If you live in an area that is outside city limits, but still think of it as “Nanaimo” (ex. Cedar, Extension) you are in the Regional District of Nanaimo which is a different municipal entity.

For more information you can contact the City of Nanaimo directly at the number shown.

Ryan Coffey

Having said that, the money to run the province has to come from somewhere and not being a political science major or having a background in macro economics it’s hard for me to say what they would replace this tax with. I suppose this is why I have kept thinking about this article.

I am still grumpy about the HST though.

Ryan Coffey

Time to axe transfer tax

By Darrell Bellaart, The Daily NewsAugust 11, 2010

It’s time the provincial government started taking a hard look at eradicating the property transfer tax.

The B.C. Real Estate Association is keeping up its push to axe the PTT and has been busy arranging meetings with senior members of government for this September.

Now that the province has followed Ontario’s lead by harmonizing provincial sales taxes with their federal counterpart, it takes away one of the province’s biggest arguments for keeping the tax in place.

Provincial officials wonder how they would replace the millions of dollars the PTT brings in. In the 2002-03 tax year, it added

$400 million to provincial coffers and that amount grew by about $100 million each year afterward, reaching a peak of more than

$1 billion before the real estate market retreated in 2008.

Anyone who has bought a house in the past decade will be familiar with the shocking experience on closing day of sitting at the lawyer’s office and learning that the price of the transaction is several thousand dollars more than expected.

The reason is that in B.C. the first $200,000 is taxed at 1% but anything above that amount is taxed at 2%. The total is tallied up and inserted as a line item on closing day.

For the average Nanaimo homebuyer closing the deal on a $350,000 property, they can expect an additional $5,000 in taxes, which most people will likely add to their mortgage.

Add that to the legal fees, real-estate commissions, assessment and inspection costs and annual property taxes and insurance costs and it contributes considerably to the total the average person shells out each month to keep a roof over their head.

B.C. is not the only province with property-transfer taxes. Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island also use them, but in a recent analysis done for BCREA by economist Stanley W. Hamilton, he said the way B.C. applies the tax makes it “the highest property-transfer tax in Canada,” outside metropolitan Toronto, where a separate municipal tax jacks it up even higher.

Taxation pays for important services like health care and education and social services for the poor and needy.

But a shelter tax has unexpected social costs. It affects rental rates and that means it affects everyone, especially those people surviving on welfare and pensions who suddenly can no longer afford renting.

Many people now live in alleys, under bridges and in abandoned buildings. Suddenly, the province has a homelessness problem, requiring even more tax money to solve.

Taxes alone didn’t drive shelter costs up, but it did play a role.

Nanaimo realtor Jim Stewart was the chairman of the association’s committee fighting to axe the tax for more than 15 years. He says the government “does a terrible job of dealing with issues like affordable housing.”

He’s right. When the government gets involved, projects become more expensive due partly to standards unknown elsewhere in the marketplace. It drove the unit costs of a housing project on Meredith Road through the roof.

When former premier Bill Vander Zalm introduced the PTT in 1988, he said it would be a rich-man’s tax since it only applied to properties beyond the reach of the average worker. Twenty years later, it affects virtually all homes sold in the province.

The BCREA calls for a gradual phase-out of the tax, starting with eliminating the 1% portion applicable on the first $200,000. A year later, it proposes removing it on homes below $500,000, before abolishing it completely.

It’s time to axe the PTT.

The main reason why you should own real estate  is because your equity (the portion of the value which is yours and not the bank’s) will almost certainly grow over time. It’s not so much a question of “if” it will grow as it is a question of “how long”. This is the part which I think loses a lot of those new to the concept of real estate. It takes time. In a boom market it may only be a couple of years, but generally speaking it takes more like 5-10 for a substantial change in the property’s value. Time and time again I see listings for places that have recently sold where the selling price is nearly double what they paid for it ten years ago. If they’ve done more than just replace the roof and the hot water tank in that time, it may be more. It may not be too, as it is very case by case but my point is that such an increase in value is not unusual. Of course, it should be mentioned that we had a boom time for most of the 00’s but I still stand by my point overall as although from 1990 to 2000 we only saw a 50% increase in average sale price for houses in Nanaimo, we saw it triple from 1985 to 1995.

Here are the stats from the real estate board to support my arguement.

