B.C. – You Don’t Have a Choice!!

UPCOMING CHANGES FOR CONSUMERS WHO ARE BUYING OR SELLING -

 YOU ARE NOT GOING TO HAVE A CHOICE AS TO WHO REPRESENTS YOU

 Mr. Michael Noseworthy, the Superintendent of Real Estate has given directions to the Real Estate Council of B.C. [RECBC] to implement changes that are supposedly for the protection of buyers and sellers. These changes are to be effective on March15th, 2018.

 We all know that Limited Dual Agency will be forbidden come March 15, 2018 as well. This means there is a ban on one REALTOR® representing a buyer and seller in the same transaction. Okay, we get it.

However, one of the major concerns to REALTORS® is the new rule with respect to what is called “double recusal”. Recuse means “to remove oneself from participation to avoid a conflict of interest.” Here is an example of how “double recusal” could apply if you are going to sell your house.

You, the sellers have decided on offering your home for sale with REALTOR® Mr. Agent. You interviewed three other REALTORS® and after serious consideration you selected Mr. Agent to represent you. 

Mr. Agent was highly recommended to you; has been in the profession for over 25 years, has a huge clientele base since his business is built on referrals from satisfied buyers and sellers and knows everything about the neighborhood where your home is located. He is perfect to represent you and you trust him.

You told Mr. Agent what you were hoping to sell your home for, you agreed to his marketing plan, you told him all your personal information, why you were selling and what you hoped to buy. You told Mr. Agent your mortgage amount owing and other confidential information.

You chose Mr. Agent because of his ethics, his professionalism, his negotiating plan and abilities. You trusted Mr. Agent and wanted him to represent you in the sale of your most important asset, your home.

You then asked Mr. Agent if he had any buyers in his clientele list that might be interested in buying their home. This is where the concern for the consumers comes into play.

Mr. Agent tells the sellers that yes, in fact he does have a couple that he just sold their home and he also knows another buyer that might be really interested as well.

HERE IS WHERE THE PROBLEM EXISTS

Mr. Agent must tell the sellers that he cannot represent either of his possible buyers because he also knows all the buyer’s personal information. Remember, he also knows all your confidential information. It is called “double recusal” [avoiding a conflict of interest re confidentiality].

The new rules state that Mr. Agent cannot represent you as the sellers and the potential buyers he knows, because he has confidential information about both parties.He will however, recommend the buyers to another REALTOR® to represent them.

This is all good unless these buyers really do want to make an offer on your home.They have seen many other houses for sale but now they love your home. They want their referred REALTOR® to make an offer on your property.

Here’s where it gets very complicated under the new rules and where you as sellers and/or buyers cannot choose your own representation for your real estate needs.You hired Mr. Agent to represent you with the most important and complex transaction of your life.

The primary agency duties Mr. Agent must uphold always are: loyalty, avoiding conflicts of interest, full disclosure and confidentiality.  The one duty that never expires is the continuing duty of confidentiality.

These new rules will take away the consumers choice of representation in the sale/purchase of their real estate.

Because Mr. Agent knows you and your confidential information if the REALTOR® representing the buyers brings you an offer on your home — according to the new rules, there is the problem of a conflict of interest. Mr. Agent knows both parties confidential information.

he rules mean that when the Buyer’s REALTOR® presents an offer, Mr. Agent is required to step away from representing you, the sellers. That’s right; Mr. Agent cannot represent you the sellers because of the supposed conflict of interest. 

Is that allowing you the consumer, to choose who represents you?

Even if you as sellers signed a disclosure that Mr. Agent does have confidential information, but he will not share that with you the sellers; that will not be allowed. He would still not be able to represent you.

Well, what if we even had the buyers sign they are okay with their referred REALTOR® representing them and to go ahead with Mr. Agent representing the sellers. No, this is still not allowed. So now you the sellers must wait until the Brokerage of Mr. Agent appoints another designated agent to step in for him.

Yes, you had hired Mr. Agent based on his knowledge, professionalism, ethics, recommendations, trustworthiness and most importantly on his negotiating skills to help bring you the highest offer possible. You have no option or choice of who can represent you if Mr. Agent also knows confidential information about a prospective buyer.

