After you have found the home you want to buy with the help of The Axford Team, we will help you prepare an offer in the form of a Contract of Purchase and Sale to present to the seller.  In this contract you will have to include the following information;

• Your legal name, the name of the seller, and the legal civic address of the property
• The price you are offering to pay
• Any items in or around the home that you think are included in the sale should be specifically stated in your offer.  For example, window coverings and appliances.
• The deposit amount. Typically 5% of the purchase price due to be paid within a day of removing subjects.
• The date that you want to take possession of the home and start paying taxes and utility bills
• An expiry date and time that the offer is open for
• Other conditions may include a satisfactory home inspection report, a property appraisal, and lender approval of mortgage financing.  These subject conditions will be written into the Contract of Purchase and Sale.

If the seller accepts your first offer, you move to the next step, the Subject Removal Period.

The seller may decide to counter your initial offer with one of their own in an effort to satisfy both parties needs.  Our team is confident that we will prepare you with all relevant information that is available to allow you to make an informed purchasing decision.  

Once your offer is accepted our experience will guide you through every step of the Subject Removal Period as well as the Closing and Possession day up until you move in!

• Lawyer or Notary Fees and Expenses
  • Attending to execution documents
• Costs of clearing title, including;
  • discharge fees charged by encumbrance holders
  • prepayment penalties 
• Real Estate Commission
  • GST on the commission NOT the purchase price.

Costs to be paid by the Buyer;

• Lawyer or Notary Fees and Expenses
  • searching title
  • investigating title
  • drafting documents
• Land Title Registration fees
• Survey Certificate (if required)
• Costs of Mortgage including
  • mortgage company's Lawyer/Notary
  • appraisal (if applicable)
• Fire Insurance Premium
• Sales Tax (only on new homes)
• Property Transfer Tax
  • 2% on the first $100,000 and 1% on the balance of the Purchase Price

Home sales continue at below average pace

• First-Time Home Buyers' Tax Credit
  • The First-Time Home Buyers' Tax Credit is a $5,000 non-refundable income tax credit on a qualifying home.  The credit provides up to $750 in tax relief to assist first-time buyers with purchase costs.  For more information, check the Canada Revenue Agency's (CRA) website: www.cra-arc.gc.ca.
• Home Buyers' Plan
  • The Home Buyers' Plan is a one-time withdrawal up to $25,000 from a Registered Retirement Savings Plan (RRSP) by first-time buyers to help purchase or build a home.  Generally, you have to repay all withdrawals from your RRSP within 15 years.  For more details visit the CRA at www.cra-arc.gc.ca.
• CMHC Green Home Program
  • The CMHC Green Home Program is when you use CMHC-Insured financing to buy or build an energy-efficient home or make energy-saving renovations, you may qualify for a premium refund of 10% on your mortgage default insurance and a premium refund for a longer amortization period (if applicable).  Check out the CMHC's website for more information at www.cmhc.ca.

As always we will be helping you find any and all applicable rebate and grant programs available to best meet your individual needs. 

• Freehold
  • You own the land and house and are responsible for everything inside and outside of the home.
• Condominium Ownership
  • You own your unit and share ownership of common spaces.  The Strata Corporation is responsible for upkeep of the building and common interior elements, such as halls, elevators, parking garages and the grounds.  You pay a monthly fee to the Strata to cover these common maintenance costs.  The fees vary but can often include utilities.  You may also have to buy or rent your parking space. 
  • Condos often have strict rules regarding noise, use of common areas and renovations to units.  We will guide you through reading the Strata's Bylaws during the Subject Removal Period to make sure you understand and are comfortable with these rules. 
• Co-operatives
  • Similar to condos, but instead of owning your unit, you own  shares in the entire building or complex with the other residents.  Co-op residents pay for maintenance and repairs through monthly fees and are subject to the rules and regulations of the Co-op board.
  • Be aware that if you decide to sell or rent your shares, the Co-op board has the right to reject your prospective buyer or tenant.  We will guide you through reading the Co-op boards rules during the Subject Removal Period. 

Resales:  Resale transactions in 2013 are expected to reach 73,000 units, up from 67,637 sales in 2012.  In 2014, resale transactions will increase further to 79,500 sales.  Despite these gains, the level of sales over the forecast horizon will remain below the ten-year average of roughly 86,500 units.  While employment and population growth would suggest a higher level of resale activity than projected, a number of factors are dampening sales.  These factors include a reduced inventory of homes for sale as some sellers choose to let their listings expire rather than accept lower prices, and buyers take a wait-and-see attitude as existing home prices moderate in the Vancouver and Victoria housing markets. 

Prices:  Compared to an average MLS price of $514,836 in 2012, existing home prices are forecast to essentially hold steady in 2013 at $511,200 before rising to $524,000 in 2014.  On a quarterly basis, resale home prices are forecast to grow at a rate consistent with overall consumer price inflation. 

