It’s Not Always About the Price

That is when it comes to Offers....

When considering which of two or more competing offers to accept for your home, there is no doubt price plays a huge role. After all, if Offer #1 is $10,000 higher than Offer #2, that’s an enticing difference that puts thousands of extra dollars in your pocket.

Price isn't always #1

However, price isn’t the only thing you should think about when comparing multiple offers. There are other factors you need to consider as well.

For example, what conditions are in the offer? If Offer #1 is conditional upon the buyer selling his current property for a specific amount, then what if that doesn’t happen? You could end up with an offer that dies and be forced to list your home all over again.

In that circumstance, accepting the lower offer may be your best move.

There’s also financing to consider. Most buyers will attach a certificate from their mortgage lender to show that they can afford the home and will likely secure financing with little difficulty. If you get an offer where the ability of the buyer to get financing is in doubt, that’s a red flag.

The closing date is another important factor. Offer #1 might propose a closing date that’s perfect for you, while Offer #2 is four weeks later. If you’ve already purchased another home, you might require a month of bridge financing if you accept Offer #2. There’s nothing wrong with that per se, but the costs and additional hassle are factors you should consider.

As you can see, assessing competing offers isn’t as easy as it looks. Fortunately, as your REALTOR®, I am able to guide you toward making the right decision.  Let my experience go to work for you.

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Fixture or Chattel? Does it Stay, or Does it Go?

As a REALTOR®, the question of Does it Stay or Does it Go comes up with every transaction. The technical terms; fixture or chattel, are how they are described. As a buyer or a seller, it is important to know what is really included in the sale. I’ve asked my law student Ghost Writer, B. Sacamano,  to help answer this question and the following is his article. B’s experience includes being a REALTOR® so the fixture chattel debate is discussed in an understandable way.

Fuzzy Dice

Have you ever bought a used car? What was included in your purchase? Were the tires included? How about the seats? Of course they were, they are after all, part of what makes it a car. The half used container of engine oil in the trunk was probably removed prior to the sale. As was the emergency road side assistance kit, and any other personal belongings not essential to the operation of the car in its capacity as a drivable car. The fuzzy dice hanging from the rear view mirror for example, the atlas in the glove box (younger readers feel free to google what that is), and the stack of cd’s under the front seat, all disappeared prior to you driving away in your new ride.

I’m hoping that this analogy will provide a bit of clarity regarding what’s included, and not included in a house sale. At the very least it should get you thinking so you can ask the right questions at the appropriate time of the sale. All too often the REALTOR® gets a frantic call after possession day regarding something that has been taken or switched out for something different. And the best way to deal with this issue is to prevent it from happening in the first place. This pre-emptive attitude will require knowledge of fixture’s and chattels.

Chattels can simply be described as personal property, and would not be included in any sale unless specified in writing. From our car analogy, this would be the half-used oil in the trunk, the atlas and the fuzzy dice. Conversely, a fixture is attached to the land (or home) in some way, and as such would by default be included in the sale. From our car analogy, this would include the tires and the seats. They are essential to what makes the car a car.

This seems simple enough, if it’s attached it stays, and if it’s not it goes, right? Not quite. Confusion arises when chattels become fixtures, either intentionally or unintentionally. You see, there is a legal principle that says whatever is attached to the soil becomes part of it. In other words, if an item of personal property is attached in some fashion to the land or the house, it will become a fixture and henceforth transfer ownership with the land.

This is of course the difficulty in answering the fixture or chattel question. The seller may have never intended an item of personal property to become a fixture in the first place, whereas the buyer may have assumed the item is included as it appears to be a fixture.  Unfortunately the courts have decided the issue both ways; they have on one hand said that the physical attachment of a chattel is enough to indicate that chattel is actually a fixture, [1] and they have also conversely said physical attachment is not enough.[2] Essentially it comes down to the particular set of circumstances.

So what’s the simple solution here? Basically, if you want the container of oil, or the fuzzy dice, make sure to ask for them. Don’t assume they are included in the deal just because they were in the car when you looked at it. And likewise, if you’re going to put the original wheels back on the car before possession, make sure to stipulate that at the outset. When in doubt, you have to write it out.

[1] Holland v Hodgson (1872) LR 7 CP 328

[2] Monical –v- 0793545 BC Limited, 2013 BCSE 25

If you have any further questions, please contact us or feel free to leave a comment or a like and check out our Facebook and twitter feeds.

