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Some Creative Ideas for Buying a BC Home on a Budget


1. Look outside Vancouver proper

The attractiveness of the area you buy in contributes to a fair chunk of a home’s asking price. Rather than look at popular areas in the city that are going to come with higher costs, consider your options outside of Vancouver proper. It’s clear that for those who can set up house outside of the city, there are huge savings to be had.

2. Buy in a walkable, up-and-coming location

Consider buying a home in an up-and-coming neighbourhood and avoid excessive listing prices. With projects in walkable neighbourhoods such as Brentwood, Metrotown, Surrey Central and Port Moody, these areas could yield real estate gems. And with so many amenities at your fingertips, you’ll save on things like transit, vehicle costs and more.

3. Give up the parking spot

Another way to keep your costs low is to search out places without designated parking. Houses, townhouses and apartments without parking spots will nearly always have lower listing prices than their counterparts with driveways or underground spaces, which can easily cost an extra $50K. To keep things convenient, look for listings in walkable areas and that are close to transit corridors and handy car-sharing options.

4. Buy smaller

Forgoing a little space can save you a lot. Think carefully about how much room your family really needs before you commit to a larger home with a higher price tag. For instance, while you always imagined yourself in a fully detached home, you may find that a large townhouse fits the bill. And if you’re a first-time buyer entering the market, try a small one-bedroom or even a studio to get your foot on the property ladder. Assess your needs carefully before committing to square footage.

5. Buy larger and share – or become a landlord

On the opposite end of the size spectrum, look for places that would allow you to create additional suites to subsidize your mortgage. Having tenants does come with additional responsibilities, but multiple families living in a home makes it more affordable for all parties. Alternatively, you may want toshare your first purchase with family members or friends. This mortgage offers competitive rates plus the legal and insurance support you need to protect everyone’s best interests.

6. Purchase a fixer-upper

An oldie but a goodie, this nugget of wisdom still holds true. Buying a home with a few more cracks will help you save huge on asking price, whether you plan to renovate through contractors or put in the elbow grease yourself to build up that “sweat equity.”

7. Put gifts towards a down payment

Saving for a down payment is tough. One way to create savings is to put monetary gifts towards your down payment. With that goal in mind, ask friends and relatives for cash gifts if possible. Many couples even ask for cash wedding presents rather than items from a registry, with the intention of putting the proceeds towards a new home.

Ask for more tips Oleg Tsaryov at 1-604-719-4490 Greater Vancouver REALTOR®. Homes and Aparments for Sale.

 

All information kindly provided by rew.ca



The strict new regulations on short-term rentals in Vancouver.


The strict new regulations on short-term rentals – such as AirBnB, HomeAway, VRBO etc – were announced last week by Vancouver mayor Gregor Robertson and approved by council this week to go to public hearing in the fall.

To recap briefly, the new rules ban short-term rentals on investment properties, second homes, secondary suites and laneway houses. Only those homeowners and renters out their principal residence – whether a room or the whole residence (if the owners are away) are permitted to use short-term and vacation rental services. Those doing so will be required to get a $49-a-year business licence from the City, and non-homeowners will need permission from their landlord to get a licence. There will also be a transaction fee applied as a tax for the City.

Somewhat amusingly, the City is positioning its new measures as more lenient than the current status quo, since strictly speaking, all short-term rentals of less than 30 days are currently prohibited in City bylaws. However, this rule has not been in anyway policed or enforced, whereas the new rules certainly will be when they are enacted, which is scheduled for April 2018.

And for most people who rent out their units on a short-term basis at the moment, the new rules will certainly feel more onerous. Sure, it’s fine for those homeowners with a spare bedroom or two who are supplementing their income with short-term visitors. They’ll easily be able to get a licence and continue to run their little business.

But what about those people who genuinely rely on short-term rental supplementary income, who will be prohibited under the new rules? The City’s proposal document, presented to and approved by council Tuesday, helpfully lays out several scenarios in which short-term rentals would be allowed… or not.

One example is clear. “Dev” has an investment condo that he doesn’t live in and he wants to rent it out short-term as it makes way more money than long-term renting. No way, Dev – this is exactly the kind of unit that the City – rightly – wants to see in the long-term rental pool. Even I, as an owner of an investment unit myself, can see this is fair.

