Can we negotiate on that price?

The number one question anyone is asking either Dennis or me these days is, “How’s the market?” and depending on which side of the contract you sit on, the answer changes. For sellers, we’re very conscious of what is available in your area comparative to your home since you’re competing with the other properties in your neighbourhood, your asking price range, style, and size of your property. There are many factors in your property that contribute to a successful sale, and price is the main aspect that reflects the combination of these features.

The price is the first thing that potential buyers will look at, and after the number of bedrooms and bathrooms, the square footage, the backyard size, et cetera, price is also the last thing potential buyers will look at. Correct pricing of your property can often mean the difference between just a showing and a sale.

The Fraser Valley Real Estate Board (FVREB) confirms this with their latest news release stating that “buyers [have] the upper hand” right now, but that “[there] is action when the property is competitively priced” (“Advantage buyers…”, FVREB, November 2, 2011). There is a lot of inventory available right now; October saw 1,137 new listings of single-family homes, 573 homes sold in October, and a total of 4,111 single-family homes available for sale at the end of October. So there are almost twice as many single-family homes listed than sold, and seven times as many homes remaining for sale by the end of the month (MLS Detail Sheet, FVREB, November 2011).

If you’re considering putting your home on the market, these are important numbers to consider; approximately 14% of single-family homes listed for sale in October 2011 actually sold during the month. Odds like that should cause sellers to think carefully about putting property up for sale and everything they can do to ensure that their property is one of that 14%. Perhaps you need to look at some repairs, maintenance, or updates to make your property more attractive. A move-in ready home with fresh paint is always to your advantage.

Of course the most important aspect to consider in marketing your property is the price. As it says in Dennis’ Pre-Listing Package (contact Dennis for details), there are three prices for any property:

1. the price you want
2. the price the Buyer wants
3. the price it sells for

Between your ideal price and the Buyer’s ideal price lies the true value of your home.

If you look at Report E from the FVREB for October 2011 for the breakdown of average prices for October 2010 and October 2011, the numbers may be misleading. Breaking down the Fraser Valley by community sub-areas shows that North Surrey single-family homes saw an 11% increase in average prices while Cloverdale saw a drop of 2%. At the end of October 2011 there was only a difference of under $47,000 between these two communities. While this may lead people to believe North Surrey to be more desirable, or demanding a higher sale price, don’t forget that these numbers still only apply to that 14% of available homes on the market that sold by the end of the month.

Pricing appropriate to the market is even more important for townhouses and apartments. Looking at the MLS Summary for October 2011 there were 400 new townhouse listings and 219 sales, with a total of 1,351 available townhouses for sale at the end of October 2011. There are still twice as many townhouses put on the market as there are sales, and these sales represent approximately 16% of available townhouse listings. Apartments don’t fare as well, with 470 new listings and only 209 sales for October 2011, and a total of 1,841 apartments available at the end of the month. Roughly only 11% of apartment listings are selling in a month. And this is the good new as the number of apartment and townhouse sales have gone up – 13.6% and 4.3%, respectively – compared to a 7.4% drop in single-family home sales from October 2010 to October 2011.

These are a lot of numbers and figures, and I’m telling you the increases aren’t as good as they first look, that price growth still isn’t the good news… you might even be asking yourself, “But don’t you WANT to sell my house?” And yes, of course we do. The numbers are important though, as they reflect both the actions and perceptions of buyers in the current marketplace. Buyers have a huge inventory of properties to choose from, and in the current economy, price is always what it comes down to at the end.

You all know that since I’m not a licensed Realtor I can’t actually give any market advice, but given my experience working in real estate offices, with both realtors and mortgage brokers, this isn’t an endeavour to take lightly. It’s a Buyer’s market out there, but you can gain an advantage of your own by finding a realtor you trust who will work with you determine the listing price for your property that will attract the highest number of qualified Buyers.

