Purchasing a property in the very competitive Greater Vancouver Area can be a frustrating process for buyers if they are unaware of current conditions.
James and Denny share how realtors can help their clients set realistic expectations and effectively prepare for buying in this busy real estate market.
This episode will focus on initial conversations realtors should have with new clients, the importance of communicating with listing agents, the benefits of working with a mortgage specialist, and the significance of ensuring proper due diligence is done behind the scenes to ensure clients make the best offer.
You have found your dream home and are wanting to put in an offer. Watch this video and review the list of 10 due diligence steps you should take to ensure you can move forward with confidence.
1. Find Out How Much you Can Afford
A mortgage broker or a mortgage specialist at your bank can take you through the steps to get pre-approved for a mortgage. A good mortgage pre-approval accurately measures your financial qualifications and how much house you can afford. Furthermore, the financial institution will provide a 90 or 120-day guarantee of its mortgage rate in case those rates jump while you are shopping. For more information on mortgage pre-approvals, visit the Government of Canada website.
It is important to note that a pre-approval isn’t a firm approval. When you’re ready to make a purchase, the lender will likely want to appraise the property to ensure that you’re paying market value and the property has an adequate lifespan. If the purchase price is well above market value or the home is deemed to have a short life expectancy, you may require a higher down payment. In some cases, the bank may not give you a mortgage at all.
When setting your budget, do not forget to factor in costs like closing fees and maintenance or repairs. Another cost to consider is condo strata fees.
2. Go to City Hall
Another due diligence step is to request any information City Hall may have on record about the property such as its zoning, lot dimensions, permits that have been issued or any future plans for the surrounding area. Checking the zoning is especially important if you’re planning to operate a business out of your residence, renovate or redevelop, or rent a suite in the home. Review all extensive renovations for proper permits.
3. Request a Property Disclosure Statement
While property disclosure statements are not required under BC law, realtors will often ask for one from the property’s current owner so they can give buyers as much detailed information about a property as possible. The property disclosure statement is a three-page document that itemizes potential problems like renovations done without a permit, unauthorized rental suites, asbestos insulation, unregistered easements or whether the seller is aware of any issues like the presence of an underground oil tank, moisture problems, if the property was ever used as a grow op, or if it has ever been designated as a heritage site. The statement can be legally incorporated into the contract for purchase and sale.
4. Do a Title Search on the Property
A title search will confirm whether the person selling you their property is actually the rightful owner. It will also determine whether there are any easements, right-of-ways, or covenants against the property that could affect its future development. It will show if there are liens or outstanding mortgages on the property. Click here for more information.
5. Ask for a Site Survey
A site survey will tell you what you are buying. It shows the property lines, how the property is aligned with neighbouring properties, and features like roads or sidewalks. It will also show where the house is positioned on the property. A lender will often require a survey certificate as part of their mortgage requirements. In some cases, the lender will request a title insurance policy instead of a survey certificate, and sometimes they will ask for both. Title insurance protects the lender against potential issues with a property such as encroachment or past fraud. For more information about site surveys, visit the BC Land Title & Survey website.
6. Find out the Home’s Utility Expenses
Another due diligence step is finding out the home’s utility expenses. Utilities include gas, electrical, annual solid waste, water and sewer levies, and property taxes. Your realtor can request utility bills from the property’s current owner. Water/sewage rates as well as the taxes for a particular property can usually be found on a municipality’s website.
7. Hire a Home Inspector
A qualified home inspector will walk through and around the property to assess any major defects, safety concerns, or potential threats to the integrity of the home. Keep in mind that there are limitations to these inspections as they cannot see behind walls.
In a hot market it can be difficult, even impossible, to purchase a home with a “subject to inspection” clause. When this is the case, hire an inspector before presenting an offer. When you’re considering the qualifications of a home inspector, assess their knowledge, experience, training, certification, licensing and their level of participation in the industry. For more information, listen to our podcast episode on the benefits of working with an experienced home inspector.