But a more questionable example is the couple (“Rick and Andy”) who built a laneway home on their property for family and friends to stay in, but want to rent it short term when they have no guests – especially now that they are retiring and have more time to run it as a business. Tough luck, Rick and Andy. You have to rent it out long-term, make way less money to supplement your meagre retirement income, and your family and friends will just have to stay at the exorbitantly priced nearby hotel, or in a room in someone’s house. Serves you right for building a home that someone could live in – it belongs to the people now.

The City of Vancouver’s reason? “Laneway homes are very important to Vancouver’s long-term rental stock, and should be rented for 30 days or more.”

What about “Marissa”, who short-term-rents out her rented apartment when she’s away, without her landlord’s knowledge? Tut-tut, Marissa. You’ll have to stop that, and get your landlord’s permission in order to secure a business licence. Which, of course, no landlord in their right mind will grant. As a landlord myself, the idea of a parade of tourists staying in my Vancouver studio when my tenant is away, vetted only (or not) by my tenant, give me the shivers. Not a chance, Marissa.

And the City does not set out this scenario, but let’s say “Jon and Sara” have a finished basement in their home, or perhaps a nanny suite in an apartment or townhome. If it has a separate entrance and can be locked off, then bad luck, Jon and Sara. Long-term renters only for you. But if it’s part of your house and the bedrooms just happen to be in the basement, no problem – AirBnB away.

Which of course will presumably lead to a whole bunch of people either a) lying on their licence application forms about whether their suite is locked off, or b) removing locks, and facilities such as full kitchens, from suites so that they are arguably no longer secondary suites and become eligible.

(Side note: I’m not sure that if I’m inviting strangers to stay in my home that I would want to be removing the locks, but I guess it’s still OK to put locks on your own residence’s doors…)

My point? With the possible exception of Marissa, who really should be transparent with her landlord, these are people who own their homes, should be able to do with them what they like, and oftentimes bought them with the expectation of being able to supplement their incomes. And most of the units in these regulatory grey areas will not end up in the long-term rental pool. Rick and Andy will probably keep their laneway home for exclusive use by visiting friends and family, thereby removing an affordable short-term rental option from the vacation market. Same goes for Jon and Sara’s suite. And they won’t even have to pay the Empty Homes Tax, as properties with multiple units such as these are exempt if one of the units is the principal residence.

The City’s hope that around 1,000 units will be freed up for long-term rentals is, I believe, highly optimistic. AirBnB itself agrees, with Alex Dagg, public policy manager, saying recently, ““We think there is a mistake or assumption here that all of those units will be placed in the long term rental market. We don’t think that is the case.”

What’s more, city staff expect that the cost of implementing and operating the rules will be $1.644 million in the first three years, and that it won’t break even (through licence fees and taxes imposed) until 2024.

Will it be worth it for a few hundred new rental units?

Information provided by REW.CA



Airbnb in Vancouver - short-term rental licensing plans too strict. What do you feel?


Airbnb is asking the city of Vancouver to reconsider some parts of its new short-term rental licensing plan.

The city's proposed scheme bans short-term rentals in secondary suites like basement suites or laneway houses. Instead, applicants would ONLY be eligible to rent out homes that are principal residences, and they would require a business license!!!

At a council presentation on Wednesday, Airbnb — the online-based company that facilitates short-term rentals — urged council to be more flexible.

"We believe regulations for home-sharing need to allow for appropriate flexibility," said Alexandra Dagg, a public policy manager with Airbnb Canada.

Families are diverse and change over time, as do their needs for extra space in their homes."

Council has argued the limitations are in place to add much-needed rental stock to the city, and a staff report said the move could add up to 1,500 rental properties to Vancouver's housing market.

Dagg disagreed.

"If a homeowner isn't going to put them on the market anyways [or] if they're going to be empty because they use it for their family or other things ... then that's not helping anybody."

Despite that, she said Airbnb is open to including business license numbers on its postings — a requirement the city is making for all advertised short-term rentals.



Importants Changes Coming for Tenants, Landlords and Strata Property Owners in Greater Vancouver, BC


The BC governmetn this month introduced Bill 40. This legistlation proposes some changes to Residential Tenancy Act and Strata Property Act. It reflects consultation with and wide support of landlord and tenant groups as well as condominium owners’ associations.

