Vernon Real Estate – Blog & News

Subject to Sale Offers

Posted by admin on June 28, 2011 | No Comments

 When selling, have you ever wondered why you should or should not consider offers which are subject to the sale of a Buyer’s property?
 Many possible factors can influence your decision.  At the top of the list would be to find out if the Buyer will accept you adding a “time clause.” A time clause allows the seller to keep their property on the market.  If the seller receives another acceptable offer then the Seller notifies the first buyer (through their Realtor®) that they have so many hours to remove any and all conditions from their offer or step back and let the second Buyer proceed to buy the property.  The number of hours for notice is set at the time the purchase price, possession etc are negotiated.  Sellers should be aware that the higher the number of hours, the more of a deterrent it is to any other buyer.  Commonly 24 to 72 hour periods are used.
 In a time clause, buyers sometimes ask to exclude weekends, or at least Sundays and statutory holidays from the calculation of time.  Sellers need to be cautious about such exclusions. This can directly affect out of town buyers who come to the area to look on weekends.  If that buyer must make their choice, or even prefer to make their choice on the concerned weekend, they may be put off by the existence of a time clause.  The shorter the time clause, the less effect it has on the saleability of the property.
 If you are a buyer and you have made your offer subject to the sale of your current home, it is best you decide early if you would actually finance the purchase of you new home, rather than wait to sell your existing home.  Even if you only think you might wish to bridge/interim finance then go see your banker or mortgage broker as soon as you sign the purchase contract.  Don’t wait until a second buyer comes along and triggers the time clause.  You may find your banker needs more time to process your loan application than the time clause allows.  Better to be safe than sorry.
 As a seller, another question you may have is trying to assess if there would be fewer showings, if you have accepted an offer to sell that is subject to the sale of the Buyers home.  The answer is that it doesn’t change the number of showings substantially.  Realtors® accept that “subject to sale” seldom means they will not be able to bump the first offer, and they are therefore usually happy to show the property.  Of course the shorter the time clause, the less the effect it has on showings.
 Sellers, please know that your Realtor® is not required to notify the Multiple Listing Service that a subject deal is pending.  In the case of “subject to sale” it is doubtful your Realtor® would report the sale and it is your right to ask your Realtor®  not to.  Your Realtor®  will have to tell Realtors® who show your property of the existence of a time clause; however.  Once the Realtors® get the details, they usually do continue efforts to show the property.
 All in all, I think “subject to the sale” offers can be managed to not have too much negative effect on the Sellers position.

Jane Field works with RE/MAX Vernon.  To suggest topics for future articles or to ask Jane questions, email her at jane@vernonrealestate.ca or call 250.503.3755. 

What’s up for 2011?

Posted by admin on February 22, 2011 | No Comments

This truly is a multi-faceted question. The MLS system still maintains a large inventory.  The North Okanagan residential  listings, combining both single family homes and strata homes is already numbering close to 1300.  Many more listings are expected to arrive on the marketplace as Winter gives way to Spring.  More listings means the laws of  supply and demand are activated.  When sellers outnumber buyers, buyers maintain the stronger position when making offers.  As long as that situation is present, downward pressure on prices continues and prices inch downward.

A change in this pattern may be just around the corner. I am pleased to be able to say that there appears to be a lot more interest from buyers. I am getting a considerably higher number of inquiries and more showing appointments are being booked on my listings. I assume this is true for many other Realtors®. That is certainly a welcome market indicator after several months of a less than exciting market.
Buyers are likely back on the scene because it is simply a good time to buy.  Prices have been corrected and our record low interest rates have moved only very slightly upward on some of the fixed rate mortgages. According to many reports that cross my desk, the economy is showing renewed strength. The bond markets will reflect that and the mortgage interest rates will be raised, accordingly.
One has to think this is an excellent time to buy. If enough buyers make their move and make a purchase soon, that will curb the decrease in prices. So, as long as the economy continues to recuperate, the possibility of a return to increasing prices is feasible.  Although, I can see it will take a while to consume the excessive number of listings.  I would just be pleased to see the prices stabilize, never mind rise.
My hope is that this renewed interest from buyers is the beginnings of a return of a healthy, balanced market.

Originally published in the Vernon Morning Star Feb. 20, 2011.   To suggest topics for future articles or to ask Jane questions, email her at jane@vernonrealestate.ca or call 250.503.3755.  Previous articles published in the Morning Star appear on Jane’s website – www.vernonrealestate.ca

Did You List Too Low?

Posted by admin on February 9, 2011 | No Comments

This can happen, but it’s extremely rare. Perhaps you have put your property on the market and in less than a week you get an offer.  Maybe that offer is at or close to your asking price.  Your first thought may well be that you have not asked enough for your property.