Nanaimo-single-family-stats-1982-2009

Just in case that little drop during last year’s slow market is a concern for you let me point out that prices have already begun to climb again. Have a look.

06-jun_10_nanaimo_graphstats

You see, the bubble never burst here. Although there was certainly a big slowdown in numbers of sales we didn’t see a huge drop in prices like so many people who get their info from mainstream media were led to believe. We weren’t inundated with foreclosures, nor were places selling at a fraction of the value they were a couple of years before. People just seem to need something to freak out over once in a while. Besides, real estate was on sale for a time there and those of you who were to scared to buy at the time but could have, missed out on a good opportunity. Don’t fret though. I always say that in terms of the market, there are good times to buy and better times to buy. You just need to figure out what is affordable to you by talking to a mortgage broker.

Ryan Coffey

This is a (mostly) serious blog about real estate in the Nanaimo area. That doesn’t mean that my dissemination of information has to be all dry and dull.

Here is a video where Seth Green actually makes some really important points about starter homes, ultimately he’s talking about keeping it within your means. As I’ve said before, this is the number one thing with buying real estate as it will go up in the long term, but in the short term you MUST be able to pay for it.

By the way, houses like the one he’s showing off (small but pretty new or at least recently and thoroughly updated) would probably be somewhere between $260k and $280k here in Nanaimo depending on location. But if it were me, I’d go for the place that’s a bit more and has a suite that I can rent out and have tenants pay a good chunk of the mortgage for me. One day, when I am in a better financial position I’ll stop renting out the suite and expand my own living area to include the whole house.

Enjoy.

Ryan Coffey

Sometimes, they’re surprised by the question and have no real answer for me, more often they give me some tips that help make things a bit easier for me and once in a while they save me from walking into a landmine or two. This post is about how I would answer such a question if a new buyer were to ask it to me.

- First off, you want to make sure you know what you can afford and what your plan is. I recently saw the phrase somewhere “A goal without a plan is just a wish.” So, regardless of what you think you can afford, you will want to make sure you have a solid financial plan in place and talking to a Mortgage Broker is a big part of that.  You don’t need to wait until you’re about to buy the home, and it’s much better to do it as soon as you start thinking that’s making the purchase is something you’re serious about doing. A Mortgage Broker will usually do more for you than a bank can for reasons I won’t go into here.  It would cause professional embarrassment for your Realtor, and waste the time, effort and money of everyone on both sides of the deal if you have an accepted offer on a place that you were sure you could afford, but it turns out you can’t get the mortgage for. You may find that it makes more financial sense to buy sooner than later, or vice-versa. Or you may find that you can afford something nicer than you originally dreamed of quite easily, or the opposite.

- Know the difference between what you need, want you really want and what you would like to have. Too many criteria can make it hard for you to find anything that suits you and asking for too much for your given price range is a sure way to find few if any potential places to live. In other words, be ready to redefine your search as you become more familiar with what’s available.

-I generally recommend that buyers look at 6 to 8 homes in person before they make a choice. This way, they have a reasonably good idea as to what is out there that is available to them. I also think, but don’t need to say so often, that if you’ve looked at 15 places and still haven’t found anything you want to make an offer on, it’s probably time to change your criteria. If you can’t change the price range, you might change something like how many square feet in the home or in the yard, how many bathrooms you need, how new and polished in needs to be and so on.

-Remember that I, as your Realtor, spend my days looking at homes of all sorts. I’ve seen all sorts of things real estate both beautiful and crazy exist and happen. I’ve dealt with a lot of negotiations in my time and I’ve seen people get what they want against the odds and I’ve seen people throw away amazing, life altering opportunities because they decided to take the advice of their buddy, their uncle, or some guy they met at a bar. That’s the one that gets me, and that’s probably the one that stresses me out the most. When I hear phrases that start something like “I was talking to (someone who bought a house once) and they told me to….” I cringe because that advice is as likely to be useful as it is to be harmful. You see, every sale is unique and what that person went through won’t be quite the same as what you go through. I find that some people also think they know more than they really do, that’s just how some people are wired. At least when you’re dealing with a professional such as me, you know that if I have an opinion on something I can back it up with experience or at very least with legit info that has been passed my way. If I don’t know something, I will tell you, and will either find out the answer or tell you how you can do it.

-Above all, clear and concise communication is key. It’s just as import that you listen and understand everything I tell you as your Realtor as it is for me to listen and understand everything you tell me.