There are two proposed changes to the Residential Tenancy Act:

  1. Tenants can terminate a fixed-term lease: In case if someone fleeing violence or headed for long-term care will be able to terminate a fixed-term lease early without any financial penalty. Tenants will be permitted to give their landlord only one month’s written notice, accompanied by written third-party verification from a professional. In the coming months, the government will draft a regulation that defines “qualified professionals.” They'll likely include victim services workers and justice system and healthcare professionals.
  2. Electronic funds transfer: In keeping with government’s goal to reduce red tape, landlords will be able to repay security deposits electronically.

An important change to the Strata Property Act

The BC government is also proposing to allow strata corporation members to terminate the strata corporation by an 80 per cent vote and a court order.

Currently, a unanimous vote is required, which can make it harder to wind up a strata corporation when a building is at the end of its life cycle. Needing a unanimous vote is also challenging when strata members face expensive repair bills and want to sell their property for redevelopment.

“This will be a welcome change for condo owners struggling with aging buildings,” said Tony Gioventu, executive director, Condominium Home Owners Association. He explained that a unanimous vote is virtually impossible in most strata corporations as it requires every owner to vote in favour of termination.



How to boost housing affordability in Greater Vancouver


twhouse ash f  

Plenty of reasons why Vancouver’s housing market is expensive, but lets check some ideas that could help boost the supply and bring home tags down. 

Lets build more townhouses

Building more in-demand townhouses (even triplexes and quadraplexes – 4 homes on one lot) could add to our supply of existing family homes by offering two or more homes instead of just one on the same size lot. Taking into consideration changing existing zoning to allow for additional townhouse offerings to create a more affordable and diverse array of housing for families.

 twhouse ash b

Townhouses with basement suites

Encouraging more townhouses and single-family homes to be built with lock-off/basement suites would further increase the amount of affordable housing in Vancouver. What do you think?

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How about building more microsuites?

Additional microsuites could offer much-needed, self-contained apartments to renters and owners who want to live in central locations, but can’t afford the high rents/mortgage monthly payments. This may mean reviewing the minimum unit size permitted.

 twhouse ash h

We could build more laneway homes

Laneway homes increase density by allowing another smaller house to be developed on the traditional single-family property as a rental unit. If bylaws were changed to allow some of these houses to be sold, there could be more opportunities for affordable home ownership.

twhouse ash i

Unfortunately , but... Decrease the lot size?

Building smaller houses on smaller lots – to allow for homes from 1,200 to 1,500 square feet on 25 foot lots – would mean thousands more single family homes could be built on a relatively small footprint.

Without rezoning approvals and the resulting increase in new construction, the current situation won’t change. The formula is: less supply + high demand = higher prices in Vancouver.

 

twhouse ash d 

Недвижимость Ванкувера



West Vancouver Buyers. Negotiate the price when buying a home.


Small PicBuying a property in West Vancouver requires good knowledge of market conditions, personal finances as well as the ability to judge what a good investment is. It is important to be in a position to negotiate realistically when you decide to make an offer either on a house or condo in North Shore. This comes as a result of good preparation before submitting a formal offer to purchase.

1. Request a Comparable Market Analysis (CMA) report from your real estate agent. These unbiased reports provide all kinds of valuable information on properties that have recently sold in West Vancouver or North Vancouver area. In addition to price information, you'll be able to compare amenities, square footage/size of the property and other factors that influence a home's price.

2. Set a maximum price you're willing to pay for a house. While you'll have to negotiate back and forth with the seller, it's good to have a firm idea of how much you're capable of spending. Calculate your monthly mortgage payment and make sure it's within your budget. Don't forget to consider other expenses such as taxes and insurance.

3. Be realistic in your offer for the real estate in North Shore. Don't make a low offer on a house you really want. If your research has shown that the price is realistic, then offering a low price may annoy the sellers and potentially upset your chances of getting the house - particularly if there are other folks making offers too.

4.When you make an offer, try to show flexibility. Be willing to go up in price a bit. You want the best deal for you and the seller wants to feel good about the deal that is struck too. Many times the seller’s position is just as stressful and emotional as your position.

5. If the seller appears to be highly motivated you could offer terms, such as repairs, to bargain with but be reasonable. In this situation the seller may agree to a lower selling price if you agree to take care of repairs that were found during the inspection, or with a fast closing date. This tactic is often most effective in a slower market.

