Occasionally in Vancouver I meet potential home buyers who tell me they aren’t planning on using a buyer’s agent, as they hope to save a bit of cash by going direct through the listing agent. This misconception can be a costly mistake as you typically opt to use a “No Agency Relationship” which means you don’t receive proper representation throughout the deal. Most buyers aren’t aware of the severe repercussions that can result from “trying to do it on your own,” so I’ve listed a few things you should know prior to making any decisions:
- The listing agent has a contractual agreement to get the Seller not only the highest price, but also the best deal for his/her clients.
- How will you know what is actually fair market value and what to offer first? Sure, maybe you can negotiate a few thousand off the asking price, but how do you know the home isn’t grossly overpriced especially in a shifting market?
- Did you know that anything you tell the listing agent should be considered the same as telling the seller? Remember these are professionals you’re going up against, one slip in regards to your financial position or motivation for buying a home and it could cost you some serious cash.
- Who’s going to negotiate The Contract of Purchase and Sale to look out for your best interests? Even if this isn’t your first time buying a home the process and legalities surrounding the transaction are constantly changing. The listing agent is not able to offer any recommendations in regards to the offer price or specific clauses you should put in to protect yourself....and why would they?! Remember, they have a contractual agreement to get the Seller the best deal possible.
- Lastly, who’s to say the listing agent and listing agent’s brokerage will even be open to cutting the commission? They definitely don’t have to and many won’t. There are added risks put on the agent’s and the brokerage’s license when working both sides of the deal and therefore most require the reward to outweigh the added risks involved.
Think of it like this: if you found yourself in legal matter would you ask the plaintiff's lawyer to defend you?
My Buyers in Vancouver on average pay only 97.33% of the asking price. Most will pay much less, while others find homes that are priced sharply or wait until right after a major price reduction, at which point we make a strong offer right away so to not miss out.
By using a REALTOR to represent you to buy a property in Vancouver you get peace of mind. You’ll have a great understanding of what you’re buying, what other homes have sold for in the area and you won’t have to wonder if maybe you paid too much. When things come up (and trust me they will), during the process you’ll have someone not only with experience, but also someone you can trust for guidance. The best part is my fee is paid for by the Seller, so it’s a free service to you!
TAKE ADVANTAGE!
It’s been a crazy year thus far for the Vancouver Real Estate Market....
It started off strong, but quickly started to cool down in the spring, really not deciding what direction to head even still as we head into winter. The media has tried to scare us, the REALTORS have tried to reassure us and the Bank of Canada threw us a few curve balls, like dramatically changing lending restrictions with a little more than two weeks notice.
It’s the first time in a number of years we’ve seen any sort of uncertainty in the Vancouver Real Estate Market, so naturally all sorts of industry professionals give their two sense worth. Some took extreme positions - thinking back to a certain REALTOR who grabbed the front page of The Province by stating it was “time to cash out” - while others took a more neutral approach, understanding that all real estate markets are cyclical. Yes, it’s certainly been a unique year, yet here we are, our home values still relatively unchanged and getting ready to do it all over again in 2013.
So what can we expect for next year? I thought I would share with you the modest, yet positive, local market predictions for spring 2013 produced by CMHC, which you can read here.
One thing I take comfort in knowing as a fellow owner of real estate in trendy Kitsilano is this; I’ve traveled across our country and others many times, I’ve visited countless major cities around the globe, and yet I’m always so relieved to get back to Vancouver. It truly is a special city. Surrounded by natural beauty on all sides, it demonstrates great urban planning, and takes pride as being one of the greenest cities in the world! Keep in mind, I’m quite biased on this topic, but I think it’s safe to say that most people would agree with the Vancouver traits that I just mentioned. There is no doubt this unique city is a special place to call home!
What makes our houses in high demand is the fact that we’re out of space. Our physical land supply is constrained by things like: ocean, rivers, parks and mountains. Now immigration may have slowed a bit, but it’s still mind boggling when you see the number of people moving to the Lower Mainland year after year. Does it make Vancouver the cheapest place to live? No, but for me quality of life has always been one of the most important things when considering a place to call home. Our real estate market isn’t unaffordable, it’s just how much it costs to live here. Many people say Vancouver prices are too expensive, but as the old saying goes: “where there’s a will, there’s a way.”