Home Buying Is a Process – What should you do next?

Do you have a plan?

The home buying process can be exciting and fun or it can be a time of stress and anxiety. This is greatly affected by what process or plan you have implemented. It will also depend on the type of Home Ownership you have decided to pursue.

Home Buying Process

There will be common factors like:

  1. Establishing your budget and Level of Risk Tolerance
  2. Getting Pre Approved
  3. Contact Your Real Estate Professional
  4. Determining Wants and Needs
  5. Review  of properties currently available
  6. Physical introduction to suitable properties.
  7. Educating yourself on neighbourhood and surrounding area.
  8. Shortlist Properties
  9. Make Conditional Offer on preferred Property
  10. Review of Documentation
  11. Arrange Inspection
  12. Remove Conditions
  13. Complete Purchase
  14. Move in.

Step 10 is pretty straight forward when buying a house because you will only be reviewing about 5 to 7 documents depending on the property. Purchasing a strata titled property (Condominium)  is much more complicated. You will need to ensure your plan includes a review of all Strata Documentation.  Your Real Estate Professional will be able to guide you through this part of the home buying process.

Home Buying Process – Documents To Review

  1. Title: What is registered against the title and how might it affect your property.  Restrictive Covenants or Easements, and Rights of way will remain on the title so know what they are for.
  2. Occupancy Permits: Has all work been completed and an occupancy permit provided.
  3. New Home Warranty: If the property is newer (less than 10 years old) it should have some New Home Warranty coverage.
  4. Developer Disclosure: If it is a new building or owned by someone who owns more than 5 units a Disclosure Statement may be available.
  5. Strata Property Disclosure Statement: The Owner will have completed this disclosure letting you know more details.
  6. Strata Plan: This one is key to understanding what it is you are actually buying.
  7. Bylaws: Even in the simplest of Strata’s there is a set of Bylaws. Strata’s can have restrictions as to Children, age, Pets, business etc. Know what they are before you buy.
  8. Strata Plan General Index: Bylaws, designations of Limited common property can change. These need to be registered in order to be valid.
  9. Form B (Information Certificate): The Strata Council will issue the form b and provide information on Parking, storage, contingency reserve, etc. It is important to compare this info to other info you receive. We once received documentation saying the parking was Common Property when the Strata Plan correctly identified the parking as Limited Common Property. There is a difference.
  10. Form F: Usually obtained to ensure payment of strata fees is up to date.
  11. Depreciation Reports: Became mandatory in BC on December 14 2013. Not all strata’s will have one since they are still able to waive the requirement by a 2/3 vote at a strata meeting. If one is available, this can be a very valuable document in your decision making process. These documents are typically long (40 pages) and include a broad range of information.
  12. Engineers Reports: If there are any, you want to have the opportunity to view them. They will cover structural and geological issues of a strata.
  13. Inspections: The Depreciation Report is a big inspection of the entire strata. An inspection will reveal any short comings of the Unit itself. These could be leaks under the sink, tub enclosures, electrical deficiencies etc.
  14. Minutes of Strata Meetings: Whether AGM’s, council or special meetings these documents are important. They will contain correspondence as well which can give an indication if anything odd is taking place.
  15. Legal Opinions: The form b will tell you if the Strata is involved in any lawsuits.
  16. Budget and Financial statements: Very important to know the financial strength of the strata.
  17. List of owners is sometimes available for review as well.

Making major decisions involves going through a process. The home buying process must have a strong plan to be successful. A strong process leads to wise decisions.

Strata Titled Properties and the Home buying Process is our specialty. A complicated transaction can benefit from an experienced guide. Knowing what red flags to look for could save you from grief later on. Please contact us  if you are needing help in locating the right property or if you are needing help with your review of your documents.

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Condominium – What does that really mean?

We often hear the word condominium shortened to condo. And for many it has become synonymous with Apartment style housing. In this post we will unpack what Condominium really means.

Commercial Condominium Project

Terminology in Real Estate can sometimes be a bit confusing so when selling or purchasing a property you need to understand what it is you are buying or selling. Condominium is defined as per the Oxford dictionaries as:

a building or complex of buildings containing a number of individually owned apartments or houses.

