has declined and the developer cannot sell it for as much as it had previously.

From the recent cases it is not as cut-and-dried as it used to be. Purchasers and developers should be more cautious going forward.

Building on an Irregularly Shaped Lot

Wed, 09 May 2012 20:51:00 GMT

Last month I wrote about the process of building a single family home in Vancouver. This month I will be focussing on building a home on an irregularly shaped property. Before considering an irregularly shaped lot, ask yourself if you would prefer a home that is different than your standard cookie cutter house. If you answered yes, then an irregularly shaped property may be the right choice.

The challenge to a property with skewed or curved property lines is finding the set-back lines for the house itself. The RS-1 bylaw has some pretty prescriptive ways of accomplishing this. The challenge is to interpret the bylaw “correctly”. An architect will be able to assist you with this and will quickly be able to arrive at the footprint for the home.

Following is an example of a property that I have listed at 3306 Trutch Street in Vancouver that shows where the home could be located on this irregularly shaped lot. I really like the 146 feet of south west front exposure for this example and the fact that the side yards for the home set your home back from the surrounding homes. The set back from other homes also provides for an opportunity to design and build bay windows on all four sides of the home versus just the front and back.

The next step would be to calculate the amount of area that can be located above grade. According to the RS-1 bylaw, you are allowed 20% of the lot area plus an additional 1,400 square feet. For this 7,700 square foot lot you would be allowed to build approximately 2,855 square feet above grade (see plan below). The maximum size for the home is 60% of the total size of the property. For this example you could add another 1,700 square feet to the basement in order to maximize the buildable area on the site.

The garage placement is the next item to address. The city of Vancouver (and the RS-1 bylaw) encourages builders to place their garage in the back of the property off of the lane. Having lived in Arizona, I can appreciate the aesthetic to having the garage in the back of the home and not looking at a sea of garage doors as you walk or drive down a street (very common with the track homes that you see in built in the outlying areas of Vancouver such as Port Coquitlam). In order for the garage to not count in the liveable above grade square footage, you must place your garage within 26 feet of the rear property line.

After the home and garage is situated on the lot, it is time to come up with a landscaping plan. This is where I believe an irregularly shaped will shine over your standard rectangular lot. As you can see from the example above, this lot provides the opportunity for two back yards (technically side yards). With this property, you could have one yard for the kids and one for adult entertaining. Usually a back yard does not get enough natural light. With an irregular lot you have more of an opportunity to light your yard space (such as the yard with south west exposure in this example). Porches, hedges and other combinations of soft scape and hard scape could be used to create a very attractive and inviting yard.

Important words to know from CMHC when buying a home

Wed, 09 May 2012 15:44:00 GMT

Adjustable mortgage interest rate:: With an adjustable rate, both the interest rate and the mortgage payment vary, based on market conditions.

Amortization:: Length of time over which the debt will be repaid.

Appraisal:: Process for estimating the market value of a property.

Appraiser:: Certified professional who carries out an appraisal.

Appreciation:: The increase in value of something because it is worth more now than when you bought it.

Approved Lender:: A lending institution authorized by the Government of Canada through CMHC to make loans under the terms of the National Housing Act. Only Approved Lenders can negotiate CMHC insured mortgages.

Assumption Agreement:: A legal document signed by a homebuyer that requires the buyer to assume responsibility for the obligations of a mortgage by the builder or the previous owner.

Blended Payment:: A mortgage payment that includes principal and interest. It is paid regularly during the term of the mortgage. The payment total remains the same, although the principal portion increases over time and the interest portion decreases.

Builder:: A person or company that builds homes.

Carriage home:: A carriage, or link home, is joined by a garage or carport. The garage or carport gives access to the front and back yards. Builders sometimes join basement walls so that link houses appear to be single-family homes on small lots. These houses can be less expensive than single-family detached homes.

Certificate of location (or land survey):: A document that shows property boundaries and measurements, specifies the location of buildings on the property and states easements or encroachments.

Certificate of status:: Also called an Estoppel certificate, it is a certificate that outlines a condominium corporation's financial and legal state. Fees may vary and may be capped by law (does not apply in Quebec).