References

“Advantage buyers…” http://www.realtorlink.ca/portal/server.pt/document/3290664/advantage_buyers____in_fraser_valley%27s_housing_market_%28october_2011%29

MLS Detail Sheet. http://www.realtorlink.ca/portal/server.pt/document/3350976/detail_sheet_2011-10_-_fraser_valley

MLS Statistics Package October 2011. http://www.realtorlink.ca/portal/server.pt/document/3351004/statistics_package_2011-10_-_fraser_valley

Report E. http://www.realtorlink.ca/portal/server.pt/document/3350986/e_report_2011-10_-_fraser_valley

There’s an App for that!

I love gadgets. The more lights, bells, and whistles, the more I like it. I’ve had a cell phone since my undergrad days, a laptop since getting my Bachelor’s degree, and have had my desktop tower cover taken off more than it was ever put together.I got my first Palm m100 about 8 years ago and loved it, and eventually had the Treo 755p phone/PDA convergence. What I loved so much about Palm and their products was the software available for them that I found useful for business, education, and for lifestyle.

Then Apple came out with the iPhone and blew the guts out of my wee little Treo. I got once as soon as they were available through my mobile provider – and once they had them in stock! – and am totally in love with my 32gb iPhone 4G.

Dennis switched too once he saw how much I loved mine, although he’s not as app-crazy as I am. I currently have 166 apps that I’ve downloaded and kept, mostly photography-related apps. But what’s really exciting is all the new FREE apps that are great on their own as well as several that are great for people in real estate. First up: the real-estate specific apps.

1. Realtor.ca

This is an independent app put out by Realtor.ca and allows users to search for properties currently listed for sale near them using the built-in GPS. You can also search for open houses, search for a realtor, and even save your current agent, your favourite properties, or look up properties according to their MLS number. The drawbacks? Unfortunately it does not show recent sales, which is also important to buyers when making their decisions about where they want to move.

2. CIBC Home Advisor

There is no shortage of mortgage calculators available in the App Store, and while they all do pretty much the same thing, CIBC’s app looks to provide users with more information about the home buying process, as well as comparing rental versus ownership costs, “affordability” in addition to the mortgage calculator, and a number of articles about mortgages, equity, and the process of purchasing a home. On the plus side: Get pre-approved for your mortgage ON YOUR IPHONE with a 90-day approval certificate. Drawbacks: It’s only for CIBC. If you’re not a member of CIBC, the pre-approval function may not be appropriate for you, and many times a mortgage broker may be a better choice for buyers as they are able to access lenders from a variety of banks and other sources. Also, I don’t know that I want to share my financial transaction information over Facebook and/or Twitter.

3. MagicPlan

Whenever we go into a new listing to take photos and record information about the house, we need to determine the layout and dimensions of the rooms. It was often challenging with only a notepad and a tape measure, and then trying to remember the floor plans and how the rooms were arranged from memory. And if the homeowner didn’t have the original plans available… well, that’s why all contracts state that the measurements are approximate and it is the Buyer’s responsibility to verify them.

But with MagicPlan, after watching the video tutorials for each step, you need only spend about 10 minutes calibrating the app and then you can measure, arrange, and identify the rooms on each floor of the property you’re working with. Pros: with practice, users can create accurate, professional floor plans for residential properties. Drawbacks: Most apps don’t have a real learning curve and after only one use I know already that I need more practice, particularly for oddly-shaped rooms. But so far I like it, I think it’s going to be a great help to me, and it’s FREE!

Apps for Everyone!

What really drew me to the iPhone in the first place was the advances in the built-in camera compared to my first camera phone. My camera in my Treo was terrible; grainy, poor resolution, small image size, and very little you could do with it. With the iPhone, the quality is as good or better than my first 2-megapixel digital camera was, and with the retina display, users have the capability for high-def resolution in both photos and video.

I won’t get into camera apps, there are far too many to start with and they’ve been covered by a lot of other great tech sources such as TechRepublic.com. But once you have those pictures, there are some really neat apps available.

1. Zapd

Publish a unique webpage in 60 seconds. Okay, that’s their selling line and sure, it took me a bit longer than that the first time I used it, but it was still super-quick! The app comes with twenty pre-l0aded webpage templates with more promised in future updates, and easy buttons to add your text, photos, and web links. Include as much or as little information as you want about yourself, and in publishing your page you can share it on Facebook and/or Twitter. It would also be easy enough to email the link to friends, family, customers, whoever you think might want to see the webpage you’ve created on your iPhone.