When your Realtor© does their market analysis they look through the most recent sales on the properties sold that are the most comparable to yours.  When your Realtor© looks at the sold prices on three or more properties they can establish a value range pretty quickly.  The other information your Realtor© gathers is what price homes currently on the market are asking.  Your Realtor© in most cases will supply you with a printout of both the sold and competing listings, which you should review with them.  They can go over individual points and features of the various properties with you and help you see the pattern in the prices shown.

In a competitive market such as this one, the best way to catch the attention of buyers, is to list at a price just a little less than your most obvious competitors.  The buyers who have been shopping immediately see true value when they view your new listing and voila!  You get to sell in a short period of time.  So it’s really competitive pricing that gets a sale quickly as opposed to actually under-selling.

In some markets we have even seen listing a little lower than your worst competition create a situation where multiple buyers write offers.  The Seller is nearly always the winner in this situation.  They often end up with a sale price that is higher than their asking price.

View Vernon Real Estate Listings

Basic Principles of Pricing

Posted by admin on February 1, 2011 | No Comments

 When listing your home or property, it is critical in all but the hottest of markets, to ask the right price.  The first thing to consider is what prices have recently been obtained in your area or in areas of equivalent value, on homes/properties similar to yours.  This is when a knowledgeable Realtor® is your best ally.  Many times your Realtor® has toured or shown the properties they use in their analysis.  Realtors® know how to adjust for critical pricing differences like lake views vs. view, or view vs. non-view.  Garage vs. carport, finished basement vs. unfinished basement, hardwood vs. carpet, dated vs. up-to-date and so on.  This list is a long one, but I am sure you understand the concept.
 Realtors® can also evaluate the accuracy of the sold data.  By that, I am referring to their ability to know if a property was priced under value, or if there were two or three buyers competing on the purchase which would likely have driven the price upward.  They often know if there was a Seller who sold too low because there was particular motivation to sell.  They may know if a property had some particular unique feature that “certain” Buyers would pay more for than an average buyer.
 To get the price right, accept that you must meet or beat the competition.  Don’t kid yourself.  Expecting buyers to make an offer on an overpriced listing will only end in a Seller’s disappointment.  When Buyers go out looking at property they make a shortlist of properties they like enough to consider. When they see one they like, and it’s overpriced, it seldom if ever, makes it to their shortlist.  The reason is simple.  No one wants to spend more than they have to.  Remember, these purchases are usually made with hard earned dollars.  Buyers automatically migrate towards the listings that are delivering the best value.
The next factor is how quickly you need or want to sell.  Faster sales require discounted prices.  Perhaps only a two or three percent lower price will make the difference between a good listing and a great one.  If Buyers can see it’s a great deal, they will make the offer with little hesitation.
 Also, assess the competition.  Are there a lot of properties similar to yours currently on the market?  If supply exceeds demand, prices need to be lower.  If demand is high and the inventory of listings is low then the opposite is true.
 Don’t be concerned if you have to lower your price to meet current market conditions.  If you buy on the same market you sold on, you presumably will also be buying at a lower price.  You’d be none the worse off.
 A policy when pricing your property to sell, is to put yourself in the Buyer’s shoes.  Look at your price through the Buyer’s eyes.  It will help you keep focus on how very important the right asking price is.

Originally published in the Vernon Morning Star – November, 2009.      To suggest topics for future articles or to ask  questions, email Jane at jane@vernonrealestate.ca or call 250.503.3755.

Back Up Offers

Posted by admin on February 1, 2011 | No Comments

 Back up offers are offers that are accepted by a Seller, after they have already accepted an earlier offer.  The back up offer is accepted “Subject to the Seller ceasing to be obligated in any way under the previously accepted Contract of Purchase and Sale on the subject property by a certain date”.   Realtors® are very careful in assisting the Sellers they are representing so as to prevent the Seller from inadvertently being under contract to sell the same property to two different Buyers.
 An interesting question arises when the Seller and the first Buyer wish to amend the first contract.  Does the second Buyer have a right to protest that any change to the first contract constitutes a collapse of that first contract?  The answer is “that depends”. 
In a recent Provincial Court of British Columbia decision the court concluded that amending non fundamental terms of the contract did not cause the first contract to collapse.  In that particular case only the completion dates and deposit amount were being changed. 
What if something as basic as the price were changed?  The court ruling might well have had a different outcome.
Bottom line is that if you are a Buyer in backup position and you become aware of changes on the first contract, get legal advice.  If you really want to be able to buy that property you’ll need your lawyers’ opinion as to whether or not you can challenge that amended first contract.

Originally published in the Vernon Morning Star – July, 2009.      To suggest topics for future articles or to ask  questions, email Jane at jane@vernonrealestate.ca or call 250.503.3755.

