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.

 

Home Ownership – Is it Right for You?

And what type .......

Of course you want to own your own home! This is Canada. Home ownership is the Great Canadian dream! And what do you mean what type? Aren’t they all the same?

Home Ownership

Let’s take this one step at a time. Home ownership has several different aspects that can affect your decision. Some advantages and some disadvantages. Click here for 6 mistakes Home Buyers Make.

Advantages of Home Ownership

  1. It is the place you call home. You might say the place you rent is also home but when your landlord decides it is time to sell, you are forced to move. Owning your own home gives you the choice.
  2. It is a great investment. With Real Estate you are likely going to see your investment grow over the longer term. Sure their might be some ups and downs but the majority of wealth is built through wise investments.
  3. It is a way you can establish memories of your family. Your kids will grow up and leave but they will always remember where home was.
  4. It is where you can demonstrate your ‘pride of ownership’. Paint your home and its walls any color you like. Decorate it with your style. Show it off. Your earned it.

Disadvantages of Home Ownership

  1. Home ownership has a cost to it. Acquisition cost and maintenance cost.
  2. Home ownership takes an investment of Time as well as money.
  3. Home ownership is not a liquid investment.

Types of Home Ownership

  1. Single Family Detached – 59% of residential properties sold this year on the MLS were Detached houses of some form or another.
  2. Attached Strata Properties – Commonly known as Condo’s or Townhomes. They represent about 41% of the MLS sales this year.
  3. Co – operatives – Usually town homes or condos owned by a corporation that sells shares in the corporation to the residents. Quite often a lower cost form of housing and great for young families.
  4. Lease-hold properties – Resemble strata with the main difference being the existence of an underlying lease on the land so ownership is subject to the lease. Not to common in Abbotsford but Chilliwack is another story.

Rental properties is kind of a form of ownership because as with all of the above, your payment affords you a bundle of rights to use the property. Knowing which rights you are purchasing is important.

Home ownership of a strata property has become somewhat of a hot commodity lately as the price of the detached house slipped out of reach of many. And it is good to have this as a choice. When looking at Strata Properties, there are a number of technical issues that come up and will be the topic of an upcoming post.

Home Ownership is a good thing to consider. When looking into it make sure you go in with your eyes open. You need to know:

  1. Your budget – Remember having a life is good too. Don’t become house rich.
  2. Size of your family – Is it going to change soon?
  3. Location you like. Schools close, Shopping, Parks, Entertainment, Transit, Church’s. These all make for more sustainable living.
  4. List of must have’s and wants. Prioritize.

Navigating the waters of home ownership is full of technicalities, legalities and personalities. My best advice to you is to get a guide you TRUST. Your best interests are the required priority. Please feel free to contact me should you need any answers to your questions.

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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.

How to Safely Sell Your Items Online

When you are planning to sell your home and move, you may decide it is a good time to downsize and sell some items of value that you have collected over the years.

Office Clutter

And then again, if you are like me, you just need to clear a bunch of stuff out. Have you ever kept something thinking it had value. Just think. When was the last time you used it? They say if the answer is over a year you should chuck it. But I might need it some day! Throw it out!

You guys ever have that discussion with yourselves?

Recently I decided to redo my home office. I could not believe the amount of crap I had been hoarding over the last 15 years. I am sure that once I took it all out of the room, there is no way it would fit back into the room. In fact, I now have the frame of what was a very good Ikea desk sitting on my back deck. I tried three times to sell it on Abbotsford Bidding Wars but no takers. So there it sits. Not for long because I am sure Sonya will soon grow tired of my ideas on how we could use it again. Throw it out Don! Ok.

Well as you can probably tell, I might not be the best guy to talk to about the stuff you want to sell or get rid of. Thats why I have added this great article on what How to Safely Sell Items Online. I hope you enjoy.

sell your stuff

How to Sell Stuff Online

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2015 – A Review of Real Estate Market Value

What happened to your property value?

A very common question I get as a REALTOR® is “How is the market” Typically we understand that to mean is “Is the value of my house going higher or should I be worrying about a bubble?”

House Price Index Average 2015

To say the real estate market in Abbotsford and Mission areas was active in 2015 would not really do justice to the level of activity we have had. Robust would be a better word. The number of properties that sold was up 33.8% in Abbotsford and 37.1% in Mission. New listings were up only 9.3 and 3.6 per cent respectively.

Market value on average increased about 11% in Abbotsford for a typical Single Family home December 2014 to December 2015. Mission experienced increases of 17.3% for the same time period. This is based on the average price of a single family home as per the House Price Index published by the Fraser Valley Real Estate Board.

Jorda Maisy, president of the FVREB had this to say :

The market remains buoyant, and with very low inventory currently there is tremendous
opportunity for sellers. For buyers finding it challenging in their search, REALTORS® are recommending they consider a variety of housing options and communities they may not have considered. There’s a lot of choice out there, you just need to know where to look.”