Did you know this was coming into effect March 15th, 2018? How do you feel about not having your own choice of who works for you when you are buying or selling?

The new rules are stating that you the sellers who hired Mr. Agent will now have to change to another REALTOR® who you do not know – how are their negotiating skills, what do they know about you and your concerns. 

This is the most critical negotiation of your lifetime and you cannot have the REALTOR® you originally contracted with look after your needs, negotiate on your behalf and explain step by step what is involved.

If there are subjects Mr. Agent won’t be allowed to advise you on their validity in the sale of your home; the length of time allowed for the subject removal, the date of closing [the day you get paid] – does it meet your needs and is there enough time between being paid and moving out to allow you to pay for the new home you are purchasing. 

What if there is an unauthorized suite that needs to be disclosed properly to protect both the sellers and buyers – does this new ‘fill-in’ agent know all about this?

Sure, let’s just change your representative in the middle of the most critical part of selling your home. Demanding Mr. Agent step aside from the negotiations because he may know some ‘confidential’ information about the buyers is a total disservice to you.

This newly appointed REALTOR® most likely knows nothing about the listing information and nothing about you the sellers – how is that protecting you? Who is looking after you – you chose Mr. Agent to represent and protect you throughout the sale of your property but due to the new rules you have absolutely NO CHOICE in the matter?

How is this fair to any members of the public?

This proposed new rule being brought down by the Superintendent of Real Estate and implemented by the Real Estate Council of B.C. eliminates the public’s choice of representation. Are you okay with it?

Please voice your comments/questions/concerns to the following regulatory bodies.

advisor@recbc.ca or info@recbc.ca

RealEstate@gov.bc.ca ATTENTION: MR. MICHAEL NOSEWORTHY

https://www.recbc.ca

VIREB Posts the Strongest December on Record

January Raindrops

NANAIMO, BC – The Vancouver Island Real Estate Board (VIREB) reports that on a seasonally adjusted basis, the board had its busiest December on record, with 667 housing units changing hands last month.

Sales of single-family homes increased by 35 per cent from December 2016. Annually, 5,612 single-family homes sold on the Multiple Listing Service® (MLS®) System in 2017 compared to 6,059 the previous year, a decrease of seven per cent. However, this reduction reflects the market returning to more normal levels from the unprecedented sales activity generated in 2016.

Inventory of single-family homes dropped to 762 in December, the lowest recorded since VIREB began tracking inventory in 1999. The supply of apartments and townhouses dipped by 13 per cent and 33 per cent, respectively. Diminishing housing supply and high consumer demand are driving rising benchmark prices of single-family homes, apartments, and townhouses in all markets.

The British Columbia Real Estate Association (BCREA) notes that the housing market in B.C. is thriving due to strong economic fundamentals, such as robust retail sales, job growth, and population growth. BCREA’s Fourth Quarter Housing Forecast states that the provincial economy is on track to expand by 3.8 per cent in 2017, the fourth consecutive year of three per cent or more real GDP growth. The cumulative effect has fuelled employment growth to its strongest performance in almost 20 years, with the provincial jobless rate at its lowest level in nearly a decade.

However, while provincial economic conditions appear to be on a sound footing, BCREA expects economic growth to slow in 2018, expanding at a respectable 2.8 per cent, but lower than we have seen in some time. The province’s housing market will face additional economic headwinds in 2018, with rising interest rates eroding affordability and Guideline B-20 making it harder for some buyers to qualify for a mortgage.

Janice Stromar, 2017 VIREB President, notes that VIREB’S record December shows that consumers are still highly motivated to buy a home, but she encourages sellers to list their property now before mitigating economic factors have an impact on housing activity.“My advice to prospective sellers is not to delay listing their home until the spring,” says Stromar. “The VIREB area has been a sellers’ market for a long time, but we know that it cannot continue indefinitely.”

That said, since the current VIREB market still favours sellers, connecting with a local REALTOR® is especially crucial in a competitive housing market.

“REALTORS have specialized knowledge of their communities that can help streamline the buying and selling process to ensure the best possible outcome for our clients,” says Stromar.