The pages are optimized for viewing on a mobile device, but look great on a desktop or laptop screen, too. Not yet available for the iPad, and not available for the Blackberry or Android. And FREE! Did I mention it’s FREE?

2. Viddy

Photography apps are very popular, especially when you can choose your “filters” or “lenses”; the processing algorithms to change the look of your photos. Now this processing choice is available for your videos. Viddy is similar to Instagram in its interface and provides users with a community for sharing short videos of 15 seconds or less. While I may not use this app for virtual tours of our new listings, it’s definitely a fun app for little vignettes of daily life.

Shoot your video with the Viddy application itself or choose one of your existing videos. Then choose from six different effects and adjust the sliders for how much of that effect to apply to your video as well as how much of the music soundtrack you wish to accompany your video. Each effect has a different soundtrack to change the mood of your video. The result is a fun little video that you can produce and then share with Viddy community as well as Facebook, Twitter, and YouTube. Foursquare and Tumblr are coming in future updates as well.

3. Vimeo

Similar to Viddy, but Vimeo allows for longer videos. Currently only offering two processing effects, but likely more are in the works as well. Shoot your video with the Vimeo app or choose an existing video. Users are also able to add clips from other videos and includes a video editor for transitions, titles, and audio from their pre-loaded recordings or import new ones from your iPhone or from iTunes itself. Upload to share with the Vimeo community or save to your iPhone and then email, post, or upload it wherever you like.

4. Splice

Also similar to Vimeo in that it allows for longer videos than Viddy, but is a video-editor app only. Doesn’t record or upload, but allows a little more control in your editing and rendering. Some pre-loaded effects and audio, with more available via in-app purchases from the Splice store.

5. Twitter

I’m not sure I can talk about marketing homes for sale without acknowledging the growing influence of Twitter in the consumer marketplace. Your choice of Twitter app – I use Echofon on my iPhone and Tweetdeck on my laptop – isn’t quite as important as HOW you use Twitter and who your followers are.

For real estate I have one set of Twitter accounts (@surreyhomesales and @kellymbohl) while I have a private one for friends and family. Why multiple accounts? Well, my friends might be amused to know that the boss and I are planning the office golf tournament, but they might not be so interested in our new listings for sale. Particularly if those friends live outside of Canada. Hence a separate account for real estate with hashtags to make searching for homes for sale in Surrey easier.

I love my apps. I love my iPhone. Sorry BlackBerry and Android, but Apple just made it a lot easier for me to do my job and gave me the tools to do it better, faster, and with more features.

What are some of your favourite apps? Drop me an email at kelly@surreyproperties.com, tweet me at @surreyhomesales, or check out the rest of our website at surreyproperties.com which is now OPTIMIZED for mobile devices. We’d love to hear from you.

Mortgage Rule Changes March 18

Canadians Keeping More Equity

The Canadian federal government announced in January that they would be changing some of the rules regarding Canadian mortgages in an effort to help Canadians reduce their household debt load and encourage building and maintaining equity in their homes (http://www.fin.gc.ca/n11/11-003-eng.asp). Starting March 18th the first change is that the maximum amortization period for high-ratio loans is being lowered from 35 years to 30 years. High-ratio loans are those where the loan-to-value ratio is calculated at 80% or higher. Loan-to-value ratio is calculated by subtracting the down payment amount from the selling price of a property, and that remaining value – the loan amount – is divided by the total selling price.

For example; a home in Surrey sells at $565,000.00 and the Buyer has a 10% down payment of $56,500.00. The remaining loan amount is $508,000.00. Dividing $508,500 by $565,000 (the total selling price of the house, or the value) the loan-to-value amount or percentage is 90%, which would certainly mean a high-ratio loan, and the maximum term for that loan is 30 years.

The second change affects homeowners who are looking to refinance their mortgages, reducing the maximum value that they can borrow from 90% to 85% of the value of their home. This means that on the same $565,000.00 home in Surrey, the homeowner can access $480.250 of the home’s value as opposed to the $508,500 that was accessible prior to this rule change. What this does is it keeps another $28,250 in equity in the home rather than allowing the homeowner to take it out in financing, ensuring that the homeowner has a greater value in the home as an asset.