6. Show no emotion. The more desperate you appear in concluding the deal, the more likely you are going to be taken advantage of in the negotiation process.

7. Good negotiation comes down to both parties being satisfied with the price and the terms and conditions of the deal. Make sure that everything is documented and signed when making the offer as this will prevent any misunderstandings or chances of either party backing out in the future. 

If you have an experienced Realtor, we will educate you how to get the house in West or North Vancouver for the good value. Call your local Reltor on North Shore, Oleg Tsaryov who is one of the top negotiators  in the area.

The information kindly provided by Canada Realty News™.



Secondary suite in West Vancouver


Legal or not the "mortgage helper" in West Vancouver?

On March 1, 2010, secondary suites became legal in West Vancouver.

What is a Secondary Suite?

A secondary suite is a separate residential unit within a home, generally located in the basement, and significantly smaller than the dwelling in which it is located. The size must be either 40% of the square footage of the home, up to a maximum of 968 sq.ft., whichever is less.

What Are the Fees to Register a Secondary Suite?

  • The application fee is $450, which covers the inspection and the first calendar year licence fee.
  • The annual renewal fee for rented suites in non-owner occupied homes is $450
  • The annual renewal fee for rental suites in owner-occupied homes is $350
  • The annual renewal fee for non-rented (unoccupied or family use) suites is $85

Why Does the District West Vancouver Require an Annual Fee?

The annual fee is intended to cover a portion of the additional costs to the District of West Vancouver of providing services to the tenant of the suite.  Such services include, but are not limited to, the Library, the Seniors' Centre, the Aquatic Centre, the Community Centre and Police and Fire Department Services.

What Are the BC Building Code Requirements?

After May 31, 2012, all owners will be required to comply with the full BC Building Code Standards which may incur extra costs by requiring them to:

  • provide a separate heating system for the suite
  • add or alter an existing sprinkler system
  • provide a 45 minute fire separation between the suite and dwelling
  • provide both an ionized and photo-electric interconnected hard wired smoke alarm in the suite and dwelling
  • increase the width of the exit stairs or corridors to the suite
  • provide a self closing solid core door between the dwelling and the suite
  • provide an exit door to the suite which swings on a vertical access (no sliders)
  • remove or provide protection to doors and windows of the dwelling that could expose the suite exit stairs to fire
  • enclose exposed combustible plumbing piping in the suite as it is not permitted to pass through the rated floor system
  • upgrade the electrical and plumbing systems to those code standards
  • make any other alterations necessary to bring the suite and the dwelling into compliance with the BC Building Code or other provincial regulations

What Are the Risks of Having an Unregistered Suite?

Unregistered suites are in contravention of the Zoning Bylaw and owners may be subject to fines and/or other enforcement, including:

  • Fines may be as high as $10,000
  • A lien may be placed on the property to prevent it from being sold with contraventions in place
  • A Court Order requiring the owner to take remedial action (stop renting, remove the suite, apply for permits etc.)

Other implications of having an illegal suite:

  • The value of the home on the real estate market is decreased
  • Illegal suites are not covered by insurance in the case of fire
  • Basic life and safety features may not be available including sufficient emergency egress, fire extinguishers and smoke detectors

Alternatives to Registering Your Suite

If a home owner does not wish to register their suite, they have the option to decommission it. This is a simple process which involves the following steps:

  • Hiring a qualified electrician to obtain an electrical permit to remove the stove wiring from wall outlet and from electrical panel
  • Removing all cooking facilities from the suite, which means equipment, devices or appliances that can be utilized to prepare a meal. i.e. stove, hot plate, microwave, etc.
  • Submitting a declaration to the District of West Vancouver once the work has been completed

the information has been provided by city hall of West Vancouver.



West Vancouver Real Estate at Christmas time


10 Reasons To List Your Home During The Holidays

Here are a few great reasons why we may want to move forward instead of waiting for the spring.

  1. People who look for a home during the Holidays are more serious buyers!
  2. Serious buyers have fewer houses to choose from during the Holidays and less competition means more money for you!
  3. Many people from overseas come to visit friends and family members in our marketplace over the Holiday season. Some of these visitors will buy real estate. Why miss these buyers by not being on the market?
  4. Houses show better when decorated for the Holidays!
  5. Buyers are more emotional during the Holidays, so they are more likely to pay your price!
  6. Buyers have more time to look for a home during the Holidays than they do during a working week!
  7. January is traditionally the month for employees to begin new jobs. Since transferees cannot wait until Spring to buy, you must be on the market now to capture that market!
  8. You can still be on the market, but you have the option to restrict showings during the six or seven days during the Holidays!
  9. You can sell now for more money and we will provide for a delayed closing or extended occupancy until early next year!
  10. Since the supply of listings will dramatically increase in the New Year, there will be less demand for your particular home! Less demand means less money for you!