Continuing low mortgage interest rates and combined easing back of home prices in some areas is expected to trend home sales higher during the spring and summer months of this year.  The ratio of listings to home sales has reached a balance market.However, there exists a backlog of existing homes to either sell or be pulled off the market before supply and demand can be considered in check.

In this sense, 2013 is likely going to be a transition year.

Courtesy BCREA Cameron Muir, Chief Economist

Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of 5% - with interest rates comparable to those with a 20% down payment. 

The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment.  The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.  The cost for Mortgage Loan Insurance premiums is usually offset by the savings you get from lower interest rates and can be found through the link HERE.

Without mortgage insurance you may avoid the insurance premium but you'll typically pay much higher interest rates and additional administrative fees.  At the end of the day, for the vast majority of borrowers, the cost of CMHC Mortgage Loan Insurance is more than fully offset by the savings achieved.  

A 10% premium refund, and a premium refund for a longer amortization period (if applicable) may be available when CMHC Mortgage Loan Insurance is used to finance an Energy-Efficient Home.  

BCREA 2013 First Quarter Housing Forecast

• Portable Mortgages;
  • If you sell your existing home, you can transfer your mortgage to your new home while keeping your existing interest rate.  You may be able to avoid prepayment charges by porting your mortgage.
• Prepayment Privileges;
  • You can make lump-sum prepayments or increase your monthly payments without having to pay a charge.  This can help you pay off your mortgage quicker and save on interest charges.

You payment schedule will also effect how much of each payment is going towards the Principle and how much is servicing the Interest.  By switching from monthly payments to accelerated weekly or biweekly payments, you can pay off your mortgage faster.  Explore your options for mortgage payments and how much interest you could save by using this Mortgage Qualifier Tool.

These are all things that you should discuss with your Mortgage Specialist while discovering what mortgage package works best for you.  If you would like to be sent contact information on some local qualified mortgage specialists please email Clayton@theAxfords.com.

This is Part 3 of 8 in our First Time Home Buyers Blog Series. You can email Clayton@theAxfords.com for the entire series.

Don't be afraid to negotiate interest rates and mortgage terms with different lenders.  They are offering you a product and talking to more than one lender allows you make an informed decision.  The different types of Mortgages out there are:

• Variable Rate Mortgages;
  • The rate of interest, or principle you pay may change if rates go up or down.
• Conventional Mortgages;
  • Require a down payment of more than 20% of the property's value.  You are not required to get mortgage default insurance with a conventional mortgage.
• Closed Mortgages;
  • The mortgage can not be paid off early without paying a prepayment charge.
• Open Mortgages;
  • A mortgage that can be paid off at any time during the term without having to pay a charge.  The interest rate for an open mortgage may be higher than for a closed mortgage with the same term.

Discussing different scenarios with a mortgage broker is a good way to feel comfortable with your choice and to get the most suitable mortgage that fits your personal needs.  If you would like the name of a few qualified brokers in the area send an email to Clayton@theAxfords.com.

This is Part 2 of 8 in our First Time Home Buyers Blog Series.  You can email Clayton@theAxfords.com for the entire series. 

It may be a new year but it is the same story this morning from the Bank of Canada which once again held its target for the overnight rate at 1%.  The statement released in support of the interest rate decision noted that the global economic outlook is weaker than the Bank previously projected, though risk of a severe external shock to the economy has diminished.  As a result, the slowdown in the Canadian economy in the second half of 2012 was more pronounced than the Bank had anticipated.   The Bank forecasts 2% growth in 2013 before an acceleration to 2.7% in 2014.  Importantly, the Bank has also shifted its expectation that the economy will reach full capacity out to the second half of 2014.  On inflation, the Bank expects growth in consumer prices to run significantly below its 2% target for much of 2013 before gradually rising to target in 2014.

Following two years of overly optimistic forecasts, the Bank has struck a slightly more dour tone in its outlook.  The gloomier growth forecast and positive signs that households are reigning in household debt have prompted the Bank to revise its language on the gradual withdrawal of monetary stimulus.  In its concluding statement accompanying the rate decision, a key focus of monetary policy watchers over the past year, the Bank continued to note that a withdrawal of stimulus would likely be required over time, but that the timing of any such withdrawal is less imminent than previously anticipated.  This strongly suggests that interest rates will remain constant at 1% for all of 2013. 

Send an email to Clayton@theAxfords.com to see how you can take advantage of these historically low interest rates.

The first step in preparing for the purchase of a new home, whether it be your first condo or your fifth family home, is to assess your financial readiness. This helps you prepare for how much you can afford on a month to month, and yearly basis while maintaining a balanced lifestyle. It is no fun being in a large, beautiful house and not have enough money for furniture or food. This type of planning is to prevent you from becoming house rich and cash poor, with the goal of owning a house that fits your life.