Closed mortgage:: A closed mortgage cannot be paid off, in whole or in part, before the end of its term. Many closed mortgages limit prepayment options such as increasing your mortgage payment or lump sum prepayment (usually up to 20% of your original principal amount).

Closing costs:: Costs in addition to the purchase price of the home, such as legal fees, transfer fees and disbursements, that are payable on closing day. They range from 1.5% to 4% of a home’s selling price.

Closing day:: Date on which the sale of the property becomes final and the new owner takes possession of the home.

CMHC:: Canada Mortgage and Housing Corporation. A Crown corporation that administers the National Housing Act for the federal government and encourages the improvement of housing and living conditions for all Canadians. CMHC also develops and sells mortgage loan insurance products.

CMHC Insurance Premiums:: The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.

Commitment Letter (or Mortgage Approval):: Written notification from the mortgage lender to the borrower that approves the advancement of a specified amount of mortgage funds under specified conditions.

Compound Interest:: Interest calculated on both the principal and the accrued interest.

Conditional offer:: An Offer to Purchase that is subject to specified conditions, for example, the arrangement of a mortgage. There is usually a stipulated time limit within which the specified conditions must be met.

Condominium (or strata):: A unit, usually in a highrise or lowrise, or a townhouse that can be owned. You own the unit you live in and share ownership rights for the common space of the building. Common space includes areas such as corridors, the grounds around the building, and facilities such as a swimming pool and recreation rooms. Condominium owners together control the common areas through an owners’ association. The association makes decisions about using and maintaining the common space.

Contractor:: A person responsible for overall construction of a home, including buying, scheduling, workmanship, and management of subcontractors and suppliers.

Conventional mortgage:: A mortgage loan up to a maximum of 80% of the lending value of the property. Typically, the lending value is the lesser of the purchase price and market value of the property. Mortgage insurance is usually not required for this type of mortgage.

Counteroffer:: If your original offer to the vendor is not accepted, the vendor may counteroffer. This means that the vendor has amended something from your original offer, such as the price or closing date. If a counteroffer is presented, the individual has a specified amount of time to accept or reject.

Credit bureau:: A company that collects information from various sources and provides credit information on a person’s borrowing and bill paying habits to help lenders assess whether or not to lend money to the person.

Credit history or Credit Report:: The main report a lender uses to determine your creditworthiness. It includes information about your ability to handle your debt obligations and your current outstanding obligations.

Curb appeal:: How attractive the home looks from the street. A home with good curb appeal will have attractive landscaping and a well-maintained exterior.

Deed:: A legal document that is signed by both vendor and purchaser, transferring ownership. This document is registered as evidence of ownership.

Default on payment:: Failure to make a mortgage payment.

Delinquency:: Failing to make a mortgage payment on time.

Deposit:: Money placed in trust by the purchaser when an Offer to Purchase is made. The sum is held by the real estate representative or lawyer/notary until the sale is closed and then it is paid to the vendor.

Depreciation:: The decrease in value of something because it is now worth less than when you bought it.

Down payment:: The portion of the home price that is not financed by the mortgage loan. The buyer must pay the down payment from his/her own funds or other eligible sources before securing a mortgage.

Duplex:: A duplex is a building containing two single-family homes, located one above the other.

Easement:: This is where someone else has the right for access to or over another person’s land for a specific purpose, such as a driveway or public utilities.

Equity:: The difference between the price for which a home could be sold and the total debts registered against it. Equity usually increases as the mortgage is reduced through regular payments. Market values and improvements to the property may also affect equity.

Estoppel Certificate:: Also called a certificate of status, it is a certificate that outlines a condominium corporation's financial and legal state. Fees may vary and may be capped by law (does not apply in Quebec).

Fixed mortgage interest rate:: A locked-in rate that will not increase for the term of the mortgage.

FlexHousing™:: A housing concept that incorporates, at the design and construction stage, the ability to make future changes easily and with minimum expense, to meet the evolving needs of its occupants.

Foreclosure:: The legal process where the lender takes possession of your property and sells it to cover the debts you have failed to pay off. When you default on a loan and the lender feels that you are unable to make payments, you may lose your home to foreclosure.