The next question that may come mind is “What will market value do this next year?” Unfortunately for that one, we cannot accurately predict what will take place. Time will tell the tale of what actually happens but my experience tells me we could expect a levelling off on the activity and depending on our supply, Market Value might level off as well.

Three things that will impact Market Value

Inventory Levels:

Currently our inventory levels are at around 60% of what they would normally be. I recall a similar situation in 1989 and 1990. An extemely robust market caused values to increase and inventory levels to plummet. In the Spring, inventory levels returned to normal and beyond causing a levelling off of our market.

Demand

Some predictions are we will have a strong migration of people to Abbotsford which would fuel the demand. People will need a place to live. Either rental or purchase. Either way demand should be good throughout 2016

Interest Rates

While the Bank of Canada Rate has remained somewhat steady, there is talk that it could go down and perhaps even become negative. This would happen in order to stimulate our economy. You should talk to someone who is smarter than I about such things but the Mortgage rates may actually increase. They are based on the Bond rate and apparently they may go up. Should interest rates go up significantly, it will affect the price of our homes.

Me out on a limb… Or in Summary…. I predict that you will see continued activity in our market but with more modest growth in market value in both Mission and Abbotsford. 

To see what is currently available just click on this link.

If you are interested in getting your property value updated, please feel free to contact me. I am only to happy to provide that service to you. If you found this article interesting, please like us on facebook or share through twitter.

 

October’s Abbotsford Real Estate Stats

What's the real estate market doing these days?

October real estate stats are out and they tell an interesting tale. The FVREB says “No sign of slowdown for the Fraser Valley….” Get the complete report by clicking here or you can follow this post to get my take and point of view.

This Chart is a look at the real estate market Stats for the month of October over the past 8 years. I’m not a statistician but I thought this could give us an interesting perspective of where we are in relation to other years. We will take a look at the three main areas of activity. Namely; Detached Housing, Townhouse’s and Apartment’s.

  1. Detached Housing Highlights.

    1. Inventory levels are at very low levels.
    2. Currently less than a 3 month supply of houses.
    3. Sales to Active Listing Ratio is high at 39%. (Sellers Market)
    4. Sales are up 46% from one year ago
  2. Townhouse Highlights

    1. Inventory levels have remained relatively constant compared to Detached and Apt.
    2. Currently 4 month supply.
    3. Sales to Active Listing Ratio is at an 8 year high of 24%. (Sellers Market)
    4. Sales are up 28% from one year ago
  3. Apartment Highlights

    1. Inventory levels are down almost 200 units from the high in 2010.
    2. Currently a 4.5 month supply. A signifcant change from 2010 where there was over 8 months supply.
    3. Sales to Active Listing Ratio is currently at 22% (Sellers market)
    4. Sales are up 19% from one year ago.

We can interpret from these real estate stats the following

  1. There will remain upward pressure on the price of Detached housing as long as inventory levels remain low and the demand remains high. People may hesitate to put their home on the market without being comfortable knowing they will find what they are looking for.
  2. The townhouse market will continue to remain steady. A more in-depth analysis would also take into consideration the type of units these are. An example of this would be whether or not they are age restricted.
  3. The apartment market would seem to be heading for a bit of a resurgance if the inventory levels continue to drop. After a number of years of poor performance, I believe we could begin to see a return to some appreciation in the value of some of the used apartment units with continued lowering of inventory. That would mean an apartment may make for a pretty good investment for your retirement portfolio given the right circumstances.

We often think of real estate as an investment and for most of us it is usually our single largest investment. This makes it important to understand what is affecting it. It is also a place where we call home. The place where memories are made. Relationships forged. So we can’t just look at it from a statistical point of view. But we need to be certain we are aware of what is happening so we can make informed decisions.

I hope this give you some insight into the real estate market conditions in Abbotsford. If you are interested in learning how they might affect your decisions regarding your property, please feel free to contact me at your convenience for “Friendly Service all the Time” 

 

Abbotsford May 2015 Real Estate Market Stats

What is happening in your Neighbourhood?

The Abbotsford Real Estate Market remains very active and we are now experiencing a strong sellers market in many areas.  Inventory in single family houses has dropped 20% from one year ago but remains relatively unchanged from April of this Year.

Get all the Stats – Click the Pic to Get Your Real Estate Market Stats Report!

Real Estate Market Report Cover

 

How does this affect your property? Click the Pic to get an up to date Market Evaluation of your Home!

What will happen when you do?

You will be asked for information about your property. I will receive a notification you are interested in knowing more about your property value.  The more information you provide will help make the evaluation more accurate. A complete CMA will be provided to you in a timely fashion. I will personally follow up with you to make sure that we have answered all of your questions. If you would like more information we can discuss it at that time. If you don’t need any thing else then that will be the end of it. Please understand this in no way obligates you to use my services as a REALTOR.

Your Abbotsford Home Value

Your Abbotsford Home Value

If you have a question about Real Estate and the Abbotsford Market, just leave a comment or let us know on Facebook or our twitter feed.