This morning I was checking the location of a property on Google Maps when I zoomed in really close to verify its proximity to a bus stop, and then I was in street view staring quite clearly at the bus stop.  I knew this feature was coming to Nanaimo, but I didn’t know it had already arrived.

What this means for you as someone who is looking at buying real estate, is that you can preview the neighbourhoods much more easily than before.

Have a look below. I’ve set it so that you’re looking at my office to start but you can go anywhere in Nanaimo by taking the controls. Just go into the window in the bottom right corner, expand it and you can zoom in and out and move the “you” to where ever you’d like to view.

Ryan Coffey

View Larger Map

On its own, it is not however, a good way for a would be client/buyer to get their Realtor to do so.

Why?

Well, quite simply… of course you want a good deal. That goes without saying. I’m sure that every Realtor out there has heard this sort of request a thousand times. As we hear it so often from so many people, and because most people who say this aren’t actually serious or know whats entailed in actually getting those deals, how are we to know which of those many people to go to when we actually find one? After all, we are only paid when we sell something and spending time hunting for deals for people who aren’t serious rather than spending time working with those who are is a great way to go bankrupt.

So, in order for you as a consumer to stand out from the crowd and show up on the Realtor’s radar as a “go to” person for these deals, here are some tips:

Are You Sure This Is The Route For You?

First and foremost, YOU need to understand that “a great deal” that comes your way is probably not going to be a suitable home for you.

Say for example you are a youngish family of four and you have an average income. For you, that $450,000 house that would normally be  $500,000 if it wasn’t for the dramatic divorce that is making the owners sell it just to get rid of it, is not going to be an option for you because you probably can’t afford it. Even if you can, it may not be your tastes, or in the wrong part of town, it may be too old, or too small etc. Or maybe the property is a an old trailer that should be priced at about $90,000 but is price at $70,000 in a 55+ plus park. (For retirees.) Or an empty lot. I could go on because there are so many types of properties out there, and the majority are not suitable homes for any one person or family, therefore neither will the majority of “great deals”.

If it’s a home you want, figure out what you need, want and can afford first. Then go out with your Realtor looking at homes and choose the best one for the best price  based on what’s available. That’s the conventional way and I think it’s a good, tried and true system for finding a good home for you. If you get a home that you like, at a price you’re comfortable with, THAT’S a good deal. It’s no good getting a great deal in a home you can’t enjoy living in.  A happy home is a pretty good deal if you ask me.

Financing

Make sure you’ve already been pre-approved by a mortgage broker and make sure your Realtor knows it. This gives the Realtor a price range to work with so that nobody’s time is wasted by excited phone calls where the Realtor says they have this great deal for you and you have to contact the RIGHT AWAY for places you can’t afford.

The broader the price range the better.

Have A Purpose In Mind

If you have a specific plan for the property, let the Realtor know. Try to be general, otherwise it won’t work. You see, it’s only once every few months a Realtor finds out about a smoking deal before its been jumped on by the others. And that’s including all real estate, without things like price ranges or property types!

An example of what you want to say might be “I’d like a house to rent out.” or “I’d like an older home that I could rent out until the markets rise sufficiently and then renovate and sell.”

Be Ready to Move Fast

Let your Realtor know that you’re ready to make that offer the same day you hear from your Realtor, and have money on hand to pay for deposit etc. A really good deal causes a feeding frenzy until its snatched up, which usually only takes a day or two. You’ll need to move quickly before anyone else finds out about it.

Decide Quickly How Badly You Want It

Be prepared to make offers above asking price if you really want the place. The feeding frenzy often generates multiple offers, which means you’ll be competing with other buyers who are just as eager as you to buy this smoking deal. You just might not get it either, so don’t be too disappointed if someone else outbids you and they get the property.

If the above info hasn’t shaken you off the path of wanting to get a “great deal”, then you sound like someone who is serious about getting into real estate investment and therefore someone I, as a Realtor, look forward to having the chance to do business with. If you have read the above and no longer wish to wait for that “great deal” but still want to buy a home or investment the more conventional way, then you too are just as much someone I look forward to doing business with. And yes, I’m always looking for people who want to sell their homes too!