In December 2017, the benchmark price of a single-family home in the VIREB area reached $466,400, up 17 per cent from one year ago. (Benchmark pricing tracks the value of a typical home in the reported area.) The benchmark price of an apartment last month rose to $284,400, up 28 per cent board-wide from the previous year, while the benchmark price of a townhouse hit $370,700, a 23 per cent increase from December 2016.

The December 2017 benchmark price of a single-family home in the Campbell River area was $375,100, an increase of 20 per cent over December 2016. In the Comox Valley, the benchmark price hit $467,400, up 19 per cent from last year. Duncan reported a benchmark price of $418,000, an increase of 16 per cent compared to December 2016. Nanaimo’s benchmark price rose 17 per cent to $500,500 while the Parksville-Qualicum area saw its benchmark price increase by 16 per cent to $524,900. The cost of a benchmark home in Port Alberni was $249,800, up 16 per cent from one year ago. 

Another Rule

 

A lot of people seem to have missed hearing about this one (maybe because it’s about taxes) but it could have negative consequences if you fail to pay attention.

 

On October 3, 2016, the Government announced an administrative change to Canada Revenue Agency’s reporting requirements for the sale of a principal residence.

When you sell your principal residence or when you are considered to have sold it, usually you do not have to report the sale on your income tax and benefit return and you do not have to pay tax on any gain from the sale. This is the case if you are eligible for the full income tax exemption (principal residence exemption) because the property was your principal residence for every year you owned it.

Starting with the 2016 tax year, generally due by late April 2017, you will be required to report basic information (date of acquisition, proceeds of disposition and description of the property) on your income tax and benefit return when you sell your principal residence to claim the full principal residence exemption.

The Potential Implications

If you fail to report the sale of a residence in 2016 or later years, you won’t be entitled to the PRE. If you forget to designate a property as your principal residence in the year of sale (for 2016 and later years), you should ask CRA to amend your tax return for that year. CRA will often accept a late designation but penalties could apply (the penalty could be $100 for each complete month the designation is late, or $8,000, whichever is less).  For further information check out the following links:

http://www.cra-arc.gc.ca/gncy/bdgt/2016/qa11-eng.html

http://www.thor.ca/blog/2016/10/new-tax-reporting-rules-for-principal-residence-sales/

If you have any questions, don’t hesitate to contact us.”

Nanaimo B.C. – Makes Top 5 List for Real Estate Investors

 

Along with Kamloops, Coquitlam, St. Albert, and Terrace, Nanaimo has been picked by Western Investor  as one of the top five centres in Western Canada they believe hold the most potential for real estate returns through 2017.

 

An oceanfront port city, Nanaimo has the potential to become the pressure valve for Lower Mainland housing and export growth.

Building permit values, averaging $30 million per month this year already eclipse those of larger Lower Mainland suburbs.

House prices, are a third that of those in Metro Vancouver, and fat-passenger ferry service is on the horizon to augment BC Ferries and air links to the big city.

Tourism is a growing force, with BC Ferries traffic up 6 per cent this year to 4.4 million passengers and Nanaimo air passengers up nearly 12 per cent. In August, hotel occupancy rates topped 90 per cent..

With research from Jacob Parry

Home Sales Cool in October & Inventor Dips Again

FOR IMMEDIATE RELEASE November 1, 2016 Home Sales Cool in October and Inventory Dips Again

NANAIMO, BC – In October 2016, 399 single-family homes sold on the MLS® System compared to 368 last October, an increase of eight per cent.Month over month, sales decreased by 24 per cent from September, which saw 528 unit sales. Reduced sales activity in October is likely caused by typical late-summer cooling and continuing inventory challenges.Active listings of single family homes dropped once again in October, dipping to 1,158, the lowest VIREB has seen since the board began tracking inventory levels in 1999.

Robust sales in the VIREB area and throughout much of B.C. continue to be driven by a combination of economic factors that are creating a sound foundation for housing sales.

“British Columbia’s GDP and employment growth have been above three per cent for three years now, and GDP is currently tracking at 3.5 per cent,” says Cameron Muir, BCREA Chief Economist. “Population growth is also a significant factor, with over 8,000 people migrating to B.C. from other parts of Canada in the second quarter of 2016.”