Freehold :: Ownership of land and buildings (house) by one person (or two, such as joint ownership by spouses). Detached and semi-detached homes, duplexes and townhouses are usually owned freehold. Freehold owners can do what they want with their property — up to a point. They must obey municipal bylaws, subdivision agreements, building codes and federal and provincial laws, such as those protecting the environment.

Gross Debt Service Ratio (GDS):: The percentage of the borrower's gross monthly income that will be used for monthly payments of principal, interest, taxes and heating costs (P.I.T.H.) and half of any condominium maintenance fees.

Gross monthly income:: Monthly income before taxes and deductions.

High-ratio mortgage:: A mortgage loan higher than 80% of the lending value of the property. This type of mortgage may have to be insured — by CMHC, for example — against payment default.

Home inspector:: A person who visually inspects a home to tell you if something is not working properly, or is unsafe. He or she will also tell you if repairs are needed, and maybe even where there were problems in the past.

Home warranty:: (New Home Warranty Program) A guarantee that if something covered under the warranty needs to be repaired it will be. If the builder doesn’t repair it, the repair will be made by the organization that provided the warranty.

Household budget:: A plan that allocates income for household expenses.

Insurance:: insurance provides coverage to ensure a loan is paid. See also Mortgage Loan Insurance and Mortgage Life Insurance.

Insurance premium:: Payment for insurance.

Interest:: The cost of borrowing money. Interest is usually paid to the lender in regular payments along with repayment of the principal (loan amount).

Interest rate:: The price paid for the use of money borrowed from a lender.

Land registration:: A legal document that records the ownership of a property and land.

Land survey:: (Survey or Certificate of Location) : A document that shows property boundaries and measurements, specifies the location of buildings on the property and states easements or encroachments.

Land surveyor:: A professional who can survey a property in order to provide a certificate of location.

Lawyer:: A legal advisor who assists people by representing them on legal matters.

Lender:: A mortgage lender is an institution (bank, trust company, credit union, etc.) that lends money for a mortgage.

Life insurance:: See Mortgage life insurance.

Lien:: A claim against a property for money owing. A lien may be filed by a supplier or a subcontractor who has provided labour or materials but has not been paid.

Link home:: A link, or carriage home, is joined by a garage or carport. The garage or carport gives access to the front and back yards. Builders sometimes join basement walls so that link houses appear to be single-family homes on small lots. These houses can be less expensive than single-family detached homes.

Lump Sum Prepayment:: An extra payment, made in lump sum, to reduce the principal balance of your mortgage, with or without penalty. A closed mortgage typically restricts the amount and frequency of the prepayments you can make. With an open mortgage, however, you can make a lump sum prepayment at any time without penalty. Making prepayments can help you pay off your mortgage sooner and ultimately save on interest costs over the life of your mortgage.

Manufactured home:: Sometimes called a mobile home is a factory-built, single-family home. It is transported to a chosen location, and placed onto a foundation.

Maturity Date:: The last day of the term of the mortgage. On this day, the mortgage loan must either be paid in full or the agreement renewed.

Mobile home:: These are built in factories, and then taken to the place where they will be occupied. While these homes are usually placed in one location and left there permanently, they do retain the ability to be moved.

Modular Home:: A factory-built, single-family home. The home is typically shipped to a location in two, or more, sections (or modules).

Mortgage:: A mortgage is a security for a loan on the property you own. It is repaid in regular mortgage payments, which are usually blended payments. This means that the payment includes the principal (amount borrowed) plus the interest (the charge for borrowing money). The payment may also include a portion of the property taxes.

Mortgage approval:: Written notification from the mortgage lender to the borrower that approves the advancement of a specified amount of mortgage funds under specified conditions.

Mortgage broker:: The job of the mortgage broker is to find you a lender with the terms and rates that will best suit you.

Mortgage life insurance:: Mortgage life insurance gives coverage for your family, if you die before your mortgage is paid off.

Mortgage loan insurance:: If you have a nigh-ratio mortgage (more than 80% of the lending value of the property) your lender will probably require mortgage load insurance, which is available from CMHC or a private company.