Ryan Coffey

Today I received an announcement from the local real estate board that updated us on the issue’s development and it seems there has been some improvements made but I am still concerned about the effect it will have on builders in higher priced areas like Vancouver and Victoria as $525,000 isn’t very much for a new home there. Here in Nanaimo though, that’s a pretty nice home, even for a new one.

I am still concerned though that as Realtors, this will mean a 7% increase in what it costs to hire us. This will affect our industry. There are also the high end builders who will now be trying harder than ever to build home that come in under the wire of $525,000.

The announcement in question follows:

Ryan Coffey

HST transitional rules on housing

• Generally, builders’ sales of newly constructed or substantially renovated homes would be subject to the provincial component of the HST where both ownership and possession of the home are transferred after June 2010. Grandparenting would be provided for certain contracts.
• The proposed transitional rules for new housing, including builder reporting and disclosure requirements, would be administered by the CRA.
• Generally, sales of new homes under written agreements of purchase and sale entered into on or before Nov. 18, 2009, would be grandparented, such that these sales would not be subject to the provincial component of the HST and would not be eligible for B.C.’s housing rebates.
• Grandparenting would be provided for newly constructed or substantially renovated single unit homes, including detached homes, semi-detached homes, and attached homes.
• Grandparenting would not apply to traditional apartment buildings, mobile homes (including modular homes) and floating homes, as the general transitional rules would apply differently to those homes. However, these homes may qualify for B.C. housing rebates.

Ryan Coffey

Real Estate Terms You Should Know Buying or selling real estate can be a tricky process. There are hundreds of commonly used terms that could make up a language of their own. Here are some home buying terms that you will most likely encounter when you purchase your home.

Amenities
Features that enhance and add to the value or desirability of real estate. Common amenities include swimming pools, professional landscaping, gourmet kitchen and so on.

Amortization
This is a schedule that outlines your loan payments for the duration of the home buying loan. It details how much of each monthly payment goes toward the principal and how much goes toward the loan interest. Initially, the bulk of your payments will be applied toward the interest.

Appraisal
An estimate of the value of property, made by a qualified professional called an “appraiser”.

Bungalow/Rancher
A one-story house, cottage, or cabin.

In Breach of contract
Violation of an obligation in a contract.

Broker
A real estate professional who has acquired a higher level of training and experience than a sales agent. A minimum number of classes must be taken along with passing a state  exam to acquire a broker’s license. Generally they are a legal representative or a proprietor of the office. Brokers usually charge a fee or receive a commission for their services.

Building Code
A set of stringent laws that control the construction of buildings, design, materials and other similar factors.

Condominium
A large property complex that is divided into individual units and sold. Ownership usually includes a non-exclusive interest in certain “common properties” controlled by the condominium management.

Completion
The final procedure in a home sale in which documents are signed and recorded. This is the time when the ownership of the property is transferred.

Closing Costs
Expenses in addition to the purchase price for buying and selling a property.

CMA
Comparative Market Analysis. A CMA is a report that shows prices of properties that are comparable to a subject property and that were recently sold, are currently on the market or were on the market, but not sold within the listing period.

Conventional Mortgage
A first mortgage issued for up to 75% of the property’s appraised value or purchase price, whichever is lower.

Counter Offer
An offer made by the seller back to the buyer altering one or several terms and/or conditions of the offer as originally written.

Deposit
Along with an offer, buyers can make a deposit on the home to demonstrate the seriousness of the offer. When a deposit is made, it is held in trust until completion. It is then added to the down payment.

Foreclosure
The process after home buying is complete by which a lender repossesses and resells a property after the owner has defaulted.

Investment Real Estate
Real estate that generates income or is otherwise intended for investment purposes rather than as a primary residence. It is common for investors to own multiple pieces of real estate, one of which serves as a primary residence, while the others are used to generate rental income and profits through price appreciation. The tax implications for investment real estate are often different than those for residential real estate.

Land
Property or real estate, not including buildings or equipment that does not occur naturally. Depending on the title, land ownership may also give the holder the rights to all natural resources on the land. These may include water, plants, human  and animal life, fossils, soil, minerals, electromagnetic features, geographical location, and geophysical occurrences.

Land Value
The total value of the land, including any upgrades or improvements to the land.

Land Transfer Tax
Payment to the provincial government for transferring property from the seller to the buyer.

Lien
This is a legal claim that keeps the property from being sold until the lien is paid off.