Remember, all markets are cyclical, the key to being successful is timing. Ideally buy low and sell high, so with that in mind now might just be the perfect time to buy!
Most of our clients will bring up the BC government assessed value of the subject property at some point during their real estate transaction in Vancouver. Many people assume assessed value represents market value, so naturally Buyers want to settle with a price below assessment, while Sellers want to obtain a price of at least their property’s assessed value. BC Assessment is a crown corporation in BC and is responsible for determining the assessment value for all the properties in British Columbia, including over 300,000 properties just in our Vancouver/Sea to Sky region. The assessment value determines how much you will pay in property tax for the year (the more your property is worth the more property taxes you will be subject to) and gives you a “ball park figure” as to what your property is worth.
To really understand what we are talking about, there are some important dates throughout the year you should understand:
Let’s use 2012 as an example...
April 2012 - November 2012: Appraisals are conducted and assessed values are determined with a price that reflects the value of your home as of July 1, 2012.
January, 2013 - New Assessment 2012 Values are mailed out along with the amount of taxes due for that year.
January - March 2013 -The Appealment Period. If you disagree with the new assessment price for whatever reason you can go through an appeal process and try to dispute it. Appeals must be submitted before the end of January.
Based on the above dates, a few things should stand out...
You should notice that “the new assessment value” of your property you receive in the mail each January is actually the value of your home as of July 1 of the previous year! This already out-of-date value is then used for another whole calendar year, meaning by Winter we are using values that are up to a year and a half old! The assessed value can quickly become an irrelevant and misleading number in a fast paced real estate market like Vancouver.
So, how do we use assessed values to help you???
Get ready, because this will seem like a total contradiction to what we'vejust said... The assessed value of a property is one of the most important numbers we take into account when determining how much a property is worth, but we use them differently than you may think. We use them as a piece of data in a much larger calculation.
BC Assessment takes into account many of the same property features we as REALTORS use when determining value. They consider lot size, property features, views, and how much properties are selling for in that particular area. They also take into account higher valued pockets within neighborhoods, for example, the North of 4th area in Kitsilano or a high-end condo building in Yaletown. But, things that they don't consider are those special little improvements that make your property stand out. Things like: your custom closet organizers, heated bathroom floors, high-end appliances and a marble waterfall shower in your master spa. So, not to get totally sidetracked, but are you starting to see why it’s crucial to use a real estate agent that specializes in your particular area?
The most important thing about BC Assessment is that they use a standardized system to determine property value, which is unlike REALTORS who all value various aspects of a property differently. This makes BC Assessed values more consistent and even though the assessed value might become irrelevant over the year, a REALTOR can use this value to double check the pricing they have determined for a particular property.
So, how does that calculation work? It’s actually quite simple, a good agent like myself, will look at the sold price on appropriate comparable properties located within the same “pockets” as the subject property, and then divide each of the respective property’s assessed values into that sold price to represent a percentage. This calculation will determine whether properties are selling for above or below assessed value, as each neighborhood will vary (remembering that BC Assessment uses a standardized system on all of the properties). We can then take all the assessed to sold price percentages and determine an average. Then, we can cross reference our subject property’s assessed value to sold price percentage and compare it against the averages. This can help us double check the pricing we have already determined based on past current price per square footage, market conditions and unique property features.
As we always tell our clients, it’s important to consider the assessed value, but it really only means something once we've done a little number crunching and gone through the calculations mentioned above. It takes a little bit longer, but at the end of the day we are always committed to ensuring our clients have ALL of the information they need to make an informed decision when buying or selling real estate in Vancouver.
Happy Monday!
Darren
I’ve always loved September! My friends are probably rolling their eyes thinking I’m about to plug my birthday party (which I won’t do again I promise), but in all honesty I think it’s an exciting time of the year! It’s a time when the world returns to normal: students head back to class, workers go back to work and of course buyers and sellers typically return to the Vancouver Real Estate Market.