8. Consult a Home Insurance Provider and Purchase a Home Warranty
Most lenders are going to require you to have insurance in place in order to get a mortgage. Home insurance helps pay for structural damage and loss of personal property from emergencies like theft or fire. If you’re buying an older home that has a wood-burning fireplace or knob-and-tube wiring, you may encounter some issues getting insurance or have to pay higher premiums. Insurance companies can deny coverage if the property has been poorly maintained or vacant for an extended period of time. Renovations could also affect your ability to get an insurance policy. Remember that events like sewer backups and earthquakes are not typically included in basic policies.
A home warranty covers the repairs and replacements of your home’s major systems and appliances when they fail from old age. Carry out thorough research to compare different companies to find the best plan that meets your family’s future needs.
9. Check for a Buried Oil Tank
If you are purchasing an older home, your due diligence should include confirming there is no oil tank buried on the property. Many homes used an oil-burning furnace that was fueled from a tank buried somewhere on the property before the widespread adoption of natural gas or hydro for heating.
Some municipalities keep records of properties known to have oil tanks, or those that have had old tanks decommissioned. This is a great place to start. New Westminster: call the fire prevention office to see if they have anything on file for your property Burnaby: send an email to firstname.lastname@example.org Vancouver: call the city’s information line at 3-1-1 to check if there are any records for oil tank removals or abandonments Coquitlam: call Coquitlam Fire & Rescue at 604-927-6400 to have them check their records
If those searches come up empty, you’ll have to check with the current owner to see if they have had the property scanned for an oil tank, or else hire a company that can do the scan. A basic scan will cost you between $80 – $150. It includes a technician scanning the property with a metal detector and probing device. For a more accurate and detailed scan, consider a company that uses Ground Penetrating Radar (GPR). Low clearance decks and metal debris may affect the ability to get a conclusive scan.
The decommissioning and removal of old oil tanks is labourious and expensive, especially if it’s leaking oil into the soil. Be aware that if a tank is discovered after you’ve acquired the property, you will be responsible for its removal as well as any remediation for the surrounding soil. Visit the British Columbia website for more information about residential heating oil storage tanks.
10. Confirm all the Items Included in the Sale
Unless specifically written into the contract, appliances like the stove, refrigerator, dishwasher or microwave may not included in the purchase. Garage remotes, window coverings, curtains, keys, sheds, appliances and corresponding warranty manuals, potted plants, shelving units that aren’t attached to walls are all items that should be specifically written into a contract. The inclusion of fixtures like TV mounts, blinds, security systems, hood fans and central vacuum systems should also be clarified.
It is also a great idea to research the neighbourhood and find out more information about where you will be living. Mapping out your daily commute to work, finding the best shopping centers and stores, and getting a better feel for your neighbours is a great start.
Once your due diligence checks out and you are confident in your purchase decision, you can remove subjects, submit your deposit, and wait for the day when you get the keys to your new home!
With current properties being sold so quickly, a lot of buyers may be overlooking certain negative aspects of a home that in the past may have been major red flags in a sale.
James and Denny discuss the reasons behind unpermitted renovations and share how buyers can gain valuable information regarding work done on a property before buying.
This episode will focus on the importance of certified inspections and permit approvals, legal basement suites, material latent defects, enquiring about permit history, and the varying severity of unpermitted renovations.
This is the story of a family selling two strata properties and coming together to buy a multigenerational dream detached house in a scorching-hot market. We will rename them the Smith Family for the purposes of this blog post.
Currently, we are knee-deep in a Seller’s Market, and desirable, well-priced properties are flying off the shelf. While detached houses are selling quickly with overbooked showings and multiple offers, the buyer’s side is very competitive. Buyers may lose out on several houses before winning the bid. So, what does this mean for those wanting to buy AND sell?
Searching for the Dream Detached House
It was an advanced magic trick that required trust, timing, and finesse to secure this three-part deal for the Smiths. We had been searching for the perfect multigenerational home for the Smith family for over a year in the Port Moody real estate market. It was a slower Buyer’s Market when we started shopping so we had more time and less pressure to visit local showings. Unfortunately, the right product was nowhere to be found.