MLS – Multiple Listing Service
An organization that collects, compiles, and distributes information about properties listed for sale by its members, who are real estate brokers. Membership isn’t open to the general public, although selected MLS data may be sold to real estate listing websites. MLS’s can be local or regional.

Realtor
A person with a state/provincial license to represent a buyer or a seller in a real estate transaction in exchange for commission. Most agents work for a real estate broker or realtor.

Title Insurance
An insurance policy that protects a lender’s or owner’s interest in real estate property from assorted types of unexpected or fraudulent claims of ownership. It’s customary for the buyer to pay for the lender’s title insurance policy.

Zoning
Government (usually municipal) laws that control the use of land within a jurisdiction.

Of the handful of common mistakes I see people make when buying/selling real estate, piling all the resonsibility on the hired professionals and not getting personally involved with the process would be the mother of all the other blunders. Of course, a client hires a Realtor, Lawyer, Mortgage Broker, Home Inspector and sometimes others, to help them through the process. Each professional is expected to know their aspect more than well enough to keep the seller informed enough to be able to make informed decisions that are in their own best interest. However, many clients feel powerless or perhaps feel that as they are paying good money for the help, that giving ALL responsibility to the hired experts will yield positive results if the hired experts are truly expert.

This is a recipe for folly. You see, the team of experts needs a leader and said leader needs to understand what they can reasonably expect from each professional, be able to make decisions in a timely manner and take the time to understand (to a point) what the pros and cons of each decision are. If you don’t think your professional is going to work hard no matter what and if you don’t think they’re trustworthy, then work with someone else. You need to know that your team will follow your leadership just like they need to know that you will be able to provide it.

Imagine if a CEO refused to make decisions and instead delegated all responsibility to their executives, or if the Captain of a ship made their officers try to do accomplish difficult tasks without the benefit of the Captain’s leadership, or if the Prime Minister of a country sat back and let the cabinet members lead the country. In all cases, achieving any objective at all would be difficult for all and almost certainly of lower standard than with the benefits of active leadership. This is why a client who takes the time to learn how to take charge of their transaction will benefit so much more.

In short, you’re paying for the expertise, time and advice of the various professionals. Make sure you’re using them for what you hired them for and not for what you wish you could hire them for. Time and time again, I have seen how clients who take the time to become an active part of the process get so much more from it than those who expect to sit back and wait for good things to happen to them.

Ryan Coffey

Buying a Home? Take Charge and Be in the Pilot Seat!

Does the idea of buying a home seem overwhelming to you? Do you ask yourself questions like: How much can I afford? How can I find the best loan? Should I buy a new or a resale home? Should I use an agent or look at homes on my own? You probably have many other questions too. Buying a home is one of the major decisions that you will make in life, and is one of the largest financial transactions in your lifetime. Although there is much to consider when buying a home, if you do your research and approach the home buying process with confidence, you will most likely buy a house that you will be proud to call home. Below are the three most important things to remember no matter where you are on the road to home ownership. If you follow them closely, you will be happy with the end result! 1. Understand the home buying process. When buying a home, there is nothing that is complex that can’t be easily explained to anyone. If you don’t apply for a thirty year mortgage once a week, don’t take the first one that comes along. You’ll need to do your research, learn some new terms, apply some new concepts, and take the time to understand the entire process. If something happens at any point that you don’t understand, simply ask for a full and complete explanation from someone you trust like your real estate agent, accountant or your lawyer. 2. Become the most important person in the process. In the world of real estate sales, YOU are the most important person in the home buying process. It’s easy to think that everyone else carries more weight than you but that’s not the reality. The seller owns the house and has all the money and the real estate agent tries to sell the house for the seller. However, you, the buyer, are the one person in the transaction that makes it all happen. This entire process could come to a stop if you decide not to buy. So why not take command of this process? 3. Surround yourself with a team of professionals that you trust and make them work for you. A good realtor, mortgage specialist and a property lawyer are some people that you can count on to help you. They all save you time and money. They know your community, they know what is important when buying and selling a home, and they know all the intricacies of the process, from finding a home, to negotiating a price, to closing a deal and to ensuring the paperwork is done right. As you can see, if you approach home buying with intelligence and confidence, you are more likely to buy a house you’re happy with and know that you made the right decision. When you start to walk down this road, take charge from the first step and be in the pilot seat to ensure your satisfaction. Remember, YOU are the most important person in this process!