This has been a roller coaster of a summer for the local housing market. We’ve seen a shift in the supply curve, giving Buyers more variety at lower than normal prices. The Vancouver Real Estate Board finally declared (what everyone already knew) that our current market is a Buyer’s Market. We’ve seen CHMC regulations change restricting loan to value ratios, shortening high ratio mortgage amortization periods and ultimately forcing people to keep some equity in their homes. Even with all this we’re still selling properties, and sometimes even in multiple offer situations.
It starts to become clear that we are in a healthier market than the media wants us to believe. We’ve got a government being proactive preventing people from leveraging the equity in their houses, encouraging immigration and being moderatly successful in foreign trade. We’ve got Buyer’s letting prices come down a few points to a level they feel more comfortable with and top it all off we still have many Sellers making a decent return on their investment.
Just because every condo and house isn’t selling in four days like in the spring of 2007 doesn’t mean the Vancouver housing market isn’t a great place to own your home or a safe place to have your money. Personally, I’m more comfortable with a market that shows long term steady growth than one that spikes up and down every other year. You’ll see August numbers published in the next couple days and expect them to be low, rest assured this is normal. The August market is always down compared to other months of the year with most people out of town and worrying about everything outside of real estate.
Looking ahead there’s lots of positive excitement in the Real Estate Community regarding the “Fall Market” for this year and beyond. Time will shortly tell what unfolds in the near future, but with Vancouver being one of the best cities in the world to live, the limited land available to buy and a lengthy list of multicultural potential Buyers hoping to call Vancouver home, I wouldn’t expect this lull to stick around for any significant amount of time.
It’s an excellent topic for discussion and I welcome your questions and comments (and of course your birthday wishes). If you would like to discuss more about your specific options or situation regarding buying or selling, then don’t hesitate to get in touch!
Welcome back everyone!
Darren
10. Doggie Beach
There are lots of them around, but Kits Doggie Beach is one of the best going. Even if you don’t have a dog stop by on a weeknight to watch the dogs go nuts!
9. Seawall
You can hop onto Vancouver’s intricate seawall at Kits Beach and go as far as you like.
8. The People
Contrary to what people say, most of the folks living in Kits are some of the coolest easygoing people around. And yes, that is a stereotype.
7. Close to Campus
If you’re going to UBC and not living on campus, Kits is the obvious choice.
6. Restaurants
You can find some of the best places to eat in Kits offering a wide variety of options that will satisfy anyone’s appetite.
5. Condo Prices
You don’t have to lose a limb to live here. Real estate prices are way more reasonable than most people think.
4. Views
Real estate in Kitsilano offers some of the best views in Vancouver!
3. Shopping on West 4th
Check out some of the great shopping along west 4th and Broadway featuring very cool local shops.
2. Beaches and Kits Pool
Life’s a beach! So why not live here? Kitsilano offers some of Vancouver’s best beaches and one of North America’s largest outdoor salt-water pools, enough said.
1. Lifestyle
Living the laid back beach lifestyle, but being so close to downtown has got to be the best reason to move to kits.
If you’re still not convinced, call me. I’ll take you out to see some places and convince you!
778 990 2728
Happy Friday!
Darren
Well the Real Estate Board of Greater Vancouver posted the numbers for June and once again we’ve seen a decline, and this time a big one! The board seems to think we are at the bottom end of a balanced market, but I think everyone else realizes we are now in a full Buyers Market. Hopefully this news will offset any dismay the new changes restricting amortization periods to 25 years brought to Buyers. Now more than ever Buyers have a chance to see a variety of product and get in at a lower price. In regards to the new mortgage rules it truly is great to see the government taking action against increasing household debt levels in Canada. I think it would have been nice to see them take into account property prices in major markets like Vancouver and Toronto as well as the average citizen that’s been saving for a down payment and finally get into the market. Let me be clear. At the end of the day this is a good thing for you and a good thing for me. You pay thousands less in interest and have your mortgage paid off five years sooner. I should also point out that this is only for high ratio mortgages, so if you have more than 20% or more to put down, rest assured you can still sign on for longer amortization periods. If you are unsure about what you can afford or if now is the time to buy; keep in mind you can still take advantage of historic low interest rates and now should have a wide variety of options of great properties on the market. Give me a shout anytime and we can discuss your options.