Two tests of your financial readiness are the Gross Debt Service Ratio (GDS) and the Total Debt Service Ratio (TDS).

Gross Debt Service Ratio

This factors in all costs associated with owning a home, for example, property taxes, mortgage payments, heating and electrical costs, as well as a maintenance budget. For Strata properties this would include your monthly maintenance fees. Take all of these 'home expenses' and calculate their monthly total. Place that number above your 'total household income' to find a percent. This percent should be no greater than 32%. This allows you 68% of your total monthly income to use as disposable income.

'monthly home expenses' / 'total monthly household income'                                                                                                               

Total Debt Service Ratio

Similar to the GDS, the Total Debt Service Ratio looks at all home expenses PLUS all other debt payments you have, for example, student loans, credit card debt, car loans, etc. on a monthly basis compared to your 'total household income'. This percentage should not exceed 40%.

'monthly home expenses + all debt payments' / 'total monthly household income'                                                                                           

Do Your Calculations Look Encouraging?

After doing the calculations, do you feel fairly confident about beginning the home Buying process? The Axfords Home Purchasing Program is second to none when it comes to experience and service.  Contact us at the office 778-355-0116 or email Clayton@theAxfords.com. We can help by setting you up with New Listing Notifications and connect you to a couple qualified Mortgage Specialists to help you evaluate your mortgage options on route to you taking the next step in the purchasing process.  

Do Your Calculations Look Discouraging?

You may need to step back and make some improvements. Did your calculations show that you might have trouble meeting monthly debt payment? If that's the case, you may find it difficult to get approved for a mortgage. Here are some things you can do to improve your situation:

• Pay off some loans first.

• Save for a larger down payment.

• Take another look at your current household budget to see where you can spend less. The money you save can go towards a larger down payment.

You might also want to consider meeting with a credit counselor. He or she can help you figure out how to minimize your debts.

This is Part 1 of an 8 Part Blog series geared toward helping First Time Home Buyers step by step through the home purchasing process.  If you would like to receive the entire 8 part series at once please email me at Clayton@theAxfords.com and I can send it to you.  

While prospective home buyers appear to be waiting for an ever-elusive real estate bubble to burst in Vancouver, people thinking of selling their homes also appear to be willing to wait.

Alongside sales volumes, the number of new listings has dropped.

“That’s consistent with sellers saying, ‘It’s not a good time to sell, I’m not selling if I don’t have to,’” said Tsur Somerville, director of the centre for urban economics and real estate, Sauder School of Business at the University of B.C.

While prospective sellers are waiting, the numbers indicate that prospective buyers are a bit shy as well. “The market right now is both slow and tentative. There are a lot of people out there being very tentative because they’re not really sure where things are going,” Somerville said. “I can’t say how many buyers are in the market — I want to differentiate between that and the prices they are willing to pay. Maybe there are people who are actually interested in buying, but they’re either waiting for prices to be at a certain point, or they’re making offers that aren’t being accepted. I can’t differentiate between those things.”

Concerns about the global economy may be another reason for the “tentative” market, Somerville said.

“My general sense is that it’s hard to see where a market turnaround is going to come from in the short run until there is more confidence and clarity about the American economy,” Somerville said. “Even without the fiscal cliff, the American recovery is very slow. Given the state of things in Europe and China, you’re not looking at any dramatic economic growth that’s going to pull the Canadian economy along. Part of the story is for the housing market to pick up, there has to be more juice to the economy.”

While a pickup in the market may require more “juice,” a crash would require a significant event, Somerville said.

“To get prices to really tank, you’ve got to have something happen. Either you’ve got to have overbuilding, or you’ve got to have some big change in the world of finance, such as large movement in interest rates or a financial disruption, or you’ve got to have a real negative economic shock,” Somerville said. “You’ve got to have some combination of those, or one of those to make prices drop dramatically.”

Overbuilding of single-family homes in Metro Vancouver is difficult because land is so limited, Somerville said.

“On the condo side, even though starts have picked up, it’s nowhere near where they were during the peak. The yield curve for interest rates is very flat so the market isn’t expecting interest rates to rise dramatically,” Somerville said. “But if I could predict interest rates, I could be really, really rich.”

Cameron Muir, B.C. Real Estate Association chief economist, thinks if buyers are waiting, they could be waiting a long time.

“Three years ago we saw the largest financial crisis since the Great Depression and an ensuing global recession. If that’s wasn’t enough to trigger a correction in an asset bubble, I don’t know what is,” Muir said.