West Vancouver home purchasers asking


My clients in West Vancouver while buying or building a home with my company often ask me what is HVAC system.

HVAC (heating, ventilation and air conditioining) refers to technology of environmental comfort.

Heating

There are many different types of heating systems. Central heating is often used in cold climates to heat private houses and public buildings. Such a system contains a boiler, furnace, or heat pump to heat water, steam, or air in a central location such as a furnace room in a home.

Ventilation

Ventilation is the process of "changing" or replacing air in any space to control temperature or remove moisture, odors, smoke, heat, dust, airborne bacteria and/or carbon dioxide, and to replenish oxygen. Ventilation includes both the exchange of air with the outside as well as circulation of air within the building. It is one of the most important factors for maintaining acceptable indoor air quality in buildings. Methods for ventilating a building may be divided into mechanical/forced and natural types.

Mechanical or forced ventilation

"Mechanical" or "forced" ventilation is provided by an air handler and used to control indoor air quality. Excess humidity, odors, and contaminants can often be controlled via dilution or replacement with outside air. However, in humid climates much energy is required to remove excess moisture from ventilation air.

Kitchens and bathrooms typically have mechanical exhausts to control odors and sometimes humidity. Factors in the design of such systems include the flow rate (which is a function of the fan speed and exhaust vent size) and noise level. Direct drive fans are available for many applications, and can reduce maintenance needs.

Ceiling fans and table/floor fans circulate air within a room for the purpose of reducing the perceived temperature by increasing evaporation of perspiration on the skin of the occupants. Because hot air rises, ceiling fans may be used to keep a room warmer in the winter by circulating the warm stratified air from the ceiling to the floor.

Natural ventilation

Can be achieved with openable windows or trickle vents when the spaces to ventilate are small and the architecture permits. In more complex systems warm air in the building can be allowed to rise and flow out upper openings to the outside (stack effect) thus forcing cool outside air to be drawn into the building naturally through openings in the lower areas. These systems use very little energy but care must be taken to ensure the occupants' comfort. In warm or humid months in many climates maintaining thermal comfort solely via natural ventilation may not be possible so conventional air conditioning systems are used as backups. Air-side economizers perform the same function as natural ventilation, but use mechanical systems' fans, ducts, dampers, and control systems to introduce and distribute cool outdoor air when appropriate.

Air conditioning

Air conditioning and refrigeration are provided through the removal of heat. Heat can be removed through radiation, convection, and by heat pump systems through a process called the refrigeration cycle. Refrigeration conduction media such as water, air, ice, and chemicals are referred to as refrigerants.

An air conditioning system, or a standalone air conditioner, provides cooling, ventilation, and humidity control for all or part of a house or building.

The refrigeration cycle uses four essential elements to create a cooling effect. The system refrigerant starts its cycle in a gaseous state. The compressor pumps the refrigerant gas up to a high pressure and temperature. From there it enters a heat exchanger (sometimes called a "condensing coil" or condenser) where it loses energy (heat) to the outside. In the process the refrigerant condenses into a liquid. The liquid refrigerant is returned indoors to another heat exchanger. A metering device allows the liquid to flow in at a low pressure at the proper rate. As the liquid refrigerant evaporates it aborbs energy (heat) from the inside air, returns to the compressor, and repeats the cycle. In the process heat is absorbed from indoors and transferred outdoors, resulting in cooling of the building.

In variable climates, the system may include a reversing valve that automatically switches from heating in winter to cooling in summer. By reversing the flow of refrigerant, the heat pump refrigeration cycle is changed from cooling to heating or vice versa. This allows a residence or facility to be heated and cooled by a single piece of equipment, by the same means, and with the same hardware.