Mortgage payment:: A regular payment to the lender that includes both the interest and the principal.

Mortgage term:: Length of time that the agreed-upon mortgage contract conditions, including interest rate, is fixed.

MLS — Multiple Listing Service:: A multiple listing service is a real estate agents’ cooperative service that contains descriptions of most of the homes that are for sale. Real estate agents use this computer-based service to keep up with properties they are listing for sale in their area.

Net worth:: Your financial worth, calculated by subtracting your total liabilities from your total assets.

New Home Warranty Program:: Coverage in the event that an item under the warranty needs to be repaired. If the builder doesn’t repair it, the repair will be made by the organization that provided the warranty.

Notary:: In Quebec a notary handles the legal matters related to homebuying.

Offer to purchase:: A written contract setting out the terms under which the buyer agrees to buy the home. If the Offer to Purchase is accepted by the seller, it forms a legally binding contract that binds the people who signed to certain terms and conditions.

Open mortgage:: A flexible mortgage that allows you to pay part before the end of its term.

Open-house:: A period of time during which a house or apartment for sale or rent is held open for public viewing.

Operating Costs:: The expenses that a homeowner has each month to operate a home. These include property taxes, property insurance, utilities, telephone and communications charges, maintenance and repairs.

Payment schedule:: The monthly, biweekly, or weekly mortgage payments

Premium:: See CMHC Insurance Premiums.

Principal:: The amount that you borrow for a loan. Each monthly mortgage payment consists of a portion of the principal that must be repaid plus the interest that the lender is charging you on the outstanding loan balance. During the early years of your mortgage, the interest portion is usually larger than the principal portion.

P.I.T.H.:: Principal, interest, taxes and heating — costs used to calculate the Gross Debt Service ratio (GDS).

Property Insurance:: Insurance that you buy for the building(s) on the land you own. This insurance should be high enough to pay for the building to be re-built if it is destroyed by fire or other hazards listed in the policy.

Property taxes:: Taxes charged by the municipality where the home is located based on the value of the home. In some cases the lender will collect a monthly amount to cover your property taxes, which is then paid by the lender to the municipality on your behalf.

Real estate:: Property consisting of houses and land.

Realtor or real estate agent:: A person who acts as an intermediary between the seller and the buyer of a property.

Reserve Fund:: This amount is set aside by the homeowner on a regular basis so that funds are available for emergency or major repairs. Setting aside 5% of your monthly take-home pay will give you a well-funded reserve.

Row house:: Also called a townhouse, a row house is one unit of several similar single-family homes, side-by-side, joined by common walls.

Security:: Property that can be claimed by a creditor if a loan is not repaid.

Single-family detached home:: Free-standing home for one family, not attached to a house on either side.

Single-family semi-detached home:: Home for one family, attached to another building on one side.

Stacked townhouse:: Two two-story homes are stacked one on top of the other. The buildings are usually attached in groups of four or more. Each unit has direct access from the outside.

Strata (or condominium):: a unit, usually in a highrise or lowrise, or a townhouse that can be owned. You own the unit you live in and share ownership rights for the common space of the building. Common space includes areas such as corridors, the grounds around the building, and facilities such as a swimming pool and recreation rooms. Strata owners together control the common areas through an owners’ association. The association makes decisions about using and maintaining the common space.

Survey or Certificate of Location:: A document that shows property boundaries and measurements, specifies the location of buildings on the property and states easements or encroachments.

Sustainable neighbourhood:: Neighbourhood that meets residents needs while protecting the environment.

Total Debt Service (TDS) ratio:: The percentage of gross monthly income required to cover the monthly housing payments and other debts, such as car payments.

Term:: Mortgage term is the length of time that the mortgage contract conditions, including interest rate, are fixed.

Title:: A freehold title gives the holder full and exclusive ownership of the land and building for an indefinite period. A leasehold title gives the holder the right to use and occupy the land and building for a defined period.

Title Insurance:: Insurance against loss or damage caused by a matter affecting the title to immoveable property, in particular by a defect in the title or by the existence of a lien, encumbrance or servitude.