The Smith family was looking for: – A completely above-ground in-law suite that felt like part of the main home. – A property in the Heritage Mountain, Port Moody area to stay close to friends and family.
We found a few potential homes in the summer of 2020, but the market was starting to shift. We put in offers on 3 or 4 houses but lost out in multiple offer situations because we had Subject to Sale of TWO properties.
Finding the Dream Home
Being Port Moody realtors, we had the advantage of regularly being in the area. We continued to keep an eye out for any new listings that fit the bill. It took time and patience, but a few weeks ago we finally found THE DREAM HOME! The Smith family was willing to do anything to get this house. The property was $200,000 over budget (and in our opinion a little overpriced), but otherwise perfect. My real estate partner Lucas and I discussed this purchase many times and it all boiled down to timing.
Sale #1: How we Won the Dream Detached House
It is a challenge to negotiate dollars off the purchase price in a Seller’s Market. Our plan was to present the offer in a way that would convince the Seller that this is a win for all of us. We put our offer together with an extensive Comparative Market Analysis (CMA) arguing our case for the purchase price and a personal letter from the family.
We decided to drop the Subject to Sale of the townhouse because we had a good feeling about where the market was at for this type of property.
After a few cleanup items and a fair conversation with the Listing Realtor, the Seller accepted our offer! The house had been listed for over a year, and the family wanted it sold.
Condo and Townhouse for Sale
Now came the scary part: we needed to sell, and we needed to sell fast. With only two months until completion (the day you pay for the home), there was not a lot of time to test out the market. We priced their Westwood Plateau condo and Heritage Mountain townhouse at the top end of market value. This meant that we had to bring the heat with marketing their homes!
The townhouse in Port Moody was very popular, so we decided to give it 2 weekends on the market before looking at offers. This strategy was nerve-wracking and definitely tested our patience. For the condo in Coquitlam, we opted to look at the offers as they came. We put the condo on the market one week before the townhouse, as we knew it could potentially take longer to sell.
Sale #2: Offer time for the Cascade, Coquitlam condo
The day before we were going to drop the condo price, we received an offer! We negotiated the price up to a very acceptable range: $5,000 higher than the price drop that was scheduled. Just to note, the contract did come with some subjects.
Sale #3: Offer time for the Discovery Ridge, Port Moody Townhouse
We were scheduled to present offers on the townhouse in Port Moody the very next day. We received 8 offers after 45 buyer showings. Two of those offers really stood out. All buyers were given a chance to put their best foot forward and, in the end, we had a winner!
I want to take a quick break here to let you know that the winner was the LAST BUYER to view the property. We may have easily left money on the table if we had not given every person a chance to see the home.
Once we had our winner, we negotiated the exact dates we needed for Completion/Possession to line up with the dates on the Smith’s DREAM detached house purchase. We also managed to slip in a very clever subject protecting the Sellers in case subjects did not get removed on the condo sale.
Are you still with me? To break it down, we put in a Subject to the Sellerentering into an unconditional contract to purchase a new residence. This type of subject typically does not work in a buyer’s market, but we knew the moment was right and had the expertise to present it to the buyers in a way that made it feel like a win-win. We agreed to let the buyers do some due diligence during that time AND we got the 2nd best offer to agree to be in a Back-Up Offer position. This way, if the first offer fell through for any reason, we had another one on deck!
Putting up SOLD Stickers on THREE Properties
When Subject Removal day arrived, we were excited to remove subjects on all 3 properties. Our plan worked perfectly!
How were we able to quickly sell the strata properties? The major keys were market timing, appropriate price, and prepared real estate agents. Having the strata documents ready, all paperwork in order, and thoroughly reviewing the documents prior to listing gave buyers a sense of confidence. Buyers have a much higher rate of removing subjects when realtors can answer every question with clarity. This is extremely important.
Goodbye strata life!
The Smith family is packing for the big move that is set to take place in just a few short weeks. Our real estate team is delighted for this family and so grateful that they put their trust in us.