In British Columbia it also means any property that is part of a strata titled group of properties. This can include; Apartment style, Townhome’s, Duplex’s, Bare Land Strata’s, Commercial Properties and Mixed use Properties. You may not even know what category you are buying!
In British Columbia, these types of properties used to be governed by the Condominium Act.  This was replaced with the Strata Property Act and it is the governing authority. You will recall in my previous post  we discussed different types of ownership. It was mentioned that strata ownership represents approximately 50% of all ownership types. This will vary depending on community but it is significant to note that a strata (condominium) transaction is typically the most complicated type of transaction you might ever enter into.
Every Condominium is subject to the strata title act which outlines the responsibilities of the owner as well as the strata corporation. Now the term strata corporation itself needs some defining.
By default, the owners of the condominium are also joint owners of any common property (Assets) of the development. This joint ownership is what is called the strata corporation. The strata corporation is managed by a strata council which acts for the benefit of the owners as whole. It is a common practise for the strata corporation to hire a Property Management company to assist them in ensuring the corporation is run correctly.

Key Areas of Condominium Ownership:

  • ByLaws – Every Strata is governed by a set of bylaws. These bylaws are either established by the strata corporation or they are by default the bylaws specified within the Strata Property Act

A common error when buying bare land strata is not recognizing these still apply.

  • Strata Plan – The strata plan shows you what type of strata you are involved in and what you actually own.

the ad said your unit came with 2 parking stalls. Do you really own them?

  •  Engineers Reports & Depreciation Reports – These reports, if available, can be key to making a good decision on whether or not you should buy a particular unit. They are also valuable tools for the Owners in making good decisions on managing their assets.

Knowing when a major asset like a roof or heating system needs replacing is key in budgeting for a strata. Also important as a buyer to know if something major is upcoming and how it will be paid for.

  • Financial Statements – Gives you a clear picture of the Financial health of the development and where they are spending money.

A key thing to look for is whether or not the expenditures match the budget. If the maintenance budget is not being spent, are there going to be deferred maintenance issues?

  • Minutes of Strata Meetings – These minutes are the records of any Strata Council, Annual General Meetings and Special Meetings. As a buyer you will want to see a minimum of the previous 2 years on record.

Reviewing these documents will help give you a sense of the management of the strata corporation. Does the council overstep their level of authority? Do they deal with things in a timely manner? Are their changes to the bylaws moving forward? Special assessments?

This brief explanation of a condominium and what it means is only meant to alert you to some of the key areas to look at. As mentioned earlier, it is a complicated transaction and you are best advised to seek expert advice.

As a real estate professional I am qualified through education and experience to help you in one of two ways.

  1. Buying or Selling a Condominium: Able to help you navigate the entire process as your agent.
  2. Strata Property Review service; A comprehensive evaluation of the key areas identified above. As a Buyer this is important before you make your deal firm. (If we are acting on your behalf as in option 1, this service is included).

Please feel free to contact me at any time should you need any help. And please feel free to comment or share this post.

 

Will Our Real Estate Market Change Soon?

There is certainly lots of talk about the possibility of change to our real estate market and to our industry. Our Government seems to be intent on doing their part with the implementation of a new property transfer tax. Others have posted our industry should change because of perceived conflicts of interest and what could be referred to as “An Old Boys Club” mentality. I believe the term “incestuous relationship” was used.

Change happens

This conversation for me is deeply disturbing. In over 30 years of being an Agent, Manager and a Broker Owner, I have always tried to adhere to what my Dad taught me. Treat people right and the business will come. Have I been perfect at this? Nope! Do I always try? Yup! Can I get better? You Betcha! Getting better everyday should be what it is about. Looking out for my clients interest must always be my number 1 priority.

I know there are many others like me in this industry and I would have no problem naming many without hesitation should you ever want a list.

There has been ton’s of change over these years. Technology, regulations, Legal issues have all driven their own change.  I remember the computer terminal we first had. It was about 2 feet wide and 3 feet long. Reams and reams of paper were used as we would print out listings and other info. Any one remember Dial Up modems? Do you know how slow 300 baud is compared to today’s high speed connections? Our first Fax machine cost over $3,000.00 and used thermal paper. After about a year you couldn’t read what it said!

Of course for many, I am speaking a different language. You likely don’t know what a baud rate is or even a fax machine. Well, we could talk about a bunch of stuff here but the reality is “Sure things will change.”