Central, 'all-air' air conditioning systems (or package systems) with a combined outdoor condenser/evaporator unit are often installed in modern residences, offices, and public buildings, but are difficult to retrofit (install in a building that was not designed to receive it) because of the bulky air ducts required to carry the needed air to heat or cool an area. The duct system must be carefully maintained to prevent the growth of pathogenic bacteria such as legionella in the ducts.

An alternative to central systems is the use of separate indoor and outdoor coils in split systems. These systems, although most often seen in residential applications, are gaining popularity in small commercial buildings. The evaporator coil is connected to a remote condenser unit using refrigerant piping between an indoor and outdoor unit instead of ducting air directly from the outdoor unit. Indoor units with directional vents mount onto walls, suspend from ceilings, or fit into the ceiling. Other indoor units mount inside the ceiling cavity, so that short lengths of duct handle air from the indoor unit to vents or diffusers around the room or rooms.

Dehumidification in an air conditioning system is provided by the evaporator. Since the evaporator operates at a temperature below dew point, moisture in the air condenses on the evaporator coil tubes. This moisture is collected at the bottom of the evaporator in a pan and removed by piping to a central drain or onto the ground outside. A dehumidifier is an air-conditioner-like device that controls the humidity of a room or building. It is often employed in basements which have a higher relative humidity because of their lower temperature (and propensity for damp floors and walls). In food retailing establishments, large open chiller cabinets are highly effective at dehumidifying the internal air. Conversely, a humidifier increases the humidity of a building.

Air-conditioned buildings often have sealed windows, because open windows would work against an HVAC system intended to maintain constant indoor air conditions.

All modern air conditioning systems, down to small "window" package units, are equipped with internal air filters. These are generally of a lightweight gauzy material, and must be replaced as conditions warrant (some models may be washable). For example, a building in a high-dust environment, or a home with furry pets, will need to have the filters changed more often than buildings without these dirt loads. Failure to replace these filters as needed will contribute to a lower heat-exchange rate, resulting in wasted energy, shortened equipment life, and higher energy bills; low air flow can result in "iced-up" or "iced-over" evaporator coils, which can completely stop air flow. Additionally, very dirty or plugged filters can cause overheating during a heating cycle, and can result in damage to the system or even fire.

It is important to keep in mind that because an air conditioner moves heat between the indoor coil and the outdoor coil, both must be kept just as clean. This means that, in addition to replacing the air filter at the evaporator coil, it is also necessary to regularly clean the condenser coil. Failure to keep the condenser clean will eventually result in harm to the compressor, because the condenser coil is responsible for discharging both the indoor heat (as picked up by the evaporator) and the heat generated by the electric motor driving the compressor.

Outside, "fresh" air is generally drawn into the system by a vent into the indoor heat exchanger section, creating positive air pressure. The percentage of return air made up of fresh air can usually be manipulated by adjusting the opening of this vent.



West Vancouver real estae update.


As we approach the end of 2011 real estate prices in most urban areas of British Columbia continue to rise. The Real Estate Board of Greater Vancouver is showing gains in average price of over 10% from 2010.Yet many clients, especially those in the under $500,000 price point in Greater Vancouver, are wondering why their properties are not reflecting this increase.

Vancouver is still in a recovery phase from the drop in price in the lower end of the market which occurred during the financial crisis of 2008. The increase in price seen "on average price" is greatly affected by the higher end of the market, which has seen significant gains over the past year. These gains are reflected in the increase of purchasers from Asia, particularly China.

 

This influx of buyers, not seen on this scale since the 1990s, has created a market which is a "top down" market. Most real estate markets are supported by the bottom of the market. This means the first time buyers buy an apartment from someone who is moving up to a townhouse who is buying from someone moving from the townhouse to a house.

In a top down market, offshore buyers purchase more expensive homes from existing owners who may be downsizing or making a sideways move. When prices hit a certain point, these offshore buyers have to look at smaller houses as they can no longer afford what they may have purchased a year ago. Thus the market is now supported from the top down.

With net-inmigration still over 50,000 per year, Vancouver should do very well over the next 5 years. The lower end of the market is just starting to react to the top down conditions. Especially as turbulent stock markets push investors back to brick and mortar investments such as real estate and precious metals.

Most of the buyers now consentrating to purchase real estate in West Vancouver. The most popular areas in West Vancouver today are Ambleside, Dundarave and British Properties.