Total Debt Service Ratio (TDS):: The percentage of gross monthly income required to cover the monthly housing payments and other debts, such as car payments.

Townhouse:: Also called a row house, a townhouse is one unit of several similar single-family homes, side-by-side, joined by common walls.

Variable mortgage interest rate:: Fluctuates based on market conditions but the mortgage payment remains unchanged.

Vendor:: The seller of a property.

Vendor take-back mortgage (Sometimes called take-back mortgage):: The vendor, not a financial institution, finances the mortgage. The title of the property is transferred to the buyer who makes mortgage payments directly to the seller. These types of mortgages, can be helpful if you need a second mortgage to buy a home.

Warranty (New Home Warranty Program):: Coverage in the event that an item under the warranty needs to be repaired. If the builder doesn’t repair it, the repair will be made by the organization that provided the warranty. All provinces have New Home Warranty programs for newly built homes. However, there are currently no such programs in the Territories.

Thinking of Building a new Home in Vancouver? - Here is the Process

Thu, 12 Apr 2012 17:10:00 GMT

Step 1 - Finding Land

The first step is obviously finding a nice piece of land to develop. There are many things to consider when searching for land. Here are a few questions to ask yourself:

Step 2 - Read the Zoning Bylaw and Visit City Hall

The most important items to consider are the front and side yard set backs and the allowable FSR. The zoning bylaws are available on the City of Vancouver's Website.

Zoning bylaws Iin particular) and GIS websites can be difficult to interpret, which leads to the next step of the process - hiring an architect.

Step 3 - Hire an Architect

Step 4 - Hire a Contractor

Finally, don't forget to plan and budget for a place to live while you are building - and add a contingency to the mix!

Newsletter

Why Invest in Vancouver Real Estate

What can I do to Sell my Home Faster?

10 Common Mortgage Mistakes

Homebuyer's Guide (Parts 6 and 7)

Part 6: Making an Offer

What is an offer?

Do you have your money ready?

Do you have up-to-date identification?

Part 7: Closing and Related Costs

How much land transfer tax will you have to pay?

Have you budgeted for the associated legal costs?

Do you need a home inspection?

What other costs can you expect?

The Value of a REALTOR in Vancouver

VALUE POINT 1

VALUE POINT 2

VALUE POINT 3

VALUE POINT 4

VALUE POINT 5

VALUE POINT 6

VALUE POINT 7

VALUE POINT 8

VALUE POINT 9

VALUE POINT 10

50 Ways to Green Your Home and Save Money in Vancouver

LOCATION: Choosing Where You Live

HOME IMPROVEMENT: Heating and Cooling

WATER

LIGHTING

KITCHEN

BATHROOM

OFFICE

YARD IMPROVEMENT

GREEN AND CLEAN

LIVING GREEN

FINANCING

RESOURCES

COMING SOON

Homebuyer's Guide (Parts 4 and 5)

Part 4: Research Government Programs

First-Time Home Buyers’ Tax Credit

Home Buyers’ Plan

CMHC Green Home program

Part 5: Finding a Home

Where do you want to live?

What type of home do you prefer?

What are the types of ownership?

Freehold

Condominium ownership

Co-operatives

Homebuyer's Guide (Parts 2 and 3)

Part 2: Consider Mortgage Options

What type of mortgage is best for you?

What mortgage features are best for you?

How often can you make your payments?

What types of mortgage charges might you have to pay?

How much do you need for your down payment?

Part 3: Mortgage Default Insurance

Homebuyer's Guide (Part 1)

Part 1: Are you Financially Ready

What do lenders look for?

Have you been pre-approved for a loan?

What is your Credit Rating?

Tips for Selling During the Holiday Season

How is the Vancouver Real Estate Market Doing?

Should I Invest in Real Estate or Insurance?

Come Horse Around with me at the Southlands Country Fair This Weekend

Should I Buy a New or Used Home?

Win / Win Conflict Resolution

Thinking of Building a new Home in Vancouver? - Here is the Process

Rescinding a Condo Pre-Sale

Building on an Irregularly Shaped Lot

Important words to know from CMHC when buying a home

Thinking of Building a new Home in Vancouver? - Here is the Process