The third change announced by the federal government is that the government is no longer guaranteeing non-amortizing lines of credit where the home is used as security (i.e. home equity loans or home equity lines of credit). That is, home equity loans or lines of credit that do not require a monthly payment on the principal and interest will no longer be eligible for government-backed insurance. This does not mean that they are entirely ineligible for insurance, just that the federal government will not be insuring these types of loans or lines of credit without scheduled principal and interest payments. This change will go into effect on April 18, 2011.

The Competition Bureau and the CREA: What does it mean for YOU?

GOOD QUESTION!

Even working in real estate myself, the whole issue about the Competition Bureau, the Multiple Listing Service (MLS), and the Canadian Real Estate Association (CREA) and what was being negotiated was very confusing. Luckily there is a very simple answer.

The Competition Bureau was mainly concerned with the possibility in real estate that some Realtors were engaging in discriminatory practices against other Realtors or companies, namely not showing clients any properties listed by Realtors or brokerages who offer “mere posting services.” A mere posting service is offering a seller access to the MLS for a low or flat fee under the brokerage’s name for that property to gain access to a wider customer base and exposure to the other Realtors who are searching for homes for their clients.

So what does this mean for buyers and sellers? It really just ensures that there are other options available for both the buyers and the sellers. Most home buyers are going to access the public mls.ca website to see what homes are listed for sale in their target area with a set of customizable search parameters. For sellers, the MLS is the optimal market for listing your home as available for purchase, but there are sellers out there who wish to handle the sale of their home themselves, yet still want that greater exposure on mls.ca rather than the other sites available for owner-sellers.

The agreement between the Competition Bureau and CREA ensures that Realtors and brokerages who wish to offer a different business model – or negotiate with potential sellers for a different set of marketing strategies – will not be discriminated against by other Realtors or brokerage companies. It’s really all about commissions; how much do you want to pay and what duties or marketing strategies are going to be included for the commission you negotiate? For sellers who simply want access to the MLS, a low- or flat-rate commission for a mere posting service may be their ideal choice. For those sellers who want a more hands-on Realtor, or sellers who don’t feel comfortable handling their own sale or negotiations, they still have the option of a traditional sales representative responsible for advertising and marketing, producing marketing packages, and spending the time and money to maximize the exposure of the property to the buying market. Or maybe there’s something in between the do-it-yourselfers and hiring someone else to do it all that is more appealing. This agreement ensures that there is flexibility in real estate marketing services and that each potential seller can take advantage of it.

Interest Rates Inching Up

Wow, interesting that my post last week warns people to lock in their interest rates ASAP because the rates can’t stay this low forever, and here we are, a week later, and the Bank of Canada posted its new rate of 1.00% today. That means the Prime Lending Rate is now at 2.75% and all other posted rates from the banks, credit unions, and lending institutions have followed suit.

Click on the image for a larger version.

What does this mean for Buyers? Well, that’s up for some debate here between the Assistant’s Desk and the Boss’ Desk. My own personal feeling is that Buyers would be best served getting at least pre-approved for financing and seriously consider locking in your rate. This is the third interest rate increase in as many months by the Bank of Canada and they aren’t going to go down again for a long time. Dennis still feels that there is more room yet before Buyers need to get locked in, and the increases have been quite small, in 0.5% increments. What we both agree on is the pre-approval process so that Buyers know for certain how much they can afford to borrow in order to make a purchase.

As for Sellers, personally – and without any sales license at all, just my own experience in working with licensed Realtors for 15 years – I think that Buyers are going to start to get very firm on their price range. If you currently have a property listed for sale, or are thinking of listing a property in the near future, DO consider consulting with a local Realtor and have a Current Market Analysis (CMA) produced for your property. A Realtor is more than happy to give you the best information available regarding what homes like yours are selling for in your area as well as what the current market activity is like in your neighbourhood. A CMA is your best piece of information when it comes to setting the listing price for your property because it allows the Realtor to determine average asking price for similar homes in your area, as well as the average selling price. With that information, you – the Seller – can decide where to price your home; whether in the middle of the pack if you have something more special to offer that other listings don’t, or price it a little lower on that scale to make your property the more attractive option in the local market.