Is this new tax a good thing? I don’t know. Maybe in the long run but what about those people caught with a deal that might not close because someone won’t pay the added tax? What about the person who might be depending on that sale to complete so they can move forward on their commitments. Seems to me some innocents could get burned in this process. It isn’t to be applied east of Langley but will it drive foreign investors here? Could that be good?

Will our market crash? I don’t know. Maybe it will do like it usually does. Level off, and then decline 5 – 10% over the next 4 – 8 years. The factors driving this market are different than any other experienced during my time.

Change is a given. Our market and our industry will always change. Sometimes for the good and sometimes not so good. The more important question is “How will I navigate what is to come?”

So Here is Some Advice for Change:

  1. Don’t be part of the herd. Just because everyone is doing something doesn’t mean it is a smart thing to do. Use your head.
  2. Choose to be represented by someone who has experience and familiarity with all aspects of the transaction. The legal issues and complexity of today’s transactions need to be considered.
  3. Know your limits. Yes, a level of risk is sometimes good but not everyone is comfortable at the same level.
  4. Be clear on your objectives. What is it you are trying to accomplish.
  5. Most important of all. Work with someone you trust.

The real estate market adds a significant amount to our economy so a discussion of what affects it is worthy to take place. Please feel free to leave your comments or likes. If you have any questions about real estate please feel free to ask. I will do my best to answer them.

The Top Three Characteristics Your REALTOR® Should Exhibit

There are polls that have been published about the most trusted professions. I checked out two of them and found my chosen fields to be among the lowest. In fact on the Ipsos Reid survey my role as a realtor wasn’t even listed. On the other, Bloggers came in tied with politicians and incrementally higher than car salesman. What do you say to that?

Realtor Trusted Professional

I am determined to do my part in changing that perspective. One at a time.

First – Your REALTOR®

My career in Real Estate has spanned 30 years and I have had the very good fortune of working with some fine people. Notwithstanding, (I always liked that legal word. Just means in spite of. I looked it up) the polls, there have been more than a few of them. The screening, legal ramifications and training required to sell Real Estate in BC are quite rigorous so it is usually the good ones that last. Unfortunately, I have also met the few who have given us a bad rap. But they are definitely in the minority. Based on this experience, if you were to ask me what to look for in a REALTOR®, I would list 3 Characteristics.

  1. Trustworthiness
  2. Competence
  3. Confidentiality

So let’s take a quick look at what these might mean since it is important for you to know who you are trusting with a significant part of your life.

1. Trustworthiness

A lot has been written about trust. Steven Covey wrote a book called ‘The Speed of Trust’. An excellent book that tells you what happens when you have trust. Patrick Lencioni wrote 5 Dysfunctions of a Team where he says the basis for any team to perform must be trust.

I was listening to someone speak a while ago, sorry don’t remember who, and they had an interesting take on trust. The books mentioned above tell you what you can do when you have trust. But how do you describe what it really is. This speaker basically said trust was something you could feel. You instinctively knew whether or not you couild trust the individual or not.

A persons record and reputation will give you a good indication of this but you should also feel comfortable with the person you are going to deal with in matters of great importance. Real Estate is one of those times. The person you are going to work with must be turstworthy and make sure they are someone you will enjoy working with. Most of the time, it is going to be a relationship that could last for quite a while.

2. Competence

There are different levels of competence. And different areas requiring different types of competence. A good realtor will be competent in:

  1. Product Knowledge
  2. Market Knowledge
  3. People Skills
  4. Social Skills
  5. Negotiating
  6. Follow through

A solid combination of these characteristics will enable your move to proceed much more smoothly than one where any are lacking in a significant way.

3. Confidentiality

Some one once asked John Maxwell to teach a course on business ethics. He said he couldn’t do it. His reason was that you either are an ethical person or you are not. An ethical person will understand what needs to be held confidential. They will be aware of the need to disclose what needs to be disclosed and what should not be disclosed. A REALTOR® is guided by a code of Ethics and a good one doesn’t have to refer to the printed version to know what is right and what is wrong. They just know.

If you are looking to enter into a contractual relationship with someone to represent you with perhaps your most significant investment, you owe it to yourself to establish a criteria from which to make such a decision.

My experience as an agent, manager and an owner has given me some pretty interesting stories. And I am proud to say most of them are very good stories. I would like to keep it that way so I hope this helps you in deciding who you should be contacting as your representative.

If you have had a good experience with your REALTOR® why not comment or post on Facebook or twitter what made that experience work well.