Congratulations to our amazing clients on your dream detached house in Port Moody!
Detached houses are HOT right now as people are moving out of Vancouver in search of more space.
James and Denny weigh in on the very low supply of single-family homes available and the increasing number of buyers looking to move into these types of properties.
This episode will focus on bidding wars with multiple offers, the overwhelming number of people trying to attend showings, the importance of setting proper price points for listings, and how to make a competitive offer. The guys also share the interesting experiences they have had with detached houses in the cities seeing the most activity right now: Pitt Meadows, Maple Ridge, Langley, and Abbotsford.
More buyers are entering the market due to low-interest rates and the desire for more space. It can be difficult to navigate through these price increases to find the best value in the top locations, so James and Denny have broken down some of their favourite locations for you.
Where are we Seeing the Most Activity?
Many people are moving further East into Langley, Abbotsford, Maple Ridge, and Pitt Meadows for more space and affordability. Previously, these cities were seen as too far out for most buyers. However, they have quickly become the new hot spots due to lower prices and larger property sizes.
Maple Ridge (including some areas of Pitt Meadows): – Growing communities with mountains, lakes, breweries, and great shopping – West Maple Ridge has a lot of amenities, parks, and is closer to the city. – East Maple Ridge has bigger houses and newer construction selling in the $1.3 million to $1.5 million range as of early 2021. – Demographic: a lot of young families looking for more space
Langley: – The communities seeing high activity are Brookswood, Cloverdale, Walnut Grove, Murrayville, and Willoughby Heights – There has been an approximate 15% price increase within the last 3 months in these areas with houses selling for $1.2 million to $1.4 million – Access: Langley is close to the highway and is very accessible to those commuting for work
Coquitlam: – A lot of value in livable, entry-level detached homes in this area – Due to the high cost of materials, it may be better to buy a built home and sell in 5 years than buy an empty lot/tear down and build for investment purposes. – Listings under $1.5 million is getting a lot of interest right now – Greatest value found in properties worth over $2 million
What to Expect When Purchasing Detached Homes:
It is hard to predict exactly what will happen this year in the real estate market. In the last two months, we have already seen a 15% increase in single-family home prices. It is important to note that this does not increase on a gradual scale, so it will not necessarily continue growing at the same rate. Nevertheless, we do believe that it will continue to rise.
With the value of detached homes increasing seemingly over night as more houses sell, it can be difficult to know exactly what your offer should be.
The Takeaway Message:
It may be challenging to find value in the prices of detached homes right now, but they will most likely seem like a deal when you look back at these numbers in a few months’ time! Unless there is a big influx of houses going on sale, which is quite unlikely at this time, the market will continue to become more competitive.
A cautious suggestion for those thinking of entering the real estate market: even if you are stretching yourself and spending more than what you had originally planned, it is better to do that now than wait 6 months when real estate value has increased.
Do you have questions regarding upsizing into a larger home, the appropriate price of a listing, and the growing appeal of moving out of the city and into the surrounding areas? We would love to hear from you – contact us and we can help you with some of the specifics.
As a new year begins, more buyers and sellers are considering entering the housing market and are looking for expertise and direction on how best to proceed.
James and Denny discuss what type of conversations realtors should be having during this time to prepare their clients for what to expect in a very active real estate market.
This episode will focus on the value behind following up with clients, opportunities to provide information and show expertise during slow periods, empty nesters looking to downsize, the power of a strong offer, and how best to navigate the increase in the market value of detached homes.
The real estate industry fluctuated throughout the 2020 year, finishing strong during the fall and early winter months. The last Garbutt and Dumas recap was done in June 2020 which marked an uncertain time with little data to help with future predictions.
Fortunately, there was an increase in activity and September was a record-breaking month for the Garbutt and Dumas realtors (with November being a close second). Rates are low, higher priced properties are starting to move, and land value is increasing.
Single-family homes went from slow-selling to outrageously active
Condos remained relatively slow unless they had a strong selling feature (like great view or good neighborhood)
Big trend towards upsizing. Buyers are wanting more space!