But what kinds of features would that “something more special” quality refer to? It depends; what are most properties like in your area? Maybe you have a similar floor size and layout to other homes, but your property has a larger backyard for kids to play in. Or perhaps you’re located on the corner with two frontages for more parking. Perhaps you’ve renovated recently and have a gourmet kitchen, a home theatre, or a new, luxurious master suite. These are features that a licensed, experienced Realtor can help you with in determining how to price your property for the quickest sale at the best price.

But remember what I said last week; your home is only worth what someone else is willing to pay for it, and with the HST and now a rate increase, Buyers are definitely more in control when it comes to valuing local properties for sale.

Good luck in the market, and if you find you need more information on pricing a property or finding the right one for you, please call Dennis at 604-230-7788 or email him directly at dennis@dfung.com.

Are You Thinking of Buying?

If so, there are a few things you need to know about the market right now.

I decided I needed to do this blog post as the front page of the Vancouver Sun features an opinion piece by Craig McInnes titled, “A home you like and can afford trumps the market.” I couldn’t agree more.

The market has been slow lately, although there are signs of things picking up, but it still feels as if the market itself has gone on vacation. That’s not to say that there aren’t any listings or any buyers, they’re all out there, but things have stalled a bit. The HST confusion, new rules for qualifying for a CMHC-insured mortgage, and the general economy itself seem to have caught up to us now, but McInnes points out a couple of other factors I hadn’t considered.

The first one is in two parts; the report issued from David MacDonald at the Canadian Centre for Policy Alternatives warning that Canada is in a housing bubble that is about to burst, and the brief from the C.D. Howe Institute that argues Canada will not see the same crisis as the US experienced when its housing market tanked.

Once again, I must state that I do not have a real estate license and that this post is based solely on my experience working in real estate offices and directly for realtors and mortgage brokers over the past 15 years. For the best information be sure to contact a realtor whom you trust.

That caveat given, I do not believe Canada is at risk of a US-style bust, simply because we did not have the same type of sub-prime mortgages available here that were sold in the US. Yes, we still have problems with credit cards and living in debt, but even before the stricter mortgage qualifications Canadians were not in the same risk category as were home owners with those sub-prime mortgages. And now with the tighter rules, it further protects our economy from that same free-fall our southern neighbours experienced.

At greater issue right now are two other factors that are influencing the market: interest rates and possible increases, and the pricing gap between Vendors and Buyers. The latter is more easily explained because pricing and home values in the real estate market come down to one principle I have seen borne out over my 15 years: a home is only worth what a Buyer is willing to pay for it.

We’re in a sort of real estate limbo; Buyers are concerned about how the HST really works (although most people seem to have figured that out now), they’ve adjusted their view of their price range in light of the mortgage qualifications, and they are out there looking for the right house. The problem is that there are still many Vendors who are expecting to sell their homes and properties with last-year’s record-setting price tags. And while we’ve known for some time that those prices were unrealistic, that they wouldn’t last, and were likely to disappear quickly, there are still a fair number of vendors whose valuations of their properties are using 2009 pricing.

The problem is that Buyers have already moved on and fully embraced the new, lower-price outlook. That two-storey plus basement home that was listed last year for $900K is not going to attract a Buyer unless you drop it by probably about $50,000. And until you do make a price reduction, Buyers are content to wait it out and look at other, lower-priced properties, out of the fear that buying a high-priced home NOW is going to be a wasted investment in the future.

The other factor McInnes discusses is the question of interest rates. He reminds us that “what most people pay for when they buy a property is not the property itself but the money they borrow to complete the purchase” (“A home you like…” September 1, 2010, the Vancouver Sun, pA1). Interest rates are at an all-time low, and everyone has been urging Buyers to get locked in to these low rates now. Prequalifying for a mortgage before you start your home search is always the best move, as Buyers need to have a realistic understanding of how much they will be able to afford and what the bank or lender can actually offer.

