Feb. 5, 2019

Does Moving Make You Nervous?

Does moving make you nervous?

Does looking a home make you nauseous?

I get it – moving costs a lot. Will your friends still visit? What about the kids? Will it be worth the hassle?

 

The question you need to ask yourself is why did you start looking to move in the first place? Was it for more space or are you looking to downsize?

Do you need more from your home than the current one allows? Are you thinking of renovating and wondering if it would be better to move instead?

All of these are great questions that only you can answer. 

Here is my question to you,  

If you put off buying a home today will you be at peace with your decision or will it nag you and weigh heavily on your shoulders.

If you can let it go, then maybe the timing isn't right.

However, if you can't drop it then you know it is time.

cat in bacckpack

 

Jan. 23, 2019

Energy Efficiency and Purchasing an Older Home

With the desire to be as energy efficient as possible to save money and create a smaller footprint on the earth, our budget and our values can sometimes be at odds while house shopping. Luckily there is a solution for when you find your dream home but it is not as energy efficient as you had hoped. With a combination of lender financing options called Purchase Plus Improvements and BC Energy and Efficiency Grants you may be in for a win-win situation. 

Purchase Plus Improvements is a program where you can add a certain dollar value of money to your mortgage. Suppose you purchased a $450,000 property and you wanted to do some upgrades. You could add up to 10% of the value to the property price for renovations. Now you will have a purchase price of $495,000 and would need at least 5% down payment on $495,000 versus $450,000 BUT you would have that extra money to do renovations and improvements on your home.

 

To get even more bang for your buck, utilize some of those funds to create a more energy efficient house, including new windows, upgraded insulation, changing to an efficient heat and hot water source you may receive rebates from utility companies, government and even the high ratio insurance providers. https://efficiencybc.ca/incentives/ is a great place to start to see what rebates and incentives you could be eligible for.

 

I have personally utilized these incentives to make a 1913 home more comfortable and affordable to live in. If the house you love isn’t perfect, there are a lot of options to make it work for you. Call me if you would like further insight into the available programs.

Jan. 11, 2019

2 Property Transfer Tax Exemptions

There are two basic Property Transfer Tax exemptions that you may be eligible for, and knowing what the price ceilings are may help you decide between house A and house B.

 

The First Time Home Buyer’s Program was created to help first time home buyers get in to a home. The BC Government realizes the cost of getting into a home is substantial.

 

To qualify you 

  • must be a Canadian citizen or permanent resident
  • never have owned a home ANYWHERE in the world
  • have lived in BC for 12 consecutive months before buying the property OR filed at least 2 income tax returns in the past 6 years as a BC Resident
  • have never receive the First Time Home Buyers’ grant before
  • must be buying the residence to live in (principal residence)
  • must be under 1.24 acres in size
  • Under $500,000 (there is a partial exemption up to $525,000)

 

If one person has owned a home before, and the other buyer has not, you should talk to your mortgage broker as you may be able to go 50/50 on title or even 99/1 on title and save a significant amount of money.

 

Newly Built Home Exemption

 

A home is considered newly built if

  • constructed on a vacant parcel of land
  • apartment is in a newly built condominium building
  • manufactured home placed on a vacant parcel of land
  • house moved from one parcel of land to another and hasn't been occupied

 

If you paid PPT on a piece of bare land and have now built a house on the land you may be eligible for a PPT refund.

 

To qualify you must be

  • an individual (not a corporation)
  • Canadian citizen or permanent resident
  • the property must be in BC
  • the property must be used as your principal residence (not a rental property or second home)
  • have a value of $750,000.00 or less
  • be 1.24 acres or smaller

 

This can be a tricky exemption. Even my lawyer got it wrong the first time and second time. Luckily I knew exactly what my costs should be and was able to show the lawyer where to find the information.

 

The nice thing about the GST on a New Home is that it is ADDED to the purchase price so you do not need to come up with the cash. Add this fact and the property tax exemption, buying a 'Newly Built Home' can save you from spending a lot of upfront cash at closing.

 

If you have any further questions, do not hesitate to reach out to me at 250-937-9856. It’s complicated. I have spent 16 years working in mortgage finance and real estate transactions. I can help you.

 

Jan. 9, 2019

Closing Costs Add Up Quickly

If you are buying a house, there are a lot of additional costs to consider besides your down payment. You have scrimped and saved to get your down payment, but what else is going to come up?

 

Here are some costs that you will also need to save for, and in many cases, provide proof to your mortgage holder that you have these funds saved.

 

The biggest cost is the Property Transfer Tax. This is very different than property taxes. The Property Transfer Tax (PTT) is paid when you buy a home and is a percentage amount based on the fair market value of the property (unless you qualify for an exemption). If you purchased the house through a Realtor, the house will generally be considered fair market value, but if you bought the house from your Grandma, and she gave you a smoking deal, you may be required to prove that you paid fair market value and are likely to be audited.

 

The amount is substantial. As of January 2019, the tax is 1%on the first 200,000.00, 2% on the portion between 200K and 2 Million, 3% on the portion from 2 Million to 3 Million and 5% for any value greater than 3 Million.

 

As an example, if you purchase a $500,000 house, you will be required to pay $8000. Below is the BC Government tax estimate calculator.

 

https://forms.gov.bc.ca/taxes/estimate-your-property-transfer-taxes/

 

IF you have NEVER owned a home anywhere in the world, and purchase a house under 525,000.00 then read the blog on PPT exemptions as you may be eligible for an exemption.

As well, IF you are buying a newly built home that is subject to GST and under 750,000.00 you may be eligible for an exemption (which seems fair as you are paying GST as well).