HST and Real Estate

Posted by admin on February 1, 2011 | No Comments

 It will take more than one of these articles to explain the details of the anticipated new Harmonized Sales Tax.  This week I’ll give you the basic information I have received so far on this topic.
 Firstly, the HST will not apply to sales of used residential homes.  In general, HST on real estate will be applied in the same situations as the GST is applicable currently.
 The HST is to take effect July 1, 2010.  If you entered into a contract to buy a new home on or before Nov. 18, 2009 and you take ownership or possession after July 1, 2010 you will pay GST, not HST.  If you enter into a contract to buy a new home after Nov. 15, 2009 and take over ownership prior to July 1, 2010 you will pay GST, not HST.  If you enter into a purchase contract on a new home after Nov. 18, 2009 and take over ownership after July 1, 2010 you will pay the HST and you will probably be eligible for the New Housing Rebate (assuming it is your principle residence).
 Why is November 18, 2009 an important date?  The answer is that was the day the government announced their HST proposal.
 Under the current GST rules, the New Housing Rebate trailed off the zero at a purchase price of $450,000.  In the new HST proposal that limit will be raised to $525,000.  The total New Housing Rebate on a home bought at $525,000 is eligible for a rebate of $26,250.  That is the maximum rebate, and home purchases costing more than $525,000 will still only be able to get the rebate of $26,250.  If you buy a home for less than $525,000 the rebate is less.  For example, on a purchase price of $450,000 the rebate drops to $23,150.  Of course, the gross amount of the tax, being based on the purchase price, would also be less.
 The formula is as follows.  Buyers of new homes will be eligible for a rebate of 71.43% of the provincial portion (7% of the HST’s 12%) of the HST paid on a new home up to a maximum rebate of $26,250.  I can see most new home buyers will be well advised to go over the tax calculation with their accountants prior to solidifying their purchase contract.
 More information is available at www.fin.gov.bc.ca/rev.htm

Originally published in the Vernon Morning Star – April 6, 2010.      To suggest topics for future articles or to ask  questions, email Jane at jane@vernonrealestate.ca or call 250.503.3755.

Patent Defects

Posted by admin on February 1, 2011 | No Comments

 In my last column I described what latent or hidden defects were.
 Patent defects are a little different.  They are the problems with properties or homes that a buyer would observe if that buyer was making what is referred to as a “reasonable inspection”.
 The courts have taken the position that it is incumbent on buyers to be careful.  More and more, home inspections are considered to be a standard of business practice in today’s home buying process.  So, the courts increasingly will have an expectation that a buyer would not buy a property without at the very least, taking a good look at it.  A judge may well take the position that the buyer had an opportunity to have a home inspection.  So, if the buyer chose not to do a home inspection then perhaps Caveat Emptor or “let the buyer beware” would prevent that buyer from a successful legal action against a seller.
 Generally, the seller is not obliged to point out patent defects to prospective buyers, unlike latent defects.
 Examples of patent defects would be things like an aging roof or a cracked window.
 To have the smoothest pre sale and post sale experiences I think it would be best if sellers disclosed everything, both patent and latent.  That way it eliminates or greatly reduces the likelihood of future legal entanglements.
 I also think buyers should routinely have home inspections.  I know these inspections are not foolproof, but they go a long way toward preventing a buyer from purchasing a problem they didn’t count on.

Originally published in the Vernon Morning Star -  February 28, 2010.      To suggest topics for future articles or to ask  questions, email Jane at jane@vernonrealestate.ca or call 250.503.3755.

Latent Defects

Posted by admin on February 1, 2011 | No Comments

Selling a property through Realtors in most places in North America including in British Columbia, requires a sellers Property Disclosure Statement.
 The form British Columbia Realtors use contains, amongst many other  revealing questions, a clause which reads as follows. “Are you aware of any material latent defect as defined in Real Estate Council of British Columbia Rule 5-13(1)(a)(i) or Rule 5-13(1)(a)(ii) in respect of the Property or Unit”.  Rule 5-13 is explained as “Material latent defect that cannot be discerned through a reasonable inspection of the property, including any of the following:
a defect that renders the real estate,
(i) Dangerous or potentially dangerous to the occupants
(ii) Unfit for habitation”
Bottom line, if you are a seller and you fail to inform a buyer about any defects in the home or property you are selling, you could wind up in court.  If you think the age old rule of caveat emptor (let the buyer beware) still protects you, please know that it may not in the case of a latent defect.  It is only useful for patent defects which I will explain in my next article which is to be published February 21st, 2010.
 A few examples of latent defects would be perhaps a missing vapor barrier in the walls or ceiling, blocked drains, insufficient ventilation or the like.   Buyers are expected to “reasonably inspect” what they are buying.  This would reveal patent defects but not necessarily latent defects.   Private buyers especially should be aware of this.  Realtors will have a Property Disclosure Statement filled out and signed by the sellers.  But, with private sellers you don’t automatically get that same protection.
 Home Inspections are always important.  I recommend them to every buyer as do most, if not all Realtors.  But if you’re buying privately, it’s that much more important.  Private buyers would be well advised to obtain a written statement from a seller, either getting the seller to reveal any defects or stating that there are none, whichever is appropriate.
 Whether buying privately, or with the helping hand of your favorite Realtor, you want to be sure that the Property Disclosure Statement, or written statement from the seller are incorporated into and form part of the contract of purchase and sale.  Doing it that way gives you as a buyer, a greater ability to have recourse against the seller, should you discover that knowledge of latent defects has been withheld from you.