If you are looking to buy a home in the near future, DO go talk to your lending professional, whether at your financial institution or consult a mortgage broker. The difference between the loans officer at your financial institution and a mortgage broker is that a mortgage broker is able to access the interest rates and lending plans from nearly all financial and lending institutions, whether a bank, credit union, or a dedicated lending institution. And while you may engage the services of a mortgage broker, you as the Buyer do not pay the broker’s commission, he or she is paid by the institution for bringing you, the customer, to their services.

The reality is that interest rates have been so low for so long that they will have to go up; there’s nowhere else for them to go and it’s simply all part of the cycle. The big risk for Buyers who may still be sitting on the fence is that waiting to get that financing in place may cost you more in the long run, and may actually cost more than a momentary dip in the real estate market. Even if you only plan to be in the house you buy for five years, in that period there may be several fluctuations in housing prices, but that one instance of a hike in interest rates will cost you for that entire five-year period. And for buyers who plan to raise their family in one home, McInnes reminds us that the value of that home as the place you can actually afford to live is of far greater value than worrying about how much it will sell for from one market shift to the next.

Similarly, there are vast differences in prices depending on the area you’re looking at. We all know this, but the realities are so clear nowadays, particularly when looking at housing prices in Vancouver compared with Surrey. Surrey gets a bad rap for its rapid growth, issues with school populations outpacing funding, infrastructure that needs to catch up in some spots, but pricewise, Surrey genuinely will get you more house for your money. We’ve all seen the websites that quiz you whether or not a property is a “crack shack” or a legitimate million-dollar listing, and we know that there are decrepit houses in downtown Vancouver that will sell for over a million dollars as a “tear-down” simply for the land value.

This is where Surrey and the Fraser Valley can be the right place for some of those disillusioned Buyers being displaced from the Vancouver market. A million dollars in a new subdivision in Surrey can get you that two-storey plus basement home, with one or two rental suites, four bedrooms for your own family, huge two-storey family room, formal dining room, and a gourmet kitchen with granite countertops, tile flooring and splashes, custom cabinetry, and built-in stainless steel appliances. All on a quiet street with a yard where your kids can play safely, and still with all the local amenities, and a short drive to Vancouver. Don’t believe me? Just have a look at any of Dennis’ listings; and most of those million-dollar homes would probably sell for lower than their list price.

So at the end of this discussion of prices, financing, market shifts up and down, and the standoffs between Vendors and Buyers, what do I think you should do? Normally I don’t give advice because technically I’m not supposed to, but I’ll give you some common-sense stuff that even your mom would tell you:

1. Get pre-approved for a mortgage. Seriously, it would be irresponsible to go out and start looking at houses between $800,000 to $900,000 if the bank calls you up and says that because of your eighteen credit cards, unpaid student loans, two cars, and that big-screen TV you bought on store credit you can only get $500,000, and only if you have a $25,000 down payment. That price range will change the type of homes you will be looking at.

2. Use the internet to your advantage. What I mean by this is use the tools that are available to Buyers and prospective Buyers to find out what kinds of homes their price range includes. Think about the things you must have in your new home; include proximity to schools and parks, shopping and amenities, transit, and community features as well as the actual physical things you want in your new home. Maybe a great park in walking distance is worth more to you than a main bathroom with double sinks, or living a little farther away from the fire hall is worth giving up that kitchen island with vegetable sink. These are things that you need to consider too, not just your “must haves” but also the “I can give ups”.

3. Be realistic. This is something that I say with the utmost careful consideration. Everyone has their own idea of what their dream home is, and while we think we know what we really want and what we can live without, every Buyer must be very clear in what the biggest goal of their home purchase is. Is this a starter home and you are planning to move again in a few years? Or is this the home where you are going to raise your family until you’re ready to downsize? Is this a downsize or are you moving for financial reasons? The answers to these questions are going to better guide you and your Realtor in finding the property that fits your wants, your needs, and your budget.

Again, if you have any questions about any of these topics, please call your Realtor or feel free to call Dennis at 604-230-7788.

What you need to know about the HST and Real Estate

There’s a lot of confusion and vagueness out there regarding the incoming Harmonized Sales Tax (HST) and how it will affect the real estate market for both buyers and sellers, and while there are great sites out there that are explaining the ins and outs in detail, I thought we would just provide a summary to give our clients and readers an idea of what they can expect now and upon July 1st. Happy Canada Day, eh?