Happy Hump Day!
Darren
I had one of the best customer service experiences this morning in my local Yaletown JJ Bean. Normally I’m not one to going on about a coffee experience on my real estate blog, but I always feel that credit should be given where credit is due...
I walked into JJ joining the Thursday morning rush when my phone rang and it was one of my good clients. I figured the lineup was going to take a while so I’d step outside the door and let it die down before placing my usual order. About 3 minutes later one of the awesome staff members came outside and said “Sorry to interrupt, but I saw you walk in so I started making your drink and I didn’t want it to get cold”. I was absolutely blown away! Not only do these guys remember hundreds of regulars drink orders on a daily basis, now they are bringing me my drink before I have even ordered it! Now I know at the end of the day some people might think he was “just doing his job”, but I think he clearly went above and beyond the call of duty. As someone who believes in (and makes a living off) giving people an incredible customer experience, I must say the JJ Bean staff hits the mark every time!
It doesn’t matter if I’m spending hours on end trying to get an assignment done for school or just having a quick meeting with a client to sign off an offer; I can always count on a great experience at any of the JJ Beans around Vancouver. If you’re lucky enough to have one of the locations in your neighborhood then ditch the chain coffee joint and support a great local business!
Like many other people in Vancouver I was disappointed in the market report that was published by the Great Vancouver Real Estate Board on Monday. I’m sure if you are reading this you probably had a chance to view some of the numbers, but in case you didn’t have the chance you can catch up here. I’m having lots of clients inquiring about what their next move should be with all the uncertainty in today’s market so I thought I would take a second and give a quick overview.
I honestly still think Vancouver is a safe place to have your money. With my profession I know I’m slightly biased, but I also own a condo on Vancouver’s Westside so I do have my money where my mouth is. When it comes to buying home and investment properties I say you should continue looking!
Monday’s stats tell us there is a huge supply of inventory on the market right now. We are seeing more than a 16% increase in inventory compared to May 2011 and a 14.4% increase from April 2012. What is important to point out is that overall prices haven’t dropped, but the volume has. The Greater Vancouver Region benchmark price for all residential properties was actually up 3.3% from this time last year and up 2.4% compared to the last three months. What we are seeing now is simply a shift in the demand curve. There are less Buyers on the market right now, but enough for us to see continued growth at a slower rate then we’ve become used to.
I think when it comes to buying and selling we should be aware, yet welcoming to the current situation. It’s good to see markets with slow steady continuous appreciation. What I can say is we are currently in a balanced market. I have seen a decrease in volume, but an increase in prices (overall). It’s also important to point out that no one side in the game of Buyers and Sellers appears to have the upper hand at this point.
BUYERS
So what does this mean? It means keep shopping! It means we haven’t seen this kind of inventory in a long time! It means that you as a Buyer have more bargaining power when negotiating terms and price in the contract! If anything you should take advantage and try to capitalize during times like this. Stick to your wish list and find the perfect home or investment property now while you have the better negotiating position with lots of properties to choose from!
SELLERS
If you own a property and are thinking of Selling it’s not going to be the end of the world. The bubble isn’t bursting. In fact it really depends on what side of the bubble argument you’re on as most economists can’t seem to agree as to whether Vancouver is even a bubble market (but we’re not here to talk about the bubble situation that will have to be another post!).
When it comes to selling your property I think it’s more important than ever to pick an agent that understands this balanced market. Now is not the time to have a inexperienced agent walk into your house and “buy your listing” by flashing a huge number in your face (as I can guarantee you more then ever you will be reducing the price within two weeks to market value). On the flip side now is also not the time to slash prices and give away your property. It’s important to pick someone to represent your home who is using “outside the box” marketing techniques and actually succeeds in creating a buzz over the listing. In this market you need someone working for you that isn’t afraid to roll up their sleeves and get to work.