Multiple offers for certain listings (depends on how saturated the market is in that area)
The number of homeowners moving out of downtown Vancouver to the surrounding cities is still increasing
Driven by affordability
Includes Langley, Tsawwassen, Sunshine Coast, and the Okanagan
Communities with little population will double in a relatively small amount of time
This movement will keep the market busy for years to come
Downtown Vancouver market remained slow
Buyers finding larger and newer condos in Brentwood for the same price
What makes the market climb?
The real estate market will climb when there is a shortage of supply. When there are limited properties on the market, more buyers are looking at each one. Real estate agents may receive multiple offers on a listing, however only one can purchase the house. The other buyers must continue looking and place an offer on another property when it becomes available. As more buyers enter the market, it can become more competitive, pushing the prices to increase. In a hot market, the offer that is subject free and has a deposit attached will be a real contender.
There is a definite upward trend in the real estate market and here are the numbers to prove it!
A sales ratio breaks down how many sales were completed in each month compared to the total number of listings available. Townhouses had the highest sales ratio with 40% and condos had the lowest sales ratio with 20% – both are significantly high. Townhouses are in high demand and it is estimated that we will see an approximate increase in price of 10-15% by summer.
Low interest rates have also played a role in the real estate market climb. More people can now afford a mortgage and are entering the real estate market. This increases the competition and can help to boost prices. HSBC announced a 0.99 rate. This will put pressure on other big banks like RBC, TD, and Scotia Bank to make their rates more competitive. It looks as if rates will remain low! A great tool for finding out what type of rate you will qualify for is ratehub.ca. Talk to your bank or an independent mortgage broker for a better idea on your specific situation.
our predictions for 2021:
The market will be active – lots of up-sizers (due to low interest rates and wanting more space) and down-sizers (due to high prices)
People will continue moving out of Vancouver into smaller cities and suburbs
Port Moody, Langley, Maple Ridge, Squamish, Tsawwassen, North Vancouver, and East Vancouver will see record-high prices and sales activity
Townhouses and detached houses will be hot! Value of property will continue to increase
Condos will increase in price (but less so compared to houses and townhouses)
More investors will be coming back
Denny’s advice: buy a house now or you may never own one!
There is a limited amount of land available for single-family/detached homes to be built on. With a decreased chance of a newer house being built in your community, there are fewer properties to compare to when looking to sell. This leads to less competitive pricing, which will in turn increase selling price over time.
It is hard to know for sure if all of our predictions will come true, but one thing is for certain: the Garbutt and Dumas realtors are looking forward to helping you navigate through all things real estate in 2021!
Do you have questions regarding low-interest rates, the upsizing trend, the popularity of apartments and townhouses, and the growing appeal of moving out of the city and into the surrounding areas? We would love to hear from you – contact us and we can help you with some of the specifics.
Townhouses come in a variety of sizes, offering affordable options for families looking to upsize from a condo and empty nesters looking to downsize from a large house.
James and Denny breakdown what a townhouse is and examine the high demand for this type of property within the lower mainland.
This episode will focus on the benefits of a townhouse, the different ages and sizes available, strata fees and insurance costs that come with different types of townhouses, and our favorite areas that you should consider.
James and Denny are excited to announce that the Garbutt and Dumas Real Estate team is looking to grow!
It has been a record year for the G+D team and they are wanting to hire awesome realtors to help reach the ambitious goals they have set for 2021. James and Denny are looking for individuals who are motivated to grow personally and professionally, and who are passionate about real estate and the people they are helping. They want someone who will commit to the successful behaviors and attitudes that have helped build G+D into what it is today.
If you are curious and want to find out more, please do not hesitate to reach out!
Brentwood, located in Burnaby, is a growing neighborhood that offers beautiful views and a central location.
James and Denny share information about the developing community and review the different condo options available to buyers.
This episode will focus on the development in Brentwood, resale versus new construction, the varying amenities that different buildings offer, the importance of air conditioning in a condo, the increasing amount of incentives from developers, and the positives and negatives of investing in presale properties.