Will I have to pay HST when I buy a house?

That depends. If the house is a new construction, or has been substantially renovated, then the HST applies. Substantially renovated is defined as a home that has had an addition built on or major renovations completed on at least 90% of the property. Same rules as for the GST, so yes, a new construction home will have a total of 12% tax. Whether the sale price includes both taxes or will be calculated on top of the sale price is a matter of negotiations.

Will I have to pay HST on my Realtor’s commission?

For work that is performed after July 1st, yes, HST will be applied to the services of your Realtor. Here’s a handy table courtesy of the Fraser Valley Real Estate Board’s NewsReal newsletter:

FVREB NewsReal, March 29, 2010

So I’ve already signed a contract to buy a home; do I have to pay HST on it?

Again, it depends; if it is a new or substantially renovated home, then it may be subject to the HST, depending upon when the purchase and sale agreement dates are, and the ownership and possession dates. I have another handy table with figures courtesy of the FVREB:

FVREB NewsReal, March 29, 2010

There are other conditions which may come into play in a Contract for Purchase and Sale and affect a sale that was initially subject only GST and render it subject to the HST instead, but it is best to consult a Realtor for a more detailed explanation in order to either save you the HST or at least minimize any impact.

What about the New Housing Rebates? Will they still be available under the HST?

YES! Thank goodness, eh? Under the current GST, the Federal New Housing Rebate is only applicable for new homes priced up to $350,000, at a rebate amount of $6,300. Under the HST, the Provincial HST Rebate program will be applicable for new homes priced up to and including $525,000 at a rate of 71.43%. A new home priced at $350,000 will then receive a rebate of $17,500, and a new home at $525,000 will receive a rebate of $26,250. Homes priced over $525,000 will receive a flat rebate of $26,250.

What does change is the Federal GST New Housing Rebate plan for homes priced between $350,000 and $450,000, which is replaced by the Provincial HST Rebate plan – that 71.43% on the 7% provincial portion of the HST (NewsReal, FVREB, March 29, 2010).

What about all the other fees and transactions involved in selling or buying a home?

Unfortunately most of those are going up. Yippee. Here’s yet another handy-dandy chart this time from the British Columbia Real Estate Association!

BC Real Estate Association, July 2009

So are we good on buying or selling a home in the next little while? So-so, I get it. It’s a weird time right now with all this tax junk happening and it really is hard to try and keep it all straight as to what is and isn’t eligible for the HST. Have you seen the document from the Provincial government? It’s ridiculous!

Well, that said, for better answers, better detail, and perhaps some strategies for negotiations to hopefully minimize your experience of the HST on real estate sales or purchases, do call your local realtor, or give Dennis a call at 604-585-4343 for some no-obligation information and advice on dealing with HST, pricing, or any questions about buying or selling.

Good news and bad news…

…okay the bad news first: fixed-term mortgage interest rates are going up. But that’s not really news unless you’re just emerging from your post-Olympic and -Paralympic coma. Not only are the rates going up, but despite the rate quote you may receive from your mortgage advisor or broker, you as a buyer will have to meet the qualification requirements for the posted five-year fixed term rate, which is going up to 5.85%. Even if you will be getting a lower rate for a shorter term, you’ll still need to qualify for that five-year rate.

Why? It’s part of the Federal Government’s restructuring of the mortgage rules for government-backed insured mortgages coming into effect on April 19th in order to help prevent a housing bubble – and the inevitable collapse – as we saw not long ago in the U.S.

So where’s the good news, Kelly? We’re going to have to have more money in order to borrow less! What’s good about that?

Well buyers, it means that the market conditions are going to change. If you’re looking to buy a home and your buying power is changed or reduced, it doesn’t mean you won’t be buying, but it will change your price range. Buyers will be signalling to home sellers that the price the market will bear on a given home may not be supported as it may have been prior to the Olympics.

It may take some time for these new conditions to present themselves, though; between the interest rates, new mortgage qualifications, and the fear and suspicion surrounding the new HST, it may be time for buyers to take action now. Remember that the HST only applies on house sale prices for new constructions only as does the GST, but it does apply to the services involved in the sale and purchase of properties, such as legal and conveyancing fees, Form ‘B’ orders for strata properties, and home inspections.