Originally published in the Vernon Morning Star -  February 7, 2010.      To suggest topics for future articles or to ask  questions, email Jane at jane@vernonrealestate.ca or call 250.503.3755.

An Ounce of Prevention

Posted by admin on February 1, 2011 | No Comments

 Is worth a pound of cure.  A stitch in time saves nine.  These old adages also apply to your real estate investments.
 To protect the value of your home and rental properties plan on doing something to upgrade and update every year.  Preventing your home from ever getting run down is key to getting the best return on your investment.
 For instance, as winter breaks up you’ll perhaps see a loose gutter,  peeling fence paint or your concrete driveway surface declining.  In all these scenarios you are best to remedy them as soon as possible to prevent further deterioration.
 If you do something each year to update your home then it neither becomes too dated, nor too expensive to fix.
 When it comes time to sell, most of us are on a rapid agenda.  To try to do all the work at once is too expensive and too time consuming.  As a result, many of us just clean and tidy and put it straight on the market.  This is clearly not the best way to get top price on your investment.
 Homes that come onto the market that have never been allowed to become run down, that have always received proper maintenance and updates, outsell their peer properties.  When that pride of ownership is evident, buyers see it right away. These are the homes that get buyers competing with one another and that yield the highest sale prices.
 If you think about it, the reason for the better price is two fold.  Firstly, it’s simply that the buyer can move right in and doesn’t face having to do any immediate work.  But the other factor is trust and confidence.  If a home is in pristine condition and it is obvious that it has always been kept that way, the buyer determines that the seller is the kind of person who takes care of things.  The buyer quickly interprets that they are not apt to be faced with unexpected repairs.  They are then prepared to pay a higher dollar for that peace of mind.

Originally published in the Vernon Morning Star -  January, 2010.    To suggest topics for future articles or to ask  questions, email Jane at jane@vernonrealestate.ca or call 250.503.3755.

Watch your Assessments

Posted by admin on January 27, 2011 | No Comments

The deadline for appeal of your property assessment is rapidly approaching.  The final date for filing a written request for review is January 31, 2007.  You can file in person by taking your written request to your local BC Assessment Office.  In the Vernon Assessment area the address is 2820 – 28th Street.  You can also fax your request to that office.  The fax number is shown on the assessment notice you just received in the mail.  Locally, the fax number is (250)545-5603.  If you prefer the convenience of filing for an appeal using the Internet, you can do so at www.bcassessment.ca
Also on the www.bcassessment.ca website is a well prepared data bank of home sales.  The sale dates range from Jan. 01, 2006 to Oct. 31, 2006.  When you type in the area your property is in, up to 100 recent and at least somewhat comparable sales are revealed to you.  This helps you have some idea about the data which the tax assessor had access to when he or she formed the opinion of market value as at July 1, 2006, that appears on your tax assessment notice.  You can also readily look up the assessment values and recent sale prices of homes in your neighborhood or similar neighborhoods. 
Chances are that once you’ve received this material you will understand and agree with your assessed value (of course, I am assuming you have access to the Internet).  However, every year I see a few assessments that one could and should disagree with.  Remember, you have a greater familiarity with your property than the assessor does.  Often its years between visual inspections by the assessment authority.  You may even have more detailed knowledge than the assessor, of properties that were used as the sales comparables.  There are just too many properties out there for the assessors to be fully familiar with all of them.
Your Realtor can possibly be of some assistance in your appeal.  We can provide copies of sold data to you that we feel are relevant to your property.  You can present that data at your appeal meeting or even attach it to your request for review.  Your Realtor can also give you their opinion of whether or not they think your assessed value sounds reasonable.  If you are thinking of selling this year, this would be a good time for your Realtor to do an evaluation.  Then you’d have the current opinion of value for both tax and sales purposes.

Originally published in the Vernon Morning Star -  Jan 2007.      To suggest topics for future articles or to ask  questions, email Jane at jane@vernonrealestate.ca or call 250.503.3755.