5% Down – Available to some purchasers but not necessarily advisable

Just say no to 5% down. Unless of course you’re a gambler or expect a steep salary increase in the short-term or some sort of windfall is on the horizon…

Here’s a convincing Globe and Mail article on the reasons why a low down property purchase may not be a prudent decision. Purchasing with 5% down is most likely not for the faint of heart. If there is a market downturn a property owner could quickly be in a negative equity situation. If property values do start to decline we could see mortgage lending rules tighten up and the minimum down payment requirement could increase.

Photo courtesy USACEpublicaffairs.

So here’s the simple point: If you have to stretch yourself financially to buy a new home, you’re probably not ready to trade in your landlord for a lender. If you do press forward with just 5 per cent down, be prepared to stay in your home a while – potentially a long while.

If you must press on with your low down payment purchasing plans make sure you have a contingency plan, or better, access to emergency funds. If you do make a purchase with the minimum down payment and run into trouble in the future, I’m here to help

I welcome any questions you may have about selling or buying.
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Underground Storage Oil Tanks (UST)

Did you know owners of properties in Metro Vancouver may have a potentially costly underground storage oil tank (UST) in their backyard? Clean-up and liability issues can come into play if the oil tank leaks and contaminates your property. If the contaminant originates on your property and then seeps onto adjacent properties, you could be liable for the mess and any clean-up on those properties. Ouch! 

Underground oil tanks were commonly installed on properties beginning in the late 1950s. Oil was the primary source of heating fuel for homes until natural gas replaced it due to lower cost and ease of connecting to utility gas pipelines. The oil tanks were usually just capped and decommissioned in place at this point – some with oil remaining in the tanks!

There are many companies in Metro Vancouver that use scanning equipment to check for buried oil tanks for a nominal fee. If there is any possibility that there may be a UST, doing the scan makes sense for buyers and is almost always advisable for sellers. Caveat emptor (buyer beware) is the best policy when it comes to oil tanks and avoiding the associated risks with buying a property where one may be lurking. The cost to remove a decommissioned tank that has not leaked is much less than a major environmental clean-up of a decommissioned leaky tank. Insist on full and proper tank removal documentation in the purchase contract if you are a buyer.

To complicate matters further, different municipalities around Metro Vancouver have different requirements to follow during removal. For further reading I recommend a great article by The Spagnuolo Group of Real Estate Law Firms.

I welcome any questions you may have about selling or buying.
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Rize Alliance Development – Public Hearing for Mount Pleasant Tower Proposal

Figure A shows a rendering submitted by the developer. Figure B shows the virtual model created by the City. Figure C shows a rendering created by RAMP. Image courtesy of Openfile.ca

One of the most divisive proposed developments in Vancouver in a long time is currently being considered by Vancouver city council. The Rize Alliance Properties development at Kingsway and Broadway promises to radically change the area where Kingsway, Main and Broadway meet. An article from BC Business is in support of this development and offers some insight into the issues. The original development proposal was more aggressive at 26 stories but has since been scaled back to 19 stories following public opposition. Notice in the renderings above how the building height differs depending on which party it was created by and their particular interest. The rendering closest to reality is likely the one created by the City.

It seems to me that this location is an ideal place to increase density since it’s well-located close to public transportation along the Broadway corridor and is a walk or quick bus ride to two Skytrain lines. The anti-development types are unlikely to be satisfied with any proposal put forward but many Mount Pleasant residents are watching this one closely to see what the City will allow.

I welcome any questions you may have about selling or buying.
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Will the real estate market and prices remain stable in 2012?

Some interesting predictions from a new poll of Canadian financial strategists and analysts. Get out your crystal ball and get ready to play “Guess where the market is going!” As a REALTOR® I get asked almost on a daily basis what the market will do next. Unfortunately this is anyone’s guess. Of  the poll respondents, only 60% of these experts would even attempt a guess at the price forecasting.

The referenced article shares what might be on the horizon. If we do see a small drop in prices I don’t expect much in the way of a major market adjustment. Sure, people who bought with a very minimal down payment and are in a variable rate mortgage could feel the pinch but for the most part Canadian banks are conservative and don’t lend money easily.

Stay tuned here for updates on he market situation and for predictions on where the market is headed. Not from me directly of course, I gave up guessing long ago.

Do your homework and enlist the services of a well-recommended REALTOR® before undertaking a property search to best protect yourself.

I welcome any questions you may have about selling or buying.
Feel free to comment here or contact me directly.

Building permits way up in Vancouver

This just in: Canada-wide building permits are up but Vancouver seems to be the only bright spot for housing starts in BC. This explains why every block in this city seems to have several construction projects underway. Developers are clearly not anticipating any slowdown in the Vancouver market for new homes.

How to Improve Housing Options in Metro Vancouver

First post of 2012 so it seems fitting to start with a list of ideas on how to increase housing options. This article appeared recently in the Vancouver Sun and the writer makes a number of useful, if perhaps optimistic, suggestions on how home ownership might be made more attainable in Metro Vancouver.

The simplest suggestion mentioned to implement would be encouraging and allowing higher density (innovative design and more compact units). This would increase opportunities for people to remain in urban areas without breaking the bank. The main hurdle here seems to be nearby neighbors who fear their property values will fall as a result of additional density being built close by.

Another idea presented relates to having municipalities reduce the charges and fees (development cost charges) they assess for granting building permits as this is a major cost. One would hope that savings here would trickle down to property buyers.

Finally, higher density developments should first be considered near good public transit and the requirements for minimum number of parking spaces per property should be abandoned in some instances.

So that’s the wish list. Do I think any of these are likely to happen any time soon? No, but dreams are healthy.

I welcome any questions you may have about selling or buying.
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The Condo Walk-through – Deficiency Hunting

I recently accompanied a client on their substantially completed new construction condo walk-through. This took place about two weeks before the buyer was to take possession of the new two bedroom condo in the Fraser area of Vancouver. Now I consider attending these inspections a part of my job as a full service REALTOR® but this one was scheduled for 7AM! This is not known as peak performance timing for most REALTORS®.

Nevertheless, I made my way to the building on time to meet my client and we then proceeded to wait for the developer’s representative who ended up being about 10 minutes late. On these outings I use a detailed checklist of potential problems to look for (see image for a sample).

These usually go pretty smoothly and this one was no exception except for some minor surprises. The best part of this inspection was when the developer’s representative opened the door to the laundry area and it was empty. The washer and dryer that were to be included as per the buyer’s contract were nowhere to be found.

Make sure your REALTOR® attends the walk-through inspection with you so they can provide expertise on what to be on the lookout for and to fully protect your interests.

I welcome any questions you may have about selling or buying.
Feel free to comment here or contact me directly.