 

 

West Vancouver Realtor

Oleg Tsaryov



Friends, family become partners


Fixed mortgage rates keep going down, variable rates keep going up... the gap between the two hasn't been this narrow in a long time. Unless a buyer is buying for the short term it's getting pretty hard to recommend anything but a fixed rate.

When friends, family become partners

When buying a home in Vancouver with friends, think of them as business partners. Make sure to draft a legal contract that addresses unexpected issues.

With home prices moving ahead at a healthy clip, some single residents of Vancouver are choosing to purchase a property with a friend or relative.

"I've had a number of clients over the years enter into this type of agreement," says Nadine de Palma, financial advisor.

"A lot of individuals, particularly younger adults, feel as if they have been priced out of the market so go in with a friend or a sibling to purchase the property. I see that as a trend that is going to gain momentum."

However, whether you are purchasing with a friend or relative, Ms. de Palma says this is essentially a business deal.

"If you're looking at buying a property together, friends are no different from business partners. Consult a lawyer and consider what you are doing," says Ray Leclair, real estate lawyer and vice-president of Title Plus at Law Pro. "The parties could enter into an agreement ... they should consider that they are business partners. The business is owning a house."

Mr. Leclair says the agreement should cover who pays for what in terms of purchasing and maintaining the house, as well as how the property will be divided if the friends decide to go their separate ways.

"With two young people starting out, if one dies or becomes incapacitated, you can be sure that the parents or the brothers or sisters are going to be in there," Mr. Leclair says. "That's where you want to have the agreement in place. If you don't have the agreement, you get a family member or litigation lawyer to settle the issue and that's never a good thing. It is worth talking to a real estate lawyer prior to, and not litigation lawyers after the fact."

Ms. de Palma says planning is key.

"I always start off by saying we cannot predict life so we have to plan for it. I recommend two plans ... your financial plan and your risk management plan," she says.

The financial plan covers how best to finance the purchase as well as examining how one party would continue to live in the home if the other owner wanted out of the agreement, Ms. de Palma explains.

"The other plan that I feel is important is a risk management plan. [There is the] possibility of becoming disabled or suffering a critical illness before aged 55. While most recover, it can be financially devastating," Ms. de Palma says. "I encourage individuals to look at life insurance, disability and critical illness. It allows that individual to maintain their half" of the property.

Mr. Leclair says individuals buying property together should take this as an opportunity to look over all their documentation.

"They should be looking at their domestic contract if they have one, their wills, their powers of attorney to make sure they are consistent," Mr. Leclair says. "If in my will I say everything goes to 'Jane,' yet my interest in my property I want to go to the person I am buying with, they would not be consistent at that point. Make sure all of your legal documents deal with the same assets in the same way."

Oleg Tsaryov would be pleased to assist you with buying or selling your luxury home, water front home, or family home in West Vancouver.

West Vancouver Realtor

North Shore Real Estate

 



Vancouver real estate no bubble. Real Estate in Vancouver.


B.C.'s real estate market may be slowing down, but there is no sign Vancouver's sky high prices are caught up in a bubble that is about to burst, according to a new report

The Central 1 Credit Union report forecasts the Vancouver's real estate market will slow this year and total sales will drop slightly from 2010, but prices will continue to rise an estimated 6.8 per cent in 2012.

According to the report's author economist Brian Yu, low interest rates that show no sign of rising quickly and the limited supply of land will keep values rising – all familiar arguments.

But Yu says there is another important reason to believe prices in Vancouver are unlikely to collapse. Market speculation —commonly known as flipping — currently accounts for only about two or three per cent of the market.

Yu says that is a normal level, which shows most people are living in the homes they buy.

"Our research shows few signs that speculators are overly active in the Vancouver market, which means we are unlikely to see a speculation-induced bust," he said.

"Even if the economy slows and employment slows, we expect to see individuals hold on to their homes, rather than sell them in a weaker market," he said.

Prices may be way up for detached homes in Richmond, Vancouver and Burnaby, but Yu insists there hasn't been a price surge across the region and concerns about a possible dramatic price drop in Vancouver are overblown.

"Price jumps that have received media attention have been in localized areas and we have not seen a region-wide price surge," he said.

Market balanced.

That's backed up the Canadian Real Estate Association's monthly report, also issued on Thursday, that found a record 70 per cent of all local markets across the country are considered to be in balance.

Vancouver share of provincial and national sales activity reached "unusually elevated" levels earlier 2011, but has since pulled back into normal seasonal variations, the group said.