 

Legal Fees will likely be around $1500

Title Insurance is required if you are getting a mortgage $200

And an Appraisal if you are getting a mortgage $300

 

Moving costs - this can range from beer and pizza ($125) up to thousands of dollars when you moving any distance. When getting a quote from a mover ask for an all in price, including fuel surcharge, tax etc. From personal experience, I was quoted $1400 for a move and the final bill came in at just over $2100.

 

Odds and Sods - You will likely have new connection fees for things like natural gas, electricity, internet, and cable. Other things that you might not have considered are garbage cans, garden hoses, blinds or drapes. I once moved into a house which had no window coverings at all, it felt like the neighbourhood fishbowl. Blinds and drapes can easily cost $100/window so with even ten windows you are out another thousand dollars.

 

If you require any further clarification on closing costs, please reach out to me and I will be happy to go over what your specific closing costs should look like.

 

Jan. 7, 2019

Preparing Your Home For Sale

Selling your home is a big step. More than a big step, it is a huge step!

There are many things that need to be done in preparing your home for sale but for now, I am going to tackle three points that are going to be helpful.

 

  1. Once you identify your “Why” for selling the home - you want a larger house, a smaller house, or you are moving to a different location. Whatever the reason, you then need to go to your mortgage broker or bank to ensure that you are going to be able to do what you want to do. In my past, I have seen people find their dream home, sell their house and then find out that the penalty on their existing mortgage was over $20,000.00. The mortgage rules have changed in Canada over 20 times in the past 10 years so you want to make sure that you can qualify for a mortgage if you are going to need one. It would be terrible to sell your home only to find out that now you are unable to qualify for a new home.
  2. Seek out a Realtor who is going to help you sell your home and has excellent marketing skills. Someone who is going to work with you before, during and after the sale of your home. Find someone who communicates well with you and who you trust. A Real Estate Agent should provide advice on how to optimize the value of your home, staging advice, professional photos, comprehensive market evaluation and detailed marketing plan that all works within your timeline. Find a Realtor who will invest in you and your home.
  3. Clean, fix and declutter. I know this is a hard one. You work, have a family, other priorities and then someone wants to view your home. The easiest way to keep on top of the cleanliness is to de-clutter. I provide a pre-sale packing package that comes with boxes, foam wrapping for protecting breakables and tape. You are going to need to pack anyway; why not get a head start? Have you wondered about staging? I bring in a staging consultant who will work with the furniture you have and together we decide what can and cannot be done to optimize the value of your home. Do you have repairs that need to be done? We will consider each repair and evaluate if the repair is worth doing (or has to be done) or whether it is better to leave the repair for the new owners.

There are many more things to consider when preparing your home for sale, but this is a great start. If you would like to meet to discuss selling your home, please do not hesitate to reach out to me at any time.

Jan. 5, 2019

Fiduciary (Trust) Responsibilities of a Realtor

When we first meet and start to get into personal information I will stop and have you read and sign a “Disclosure of Representation Trading Services.”

 

This form explains who the Real Estate Agent is working for (hopefully YOU) and that the information you disclose is to them is confidential. That confidentiality agreement NEVER ends even if you stop working with that realtor.

 

It explains the Realtor will not act in a conflict of interest and they will obey all lawful instructions you provide.

 

This provides you with the confidence and understanding of the professionalism and value that is provided during and after buying or selling your home. This is generally one of the largest transactions that happen in a person's life and it is important to be properly represented.

 

If you work with a Realtor who is working with the buyer AND the seller, one party MUST go unrepresented or find another Realtor to work with. This is to protect the buyers and sellers, ensuring that they are being advocated for properly and professionally. Just as a lawyer does not work for the plaintiff and the defendant, a Realtor should not work for both a buyer and a seller.

 

This form does not obligate you to work with the Realtor you signed the form with, and you may end up signing several of the forms when looking for a Real Estate Agent that suits your style. The form protects you and that is a good thing.

 

If you have any questions about the Disclosure in Trading Services Form please do not hesitate to reach out to me at any time.

Dec. 14, 2018

Buying New versus a "Used" House

Home

There are a few differences when purchasing a new home versus a home that has been lived in before. Some of the differences are obvious, such as appliances that have never been used, and some are less obvious, such as possibly no closet organizers.

Here are a few of the major differences that may help with your decision.

1. Financial Differences

a. On a new build, or an extensive renovation, the property is subject to GST which is ADDED to the purchase price.

b. On a new build, there is a property transfer tax credit on properties less than $750,000.00

c. Existing properties may have more features added, for example, a garden shed, window coverings and landscaping.

d. Depending on the market a developer may be less likely to negotiate.

 

2. Building Differences

a. A new build from a professional builder will have a New Home Warranty that protects the homeowner from major defects.

b. If a house is built by an owner-builder or has had a major renovation, this warranty is supposed to be in place.

c. An existing property may have unknown issues with drains, insulation, etc as these are difficult to discover visually. A building inspection and due diligence is strongly recommended.

 

3. Odds and Sods

a. The new build’s address will be brand new which may require more time to get internet, phone and other utilities.

b. Existing homes are easier to get connected as the wiring and services are already in place.

c. Timing can be challenging as new builds are often delayed. This is especially important if you are moving from one place to another or if you have special rate financing that has an expiry date close to your potential closing date.

 

A new house is nice. So is an existing house. If you see an existing house for sale that you like, but it requires some renovations to make it your own, consider talking to your mortgage broker and Realtor about Purchase plus improvements. This program adds the cost of the renovations into the purchase price of your home.

Having purchased old homes, new homes and everything in between I can say there is no right answer. I can help you decide which is best for you.