Our advice? Buyers, talk to your licensed mortgage professional about the new qualifications and your options, and get qualified before you start looking for your next home. Once you know your price range, you’re in a better position to make your “must-haves” and “deal-breakers” lists.

Home sellers, talk to your real estate professional and discuss the current market conditions with an eye to watching how it will fluctuate as these new factors come into play. Good realtors have an effective marketing plan for your home to promote it in the best way possible, but accurate pricing for the market is always the key to putting your home on a prospective buyer’s tour list.

For more information about the rising interest rates, the new mortgage qualifications, and how this will affect the market, check out some of these articles:

• Industry not surprised by Flaherty’s mortgage rule changes
• Mortgage Rate Increase, how does this affect you and why now?
• New Government Guarantee Parameters for Mortgage Loan Insurance and CMHC Product Changes

Sources: camiloblog.com, vericoideal.com, Canada Mortgage and Housing Corporation

Dennis & Kelly’s “Culture Crawl”

Ah Fridays, I love Fridays. The work week is over and we all sit at our desks, workspaces, or wherever your “office” happens to be, counting down until that magical time when we all imagine ourselves like Fred Flintstone hollering our excitement for quitting time.

Okay, I admit it, we’re taking off early tonight even though it’s not a long weekend. Dennis still wanted to take in some of the arts and theatre performances visiting Vancouver as part of the Cultural Olympiad so tonight we’re heading downtown to the Centre in Vancouver for Performing Arts to see the U Theatre of Taiwan performing Sound of the Ocean. The U Theatre company is a Zen drumming group who all live together on a remote mountain outside of Taipei practicing their music, dance, and cultural traditions. There is little information about the group itself via the web, and the company doesn’t have an English website, so hopefully they will have a brochure with more of their history and background.

Unfortunately I can’t seem to find a Taiwanese restaurant close to the theatre – the closest is the Taiwan Beef Noodle House on Granville at W. 29th Ave – so we might have to choose sushi or another Asian cuisine tonight. Not that I mind, I love sushi and the Greater Vancouver area has some fabulous sushi restaurants, from downtown to the suburbs of Surrey and Langley, everything from the best of the best (i.e. Tojo’s) to some great little unassuming places where they just do sushi well.

I love pretty much all Asian cuisines, and Dennis gets a kick out of it that I have several pairs of chopsticks in carry cases to throw in my purse for those times when I’m out and about and find myself having sushi, noodles, or dim sum. I think I could easily survive on sushi and sashimi, and it’s probably the pickled ginger that I love most.

We’re so lucky here in the Greater Vancouver region that we have such large populations of so many different cultures, you can go out every night for weeks and try a new cuisine or regional variation of cuisines you think you already know. I would be hard-pressed to choose between any manner of restaurant; we’re terribly spoiled at having the convergence of incredible local produce and seafood, easy access to international ingredients, and skilled, talented chefs who make the most out of what we have.

Well, back to the mailout, we’re heading out in a little while and I need to clean up my desk for Monday morning.

Post-Olympic Hangover? Not here!

It’s been quiet here in the office this week, which seemed appropriate for the nice weather we’re having. Dennis got in a round of golf the other day and I got caught up on some paperwork that I never seem to have time for when we’re busy. It’s kind of nice to have a little break to regroup, do some of those “housecleaning”-type tasks, and think of what to do next. Not just real estate, but all sorts of things that start again once the weather cooperates a little more.

So far on the list for tomorrow: taking the camera out to see if I can get pictures of the pair of bald eagles who roost in the trees between my house and the office, some more pictures of local cherry & plum blossoms, and perhaps coffee on a patio somewhere. The boss has a golf date tomorrow – it’s still a little chilly for me yet, but my clubs are in the trunk! – and walking the dog out at the dog park.

Sunday is looking better and better every time I check the Weather Network so it might be a good day to head downtown and visit with some friends.

I’d write a little bit more but it’s five minutes to 5PM and I’d like to get out of the office while there’s still daylight!

Happy Friday, everyone!