“The condo market in Vancouver has not been ‘hot’ since 2009, and perhaps even earlier than that. Prices on the condominium side have been relatively flat for three years, so that doesn’t signal any kind of asset bubble welling up,” Muir said. “There has also been little speculation in the marketplace over the past few years and home builders have been kept in check in terms of their total units in production.

For more insight on the TriCity / Burnaby / New Westminster Real Estate Market stop by our Suter Brook Office or contact us through our website.

Read more: http://www.vancouversun.com/business/real-estate/Vancouver+real+estate+buyers+waiting+price+collapse/7754204/story.html#ixzz2I6C7absY

During the first half of the year, home prices were on the rise and reached an all time high in May.  Since then home prices have declined about 6% with the largest declines of detached properties seen in Richmond and Vancouver west side and the apartments in Whistler and West Vancouver.

The Real Estate Board of Greater Vancouver (REBGV) reports that total sales of detached, attached and apartment properties in 2012 reached 25,032, a 22.7 per cent decline from the 32,387 sales recorded in 2011, and an 18.2 per cent decrease from the 30,595 residential sales in 2010. Last year’s home sale total was 25.7 per cent below the ten-year average for annual Multiple Listing Service® (MLS®) sales in the region.

The number of residential properties listed for sale on the MLS® in Greater Vancouver declined 2 per cent in 2012 to 58,379 compared to the 59,539 properties listed in 2011. Looking back further, last year’s total represents a 0.6 per cent increase compared to the 58,009 residential properties listed in 2010. Last year’s listing total was 6.1 per cent above the ten-year average for annual MLS® property listings in the region.

"For much of 2012 we saw a collective hesitation on the part of buyers and sellers in the Greater Vancouver housing market. This behavior was reflected in lower than average home sale activity and modest fluctuations in home prices,” Eugen Klein, REBGV president said.

Residential property sales in Greater Vancouver totalled 1,142 in December 2012, a decrease of 31.1 per cent from the 1,658 sales recorded in December 2011 and a 32.3 per cent decline compared to November 2012 when 1,686 home sales occurred. December sales were 38.4 per cent below the 10-year December sales average of 1,855.

Since reaching a peak in May of $625,100, the MLS® Home Price Index composite benchmark price for all residential properties in Greater Vancouver has declined 5.8 per cent to $590,800. This represents a 2.3 per cent decline when compared to this time last year.

“We saw home prices come down a bit during the latter half of the year. During the same period, we saw fewer home sales and listings,” Klein said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 1,380 in December 2012. This represents a 15.3 per cent decline compared to the 1,629 units listed in December 2011 and a 50 per cent decline compared to November 2012 when 2,758 properties were listed.

Sales of detached properties in December 2012 reached 425, a decrease of 32.5 per cent from the 630 detached sales recorded in December 2011, and a 44.7 per cent decrease from the 769 units sold in December 2010. The benchmark price for detached properties decreased 2.7 per cent from December 2011 to $904,200. Since reaching a peak in May, the benchmark price of a detached property has declined 6.5%.

Sales of apartment properties reached 504 in December 2012, a decline of 34.9 per cent compared to the 774 sales in December 2011, and a decrease of 37.9 per cent compared to the 811 sales in December 2010.The benchmark price of an apartment property decreased 1.9 per cent from December 2011 to $361,200. Since reaching a peak in May, the benchmark price of an apartment property has declined 12.8%.

Attached property sales in December 2012 totalled 213, a decline of 16.1 per cent compared to the 254 sales in December 2011, and a 33.2 per cent decrease from the 319 attached properties sold in December 2010. The benchmark price of an attached unit decreased 2.6 per cent between December 2011 and 2012 to $450,900. Since reaching a peak in April, the benchmark price of an attached property has declined 4.4%.

“Activity continues to vary depending on area so it’s important to work with your REALTOR® and other professionals to understand the trends in your area of interest,” Klein said.

Tomorrow on December 18, the CP Rail holiday train will make it's stop behind the rec complex in Port Moody at 9:00 pm. Doc Walker and Miss Emily will entertain beginning about 9:15.  The pre-train festivities will take place beginning at 8:00 pm and will feature seasonal treats (hot chocolate, chili, and cookie decorating for children).  All the proceeds will go to Share and non-perishable food donations (or cash) will be welcomed. This is the last stop on a cross-continent journey which is an important fundraiser for many food banks.

Parking will be very limited, so walk or take transit if possible.

Last month a total of 2,730 homes were newly listed.  This number also represents a decline of 14% from November 2011 and is 12% below the 10 year average.  Currently, there are 15,698 properties listed for sale.  This number has been steadily declining since the peak in June of this year.

At this time, Sellers seem more inclined to remove their home from the market than reduce the price to sell it.  Buyers, on the other hand, expect prices to moderate.  Home prices have declined since reaching a peak 6 months ago (between -2.9% and -5.5% depending on the property type).