However, some observers said the market is eventually headed for a drop.

Fannie Fong of TD Economics said a peak-to-trough drop of roughly 10 per cent for both home sales and prices is expected, though that change isn't expected until the Bank of Canada begins hiking interest rates in earnest in early 2013.

BMO Capital Markets raised the spectre of a Vancouver price correction, but with a caveat: as long as immigrants with money continue coming to Vancouver, and interest rates stay low, prices in will stay high, said the BMO report.



July 1, 2011. The mortgage game.


Should you lock in, or take a risk and how much should first timers spend?

Many homeowners are wondering whether to lock debt such as mortgages and secured lines of credit into a fixed-rate mortgage or stay variable. Even some who are mortgage free are concerned with how rate increases will impact secured lines of credit, the financing of vacation homes and recreational property. First-time buyers may be particularly concerned with entering the national capital’s expensive real estate market.

What can you afford?

As a first time home buyer, it’s essential to figure out what you can afford. A quick rule of thumb is that your household expenses should not add up to more than 40 per cent of your pre-tax household income. Household expenses include mortgage payments, property taxes, condo fees, utility and heating costs, and any payments on other loans such as car loans, credit card debt and lines of credit.

First of all you should get a copy of your credit history from the credit bureau and/or Equifax Canada. As this is what lenders will look at, it’s important to review its accuracy.

Secondly, do a household budget, list your assets and liabilities and meet with a bank or mortgage broker to be pre-approved for a mortgage. Try the monthly payments on for size. Let’s assume that your current rent is $1,000 and your anticipated payment as a homeowner is $2,350 for principal, interest, taxes, hydro, etc. Try putting aside the extra $1,350 immediately. It will get you in the habit of allocating the level of payment every month. Consider the maintenance costs as well, from normal upkeep to potentially larger expenses like a new roof or re-plumbing.

Start saving before you start shopping — the larger the down payment, the lower the financing costs. Although it’s not always possible for first-time home buyers, try to come up with at least a 20-per-cent down payment. Any down payments below this level must be insured with Canada Mortgage and Housing Corporation (CMHC) or Genworth Financial — another expense to factor in.

To assist with your down payment, consider using the Home Buyer’s Plan, which allows you to withdraw up to $25,000 from your RRSP for the purchase of a qualifying home.

Mortgage options

Fixed rate: If the prospect of rate increases is causing you significant concern, then perhaps you should consider locking in all or some of your debt. With the inflated home equity line of credit rates that consumers have been charged (prime plus 0.5 to one per cent instead of the traditional prime), it’s not that big a jump to a five-year fixed rate, perhaps as little as one per cent more.

If your fixed-rate mortgage is renewing in 2011 and you are interested in another fixed-rate mortgage, it may be worthwhile negotiating with your lender to close out your current mortgage and move into the new lower rate mortgage without penalty. As a strategy to pay off the mortgage sooner, consider increasing the payment and utilize weekly or accelerated bi-weekly payment schedules.

If you would like some level of security but don’t want a fixed rate on all your debt, consider a blend where a portion is at a fixed rate and the balance at a variable rate.

Variable rate: There are many studies that show that despite its volatility, a variable-rate mortgage tends to save more interest in the long term.

Variable-rate mortgages are best for consumers who are financially stable and can financially and emotionally handle the day-to-day fluctuations. One strategy is to benchmark your variable rate payment to that of a five-year, fixed-rate mortgage. Not only will you apply thousands of dollars against the principal and shorten the mortgage term, you will also build a higher potential payment into your budget.

Here are other tips for a variable-rate mortgage:

• Ask for a variable-rate mortgage at below prime. You might even be able to get prime minus 0.80 per cent.

• Negotiate a better rate on your home equity line of credit. Try to get the prime rate or prime plus 0.5 per cent, as opposed to the current prime plus one per cent that you are probably paying.

• Consider moving all of your debt to a combination of these two options.

For consumers who like the variable-rate mortgage option but are concerned about rate increases, ask your financial institution to give you a 90-day rate guarantee at their best discounted five-year rate. Keep the five-year, fixed-rate guarantee as insurance if rates increase significantly and renew it every 90 days until you feel rates have stabilized.

Your Extra Costs

 

Oleg Tsaryov

Top Realtor in West Vancouver