There has been a moderating trend in activity and prices occurring in Vancouver and on the Lower Mainland, with Vancouver experiencing three consecutive months of flat sales in August, September, and October. Yet Vancouver’s housing prices are still high, so many of B.C.’s new residents are settling down in the Fraser Valley or on Vancouver Island.

BCREA cannot yet determine whether the Foreign Buyer Tax imposed at the beginning of August has adversely affected the Vancouver market, nor whether the new housing rules introduced by the Government of Canada in October will have an impact. Thus far, however, there appears to be no negative fallout from any of these factors in the VIREB market. Foreign buyers are not turning to Vancouver Island instead of the Lower Mainland and are not the impetus behind VIREB’s robust housing market. As well, the federal government’s new rules that standardize eligibility criteria for high-ratio and low-ratio insured mortgages will have a greater impact on buyers purchasing homes in the $500,000-plus range. VIREB’s benchmark prices on all property types are below that mark.

Rather, the biggest challenge for the VIREB area continues to be a lack of inventory. Sales would be higher if there were were homes available, and buyer frustration is growing. Jason Finlayson, 2016 VIREB Past President, is encouraging potential home sellers to take advantage of these market conditions.

“Sellers are in the driver’s seat right now, but consumers need to realize that sellers’ markets don’t last forever,” says Finlayson. “If you’re thinking of putting your home on the market, now is the time.”

Finlayson adds that in a competitive housing market, connecting with a local REALTOR® is crucial. They have specialized knowledge of their communities and are equipped with sales tools, such as custom analytics, to help you develop a winning strategy for buying or selling a home.

In October 2016, the benchmark price of a single-family home in the VIREB area was $393,700, up 16 per cent from one year ago. Prices increased in every zone, ranging from around 13 per cent in Campbell River and Port Alberni to 19 per cent in Nanaimo and the Parksville-Qualicum area. The benchmark price of an apartment rose approximately 18 per cent board-wide, with ParksvilleQualicum reporting an increase of 33 per cent. The townhouse market also strengthened, posting a 12 per cent increase boardwide.

The October 2016 benchmark price of a single-family home in the Campbell River area was $308,900, an increase of 13 per cent over October 2015. In the Comox Valley, the benchmark price was $398,500, up 17 per cent from 2015. Duncan reported a benchmark price of $342,100, an increase of 13 per cent compared to October 2015. Nanaimo’s benchmark price rose 19 per cent to $428,500 while the Parksville-Qualicum area saw its benchmark price rise by 19 per cent as well to $449,400. The price of a benchmark home in Port Alberni hit $215,700, up 13 per cent from one year ago. 

Would you like to know if  YOUR HOME falls into these categories? Give us a call and we’ll provide you with a no obligation consultation and a FREE evaluation.

Strong Housing Demand Forecast Through 2017

Strong Housing Demand Forecast Through 2017
BCREA 2016 First Quarter Housing Forecast Update

Vancouver, BC – January 28, 2016. The British Columbia Real Estate Association (BCREA) released 2016 First Quarter Housing Forecast Update today.

Parksville

Multiple Listing Service® (MLS®) rresidential sales in the province are forecast to edge back 6.2 per cent to 96,100 units this year, after reaching 102,517 units in 2015. Strong consumer demand is expected to push MLS® residential sales up by 2 per cent to 98,000 units in 2017.

Housing demand in the province is being supported by a relatively robust economy, leading to strong employment growth and rising wages. In addition, net interprovincial migration is on an upswing as many Albertans look to BC for job opportunities. BC home sales are forecast to remain well above the ten-year average of 83,200 units over the next two years.

“The inventory of homes for sale is now at its lowest level in almost a decade,” said Cameron Muir, BCREA Chief Economist. “Fewer homes for sale and strong consumer demand are expected to push home prices higher in most BC regions this year and in 2017.” The average MLS® residential price in the province is projected to increase 6.4 per cent to $677,200 this year and a further 4.1 per cent to $705,300 in 2017.

New home construction activity is expected to remain at elevated levels corresponding to strong consumer demand and relatively thin inventories, particularly on the South Coast.  Total housing starts in the province are forecast to remain close to an annual pace of 30,000 units through 2017, which will be the strongest two year performance since the 2007-2008 period.